/ 
_J.  ... 
INTERCEPTION  0?   INTENT  10,^1  rcI£CC'r-UMl CATION'S 
BY  Q7g~-^Ttt-?^r-frU..^  1 1   AGENCff 
t  STeT 
Reoort  by  The 
Intrccjc  ti  m : 
Srey 
The  federal  intelligence  agency  ^vrJi  is-l.  .ij..^;.  ijthis  report  is  the 
National  Security  Agency  (XSA).     Official  published  estimates  of  its  size  in 
dollars  expended  or  manpower  employed,  by  either  the  Legislative  or  Executive 
branches,  do  r.ot  exist. -1    Unofficial  estimates  are  that  the  NSA  annually  spends 
as  much  as  $1S  billion  and  employs  up  to  120,000  persons,  when  military  agencies 
under  the  NSA's  direction  are  included.-'     Whatever  its  actual  budget  and  per- 
sonnel  levels,    it  has,   through  a  network  of  over  2,000  specialized  intercept 
positions  aroind  the  world,   the  technological  capability  to  intercept  a  significant 
portion  or  worldwide  telecommunications.     This  capability  can  be  brought  to  bear 
against  any  country.     If  used  against  the  America.",  tec-pie,  Senator  Frank  Church 
has  noted,  "no  Arerican  would  have  any  privacy  left  ...   there  would  be  no  place 
to  hice.  - 
The  NSA  was  created  by  a  seven-page  Top  Secret  memorandum  from  President 
Harry  S.  Truman  to  Secretary  of  State  Dean  G.  Acheson  and  Secretary  of  Defense 
Robert  A.  Lovett,  on  October  24,  19S2.     Under  this  directive,  which  even  today 
remains  classified,  the  NS^  assumed  the  responsibilities  of  the  Armed  Forces 
Security  Agency,  which  in  turn  had  largely  inherited  the  intelligence  responsi- 
bilities of  the  Army  Security  Agency  (which  remains  a  functioning  Army  entity)  .-^ 
The  NSA's  two  basic  functions,  derived  from  Top  Secret  National  Security 
Council  and  Director  of  Central  Intelligence  directives,  are:   (1)   to  protect  the 
"Co.— uni  cat  ions  Security"  (CQMSEC)  of  U.S.   teleco.— anications  that  are  national 
security  related;  and  (2)   to  obtain  foreign  intelligence  related  telecommunications 
through  the  interception  of  "Signals  Intelligence"  (S1GINT). 
SIGINT  interception  is  the  NSA's  dominant  activity.     It  consists  of  "Com- 
munications Intelligence"  (CCMINT) ,  or  intelligence  obtained  through  the  interception 
of  electronic  ressage  communications   (such  as  telegrams  and  telephones),-    and 
"Electronic  Intelligence"  (ELINT) ,  intelligence  obtained  through  the  interception 
of  electronic  signals   (such  as  iadar  and  missile  e-iisions),  which  were  not
/ 
/  r 
-2- 
inu-nded  by  the  sender  to  communicate  messages. 4k.  L^A\  ,„   ,., 
,         This  report  is  primarily  concerned  with  £--."  T7^  r.f  O0M1NT  activity' ««Jer- 
I  *f««-i     •  ?    wf.'Vt,w    »^. lrc-»-».»^. <»4,w-.      Sa/ 
(      «V  ,.i   j.   w.«J  i-di"-  D)   .'.'SA   the-  iiitLiccf'tien  pf  i,-.te.;'»ot  icon]   tologrAr.s-~-'  -  -   and 
<H«  l/J 
ryw  tnv<  vyit»  ;<tt«?c,.'wi   the  ron>'.:r»r  ion> : 'y   ~j3rcr,(e(":  nort  of  onvacv  or 
."-.-  -ricm  ci:i:c-ns.     This   report  also  notes,   to  a  lesser  extent,  one  OOMSEC  activity 
that  e\tc--ds  b-:>ond  the  "protection"  of  cor— anications  related  to  national  security, 
that  may  li»:e -ise  encroach  on  the  privacy  of  African  citizens. 
Background: 
Prompted  by  a  press  report,-'   the  Subcommittee  on  Government  Information 
and  Individual  Rights  initiated  in  August  1975,   an  investigation  into  the  inter- 
ception and  monitoring  by  federal  intelligence  agencies,  of  telegrams  and  other 
fen-s  of  data  transmissions  entering  and  leaving  the  United  States.     The  investigation 
was  undertaken  pursuant  to  the  subcommittee's  oversight  responsibility  for  matters 
concerning  the  rights  of  privacy  of  American  citizens  and  for  the  operations  of 
the  Federal  Cc~jnications  Commission.     Public  hearings  were  held  on  October  23, 
1975,   and  February  25,  March  3,    10,   and  11,   1976.      (Hereafter  cited  as  Subcom.it teg 
H^riigs.)     These  hearings  were  conducted  in  the  face  of  intense  Executive  br.mch 
efforts  to  have  them  curtailed  or  postponed. - 
Similar  pressure  was  exerted  on  the  Senate  Select  Committee  to  Study 
Governmental  Operations  vith  Respect  to  Intelligence  Activities.     (Hereafter  referred 
tc  as  the  Church  Committee^)     On  October  7,  1975,  Attorney  General  Edward  Levi 
personally  asked  Senator  Church  on  behalf  of  the  President  to  postpone  committee 
h.££ri.-.;s  cr.  selected  National  Security  Agency  activities,  scheduled  for  October  8 
and  9,  at  which  NSA  Director  Lew  Allen,  Jr.  was  to  testify.     The  Church  Committee 
agreed  to  delay  Gen.  Allen's  appearance  indefinitely. 
Vhereas  the  Church  Committee  had  conducted  its  NSA  investigation  by  going 
directly  to  that  Agency,   the  subcommittee  approached  no  government  agency,  going 
instead  tc  the  international  telegraph  companies  who  allegedly  had  participated  in 
such  activities.     These  companies  were  initially  responsive.     It  was  apparently 
not  until  October  21,  1975  --  two  days  prior  to  the  subcommittee's  initial  hearing 
--  that  the  Administration  became  aware  of  the  subcommittee's  investigation,  at 
which  time  it  reacted  strongly.     On  that  day,  the  subcommittee  received  a  letter 
frcm  FBI  Director  Clarence  Kelley,  advising  that  a  former  FBI  special  agent,  whom 
8/ 
the  ? ^bccT-.;t:ee  staff  had  interviewed,  would  not  be  allowed  to  testify.—'  On  the
sa.~ie  Cay,  as  a  result  of  government  pressure,   the   tvo  largest   international  conmon 
carriers   involved   --  RCA  Global  Ccn:m;nicat ions   rind   ITT  V.'orld  Communications   -- 
SoJJe::ly  withi.-e-.;  their  offer*  'o  appear  vri1.,iT,T^rily  and  demanded  that  they  be 
i«c..nH  «nhnp>"as  3S  a  condition  to  their  testifvine.      fA  reoresentative  of  •**»  nu.4L< 
«tii»>T>  comunicaticis  carrier   HwaOwr<W«~«p;MiMiw-iii»j»<it.  .W«.tiuii.inwwl""i  ■  subsequently 
i.-.rc:~cd  the  i.'::v  ruttce  that  highly  placed  Justice  Dc-partment  officials, 
immediately  prior  to  the  subcommittee's  October  23  hearing,  had  urged  the  company 
to  derand  subpenas.     The  company  did  not  accede  to  the  Executive  branch  request^  . 
On  October  22,   1975,   the  subcommittee  Chairwoman,  Representative  Bella 
S.  Abzug,  was  visited  by   '    ''"i  1  ''     i  irifi»FiMVTyiiia*riiiinii<iiirti  >r»ui<i,,i(  imi,k*i,*m 
Deputy  Attorney  General  Harold  Tyler,  NSA  Director  Allen,  Assistant  Secretary  of 
Defense  for  Intelligence  Albert  Hall,  Special  Counsel  to  the  President    Jonathan 
f-'.arsh,  and  White  House  Congressional  Liaison  Charles  Leppert,  who  requested  the 
hearings  not  be  held  on  grounds  of  ieopardizing  an  ongoing  Justice  Department 
or  K 
criminal  investigation  ^*?  jeopardizing  national  security. 
On  October  23,  moments  before  the  subecrmittee's  hearing  vas  to  begin, 
Attorney  General  Levi  unexpectedly  arrived  at  the  hearing  room,  bearing  the  same 
message.     Like  the  previous  visitors,  Mr.   Levi  could  not  say  which  "national 
security"  interests  were  being  jeopardized,  nor  suggest  to  the  subconmittee 
any  course  of  action  beyond  postponement  or  cancellation.     The  subcommittee's 
hearing  proceeded  as  scheduled,  but  former  FBI  special  agent  Joe  R.  Craig,  and 
representatives  of  RCA  Global  Communications  and  ITT  World  Communications  refused 
to-testify  unless  subpenaed.     Testimony  was  ta^er.  from  representatives  of  American 
Telephone  and  TeiegTaph  Company  and  one  of  its  operating  subsidiaries,  the 
Chesapeake  §  Potomac  Telephone  Company. 
Within  two  hours  of  the  close  of  the  subconr.ittee's  October  23  hearing, 
the  Church  Ccrmittee  reversed  its  earlier  decision  and  voted  to  hold  public  hearings 
on  the  NSA. 
On  October  29,  NSA  Director  Allen,  accompanied  by  NSA  Deputy  Director  Benson 
Buffnam  and  NSA  General  Counsel  Roy  Banner,  appeared  before  the  Church  Committee 
in  public  session,  essentially  confining  their  testimony  to  the  Agency's  "watch- 
list"  activity  (see  p.        ).     A  second  matter  raised  at  the  hearing,   identified 
as  Operations  SH-.'-30CK  (see  p.       ) ,  was  temporarily  put  off.
On  November  6,  in  pibUc  session,  Senator  Church  read  tine  committee's 
t       h- -.  7.CCK  -.cpurl.  a   summary  of  the  Church  Crrr.ittee's  investigation  to  oats, 
I   into  the  record.--   No  testijnory,  however,  was  elicited  in  public  session. 
The  Church  report  primarily  dealt  with  contacts  between  U.S.  telegraph 
c-.-.f.-.ics  and  covemme-.t  representatives  l:'...'.r.  iS;:l^  and  197S,  and  procedures 
by  •-hich  private  communications  entrusted  to  the  carriers  were  turned  over  to  " 
the  N'SA  and,  to  a  lesser  extent,  the  FBI.  The  report  did  not  discuss  how  the 
information  made  available  to  the  intelligence  agencies  was  utilized  by  its 
collectors,  or  to  whom  it  was  disseminated,  or  the  uses  made  of  it  by  those 
entities  --  subjects  of  vital  interest  to  this  Committee. 
On  February  4,  1976,  this  Committee  issued  subpenas  ad  testificandum  and 
subpenas  duces  tecum  to  three  FBI  special  agents,  one  former  FBI  special  agent, 
one  JJSA  employee,  and  executives  of  ITT  V.brld  Comrmjnicaticns,  RCA  Global  Com- 
munications, and  Western  Union  International.  On  February  17,  President  Ford 
instructed  Secretary  of  Defense  Rumsfeld  and  Attorney  General  Levi  "to  decline 
to  comply  with  the  subpenas"  directed  to  the  government  and  government  witnesses, 
stating  that  disclosure  of  the  records  sought  by  the  Committee  were  not  in  .the 
public  interest.—'   Immediately,  Secretary  Rumsfeld  instructed  the  KSA  employee, 
and  Attorney  General  Levi  instructed  the  FBI  employees,  that  the  Committee's 
subpenas  duces  tecum  vere  not  to  be  complied  with,  inasmuch  as  "President  Ford 
has  asserted  executive  privilege." —   On  February  17,  Attorney  General  Levi  also 
requested  "that  Western  Union  Internationa*  '  onor  [President  Ford's]  invocation 
of  e.v.ecutive  privilege,  and  that  it  not  produce  and  deliver  documents  described 
by  the  said  subpenas."— ^   These  applications  of  "executive  privilege"  to 
private  corporations  and  to  former  government  employee^,  were  unprecedented 
e.xpar.sions  of  that  concept. 
On  February  25,  the  aforementioned  former  FBI  employee,  three  current 
FBI  agents,  and  one  NSA  employee  appeared  before  the  subcommittee ,  but  refused 
to  testify.  Both  the  present  and  former  FBI  agents  refused  to  testify  on 
instructions  from  the  Attorney  General,  v.hile  the  NSA  employee  refused  on  orders 
from  the  Deputy  Secretary  of  Defense,  William  P.  Clements,  Jr.  Because  of  their 
failure  to  give  testimony,  the  subcommittee  recommended  that  all  five  be  cited, 
pursuant  to  2  U.S.C.  192,  for  contempt  of  Congress.  Four  of  the  witnesses  were 
also  recommended  for  contempt  citations  for  their  failure  to  produce  documents 
puri'-ant  to  subpenas.
■  ,        ■  -5- 
Cn  Mirch  3,   the  Executive  Vice  President  of  v.'estem  Union  International 
t-.-stified  before  the  subcommittee,  and   fumed  over  an  eijjht  year  old  list  of  NSA 
-.irgets,   the  production  of  which  President  Ford  had  attempted  to  block  by  asking 
t..=  ccipvi a\. iui  to  lienor  !iis  claim  of    'CACi-utivc  privilege.'' 
Attcrr-,-  General  Levi  also  asked  RCA  Global  Communications   that  its 
r.^resentatnes  neither   testify  before  the  subco.-aittee,  nor  produce  documents, 
"r.itl  procedures  can  be  agreed  upon  to  assure  that  the  President's  invocation 
14/ 
cr  executive  privilege  is  not  effectively  undone." — 
Without  procedures  being  "agreed  upon",  representatives  of  RCA  Global 
Cc-rouiications  did  testify  on  March  3,   as  well  as  on  March  10,   and  subsequently 
f^rr.sd  over  to  the  su'-.-cc-nittee  additional  records  that  the  company  had  previously 
considered  as  not  covered  by  the  subcommittee's  subpena  duces  tecum.—''    Also 
en  :  larch  10,  the  subcommittee  received  the  testimony  of  the  Chairman  of  the 
Federal  Ccrmuni  cat  ions  Commission,  Richard  E.  Kiley. 
On  Varch  11,  representatives  of  ITT  World  Communication,  which  did  not 
receive  an  "executive  privilege"  request  from  Attorney  General  Levi,  testified 
before  the  subcenmittee. 
PART  I 
C-Z^NOLOGY  0=  U.S.   TELEGRAPH  COMPANIES'   COOPERATION 
WITH  FEDERAL  INTELLIGENCE  AGENCIES 
Fre-V.orld  War  II. 
I.     History 
During  V.'crld  V.'ar  I,  U.S.  government  intelligence  agents  censored  tele- 
graphic teleccmr-jnicaticns  by  working  in  the  offices  of  private  telegraph  companies. 
All  telegrams  entering  or  leaving  the  United  States  were  placed  at  the  disposal 
of  a  military  intelligence  unit  of  the  War  Department  known  as  MI -8   [Military  Intel- 
i^e.-ice 
,-  17/ 
licence  -  Section  8]. — '     This  practice  ceased  soon  after  the  conclusion  of  the 
MI-8,   frcr>.  its  inception  in  1917,  had  been  directed  by  Herbert  Osborne 
Yarcley,  considered  by  some  cryptologists  to  be  the  most  famous  in  history. 
At  -ar's  end,  faced  with  the  phasing  out  of  his  organization,  and  envisioning 
iti  having  a  peacetime  role,  Yardley,   in  May  1919,  convinced  the  State  and  War 
Departments  to  approve  a  plan  for  a  "permanent  organization  for  code  and  cipher 
13/ 
investigation  a-.d  attack." —      Forty  thousand  dollars  of  the  organization's 
5 - "  t , CGO  annual  'udget  ".-.as   to  ccme  from  State  Department  special   funds,  with
-6- 
•__-._;  balance  to  come  frcrr,  .military   intelligence  budgets  after  selected  Congressional 
1?--Jcrs  r.-i  ^ccn  briefed  on  the  project.!.-/ 
.Although  supported  by  government   funds,    the  resulting  organization  had  no 
visible  gcverrj-'C-nt  connection.     Known  as  "The  Black  ChajT.ber"  by  the  few  persons 
;".-: liar  -.ith  its  existence,   it  operated,  from  1919  until  1929,  under  Yardley's 
leadership  in  New  York  City  --  under  the  co\er  name  "Code  Compilation  Company . "12/ 
Th=  operation  was  initially  situated  in  tollhouses  in  the  East  Thirties,  but 
following  a  192S  break- in  in  which  desks  were  rifled,   it  was  moved  to  a  large 
Manhattan  office  building. 
In  1929,  President  Hoover's  newly  appointed  Secretary  of  State,  Henry  L. 
Sti-son  was  shocked  to  learn  of  the  Black  Charter's  existence  and  abruptly  terminated 
s  were 
the  operation  — 
in  the  belief  its  activities  were  shameful  in  a  "world  [that] 
was  striving  with  good  will  for  lasting  peace. 
Suddenly  without  a  job  and  in  need  of  funds,  and  apparently  believing  that 
since  the  Black  Chamber  had  been  destroyed  there  was  no  longer  any  valid  reason  for 
withholding  its  secrets,  Yardley  wrote  a  book,  The  American  Slack  Chamber,  published 
in  1951,  which  soon  became  an  international  best-seller.  In  it  Yardley  boasted: 
we  solved  over  forty- five  thousand  cryptograms  from  191?  to  1929, 
and  at  cne  time  or  another,  we  broke  the  codes  of  Argentine, 
Brazil,  Chile,  China,  Costa  Rica,  Cuba,  England,  France,  Germany, 
Japan,  Liberia,  Mexico,  Nicaragua,  Panama,  Peru,  Russia  [sic], 
San  Salvador,  Santo  Domingo,  Soviet  Union  and  Spain. 23/ 
Ths  31ack  Charier,  he  stated, 
also  made  preliminary  analyses  of  the  codes  of  many  other  govern- 
ments. This  we  did  because  we  never  knev  at  what  moment  a  crisis 
v.ou_d  arise  which  would  rehire  quick  solution  of  a  particular 
government's  diplomatic  telegrams.  Our  personnel  was  limited  and 
we  could  not  hope  to  read  the  telegrams  of  all  nations. 24/ 
S 
Despite  his  proclivity  towards  sensational  disclosure,  Yardley  coyly  avoided 
t 
stating  hov,  in  the  ten  years  of  MI-8's  peacetime  existence,  from  1919  to  1929, 
the  Black  Chamber  had  obtained  telegrams  it  had  analyzed: 
V."e  employed  guards,  replaced  all  the  locks  and  were  ready 
to  begin  [in  1919]  our  secret  activities.  3ut  there  were  now 
no  code  and  cipher  telegrams  to  work  on!  Tne  cable  censorship 
had  been  lifted  and  the  supervision  of  messages  restored  to  the 
private  cable  companies.  Our  problem  was  to  obtain  copies  of 
messages.  How? 
