The National Security Agency: Issues for Congress
Released: 2001-01-16T00:00:00

Summary:
The National Security Agency (NSA), one of the largest components of the U.S. Intelligence Community, has reached a major watershed in its history. Responsible for obtaining intelligence from international communications, NSA's efforts are being challenged bythe multiplicity of new types of communicationslinks, by the widespread availability of low-cost encryption systems, and by changes in the internationalenvironment in which dangerous security threats cancome from small, but well organized, terrorist groups as well as hostile nation states.
NSA's efforts to adjust to the changing geopolitical and technological environment have been strongly encouraged by Congress and reflect a major shift incongressional oversight of the Agency. Although Congress has always approved funding for NSA, for decadesroutine oversight was limited to a few Membersand staff. In the 1970s, congressional investigations of intelligence agencies resulted in greater public attention toNSA and criticism of activities that infringed onthe civil liberties of U.S. persons. Subsequently, both the Senate and the House of Representatives establishedintelligence oversight committees that have closelymonitored NSA's operations. The Foreign Intelligence Surveillance Act (FISA) was enacted in 1978 to regulatecollection by foreign intelligence agencies of thecommunications of U.S. persons. The end of the Cold War, the expansion of low-cost encryption and the explosionof communications systems led Congress totake a more public profile in overseeing the large and secretive Agency.
Reacting in large measure to congressional concerns, NSA launched two separate management reviews, one by outside experts, the other by longtime Agencyofficials. Both made strong criticisms of Agency personnel policies, an outmoded organizational structure, and anunwillingness to utilize civilian practices thatmore effective than those available in-house. The current NSA Director, Lt. General Michael V. Hayden, USAF,has used these analyses to launch a series ofmajor initiatives designed to improve NSA's operations, to attract and reward more qualified people from outsideindustry, and is developing a major contract foroutside support of its non-sensitive Information Technology (IT) functions.
A major renewal effort is underway, but observers believe many challenges lie ahead that will require congressional oversight. Many of the reforms in personnelpolicies recommended are difficult to implement in a government organization, especially in an extremely tightmarket for technical specialists. The technicalcomplexities of dealing with widespread and sophisticated encryption as well as the proliferation of communicationsdevices remain to be resolved. NSA is,along with other intelligence agencies, not well-positioned to analyze developments among the assortment ofterrorist groups and narcotics smugglers around theworld that can seriously affect U.S. interests. NSA has also come under heated criticism in the European Parliamentfor allegedly collecting, in cooperation withthe British, commercial intelligence to benefit U.S. corporations.

subsections: section_title: Introduction
paragraphs: The National Security Agency (NSA), one of the largest components of the U.S. Intelligence Community, hasreached a major watershed in its history. Responsible
for obtaining intelligence from international communications, (1) NSA's efforts are being challenged by the multiplicity of new types of communications links, bythe widespread availability of low-cost encryption systems, and by changes in the international environment inwhich dangerous security threats can come fromsmall, but well organized, terrorist groups as well as hostile nation states.
NSA was established in 1952 as a highly compartmented secret codebreaking effort undertaken by a handful of military officers and civilians, but the Agency hasgradually become an acknowledged government agency responsible for signals intelligence (sigint). This evolutionhas been in significant measure a result ofcongressional initiatives. Congress provided the statutory framework for NSA and its activities. Laws have beenenacted that carefully prescribe the limits ofNSA's electronic surveillance of U.S. persons. Congress has been increasingly inclined to take public notice ofproblems at NSA and is supporting reforms thatare designed to make NSA more effective in current technological and geopolitical environments.
The challenges facing NSA are formidable; a difficult operational environment as well as limitations on spending levels for intelligence call into question thefuture capabilities of NSA. Public interest in NSA has been heightened in recent months by some members of theEuropean Parliament who allege that the UnitedStates and a few other countries are cooperatively engaged in systematic electronic eavesdropping in order topromote the commercial interests of U.S.corporations. This Report will attempt to provide an unclassified description of NSA's evolution, the technical andoperational environment that now exists, andindicate some issues that the executive branch and Congress will be facing in coming years.
An unmistakable change affecting NSA has been the openness with which its policies and problems are now discussed both by the Agency's leadership and bycongressional oversight committees. Until very recently NSA was the most secretive intelligence agency, moreshielded from public scrutiny than the CentralIntelligence Agency (CIA). Only the most elliptical references were made in public to the sigint mission, and atone time, NSA employees identified themselvesonly as working for the Defense Department. In the past few years, however, senior intelligence officials frequentlydescribe NSA's problems and reportsaccompanying intelligence legislation include extensive commentary on the challenges facing NSA and theapproaches encouraged by Congress. These changeswere made possible by the absence of a superpower competitor capable of exploiting any inadvertent security slipand by the need to justify intelligence spendingat a time when international climate is apparently more benign. These factors removed inhibitions against NSA"going public" and, at the same time, created apolitical environment that would require public understanding of NSA's mission if the Agency could continue toobtain the funding necessary to update itsoperations.
section_title: Roles and Missions: The Growing Influence of Congress
paragraphs: For decades Congress was content to consider the signals intelligence effort and the organization of NSAprimarily as the responsibility of the executive branch.For a quarter century after the end of the Second World War, NSA and the nation's other intelligence agenciesundertook their activities with little publicity andwith congressional interest limited to a handful of members of armed services and appropriations committees. Theintelligence investigations of the 1970s,however, led to well-publicized hearings that placed many secrets, including those of NSA, on the public record. Of greater enduring significance was theestablishment of select intelligence committees in both the House of Representatives and the Senate. Thesecommittees were granted the authority to conductoversight over the intelligence activities of the Federal Government, including NSA. They became, along with theappropriations committees, the points ofcontact between the intelligence agencies and Congress. As a result of the extreme sensitivity of much intelligenceinformation, the two intelligence committeescame to act essentially as surrogates for the Congress and the public in regard to intelligence agencies. Until themid-1990s much of interest of the committees, asreflected in report language and public hearings, centered on the CIA and especially its operations directorate. Sigintactivities were undoubtedly matters ofcongressional concern, but they were very rarely the focus of public attention. (2)
In recent years, with the end of the Cold War the two intelligence committees have had much more intensive concern with NSA as reflected in more detailedreport language on NSA's activities. The extent of oversight is reflected by comments in the report on the FY2000Intelligence Authorization bill( H.R. 1555 ) by the House intelligence committee:
In the last two Congresses, the committee has been direct in its identification of process and management problemsthat require attention. The committee believes that NSA management has not yet stepped up to the line. There havebeen some efforts at reform, but there are stillseveral areas where change is not only needed but is critical for NSA's future. (3)
Congress has taken a more open interest in NSA at a time when the Agency's roles and missions are facing significant reformulation. Congress has providedguidance for NSA's future direction and has made budgetary allocations based on its sense of appropriate goals,personnel policies, and organizational structure. Most observers believe, moreover, that, given the fluid state of international affairs and information technologies,that further congressional attention is likely asNSA changes to adapt to its new environment. 
section_title: Changing Technologies
paragraphs: The primary targets of electronic surveillance during the Cold War were the communications of hostile militaryorganizations and governments. Most of suchcommunications were encrypted; in many cases this message traffic could be read only sporadically, if at all(although useful information can often be obtainedwithout actually reading the actual messages). Some communications were carried on land lines that could beintercepted only if they could be physically tapped,inevitably a difficult undertaking. It was, nonetheless, the government and military circuits that provided the mostimportant intelligence of military capabilities,hostile intentions, and diplomatic maneuvers that could place this nation's security at risk. Civiliancommunications-telegraphs, telephones, facsimile devices,etc.-were usually unencrypted and often sources of valuable information, albeit of secondary priority.
