By Christiane Schulzki Haddouti

Telepolis Magazine, April 28, 2000

The heads of the American intelligence agencies, NSA and
CIA, have denied before Congress conducting economic
espionage by means of Echelon. They claim to have no
interest in European secrets, and believe such secrets would
not be worthwhile.

In March former CIA Director James Woolsey said the opposite
in the Wall Street Journal, "that it was well-known that the
CIA had spied on the Europeans" because "your businesses use
bribery". Now his successor in the office, George Tenet, in
his first public Congressional hearing goes against that
view: The CIA has no "interest" in economic spying.

The CIA head was scheduled together with the head of the
National Security Agency (NSA), Michael Hayden, to appear
before the committee on April 12, in order to respond to
European complaints over Echelon. American civil rights
organizations like the American Civil Liberty Union also
fear also that the high performance espionage system, a
leftover of the cold war, is being used for surveilling
American citizens.

Tenet denied that, if not all of it: Sometimes the CIA
gathers intelligence on spying of foreign firms and/or their
governments which is directed against American firms. In
such cases the CIA gives the information "to other, suitable
authorities." These may then use the data for "other means
and in other channels," in order to support US firms. Tenet
dissociated himself however from active economic espionage:
"We play defense, we never play offense, and we will never
play offense."



Statement by Director of Central Intelligence George J.
Tenet Before the House Permanent Select Committee on
Intelligence (as prepared for delivery)

12 April 2000

Mr. Chairman, I am here today to discuss allegations about
SIGINT activities and the so-called Echelon program of the
National Security Agency with a very specific objective: To
assure this Committee, the Congress, and the American public
that the United States Intelligence Community is
unequivocally committed to conducting its activities in
accordance with US law and due regard for the rights of

Intelligence agencies normally do not, and should not,
publicly reveal sensitive details about their operations.
For this reason, signals intelligence - or SIGINT - activities
may not be known or understood by the public at large. Their
limits are well known to the members of this committee but,
like me, you too cannot speak publicly as much as you would
wish. As the Director of Central Intelligence with overall
responsibility for establishing requirements and priorities
for the collection of intelligence vital to our national
security, I understand that the Intelligence Community must
have the confidence of the American public to ensure we have
an aggressive intelligence capability. I also know that our
foreign allies have to be reassured that their trust in us
is justified and that our relationships are beneficial from
their perspectives.

There have been recent allegations that the Intelligence
Community through NSA has improperly directed our SIGINT
capabilities against the private conversations of US
persons. That is not the case.

There is a rigorous regime of checks and balances which
we - the CIA, the NSA and the FBI - scrupulously adhere to
whenever the conversations of US persons are
involved - directly or indirectly.

We do not collect against US persons unless they are agents
of a foreign power, as that term is defined in law. We do
not target their conversations for collection in the United
States unless a FISA [Foreign Intelligence Surveillance Act]
warrant has been obtained from the FISA court by the Justice
Department. And we do not target their conversations for
collection overseas unless Executive Order 12333 has been
followed and the Attorney General has personally approved

There also have been allegations that the Intelligence
Community is conducting industrial espionage to provide
unfair advantages to US companies. I recognize that it is
standard practice for some countries to use their
intelligence services to conduct economic espionage, but
that is not the policy or practice of the United States. If
we lose the confidence of the American people because they
think we are violating their privacy rights, or if we were
to violate the trust of our allies and steal their business
secrets to help US companies increase their profits, we
would put your support for our SIGINT programs in jeopardy,
and risk losing our eyes and earsÑas well as US
influenceÑaround the world. I cannot afford to let that

For this reason, I welcome the opportunity, in the face of
provocative allegations about NSA that have attracted
national and international attention, as well as legitimate
congressional interest, to allay concerns that have arisen
in recent months about the conduct of SIGINT activities. I
will say a few words, then turn to NSA Director General
Hayden so that he can address more specifically the system
under which NSA operates and some of the specific questions
that have been raised.