I  shall  not  answer- this  question  directly.  Instead  I  shall 
tell  you  something  of  the  Soviet  Government's  type  of  espionage 
as  revealed  by  documents  that  passed  through  my  hands.  After 
you  read  these,  you  can  draw  your  own  conclusions  as  to  how  the 
United  States  Government  obtained  the  code  and  cipher  diplomatic 
messages  of  foreign  govemr.ients.25_/
-7- 
^cver.   this  question  was  answer  .-d   ir.  a   loiter  Yarciey  sent  to  his 
;  M.:sh:-r  on  r-Urch  18.   1931.1^     ^ere  he  ,TOte  thsL  no,  ^  of  ^  ^^  ^^ 
:o  L-.  the  manuscript  of  The  American  3Iack  Cj,a-,b*.r, 
v.-.her  tnan  certain  wireless  messages  echoed  between  Germany 
ard    .exico,  x.are  sent  by  radio.   They  c.-'.-  b>-  ccble.     V.'ith 
LrJ2*±l  1°  everv  cablegram  referred  to  in  such  book,   th~e~copies 
^lii:  to  wucn  I  refer  therein  were  obtained  oTThe~cons?nt  — 
f£J  ^'-ority.  of  the  respective  presidents  oTt«ie  Ki?te7h~Un7on 
^egraph  Corpany  and  or  the  Postal  Telegraph"  Cc^nin)rb^e"r_tne~ 
•  :res  ox  one  or  the  otHeVo7  such  conpanies  sucn Mire's  sages  were 
transmitted.      [Emphasis  added.]  - --- 
In  the  1520's.  these  two  companies  carried  almost  all  the  telegraphic  communications 
in  and  out  of  this  country.— 
According  to  Yardley's  book,  only  coded  nessages  were  turned  over  to  MI-8; 
plain  text  (i.e.  uncoded)  messages  were  never  made  available.—'' 
The  Army  Security  Agency's  323  page  Historical  Background  of  the  Signal  . 
Security  .Agency  1919-1939,     which  the  subcasnittee  requested  and  received  in 
ssnitired  fora,  omits  any  mention  of  the  arrangement  described  by  Yardley,  whereby 
:-3-3  received  telegraph  nessages  from  the  Was  tern  Union  and  Postal  Telegraph 
cc-ar.ies,  or  any  other  company.     It  suggests  only  that  the  Army  Signal  Corps 
c:d  r.ot  continue  to  support  the  MI-8  activities: 
Plans  for  establishing  Ml -8  on  a  DS£:e-time  basis  in  1°19 
r\cluuea  no  provision  for  the  development  of  facilities  for 
obtaining  the  necessary  intercepted  nessages.     A  detailed  account 
or^uhe  situation  will  be  given  shortly  but  at  this  point  it  will 
suxrice  to  indicate  that  it  was  doubtless  assumed  that  the  cable 
companies  would  continue  to  supply  ccpies  of  all  messages  passing 
yirougn  their  ofnees  and  that  the  Signal  Corps  would  continue 
,1",  waI-tlrae  intercept  facilities  which  would  be  at  the  call  of 
.■^-;._  j.-.ese  assumptions  proved  to  be  unwarranted.     That  no 
sacisractory  solution  for  this  problem  vas  ever  reached  was  one 
ci  tne  prune  causes  for  the  decline  of  activity  of  NO -8  in  New 
2     "     lZ  V3S  also  one  of  the  factors  which  led  to  the  absorption 
of  tne  Bureau  by  the  Signal  Corps,  an  organization  which  could 
rore  easily  develop  intercept  facilities .?_?_/ 
The  -detailed  account"  of  the  cable  companies'  cooperation,  suggested  in 
t.-s  passage,  was  deleted  from  the  manuscript  provided  the  subcommittee.     If  Yardley's 
accent  is  accurate,  however,  NO -8  did  remain  operational  for  ten  years  after 
K:r:d  :var  I  with  the  cooperation  of  the  telegraph  companies  heretofore  identified, 
f-r-.he-o-e,  it  was  Secretary  Stimson's  philosophical  objections,  and  not  the 
reluctance  of  the  telegraph  companies,  which  apparently  brought  the  activities  of 
MI-8  to  a  halt  in  1929. 
*  II.     Legality 
30/ 
V.hsn  World  War  I  ended,   the  Radio  Communications  Act  of  August  13,   1912,  which 
:  -.-at  the  Goverr.-ent  would  guarantee  the   secrecy  of  ccn.vunications,  was 
.".  effect.     That  Act  provided,    in  pertinent  cart:
-8-" 
"o  person  or  persons  engaged  ir-  or  having  knowledge  of 
the  c;  cration  of  any  station  or  stations  shall  divulge  or 
publish  the  contents  of  any  nessaees  transmitted  or  received 
by  f-ch  statics,  "xcepr.  to  the  jvrso"  "r  persons  to  v.hom  the 
sara  ray  be  directed,  cr  their  authorized  agent,  or  to 
Another  station  e.-rroloyeJ  to  forward  such  message  to  its 
Jc ::: '.2 :i<>.". ,  urile;:  legally  icquiicJ  so  tc  do  by  the  court 
of  tc-^etent  jurisdiction  or  other  competent  authority.il/ 
Tr.Ls   lew  did  not  prohibit  the  interception  of  radio  traffic  per  se,  but 
r-;-rely  prchibited  the  employees  of  common  carriers  covered  by  the  Act  from 
divulging  or  publishing  the  contents  of  messages  to  unauthorized  persons.  Although 
no  court  had  occasion  to  so  rule,  the  prohibition  contained  in  the  statute  would 
seen  to  have  been  violated  by  those  employees  of  the  cable  companies  who  divulged 
the  contents  of  telegrams  to  MI-8,  unless  MI-8  could  have  been  considered  as  "other 
cempetent  authority".  This  point  has  never  been  the  subject  of  a  judicial 
determination. 
The  1912  statute  remained  in  effect  until  the  enactment  of  the  Radio  Act 
of  1927,  v.hich  considerably  broadened  the  prohibition  against  unauthorized  disclosures: 
No  person  receiving"  or  assisting  in  receiving  any  radio 
cc.-nunication  shall  divulge  or  publish  the  contents,  substance, 
purport,  effect,  or  meaning  thereof  except  through  authorized 
cr.ar.nels  of  transmission  or  reception  to  any  person  other  than 
the  addressee,  his  agent  or  attorney,  or  to  a  telephone,  tele- 
graph, cable  or  radio  station  employed  or  authorized  to  forward 
such  radio  co— onication  to  its  destination,  or  to  proper 
accounting  cr  distributing  officers  of  the  various  communicating 
centers  over  which  the  radio  communication  may  be  passed,  or  to 
the  master  of  a  ship  under  whom  he  is  serving,  or  in  response  to 
a  rubpoena  issued  by  a  court  of  competent  jurisdiction,  or  on 
csr-and  of  other  lawful  authority;  and  no  person  not  being  authorized 
by  the  sender  shall  intercept  any  message  and  divulge  or  publish 
the  contents,  substance,  purport,  effect  or  meaning  of  such  inter- 
cepted message  to  any  person;  and  no  person  not  being  entitled 
thereto  shall  receive  or  assist  in  receiving  any  radio  corrruni- 
titicr.  and  use  the  seme  or  any  information  therein  contained  and 
no  person  having  received  such  intercepted  radio  communication  or 
having  become  acquainted  with  the  contents,  substance,  purport, 
effect,  or  meaning  of  the  same  or  any  part  thereof,  knowing  that 
such  information  was  so  obtained,  shall  divulge  or  publish  the 
contents,  substance,  purport,  effect,  or  meaning  of  the  same  or 
any  part  thereof,  or  use  the  same  or  any  information  therein 
contained  for  his  own  benefit  or  for  the  benefit  of  another  not 
entitled  thereto  ....  [Emphasis  added. 132/ 
'••hereas  the  1912  Act  had  applied  only  to  employees  of  common  carriers, 
the  1=17  Act  applied  to  all  persons  not  authorized  by  the  sender  to  receive  such 
co— .-jnications.  This  would  bring  MI-8,  as  well  as  the  employees  of  the  cable 
cor.panies,  under  the  Act's  prohibition.  The  Army  Security  Agency's  historical 
record  states  that  the  law's  "or  on  demand  of  other  lawful  authority"  provision 
had  never  been  used  by  MI-8  to  justify  its  interception  of  foreign  diplomatic 
traffic.  Apparently,  there  was  never  a  need  for  MI-8  to  assert  such  authority.
•9- 
Hi--ce,   subsequent   to  1927  at  least,   th?  B].t..<  Cha-ber  .jpparently  operated  in 
violation  of  the  law. 
/ne  Arny  Security-  Agency's  historical  record  suggests,^K4^_oibjuJiand, 
tr.i:   J.c  sctMties  cf  rilitary  i.-,tclli£cr...e  getting     -    w„_;uding  MI  C's  -- 
u-irs  rot  interred  to  be  covered  by  the  19?7  Act's  prohibitions: 
The  purpose  behind  the  legislation  was  of  course,  the 
security-  of  co~ unications  from  tJie  danger  of  interception 
by  .r-.ajthoriied  persons  who  might  have  r.ade  use  of  intelli- 
gence contained  therein  for  personal  profit.     That  the  laws 
would  also  hamper  Governmental  agencies  engaged  in  the 
production  of  intelligence  upon  which  the  safety  of  the 
United  States  night  be  based  was  probably  far  from  the  minds 
of  the  legislators.     Indeed,  prior  to  World  War  I,  no  such 
agency  existed,  and  until  1931,  the  fact  that  one  had  ex- 
isted during  the  war  period  was  unknown  either  to  the 
general  public  or  to  most  officers  in  the  Amy  itself. 
On  the  other  hand,  inclusion  in  these  acts  of  specific 
exemptions  permitting  the  interception  of  radio  communications 
for  the  purposes  of  military  intelligence  would  have  given  notice 
to  the  world  in  general,  and  therefore  to  a  possible  enemy  in 
particular,  that  cryptanalytic  units  were  indeed  operating. 
Such  a  course  would  have  been  highly  undesirable.     What  solution 
this  thorny  problem  could  have  had  is  not  clear:     the  fact  that 
no  solution  was  ever  reached  constituted  one  of  the  greatest 
obstacles  to  the  proper  functioning  of  MI -8 .33/ 
Yardley  infers  that  the  1929  Act  presented  no  obstacle  at  all.     It  was 
si.Tr'y  ignored. 
Ill-     ^.•err.-.e"  ".section  to  Yardley  Disclosures 
The  publication  of  Yardley' s  book,  in  1931,  prompted  the  War  Department 
to  state  that  the  American  Black  Chamber  had  not  existed  for  four  years   Ca  date 
which  coincided  with  the  passage  of  the  Radio  Act  in  1927) .—    General  Douglas 
y£.z.-zz'--j.T ,  then  .Army  Chief  of  Staff,  said  he  did  not  know  anything  about  it, 
while  high  officers  in  the  intelligence  divisions  said  no  such  bureau  then  existed 
and  they  professed  to  have  no  knowledge  of  it  in  former  years.—''     State 
Departrent  officials  similarly  said  they  were  sure  there  had  been  no  such  practice 
and  cr.e  official,  speaking  on  behalf  of  Secretary  Stimson,  said  he  had  never  heard 
of  ar.y  such  organization  as  the  so-called  "black  chamber."^ 
Yardley,  a  man  who  had  been  revered  as  a  cryptanalytic  genius,  and  who,   in 
192!,  had  been  awarded  the  Distinguished  Service  Medal  by  the  Secretary  of  War,—' 
was  portrayed  in  official  commentaries  as  an  opportunist  and  braggart  whose  actions 
bordered  on  treason.
-10- 
Ths  Amy   "ecurity  Ageniy  hi.-tcry,  written  in  1946,  described  Yardley  as  a 
ran  who  "had  cenonstrated  a  certain  amount  of  crypianalytic  ability  and  had  achieved 
within  the  V.'ar  Department  a  repumiion  as  *  ^ryptc- .al/st."     i'le  was,   the  report 
s-aiv.U.  ..  r--.-  ;i-i.-.i:tr;t;r  •••>.:  h:d  ".-.cither  tv*  ;r.if  i^'ve  *"?r  f«re<iohr  Tn 
r.ild  "H-S  en  a  firm  foundation."    He  ignored  his  duties,   the  report  continued, 
"..hile  he  profited  from  real  estate  activities;    his  enthusiasm  for  cryptanalysis 
lagged  as  he  became  a  consultant  in  more  profitable  code  production  activities 
for  comr-ercial  firms.     Then,  when  his  own  position  was  abolished,  he  divulged 
infor-aticn  of  the  highest  secrecy  and  made  hirself  notorious  in  the  annals  of 
cryptolcgy."^!/ 
I-  1952,  Yardley  wrote  a  new  book  entitled  "Japanese  Diplomatic  Secrets" 
that  was  never  published.     On  February  20,  1933,  U.S.  marshals  in  New  York  seized 
the  manuscript  in  the  publishing  offices  of  The  Macmillan  Company,  on  the  grounds 
39/ 
Yardley,  as  an  agent  of  the  U.S.  government,  had  appropriated  secret  documents. — 
Yardley  :-zs  never  prosecuted,  but  his  case  pre— ted  Congress  to  enact  the  "Protection 
cf  C-rverr.-^nt  Records"  bill  in  1933.     Now  codified  as  IS  U.S.C.  952,  the  law  makes 
disclosure  of  diplomatic  codes  or  correspondence  a  felony. 
40/ 
IV.     Assessment  of  MI -8  by  the  Army  Security  Agency .— 
Acicrdir.g  to  the  Army  Security  Agency's  historical  chronology,  MI-8  primarily 
failed  because  "its  principal  support  was  derived  from  a  department  of  the  govern- 
ment which  reflected  political  changes  and  the  temper  of  the  times  more  directly 
than  does  the  v.'ar  Department."     In  other  words,  such  a  sensitive  activity  as  MI-8 
•„i5  -ot  to  be  entrusted  to  the  political  whirs  cf  the  country's  civilian  leadership. 
The  Army  Security  Agency,   in  hindsight,  also  sav  other  reasons  for  iMl-8's  demise: 
(1)  Its  leader  was  not  sufficiently  concerned  with  its  secrecy 
(though  there  is  no  evidence  Yardley  compromised  the  secrecy  of 
the  "Black  Chamber"  in  any  way,  during  its  twelve  year  existence). 
(2)  Its  isolation  from  direct  supervision  as  a  result  of  its  trans- 
fer to  New  York  produced  neither  the  desired  secrecy  nor  the 
attention  it  should  have  had  from  the  V.'ar  Department  (though 
there  was  every  evidence,  from  Yardley' s  narration,  its  existence 
was  well  known  at  the  highest  State  and  War  Department  levels) . 
(5)  Tne  separation  of  cryptanalysis  (breaking  the  codes  and  ciphers 
of  foreign  governments)  and  cryptography  (making  codes  and  ciphers 
for  one's  own  government)  was  a  mistake."     (MI -3  was  not  involved 
in  cryptography)  •  ''
-11- 
Even  before  ,'U-S  formally  terminated  its  operations  on  October  31  1929 
::-.;  v.ar  Dtprt.-'"-.'.  hsd  forced  the  Signal  Intelligence  Service  -..ithin  the  Agency  to 
rsrry  out  rost  c.--~;olooical  work  on  a  continuing  basis.  '  Tni:  m .  ^■•--..•nn<-gay    ^  * 
wa-  ■:!-  3  .r;  :■<>-  .■  fa  the  Armed  Forces  Security  Service  aid  its  successor,  the      ' 
Naticr.al  Security  .:£cncy. 
?-:i-  '-or Id  War  II 
I.  History 
During  V.brld  War  II,  U.S.  government  agents  pursuant  to  the  wartime  powers 
of  the  President,  again  censored  written  telecommunications  by  working  in  the  offices 
of  the  telegraph  ccrpanies.  Three  companies  --  ITT  Cc— jnications,  RCA  Communi- 
cations, and  V.'estem  Union  --  transmitted  almost  all  international  cablegrams  and 
radiograms  entering  or  leaving  the  United  States.  All  such  messages  were  placed 
at  the  disposal  of  military  intelligence.—' 
However,  the  V.'ar  Department's  post-World  Wax  II  actions  to  convince  the 
cable  companies  to  -jske   international  telegrams  available  to  federal  intelligence 
agents  were  markedly  different  than  those  taken  after  V.brld  V.'ar  I.  The  post 
V.crlc  War  I  period  was  narked  by  inaction:  six  months  after  the  Armistice,  Herbert 
Yardley  had  to  sL-gle-handedly  persuade  the  goverr.-'ent  to  enter  into  such  an 
arrangement  and  his  scheme  provided  that  only  coded  messages  would  be  handed  over. 