In the past decade, two important trends have combined to change the nature of electronic surveillance efforts. The end of the Cold War meant policymakers andmilitary officials had a wider range of countries that they were concerned with and placed much greater emphasison "non-state actors"-terrorist groups andnarcotics smuggling organizations that have come to be seen as genuine national security threats. These links arenot necessarily easy targets given the greatexpansion in international telephone service that has grown by approximately 18% annually since 1992. Intelligenceagencies are faced with profound "needle-in-a-haystack" challenges; it being estimated that in 1997 there were some 82 billion minutes of telephone serviceworldwide. (4)
The technologies used in civilian communications circuits have also changed; in the past decade reliance on microwave transmissions (which can be interceptedwith relative efficiency) has been increasingly displaced by fiber optic cables. (5) Fiber optics can carry far more circuits with greater clarity and through longerdistances and provides the greater bandwidth necessary for transmitting the enormous quantities of datacommonplace in the Internet age. Inevitably, fiber optictransmission present major challenges to electronic surveillance efforts as their contents cannot be readilyintercepted, at least without direct access to the cablesthemselves. The widespread use of fiber optics may also affect requirements for expensive sigint satellites sincetransmissions over fiber optic cables cannot beintercepted from space-based platforms. (6)
In addition to the widespread use of fiber optic cable, civilian communications have been marked by increased access to high-quality encryption systems formerlyavailable only to governments and militaries. Some systems are available at no cost on the Internet and others canbe obtained commercially at minimal expense. This has led to an extensive debate in the United States about the need for export controls on sophisticatedencryption systems. Although it is universallyacknowledged that commercial encryption systems available throughout the world present major challenges tointelligence (and law enforcement) agencies, U.S.intelligence officials have argued that permitting export of high-quality U.S. systems with associated systemssupport would greatly extend the capabilities ofother governments and hostile groups to protect their communications. After extensive discussions within theexecutive branch and Congress, steps have beentaken to loosen, but not remove, U.S. restrictions on encryption exports. (7) NSA officials were active in criticizing unrestricted encryption exports andobserverssuggest that these views, which were shared by many in Congress especially within the intelligence and armedservices committees, may have fueled presscriticism of NSA.
Changing threats, coupled with the evolving global technological environment, have undoubtedly made NSA's tasks far more difficult. The proliferation ofcommunications throughout the world and the spread of encryption may make electronic surveillance almostimpossible. Much equipment acquired for Cold Warmissions is not effective against new targets. In some cases, NSA must resort to analyses of traffic patterns-whois communicating with whom, when, and howoften-to provide information that may not be obtainable through breaking of codes and reading of plaintext. 
A major shortcoming was revealed in January 2000 when a software anomaly in the communications infrastructure curtailed NSA's operations for some 72 hours. An intensive and expensive effort was required to restore operations. A subsequent assessment found that thefundamental problem was not technical, butdoctrinal and organizational. (8)
section_title: Personnel Matters
paragraphs: NSA has employed many highly gifted scientists, engineers, and mathematicians. However, shifting geopoliticalconcerns and budget reductions required in theearly 1990's led to early retirements and fewer newly hired employees. During the same period, the Agency wasalso required to move towards a personnelstructure more closely reflective of national demographics. Simultaneously, a revolution in communications andinformation technologies was launched in manysmall, start-up firms whose culture and salary and personnel benefit levels were radically different from those ofgovernment agencies. As the extent of theseproblems became apparent, Congress has provided guidance in several areas.
subsections: section_title: Diversity and Equal Opportunity Issues
paragraphs: At least since the enactment of the National Security Agency Act of 1959 NSA's personnel policies have been the subject of congressional interest. That Act inessence established a separate personnel system for NSA. By the mid-1980s the House Intelligence Committeebecame concerned with the relatively smallnumbers of African-Americans, Hispanics, and women within the NSA workforce. (In 1993, blacks constituted 9%of the total number of NSA employeeswhereas the national labor force percentage was just over 10; the NSA Hispanic percentage was 1.2, whereas thenational average was just over 8; for AsianAmericans, the national figure was 2.9, at NSA it was 0.9.) (9) One congressional initiative included provisions in the FY1987 Intelligence Authorization Act( P.L.99-569 ) amending the National Security Agency Act to establish an undergraduate training program to facilitatethe recruitment of minority high schoolstudents with skills in mathematics, computer sciences, engineering and foreign languages. Recruitment efforts weremade in colleges with higher concentrationsof Hispanic students and efforts were made to ensure equal consideration in promotions. By 1996, NSA had mademeasurable increases in minority and femalerepresentation in the general workforce and in leadership positions. (10) These initiatives were not welcomed by all NSA personnel, with someofficials expressingconcerns that others would receive preference at their own expense. (11) Since the mid-1990s public congressional hearings and publishedcommittee reports havenot given extensive discussion to diversity issues. Although efforts continue to increase the diversity of NSA'sworkforce, other personnel issues have complicatedhiring and promotion policies.
