NAO - Domestic Spying, Inc.

Domestic Spying, Inc.

by Tim Shorrock , Special to CorpWatch
November 27th, 2007
A new intelligence institution to be inaugurated soon by the Bush
administration will allow government spying agencies to conduct broad surveillance and reconnaissance inside the United States for the first time. Under a proposal being reviewed by Congress, a National Applications Office (NAO) will be established to coordinate how the Department of Homeland Security (DHS) and domestic law enforcement and rescue agencies use imagery and communications intelligence picked up by U.S. spy satellites. If the plan goes forward, the NAO will create the legal mechanism for an unprecedented degree of domestic intelligence gathering that would make the U.S. one of the world's most closely monitored nations. Until now, domestic use of electronic intelligence from spy satellites was limited to scientific agencies with no responsibility for national security or law enforcement.

The intelligence-sharing system to be managed by the NAO will rely heavily on private contractors including Boeing, BAE Systems, L-3 Communications and Science Applications International Corporation (SAIC). These companies already provide technology and personnel to U.S. agencies involved in foreign intelligence, and the NAO greatly expands their markets. Indeed, at an intelligence conference in San Antonio, Texas, last month, the titans of the industry were actively lobbying intelligence officials to buy products specifically designed for domestic surveillance.

The NAO was created under a plan tentatively approved in May 2007 by Director of National Intelligence Michael McConnell. Specifically, the NAO will oversee how classified information collected by the National Security Agency (NSA), the National Geospatial-Intelligence Agency (NGA) and other key agencies is used within the U.S. during natural disasters, terrorist attacks and other events affecting national security. The most critical intelligence will be supplied by the NSA and the NGA, which are often referred to by U.S. officials as the “eyes” and “ears” of the intelligence community.

The NSA, through a global network of listening posts, surveillance planes, and satellites, captures signals from phone calls, e-mail and Internet traffic, and translates and analyzes them for U.S. military and national intelligence officials.

The National Geospatial-Intelligence Agency (NGA), which was formally inaugurated in 2003, provides overhead imagery and mapping tools that allow intelligence and military analysts to monitor events from the skies and space. The NSA and the NGA have a close relationship with the super-secret National Reconnaissance Office (NRO), which builds and maintains the U.S. fleet of spy satellites and operates the ground stations where the NSA’s signals and the NGA’s imagery are processed and analyzed. By law, their collection efforts are supposed to be confined to foreign countries and battlefields.

The National Applications Office was conceived in 2005 by the Office of the Director of National Intelligence (ODNI), which Congress created in 2004 to oversee the 16 agencies that make up the U.S. intelligence community. The ODNI, concerned that the legal framework for U.S. intelligence operations had not been updated for the global “war on terror,” turned to Booz Allen Hamilton of McLean, Virginia -- one of the largest contractors in the spy business. The company was tasked with studying how intelligence from spy satellites and photoreconnaissance planes could be better used domestically to track potential threats to security within the U.S.. The Booz Allen study was completed in May of that year, and has since become the basis for the NAO oversight plan. In May 2007, McConnell, the former executive vice president of Booz Allen, signed off on the creation of the NAO as the principal body to oversee the merging of foreign and domestic intelligence collection operations.

The NAO is "an idea whose time has arrived," Charles Allen, a top U.S. intelligence official, told the Wall Street Journal in August 2007 after it broke the news of the creation of the NAO. Allen, the DHS's chief intelligence officer, will head the new program. The announcement came just days after President George W. Bush signed a new law approved by Congress to expand the ability of the NSA to eavesdrop, without warrants, on telephone calls, e-mail and faxes passing through telecommunications hubs in the U.S. when the government suspects agents of a foreign power may be involved. "These [intelligence] systems are already used to help us respond to crises," Allen later told the Washington Post. "We anticipate that we can also use them to protect Americans by preventing the entry of dangerous people and goods into the country, and by helping us examine critical infrastructure for vulnerabilities."

Donald Kerr, a former NRO director who is now the number two at ODNI, recently explained to reporters that the intelligence community was no longer discussing whether or not to spy on U.S. citizens: “Our job now is to engage in a productive debate, which focuses on privacy as a component of appropriate levels of security and public safety,'' Kerr said. ''I think all of us have to really take stock of what we already are willing to give up, in terms of anonymity, but [also] what safeguards we want in place to be sure that giving that doesn't empty our bank account or do something equally bad elsewhere.''

What Will The NAO Do?

