The Obfuscation Report

I'm Not Racist. Some of my Best Friends Are Black.
by Orlando Lima

Meanwhile, company assigned to distribute money reaping profits

NEW ORLEANS - Two-and-a-half years after Hurricane Katrina, tens of thousands of miserable homeowners are still waiting for their government rebuilding checks, and many complain they can’t even get their calls returned. But the company that holds the big contract to distribute the aid is doing quite well for itself.

ICF International of Fairfax, Va., has posted strong profits, gone public, landed additional multimillion-dollar government contracts, and, it was learned this week, secured a potentially big raise recently from the state of Louisiana.

In the waning days of Gov. Kathleen Blanco’s administration, state officials increased the management contract ceiling from $756 million to $914 million — this, after the Legislature wanted to fire ICF over its handling of the homeowner recovery program, called Road Home.

“I’m flabbergasted that this company could be so inefficient and could mess up so consistently and for so long,” said Bill Yurt, 57, who has been living in a FEMA trailer for 2½ years.

He said ICF hasn’t sent an appraiser to determine the grant amount that will resurrect his gutted house in Gentilly. And his calls to an ICF caseworker have gone unreturned for a month.

56,000 applicants still waiting
Road Home was created in June 2006 to compensate homeowners for the breach of New Orleans’ government-run levees. The program is funded by the federal government but run by the state of Louisiana. Homeowners can apply for grants to repair their homes, or obtain buyouts if they don’t want to fix things up.

Yet, 56,000 applicants — nearly 40 percent of the qualified total — had yet to receive a cent as of last month. Plagued by cost overruns and delays, Road Home is expected to cost the taxpayers $10 billion in federal money and has become another glaring symbol of frustration and red tape in post-Katrina New Orleans.

“Supposedly they had the expertise, but what we’ve learned ever since is it’s been on-the-job training,” said Frank Silvestri, co-chairman of the Citizens Road Home Action Team, or CHAT, a community group that was formed in anger over ICF.

ICF spokeswoman Gentry Brann blamed the state’s ever-changing rules and political meddling by officials and community groups for many of Road Home’s difficulties.

She complained that Road Home has come to be regarded as an entitlement program, and said the company must carefully evaluate 157,000 applications to guard against fraud.

“The state essentially redefined the goal of the program from rebuilding to relief in midstream,” Brann said.

She said the $914 million that the company could earn is to cover the costs of the program and was approved by public officials.

Company partly blames expenses
“It’s very important to note this is not a ‘pay increase.’ It’s not actually even ‘pay’ to ICF. Rather it is an increase in the contract ceiling to cover the additional unit price costs incurred by our subcontractors,” Brann said.

The state got tough with ICF last year, threatening to terminate its contract, and ultimately set benchmarks to force it to “close,” or decide cases more quickly.

However, ICF now stands accused of inflating its closing figures by deliberately using red tape, confusion and delays to get applicants to settle for low grant amounts.

“They have been pressured into signing closing documents,” said Melanie Ehrlich, the other chair of CHAT, who has documented nearly 1,000 such disputes. “We know that this includes applicants who had obvious mistakes in the calculation of the grant.”

Ehrlich said more than half of the Road Home applicants who have contacted CHAT say they are appealing their awards. Some report getting letters from ICF telling them they were not eligible for a grant, followed by letters congratulating them for receiving one.

Dorcil Albair, a resident of Cameron Parish, said she got $9,800 from Road Home for damage estimated by her insurer at $49,000. She said she signed Road Home papers with hundreds of others at a local hotel.

“They just shoved the paper in front of us,” said Albair, 65. “It was like an assembly line.”

The company had the inside track from the start, critics say. It won the Road Home contract from a committee of housing experts and a state agency pressed by Blanco to jump-start the rebuilding. A few companies submitted bids. But ICF, which counted a $23.6 million Department of Housing and Urban Development contract as its previous experience, had already designed the Road Home template.

The relationship alarmed a state ethics board. But ICF was not dropped as the contractor.