section_title: Changing Personnel Requirements
paragraphs: Since the end of the Cold War, the nature of sigint targets has changed; the sheer quantity of communications has dramatically risen and sophisticated encryptionsystems are increasingly available throughout the world. These changes in targets and technologies have requireda substantially different NSA workforce. Longstaffed by civil servants and military personnel who made their whole careers in cryptologic specialities; NSAofficials must now be able to shift rapidly amongdisparate sigint efforts and varying targets. Different skill mixes are required at NSA at a time when technicalspecialists in communications, computer services,and encryption systems are in high demand throughout the economy. Observers believe that entry- and mid-levelgovernment salaries are not equal toopportunities currently available in an especially dynamic sector of the economy; furthermore, workers in technicalfields often shift jobs in short periods and itmay not be possible to retain them solely on the basis of the career benefits of federal service. (12)
As has been the case with other intelligence agencies, staffing levels at NSA have been reduced during the past decade. Many analysts and others who spent theircareers focusing on Soviet and Warsaw Pact issues no longer directly relevant to U.S. security concerns have retiredor moved into new specialities. Some mediaobservers suggest, however, that NSA continues to be burdened by an "old guard" of Cold War-era careerists whosetalents are not precisely suitable to emergingmissions. Although such charges are difficult to document (and may only reflect bureaucratic politics), it isgenerally acknowledged that NSA will have to adoptan altered personnel structure. FY2001 Intelligence Authorization legislation (passed by both houses, but vetoedby the President because of concerns not directlyrelated to NSA) would provide authority for NSA to offer early retirement and voluntary separation pay toemployees with 20 or 25 years of service (depending onage). This provision was inserted to provide the NSA Director with the opportunity to institute personnel changesthat are considered necessary and reflects theintelligence committees view that "the situation at NSA is unique, not only in the enormity of the task ofmodernization, but also in the direct impact on nationalsecurity should NSA modernization fail." (13)
One approach that has been adopted is to increase reliance on contracting out personnel services although security considerations can complicate the use ofnon-career personnel. (14) In some cases it has beenpossible to acquire the services of some retired NSA officials who are able to receive the relevant clearanceswith little delay. In other situations NSA is able to compartmentalize some activities and make use of specialistswho do not need access to sensitive information. Some observers warn, however, that contract personnel will tend not to be as committed to the Agency's missions,and may work subsequently fornon-government concerns with an increased possibility of unauthorized sharing of classified information.
section_title: Charting NSA's Future Direction
paragraphs: In recent years, congressional oversight committees have become concerned about the effect of the changedinternational threat environment and new technologieson NSA's future effectiveness. The requirement to replace aging satellite systems in particular have placed pressureson intelligence spending across the board;the size and extent of NSA's budget inevitably meant that it would be subject to close scrutiny. Thus, in 1997 theSenate Select Committee on Intelligenceestablished a Technical Advisory Group (TAG) to review the U.S. sigint effort along with other technical challengesfacing the Intelligence Community. TheTAG was composed of leading U.S. scientists and experts in technology and intelligence and has made twoclassified reports on NSA's capabilities. According tothe Senate Committee, the TAG identified serious deficiencies; "as resources have been reduced, the NSAsystematically has sacrificed infrastructuremodernization in order to meet day-to-day intelligence requirements. Consequently, the organization begins the21st Century lacking the technologicalinfrastructure and human resources needed even to maintain the status quo, much less meet emerging challenges." (15) One media account indicates that the TAG'sconclusions were highly critical: "`We told them that unless you totally change your intelligence-collection systemsyou will go deaf," one involved official[stated]. "You've got ten years."' According to the account, the Group "urged that the agency immediately begina major reorganization, and start planning for therecruitment of several thousand skilled computer scientists." (16)
According to the Senate report, the TAG also recommended new business procedures and additional resources. The report indicated that the FY2001authorization bill would likely reflect TAG recommendations, with resources being shifted to long-terminfrastructure modernization at the expense of someshort-term collection. (17)
The House Permanent Select Committee on Intelligence also reached the conclusion in 1998 that "very large changes in the National Security Agency's cultureand method of operations need to take place." (18) The Committee indicated its approach:
First, the committee is funding and mandating external management reviews. Second, the committee is attempting toinfuse fresh thought, needed expertise (especially in systems engineering), and greater fairness by insisting thatsignificant portions of certain categories becontracted out and that outside proposals and expertise be solicited, notably in systems engineering, advancedresearch and development, and in developmentactivities.... Third, fences have been placed on portions of the budget, with the prospect that a considerable amountof money could be reprogrammed for other[Intelligence Community] needs if NSA does not develop detailed strategic and business planning. (19)
The House committee envisioned "a far more radical revision of the budget process than presently contemplated." Emphasis would be placed on "a new culture inwhich all team together on a new architecture." 
subsections: section_title: Director Hayden's Initiatives
paragraphs: Aware of the challenges facing the Nation's sigint effort and responsive to congressional concerns, the senior leadership of NSA has been moving to make drasticchanges in NSA's operations and organization. Upon becoming NSA's director in March 1999 Air Force Lt. GeneralV. Michael Hayden assigned a number ofmid-level NSA officials to review the Agency's organizational structure. Known as the New Enterprise Team, thegroup recommended a new executiveleadership team, the development of strategic business plans, the acquisition of agency wide managementinformation systems, and hiring a financial managementofficer. A separate report by a smaller group of outside experts with experience in the telecommunications industrymade similar recommendations. (20)
The two sets of recommendations reflected a consensus by these advisory groups (and by congressional overseers) that NSA requires more centralizedmanagement, that separate divisions that had long enjoyed functional independence need greater coordination toreduce duplicative functions, and that there needsto be a strategic vision of how the Agency is to adapt to changed geopolitical and technological environments. Bothreports reflected confidence in the importanceof NSA's missions, but both were highly critical of NSA's management and personnel structures. The outsideexperts concluded: "The most serious issues areleadership, accountability, and empowerment, as evidenced by great dissatisfaction with decision making withinthe Agency." (21) The NSA officials noted theAgency's fundamental problems: "lack of governance, lack of leadership, and lack of strategic alignment." Althoughsome specific criticisms reflect the inherentlimitations of government agencies in comparison with the civilian telecommunications industry, NSA was urgedto take special steps to hold middle managersresponsible for personnel decisions. Although NSA has traditionally hired recent college graduates and retainedthem until retirement, changes in technology, inthe international environment, as well as disparities in government and civilian salaries, imply that in the future theremay be fixed-term positions and upgradedsalary levels for some critical technical specialists.
NSA was also urged to move away from its traditional preference for performing all functions in-house rather than to look for creative ways to find civiliancontractors not just as sources of manpower but as "solution providers," and to make hard choices over prioritiesrather than to make across-the-board budgetaryreductions. The outside team of experts urged NSA not only to take advantage of the potential advantages ofoutsourcing but also to bring in mid- and upper-levelmanagers from successful businesses.
In November 1999, Hayden launched "100 Days of Change"-another series of managerial initiatives responsive to the recommendations of these groups. Hesubsequently summarized NSA's challenges: "maintaining a strong infrastructure of people and facilities in a timeof constrained budgets; accurately forecastingtechnology trends in the face of an explosion of information systems; and reacting agilely to new technologicalinnovations." (22)
With congressional support Hayden has brought in industry experts from civilian firms to develop a comprehensive business plan for the Agency that will enableit to perform in a transformed global information technology arena. An initial step was the appointment of a newchief financial manager from private industry inJanuary 2000. He has also hired a chief information officer, a senior acquisition executive, and created atransformation office. It is hoped that these officials willprovide the capability for strategic planning and centralized coordination that NSA has been criticized for notmaintaining. In July 2000 it was announced thatWilliam Black, Jr., a former NSA official who had retired and found employment in a high-tech consulting firm,Science Applications International Corporation,would be appointed deputy director. Black replaces Barbara McNamara who has been widely blamed in somemedia accounts (23) as part of an "old guard" thathasdelayed NSA's transition to post-Cold War challenges. McNamara has been assigned as head of NSA's liaisonoffice in London. 