But  in  August  194,3,  immediately  after  the  end  of  the  war,  the  Army  Signal  Security 
Agency  (the  sane  as  the  Signal  Intelligence  Service  and  Array  Security  Agency)  imple- 
mented a  plan  that  led  ultimately  to  making  nost  telegram  entering  and  leaving 
the  United  States  --  including  those  in  plain  text  --  available  to  that  agency.— ^ 
On  August  18,  1945,  four  days  after  Jap-an  surrendered,  "two  representatives  of 
the  Army  Signal  Security  Agency  were  sent  to  New  York  'to  make  the  necessary 
contacts  with  the  heads  of  the  Commercial  Communications  Corpanies  in  New  York, 
secure  their  approval  of  the  interception  of  all  [foreign]  Governmental  traffic 
entering  the  United  States,  leaving  the  United  States,  or  transiting  the  United 
States,  and  make  the  necessary  arrangements  for  this  photographic  intercept  work.'"—' 
ITT  and  Western  Union  began  their  participation  by  September  1,  194S,  and  RCA 
by  October  9,  19-5.— /
-12- 
'.•."-;ile  the  Amy  Signal  Security  Agency  '-.as  ostensibly  only   interested   in 
-.-•?   Lntc-ception  of  foreign  government  traffic,    in  practice  it  was  £iver>  access  to 
ail  traffic.     This  was  necessary,  former  RCA  Executive  Vice  President  Sidney 
St arks  testified,  because  the  procedures  initially  proposed  by  the  government  - - 
-J-a:  £;>i:ial  electrical  connections  be  put  on  certain  tielines,  or  that  tapes 
•trijL-ating  and  terminating  with  certain  tielir.es  be  turned  over  --  would  result 
in  a  situation  ivr.ere  "everybody  and  his  brother  v.ould  know  just  exactly  what 
««s  -.>ere  doing  and  why."—'     To  avoid  that  revelation,  the  government  was  given, 
according  to  Mr.  Sparks,  "all  of  the  perforated  tapes,"  i.e.,  access  to  all 
^ssages.^/il/ 
ITT  also  agreed  to  allow  the  Army  access  to  all  incoming,  outgoing,  and 
transiting  messages  --  private  as  well  as  governmental  --  passing  over  the  facilities 
of  its  subsidiaries  involved  in  international  cc-munications.     ITT  agreed  to 
record  all  such  messages  on  microfilm,  which  the  Amy  Signals  Security  Agency 
.....  iS/ 
tr.en  ceveioped. — 
For  the  next  thirty  years,  between  1S45  and  1975,  RCA  and  ITT  --  which 
together  handled  approximately  70  percent  of  all  international  non-verbal  tele- 
cc—-ruca:icr.s  in  and  out  of  this  country  --  ccr.ti.-ued  to  r.aXe  all  their  customers' 
49/ 
ccrrr^iications  available  to  the  NSA. —      Only  the  form  in  which  these  messages 
were  turr.ed  over  changed  during  this  thirt>"-year  period. 
Kestem 'Union's  procedure  was  far  more  selective.     It  insisted  from  the 
tire  it  er.tered  into  the  program  in  194S,  that  its  own  personnel  do  the  actual 
har.dli.ng  of  all  r.essages  delivered,     l-'oreover  only  messages  to  one  foreign 
country  Initially  were  made  available  to  NSA.—'     At  an  undetermined  later  date, 
all  foreign  government  telegrams  were  made  available  to  NSA.—' 
V.'estern  Union's  participation  was  also  of  shorter  duration.     In  1963, 
'.-criem  Union  divested  itself  of  its  international  operations,  which  were 
taT-en  over  by  Kestem  Union  International,  an  independent  company  formed  for 
that  purpose.     Sometime  between  1965  and  1972,  an  NSA  Recordak  machine  located 
in  the  ccrpany's  New  York  operations  room  which  company  employees  used  to  copy 
foreign  government  messages,  was  removed  at  the  company's  request. — —
.  •  .  '  -13- 
Tr.e  subcccruttee  has  no  evidence  that,  after  V.'orld  War  II,  the  Anny 
Security  :i="cy  --  or,  -in  195?,  its  successor  agency,  the  MSA  --  m.ide  any  attempts 
to  lirit  its  "taXe"  to  coded  messages  from  the  telejraph  companies,  as  was  done  by 
-.erbcri  :a/dic/'-i  -ii-S  organ iisticn  sttm  V.'oriu  ■'•2r  I.  Esth  coJcu  and  unccded 
-sssi^es  ire  received  and  analyzed,  seemingly  in  \iolation  of  the  19S8  National 
Security  Council  Intelligence  Directive  (NSC ID  nuric-r  6,  dated  September  15,  19S8) 
setting  cut  the  functions  of  the  NSA: 
For  the  purpose  of  this  directive,  the  terns  "Communi-  ' 
. cations  Intelligence"  or  "CCM1NT"  shall  be  censtrued  to  i 
rvsan  technical  and  intelligence  information  derived  from  ] 
foreign  corrnunications  by  other  than  the  intended  recipients.  I 
CC.'-n.NT  activities  shall  be  construed  to  -esn  those  • 
activities  «hich  produce  COMINT  by  the  interception  and  : 
processing  of  foreign  communications  passed  by  radio,  wire,  I 
or  other  electromagnetic  means,  with  specific  exception 
stated  below,  and  by  the  processing  of  foreign  encrypted 
cc— uni  cat  ions,  however  transmitted.  Interception  comprises 
search,  intercept,  and  direction  finding.  Processing  com- 
prises range  estimation,  transmitter  operator  identification, 
signal  analysis,  traffic  analysis,  cryptanalysis,  decryption, 
study  of  plain  text,  the  fusion  of  these  processes,  and  the 
reporting  cf  results. 
CO  -INT  and  CC'-flNT  activities  as  defined  herein  shall  not  in- 
clude (a)  ar.y  intercept  and  processing  of  unencrypted  written 
c:~jr.ications,  press  and  propaganda  broadcasts,  or  (b) 
C£r.sorship\   [Erphasis  added.] 
~.s  NSA  contends  that  the  specific  exclusion  of  unencrypted  written  cora- 
-unicatiens,  '.vhich  would  appear  to  prohibit  its  interception  of  telegrams,  "is 
and  always  has  been  limited  to  mail  and  communications  other  than  those  sent 
electronically."—'  Hence,  the  NSA  appears  to  have  interpreted  this  directive 
as  a  carte  blanche  to  intercept  ana  process  all  foreign  communications,  i.e., 
all  these  in  which  at  least  one  terminal  is  foreign,  even  though  such  communications 
i-ere  unencrypted.   -—./ 
Fcoisote   5u-A  (p.   13) 
Ferrer  CIA  Director  Allen  Dulles  has  defined  connunications  intelligence 
I  as   "inf onaation  which  has  been  gained  through  successful  cryptanalysis  / 
'  of  other  people's  traffic."     He  has  defined  cryptanalysis  as  certain  codes' 
I  and  ciphers  "that  can  be  the  mathematical  analysis  of  intercepted  traffic/ 
(Allen  Bullea,  The  Craft  of  Intelligence,   Harper  &  Row,   1963;   p.   73). 
Dulles'  charge Urization  of  CCLEDiT  excludes  pO^ijj.'Juuctx-cflttiifjxx  the 
utilization  of  plain -text  messages.
•     .  -14- 
Cpzration  SiiV-LVCO.'.    the  code  nane  under  which   the  cable  companies  made 
no^t  :-'  their   international   telecc":iiunicaticns   traffic  available   to  the  NSA, 
and  tc  a  lesser  extent  to  the  FBI,  was  terminated  by   the  Secretary  of  Defense 
in  '■'*/  19'^   -■  2  nste  rninnim;  «•■::"  trie  '..Tjr'-n  '.?••-•'!  rtee'n  ri.-z-t  ri^TmnMratisrs 
of  L-":rc-st    in  the  preplan.     The  "take"  from  C;  irz;:^  SIUM30CK   --  plus   from 
oth=r  'oA  operations   --  was  used  by  the  NSA  in  the   K-.sOs  and  early  1970s  to 
cc.-pile  files  on  American  citizens.     NSA  maintained  a  "Vetch- list"  of  names  of 
individuals  and  organizations  against  which  the  "take"  was  sorted. 
MIKARET  was  the  code  name  applied  to  the  NSA's  efforts  to  protect  its 
watch-list  activities  on  American  citizens  from  disclosure.     The  watch-list 
had  actually  begun  Ln  the  early  sixties  were  not  applied  until  1969. —^    The 
A 
ML\A3ET  charter  described  the  watch-list  program  as  involving  "communications 
concerning  individuals  or  organizations  involved  in  civil  disturbances,  anti-war 
roove.-.ents/demonstraticns  and  military  deserters  involved  in  anti-war  movements." — 
MI>LArZ7  was  considered  so  sensitive  that  inform .stior.  being  disseminated  was 
classified  TCP  SEC?£T  and  labeled  "Background  Use  Cr.iy,"  and  while  handled  as 
SICi'.T  ar.d  distributed  tc  SIGINT  recipients, —    it  was  specifically  not  identified 
as  he.--.ing  any  NSA  connection. — '—      On  May  12,   U7t,  r.aterial   collected  under  the 
NSA  ••  itch-list  program  was  transferred  to  the  office  of  the  Principal  Deputy  Assistant 
Secretary  of  Defense  for  Intelligence,  Thomas  K.   Latimer,  for  safekeeping.— 
The  ."JMARET  files  re.-rain,  as  of  March  1,   1977,   in  a  safe  in  Mr.   Latimer's  office, 
retained  pending  a  request  for  their  production  Ln  a  civil  li:  igation.— 
.Also  utilizing  the  telecommunications   intercepted  under  Operation  SHAMROCK, 
the  .\3A's  Office  of  Security  maintained  approximately  75,000  files  on  American 
62/ 
citizens  between  1952  and  1974. —      Tnese  files  were  apparently  created  from  infor- 
mation obtained  through  SHAMROCK  and  NSA's  other  intercept  programs.     Persons  included 
in -these  files  included  civil  rights  leaders,  antiwar  activists,  and  Members  of 
Congress.     For  at  least  13  years,  CIA  employees  were  given  unrestricted  access  to 
these  files,  and  one  or  more  worked  full  time  retrieving  inform? tion  that  presumably 
vzs  contributed  to  the  CIA's  Operation  Qi^OS,  which  existed  from  1967  to  1974.     The 
Cc— .itt*e  does  not  know  to  which  component  of  the  CL\  the  NSA's  Office  of  Security 
files  on  American  civilians  were  transferred  prior  to  1967,  nor  by  wra<-  authority 
these  transfers  were  made.     The  Committee  is  disturbed  by  the  CIA's  apparently 
receiving  information  on  American  citizens  on  an  established  and  regular  basis, 
sc.  iral  years  prior  to  the  heretofore  believed  ccrrt.- zenent  date  of  that  Agency's 
d"estiz  surveillance  activities.     According  to  the  '  :^,    its  Office  of  Security 
files   zr.  A-ericar.  citizens  were  destroyed   in  1974.—
-is- 
V.nile  the  Coimittee  has  no  reason   to  believe  SKVSOCK  continues  today, 
2-e. ,   that  the  \'5A,  or  its   representatives,    is   Involved   in  hand-to-hand  acquisition 
of  international  telecommunications,   the  Conrnittee  cannot  report  that  the  NSA 
no  in-ioer  !'>'•?: c-'jits  >>icn  mess^es  ;y  e!"<-rrc"uc  -cans.     1,-jdeed,  cr.s  can  ar^ue 
that  if  it  .ere  not,   it  \ould  not  be  doing  its  job  of  intercepting  foreign  govern- 
64/ 
merit  teleccrr linications.  The  NSA  has   -■  and  has  had  for  several  years  •- 
ths  technical  capability  and  resources  to  accomplish  this  task  without  the  knowledge 
6,,a/ 
or  complicity  of  the  cable  companies;   '    thus,  from  the  NSA's  point  of  view,  a 
program  such  as  SHAMROCK  is  no  longer  an  operational  necessity. 
[II.     Legality  -  Britt  insert] 
&£a/  See,  for  e.\a.-nple,  testimony  of  William  Colby,  "Central  Intelligence  Agency- 
Ex  e'—t  ion  in  the  Privacy  Act  of  1974"  hearings,  House  Subcomittee  on  Government 
Information  and  Individual.  Rights,  June  25,   1975  (pp.    223-24).
■   .  M.   The  Legality  of  S'-'-V.P.OCK 
7-e  r:Jr:r.  P,-end..-.ent  tc  the  Const  i  tut  -.on  Querent  <--?s  to  the  people  the 
r  •;--.■.  "O  -;   .-i;. ••;...  :r.  their  papers.,  r.oc  ■■'-**  unreasonable  searches  and 
,_..      ,-,,      ••        ;•      <-,.-'4-nr     ^mv\tiB<     th»t     "nn    t'srr'Jntt     thsll      iKmo        h"f     ••"01 
"-s  ".:t  t'-jL  -ISA,  and  its.  predecessors,  indiscriminately  obtained  without., 
a  ..;.---£r.t  ::p'i?s  of  virtually  every  international  telegram  leaving  the 
United  Stc-.js  fcr  a  period  of  thirty  years  would  appear  to  violate  this 
ccr.<f:t-ti:".al  guarantee  of  privacy.  The  Supreme  Court  has  held  consistently 
that  official  searches  may  violate  the  Fourth  Amendment  if  they  are  not 
reziz~it)j    V>.itsd  to  the  accomplishment  of  some  legitimate  governmental 
purpose.65  Even  assuming  the  collection  of  foreign  intelligence  to  be  a 
legit i-ate  governmental  purpose,  the  fact  the  NSA  did  not  limit  its  interceptions 
to  t.'.e  teleora.-s  of  foreign  governments,  or  even  to  those  which  were  relevant 
to  f:r=ign  intelligence  requirements,  but  rather  intercepted  all  international 
te"s:';~s  retcrcless  of  their  source  or  subject  matter,  suggests  this 
ccTF~:  •* ."  ■' zn~\   standard  was  violated. 
'■<-   •"•-.j'-irP'.icn  of  international  telegrams  also  appears  to  have 
viclctei  section  605  of  the  Communications  Act,  enacted  eleven  years  prior 
to  t*-,e  cp.-.-=nce-ent  of  SHAMROCK,  although  this  point  has  never  been  the 
subject  of  a  judicial  determination.  As  set  forth  at  page    ,  supra,  that 
se:v':-  :':-:c;:ei  employees  of  common  carriers,  as  ■.•.■ell  as  any  other  person 
"nc:  pjiic  rjt.-.orized  by  the  sender",  from  intercepting  and  divulging  the 
contents  of  telegrams,  except  in  certain  specified  situations.  The  exception 
most  r^s-.ir.t  here  alleged  for  publication  "on  demand  of  other  lawful  authority." 
Kce.e-,  r;.  court  decision  prior  to  the  start  of  SHAMROCK  had  interpreted 
this  ;.-..-asr  to  .-.ean  anything  other  than  some  form  of  official  process.66 
In  :  =  '-.-':■_ ".er,  no  federal  intelligence  agency  had  ever  been  designated  by 
any  ::.-:  -S   "ether  lawful  authority"  under  this  section,    nor  did  the 
lecis"stiv=  history  of  the  Act  indicate  that  such  an  interpretation  was 
ir.t='.-.ec.-G
-2- 
lt   is,   furthermore,    important   to  note   that   the    international    telegraph 
cc-?ar.-.es  ..hich  participated  in  SHAMROCK  did  not   themselves    interpret  the 
"«»!.i^r   lc"."u"    .«>!>ui  itj"    C-CCpt id.    lu    'n\t>w    i/i. '■    oS     icyai    jus'  '  i  iCa t  i'M! 
:;r  Vsir  part ^cipation. "'  To  the  contrary,  'hey  infernally  sought  to  have 
section  :"5  ar.ended  to  permit,  as  a  matter  of  law,  the  actions  which  they  were 
teing  asfcsd  to  undertake  by  the  government.    They  agreed  to  participate 
in  SHA."?.C-CK,  nonetheless,  upon  the  assurances  of  the  Attorney  General  and 
the  President  that  they  would  not  be  prosecuted  under  the  provisions  of 
section  60S.71  Whether  these  high-level  assurances  would  satisfy  the  legal 
requirement  of  section  60S,  i.e.,  would  constitute  "demands  of  other  lawful 
authority",  has  never  been  the  subject  of  a  judicial  determination. 
Section  605  essentially  remained  in  its  original  form  tint i  1  1968, 
when  it  was  ar.ended  to  read  in  pertinent  part: 
"Except  as  authorized  by  chapter  119,  title  18,  no  person 
receiving,  assisting  in  receiving,  transmitting,  or  assisting  in 
transmitting,  any  interstate  or  foreign  co~jnication  by  wire 
or  radio  shall  divulge  or  publish  the  existence,  contents, 
substance  purport,  effect,  or  meaning  thereof,  except  through 
authorized  channels  of  transmission  or  reception .. .on  demand 
of  ether  lawful  authority.  No  person  not  being  authorized 
by  z'rs   sender  shall  intercept  any  radio  cci-'jnication  and 
civu'ge  or  publish  the  existence,  contents,  substance,  purport, 
effect,  or  meaning  of  such  intercepted  co.^munication  to  any 
person. .. (emphasis  added)" 
Chapter  119  of  title  18,  cited  in  this  section  provided  in  pertinent 
part:  "Nct.-.ing  contained  in  this  chapter  or  in  section  605  of  the  Communications 
Act" of  1924. ..shall  limit  the  constitutional  power  of  the  President. . .to  obtain 
foreign  intelligence  information  deemed  essential  for  the  security  of  the 
United  States."72 
Ostensibly,  this  language  seems  intended  to  rencve  any  doubts  that 
ccr.-jr.i'cations  companies,  or  NSA,  might  have  with  respect  to  whether  a  program 
such  as  SHAMROCK  might  constitute  a  violation  of  section  605.   But  if  this 
was  the  apparent  purpose  of  the  1968  amendments,  it  remained  unclear  whether 
they  had  this  legal  effect.   In  the  well-known  Keith  case,  for  example, 
decided  in  1972,  the  Supreme  Court  considered  the  language  in  chapter  119, 
cucted  abPve,  and  found  that  it  "confers  no  power",  but  instead* merely  provides 
that  trs  ret  shall  not  be  interpreted  to  limit  or  disturb  such  power  as  the 
Frs= ->;-:  -vj   »-ave  under  the  Constitution."73  So  if  chapter  119  of  title  18
-3- 
cid  -ot  authorize  the  President  to  do  anything,  as  the  Court  suggests,  one 
is  left  to  ponder  the  meaning  of  the  language  found  in  the  amended  version 
-.^im  eg-  "h'C."i  Sayi   incept  JS  dl'1.  'i'.'r  '  /e3  U.v  LNaO'i*'"  «"••»,  I  i  I  I  *• 
«-  -   c  • 
' ;.  .'^.el  r  :-s;r.  companies  shall  not  disclose  tj"-.:'c-.s  in  their  possession 
:=-;'jsis  =di£d).a 
This  apparent  incongruity  between  the  dicta  in  the  Keith  case  and  the 
statjtory  language  in  the  amended  section  605  has  not  been  resolved  by  the 
S-pre-e  Court.  In  United  States  v.  Butenko,  a  1974  case,  however,  the 
Court  of  -ppeals  for  the  Third  Circuit,  without  attempting  to  reconcile  the 
t„o,  appeared  to  resolve  the  issue  of  605's  applicability  in  favor  of  the 
ir.tell  iger.ee  corvnunity  by  holding:  "Section  605  of  the  Communications  Act 
neither  prohibits  the  President  from  gathering  foreign  intelligence  information 
r.zr   lir.it:  the  use  to  which  material  so. obtained  ray  be  put."'*  The  Supreme 
Cc-'t  den'ed  certiorari.7^  • 
V,'hile  the  Sutenko  case  involved  intercepts  of  telephone  conversations 
in  -.r.=  cc.rse  of  a  wiretap  which  v,as  exclusively  and  undisputedly  undertaken 
f-.r   r:re-::".  intelligence  purposes,  the  court's  exclusions  with  respect  to 
the  legal  effects  of  section  6C5  appear  broad  enough  to  insulate  foreign 
ir.tell  icence-cathering  procedures  of  all  types  from  prosecutions  under  : 
secticn  605. 