As you know, signals intelligence is one of the pillars of
US intelligence. Along with our other intelligence
collection activities, we rely on SIGINT to collect
information about the capabilities and intentions of foreign
powers, organizations, and persons to support the foreign
policy and other national interests of the United States.
SIGINT is critical to monitoring terrorist activities, arms
control compliance, narcotics trafficking, and the
development of chemical and biological weapons and weapons
of mass destruction. We could not monitor regional conflicts
affecting US interests or assess foreign capabilities and
protect our military forces and civilian personnel overseas
as effectively without SIGINT.

As DCI, I am responsible for ensuring that requirements for
intelligence collection are clearly established and assigned
to appropriate Intelligence Community elements for action. I
look to my Assistant Directors of Central Intelligence for
Collection and for Analysis and Production to help ensure
that SIGINT collection is addressing and satisfying high
priority intelligence needs. NSA and an interagency process
under my overall cognizance specifically address
intelligence needs identified by the policy community,
military commands, and the Intelligence Community. This
long-standing process and the regular review of proposed
activities help ensure that SIGINT collection and reporting
is consistent both with approved needs and with US laws and
policies to protect personal privacy and the rights of US

We conduct SIGINT to protect US national security and the
lives of Americans. Our targets are foreign. There are, as
you know, some special circumstances recognized in the law
in which collection on Americans is permitted. US persons,
both individuals and companies, who engage in activities on
behalf of foreign powers, terrorist groups, and others
working against the US are of great concern to us. General
Hayden will explain in more detail how NSA can lawfully
obtain such information.

I can assure this Committee that the Intelligence Community
adheres to a strict legal regime for approval,
implementation, conduct, minimization and use, which
involves the General Counsels Offices of each of the
Agencies involved as well as the Attorney General herself.
We protect the rights of Americans and their privacy; we do
not violate it.

With respect to allegations of industrial espionage, the
notion that we collect intelligence to promote American
business interests is simply wrong. We do not to target
foreign companies to support American business interests.

* First, our business is to gather information vital to
the national defense and foreign policy of the US. Other
departments and agencies in the US have the responsibility
to assist US business interests. Our valuable resources are
directed elsewhere.

* Second, if we are to maintain good relations with our
allies, they have to know they can trust us not to become
involved in missions that are not directly related to
national security. That is important for us, and it is
important to them as they justify their cooperation with us
to their own people.

* Third, if we did this, where would we draw the line?
Which companies would we help? Corporate giants? The little
guy? All of them? I think we quickly would get into a mess
and would raise questions of whether we are being unfair to
one or more of our own businesses.

Of course, SIGINT does provide economic information that is
useful to the United States Government. It can provide
insight into global economic conditions and trends and
assist policymakers in dealing with economic crises. On many
occasions, it has provided information about the intentions
of foreign businesses, some operated by governments, to
violate US laws or sanctions or to deny US businesses a
level playing field. When such information arises, it is
provided to the Treasury Department, the Commerce
Department, or other government agencies responsible for
enforcing US laws. The Intelligence Community is just not in
the business of conducting industrial espionage, and is not
working on behalf of US companies to provide them unfair

Finally, there are mechanisms inside and outside NSA that
oversee signals intelligence activities. SIGINT is conducted
pursuant to procedures approved by the Attorney General.
Intelligence officers are required to report violations of
law to the Attorney General through their department and
agency heads. By Executive order, the General Counsels and
Inspectors General of the Intelligence Community are
required to report to the President's Intelligence Oversight
Board activities they have reason to believe may be unlawful
or contrary to Executive order or Presidential directive.
Violations of law also must be reported to Congress. As you
will hear, NSA and the Department of Defense have processes
in place to implement these requirements. Moreover, as you
know, I take very seriously my obligation to keep the
intelligence committees fully and currently informed of
intelligence activities and violations of law that come to
my attention.