In October 2000, further adjustments in NSA's management structure were announced. General Hayden will serve as Director and Chief Executive Officer andintends to focus on implementing the changes necessary to keep NSA relevant to the needs of the rest of theGovernment. Deputy Director Black will also serveas Chief Operating Officer and be responsible for day-to-day operations. A new Executive Leadership Team willbe created to concentrate on overall strategicplanning issues, composed of Hayden, Black, and the deputy directors for operations, information assurance, andtechnology. (24)
In June 2000 NSA announced that it intended to contract out "non-mission related" information technology (IT) support-information technology functions that arenot part of its core cryptologic efforts. (25) A $4billion IT contract, to be known as Project Groundbreaker, will be awarded for handling many of the Agency'sextensive and varied requirements for information processing including desktop and workstation computers, email,network operations, software and telephonesystems. (26) Hayden indicated that NSA divisionstraditionally had undertaken much of their own IT work to support their ongoing operations, with inadequateconcern for overall financial implications for the entire Agency. He was quoted in one account:
I knew exactly how much activity X cost. I knew when we spent the money, I knew what it cost, I knew when it wasappropriated. But we didn't really have the ability to aggregate all activity Xs and portray them to the agency as,"Hey, by the way, do you realize that is whatactivity X cost you around the world and do you really want to be spending [this] percentage of your budget onactivity X as opposed to activity Y?" We couldn'tdo that. We couldn't pull the thread and aggregate what it was we were doing as an enterprise in order to makestrategic decisions ondirection. (27)
Hayden realizes that a more centralized system, with much work outsourced to a civilian contractor, may result in having to say "no to legitimate daily operationalneeds because the system can't handle it. That is the big change." (28)
On November 8, 2000 NSA announced the accomplishment of the initial phase of its new acquisition program and indicated an intention to solicit industry forconcept studies for sigint modernization. This initiative is known as Trailblazer and the studies are expected to beundertaken in 2001. 
section_title: Elements of Uncertainty
paragraphs: Few observers deny that significant structural changes in NSA's organization are warranted, but some caution that the changes thus far envisioned may not resolvethe expected problems. Skeptics note, in particular, that outsourcing is no panacea, that it may mean the loss ofexperienced personnel with longstanding ties toNSA without necessarily reducing overall costs to the taxpayers. Further, they argue, the necessity of grantingsensitive clearances to contractor personnel mayincrease risks of compromising classified information and processes. All agree that costs of background securityinvestigations will increase.
Other objections may be raised concerning the consolidation of IT functions in a centralized office. The flexibility of individual components to design uniquesystems may be jeopardized, and the NSA Director has acknowledged that certain legitimate functions may haveto be curtailed. Observers note that many of thetechnological advances in the past decade have been made by decentralized organizations that permit componentdivisions to establish their own operationalpractices and develop their own IT solutions without micro-management from a headquarters staff.
The External Team argued that "intelligence targets will continue to be increasingly transnational in nature, and . . . alignment to geographical locations andentities is obsolete." Although all observers would agree that NSA cannot maintain uniform depths of area expertisefor all potential concerns, some suggest thatthere are areas that will be of intense concern to the U.S. Government for decades to come and dispersing areafamiliarities acquired over many years would beseriously mistaken.
Congressional observers strongly support the use of NSA's budget to establish priorities. They do not indicate that they believe NSA has mishandled funds; theydo maintain that the Agency has not managed its budget to achieve managerial goals. In 1999 the House IntelligenceCommittee noted that "In the last twoCongresses, the committee has been direct in its identification of process and management problems that requiredattention," but "NSA management has not yetstepped up to the line." The committee added that it "looks forward to the opportunities for change that presentthemselves with the introduction of a newDirector of NSA." (29)
The Senate Intelligence Committee has urged that the NSA Director should have greater authority over the 70% of cryptologic resources that are currentlymanaged by the military services. The military services operate collection sites, undertake initial analysis, andprovide direct support to military commanders.NSA is responsible for tasking their efforts and for final analysis of the data they collect. Since service cryptologicelements support both NSA and militarycommanders there are inevitably differences over their disposition and responsibilities. Although the SenateIntelligence Committee advocates the NSA Directorhave "centralized direction across the SIGINT infrastructure as he implements his modernization strategy," (30) some in DOD (and perhaps in Congress as well)would argue, however, that the need to configure sigint resources in direct support of operational commanderswould argue against such augmented authorities forthe leader of a Washington-area agency.
The House Committee, in reporting its version of the FY2001 Intelligence Authorization Act in May 2000 ( H.R. 4392 ), accepted the need formanagerial changes at NSA. Criticizing the traditional independence of NSA's divisions, the Committee arguedthat:
Each type of communication-radio, satellite, microwave, cellular, cable-is becoming connected to all the others. Each new type of traffic shows up on every type of communication. Unfortunately, as the global network hasbecome more integrated, NSA's culture has evolvedso that is seemingly incapable of responding in an integrated fashion.
The House Committee argued that NSA must, as a result, "prepare itself for complex, prioritized, carefully timed and integrated systems acquisitions that, inaggregate, rival the complexity of programs commonly managed by the NRO, the Defense Department, andcommercial industry." (31)
The House Intelligence Committee's recommendations for significant shifts in NSA's budget have not yet been accepted. DOD urged that the changes not beapproved pending a review of the results of Hayden's initial reorganization efforts. (32) In particular, DOD, with support by the Senate Armed Services Committee,views with concern any efforts to give the DCI influence over NSA that would detract from that of the Secretaryof Defense. These separate approaches may noteasily be reconciled.