The plan for the NAO builds on a domestic security infrastructure that has been in place for at least seven years. After the terrorist attacks of September 11, 2001, the NSA was granted new powers to monitor domestic communications without obtaining warrants from a secret foreign intelligence court established by Congress in 1978 (that warrant-less program ended in January 2007 but was allowed to continue, with some changes, under legislation passed by Congress in August 2007).

Moreover, intelligence and reconnaissance agencies that were historically confined to spying on foreign countries have been used extensively on the home front since 2001. In the hours after the September 11th, 2001 attacks in New York, for example, the Bush administration called on the NGA to capture imagery from lower Manhattan and the Pentagon to help in the rescue and recovery efforts. In 2002, when two deranged snipers terrified the citizens of Washington and its Maryland and Virginia suburbs with a string of fatal shootings, the Federal Bureau of Investigation (FBI) asked the NGA to provide detailed images of freeway interchanges and other locations to help spot the pair.

The NGA was also used extensively during Hurricane Katrina , when the agency provided overhead imagery -- some of it supplied by U-2 photoreconnaissance aircraft -- to federal and state rescue operations. The data, which included mapping of flooded areas in Louisiana and Mississippi, allowed residents of the stricken areas to see the extent of damage to their homes and helped first-responders locate contaminated areas as well as schools, churches and hospitals that might be used in the rescue. More recently, during the October 2007 California wildfires, the Federal Emergency Management Agency (FEMA) asked the NGA to analyze overhead imagery of the fire zones and determine the areas of maximum intensity and damage. In every situation that the NGA is used domestically, it must receive a formal request from a lead domestic agency, according to agency spokesperson David Burpee. That agency is usually FEMA, which is a unit of DHS.

At first blush, the idea of a U.S. intelligence agency serving the public by providing imagery to aid in disaster recovery sounds like a positive development, especially when compared to the Bush administration’s misuse of the NSA and the Pentagon’s Counter-Intelligence Field Activity (CIFA) to spy on American citizens. But the notion of using spy satellites and aircraft for domestic purposes becomes problematic from a civil liberties standpoint when the full capabilities of agencies like the NGA and the NSA are considered.

Imagine, for example, that U.S. intelligence officials have determined, through NSA telephone intercepts, that a group of worshippers at a mosque in Oakland, California, has communicated with an Islamic charity in Saudi Arabia. This is the same group that the FBI and the U.S. Department of the Treasury believe is linked to an organization unfriendly to the United States.

Imagine further that the FBI, as a lead agency, asks and receives permission to monitor that mosque and the people inside using high-resolution imagery obtained from the NGA. Using other technologies, such as overhead traffic cameras in place in many cities, that mosque could be placed under surveillance for months, and -- through cell phone intercepts and overhead imagery -- its suspected worshipers carefully tracked in real-time as they moved almost anywhere in the country.

The NAO, under the plan approved by ODNI’s McConnell, would determine the rules that will guide the DHS and other lead federal agencies when they want to use imagery and signals intelligence in situations like this, as well as during natural disasters. If the organization is established as planned, U.S. domestic agencies will have a vast array of technology at their disposal. In addition to the powerful mapping and signals tools provided by the NGA and the NSA, domestic agencies will also have access to measures and signatures intelligence (MASINT) managed by the Defense Intelligence Agency (DIA), the principal spying agency used by the secretary of defense and the Joint Chiefs of Staff.

(MASINT is a highly classified form of intelligence that uses infrared sensors and other technologies to “sniff” the atmosphere for certain chemicals and electro-magnetic activity and “see” beneath bridges and forest canopies. Using its tools, analysts can detect signs that a nuclear power plant is producing plutonium, determine from truck exhaust what types of vehicles are in a convoy, and detect people and weapons hidden from the view of satellites or photoreconnaissance aircraft.)

Created By Contractors

The study group that established policies for the NAO was jointly funded by the ODNI and the U.S. Geological Survey (USGS), one of only two domestic U.S. agencies that is currently allowed, under rules set in the 1970s, to use classified intelligence from spy satellites. (The other is NASA, the National Aeronautics and Space Administration.) The group was chaired by Keith Hall, a Booz Allen vice president who manages his firm’s extensive contracts with the NGA and previously served as the director of the NRO.

Other members of the group included seven other former intelligence officers working for Booz Allen, as well as retired Army Lieutenant General Patrick M. Hughes, the former director of the DIA and vice president of homeland security for L-3 Communications, a key NSA contractor; and Thomas W. Conroy, the vice president of national security programs for Northrop Grumman, which has extensive contracts with the NSA and the NGA and throughout the intelligence community.