More government contracts
ICF timed the Road Home contract with the launch of its initial public stock offering, triggering millions in bonuses and options for its top executives, and has bought out four other companies to tap the deep well of government contracting work.

It counts among its recent deals a $15 million Homeland Security agreement to protect chemical installations from terrorists, and a $10 million contract to help the Environmental Protection Agency preserve the ozone.

ICF reported a profit of $40.6 million in 2007, up from $11.9 million a year earlier. The company’s stock price has at times doubled since the Wall Street offering, reaching a 52-week high of $34.36.

Securities and Exchange Commission records show no public officials among ICF’s leading shareholders. Its lobbyists include former Rep. Robert Livingston, R-La., who has offices in Washington and the state Capitol, and local insider Randy Haynie, whose clients include Philip Morris and pharmaceutical company Pfizer.

Louisiana officials have publicly said dumping ICF could further slow the recovery and generate more political fallout. Privately, they say pulling the ICF contract would be an admission of mismanagement that could give Katrina victims grounds to sue.

“A deal is a deal, whether it’s a good deal or not,” said Walter Leger, a housing official with the Louisiana Recovery Authority, which oversees Road Home and has been critical of ICF.

Audit finds incorrect payouts
Adam Knapp, deputy director of the LRA, said bad publicity ultimately will spur ICF to better perform. “Their stock will rise and fall on their delivery here,” Knapp said.

A state audit in September looked at a sampling of 80 Road Home grants and found that the incorrect amounts had been awarded 37 percent of the time. One-fifth of eligible applicants who applied in the program’s first six months — more than 13,000 — hadn’t received grants as of January, according to company data obtained by CHAT.

ICF responded to such backlogs by reassigning 500 staffers as caseworkers. But no new employees were hired to meet the demand.

Brann said that is because the company stands to make only a 3 to 5 percent profit on the contract after it pays taxes, its 2,000 employees and 35 subcontractors. “While the revenue from the Road Home contract is large, so are the costs,” she said.

The deadline for new applications for Road Home assistance has passed, and Brann said the company expects to resolve its last case this summer.

URL: http://www.msnbc.msn.com/id/23617100

Warren P. Strobel | McClatchy Newspapers

last updated: March 10, 2008 07:39:58 PM

WASHINGTON — An exhaustive review of more than 600,000 Iraqi documents that were captured after the 2003 U.S. invasion has found no evidence that Saddam Hussein's regime had any operational links with Osama bin Laden's al Qaida terrorist network.

The Pentagon-sponsored study, scheduled for release later this week, did confirm that Saddam's regime provided some support to other terrorist groups, particularly in the Middle East, U.S. officials told McClatchy. However, his security services were directed primarily against Iraqi exiles, Shiite Muslims, Kurds and others he considered enemies of his regime.

The new study of the Iraqi regime's archives found no documents indicating a "direct operational link" between Hussein's Iraq and al Qaida before the invasion, according to a U.S. official familiar with the report.

He and others spoke to McClatchy on condition of anonymity because the study isn't due to be shared with Congress and released before Wednesday.

President Bush and his aides used Saddam's alleged relationship with al Qaida, along with Iraq's supposed weapons of mass destruction, as arguments for invading Iraq after the September 11, 2001, terrorist attacks.

Then-Defense Secretary Donald H. Rumsfeld claimed in September 2002 that the United States had "bulletproof" evidence of cooperation between the radical Islamist terror group and Saddam's secular dictatorship.

Then-Secretary of State Colin Powell cited multiple linkages between Saddam and al Qaida in a watershed February 2003 speech to the United Nations Security Council to build international support for the invasion. Almost every one of the examples Powell cited turned out to be based on bogus or misinterpreted intelligence.

As recently as last July, Bush tried to tie al Qaida to the ongoing violence in Iraq. "The same people that attacked us on September the 11th is a crowd that is now bombing people, killing innocent men, women and children, many of whom are Muslims," he said.