.  Eut  ss  far-reaching  as  the  Butenko  language  seems  to  be,  even  that 
decision  indicates  that  section  605  may  have  continued  vitality  vis-a-vis 
the  activities  of  intelligence  agencies  to  the  extent  that  such  activities 
c'E  w-.:'er-  =  ker.  for  other  than  foreign  intelligence  purposes.  The  Butenko 
c:-1-:  sta;ed  its  conclusion  in  the  following  .Tanner:  "The  surveillances. at 
i3S-=  here  were  conducted  solely  for  the  purpose  of  gathering  foreign 
ir.te'i  I  ioerce.  Therefore,  section  605  does  not  render  them,  in  and  a  of 
t'r  "selves,. .  .unlawful .  "
n 
.fl- 
it  ..vuic  i^r-Jr,  tnex  that  the  amended  version  of  section  605,  pven  when 
read  in  light  of  the  b<-oad  holding  in  Butenkq,  would  prohibit  the  sort  of 
activity  which  took  place  under  SHAMROCK.  By  .NSA's  own  account,  it  oSed 
ir.'or.-aticn  gleaned  from  the  SHAMROCK  "take"--frc-  the  early  1960's  until 
1973--for  lav;  enforce-ent  and  internal  security  purposes,  and  not  solely 
fcr  foreign  intelligence  purposes.®  Virtually  all  overseas  cables  of 
Americans  were  read  during  this  period,  not  sir.ply  those  which  had  obvious 
foreign  intelligence  value.79  Two  of  the  telegraph  companies,  for  their 
part,  turned  over  everything  to  NSA,  making  no  effort  to  select  messages 
v.hichcculd  reasonably  be  expected  to  contain  in  formation  of  foreign 
intelligence  value. 8°  Thus,  even  under  the  Butenko  standard,  it  is  apparent 
that  section  605  would  have  still  presented  a  serious  legal  difficulty  to 
SHAMROCK,  had  the  program  continued  to  operate  as  it  had  until  1973.
'   •  '  PART  II 
CURREfiT  NSA  OPERATION'S 
NSA  has  never  fully  explained  to  the  public  hov.  it  operates,  nnrl,  rivan  Tnr 
r. 
,   >f  ~t  i-K  v.nrV,  n»rv.apc  ir  ranotit  no  <;o_     Enough  h?.s  appealed  on  Jie  public 
record,  however,  and  been  conveyed  to  this  Committee,  to  indicate  what  its  functions 
are  and  how  it  carries  them  out.     Such  disclosures  ha\e  also  indicated  the  potential 
which.NSA  possesses  to  violate  the  privacy  of  individuals  on  an  ursnense  scale. 
The  following  discussion  focusses  upon  several  such  apparent  problem  areas. 
The  "Vacuum  Cleaner"  Method 
.. MSA's  work  necessarily  brings  it  in  possession  of  the  private  communications 
Ac 
of  Americans.     This  is  so  because  in  order  for^NSA  to  monitor  international  lines 
of  co— unications  for  foreign  intelligence, NSA  most  intercept  all  communications 
tTansnitted  over  such  links.     Former  NSA  Director  Lev  Allen,  Jr.,  explained  the 
problem  which  this  presents  to^NSA  to  the  Church  Comittee: 
";l]t  necessarily  occurs  that  some  circuits  which  are  known 
to  cany  foreign  communications  necessary  for  foreign  intelli-^ 
gence  -'ill  also  carry  personal  communications  between  U.S.  citizens, 
one  of  whom  is  at  a  foreign  location.     The  interception  of  com- 
munications, however  it  may  occur,  is  conducted  in  such  a  manner 
as  tc  rinimite  the  unwanted  messages.     Nevertheless,  many  unwanted 
cor— unications  are  potentially  available  for  selection.     Subsequent 
processing,  sorting  and  selecting  for  analysis,  is  conducted  in 
accordance  with  strict  procedures  to  insure  irmediate  and,  where 
possible,  automatic  rejection  of  inappropriate  messages.     The 
analysis  and  reporting  is  accomplished  only  for  those  messages 
which  meet  specified  conditions  and  requirements  for  foreign 
intelligence.'!/ 
Csneral  Allen's  statement,  apparently  made  to  assure  the  Church  Committee  and 
the  public,  indicates  the  enormous  potential  for  violation  of  personal  privacy  which 
NSA  possesses"^  *4i»'J™#i^^^B» 
First,  it  suggests  that^N'SA  is  able  to  monitor  virtually  every  international 
;«.t<co— ur.icaticn  entering  or  leaving  the  United  States.     At  present,   some   24   Trillion 
teleeriT.5  and  50  nillion  telex   (teletype)  messages  enter,  leave,  and  transit  the 
'J--:-c  States  annually,^  and  most  of  these  are  sent  or  received  by  private  citizens. !■ 
.'•!il liens  of  additional  messages  are  transmitted  over  leased  lines,     »««  international 
tele-hone  calls  are  r--—-3--- ■-'  --■•  yet  another  potential  source  of  intelligence. 
y>Z.\'-.    r.rr:"--r°  ,-r--->hn^-rr   .-m-  -  nrnrn. 
Seccr.dlv,    it  is  apparent  from  General  Allen's  statement   that  NSA,    in  the 
course  of   its    intelligence-gathering,  obtains  access  to  virtually  all   types  of 
ir_:-  —  :\:r-.      '."•. 's  "ear"   is   attuned  not   simply   to  -e-s?ares  with  political   and
rilitary  significance,  b:t  to  messages  concerned  v.ith  financial  and  economic 
cTairs,  aericultur--l  matters,  cultural  and  social  affairs,  as  well  as  purely 
personal  affairs.  The  information  which .NSA  makes  use  of,  therefore,  is  not 
United  by  the  nature  of  the  information  it  acquires. 
Finally,  General  Allen's  statement  describes  in  general  terms^NSA's 
c-.pability  to  select  those  messages  which  it  decides  meet  its  foreign  intelli- 
gence criteria..  Elaborating  further  on  this  capability,  Allen  noted:  "[t]he 
use  of  lists  of  words,  including  individual  najres,  subjects,  locations,  etc., 
has  long  been  one  of  the  methods  used  to  sort  out  information  of  foreign  intelli- 
gence  value  from  that  which  is  not  of  interest."-.  Presumably,  therefore,  NSA's 
selection  process  might  be  applied  to  sort  out  the  corrminications  of  a  particular 
government,  a  particular  company,  or  a  particular  individual.  NSA  could  presumably 
select  a  message  going  to  or  from  such  target  or  one  which  simply  mentioned  it. 
NSA  could  also  presumably  select  communications  about  a  particular  subject,  such 
as  plutoni'^i  or  oil.  , 
Ir.  shcrt,  NSA  possesses  an  extraordinary  capability  to  intercept  and  make 
intelligible  electronic  signals  which  carry  co— Jtnications.  No  other  agency  of  the 
federal  go\err_-=nt  undertakes  such  activity  on  such  an  immense  scale,  ^—f 
Targeting  for  "Foreign  Intelligence"  Requirements 
General  .Mien's  statement  to  the  Church  Conrnittee  alluded  to  the  fact  that 
NSA  selects  n.essages  on  the  basis  of  "foreign  intelligence"  requirements  supplied 
by  its  ccr.su-.srs  in  the  U.S.  intelligence  community.-   V.hat  may  constitute  "foreign 
intelligence",  however,  is  far  from  clear.  As  the  Qiurch  Committee  points  out: 
'"Foreign  intelligence'  is  an  ambiguous  term.  Its  meaning 
changes,  depending  upon  the  prevailing  needs  and  views  of 
policy-.akers,  and  the  current  world  situation.  The  intern; 
politics  of  a  nation  can  also  play  a  role  in  setting  require- 
ments for  foreign  intelligence;  the  domestic  economic  situation, 
an  ■jp;cring  pclitical  campaign,  and  internal  unrest  can  all 
affect  the  kind  of  foreign  intelligence  that  a  political  leader 
desires.  Thus,  the  definition  constantly  expands  and  contracts 
to  satisfy  t^e  changing  needs  of  American  policymakers  for 
inf  o  rr.  a  t  i  on .  "H' 
Indeed,  N'SA's  monitoring  the  international  cc-rrunications  of  U.S.  citizens 
involved  in  antiwar  activities  in  the  late  1960s  was  considered  to  have  been  part 
of  the  agency's  "foreign  intelligence"  mission.-   NSA  claims  tnat  it  no  longer 
targets  U.S.  citizens  by  name  for  any  purpose,-  but  it  concedes  that  this  Imitation 
J  Q   /  Ok  Q   I 
is   a  ratter  of  self-restraint,    rather   than  one  cf  la  v.-;/ or  practicality. *^>
■      •     „  *' 
.Apart  frcTi  even  this  sort  of  blatantly  improper  intrusion,  however,  it 
is  -ot  difficult  to  see  how  a  broad  range  of  activity  carried  out  with  foreign 
er.-.ities  by  Arorican  citizens,  especially  activities  of  an  economic  and  financial" 
/.cV.rc,  cojld  be  ^.5  "foreisr.  intelligence"  interest,  tr.4,   thus,  be  "iair  ga.r:e" 
fcr,N5A. 
It  ray  be  of  "foreign  intelligence"  interest,  for  example,  to  know  what  is 
bc-L-.g  said  be- een  U.S.  banks  and  their  large  Middle  Eastern  depositors,  whose 
actions  could  have  a  substantial  impact  on  the  U.S.  economy.  It  may  be  of 
"fcreign  intelligence"  interest  to  know  the  details  of  oil  transactions  between 
U.S.  importers  and  their  foreign  suppliers,  of  conrodities  sales  with  foreign 
governments,  of  nsgotiations  regarding  the  purchase  of  equipment  or  services  from 
African  concerns,  of  the  location  and  quantity  of  various  raw  materials,  or  the 
location  of  influential  U.S.  businessmen  traveling  in  foreign  countries,  or  of     . 
what  is  being  said  about  or  to  members  or  employees  of  the  U.S.  government.     — * 
Thus,  while  an  American  citizen  or  company  might  not  be  targeted  by  name, 
by  virtue  of  his  international  activities,  his  ccr^unications  might  be  selected 
by .NSA  on  the  basis  of  its  "foreign  intelligence"  criteria.  „NSA  has  not  denied 
that  it,  in  fact,  "selects"  U.S.  messages  of  this  nature;  and,  indeed,  several 
uncorroborated  resorts  have  reached  this  Committee  indicating  that  such  monitoring 
is  presently  ur.aerway.-~ 
Cc.-— .nications  Security  \io*^e>*<-l 
'  &. 
In  addition  to  its  foreign  intelligence  mission,  NSA  is  charged  with  the 
—  rrection  ar.d  security  of  U.S.  government  cormunications. —      NSA  carries  out 
this  function  primarily  by  developing  codes  and  encryption  devices  to  ensure  that 
gcverr-ental  ccr.-j.iications  cannot  be  read  by  foreign  intelligence-gathering  agencies. 
Recently,  however,  press  reports  have  stated  that^NSA  has  carried  out  its 
ccrr-^nicaticns   security  function  by  monitoring  purely  domestic  communications 
lL-J-s  to  de:er-_L-.e  what   information,    if  any,   is  being  gleaned  from  American  com- 
.-:_-:  rations  by  Soviet   intercepts  within  the  United  States.i^ 
^NSA  has  not  publicly  denied  these  reports,  nor  has  it  sought  to  explain  them. — 
Wr.zr.  asked  about  such  reports,   the  current  NSA  Director,  Vice  Admiral  Bobby  R.   Inman, 
tin 
only  repeated/.SVs  claim  that  "no  U.S.   citizen  is  now  targeted  by  the  NSA  m  the 
Ur.::ei  States  or  abroad".-—''     .As  heretofore  noted,  however,   the  fact  that  NSA  does 
r.r~    tzr---et  U.S.   citizens  bv  name,  cocs  not  necessarily  -.can  that  NSA  does  not   Lnter- 
-_  <-.    ic.tt 
cor.— -tnicatjcni of  U.S.   ci:i:t.-.s    *.c  c.-.:ry  out   its  work.      If
m 
IK3E3T  -  PACE  22 
USA  representatives  have  repeatedly  given  the  Consul  ttee  Informal  oral 
assurances  that  internal  NSA  directives  exist  to  prevent  the  misuse  of  inter* 
And 
cepted  telecoaaunications  that  are  not  "foreign-intelligence"  related,  aoeaoaats 
Gen.  Allen  has  declared:  "The  executive  directives  applying  to  these  efforts       J 
state:  C»)  The  purpose  of  the  signals  intelligence  activities  of  the  National       .' 
Security  Agency  is  to  obtain  foreign  intelligence  from  foreign  communi cations      |J 
or  foreign  electronic  signals,  (b)  Foreign  communications  exclude  communications 
between  or  among  citizens  or  entities. "  zhzht 
Unfortunately,  these  statements  shed  little  light  on  what  the  USA  actually 
does  vith  comsuni cations  of  American  citizens  which  it  might  acquire.  KB30Q3KX 
ttyfaf  any  related  internal  USA  guidelines,  no  matter  how  tightly  drawn  they 
say  be  to  prevent  potential  abuses,  are  so  closely  held  that  any  violations 
will  likely  be  CWSMMT  undetected  by  Congress  or  any  other  authority  outside 
the  KSA,  since  the  only  persons  having  access  to  these  guidelines  outside  the 
NSA  are  a  selected  group  within  the  Executive  Branch  and  a  handful  of  "need- 
to-kaow"  Members  and  staff  within  the  Congress,  all  of  whose  access  to  information 
Furthermore, 
i6  based  on  the  condition  they  will  not  disclose  it.  KSBS&BESf-  briefings  on 
high-priority  or  potentially  embarrassing  intelligence  matters  by  federal 
intelligence  matters  given  to  these  "need-to-know"  individuals  in  Congress,  are 
Ql  a/   Moreover 
often  vague  and  incomplete. 2=-=?     JKSQi&SSflGKS  it  is  virtually  impossible  for 
selected  members  of  the 
any  person  or  Agency  outside/lnteH.gence  community  to  ascertain  if  the  guide-      i 
lines  are,  is  practice,  actually  followed.  The  guidelines,  therefore,  being 
iept  very  secret,  offer  little  assurance  tothe  American  people.  Not  only  are 
they  unknown,  but  no  public  evaluation  of  their  effectiveness  i6  presently 
permitted.   In  practice,  the  "system"  is  ultimately  based  on  the  rule  of  very 
few  men  and  not  on  the  rule  of  law.
dor-cstic  co-Tsunications  are  being  perused  by  N'SA  with  the  idea  of  discovering 
what  the  Soviets  are  able  to  obtain  from  U.S.  communications,  NSA's  communications 
>.rc^r:ct  ccu.^  conceivably  be  of  maninoth  proportions. 
Jan.*  V 
— —  UnCCin'non  Secrecy 
To  understar.d^NSA's  reluctance  to  provide  greater  public  explanation  of 
the  manner  in  which  it  intercepts  and  handles  U.S.  communications,  one  must 
understand  the  unccrmon  secrecy  which  has  traditionally  enshrouded  its  existence 
and  functions.     The  Agency  was  created  by  classified  Executive  order  in  1952,  and 
its  functions  were  assigned  by  classified  Executive  directives  thereafter.     Prior 
to  1962,  its  existence  was  not  acknowledged  in  the  U.S.  Government  Manual.     It 
was  not  until  1975,  twenty-three  years  after  its  creation,  that  any  Director 
of  the  agency  ever  appeared  before  a  congressional  committee  in  public  session. 
•"  NSA  has  furthermore  refused  to  provide  evidence  in  judicial  proceedings 
on  the  grounds  that  such  public  disclosures  could  lead  to  a  compromise  of  its 
"sources  and  methods".   .The  Church  Committee  reported  that  at  least  one  criminal 
prosecution  was  cropped  by  the  Justice  Department  because  of^NSA's  refusal  to 
discjss  such  intercepts  in  a  public  forum.i£/      Attorney  General  Levi  admitted 
to  the  Church  Co— ittee  that  even  he  was  nof  privileged  to  NSA's  secrets: 
"Attorney  General  Levi:   ...   [A]t  this  toe  I  would  have  to 
say  that  I  do  not  know  what  [NSA's]  procedures  are.     I  do  not 
know-  what  the  possibilities  are.     I  do  not  know  enough  about 
the  minimization  procedures  [for  the  interception  and  use  of 
U.S.   corrrrjnications]    ... 