My remarks today are intended to give the American people a
meaningful context for what we do, why we do it, and how we
try to ensure at all times that we do it legally, ethically,
and responsibly. There can be no reasonable doubt that the
conduct of properly controlled and lawful foreign
intelligence activities is vital to US national security
interests. We in the Intelligence Community prize our
Constitution and liberties no less than other citizens, and
we take very, very seriously our obligations under the law
to guard against misuse. Let me now turn to General Hayden.





12 April 2000

Thank you for this opportunity to provide an overview of the
regulation and oversight of the National Security Agency's
electronic surveillance activities. It is a pleasure to be
here today.


The National Security Agency (NSA) performs electronic
surveillance to collect foreign intelligence information for
the military and policymakers. As the Director of Central
Intelligence noted, NSA provides valuable intelligence to
U.S. Government consumers on a wide range of issues of
concern to all Americans, such as international terrorism,
narcotics trafficking, and proliferation of weapons of mass
destruction. NSA's electronic surveillance activities are
subject to strict regulation by statute1 and Executive
Order2 due to the potential intrusiveness and the
implications for the privacy of U.S. persons3 of these
activities. NSA's electronic surveillance activities are
also subject to oversight from multiple bodies within all
three branches of the Government. These safeguards have
ensured that NSA is operating within its legal authority.


The Seventies were a watershed for the Intelligence
Community. Congressional investigating committees, led by
Senator Frank Church and Congressman Otis Pike, found that
Government agencies, including NSA, conducted a number of
improper intelligence activities directed against U.S.
citizens. The revelations of these committees resulted in
new rules for U.S. intelligence agencies, rules meant to
inhibit abuses while preserving our intelligence
capabilities. In other words, a concerted effort was made to
balance the country's need for foreign intelligence
information with the need to protect core individual privacy

A wide-ranging, new intelligence oversight structure was
built into U.S. law. A series of laws and Executive Orders
established oversight procedures and substantive limitations
on intelligence activities. In the aftermath of the Church
and Pike committees' revelations, Congress passed the
Foreign Intelligence Surveillance Act (FISA) which created a
procedural structure with a special court for considering
and approving certain surveillances that occur in the U.S.
and thus have the potential to affect rights guaranteed by
the Constitution. The House and Senate each established
intelligence oversight committees. President Ford issued an
Executive Order that established for the first time a formal
system of intelligence oversight in the Executive Branch.
Oversight mechanisms were established within the Department
of Justice and within each intelligence agency. The
President also established an independent Intelligence
Oversight Board.

The result today at NSA is an intelligence gathering system
that operates within detailed, constitutionally-based,
substantive, and procedural limits under the watchful eyes
of Congress, numerous institutions within the Executive
Branch, and -- through the FISA -- the judiciary. The
privacy framework is technology neutral and does not require
amendment to accommodate new communications technologies.

Recently, NSA has been the subject of media reports which
suggest that NSA collects all electronic communications,
spies on U.S. citizens, and provides intelligence
information to U.S. companies. There also have been claims
that NSA activities are not subject to regulation or
oversight. All of these claims are false or misleading.
Today, I will describe NSA's electronic surveillance
authority, the framework regulating that authority for the
purpose of protecting privacy rights, and the oversight
mechanisms in place to monitor NSA's activities.

NSA's Electronic Surveillance Authority

NSA's electronic surveillance authority is found in
Executive Order 12333, entitled "Intelligence Activities."
Executive Order 12333 authorizes NSA to collect, process,
and disseminate signals intelligence information for
national foreign intelligence (and counterintelligence)
purposes and in support of U.S. military operations.4

NSA is not authorized to collect all electronic
communications. NSA is authorized to collect information
only for foreign intelligence purposes and to provide it
only to authorized Government recipients. This means that
NSA is not authorized to provide signals intelligence
information to private U.S. companies and we do not do so.
Legal proscriptions notwithstanding, as a practical matter,
it is not technically possible to collect all electronic
communications everywhere in the world on an indiscriminate

Regulation of NSA's Electronic Surveillance Authority

Electronic surveillance conducted for foreign intelligence
purposes is regulated by statutory restrictions flowing from
the Foreign Intelligence Surveillance Act, and restrictions
flowing from Executive Order 12333, which manifest
themselves in the form of restrictions applicable to all
intelligence collection activities and specific restrictions
(Attorney General Procedures) regulating NSA's electronic
surveillance activities.