The new study, entitled "Saddam and Terrorism: Emerging Insights from Captured Iraqi Documents", was essentially completed last year and has been undergoing what one U.S. intelligence official described as a "painful" declassification review.

It was produced by a federally-funded think tank, the Institute for Defense Analyses, under contract to the Norfolk, Va.-based U.S. Joint Forces Command.

Spokesmen for the Joint Forces Command declined to comment until the report is released. One of the report's authors, Kevin Woods, also declined to comment.

The issue of al Qaida in Iraq already has played a role in the 2008 presidential campaign.

Sen. John McCain, the presumptive GOP nominee, mocked Sen. Barack Obama, D-Ill, recently for saying that he'd keep some U.S. troops in Iraq if al Qaida established a base there.

"I have some news. Al Qaida is in Iraq," McCain told supporters. Obama retorted that, "There was no such thing as al Qaida in Iraq until George Bush and John McCain decided to invade." (In fact, al Qaida in Iraq didn't emerge until 2004, a year after the invasion.)

The new study appears destined to be used by both critics and supporters of Bush's decision to invade Iraq to advance their own familiar arguments.

While the documents reveal no Saddam-al Qaida links, they do show that Saddam and his underlings were willing to use terrorism against enemies of the regime and had ties to regional and global terrorist groups, the officials said.

However, the U.S. intelligence official, who's read the full report, played down the prospect of any major new revelations, saying, "I don't think there's any surprises there."

Saddam, whose regime was relentlessly secular, was wary of Islamic extremist groups such as al Qaida, although like many other Arab leaders, he gave some financial support to Palestinian groups that sponsored terrorism against Israel.

According to the State Department's annual report on global terrorism for 2002 — the last before the Iraq invasion — Saddam supported the militant Islamic group Hamas in Gaza, Palestinian Islamic Jihad and the Popular Front for the Liberation of Palestine-General Command, a radical, Syrian-based terrorist group.

Saddam also hosted Palestinian terrorist Abu Nidal, although the Abu Nidal Organization was more active when he lived in Libya and he was murdered in Baghdad in August 2002, possibly on Saddam's orders.

An earlier study based on the captured Iraqi documents, released by the Joint Forces Command in March 2006, found that a militia Saddam formed after the 1991 Persian Gulf war, the Fedayeen Saddam, planned assassinations and bombings against his enemies. Those included Iraqi exiles and opponents in Iraq's Kurdish and Shiite communities.

Other documents indicate that the Fedayeen Saddam opened paramilitary training camps that, starting in 1998, hosted "Arab volunteers" from outside of Iraq. What happened to the non-Iraqi volunteers is unknown, however, according to the earlier study.

The new Pentagon study isn't the first to refute earlier administration contentions about Saddam and al Qaida.

A September 2006 report by the Senate Intelligence Committee concluded that Saddam was "distrustful of al Qaida and viewed Islamic extremists as a threat to his regime, refusing all requests from al Qaida to provide material or operational support."

The Senate report, citing an FBI debriefing of a senior Iraqi spy, Faruq Hijazi, said that Saddam turned down a request for assistance by bin Laden which he made at a 1995 meeting in Sudan with an Iraqi operative.

Secretary Robert Gates has announced that Centcom commander Adm. William Fallon has submitted his resignation. Fallon was subject of a recent Esquire article, which stated that the admiral could be “relieved of his command before his time is up next spring,” in favor of a commander more amenable to war with Iran.

According to Gates, Fallon resigned because the fall-out from the article. Gates said Fallon told him: “The current embarrassing situation, public perception of differences between my views and administration policy, and the distraction this causes from the mission make this the right thing to do.” Gates said he approved Fallon’s request to retire with “reluctance and regret.”

Last week, White House spokeswoman Dana Perino downplayed Fallon’s possible retirement, decrying “rumor mills that don’t turn out to be true.”