From the start, the study group was heavily weighted toward companies with a stake in both foreign and domestic intelligence. Not surprisingly, its contractor-advisers called for a major expansion in the domestic use of the spy satellites that they sell to the government. Since the end of the Cold War and particularly since the September 11, 2001 attacks, they said, the “threats to the nation have changed and there is a growing interest in making available the special capabilities of the intelligence community to all parts of the government, to include homeland security and law enforcement entities and on a higher priority basis.”

Contractors are not new to the U.S. spy world. Since the creation of the Central Intelligence Agency (CIA) and the modern intelligence system in 1947, the private sector has been tapped to design and build the technology that facilitates electronic surveillance. Lockheed, for example, built the U-2, the famous surveillance plane that flew scores of spy missions over the Soviet Union and Cuba. During the 1960s, Lockheed was a prime contractor for the Corona system of spy satellites that greatly expanded the CIA’s abilities to photograph secret military installations from space. IBM, Cray Computers and other companies built the super-computers that allowed the NSA to sift through data from millions of telephone calls, and analyze them for intelligence that was passed on to national leaders.

Spending on contracts has increased exponentially in recent years along with intelligence budgets, and the NSA, the NGA and other agencies have turned to the private sector for the latest computer and communications technologies and for intelligence analysts. For example, today about half of staff at the NSA and NGA are private contractors. At the DIA, 35 percent of the workers are contractors. But the most privatized agency of all is the NRO, where a whopping 90 percent of the workforce receive paychecks from corporations. All told the U.S. intelligence agencies spend some 70 percent of their estimated $60 billion annual budget on contracts with private companies, according to documents this reporter obtained in June 2007 from the ODNI.

The plans to increase domestic spying are estimated to be worth billions of dollars in new business for the intelligence contractors. The market potential was on display in October at GEOINT 2007, the annual conference sponsored by the U.S. Geospatial Intelligence Foundation (USGIF), a non-profit organization funded by the largest contractors for the NGA. During the conference, which took place in October at the spacious Henry B. Gonzalez Convention Center in downtown San Antonio, many companies were displaying spying and surveillance tools that had been used in Afghanistan and Iraq and were now being re-branded for potential domestic use.

BAE Systems Inc.

On the first day of the conference, three employees of BAE Systems Inc. who had just returned from a three-week tour of Iraq and Afghanistan with the NGA demonstrated a new software package called SOCET GXP. (BAE Systems Inc. is the U.S. subsidiary of the UK-based BAE, the third-largest military contractor in the world.)

GXP uses Google Earth software as a basis for creating three-dimensional maps that U.S. commanders and soldiers use to conduct intelligence and reconnaissance missions. Eric Bruce, one of the BAE employees back from the Middle East, said his team trained U.S. forces to use the GXP software “to study routes for known terrorist sites” as well as to locate opium fields. “Terrorists use opium to fund their war,” he said. Bruce also said his team received help from Iraqi citizens in locating targets. “Many of the locals can’t read maps, so they tell the analysts, ‘there is a mosque next to a hill,’” he explained.

Bruce said BAE’s new package is designed for defense forces and intelligence agencies, but can also be used for homeland security and by highway departments and airports. Earlier versions of the software were sold to the U.S. Army’s Topographic Engineering Center, where it has been used to collect data on more than 12,000 square kilometers of Iraq, primarily in urban centers and over supply routes.

Another new BAE tool displayed in San Antonio was a program called GOSHAWK, which stands for “Geospatial Operations for a Secure Homeland – Awareness, Workflow, Knowledge.” It was pitched by BAE as a tool to help law enforcement and state and local emergency agencies prepare for, and respond to, “natural disasters and terrorist and criminal incidents.” Under the GOSHAWK program, BAE supplies “agencies and corporations” with data providers and information technology specialists “capable of turning geospatial information into the knowledge needed for quick decisions.” A typical operation might involve acquiring data from satellites, aircraft and sensors in ground vehicles, and integrating those data to support an emergency or security operations center. One of the program’s special attributes, the company says, is its ability to “differentiate levels of classification,” meaning that it can deduce when data are classified and meant only for use by analysts with security clearances.

These two products were just a sampling of what BAE, a major player in the U.S. intelligence market, had to offer. BAE’s services to U.S. intelligence -- including the CIA and the National Counter-Terrorism Center -- are provided through a special unit called the Global Analysis Business Unit. It is located in McLean, Virginia, a stone’s throw from the CIA. The unit is headed by John Gannon, a 25-year veteran of the CIA who reached the agency’s highest analytical ranks as deputy director of intelligence and chairman of the National Intelligence Council. Today, as a private sector contractor for the intelligence community, Gannon manages a staff of more than 800 analysts with security clearances.

