Nothing Gained by Spying on Merkel: Falkenrath

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Oct. 28 (Bloomberg) -- Bloomberg Contributing Editor Richard Falkenrath and John Borthwick, CEO at Betaworks, discuss the revelation of NSA spying on German Chancellor Angela Merkel, how the U.S. may respond and the level of overall surveillance of data by the U.S. government. They speak on Bloomberg Television’s “Bloomberg Surveillance.”

Up this debate in germany and the rest of europe?

It was central.

This would not have come out if it were not for edward snowden and these leaks.

This is a gift that keeps on giving because it has been going on for six months and this is a bad revelation about the direct spying on one of our closest allies abroad.

Did we listen to chancellor angela merkel and her staff order a pizza?

It sounds that way.

We only have published reports to work on.

We do not have details and we may have more but it was unclassified -- it was her unclassified personal cell phone including voice and text messages.

? according to the reports.

Is there no secret that is safe?

Why are we spying on german chancellor angela merkel?

In retrospect, everyone will agree this is a mistake.

Just as there was a failure and risk management in the financial industry in 2008, this is a failure of risk management in the intelligence community.

The risk reward was not there.

There was not enough to be gained from spying on her private communications to justify the risk of disclosure.

In retrospect, everyone will think this is a terrible idea.

At the time, the nsa thought it was just doing its job.

There was a tasking of the white house saying we need to know what germany is thinking about on geopolitical issues and they targeted her as they are legally and titled to do.

The legality of this in the u.s. is not the question.

It was the prince of this.

-- it was the prudence of this.

The white house is trying to develop the real facts of what happened and what else is coming.

They are worried that they will inadvertently say something that is not true and get caught in a lie and possibly at the presidential level and make this an even worse breach of trust and it is right now.

John borthwick is with us is as well.

Should we be worried about the technology?

The technology has been there.

I think this is one of the biggest stories in of the year.

There was an implicit decision that was made a couple of years back when the spies said we are going to collect everything and filter afterwards.

Somebody at some level said let's collect and let's filter.

In the old days, when spying used to be about selective targeting, everybody's information is in the cloud, on a server somewhere.

The presumption has gone to select and filter.

When you are at the white house, did you presume that the white house -- that you are spying on everyone's text messages?

They presumed you would spy on anyone that would matter.

When i was there, text messaging was not used as widely as today.

That is what officials and the national security use encrypted cell phones so that this is an possible.

The rest of it operates in the clear, you always assume would be targeted.

You had to be careful about what you said in incleared communications.

In this case, these numbers were targeted specifically.

This is different than the massive injustice and of meta data in the u.s. market that the nsa has undertaken as a result of a change in the law in 2007. thank you so much.

That's quite a statement that this is the biggest story for 2013. i think it is a huge technology story.

It is one where the news cycles tend to move fast but this one will keep rolling.

It is fundamentally changing the way technology and governments are interrelating.

John borthwick will stay with us.

Predictions of slow spending and the shopping season.

In the next hour, we will speak with gilbert harrison about that.

This is "bloomberg surveillance," on bloomberg television, streaming on your phone, your tablet, and


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