Fallon opposed the “surge” in Iraq and has consistently battled the Bush administration to avoid a confrontation with Iran, calling officials’ warmongering rhetoric “not helpful.” He rejected the praise in the Esquire piece, calling it “poison pen stuff.”

A reporter noted to Gates there was a “line in that Esquire story that said basically if Fallon gets fired, it means we’re going to war with Iran. Can you just address that?” Gates responded, “Well that’s just ridiculous.”

UPDATE: Sources at the Pentagon said that Fallon was worried the White House would “perceive the magazine piece as a challenge to the president’s authority, and insisted that couldn’t be further from the truth.”

UPDATE II: Last year, Fallon vowed that an attack on Iran “will not happen on my watch.”

UPDATE III: TPM has Fallon’s statement here. The Agonist also has more.

UPDATE IV: Senate Majority Leader Harry Reid (D-NV) has issued this statement:

I am concerned that the resignation of Admiral William J. Fallon, commander of all U.S. forces in the Middle East and a military leader with more than three decades of command experience, is yet another example that independence and the frank, open airing of experts’ views are not welcomed in this Administration.

UPDATE V: Spencer Ackerman writes:

Gates said in a press conference just now that no one should think the move reflects any substantive change in policy. That sure won’t be how Teheran sees it. The Iranians will consider Fallon’s resignation to indicate that the bombing begins in the next five minutes.

UPDATE VI: The National Security Network compiles examples of Fallon’s dissenting views from the Bush administration.

WASHINGTON, D.C. -- Five years ago, Congress killed an experimental Pentagon antiterrorism program meant to vacuum up electronic data about people in the U.S. to search for suspicious patterns. Opponents called it too broad an intrusion on Americans' privacy, even after the Sept. 11 terrorist attacks.

But the data-sifting effort didn't disappear. The National Security Agency, once confined to foreign surveillance, has been building essentially the same system.

The central role the NSA has come to occupy in domestic intelligence gathering has never been publicly disclosed. But an inquiry reveals that its efforts have evolved to reach more broadly into data about people's communications, travel and finances in the U.S. than the domestic surveillance programs brought to light since the 2001 terrorist attacks.

Congress now is hotly debating domestic spying powers under the main law governing U.S. surveillance aimed at foreign threats. An expansion of those powers expired last month and awaits renewal, which could be voted on in the House of Representatives this week. The biggest point of contention over the law, the Foreign Intelligence Surveillance Act, is whether telecommunications and other companies should be made immune from liability for assisting government surveillance.

Largely missing from the public discussion is the role of the highly secretive NSA in analyzing that data, collected through little-known arrangements that can blur the lines between domestic and foreign intelligence gathering. Supporters say the NSA is serving as a key bulwark against foreign terrorists and that it would be reckless to constrain the agency's mission. The NSA says it is scrupulously following all applicable laws and that it keeps Congress fully informed of its activities.

According to current and former intelligence officials, the spy agency now monitors huge volumes of records of domestic emails and Internet searches as well as bank transfers, credit-card transactions, travel and telephone records. The NSA receives this so-called "transactional" data from other agencies or private companies, and its sophisticated software programs analyze the various transactions for suspicious patterns. Then they spit out leads to be explored by counterterrorism programs across the U.S. government, such as the NSA's own Terrorist Surveillance Program, formed to intercept phone calls and emails between the U.S. and overseas without a judge's approval when a link to al Qaeda is suspected.

The NSA's enterprise involves a cluster of powerful intelligence-gathering programs, all of which sparked civil-liberties complaints when they came to light. They include a Federal Bureau of Investigation program to track telecommunications data once known as Carnivore, now called the Digital Collection System, and a U.S. arrangement with the world's main international banking clearinghouse to track money movements.

The effort also ties into data from an ad-hoc collection of so-called "black programs" whose existence is undisclosed, the current and former officials say. Many of the programs in various agencies began years before the 9/11 attacks but have since been given greater reach. Among them, current and former intelligence officials say, is a longstanding Treasury Department program to collect individual financial data including wire transfers and credit-card transactions.