A brochure for the Global Analysis unit distributed at GEOINT 2007 explains BAE’s role and, in the process, underscores the degree of outsourcing in U.S. intelligence. “The demand for experienced, skilled, and cleared analysts – and for the best systems to manage them – has never been greater across the Intelligence and Defense Communities, in the field and among federal, state, and local agencies responsible for national and homeland security,” BAE says. The mission of the Global Analysis unit, it says, “is to provide policymakers, warfighters, and law enforcement officials with analysts to help them understand the complex intelligence threats they face, and work force management programs to improve the skills and expertise of analysts.”

At the bottom of the brochure is a series of photographs illustrating BAE’s broad reach: a group of analysts monitoring a bank of computers; three employees studying a map of Europe, the Middle East and the Horn of Africa; the outlines of two related social networks that have been mapped out to show how their members are linked; a bearded man, apparently from the Middle East and presumably a terrorist; the fiery image of a car bomb after it exploded in Iraq; and four white radar domes (known as radomes) of the type used by the NSA to monitor global communications from dozens of bases and facilities around the world.

The brochure may look and sound like typical corporate public relations. But amid BAE’s spy talk were two phrases strategically placed by the company to alert intelligence officials that BAE has an active presence inside the U.S.. The tip-off words were “federal, state and local agencies,” “law enforcement officials” and “homeland security.” By including them, BAE was broadcasting that it is not simply a contractor for agencies involved in foreign intelligence, but has an active presence as a supplier to domestic security agencies, a category that includes the Department of Homeland Security (DHS), the FBI as well as local and state police forces stretching from Maine to Hawaii.

ManTech, Boeing, Harris and L-3

ManTech International, an important NSA contractor based in Fairfax, Virginia, has perfected the art of creating multi-agency software programs for both foreign and domestic intelligence. After the September 11th, 2001 attacks, it developed a classified program for the Defense Intelligence Agency called the Joint Regional Information Exchange System. DIA used it to combine classified and unclassified intelligence on terrorist threats on a single desktop. ManTech then tweaked that software for the Department of Homeland Security and sold it to DHS for its Homeland Security Information Network. According to literature ManTech distributed at GEOINT, that software will “significantly strengthen the exchange of real-time threat information used to combat terrorism.” ManTech, the brochure added, “also provides extensive, advanced information technology support to the National Security Agency” and other agencies.

In a nearby booth, Chicago, Illinois-based Boeing, the world’s second largest defense contractor, was displaying its “information sharing environment” software, which is designed to meet the Office of the Director of National Intelligence’s new requirements on agencies to stop buying “stovepiped” systems that can’t talk to each other. The ODNI wants to focus on products that will allow the NGA and other agencies to easily share their classified imagery with the CIA and other sectors of the community. “To ensure freedom in the world, the United States continues to address the challenges introduced by terrorism,” a Boeing handout said. Its new software, the company said, will allow information to be “shared efficiently and uninterrupted across intelligence agencies, first responders, military and world allies.” Boeing has a reason for publishing boastful material like this: In 2005, it lost a major contract with the NRO to build a new generation of imaging satellites after ringing up billions of dollars in cost-overruns. The New York Times recently called the Boeing project “the most spectacular and expensive failure in the 50-year history of American spy satellite projects.”

Boeing’s geospatial intelligence offerings are provided through its Space and Intelligence Systems unit, which also holds contracts with the NSA. It allows agencies and military units to map global shorelines and create detailed maps of cities and battlefields, complete with digital elevation data that allow users to construct three-dimensional maps. (In an intriguing aside, one Boeing intelligence brochure lists among its “specialized organizations” Jeppesen Government and Military Services. According to a 2006 account by New Yorker reporter Jane Mayer, Jeppesen provided logistical and navigational assistance, including flight plans and clearance to fly over other countries, to the CIA for its “extraordinary rendition” program.)

Although less known as an intelligence contractor than BAE and Boeing, the Harris Corporation has become a major force in providing contracted electronic, satellite and information technology services to the intelligence community, including the NSA and the NRO. In 2007, according to its most recent annual report, the $4.2 billion company, based in Melbourne, Florida, won several new classified contracts. NSA awarded one of them for software to be used by NSA analysts in the agency’s “Rapidly Deployable Integrated Command and Control System,” which is used by the NSA to transmit “actionable intelligence” to soldiers and commanders in the field. Harris also supplies geospatial and imagery products to the NGA. At GEOINT, Harris displayed a new product that allows agencies to analyze live video and audio data imported from UAVs. It was developed, said Fred Poole, a Harris market development manager, “with input from intelligence analysts who were looking for a video and audio analysis tool that would allow them to perform ‘intelligence fusion’” -- combining information from several agencies into a single picture of an ongoing operation.