"Senator  Church:     Vnyh  you  have  that  information,  you  really 
do  not  have  the  foggiest  idea  of  whether  what  they  [N'SA]   are  doing 
is  legal  or  illegal,  constitutional  or  unconstitutional? 
"Attorney  General  Levi:   I  would  be  glad  to  accept  the  pro- 
tective shape  o£  that  proposed  answer.     I  suppose  I  have  a  foggy 
idea.*l7/ 
It  has  fir.cliy  been  this  Committee's  experience  during  its  independent 
investigation  of  the  SHAMROCK  program,   that  even  after  the  Church  Committee 
had   released  its  public  report  exposing  in  great  detail  the  nature  of  the  program,^ 
NSA  steadfastly  refused  to  declassify  any  of  the  documents  regarding  the  program 
for  requested  purposes  of  this  Committee's  work. 
^1.    N'SA  contends  that,  since  it  is  concerned  solely  with  gathering  "foreign 
intelligence",  neither  the  restrictions  contained  in  the  uiretap  statute   (18  U.S.C. 
2510,   et  sea.)   or   in  section  605  of  the  Ccrr uni  cat  ions  Act  of  1934  affect   its 
op:-;  i  t  ions. — 
RESTRICTIONS  UPON, NSA'S  CURRENT  OPERATIONS
COMSEC  Is  also  involved  In  another  area  of  written  telecoasunie&t-lons  of 
V.S.  :i wizens  that  are  not  national  security  related,  throush  the  recently 
tsio-jtsd  Data  Encryption  Standard.  Data  telecommunications,  like  telephone 
:ci=unicatiou3,  can  be  intercepted  and  read.  To  protect  the  Integrity  of 
these  communications,  the  Secretary  of  Consnerce,  on  November  23,  1976, 
approved  asttaBNM«B*aMHBsapp«iHa»  the  Data  Encryption  Standard  established 
by  the  National  Bnreao  of  Standards,  which  had  been  largely  developed  through 
^a  vith  the  assistance  of  the  4B  NSA.  In  this  standard,  messages  to  be 
transmitted  can  be  encrypted  into  56  binary  digits  ("bits"),  and  decrypted 
by  the  recipient.  However,  many  critics  of  this  standard  maintain  that  the 
56  bit  level  allows  the  NSA  to  penetrate  it,  and  circumstantial  evidence 
developed 
suggests  that  prior  to  the  NSA's  involvement,  the  standard  being  «•«••«■  fcy 
<35-A 
ISM  was  set  at  a  much  higher  level. 
95-A.  See,  for  example,  a  November  18,  1976  Bell  laboratories  memorandum 
(copy  in  subcommittee  files),  which  characterizes  the  Data  Encryption 
Standard  as  having  "little  safety  margin"  and  urges  that  it  be 
strengthened  to  6k  or  128  bits.  This  memorandum  also  notes  that  a 
1971  IBM  publication  describes  the  Data  Encryption  Standard's  planned, 
but  never  implemented,  predecessar  as  utilizing  128  bits. 
The  senior  official  of  a  giant  U.S.  aultiaational  financial  institution, 
cited  in  footnote  <„0- A,  ori.-.'d  t':-ji:  "-.is  company  is  only  concerned  with 
interception  by  private  entities,  and  it  protects  ltsel.*  from  this 
threat  by  encrypting  its  telecom— onl cations  at  a  level  which  makes  it 
^  T-.g  wg p-: v.^p  *-.->  non-governmental  third  parties,  but  not  inaccessible 
to  the  NSA.  'QMBMQBRMttfe,  he  added,  haS^not  made  a  higher  encryption 
operational  because  w*  would  "run  into  a  political  morass  with  the 
Office  of  Munitions  Control"  in  Washingtontvswaaa«s*»Ma*aaMB*lMMM|B 
An  official  of  the  State  Department's  Office  of  Munitions  Control  - 
which  works  in  tandem  with  the  Department  of  Defense  -  has  advised  the 
subcecal ttee  that  for  export  use,  "anything  above  56  bits  you  have  to 
ccoe  to  us,"  adding  that  one  large  U.S.  corporation  wonts  to  use  more 
bits  in  several  overseas  situations  and  in  some  cases  ve  are  going  to 
grant  permission. "  (Telephone  interview  «assjBssasMMns»  with  Mr. 
Clyde  Brant,  January  5,  1977).
IKSEST  "3"  -  P.  83 
The  NSA  has  maintained  this  position,  notwithstanding  its  Operation. 
SHAMROCK  represented  an  invasion  of  privacy  of  American  citizens  vastly  greater 
than  any  known  FBI  or  CIA  mail  intercept  program,  and  its  watch  list  activities 
vis-a-vis  American  citizens  were  deemed  by  former  Attorney  General  Elliot 
Richardson  to  raise  "a  number  of  serious  legal  questions  which  have  yet  to  be 
resolved.  "97-A  (Was  Fink  FN  85)'  Tbe  NSA  continues  to  function  under  a  mantle 
of  secrecy.  It  has  not  explained,  and  presumably  does  not  intend  to  explain, 
itself  to  the  American  people.  It  simply  asks  the  public  und  the  Congress 
to  "trust  us." 
The  Cccaittee  does  not  believe  that  such  tru6t  is  justified,  and  finds 
it  regrettable  that  a  shroud  of  secrecy,  as  tightly  dravn  as  ever,  continues 
to  env-lcp  all  the  activities  of  the  NSA.  The  Committee  further  believes 
that  even  if  the  NSA  did  not  pose  a  significant  threat  to  the  privacy  of 
American  citizens,  end  if  it  had  not  abused  its  powers  in  this  regard,  that 
much  of  the  secrecy  surrounding  its  operations  is  obsessive  and  unfounded. 
The  fact  that  it  does  pose  a  significant  threat  to  the  privacy  of  American 
citizens,  and  has  a  record  of  violating  it  for  more  than  thirty  years, 
strengthens  the  Cqtst.1  ttee '  s  belief  that  the  NSA  should  explain  to  the  public 
what  it  does  with  its  intercepted  telecomnuni cations,  and  should  became  publicly 
accountable  for  its  activities  that  effect  Americans. 
The  Conmittee  finds  that  much  of  the  basis  for  this  secrecy  is  historical 
habit,  in  which  inte2iigence  agencies  traditionally  attempt  to  keep  everything 
-  even,  ohen  possible,  their  very  existence  -  hidden.  *l^»»*i«a*HW^**s 
The  NSA  has  vigorously  fought  disclosures  which,  in  the  Committee's  view, 
will  not  endanger  the  national  security.  Thought  the  NSA  acknowledges  that  it 
monitors  telecomnuni cations  or  "foreign  intelligence  Interest,"  and  it  is 
generally  accepted  in  diplorr.at.ic  and  intelligence  circles  that  the  Agency  monitor: 
I 
I
INSERT  "3"  -  P.  23  (cont'd) 
the  teieconsunications  of  most  foreign  governments,  the  NSA,  strongly 
reinforced  by  the  White  House  and  the  Defense  and  Justice  Departments, 
considers  it  unthinkable,  for  example,  to  identify  even  by  categroies, 
countries  in  which  it  has  an  intelligence  interest T^"1    This  attitude 
is  maintained  even  though  Herbert  Yardley  had,  in  1931,  listed  21  countries, 
including  some  of  our  closest  allies,  whose  codes  were  breaking  50  years  ago, 
in  peace  time.  Foreign  governments  today  can  hardly  believe  the  NSA  is 
currently  doing  any  less,  in  view  of  the  Cold  War  and  the  ease  with  which 
modem  technology  allows  the  NSA  and  counterpart  organizations  of  other 
governments  -  to  acquire  message  traffic.  97-3 
e  CIA,  has 
insane  f ran 
conceivable 
97.3       Several  knowledgeable  sources  have  advised  the  Cczzzlt~.es  ■chat   the  S3A, 
vai^s  aoi*  to  collect  virtually  all  teiecosEunicatios,  as  a  practical 
Batter  is  unable  fto  read  the  sensitive  traffic  of  developed  nations. 
This  results  frca  advances  la  ccssputer  technology,  which  have  enabled 
the  codehakers  to  outstrip  the  codefcreakers.     This  position  was  CfiS 
publicly  expressed  by  David  K&ha,   in  the  New  York  Tines,  %  June  22,  1973: 
V
-5- 
Ir.sofar  as  the   interception  and  use  of  the  communications  of  U.S.   citizens 
ari  cc.-.cemed,  NSA  is  restricted  only  b>  classified  F'".delines  established  by  the 
.-ttcmey  General  in  1975.     These  guidelines  have  never  been  made  public  nor 
cfficially  released  in  sanitized  form.     While  they  have  been  alluded  to  in  various 
;.:'.:c  ccrr.ents  of  agency  officials,—'  and  in  a  report  made  to  this  Conmittee 
':;••  -Jr.*  Ce.-eral  Accounting  Office',—-'   these  consents  regarding  the  guidelines  have 
•:::.  general  sn<i  have  not  explained  how  NSA  systematically  selects  and  treats  the 
cc—ur.ications  of  U.S.  citizens  and  businesses.  |»GAO,  for  example,  reported  to  the 
C:.— ittee  that.  NSA  "takes  great  pains  to  remove  the  identity  of  a  U.S.  person  from 
£.-.;-•  foreign  intelligence  report",  but  in  the  course  of  sampling  such  reports, 
G-.O  auditors  found  "three  instances  in  which  the  mention  of  eo.uiproent  might  identify 
21/   ** 
a  U.S.  manufacturer  
to  a  knowledgeable  
person".—'     
GAO  suggests,  
on  the  one  hand, 
that  NSA  deletes  the  names  of  U.S.  citizens  from  communications  which  it  uses  to 
ft 
c:~ile  its  foreign  intelligence  reports,  but  that  it  leaves  intact  certain  infor- 
r-i'icn  frrra  v.hich  identification  of  such  citizens  could  be  made. 
CONCLUSIONS 
At  the  cutset,  this  Co-mittee  realizes  that  the  newly-created  intelli- 
ri.-.ce  oversight  committees  of  the  Congress  have  primary  jurisdiction  over  the  foreign 
intelligence  activities  of  .NSA.     The  Committee  is  equally  aware  that  it  may  not 
r.zve  sufficient  information  in  its  possession  regarding  these  activities  to  make 
I** 
L-.for~.ed  judgments  regarding  the  controls  that  should  be  placed  upon.N'SA.     Never- 
z'r.t'.iss,   in  the  course  of  this  Cc-nittee's  investigation  of  the  telegram  inter- 
cj'cc:~r.  crcgram,  in  the  work  of  the  Giurch  Ccmittee,  and  in  what  has  appeared 
elsr-here  on  the  public  record,  it  has  become  apparent  that  the  activities  of  H- 
NSA  have  had,  and  probably  continue  to  have,  an  adverse  impact  upon  the  rights 
isi  rrivacy  o£  American  citizens.     This  does  concern  the  Committee. 
Although  .oA  no  longer  sends   its  messengers  to  the  offices  of  international 
-.r'.eira-h  carriers   in  the  early  hours  of  the  morning,  as  it  did  while  SHAMROCK 
-ls  cteraticnal,   it  nevertheless  intercepts  international  ccrmunications  just  as 
effectively  and  just  as  indiscriminately.     In  fact,  the  international  communications 
of   ^.-rricans  are  presumably  being   intercepted  today  in  a  significantly  greater 
:-.:■-■>  thsn  was  ever  available  under  SrlA'-SOCK.     Moreover,   the  ability  of  NSA  to 
:.-'.  such  —eat  volumes  of  material  has  miouttedly   improved  with  advances   in 
::-/■::   -ecJ-.oJcgy.
Ifi 
-6- 
fa  NSA  concedes  that  it  must  unavoidably  acquire  many  communications  of 
A-erican  citi:ens  but  it  will  not  say  what  it  does  with  those  communications. 
\r  .*>SA  further  concedes  that  some  of  the  communications  of  American  citizens. 
..if  be  of  "fcreign  intelligence"  value  but  it  ■..ill  not  say  -..hat  it  docs  with  these    l 
co~-.-iicatio.ns. 
ffji  NSA  also  says  that  it  intercepts  only  cc-rrjnications  which  have  one  foreign 
terminal,  but  it  does  not  explain  or  deny  press  reports  that  it  monitors  domestic 
long-distance  calls  to  determine  what  the  Soviets  obtain  from  U.S.  domestic  com- 
r.unicaticns. 
^  NSA  says  that  it  operates  under  strict  guidelines  established  by  the 
Attorney  C:-r.eral  but  it  refuses  to  say  what  those  guidelines  are  and  refuses  to 
make  a  public  assessment  of  their  effectiveness. 
All  of  this  leaves  the  public  to  wonder  if  their  comnujjiicaticns  are  being 
silently  intercepted  and  used  by  the  government  without  their  knowledge.     Apart 
from  a  furcarsntal  concern  for  the  privacy  of  one's  co^unications,  these  practices 
jr.avcicacly  bring  other  possibilities  to  mind.     Ccild  the  government  be  using 
information  gleaned  from  such  communications  to  influence  or  disrupt  international 
cusiress  transactions?     Could  it  provide^NSA  or  Executive  branch  employees  with 
"insider"  information  regarding  investments  or  information  which  might  otherwise 
give  the.-  a  competitive  advantage  in  some  economic  venture?     Could  such  information 
be  used  to  "blackmail"  or  threaten  some  individual  or  business?     Could  this  infor- 
mation be  turned  over  to  a  federal  agency,  such  as  the  Securities  and  Exchange 
Cc—issi-rn  or  Conr-erce  Department,  in  pursuit  of  its  administrative  responsibilities? 
V.'ojld  information  which  suggested  that  a  crime  had  taken  place  or  was  about  to  take 
place  be  turned  over  to  a  law  enforcement  agency?    Would  information  relating  to  a 
potential  civil  disturbance  or  forthcoming  political  rally  be  turned  over?     Would 
i.-fcrr.aticn  regarding  the  future  of  certain  legislation  be  passed  on  to  the  ap- 
zrcrriate  federal  agency?     Would  information  which  suggested  some  person  may  be  a 
security  risk  be  turned  over  to  the  appropriate  federal  agency?     Could  infor- 
mation under  any  circumstances  be  turned  over  to  a  private  employer?     Could  such 
ir.fcrr.ati  en  ever  be  used  to  dsny  a  federal  benefit? 
It   is   the  opinion  of  the  Committee  that,  notwithstanding  the   important  and 
«£.-.=  it i\ e   ..ork  undertaken  by  NSA,  democratic  gcvernment  demands  greater  public 
'  b> 
a-:c:-r.ta;:iity   for  an  agency  with   the  potential  vhich  NSA  has  to  violate  the
•  -7- 
ri~'r.'.s   cf  .^-■erican  citizens.  At  the  very  least,  NSA  should  maVe  public  the 
A 
.-.t*'  —  ty  General's  guidelines  which  govern  its  acquisition  ?nd  handling  of  the 
corral icatiens  of  U.S.   citizens,  and  should  op;n  such  restrictions  to  the 
invigorating  effects  of  public  debate.     If  the  guidelines  as  they  are  now 
written  cn.-.-.ot  be  disclosed  because  of  the  intelligence  methods  which  they 
raight  reveal,   the  Committee  encourages  that  they  be  released  in  a  form  which 
does  not  cc-prc^ise  such  techniques. 
Over  the  long  term,  the  Committee  concludes  that  Congress  should  adopt 
statutory  controls  to  govern  the  activities  of^NSA,  at  least  insofar  as  they 
<** 
impact  upor.  the  communications  of  American  citizens.     At  present ,iNSA  contends 
that  lavs  gzverr.ing  wiretapping  and  radio  interceptiens  are  not  applicable  to 
its  operations.     It  has  no  statutory  charter,  nor  is  its  director  even  subject 
to  confirmation  by  the  Senate.     To  this  point  at  least,  even  the  recently-created 
congressional  oversight  committees  have  provided  the  public  with  no  greater  insight. 
In  view  of  the  Agency's,  considerable  potential  for  violations  of  the 
privacy  of  .-.-.ericans,  however,  and  the  doubts  already  cast  upon  the  legitimacy 
of  its  current  practices,   the  Committee  concludes  that  NSA's  limited  accountability 
does  r.ot  serve  the  public's   interest.     Neither  the  Congress  nor  the  public  can  carry. 
out  their  constitutional  responsibilities  in  a  vacuin.     Both  need  information, 
v.hen  the  activities  of  an  Executive  agency  come  into  apparent  conflict  with  the 
rights  and  privacy  of  the  individual,   it  is  essential  to  good  government  that  the 
public  be  informed  cf  the  nature  and  extent  of  that  conflict.     We  should  not  be  left 
to  .cder  \--.etrer  ^e  are  abiding  the  activities  of  NSA  at  the  expense  of  the 
Constitution.
FOOTNOTES 
1/      The  House  Select  Committee  on  Intelligence  (hereafter  cited  as  Pike  tan- 
suttee)  noted  that  the  total  annual  intelligence  community  budget  v«»""nmbre  than 
$10  billion;"  that  the  NSA  "has  one  of  the  largest  budgets  in  the  intelligence 
co'iimnuty;"  that  "roughly  20  percent  of  the  National  Security  Agency's  budget 
is  not  added  into  the  intelligence  budget;"  that  "the  costs  given  Congress 
for  military  intelligence  [much  of  which  would  be  applicable  to  NSA's  functions] 
do  not  include  expenditures  for  tactical  military  intelligence,  which  would 
approximately  double  intelligence  budgets  for  the  three  military  services." 
(Pike  Committee  Report,  Village  Voice.  February  16,  1976,  p.  72.) 