It isn't clear how many of the different kinds of data are combined and analyzed together in one database by the NSA. An intelligence official said the agency's work links to about a dozen antiterror programs in all.

A number of NSA employees have expressed concerns that the agency may be overstepping its authority by veering into domestic surveillance. And the constitutional question of whether the government can examine such a large array of information without violating an individual's reasonable expectation of privacy "has never really been resolved," said Suzanne Spaulding, a national-security lawyer who has worked for both parties on Capitol Hill.

NSA officials say the agency's own investigations remain focused only on foreign threats, but it's increasingly difficult to distinguish between domestic and international communications in a digital era, so they need to sweep up more information.

The Fourth Amendment

In response to the Sept. 11 attacks, then NSA-chief Gen. Michael Hayden has said he used his authority to expand the NSA's capabilities under a 1981 executive order governing the agency. Another presidential order issued shortly after the attacks, the text of which is classified, opened the door for the NSA to incorporate more domestic data in its searches, one senior intelligence official said.

The NSA "strictly follows laws and regulations designed to preserve every American's privacy rights under the Fourth Amendment to the U.S. Constitution," agency spokeswoman Judith Emmel said in a statement, referring to the protection against unreasonable searches and seizures. The Office of the Director of National Intelligence, which oversees the NSA in conjunction with the Pentagon, added in a statement that intelligence agencies operate "within an extensive legal and policy framework" and inform Congress of their activities "as required by the law." It pointed out that the 9/11 Commission recommended in 2004 that intelligence agencies analyze "all relevant sources of information" and share their databases.

Two former officials familiar with the data-sifting efforts said they work by starting with some sort of lead, like a phone number or Internet address. In partnership with the FBI, the systems then can track all domestic and foreign transactions of people associated with that item -- and then the people who associated with them, and so on, casting a gradually wider net. An intelligence official described more of a rapid-response effect: If a person suspected of terrorist connections is believed to be in a U.S. city -- for instance, Detroit, a community with a high concentration of Muslim Americans -- the government's spy systems may be directed to collect and analyze all electronic communications into and out of the city.

The haul can include records of phone calls, email headers and destinations, data on financial transactions and records of Internet browsing. The system also would collect information about other people, including those in the U.S., who communicated with people in Detroit.

The information doesn't generally include the contents of conversations or emails. But it can give such transactional information as a cellphone's location, whom a person is calling, and what Web sites he or she is visiting. For an email, the data haul can include the identities of the sender and recipient and the subject line, but not the content of the message.

Intelligence agencies have used administrative subpoenas issued by the FBI -- which don't need a judge's signature -- to collect and analyze such data, current and former intelligence officials said. If that data provided "reasonable suspicion" that a person, whether foreign or from the U.S., was linked to al Qaeda, intelligence officers could eavesdrop under the NSA's Terrorist Surveillance Program.

The White House wants to give companies that assist government surveillance immunity from lawsuits alleging an invasion of privacy, but Democrats in Congress have been blocking it. The Terrorist Surveillance Program has spurred 38 lawsuits against companies. Current and former intelligence officials say telecom companies' concern comes chiefly because they are giving the government unlimited access to a copy of the flow of communications, through a network of switches at U.S. telecommunications hubs that duplicate all the data running through it. It isn't clear whether the government or telecom companies control the switches, but companies process some of the data for the NSA, the current and former officials say.

On Friday, the House Energy and Commerce Committee released a letter warning colleagues to look more deeply into how telecommunications data are being accessed, citing an allegation by the head of a New York-based computer security firm that a wireless carrier that hired him was giving unfettered access to data to an entity called "Quantico Circuit." Quantico is a Marine base that houses the FBI Academy; senior FBI official Anthony DiClemente said the bureau "does not have 'unfettered access' to any communication provider's network."