Statutory Restriction on Electronic Surveillance in the U.S.
-- Foreign Intelligence Surveillance Act (FISA)

Under FISA, NSA may only target communications of a U.S.
person in the United States if a federal judge finds
probable cause to believe that the U.S. person is an agent
of a foreign power. Probable cause exists when facts and
circumstances within the applicant's knowledge and of which
he/she has reasonably trustworthy information are sufficient
to warrant a person of reasonable caution to believe that
the proposed target of the surveillance is an agent of a
foreign power. Under the statute, a judge may determine a
U.S. person to be an agent of a foreign power only if there
is information to support a finding that the individual is a
spy, terrorist, saboteur, or someone who aids or abets them.

All FISA collection is regulated by special minimization
procedures approved by the FISA Court and the Attorney
General. Since the enactment of the FISA in 1978, there have
been no more than a very few instances of NSA seeking FISA
authorization to target a U.S. person in the United States.
In those instances there was probable cause to believe that
the individuals were involved in terrorism.

Executive Order 12333 - Restrictions Imposed on All
Intelligence Collection Activities

There are certain restrictions imposed by E.O. 12333 upon
all intelligence collection activities engaged in by the
Executive Branch agencies. Intelligence collection must be
conducted in a manner "consistent with the Constitution and
applicable law and respectful of the principles upon which
the United States was founded." (Sec. 2.1). These include
the Fourth Amendment's prohibition against unreasonable
searches and seizures. Intelligence collection must not be
undertaken to acquire information concerning the domestic
activities of U.S. persons. (Sec. 2.3(b)). The least
intrusive collection techniques feasible must be used in the
United States or against U.S. persons located abroad. (Sec.
2.4). Finally, agencies in the Intelligence Community are
prohibited from having other parties engage in activities
forbidden by the Executive Order on their behalf. (Sec.
2.12) This means that NSA can not ask another country to
illegally spy on U.S. persons on our behalf, and we do not.

Executive Order 12333 Procedures - Specific Restrictions
Imposed on NSA's Collection Techniques

In delegating authority to the Director, NSA in E.O. 12333,
the President recognized that certain intelligence gathering
techniques, such as signals intelligence, are particularly
intrusive and must be conducted in a "reasonable" manner to
comport with Fourth Amendment and statutory requirements.
The Executive Order requires, therefore, that certain
written procedures be implemented regulating such
techniques. The procedures are designed to protect
constitutional and other legal rights and limit the use of
information collected to lawful governmental purposes. The
Executive Order requires that the head of the agency (i.e.,
for NSA, the Secretary of Defense) and the Attorney General
approve the procedures.

NSA has such procedures in place. They have been approved by
the Secretary of Defense and the Attorney General. They are
classified and are appended to DoD Directive 5240.1-R, the
DoD regulation which implements E.O. 12333. Prior to
implementing or revising these procedures, NSA provides them
to the House and Senate intelligence committees, to the
Assistant to the Secretary of Defense for Intelligence
Oversight and the Intelligence Oversight Board of the
President's Foreign Intelligence Advisory Board. The
procedures are incorporated into an NSA Regulation and the
substance of the procedures is promulgated throughout the
signals intelligence system in a detailed directive, U.S.
Signals Intelligence Directive 18, signed by the Director,
NSA. This Directive provides a single document in which all
the restrictions, whether originating from constitutional,
statutory, executive order, or regulatory provisions, may be

Executive Order 12333 Restrictions on Electronic
Surveillance Outside the U.S.