This  appears  to  conflict  with  a  CIA  briefing  given  to  President-elect  Junny  Carter, 
that  "the  military  branches  of  the  intelligence  community  receive  more  than 
80  percent  of  the  roughly  $4  billion  budgeted  annually  for  all  United  States 
intelligence  efforts,  principally  for  the  photo  reconnaissance  and  radio  signals 
interception  technology  used  to  monitor  potential  adversaries."  (David  Binder, 
"U.S.  Intelligence  Officials  Apprehensive  of  New  Shake-Ups  Under  Carter,"  New 
York  Times,  December  13,  1976,  p.  43.  Emphasis  added.) 
2/  David  Kahn,  author  of  The  Codebreakers ,  a  •  definitive  work  on  cryptology, 
describes  the  NSA  as  "the  largest  and  most  secretive  of  all  American  intelli- 
gence organs,"  and  estimates  that  on  its  own  it  "spends  about  $1  billion  a  year." 
But,  he  adds,  "the  agency  also  disposes  of  about  80,000  servicemen  and  civilians 
around  the  world,  who  serve  in  the  cryptologic  agencies  of  the  Army,  Navy,  and 
Air  Force  [that]  stand  under  NSA  control,  and  if  these  agencies  and  other  col- 
lateral costs  are  included,  the  total  spent  could  well  amount  to  $15  billion." 
(Source:  David  Kahn,  "Big  Ear  of  Big  Brother",  New  York  Times  Magazine.  May  16. 
1976.)    fi  
Tad  S2ulc  describes  NSA  as  "the  largest,  most  important,  most  expensive, 
and  secret  member  of  America's  'intelligence  community,*"  which  "costs  over 
S10  billion  a  year  and  employs  some  120,003  persons  around  the  world."  Ac- 
cording to  Szulc,  "a  vast  array  of  specialized  military  agencies  such  as  the 
ASA  (Army  Security  Agency) ,  the  USAFSS  (United  States  Air  Force  Security  Service) , 
and  the  NSG  (Naval  Security  Group)  .  .  .  account  for  the  vast  majority  of  the 
NSA's  military  and  civilian  employees."  Approximately  90  percent  work  abroad. 
(Tad  Szulc,  "The  NSA  -  America's  $10  Billion  Frankenstein",  Penthouse,  November 
1975.)    
3/  "Meet  the  Press"  interview,  August  17,  1975. 
•4/  See  footnote  2. 
5/  For  "Contxmications  Intelligence"  and  "Communications  Intelligence  Activities" 
official  definitions,  see  p. 
6/  Frank  Van  Riper,  "Find  U.S.  Agents  Spy  on  Embassies'  Cables,"  New  York 
Daily  News,  July  22,  1975,  p.  2    
V    Subcommittee  Hearings,  pp,  2-3. 
8/  Id.,  p.  62. 
9/  Church  Committee  Hearings,  Vol.  5,  pp.  57-60. 
10/  Subsequently  amended  to  1945  (see  p.   ). 
11/  Subcommittee  Hearings,  p.  56. 
12/  Id.,  pp.  58-59. 
13/  Id.,  p.  99. 
14/  Id.,  pp.  125-26. 
15/  Id.,  p.  240,  et  sea.
16/    Airy  Security  Agency,  Historical  Background  of  the  Signal  Security        . 
ITol.  Ill,  p.  74;  prepared  under  the  Direction  of  the  Assistant  Chief  ox  Staff. 
G-2,  April  12,  1946. 
17/    Id- 
18/    David  Kahn,  The  Codcbreakers  (New  York,  The  Macmillan  Conpany,  1967),  p.  344. 
19/    Herbert  0.  Yardley,  The  American  Black  Chancer  (Indianapolis,  The  Bobbs- 
FterTill  Company,  1931),  p.  240. 
20/    Axry  Security  Agency,  pj>.  cit. ,  p.  48:  "In  older  to  conceal  the  true  nature 
o?  its  activity,  the  office  was  called  'Code  Compilation  Company' ,  a  cover  name 
for  MI -8  but  the  real  name  of  an  incorporated  business  firm  established  by  Yardley 
and  Charles  J.  Mendelsohn,  partners  in  this  venture.    This  firm  produced  and  sold 
in  fairly  large  quantity,  a  code  called  the  universal  Trade  Code." 
21/    Yardley,  op  cit.,  p.  370. 
22/    Quoted  in  Kahn,  op_.  cit.,  p.  360*.     (In  this  regard,  Secretary  Stimson  also 
cads  his  well-known  declaration,  "Gentlemen  do  not  read  each  other's  mail.") 
23/    Yardley,  op_.  cit.,  p.  332.       (This  forty-five  year  old  list  is  not  dis- 
similar to  one  possessed  by  Western  Union  International  which,  when  subpenaed 
by  this  Conmittee  on  February  4,  1976,  prompted  President  Ford  to  attempt  to 
extend  the  so-called  "executive  privilege"  doctrine  to  a  private  corporation. 
See  p.        below.) 
24/    Id. 
25/    Yardley,  oo.  cit.,  pp.  240-41.  ......  -  -     - 
26/    Cop;-*  in  possession  of  subcommittee. 
27_/    Postal  Telegraph,  the  holding  company  controlling  Commercial  Cable,  merged 
with  Western  Union  in  1943.     (Of  the  three  U.S.  companies  now  dominating  the 
international  telegraph  business  in  and  out  of  this  country  --  ITT  World  Communi- 
cations, RCA  Global  Conmunications ,  and  Western  Union  International,  an  independent 
spin-off  of  Western  Union  --  two  were  only  minimally  in  the  business  in  the.  1920's, 
and  one  did  not  exist.) 
28/    Yardley,  0£.  cit. ,  p.   342.  \ 
2S_/  Amy  Security  Agency,  op_.  cit.,  pp.  73-74. 
30/  This  section  is  largely  based  on  Army  Security  Agency,  op_.  cit. ,  pp.  74-77. 
31/  "An  act  to  regulate  radio  communication,"  August  13,  1912,  62nd  Cong.,  2d 
Sess.,  Ch.  287,  Statutes  at  Large,  Vol.  37,  Part  I,  p.  307. 
32/  "An  act  for  the  regulation  of  radio  comrounication,"  February  23,  1927. 
6Sth  Cong-.,  2d  Sess.,  Ch.  189,  Statutes  at  Large,  Vol.  44,  Part  II,  Sec.  27, 
p.  1172. 
33_/  Amy  Security  Agency,  op_.  cit.,  p.  77. 
■H'  Ne>  York  Times,  June  2,  1931;  p.  18. 
35/  New  York  Herald  Tribune,  June  9,  1931;  p. 
56/  New  York  Times,  June  2,  1931;  op_  cit. 
37/  Yardley  described  his  receiving  the  award,  as  follows: 
"In  awarding  you  the  D.S.M. ,"  the  General  began  again,  *Ve 
find  it  difficult  to  draft  a  citation  that  will  describe  your 
distinguished  services,  and  at  the  same  time  keep  the  nature 
of  your  activities  secret,  for  of  course  all  citations  are  pub- 
lished. Have  you  any  suggestions?" 
"I  naturally  have  never' given  the  matter  any  thought."
I M3EBT3    —    FOOT.NfOT£S 
5-A/  "Written,"  as  interpreted  in  this  report,  includes  cablegraas,  radiograms, 
telex  transaissions,  conputer  transmissions  (such  as  used  by  banks  for 
financial. transfers),  facsimile  and  video  transaissions,  telenetry, 
and  switch  and  signal  and  other  non-oral  transxissioas. 
40/A/  The  Nav7  also  had  its  own  crrtologic  section.  Seo  Saba,  op.  cit.t 
pp.  386-8S.
-3- 
37/  [footnote  continued] 
"Well,  we'll  draft  something,  so  that  your  success. s  will 
not  be  revealed.  The  only  regret  is  that  the  real  reason  for 
confirming  the  D.S.M.  can  not  be  given  .  .  .  ." 
I  was  to  appear  before  Secretary  of  War  Keeks  at  two  P.M. 
to  receive  the  D.S.M.  On  the  way  to  his  office  I  asked  General 
HeintzeljTvan  if  Secretary  Weeks  really  knew  why  I  was  being 
"  awarded  the"D.S.M„  He  assured  roe  that  tfie'fcecretary~was  one 
•  of  the  most  ardent  supporters  of  the  Black  Chamber. 
1  felt  rather  silly  standing  before  the  Secretary  of  War, 
as  he  read  my  citation  that  seemed  to  have  very  little  to  do 
with  the  breaking  of  codes  of  foreign  governments,  but  I  was 
relieved  when  he  pinned  the  medal  on  my  lapel,  for  with  a 
twinkle  in  his  eye  he  winked  at  me.  The  wink  pleased  me 
immensely.  (Yardley,  pj>.  cit. ,  pp.  322-23.) 
3S/  Array  Security  Agency,  op_.  cit.  p.  177. 
_3jV  New  York  Times,  February  21,  -1933,  p.  3. 
40/  Prinarily  from  Army  Security  Agency,  op.  cit.,  pp.  176-80. 
Mo-nf   _ —          
___T_      
41/  ITT  Communications  is  now  ITT  World  Conmunications.  RCA  Communications  is 
now  RCA  Global  Communications.  In  1963,  Western  Union's  international  operations 
were  transferred  to  Western  Union  International,  which  was  established  as  an 
independent  company.  Between  1971-1974,  these  three  companies  carried  94.9 
percent  of  all  international  telegraph  messages  in  and  out  of  the  U.S.  [Source: 
FCC  letter  to  subcommittee,  January  28,  1976). 
42/In  March  1976,  when  representatives  of  the  three  major  American  telegTaph 
companies  engaged  in  international  communications  testified  before  the  sub- 
cocirdttee,  the  subcommittee  believed  that  the  government  had  not  commenced  its 
post  World  War  II  interception  of  private  messages  until  1947.  This  belief  was 
based  on  a  report  issued  by  the  Church  Committee  on  November  6,  1975,  at  which 
time  Sen.  Church  stated:  -   -      ^   ^ 
At  meetings  with  Secretary  of  Defense  James  Forrestal  in 
1947,  representatives  of  the  three  companies  were  assured 
that  if  they  cooperated  with  the  Government  in  this  program, 
they  would  suffer  no  criminal  liability  and  no  public  exposure, 
at  least  as  long  as  the  current  administration  was  in  office. 
They  were  told  that  such  participation  was  in  the  highest 
interests  of  national  security. 
Shortly  after  the  subcommittee's  torch  1976  hearings,  a  subconznittee  staff  inquiry 
led  to  records  being  uncovered  in  the  Archives  which  indicated  that  the  Array 
Security  Agency  had,  in  fact,  taken  steps  to  initiate  the  interception  program 
as  soon  as  the  war  ended.  Prior  to  making  these  records  available  to  the  sub- 
committee, Archives  sought  Department  of  Defense  permission;  that  permission  was 
refused.  The  Department  of  Defense  then  advised  the  Church  Qjnmittee  of   
* 
the  existence  of  these  documents,  and  allowed  a  staff  member  of 
that  co__oittee  to  inspect  (but  not  copy)_them.  This  transpired  just  prior  to  the 
issuance,  in  May  1976,  of  the  Church  Committee  staff  "  ~\ 
report  on  "National  Security  Agency  Surveillance  Affecting  Americans,"  which 
  was  amended  accordingly. 
£5/  Letter  from  Intelligence  Officer  of  Army  Signal  Security  Agency  to  Com-____ 
randing  General,  August  24,  1945,  quoted  in  Church  Committee' Final  Report,       I 
Book  III,  pp.  767-66.  ~" 
  \ 
44/   Id.,  p.  769. 
45/  Subcommittee  Hearings,  p.  212. 
46/   Id.
-4- 
47/  Mr.  Sparks,  who  was  the  most  forthright  of  all  telegraph  compai.)-  witnesses, 
testified  that  within  RCA  he  was  the  sole  authority  for  nraing  all  messages 
available  to  government  agents,  and  that  this  arrangement  began  in  1947.  The 
Conmittee  has  no  reason  to  doubt  the  accuracy  of  Mr.  Spark's  testimony  inso- 
far as  he  was  aware  of  the  facts.  The  1947  date,  as  he  recalled  it,  was  pre- 
sumably a  result  of  that  being  the  program's  generally  accepted  date  of  commence- 
ment,  at  the  time  of  his  testimony.  His  belief  that  he  was  responsible  for 
making  the  arrangements  with  the  government  apparently  is  based  on  initiatives 
made  to  him  by  Army  Security  Agency  representatives,  subsequent  to  arrangements 
unknown  to  him  being  made  with  his  superiors.  (See  October  9,  1945  letter  from 
RCA  Vice-President  W.  H.  Barsby  to  Brig.  General  W.  Preston  Corderman,  in  Sub- 
committee Hearings,  p.  208).  Mr.  Sparks  apparently  never  knew  about  the  1947 
meeting  with  Secretary  Forrestal;  Spark's  superior,  Gen.  Harry  C.  Ingles,  then 
president  of  RCA  Communications,  represented  the  company. 
The  ITT  delegation  to  the  1947  Forrestal  meeting  was  led  by  ITT  Chairman 
and  President.  Sosthenes  Behn.  Joseph  L.  Egan,  Western  Union  president,  was 
invited  but  did  not  attend,  and  his  company  apparently  was  not  represented. 
48/— Army  Signal  Security  Agency  -letter j-August-24,- 194S,-op_.-cit.,  p.  772. 
£9/  For  a  detailed  description  of  these  procedures  see  Church  Committee  Final 
Report,  Book  III,  pp.  765-776. 
SO/   Id.,  p.  773. 
51/  Subcommittee  Hearings,  p.  107. 
52/  Western  Union  International's  executive  vice-president  testified  he  had 
tEe  machine  removed  in  196S.  However,  the  Church  Committee  reported  at  Book  III, 
p.  774:  This  recollection  "was  not  borne  out  by  documents  furnished  by  NSA.  The 
documents  showed  that  on  February  2,  1968,  a  company  vice-president  (not  the  one 
referred  to  above)  had  discovered  the  existence  of  NSA's  Recordak  (microfilm) 
machine  in  the  Western  Union  transmission  room.  The  machine  was  reported  to  the 
company  president,  who  directed  his  employees  to  find  out  to  whom  the  machine  be- 
longed ....  It  is  clear  that  NSA  continued  to  receive  duplicates  of  all  messages 
to  the  foreign_country  referred  to  above  until  1972;  when  again  as  a  result  of 
'discovery'  by  company  officials,  this  procedure  was  halted  ....  In  effect, 
Western  Union  International's  participation  in  SHAMROCK  ended  by  1972."     j 
On  June  7,  1976," Mr.  Greenish  advised  the  subcommittee,"  through  counsel 
".  .'  ."  that  the  practices  discussed  by  him,  copying  foreign  government  traffic 
on  the  Recordak,  terminated  with  the  removal  of  the  one  and  only  Recordak.' 
'about  1965'".  (Subcommittee  Hearings,  p.  111.) 
53/  In  addition,  the  Western  Union  International  office  in  London  turned  over 
communications  entrusted  to  its  care  to  the  government  of  the  United  Kingdom. 
On  March  3,  1976,  Executive  Vice  President  Thomas  S.  Greenish  testified  that 
his  company  never  made  cables  available  to  authorities  of  any  country  other 
than  the  United  States,  but  he  subsequently  told  the  Subcommittee  that  he  "mis- 
understood Ms.  Abzug's  question,"  and  his  attorney  requested  that  his  testimony 
be  changed  to  show  that  messages  had  been  turned  over  to  British  officials. 
(See  Subcommittee  Hearings,  pp.  112-13). 
Mr.  Greenish 's  amended  testimony  is  consistent  with  a  February  21,  1967  report 
in  the  London  Daily  Express,  which  stated  that  telegrams  sent  out  of  Britain 
were  regularly  made  available  to  that  country's  security  authorities;  the  story 
noted  that  international  telegrams  which  passed  through  foreign  companies  ' 
operating  in  Britain  "are  collected  in  vans  or  cars  each  morning  and  taken  to 
the  Post  Office  security  department."  On  June  22,  1967,  Prime  Minister  Harold  Wilson 
told  Parliament  that  the  practice  had  been  going  on  since  1927.  On  May  12,  1976, 
the  British  Embassy  in  Washington  refused  to  state  whether  the  practice  continues, 
formally  advising  the  Subcommittee  that  "it  is  not  in  accordance  with  HMG's        ~  
' 
policy  to  comment  on  such  matters.?' 
On  March  11,  1976,  George  Knapp,  president  of  ITT  World  Communications,  testi- 
fied that  to  his  "personal  knowledge"  his  company  had  never  made  communications 
available  to  any  foreign  government.   (See  Subcommittee  Hearings,  p.  306.) 
Representatives  of  RCA  Global  Communications  were  not  asked  if  their  company 
had  ever  made  communications  available  to  any  foreign  government.
-5- 
S3/     [footnote  continued] 
The  Co..sattee  does  not  knew  what  uses  the  British  government  make-i  of  the 
messages  made  available  to  it,  nor  does  it  know  if  the  messages  5?diS«E- 
nated  to  any  other  governments.     The  British  govemre.-.t  maintains  a  liaison 
uluL'lJr*  he?krr'e».i»  Ft-  Nm*.  Maryia.Kl,  and  the  NSA^iit.SsT 
it^t  w    t        ?r  **%  Britls*  government's  General  Comnunications  Headquarters 
«v5!Jt!^3m'17S  m*les  n^thwest  of  London.    NSA  personnel  are  also  bised  a" 
several  ether  locations  in  Great  Britain.    Under  the  1947  UK-USA  Agreements: 
the  U.S.  and  the  United  Kingdom  --  as  well  as  Canada,  Australia  and  NewZealand 
-  routinely  exchange  information  gleaned  from  intercepted  teleconwmcationsT 
54/    Church  Committee  Final  Report,  Book  III,  p.  737. 
*^    s3r-rm:p  P.  739. 
W*    '^^"^nt  ^Sensitive  SIGINT  Operation  Project  Minaret,"  dated 
July  1,  1969,  in  Church  Committee  Hearings,  Vol.  S,  pp.  149-50. 