The political debate over the telecom information comes as intelligence agencies seek to change traditional definitions of how to balance privacy rights against investigative needs. Donald Kerr, the deputy director of national intelligence, told a conference of intelligence officials in October that the government needs new rules. Since many people routinely post details of their lives on social-networking sites such as MySpace, he said, their identity shouldn't need the same protection as in the past. Instead, only their "essential privacy," or "what they would wish to protect about their lives and affairs," should be veiled, he said, without providing examples.

Social-Network Analysis

The NSA uses its own high-powered version of social-network analysis to search for possible new patterns and links to terrorism. The Pentagon's experimental Total Information Awareness program, later renamed Terrorism Information Awareness, was an early research effort on the same concept, designed to bring together and analyze as much and as many varied kinds of data as possible. Congress eliminated funding for the program in 2003 before it began operating. But it permitted some of the research to continue and TIA technology to be used for foreign surveillance.

Some of it was shifted to the NSA -- which also is funded by the Pentagon -- and put in the so-called black budget, where it would receive less scrutiny and bolster other data-sifting efforts, current and former intelligence officials said. "When it got taken apart, it didn't get thrown away," says a former top government official familiar with the TIA program.

Two current officials also said the NSA's current combination of programs now largely mirrors the former TIA project. But the NSA offers less privacy protection. TIA developers researched ways to limit the use of the system for broad searches of individuals' data, such as requiring intelligence officers to get leads from other sources first. The NSA effort lacks those controls, as well as controls that it developed in the 1990s for an earlier data-sweeping attempt.

Sen. Ron Wyden, an Oregon Democrat and member of the Senate Intelligence Committee who led the charge to kill TIA, says "the administration is trying to bring as much of the philosophy of operation Total Information Awareness as it can into the programs they're using today." The issue has been overshadowed by the fight over telecoms' immunity, he said. "There's not been as much discussion in the Congress as there ought to be."

Opportunity for Debate

But Sen. Kit Bond of Missouri, the ranking Republican on the committee, said by email his committee colleagues have had "ample opportunity for debate" behind closed doors and that each intelligence program has specific legal authorization and oversight. He cautioned against seeing a group of intelligence programs as "a mythical 'big brother' program," adding, "that's not what is happening today."

The legality of data-sweeping relies largely on the government's interpretation of a 1979 Supreme Court ruling allowing records of phone calls -- but not actual conversations -- to be collected without a judge issuing a warrant. Multiple laws require a court order for so-called "transactional'" records of electronic communications, but the 2001 Patriot Act lowered the standard for such an order in some cases, and in others made records accessible using FBI administrative subpoenas called "national security letters." (Read the ruling.²)

A debate is brewing among legal and technology scholars over whether there should be privacy protections when a wide variety of transactional data are brought together to paint what is essentially a profile of an individual's behavior. "You know everything I'm doing, you know what happened, and you haven't listened to any of the contents" of the communications, said Susan Landau, co-author of a book on electronic privacy and a senior engineer at Sun Microsystems Laboratories. "Transactional information is remarkably revelatory."

Ms. Spaulding, the national-security lawyer, said it's "extremely questionable" to assume Americans don't have a reasonable expectation of privacy for data such as the subject-header of an email or a Web address from an Internet search, because those are more like the content of a communication than a phone number. "These are questions that require discussion and debate," she said. "This is one of the problems with doing it all in secret."

Gen. Hayden, the former NSA chief and now Central Intelligence Agency director, in January 2006 publicly defended the activities of the Terrorist Surveillance Program after it was disclosed by the New York Times. He said it was "not a driftnet over Lackawanna or Fremont or Dearborn, grabbing all communications and then sifting them out." Rather, he said, it was carefully targeted at terrorists. However, some intelligence officials now say the broader NSA effort amounts to a driftnet. A portion of the activity, the NSA's access to domestic phone records, was disclosed by a USA Today article in 2006.