Under E.O. 12333 and implementing regulations signed by the
Secretary of Defense and approved by the Attorney General,
NSA must obtain the Attorney General's approval before
conducting electronic surveillance directed against a U.S.
person abroad. The Attorney General must have probable cause
to believe that the person is an agent of a foreign power,
either an officer or employee of a foreign power, or a spy,
terrorist, saboteur, or someone who aides or abets them.
Occasionally, NSA seeks Attorney General authorization to
target a "U.S. person" overseas. An example of such a
request would be one seeking authorization to target a
terrorist overseas who is a U.S. permanent resident alien.

Executive Order 12333 Restrictions Relative to Retention and
Dissemination of Unintentionally Acquired U.S. Person

NSA's collection of foreign intelligence from foreign
individuals and entities is designed to minimize the
incidental, or unintentional, collection of communications
to, from, or about U.S. persons. When NSA does acquire
information about a U.S. person, NSA's reporting does not
disclose that person's identity, and NSA will only do so
upon a specific request that meets the standard derived from
statute5 and imposed by Executive Order regulation -- that
is, the information is necessary to understand a particular
piece of foreign intelligence or assess its importance.
Specifically, no information, to, from, or about a U.S.
person may be retained unless the information is necessary
to understand a particular piece of foreign intelligence or
assess its importance. Similarly, no identities of U.S.
persons may be disseminated (that is, transmitted to another
Government department or agency) by NSA unless doing so is
necessary to understand a particular piece of foreign
intelligence or assess its importance. For example, if NSA
intercepted a communication indicating that a terrorist was
about to harm a U.S. person, the name of the U.S. person
would be retained and disseminated to appropriate law
enforcement officials.

Oversight of NSA's Electronic Surveillance Activities

Oversight of NSA's activities is conducted by organizations
internal to NSA, external to NSA in the Executive Branch,
and in the Legislative and Judicial Branches.

Legislative Oversight

As you are fully aware, the intelligence committees conduct
routine oversight of NSA activities. The committees
regularly call for detailed briefings on NSA's collection
activities and the procedures in place designed to protect
the privacy rights of U.S. persons. Committee staff
routinely visits NSA Headquarters and field sites as part of
its oversight activities. The committees also receive
semi-annual reports from the Department of Justice
concerning NSA's activities under the Foreign Intelligence
Surveillance Act. As discussed above, NSA has in place
procedures for our FISA and other activities to ensure that
the Agency acts in a manner that protects the privacy rights
of U.S. persons. These procedures, as well as any subsequent
changes, are reported to the intelligence committees prior
to implementation. Further, NSA is required to: keep the
committees fully and currently informed of all intelligence
activities, including any significant anticipated
intelligence activity; furnish any information on
intelligence activities requested by the committees to carry
out their oversight responsibilities; and report to the
committees any illegal intelligence activity. Recently, this
Committee requested NSA documents on a number of legal
topics related to NSA's collection activities. NSA has fully
complied with that request and met with Committee staff on
several occasions.

Section 309 of the Intelligence Authorization Act for FY2000
(Pub. L. No. 106-120) called for me to submit a report to
Congress prepared jointly with the Attorney General and the
Director of Central Intelligence providing a detailed
analysis of the legal standards employed by elements of the
Intelligence Community in conducting signals intelligence
activities, including electronic surveillance. The report we
submitted in February of this year clearly demonstrates that
there are legal standards and procedures in place to protect
the privacy rights of U.S. persons when NSA and other
Intelligence Community entities conduct electronic

Judicial Oversight

The Foreign Intelligence Surveillance Court (FISC) is
authorized by the Foreign Intelligence Surveillance Act to
issue court orders for electronic surveillance directed
against foreign powers or their agents. In reviewing
applications for court orders, the FISC judges scrutinize
the targets, the methods of surveillance, and the procedures
for handling the information collected.