57/    SIGINT  recipients  include,  but  are  not  lirdted  to,  the  President's  Foreim 
Sf"?grce  AJviS?iy  ****  ?PFIAB).  *»  Central  Intelligence  Agency  (ClSTX 
5???  Y!3"-05  Inv«fllati™  (FBDi  the  Defense  Intelligence  Agen^  (DIA1, 
the  (Army)  Assistant  Chief  of  Staff  for  Intelligence  (ACSI),  the  OfficVofNaval 
Intelligence  (ONI)     the  Air  Force  Office  of  Special  Investigations  (AFOSlJ.^hT 
Energy  Researcn  and  Development  Agency  (ERDA)  and  the  Department  of  State's  Office 
or.  Current  Intelligence. 
58/    Church  Committee  Hearings,  Vol.  5,  p.  150. 
59/    For  a  detailed  discussion  of  NSA  watch-list  activities,  see  Church  Committee 
hearings.  Vol    5    pp.  1-SS  and  145-163;  also  Church  Committee  Final  Report, 
fioox  III,  pp.  737-65. 
60/    Letter  from  Comptroller  General  of  the  United  States  Elmer  G.  Staats  to 
Chairwoman  Bella  S.  Abzug,  November  12,  1976,  p.  2. 
61/ >  Subcommittee  staff .  telephone  interview  with  Col.  Stephen  A.  Harrick,  Office 
0.  assistant  Secretary  of  Defense  for  Legislative  Affairs,  March  1,  1977.     (The 
civil  litigation  is  Halkin  v.  Helms,  7S-1773,  U.S.  District  Court,  District  of 
Columbia  Circuit). 
62/    For  a  detailed  discussion  of  NSA  Office  of  Security  files  on  American  citizens, 
see  Church  Committee  Final  Report,  Book  III,  pp.  777-78. 
63/    Church  Committee  Final  Report,  Book  III,  p.  778. 
6£/    This  is  not  to  argue  for  the  continuation  of  SHAMROCK,  or  any  SHAMROCK  surrogate,. 
^/65/    Not  even  a  single  blanket^'vacuumcleaner  approach '  satxsiied  the  appetite 
oi  government  monitors,  for  FBI  and  NSA  "cable  4rop"  operations  in  Washington 
partially  duplicated  and  triplicated  the  New  York  SHAMROCK  coverage.     In  these 
operations,  the  FBI  physically  aggaoced  the  Washington  offices  of  RCA  Global 
Ccmaucations  and  ITT  World  Communications  during  daylight  hours,  to  examine 
cable  messages,  and  NSA  repeated  the  operation  between  3  and  5  a.m.     (See  Sub- 
cormttee  Hearings,  p.   241;  the  Committee  has  also  been  informally  informed  that 
tne  same  persons  who  made  nocturnal  visits  to  RCA  similarly  visited  the  Washineton 
ornces  of  ITT).  * 
For  sorting  messages,  the  FBI  paid  RCA.  employees  from  1960  to  1973;  starting 
in  1966  the  FBI  began  withholding  20  percent  of  these  payments  for  income  tax    ' 
purposes.     (Ibid,  pp.   242-43;  the  Committee  does  not  know  if  ITT  employees 
received  comparable  message-sorting  compensation  from  the  FBI). 
^  66/    Pike  Conmittee  Hearings,  p.  241. 
1/    67/    Mr.  Colby's  semantic  qualifier,  "on  some  occasions,"  is  not  unlike  his 
testimony  before  the    subcommittee     and  others,  that  the  CIA's  20  year  mail 
L-.tercept  program  (which  opened  ever  190,000  letters) ,  was  among  "the  few" 
individual  instances  of  the  Agency's  domestic  illegalities.     Cf . ,  for  example, 
"Central  Intelligence  Agency  Exemption  in  the  Privacy  Act  of  11574"  hearings, 
House  Subcommittee  on  Government  Information  and  Individual  Rights,  March  5, 
1975  (p.   S)  and  June  25,  1975  (pp.   139-40).
J 
•  JQ!    "fte  le8ai  conflict  between  this  general  search  procedure  and  the  fourth 
^amendment  is  discussed  on  p. 
69/  Letter  from  R.  Michael  Senkowski,  Legal  Assistant  to  the  Chairman, 
^Federal  Communications  Coninission,  to  Robert  Fink,  Professional  Staff  Member, 
Subcommittee  on  Government  Information  and  Individual  Rights,  January  28, 
1976. 
70/  U.S.  persons  are  U.S.  citizens,  resident  aliens  in  the  U.S.,  and  corporations 
****  with  their  principal  place  of  business  in  the  U.S. 
71/  These  are  headquarters  procedures.  Apparently,  at  overseas  bases,  many  messages 
are  also  intercepted  by  human  analysts  prior  to  trigger  word  screening,  diet 
Flippo,  an  associate  editor  of  Rolling  Stone,  reported  that  he,  was,  in  1967,  in  the 
Naval  Security  Group  (the  NSA's  naval  wing),  assigned  to  intercept  telecoomunica- 
tions  from  a  desert  base  in  Sidi  Yahia,  Morocco.  In  addition  to  intercepting 
diplomatic  cables,  military  messages,  telegrams,  transcripts  of  transatlantic 
phone  calls,  Flippo  wrote,  "I  also  screened  reams  and  reams  of  transatlantic  cables 
to  and  from  the  U.S.,  regardless  of  whether  they  contained  any  key  words  or  names. 
Telegrams  or  phone  calls  involving  American  congressmen  and  journalists,  'dissidents,' 
multinational  corporations  —  were  all  targets."  (Chet  Flippo,  "Can ,theXIA  Tran 
^udentslnto^  Spies?",  Rolling  Stone,  March  11 ,1976).   £_.._   --.-  --_1_   
T^Tll    Church  Committee  Hearings,  Vol.  S,  p.  60. 
\S  73/  See  p.   ,  for  a  partial  list  of  SIGINT  recipients. 
74/  Letter  from  Lt.  Gen.  Lew  Allen,  Jr.  to  Chairman  Otis  Pike,  House  Select 
•  /committee  on  Intelligence,  August  25,  1975;  quoted  in  Conmittee's  final  report 
as  Dublished  in  Village  Voice,  February  16,  1976,  p.  90. 
Uf   2£±J 
*^*7V  Ibid,  p.  88  [emphasis  added]. 
76/-  Attach-  snt  to  letter  from  Federal  Reserve  Chairman  Arthur  F.  Bums  to 
Sen.  Frank  Church,  Chairman  of  the  Subcommittee  on  Multinational  Corporations 
of  the  Committee  on  Foreign  Relations,  March  9,  1976.  (Copy  in  subcomnittee 
files) .  The  Federal  Reserve  refused  to  supply  the  multinational  subcomnittee 
with  deposit  totals  of  individual  Middle  East  oil-producing  nations,  but  the 
Washington  Post  noted  that,  in  1975,  the  government  of  Kuwait  had  $1.7  billion 
on  deposit  with"  the  Citibank  of  New  York,  and  in  the  same  year  foreign  deposits 
accounted  for  nearly  two-thirds  of  all  monies  deposited  in  both  the  Citibank  and 
Chase  Manhattan  Bank,  the  nation's  second  and  third  largest  banks.  (Ronald 
Kessler,  "Banks  Hold  Huge  Foreign  Deposits:  U.S.  Examiners  Worried  About 
Pressure  From  Governments,"  Washington  Post,  January  14,  1976,  p.  A-l).  By 
June  30,  1976,  the  deposits  of  the  Middle~East  oil-exporting  countries  in  U.S. 
banks  reportedly  totaled  around  $19  billion.  (Dan  Morgan,  "Senators,  Banks 
Block  Probe  of  Arab  Deposits,"  Washington  Post,  October  10,  1976,  p.  A-l. 
LS 
7/  Telephone  interview,  December  14,  1976. 
78/The  Mutual  Security  Act  of  1954,  as  aniendedT  establishes  "controls"onr""tJie~e"xport"' 
and  import  of  arms,  ammunition,  and  implements  of  war,  including  technical  data 
relating  thereto,  other  than  by  a  United  States  government  agency."  Category  XIII, 
"Auxiliary-Military  Equipment*,"  subsection  (b)  includes: 
--•''Speech  scramblers,  privacy  devices,  cryptographic  devices 
.  ^^  (encoding  and  decoding),  and  specifically  designed  components 
V-^^       therefor,  ancillary  equipment,  and  especially  devised  pro- 
tective apparatus  for  such  devices,  components  and  equipment. 
(Source:  International  Traffic  in  Arms  Regulations,  Depart- 
ment of  State;  February  1976,  p.  5). 
The  Act  is  administered  by  the  State  Department's  Office  of  Munitions  Control, 
assisted  by  the  Department  of  Defense,  which  grants  (and  withholds)  export  licenses. 
On  November  23,  1976,  the  Secretary  of  Commerce  signed  a  Data  Encryption  Standard 
developed  by  the  National  Bureau  of  Standards,  assisted  by  the  National  Security 
Agency.  Many  critics  of  this  standard  maintain  it  is  set  at  a  level  (56  binary 
digits,  or  "bits")  which  allows  the  NSA  and,  in  time,  very  large  corporations,  to 
penetrate  it.  A  November  18,  1976  Bell  Laboratories  memorandum  (copy  in  S"0"1"" 
inittee  files)  characterizes  the  standard  as  having  "little  safety  margin,"  and 
urges  that  it  be  strengthened  to  64  or  128  bits.  An  official  of  the  Of fice  of 
Munitions  Control  has  advised  the  subcommittee  that  for  export  use,  "anything 
above  56  bits  vou  have  to  come  to  us,"  adding  that  one  large  U.S.  corporation 
— — wants  to"use~-twS~r  bits  in  several  overseas  situations  and  in  some  cases  we 
are  going  to  grant  permission."  (Tele^one  interview  with  Mr.  Clyde  Bryant, 
January  S,  1977).  v-
.  INSECT 
74A/  Itatil  the  formation  of  the  Church  Coraiittee,  these  individuals  w»re 
limited  to  selected  staff  members  of  the  Armed  Services  committees  ui  the 
■senate  ar.J  tiie  House,  and  the  Defense  subcommittees  of  the  Appropriat.vj»-_s 
conrnittees  in  the  Senate  and  the  House.  This  Committee  has  asked  several 
of  these  staff  members  if,  in  the  course  of  exercising  their  Cbiuuitlee's  over- 
sight functions,  the  NSA  had  ever  briefed  then  on  Operation  SHAMROCK.  Some 
'of  these  individuals  replied  they  were  generally  aware  that  the  Agency  from 
tine  to  time  inadvertently  intercepted  private  sector  comminications;  others 
said  the  first  they  knew  of  such  activity  was  when  they  read  it  in  the  news- 
paper. This  Comittee  has  received  no  indication  that  any  of  these  individuals 
had  a  detailed  knowledge  of  Operation  SHAMROCK.
-7- 
79/  Letter  from  Comptroller  General  of  the  United  States  Elmer  G  Staats  to 
Chairwoman  Bella  S.  Abzug,  November  12,  1976,  p.  S. 
80/  Ibid,  p.  S. 
81/  See  p. 
W  i*2b  Woodward»  "C1A  tott™*  Micronesian  Negotiations,"  Washington  Post. 
83/  In  1970,  when  President  Nixon  endorsed  the  so-called  Huston  Plan,  under  • 
which  the  NSA  would  intercept  the  private  communications  of  American  citizens, 
he  was  unaware  that  the  NSA  had  for  years  been  conducting  a  watch- list  program 
similar  to  what  he  was  proposing;  there  is  no  indication  the  NSA  ever  informed 
him  of  its  watch- list  activity. 
£*/  See.  for  example,  letter  from  Lt.  Gen.  Lew  Allen,  Jr.,  to  Attorney 
General  Elliot  Richardson,  October  4,  1973,  in  Church  Committee  Hearings, 
Vol.  5,  pp.  162-63.  . 
r*\.V4&    Letter  from  Attorney  General  Elliot  Richardson  to  Lt.  Gen.  Lew  Allen,  Jr., 
\\  ^   TEtober.  1,  1973,in  Church  Committee  Hearings,  .Vol..  S,  pp..  160:61.  . 
J6/  The  Washington  Post  has  described  the  NRO  as  spending  "an  estimated  $1.5 
billion  a  year  acquiring  and  managing  the  most  sophisticated,  elusive  and  expensive 
force  of  spies  that  has  ever  been  recruited  into  the  government's  service." 
(Laurence  Stem,  "1.5  Billion  Secret  in  Sky:  U.S.  Spy  Unit  Surfaces  by  Accident," 
Washington  Post.  December  9,  1973,  p.  A-l).  Two  years  later,  the  New  York  Times 
described  the  NRD  as  a  semi-autonomous  unit  "under  the  Air  Force  tnat  runs  the 
satellite  photography  program,  set  to  spend  under  $2  billion."  (Leslie  Gelb, 
"U.S.  Intelligence  Cost  is  Put  at  $4  Billion,"  The  New  York  Times,  November  19. 
1975,  p.  40).    
87/  So  unthinkable  is  such  disclosure  that  President  Ford  invoked  "executive 
privilege"  to  apply  to  a  private  corporation,  in  an  attempt  to  prevent  the  turn- 
over of  an  old  NSA  list  of  countries  whose  telecommunications  the  Agency  had 
kXjT?SSed  m  Merest  »  intercepting  (see  p.  ) .  The  contents  of  this  list 
had  long  been  known  to  both  the  company's  outside  counsel  and  selected  company 
employees.  On  October  22,  1975,  NSA  Director  Allen  was  informally  asked  by  a 
subcommittee  staff  member,  "What  security  clearance  does  a  private  attorney  for 
a  telegraph  company  have?"  "What  security  clearance  does  a  company  employee 
who  transmits  messages  have?"  Gen.  Allen  replied,  "None."  Apparently*,  in  the 
view  of  the  NSA,  these  individuals  are  entitled  to  information  that  the  Congress 
is  not. 
S8/  Winslow  Peck,  "U.S.  Electronic  Espionage:  A  Memoir,"  Ramparts,  August  1972. 
(Reporting  on  Peck's  allegations,  the  New  York  Times  stated:  "Extensive  independent 
checking  in  Washington  with  sources  in  and  out  of  the  Government  who  were  familiar 
with  intelligence  matters  has  resulted  in  the  corroboration  of  many  of  his  revelations 
But  experts  strongly  deny  that  the  united  States  has  broken  the  sophisticated  codes 
of  the  Soviet  Union  or  other  foreign  powers."  Benjamin  Welles,  "Ability  to  Break 
Soviet  Codes  Reported,"  New  York  Times,  July  16,  1972,  p.  1). 
_§?/  5  U.S.C.  552a,  effective. September  27,  1973. 
.90/  Federal  Register,  Vol.  40,  No.  168,  August  28,  1975,  pp.  39777-801. 
_£V  Federal  Register,  Vol.  40,  No.  166,  August  26,  1975,  pp.  37579-582:  Federal 
Register.  Vol.  40,  No.  187,  September  25,  1975,  pp.  44294-297.           
jj2/  Federal  Register,  Vol.  41,  No.  13,  January  20,  1976,  pp.  3025-033. 
Jty  See,  for  example,  House  Subcommittee  on  Government  Information  and  Individual 
Rights  Hearings,  "Central  Intelligence  Agency  Exemption  in  the  Privacy  Act  of  1974, 
1975,  p.  164;  also,  Church  Committee  Final  Report,  Book  II,  p.  101.
FOOTNOTES 
Brians  v.  William  407  U.  S.  143  (1972);  '.'y-an  v.  James  500  U.  S.  309  (1971 ) - 
Ts;ry  v.  Cr.io  3S2  U.  S.  1  (1963);  CjMnard  v.  rtjricipal  Court  3?7  U.  S.  523  (1967).' 
Win  Newfield  v.  Rvan  91  F.2d  700(3rd  Cir.  1937),  cert,  den.  302  U.  S.  729  (1937), 
re'ating  to  matters  under  investigation  constituted  "other  lawful  authority" 
f;;-  ;.rpcses  or  section  60S. 
67Ind»ed,  in  fiardone  v.  United  States  302  U.  S.  379  (1937),  the  Supreme 
Ccjrt  expressly  decided  that  the  second  clause  of  section  605  "comprehends 
federal  agents"  within  its  prohibition.  302  U.  S.  at  page  381. 
68See  Sen.  Rep.  No.  781,  73rd  Cong.,  2d  Sess.  1  (1934);  H.  Rep.  No.  1850 
73rd  Cong.,  2d  Sess/  3  (1934). 
'See  Memorandum  of  Richard  W.  Cu-Her,  "Possible  Liabilities  Arising 
frc.ii surrender  of  RCA-Transmitted  Messages  to  Government  Officials",  Novembar  11  1948 
reprinted  in  Abzug  Committee  Hearings,  at  p.  255  ff.  '    * 
See  letter  from  Thomas  K.  Latimer,  Department  of  Defense,  to  Robert 
Fink,  Staff  Member  of  the  House  Government  Operations  Committee,  Kay  10,  1976 
reprinted  in  Abzug  Committee  Hearings,  at  p.  324  * 
71See  Church  Committee  Final  Report,  Vol.  Ill,  p.  769.  • 
7?United  States  v.  United  States  district  Court  for  the  Eastern  District 
of  Michigan,  £07  U.  S.  297  (197FJT 
7318  U.  S.  C.  2511(3). 
74United  states  v.    Sutenko  494  F.2d  593  {3rd  Cir.    1974),  cert  den.   sub  nom 
United  States  v_.    Ivanov  419  U.   S.  881    (1974). 
  
7-]bid. 
Presumably,  this  would  apply  to  purely  domestic  intercepts  as  well  as 
international  intercepts. 
The  Sutenko  court  also  suggest  that  Fourth  Amendment  issues,  as  identified 
by  the  Supreme  Court  in  Keith,  supra,  footnote  72,  would  be  raised  by 
surveillance  conducted  for  other  than  foreign  intel licence  purposes.  4^4 
F.2d  at  pace  603.  
" 
"See  Church  Committee  Hearings ,  pp.  20-23. 
7^See  Church  Committee  Final  Report,  Vol.  III.,  pp.  770-776. 
SOlbid.