A major issue related to sigint in the post-Cold War environment is the erosion of distinctions between foreign and domestic threats. For example, an attack fromoutside the borders of the country through cyberspace could result in major damage to U.S. institutions, butresponsibilities for monitoring potential threats arecomplex and in some ways ill-defined. Constitutional principles and statutes sharply distinguish betweeninformation gathering by foreign intelligence anddomestic law enforcement agencies and efforts to involve NSA in surveillance of U.S. persons have been sharplyrestricted. Various administrative arrangementshave been made to facilitate cooperation between NSA and the FBI and other law enforcement agencies in gatheringinformation on threats with both foreign anddomestic components, but many uncertainties remain. Many observers strongly oppose the use in court cases ofinformation derived from sigint provided by NSAat the same time, sigint specialists are highly reluctant to see NSA diverted from its foreign intelligence missionsto tasks that may risk involvement in domesticcontroversies. Congress, included in the FY2001 Intelligence Authorization bill ( H.R. 4392 , Section 606)a requirement for a report from theAttorney General regarding actions taken in regard to the dissemination of intelligence information within theJustice Department. (This provision replaced anearlier version that would have required the establishment of procedures to accomplish this dissemination.) (33)
NSA and counterpart agencies in a number of other countries, especially Great Britain, have come under much criticism in the European Parliament for allegedlymonitoring private communications of non-U.S. businessmen in a coordinated electronic surveillance effort knownas Echelon in order to support domesticcorporations. Some critics go further and charge that NSA's activities represent a constant threat to civil libertiesof foreigners and U.S. persons as well. ThoughNSA has reassured congressional oversight committees that the Agency complies strictly with U.S. law, thesecontroversies will undoubtedly continue. (34)
section_title: Conclusion
paragraphs: The National Security Act establishes sigint as a recognized function of the U.S. Government and requires thatit is usually to be carried out by NSA. The U.S.Government thus has accepted responsibility for electronic surveillance activities that are condemned (but notnecessarily eschewed) by some foreign countries. Although some specialists in international law argue that electronic surveillance is inherently illegal, U.S. officialscontend, based on constitutionalresponsibilities, statutes, and long-established practice, that electronic surveillance related to national security andpreventing terrorism and international narcoticssmuggling is a legitimate function of the U.S. government. Unlike some foreign countries, the U.S. has not asserteda right to conduct electronic surveillance tosupport its "economic well-being." 
Managing this effort in a changing geopolitical and technological environment, according to knowledgeable observers and congressional overseers, requires thatNSA's organization and operations be substantially altered. This process is currently underway to strengthen theNSA Director's role in managing the Agency,but many uncertainties remain that will determine NSA's future. No national security official can confidently predictwhat collection priorities will exist in fiveyears time, nor can the equipment acquisition priorities be firmly projected very far into the future. Withcongressional encouragement, the current leadership ofNSA is drawing increasingly on talent available in the civilian community to offset the difficulties involved inretaining talented technological experts in a verytight sector of the labor market. This effort may not result in the stable, loyal workforce that, in the past, led toNSA's gradual successes against Cold War targets. Some observers also believe that NSA will ultimately require significant budgetary increases at a time when thereis a determination to restrict overall governmentspending. 
The future success of NSA is by no means guaranteed. The current NSA Director's managerial initiatives and the move to use outside contractors have widespreadsupport, but these efforts may not achieve all their intended goals. NSA may not be adaptable to radically changingdevelopments in internationaltelecommunications and the bewildering emergence of terrorist groups previously unheard of. The wider publicmay come to view NSA's activities as inherentthreats to privacy that outweigh the value of information acquired. Attention will be paid to the costs and benefitsof allocating additional funds to NSA at a timewhen there are sure to be competing demands. 
The current level of congressional concern with NSA is unlikely to diminish. Observers expect that, in the face of attacks on NSA by some in the media and by anumber of European parliamentarians, members of Congress will be asked to defend or criticize not only NSA'soperations, but also its statutory roles andmissions. Funding for NSA's efforts to adapt to altered geopolitical and technological environments will have tobe balanced against other competing needs. To amuch greater extent than in the past, observers expect that Congress will continue to involve itself in internalchanges in the Agency designed to acquiretechnological capabilities to acquire information at a time when the volume of communications is expandingexponentially, and access is greatly complicated bythe spread of sophisticated encryption systems.
section_title: Appendix A. Congressional Oversight of NSA: A Brief Review
paragraphs: Codemaking and signals intelligence (sigint) have long been functions of governments and militaryorganizations. (35) Although the United States gavelessattention to codemaking and codebreaking than the major European powers, U.S. forces during World War Iestablished a fairly extensive military sigint effort. Inthe 1920s and 1930s, the services maintained a small sigint effort and, for a time, the State Department collaboratedwith the Army in operating an American"Black Chamber" that attempted, with limited success, to intercept and decrypt foreign diplomatic communications. By the time the United States entered WorldWar II, U.S. codebreakers were able to decrypt some codes of Japan, Germany, and other foreign countries. Successin breaking Japanese diplomatic codes,achieved through "the exercise of the greatest ingenuity and utmost resourcefulness"was acknowledged publiclyafter the end of the war in the congressionalreport regarding the attack on Pearl Harbor. (36)
During the course of World War II, sigint efforts proved to be exceptionally valuable especially in regard to acquiring military information. The crucial victory atMidway in June 1942 that halted Japan's advance in the Pacific was gained through sigint. The Allies' ability tokeep supplies flowing across the North Atlanticdepended on limiting U-boat attacks; this too was accomplished through good sigint. Some observers haveconcluded that sigint enabled the Allies to end the warat least a year earlier than would otherwise have been possible. 
During World War II, cooperation with the British in sigint collection and analysis proved very fruitful. Although both countries were initially reluctant to sharetheir codebreaking secrets, they gradually came to appreciate the advantages of sharing both collection and analysis. Anglo-American cooperation did not endwith the conclusion of hostilities in 1945, but actually expanded with the beginning of the Cold War and theexpansion of U.S. security interests throughout theworld. The relationship with the British would eventually encompass the Canadians, Australians, and, to a lesserextent, the New Zealanders.
After the War, the Army and the Navy, and subsequently the newly independent Air Force all continued sigint collection. An effort was made to coordinate theservices' sigint efforts in a single organization known as the Armed Forces Security Agency established by theSecretary of Defense in 1949. Coordinationproblems were not, however, resolved until October 1952 when President Truman established the National SecurityAgency in an effort to provide a moreeffective structure for coordinating signals intelligence activities. Truman had determined that the sigint functionwas "national," that it would serve civilianpolicymakers in the State Department and the White House as well as the military. This action was taken in a secretmemorandum that was not made public at thetime.
NSA became the U.S. focal point of a global sigint effort. Signals are collected at field stations throughout the world, most of which operated by the militaryservices. Some initial processing and analysis may have be performed at the collection site, but in general the "take"is forwarded to NSA, which moved itsheadquarters from Arlington, Virginia to Fort Meade, Maryland in 1957. After decryption and analysis, the resultantdata is provided to "all-source" intelligenceagencies such as the CIA or the Defense Intelligence Agency (DIA). NSA has always been staffed by a combinationof civil servants and active duty militarypersonnel, but the Agency also provides operational guidance to sigint collection stations maintained by thecryptologic elements of the military services(collectively described as the Central Security Service (CSS)).