Executive Branch Oversight

Within the Executive Office of the President, the
Intelligence Oversight Board (IOB) conducts oversight of
intelligence activities. The IOB reports to the President
and the Attorney General on any intelligence activities the
IOB believes may be unlawful. The IOB also reviews agency
Inspector General and General Counsel practices and
procedures for discovering and reporting intelligence
activities that may be unlawful, as well as conducts any
investigations deemed necessary to carry out their

In the Department of Justice, the Office of Intelligence
Policy and Review (OIP&R) reviews compliance with the
court-ordered minimization procedures designed to protect
the privacy rights of U.S. persons. This office also files
semi-annual reports with Congress on electronic surveillance
conducted under FISA and is intimately involved with NSA's
FISA applications. The Office of Legal Counsel at DoJ as
well as OIP&R have been involved in setting the legal
standards under which NSA's signals intelligence activities
are conducted to ensure that these activities strike an
appropriate balance between the country's intelligence needs
and individual privacy rights.

In the Department of Defense, the Assistant to the Secretary
of Defense (Intelligence Oversight) and the Office of
General Counsel are engaged in intelligence oversight of
NSA. Within NSA, the Operations Directorate's Center for
Oversight and Compliance, the Inspector General, the General
Counsel, and NSA's Intelligence Oversight Board also conduct
oversight of NSA activities. The NSA Office of General
Counsel conducts extensive privacy protection and
intelligence oversight training for all Agency employees who
are involved in collection that implicates Fourth Amendment
privacy rights. NSA also enforces a strict set of audit
procedures to ensure compliance with the privacy rules.


In performing our mission, NSA constantly deals with
information that must remain confidential so that we can
continue to collect foreign intelligence information on
various subjects that are of vital interest to the nation.
Intelligence functions are of necessity conducted in secret,
yet the principles of our democracy require an informed
populace and public debate on national issues. The American
people must be confident that the power they have entrusted
to us is not being, and will not be, abused. These opposing
principles--secrecy on one hand, and open debate on the
other--can be reconciled successfully through rigorous
oversight. The current oversight framework reconciles these
principles. It serves as a needed check on what otherwise
has the potential to be an intrusive system. The regulatory
and oversight structure, in place now for nearly a quarter
of a century, has ensured that the imperatives of national
security are balanced with democratic values.

Mr. Chairman, this is a complex and difficult issue, one
that involves an intricate mix of technical and legal
nuance. In the end, however, the concerns expressed about
NSA's capabilities strike at very basic desires on the part
of our citizens to be secure in their homes, in their
persons, and in their communications. My appearance here
today is as the Director of NSA. But I'm also here as a
citizen who believes that the careful and continuing
oversight of NSA -- at many levels, internal and external --
represents a commitment to striking a balance between the
government's need for information against the privacy rights
of U.S. persons that my fellow citizens and their elected
representatives can endorse. I can assure you, Mr. Chairman,
and all our citizens, that I consider the maintenance of
that balance one of my highest priorities, as do the other
men and women of NSA.



1. The Foreign Intelligence Surveillance Act, 50 U.S.C. ¤
1801 et seq.

2. Exec. Order No. 12333, 3 C.F.R. 200 (1982), reprinted
in 50 U.S.C. ¤ 401 note.

3. "U.S. persons" is a term which includes citizens,
permanent resident aliens, groups substantially composed of
either or both of these categories of individuals, and
corporations incorporated in the United States. See 50
U.S.C. ¤ 1801(i) and E.O. 12333, ¤ 3.4(i).

4. See Id. at ¤ 1.12(b)(3), (4), (5), (6), and (7).
Signals intelligence is comprised of communications
intelligence and electronics intelligence. Communications
intelligence consists of foreign communications passed by
radio, wire, or other electromagnetic means and electronics
intelligence consists of foreign electromagnetic radiations
such as emissions from a radar system. National Security
Council Intelligence Directive 6, "Signals Intelligence."

5. See 50 U.S.C. ¤ 1801(h).

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