FOOTNOTES  --  TART  II 
CUrtl    £e»«.'Hft.lf**n» 
11/    ':-«-ir::  l.ruiL    •      jjV 
-.c       .       .'?1.e  "-  --'^t  Cc.....!.;...   ...  :.>.:,■■:   ..^.jl  Ouudliuii;,  -with 
.-■•'•""         ■"■"■Jl^'-'^c  ^livitiis.'i'T?;.  ?:ju-j.cj  bccjruy  Agcmry  .mil  Fuqrth 
^"•'"""r:' "io!l'->"'  U-D-   S'-ti-l-'-,  P'Mi  ^-b.vii.   ".jl  _:....>_<__.  Vol.   S,  p.   19 
\VV'r''"""'*Ll    *-'*lClJ   a°    0*U-Urft)...,liltL,li    i!._J'.II?S..j  ■—.   r— '-- 
4  0/  p.,  *-.•_..  -....,.._„  *-. 
*.3/  See  Fin*  footnote  70 
J £/  .Church  Cc-mittee  Hearings  'p.  20. 
3!/  See  Fink  footnote  73 
t|/    F*Vg*  '?gf:ft  of  -sho  S..aet  Cui...aLieu  lu  5:^.   .'  <>t  <~ .  1 '  1 ,1 . imih   i.iiLh 
-Bccj^t.  u  I,iU.lig.i,_e  A-UJi.i.s,  "5uj.-1... c...al,.   .j.di.tj  3l'jff  nmujn,.m 
y-.J-.-l,....;.,  ^LLi.ilmj  cJ)J  III.  Hignts  6i  AT*. ._..._    ,  u.i.    'u.jLi..  .HLh  Lung. 
w-Jws*^  Book  III,  pp.   736-37.   (Frrp'-iifvr  citsi  afGimJi  CUJllllietf  Ktipoit.) 
\V    General  Allen  stated  that  when  the  watch-list  activity  began,  it  was  viewed 
as    an  appropriate  part  of  the  foreign  intelliser.ee  r.ission".     See  Church  Cbiimittee 
i.eanr.gs,  vol.  5,  p.  23. 
$8/    Testimony  of  General  Lew  Allen,  Jr.,  Church  Ccaaittee  Hearings'  Vol.   S,  p    16 
See  also  the  statement  of  NSA  Director  Bobby  R.  I.-ran  before  the  Senate  Subcom- 
m.^ee  on  Intelligence  and  Human  Rights,  as  reported  in  the  '.'.'ashington  Post 
July  22,  1977.     Inman  ».fuHLu>  stated:  "Let  there  bs  no  doub~t,  no  U.S.  citizen 
is  now  targeted  by  the  NSA  in  the  United  States  or  abroad."    IW  f*..,_n  .-J.. *4, &-»'».»»  «fc.«.- 
Hi-  ^atCT.Sch'^Tiker/ .at  ^^-Oiurch  Corsnittee  hearings  asked  former  NSA  Director 
L.w  Allen    jr.:     Is  tnere  any  law  that  you  feel  — hibits  ycu  from  intercepting 
messages  .etween  American  citizens  if  one  is  at  a  foreign  terminal  and  the  other 
is  at  a  ac-estic  terminal,  cr  do  you  feel  there  is  no  law  that  covers  this  "situation? 
.v    "»Sn?^aI  -4vlen:  No'   Z  do  not  believe  there  is  a  law  that  specifically  does 
c       :      ,S     •  ,     C3?»lttee  ""rings,  Vol.   5,  p.   51.)     See  also  discussion  between      ■ 
aencuor  ...-c.-cale  ana  NSA  General  Counsel  Roy  Ea.-_-.er  at  pp.  4S-46. 
%0/  Senator  Schweiker  at  the  Church  Committee  hearings ,  asked  fefliSr  NSA  Director 
Lew  .Allen,  Jr.:  "Would  it  be  pos.ible--granted  this  is  not  v0Ur  policy,  and  you 
state  that  yOU  have  not  done  so- -would  it  be  possible  to  use  this  ...  apparatus 
tnaL  >ou  have  to  monitor  domestic  conversations  within  the  United  States  if  some 
person  witn  mal-intent  desired  to  do  it?... 
■T.*r 
.•eneral  Allen:   I  don't  think  I  really  ta  _.-...-  h:w  :o  answer  the  question.     I 
suppose  tr.at  such  a  thing  is  technically  feasible."     f Church  Committee  hearings  • 
Vol.  5,  p.   51.)  s   ' 
|1/  ?-—   ,- ro   :-::r  i-„p  v..,^  rwerted  tc  the   .-/: : :—  -. t : ■_■»      In  the  first,  a  U.S 
Dusinessman  engaged  in  selling  commercial  building  products  to  a  Middle  East  oil 
sheikdom,   reported  that  soon  after  his  first  international  conmunication  regarding 
sue-,  sale,  ne  and  his  wife  were  visited  by  federal  intelligence  agents  who  were 
ivnc-.-.-lecgearle  a=out  the  proposed  sale.     He  further  suspected  that  he  was  kept  under 
surveillance  thereafter  until  the  sale  was  cc-plet.d.  "He  reported  that  ever/  aspect 
or  the  transaction  had  been  conducted  using  intemational'cormunications. 
O  w."**1- 
in  i  ::...._  case,   a  -c-jor  ;fj  Washington  law  firm,,  which  represented  a 
clic-nt^mvolvec  m  international  trade,   reported  that  in  litigation  with  the  Justice 
Deparu.ent,  the  government  presented  evidence  which  c:uld  only  have  been  obtained 
tnrcugn  the  interception  of  its  clients   intematicnal^crrrunications.     The  law  firm 
did  not  feel   it  was  in  their  client's  best  interest  to  pursue  the  matter,   hc-wer. 
In  the  xMjceyise,   a  senior  offjc-rfifTdf  a  large  raltina*Tonhl  U.S.   corpor- 
ation told  the^coinmictee  that  he  kp.etf'that  t^A  v.as   interc&pfing   it's   internatippcrT- 
cated 
the
-2- 
^2/    C-.jrch  Cc-.iitiee  Hearings,  Vol.   S,  pp.  16-17. 
Tif-rU'S«^:i^^?7"A?i?iS»rai-0n  "3Pt  SecreT  Plan  l0  Fi«hr  Telephone 
JfKnmcn  ,  Jal>   10,  1977,  p.   1;  Washington  Fost.  "Carter  Seekine  Ways  to  Block 
Tnferr*»->?inn  nf  n,«ifi,^i  raii«»     t..iV;  Ti — tt^tt    _     .   .         "J«s  "</s  to  DiOCK 
»      -  ■<    --»  --  ■ '  ,  r-  .%  ... 
1-'     E"retlM  !>"^-'?A  "uld  determine  what  the  Soviets  were  obtaining  from  U  S 
T^St^ZfpCau-10nS  by  r^^rinS  Soviet  transnissions  leaving  this  cSSm.'-?  ^ 
gLfr^^''-r*^d^!!!!r*}^Siis  able  t0  breaJt  Soviet  coded  transmissions. 
T^ii-Jr; !; T&SZZZSSg******-?**^. - V.>- JTprtJiines ,  June  22,    1973. 
cc-  nir-^Tf ?  <£5S«t  vould-  seem  thatft'SA  nay  beTorced  to  monitor  domestic 
Si^SSSIt"^  Sfif^f;  detCnnine  h!s"  thC  S°VietS  a"  fining  fro. 
T5/    See  footnote  8. 
?|^rSS?  tesnittee  Report,  Book  III,  p.   7S8.     Recently,  however,  the  Justice 
B^aronent,  i or  the  first  time,  used  evidence  in  a  criminal  prosecution  specifically 
attributed  to  N;A  interceptions.     See  Washington  Fost.  "NSA  Tapped  Si?  Ovf  rse£        X 
Messages  ay  Attorney  for  Sirhan,  FBI  Rlveals",  August !3,  1977.  overseas 
|7/    Church  Ccraiittee  Hearings,  Vol.  S,  p.   111. 
^8/    Church  Ccraiittee  Hearings,  Vol.  5,  p.   18. 
l£/     Ibid.,  p.   16.     Also,   see  footnote^. 
\Q0/    Letter  fT-cn  Controller  General  of  the  United  States,  Eljner  C.  Staats  to 
GTair,o-,an  Bella  S.  Abzug,  Nove.-i.ber  12,   1976.  staats  to 
'£1/     Ibid.,  p.   5.
rOOTCOTX  97-B  Cont'd 
// 
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:••«>— !nf  nr:(s;a:  •>...;,.  :...  ,. 
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'•"»  '•"  •1\J    hr:r  u--  .,     -  ... 
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I-.  .l.IKi;:**     r.  ........      r  rf 
W„flJ  it,,  ||  ,„  ..  ......  j_  .. 
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bS1 
fef^lr 
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'•  "1 . 
Ijfl 
If  Kaha's  assessment  (along  with  others  of  a  similar  nature  inforaally 
receivedjis  accurate,  and  the  Cccaittee  has  little  reason  to  doubt  its 
validity,  the  NSA  is  largely  "out-of -business"  vis-a-vis  the  understanding 
of  intercepted  vritfcen  foreign  intelligence  telecoEsruaieations  traveling 
on  circuits  nost  often  shared  with  U.S.  citizens,  into  and  out  of  the  U.S. 
Cs  these  circuits  it 
consi 
appears  then,  that  the  coaprehensi\»le  COMQJT 
consists  of:  (a)  relatively  low-level  encrypted  messages  of  developed 
countries;  (b)  telecosaunications  of  relatively  unsophisticated  count: 
and  (c)  plain-text  telecommunications. 
'take' 
vely  unsophisticated  countries;
IDDEHDUH  TO  FOOTHOTB  30. 
all  the  l^MM^  tb»V-^fc# 
It  ahoold  be  noted  that  mm  vhereaa  alaort 
telegraph  rsowpaTrfwi  turned  over  to  MI-8  were  traaanlttad  by  cable  ra1 
than  radio  (m  p.  above),  this  aection  li  based  upon  statotas  epplicat 
to  the  interception  of  radio  eoanmicatioas.  During  MI-S>e  operational 
lifetiae,  legal' restrictions  applicable  to  the  interception  and  use  of 
wire  eotsmmlcatlons  were  nan-exiatent,  bat  the  tony  flecurlfr  igency   \" 
apparently  interpreted  the  statutes  applicable  to  radio  to  also  Incite 
cable  (wire)  tranamlsBioas.  ) 
B.B. 
BRITT 
Fleas*  verify  aocurocy  of  above  -  sags*  change  If  necessary. 
}, 
y\
Aid  03to  81.     Former  CIA  Director  William  E.  Colby  gave  similar  testimony  on 
^xistias  August  6,  1975,  stating,  "On  some  occasions,  ^the  Interception 
ootnote):  of  U.S.  citizens'  telecommunications/  cannot  be  separated  from 
the  traffic  that  is  being  monitored.     It  is  technologically 
impossible  to  separate  them."  (Pike  Ccc=ittee  Hearings,  p.  2J»l). 
In  fact,  Mr.  Colby's  use  of  the  expression  "on  some  occasions" 
is  misleading,  inasmuch  as  the  NSA  constantly  faces  this  problem 
in  its  search  of  international  telecommunication  links  entering 
and  leaving  this  country.     Mr.  Colby's  semantic  qualifier,   "on 
some  occasions,"  Is  not  unlike  his  testicony  before  this  subcommittee, 
and  others,  that  the  CIA's  20  year  mail  intercept  program  -  which 
opened  over  190,000  letters  -  vas  asoag  "the  few"  individual 
instances  of  the  Agency's  domestic  illegalities.     (Cf.,  for  examsle, 
"Central  Intelligence  Agency  Exemption  i.i  the  Privacy  Act  of  197*" 
bearings,  House  Subcommittee  on  Government  Information  and  Individual 
Sights,  March  5,  1975  (p.  5)  and  June  25,  1975  (pp.  139-fcO)). 
3l-A.     Flak  footnote  65. 
==■2--=*  this  proced-ire,  written  messages  of  potential  interest  are  isolated 
"otrote;:  from  the  mass  of  those  transmitted  by  the  use  of  computers  prograssred 
to  selected  "trigger"  words  or  symbols.     The  TTlEWiwi  .  extracted 
messages  are  then  studied  by  human  analysts.     £*5SnftMt*»iaw** 
Hovever,  at  overseas  bases,  many  messages  are  apparently  intercepted 
by  human  analysts  prior  to  trigger  vord  screening.     Qiet  Flippo,  an 
associate  editor  of  Rolling  Stone,  reported  that  he  vas,  in  I967,  in" 
the  Naval  Security  Group  (the  NSA's  naval  ving),  assigned  to  intercept 
telecocrauni cations  from  a  desert  base  in  Sidi  Yahia,Morooeo.     In 
1  addition  to  intercepting  diplomatic  cables,  military  messages, 
telegrams,  transcripts  of  transatlantic  phone  calls,  Flippo  wrote, 
"I  also  screened  reams  and  reams  of  transatlantic  cables  to  and 
from  the  U.S.,  regardless  of  whether  they  contained  any  key  words 
or  names.     Telegrams  or  phone  calls  involving  American  congressmen 
and  Journalists,   'dissidents,'  multir_ational  corporations  —  were 
all  targets."     (Chet  Flippo,    "Can  the  CIA  Tarn  Students  Into  Spies?", 
Soiling  Stone,  March  11,  1976). 
8l±-A  The  Church  Committee fs  report  on  the  SHAMROCK  program  stated,    "Of 
all  the  messages  made  available  to  NSA  each  year,  it  i6  estimated 
that  NSA  in  recent  years  selected  about  150,000  messages  a  month 
for  NSA  analysts  to  review.     Thousands  of  these  messages  in  one 
form  or  another  were  distributed  to  other  agencies  in  response  to 
'foreign  intelligence  requirements.'"     (Church  Committee  Hearings, 
Vol.   5,  p.  60). 
90-6   The  Pike  Consnittee •  s  final  report  noted  that   "preliminary  Investigation 
reveals  at  least  one  new  area  of  non-political  and  non-military 
ecphasis  in  international  intercept  -  economic  intelligence.      Ccssuni- 
cations  interception  in  this  area,  has  rapidly  developed  since  1972, 
.partly  in  reaction  to  the  Arab  oil  embargo  and  the  failure  to  obtain 
good  Information  on  Rus6ian  grain  production  and  negotiations  for 
•  the  purchase  with  American  corporations."     (Final  Feport  as  published 
la  Village  Voice.  February  16,   19"6,   p.   86).
91-A,  Letter  froo  Lt.  Gen.  Lew  Allen,  Jr.  to  Chairman  Otis  Pike,  Bout* 
Select  Committee  on  Intelligence,  August  25,  1975;  fMM9>  op.  cit., 
Village  Voice,  p.  90. 
91-B.  Until  the  formation  of  the  Church  Committee,  these  individuals  vere 
Halted  to  selected  staff  members  of  the  Armed  Services  committees  In 
the  Senate  and  the  House,  and  the  Defense  subcommittees  of  the  Appro* 
prlations  committees  In  the  Senate  and  the  Bouse.  Ibis  Committee  has 
asked  several  of  these  staff  members  if,  in  the  course  of  exercising 
their  Committee's  oversight  functions,  the  NSA  had  ever  briefed  them 
on  Operation  SHAMROCK.  Some  of  these  individuals  replied  they  were 
generally  avare  that  the  Agency  from  time  to  time  inadvertently  • 
Intercepted  private  sector  communications;  others  said  the  first 
they  knew  of  such  activity  was  when  they  read  lt  in  the  newspaper. 
This  Committee  has  received  no  Indication  that  any  of  these  individuals 
had  a  detailed  knowledge  of  Operation  SHAMROCK. 
An  attachment  to  a  March  3,   1976  letter  from  Federal 
Reserve  Chairman  Arthur  P.  Burns  to  Sen.  Frank  Church,  ^^halrman  of 
the  »sbcos=ittee  on  Multinational  Corporations  of  ttae^Coraaittee  on 
ForeignNjeiations,  indicates  that  Arab  oil  countrfes  bad  over 
$11  billicj^n  deposit  with  the  six  largest  JJ.'S.'  banks  —  plus 
additional  bullions  in  oafther  U.S.  banks^^as  of  December  31,  1975. 
i
J
loil  on  dep 
il  bfcUion 
The  Federal  Rese: 
with  deposit 
but  the  Washingt 
had  $1.7  billion 
same  year 
monies  deposited 
cation's 
Hold  Huge 
From  Gove: 
June  30, 
^76 
refused  to  supply  the  multinational  subcommittee 
lndividuaV'Midaie  East  oil-producing  nations, 
5,  the  government  of  Kuwait 
ink  of  New  York,  and  in  the 
early  two-thirds  of  all 
Chase  Manhattan  Bank,  the 
[Ronald  Kessler,  "Banks 
Worried  About  Pressure 
1976,  p.  A-l).  By 
Kiddle 
L 
  --•>—  ■-'    —  deposits  of  the  Kiddle  Easb»oil-exporticg  countries 
in  U.S^basks  reportedly  totaled  around  $19  billloT*vJ  (Emu  Morgan, 
"Senators,  Banks  Block  Probe  of  Arab  Deposits,"  Washington  Post. 
Jiatober  10,  1976,  p.  A-l).  ^r_— ~ 
See  staff  report  ,ji 
the  Banks,  and  U.  S 
■p 
"International  Debt, 
Foreign  Policy, "  prepared  for  use  of  Senate 
Subcommittee  on  Foreign  Economic  Policy,  of  the  Conmittee  on 
Foreign  Relations,  August,  1977- 
A  senior  official  of  a  giant  U.S.  multinational  financial  institution, 
which  has  well  over  $1  billion  on  deposit  from  a  single  Middle  Eastern 
oil  producing  nation  —  as  well  as  substantial  deposits  from  others  ~ 
has  advised  the  subcommittee  that  he  has  little  doubt  the  NSA  is 
intercepting  and  analyzing  his  company's  telecommunications.  But 
this  official,  knowledge  about  the  company's  telecosrsunications  "risk 
safeguard  management, "  stresses  that  the  company  is  not  concerned 
about  NSA  intercepts,  which  it  feels  are  legitimate.  (Telephone 
interview,  December  It,  1976).