During the Cold War, NSA's operations, along with those of allied countries) were primarily directed at the Soviet Union, its Warsaw Pact allies, and CommunistChina. Massive efforts were made to collect sigint dealing with military threats to the U.S. and its allies. In additionto sigint provided to national-level decisionmakers, tactical sigint collection, analysis and reporting was incorporated in military operations, including thoseoccurring in the Korean and Vietnam Wars.
For many years NSA's efforts did not receive much public scrutiny. Congressional oversight was conducted by small sub-committees of armed services andappropriations committees without public hearings. The first major legislation dealing directly with NSA was theNational Security Agency Act of 1959 (P.L.86-36). This Act did not describe the functions of NSA, but dealt with "housekeeping" matters such as pay andallowances, training, property acquisition, andleasing, It exempted NSA from the requirement to provide detailed information regarding organizational andfunctional matters to the Civil Service Commission(the predecessor of the Office of Personnel Management). These authorities are, in general, similar to thoseexercised by the Director of Central Intelligence(DCI) in regard to the CIA. The act has been amended from time to time and serves as the statutory basis for NSA'spersonnel policies that derive from its uniquemission, including special pay and allowances for overseas travel, professional and foreign language training, andproperty leasing, and use of the NSA.
An exception to the practice of congressional reticence regarding NSA was a report on a widely publicized defection in 1960 of two NSA employees to the SovietUnion. (37) The committee criticized personnelsecurity procedures as shockingly lax and in part as a result of congressional criticism of the handling of theMitchell/Martin case DOD tightened the security practices at NSA to ensure that background investigations werecompleted prior to granting access to cryptologicmaterials. In 1964 P.L. 88-290 (known as Title III of the Internal Security Act of 1950) was enacted to establishrequirements for security investigations forpersons working at NSA. Observers note that it was an early reflection of the importance of congressional oversight. It gave the NSA Director authority toterminate the employment of NSA personnel "whenever he considers that action to be in the best interest of theUnited States." Such actions can be takennotwithstanding usual civil service procedures for personnel actions. In 1996 these provisions were superseded byenactment of the FY1997 National DefenseAuthorization Act ( P.L. 104-201 , sections 1631-1635) which established intelligence personnel policies for theentire Defense Department, including authority toterminate employees "in the interests of the United States." Appeals of decisions to terminate can only be made tothe Secretary of Defense. (38)
In the mid-1970s, public concerns that U.S. intelligence agencies were spying on domestic groups opposed to the Vietnam War led to hearings by selectcommittees in both chambers. (39) Interest in NSAcentered on "watch lists" that had been maintained to collect communications of U.S. citizens who weresuspected of ties to hostile foreign countries and groups. (40) There was also interest in a project, known as Shamrock, by which copies of internationaltelegramswere provided to NSA on a daily basis by three telegraph companies. These practices had been terminated by theearly 1970's, but Members of Congressconsidered that the Agency should be held accountable for them. (41) (The desire to bring such practices under the constraints of statutory law contributed topassage of the Foreign Intelligence Surveillance Act of 1978.)
During the hearings conducted by the Senate Select Committee to Study Governmental Operations with respect to Intelligence Activities (known as the ChurchCommittee after its chairman, Senator Frank Church), for the first time a Director of NSA testified in open sessionto give a public overview of NSA'sresponsibilities. Lt. General Lew Allen, Jr., citing the statutory and other authorities under which NSA carried outits responsibilities, stated: 
This mission of NSA is directed to foreign intelligence, obtained from foreign electrical communications and alsofrom other foreign signals such as radars. Signals are intercepted by many techniques and processed, sorted andanalyzed by procedures which reject inappropriateor unnecessary signals. The foreign intelligence derived from these signals is then reported to various agencies ofthe government in response to their approvedrequirements for foreign intelligence. (42)
Allen also explained in some detail the practice of establishing "watch lists" by which "words, including individual names, subjects, locations, etc." could beidentified within a stream of communications to separate useful information from the vast quantities of chatter. Particular attention was paid to retrievinginformation relating to terrorism, narcotics, and-a particular concern of the Johnson and NixonAdministrations-foreign influences on domestic groups suspectedof fomenting civil disturbances in the U.S. in protest against the U.S. role in the Vietnam war.
Allen indicated that, pursuant to presidential direction, the Secretary of Defense had established NSA in accordance with his statutory authorities. He noted furtherthat "for the past 22 years [i.e., since circa 1953], Congress has annually appropriated funds for the operation of theNSA, following hearings before the ArmedServices and Appropriations Committees of both Houses of Congress in which extensive briefings of the NSA'ssignals intelligence mission have beenconducted." (43)
The Church Committee concluded: 
The National Security Agency is one of the largest and most technically oriented components of the United Statesintelligence community. Its basic function is collecting and processing foreign communications and signals forintelligence purposes. NSA is also responsible forcreating and supervising the cryptography of all United States Government agencies, and has a special responsibilityfor supervising the military services'cryptologic agencies. Another major responsibility is protecting the security of Americancommunications.
The Committee regards these functions as vital to American security. NSA's capability to perform these functionsmust be preserved. The Committee notes that despite the fact that NSA has been in existence for several decades,NSA still lacks a legislative charter. Moreover,in its extensive investigation, the Committee has identified intelligence community abuses in levying requirementson NSA and abuses by NSA itself in carryingout its functions. These abuses are detailed in the domestic portion of the Committee report. The Committee findsthat there is a compelling need for an NSAcharter to spell out limitations which will protect individual constitutional rights without impairing NSA's necessaryforeign intelligencemission. (44)
Thus, even a committee widely perceived as antagonistic to intelligence agencies concluded that NSA's sigint mission is "vital to American security." It urged,however, a better statutory framework for the Agency and an enhanced role for congressional oversight to ensurethat NSA was not misused in ways that wouldundermine American liberties. 
The complete final report of the House Select Committee on Intelligence (known as the Pike Committee) was never made public, but its publishedrecommendations also included a proposal that the existence of NSA be recognized by specific legislation, that suchlegislation provide for civilian control ofNSA, and that the role of NSA with reference to the monitoring of communications of Americans be defined. (45)
Many of the most important statutory provisions relating to NSA were enacted in the wake of these congressional investigations. Congress passed the ForeignIntelligence Surveillance Act of 1978 (FISA) (50 USC 1801) which establishes procedures for electronicsurveillance in the United States for foreign intelligencepurposes. (46) It provides that the Attorney Generalmay authorize surveillance in situations wherein the target is communications of foreign powers; in cases inwhich communications of U.S. persons might be acquired, then approval of a court, created pursuant to the FISA,would be required. Information acquired inaccordance with FISA provisions is to be used for foreign intelligence purposes (even though in recent yearsCongress has expanded FISA to permit use of sometypes of information acquired under its provisions to be used for law enforcement purposes in certaincircumstances). FISA, in essence, ensures that foreignintelligence electronic surveillance operations within the United States are conducted in accordance with statutoryauthorities and with supervision by the JusticeDepartment (and with oversight by Congress). 