The NSA, which President Truman created in 1952 through a classified presidential order to be America's ears abroad, has for decades been the country's largest and most secretive intelligence agency. The order confined NSA spying to "foreign governments," and during the Cold War the NSA developed a reputation as the world's premier code-breaking operation. But in the 1970s, the NSA and other intelligence agencies were found to be using their spy tools to monitor Americans for political purposes. That led to the original FISA legislation in 1978, which included an explicit ban on the NSA eavesdropping in the U.S. without a warrant.

Big advances in telecommunications and database technology led to unprecedented data-collection efforts in the 1990s. One was the FBI's Carnivore program, which raised fears when it was in disclosed in 2000 that it might collect telecommunications information about law-abiding individuals. But the ground shifted after 9/11. Requests for analysis of any data that might hint at terrorist activity flooded from the White House and other agencies into NSA's Fort Meade, Md., headquarters outside Washington, D.C., one former NSA official recalls. At the time, "We're scrambling, trying to find any piece of data we can to find the answers," the official said.

The 2002 congressional inquiry into the 9/11 attacks criticized the NSA for holding back information, which NSA officials said they were doing to protect the privacy of U.S. citizens. "NSA did not want to be perceived as targeting individuals in the United States" and considered such surveillance the FBI's job, the inquiry concluded.

FBI-NSA Projects

The NSA quietly redefined its role. Joint FBI-NSA projects "expanded exponentially," said Jack Cloonan, a longtime FBI veteran who investigated al Qaeda. He pointed to national-security letter requests: They rose from 8,500 in 2000 to 47,000 in 2005, according to a Justice Department inspector general's report last year. It also said the letters permitted the potentially illegal collection of thousands of records of people in the U.S. from 2003-05. Last Wednesday, FBI Director Robert Mueller said the bureau had found additional instances in 2006.

It isn't known how many Americans' data have been swept into the NSA's systems. The Treasury, for instance, built its database "to look at all the world's financial transactions" and gave the NSA access to it about 15 years ago, said a former NSA official. The data include domestic and international money flows between bank accounts and credit-card information, according to current and former intelligence officials.

The NSA receives from Treasury weekly batches of this data and adds it to a database at its headquarters. Prior to 9/11, the database was used to pursue specific leads, but afterward, the effort was expanded to hunt for suspicious patterns.

Through the Treasury, the NSA also can access the database of the Society for Worldwide Interbank Financial Telecommunication, or Swift, the Belgium-based clearinghouse for records of international transactions between financial institutions, current and former officials said. The U.S. acknowledged in 2006 that the CIA and Treasury had access to Swift's database, but said the NSA's Terrorism Surveillance Program was separate and that the NSA provided only "technical assistance." A Treasury spokesman said the agency had no comment.

Through the Department of Homeland Security, airline passenger data also are accessed and analyzed for suspicious patterns, such as five unrelated people who repeatedly fly together, current and former intelligence officials said. Homeland Security shares information with other agencies only "on a limited basis," spokesman Russ Knocke said.

NSA gets access to the flow of data from telecommunications switches through the FBI, according to current and former officials. It also has a partnership with FBI's Digital Collection system, providing access to Internet providers and other companies. The existence of a shadow hub to copy information about AT&T Corp. telecommunications in San Francisco is alleged in a lawsuit against AT&T filed by the civil-liberties group Electronic Frontier Foundation, based on documents provided by a former AT&T official. In that lawsuit, a former technology adviser to the Federal Communications Commission says in a sworn declaration that there could be 15 to 20 such operations around the country. Current and former intelligence officials confirmed a domestic network of hubs, but didn't know the number. "As a matter of policy and law, we can not discuss matters that are classified," said FBI spokesman John Miller.

The budget for the NSA's data-sifting effort is classified, but one official estimated it surpasses $1 billion. The FBI is requesting to nearly double the budget for the Digital Collection System in 2009, compared with last year, requesting $42 million. "Not only do demands for information continue to increase, but also the requirement to facilitate information sharing does," says a budget justification document, noting an "expansion of electronic surveillance activity in frequency, sophistication, and linguistic needs."

Write to Siobhan Gorman at siobhan.gorman@wsj.com³