Although in the Pearl Harbor investigations, the U.S. Government officially revealed its prewar sigint efforts, ongoing sigint activities had not beenacknowledged. FISA provided authority in U.S. statutory law for electronic surveillance activities to be conductedfor foreign intelligence (rather than lawenforcement) purposes. In enacting the statute the United States Government accepted responsibility for NSA'sactivities no matter how they might be regarded inother countries. FISA does of course provide ample warning to foreign countries and foreign groups that the U.S.undertakes electronic surveillance when itperceives it necessary. While the argument was made that such activities are best undertaken without formal legalauthorization and without the Government'saccepting responsibility for them, Congress specifically rejected that argument in the belief that intelligenceactivities, including electronic surveillance, arenecessary to protect the national security and that the U.S. Intelligence Community should be subject to law and tooversight by Congress. 
In addition to FISA, there were also efforts to establish a "legislative charter" for the agencies of the Intelligence Community, including NSA. Testifying inFebruary 1980, the then Director of NSA, Vice Admiral Bobby R. Inman, supported charter legislation, noting that"while the Agency has been provided withsignificant Congressional guidance and protection with respect to the information and products produced by theAgency, there was little Congressional guidanceon the functions and responsibilities of the Agency and few Congressionally provided statutory tools to be used toperform those functions." (47) Charter legislationfor the entire Intelligence Community became very complex and ultimately was a victim of partisan disputes in thelate 1970s. (48) It was not until 1992 that theNational Security Act was amended to provide a functional charter for NSA. (49) The Act now gives the Secretary of Defense the responsibility to ensure:
through the National Security Agency (except as otherwise directed by the President or the National SecurityCouncil), the continued operation of an effective unified organization for the conduct of signals intelligenceactivities and shall ensure that the product isdisseminated in a timely manner to authorized recipients....
Guidance for NSA's activities has been further detailed in a series of executive orders. (50) E.O. 12333, signed by President Reagan onDecember 4, 1981 afterextensive consultation with Congress, and still in effect, tasks the Secretary of Defense with responsibilities for NSAincluding:
(1) Establishment and operation of an effective unified organization for signals intelligence activities, except for thedelegation of operational control over certain operations that are conducted through other elements of theIntelligence Community. No other department or agencymay engage in signals intelligence activities except pursuant to a delegation by the Secretary of Defense;
(2) Control of signals intelligence collection and processing activities, including assignment of resources to anappropriate agent for such periods and tasks as required for the direct support of militarycommanders;
(3) Collection of signals intelligence information for national foreign intelligence purposes in accordance withguidance from the Director of Central Intelligence;
(4) Processing of signals intelligence data for national foreign intelligence purposes in accordance with guidance fromthe Director of Central Intelligence;
(5) Dissemination of signals intelligence information for national foreign intelligence purposes to authorized elementsof the Government, including the military services, in accordance with guidance from the Director of CentralIntelligence;
(6) Collection, processing and dissemination of signals intelligence information for counterintelligencepurposes;
(7) Provision of signals intelligence support for the conduct of military operations in accordance with tasking,priorities, and standards of timeliness assigned by the Secretary of Defense. If provisions of such support requiresuse of national collection systems, thesesystems will be tasked within existing guidance from the Director of Central Intelligence.
(8) Executing the responsibilities of the Secretary of Defense as executive agent for the communications security ofthe United States Government;
(9) Conduct of research and development to meet the needs of the United States for signals intelligence andcommunications security;
(10) Protection of the security of its installations, activities, property, information, and employees by appropriatemeans, including such investigations of applicants, employees, contractors, and other persons with similarassociations with the NSA as arenecessary;
(11) Prescribing, within its field or authorized operations, security regulations covering operating practices, includingthe transmission, handling and distribution of signals intelligence and communications security material within andamong the elements under control of theDirector of NSA, and exercising the necessary supervisory control to ensure compliance with theregulations;
(12) Conduct of foreign cryptologic liaison relationships, with liaison for intelligence purposes conducted inaccordance with policies formulated by the Director of Central Intelligence; and
(13) Conduct of such administrative and technical support activities within and outside the United States as arenecessary to perform the functions described in sections (1) through (12) above, includingprocurement
As noted above, in 1976 the Pike Committee urged civilian leadership for NSA. NSA has always been headed by military officers, but they have served under thedirection of both the civilian Secretary of Defense and the (usually) civilian Director of Central Intelligence. Inaccordance with subsequent amendments to theNational Security Act, Directors of NSA are now appointed by the President upon the recommendation of theSecretary of Defense with the concurrence of theDCI (although a recommendation can be submitted without the DCI's concurrence if the fact of non-concurrenceis stated). In recent years, few observers expressconcerns about the NSA Director being a serving officer.
The amended National Security Act also provides that the DCI develops budgets for the annual National Foreign Intelligence Program which includes NSA. TheDCI also establishes the requirements and priorities that govern the collection of national intelligence. Theseprovisions provide authority for the DCI to overseeNSA's budget and operations. There are, however, multiple occasions for differences between the roles of theSecretary of Defense and the DCI. The DefenseSecretary is inevitably more focused on aligning NSA closely with the operating forces of DOD and tends toemphasize collection of direct interest to militarycommanders. The DCI, for his part, tends to see NSA as one component of an interagency effort to gatherintelligence for senior policymakers in Washington; heapproves collection and analysis priorities that reflect their requirements. These respective responsibilities are wellunderstood; defense and intelligence staffsattempt to make adjustments to accommodate differing requirements within budgetary constraints. Any majorreorganization or redirection of efforts, however,that could affect NSA's ability to support either national policymakers or military commanders would be sure togenerate criticism from one quarter or another.
The Pike and Church Committees also laid the groundwork for permanent intelligence committees. Subsequent to the establishment of the committees (theSenate Select Committee on Intelligence and House Permanent Select Committee on Intelligence) in 1976-1977,Members and staff have regularly reviewed NSAprograms and adjusted budgetary priorities with almost all hearings being conducted in closed sessions. NSAspending (along with the cryptologic activities ofthe services and other agencies) is authorized in annual intelligence authorization laws with funding levels indicatedonly in classified annexes. The two armedservices committees also have oversight of most intelligence programs since they involved Defense Departmentassets.
section_title: Appendix B. Cooperation with Other Countries and the Echelon Controversy (51)
paragraphs: Although sigint collection and analysis are among the most sensitive activities undertaken by the U.S.Government, close cooperation in these efforts ismaintained with several other countries-principally, but not limited to, the United Kingdom, Canada, Australia, andNew Zealand. These relationships beganduring the Second World War when agreements to share signals intelligence were made between the militaryservices of the United States and Great Britain, withseparate arrangements made with other Commonwealth countries. This cooperation was widely considered by seniormilitary leaders at the time, and by historianssubsequently, with having significantly reduced the amount of time needed to defeat Nazi Germany and Japan aswell as the number of Allied casualties. Although both the United States and Great Britain tackled various communications links of the Japanese andGermans (along with those of other countries),arrangements were worked out whereby the American effort was concentrated on the Japanese and the British onthe Germans. The division of labor reflectedresource limitations-especially among skilled cryptologists-and possession of geographical sites from which enemytransmissions could be intercepted.
With the end of hostilities in 1945, both British and American intelligence officials were reluctant to terminate a highly productive cooperative arrangement. There was continued military cooperation between the two countries in occupation duties in various areas and, whenthe Soviet Union began to be considered athreat to both countries, intelligence cooperation continued. Cooperation with Canada was considered essential inview of potential Soviet military activitiesoriginating in Arctic regions. Formal arrangements to cooperate in collecting and analyzing sigint were made by thetwo countries (and others) given sharedgeostrategic interests and limited resources that did not permit expansive unilateral efforts. These agreements wereconducted in great secrecy at the time andremain largely classified a half-century later. (52)
The sigint relationship with the British and other Commonwealth countries has attracted criticism from anumber of sources over the years. (53) To an extenta closeintelligence relationships arguably predispose military and political leaders to coordinated policies. Some observersobject to international agreements madewithout the formal advice and consent of the U.S. Senate. The secret relationships have been criticized by observersin the U.S., Britain, Australia and elsewherewho oppose international entanglements. Some observers from European Union countries express concern thatsigint cooperation among the "Anglo-Saxons"might work against their own economic interests.
Supporters of the such relationships with other countries point to the advantages in shared efforts that conserve intelligence resources. The United States, Britain,Canada, Australia, and New Zealand often have common policies on important international issues, but theexistence of close intelligence ties has not precludeddifferent policies (or even, as at Suez in 1956, opposing policies) when national leaders felt them necessary. In thepost-Cold War environment, observers believethat sigint cooperation with a number of friendly countries maximizes opportunities to obtain information regardingdisparate regional threats from terroristgroups, narcotics traffickers, and dealers in nuclear and other substances used in making weapons of massdestruction. 
NSA has long been the target of criticism from those who view intelligence agencies as inevitable threats to civil liberties. In general, however, the Agency's lowpublic profile and the esoteric nature of its work attracted less attention than the more dramatic covert actionsundertaken by the CIA. In the past few years,however, reports prepared under the auspices of the Directorate-General for Research of the European Parliamenthave described U.S. electronic surveillanceefforts. The studies, known as Scientific and Technological Options Assessments (STOA), are prepared bycontractors and not by European Parliament's officialstaff. A series of these reports have severely criticized NSA, charging it with working together with sigintorganizations of the United Kingdom, Canada,Australia, and New Zealand to gather commercial communications and providing the intercepts to U.S. businessinterests to give them advantages over foreignfirms. (54)
The criticisms of NSA by these reports have been echoed by media commentary. One account claims that 
It is the new Cold War. The United States intelligence agencies, facing downsizing after the fall of the Berlin wall,have found themselves a new role spying on foreign firms to help American business in globalmarkets.
Echelon is part of a British and American-run world-wide spy system that can "suck up" phone calls, faxes ande-mails sent by satellite. America's intelligence agencies have been able to intercept these vital privatecommunications, often between foreign governments andEuropean businesses, to help the US win major contracts. (55)
Some media accounts state that this entire cooperative endeavor has the codename Project Echelon; others believe that Echelon refers only to the process by whichcomputers operated by cooperating sigint agencies sift through many thousands of intercepts for ones containingpre-programmed key words. (56)
U.S. intelligence officials have responded to these charges by describing the statutory framework under which NSA operates and the oversight mechanisms inplace in both the Executive and Legislative Branches. There have been categorical denials that intelligence is passedto U.S. companies to provide themcommercial advantages although it is freely acknowledged that sigint is used to provide the U.S. Government withinformation about bribery and other illegalpractices of foreign firms and that this information has been used as the basis for diplomatic complaints. (57)
NSA has successfully persuaded the congressional leadership that it faithfully and responsibly conducts its electronic surveillance activities in accordance withlaw and relevant executive orders. Section 309 of the Intelligence Authorization Act for FY2000 ( P.L. 106-120 )required that the Director of NSA submit a report(to be prepared jointly by the Director of NSA, the DCI, and the Attorney General) providing a detailed analysis ofthe legal standards used in conducting signalsintelligence activities, including electronic surveillance. The report was submitted in February 2000 and set forththe legal bases for NSA's activities,emphasizing its commitment to respect the privacy rights of U.S. persons. In a public hearing to discuss the report,Representative Goss, Chairman of the HouseIntelligence Committee, concluded that "our safeguards are in place and are working." (58)
Most U.S. observers give credence to the official U.S. position, especially given the absence of evidence that U.S. companies are pressuring the Government forhelp in learning about foreign technologies. Observers suggest, in addition, that any U.S. intelligence assistanceto a U.S. firm in winning a foreign contract wouldprovoke strong criticism by a disadvantaged U.S. competitor. (59) Former DCI R. James Woolsey has maintained that U.S. intelligence agencies do not collectinformation about foreign technology because American technology is, in general, far superior. There is, however,he argues, a real need to seek informationabout corrupt practices by foreign competitors and activities such as transfers of dual-use technologies for use inproduction of weapons of mass destruction aswell as activities in countries subject to U.N. sanctions. (60)
Some foreign observers continue to dispute U.S. claims and they will not easily be persuaded that their concerns are ill-founded. Suggestions of NSA electroniceavesdropping have clearly had resonance among members of the European Parliament which voted on July 5, 2000to undertake a lengthy investigation ofEchelon. The investigation will not include the calling of witnesses and, interestingly, an amendment calling foran investigation of eavesdropping by all EUgovernments was not adopted. (61) In part, foreignobjections stem from concern about the capabilities of NSA to monitor their communications and those ofEuropean companies. There is also, especially among some, irritation that the United States has a closer sigintrelationship with some of its allies than withothers. In part, however, observers perceive attacks on NSA's activities as instinctive hostility among politicalelements long skeptical of close U.S.-Europeanrelations and determined to forge a more independent European identity. Some objections also undoubtedly arisefrom deep-seated opposition to the work of allintelligence agencies.
There is no question that the worldwide capabilities of NSA cause suspicion and resentment among some foreign elements. U.S. officials justify NSA's activitieson international law, the necessity to acquire information about threats to national security, international terrorism,and the narcotics trade. While the potential forabuse is acknowledged, the United States has a legal structure that regulates electronic surveillance. In addition,intelligence derived from sigint supports manycollective military and diplomatic efforts with European and other allies.