For many of the contractors at GEOINT, the highlight of the symposium was an “interoperability demonstration” that allowed vendors to show how their products would work in a domestic crisis.

One scenario involved Cuba as a rogue nation supplying spent nuclear fuel to terrorists bent on creating havoc in the U.S.. Implausible as it was, the plot, which involved maritime transportation and ports, allowed the companies to display software that was likely already in use by the Department of Homeland Security and Naval Intelligence. The “plot” involved the discovery by U.S. intelligence of a Cuban ship carrying spent nuclear fuel heading for the U.S. Gulf Coast; an analysis of the social networks of Cuban officials involved with the illicit cargo; and the tracking and interception of the cargo as it departed from Cuba and moved across the Caribbean to Corpus Christi, Texas, a major port on the Gulf Coast. The agencies involved included the NGA, the NSA, Naval Intelligence and the Marines, and some of the key contractors working for those agencies. It illustrated how sophisticated the U.S. domestic surveillance system has become in the six years since the 9/11 attacks.

L-3 Communications, which is based in New York city, was a natural for the exercise: As mentioned earlier, retired Army Lt. General Patrick M. Hughes, its vice president of homeland security, was a member of the Booz Allen Hamilton study group that advised the Bush administration to expand the domestic use of military spy satellites. At GEOINT, L-3 displayed a new program called “multi-INT visualization environment” that combines imagery and signals intelligence data that can be laid over photographs and maps. One example shown during the interoperability demonstration showed how such data would be incorporated into a map of Florida and the waters surrounding Cuba. With L-3 a major player at the NSA, this demonstration software is likely seeing much use as the NSA and the NGA expand their information-sharing relationship.

Over the past two years, for example, the NGA has deployed dozens of employees and contractors to Iraq to support the “surge” of U.S. troops. The NGA teams provide imagery and full-motion video -- much of it beamed to the ground from Unmanned Aerial Vehicles (UAV) -- that help U.S. commanders and soldiers track and destroy insurgents fighting the U.S. occupation. And since 2004, under a memorandum of understanding with the NSA, the NGA has begun to incorporate signals intelligence into its imagery products. The blending technique allows U.S. military units to track and find targets by picking up signals from their cell phones, follow the suspects in real-time using overhead video, and direct fighter planes and artillery units to the exact location of the targets -- and blow them to smithereens.

That’s exactly how U.S. Special Forces tracked and killed Abu Musab al-Zarqawi, the alleged leader of Al Qaeda in Iraq, the NGA’s director, Navy Vice Admiral Robert Murrett, said in 2006. Later, Murrett told reporters during GEOINT 2007, the NSA and the NGA have cooperated in similar fashion in several other fronts of the “war on terror,” including in the Horn of Africa, where the U.S. military has attacked Al Qaeda units in Somalia, and in the Philippines, where U.S. forces are helping the government put down the Muslim insurgent group Abu Sayyaf. “When the NGA and the NSA work together, one plus one equals five,” said Murrett.

Civil Liberty Worries

For U.S. citizens, however, the combination of NGA imagery and NSA signals intelligence in a domestic situation could threaten important constitutional safeguards against unwarranted searches and seizures. Kate Martin, the director of the Center for National Security Studies, a nonprofit advocacy organization, has likened the NAO plan to “Big Brother in the Sky.” The Bush administration, she told the Washington Post, is “laying the bricks one at a time for a police state.”

Some Congress members, too, are concerned. “The enormity of the NAO’s capabilities and the intended use of the imagery received through these satellites for domestic homeland security purposes, and the unintended consequences that may arise, have heightened concerns among the general public, including reputable civil rights and civil liberties organizations,” Bennie G. Thompson, a Democratic member of Congress from Mississippi and the chairman of the House Homeland Security Committee, wrote in a September letter to Secretary of Homeland Security Michael Chertoff. Thompson and other lawmakers reacted with anger after reports of the NAO and the domestic spying plan were first revealed by the Wall Street Journal in August. “There was no briefing, no hearing, and no phone call from anyone on your staff to any member of this committee of why, how, or when satellite imagery would be shared with police and sheriffs’ officers nationwide,” Thompson complained to Chertoff.

At a hastily organized hearing in September, Thompson and others demanded that the opening of the NAO be delayed until further studies were conducted on its legal basis and questions about civil liberties were answered. They also demanded biweekly updates from Chertoff on the activities and progress of the new organization. Others pointed out the potential danger of allowing U.S. military satellites to be used domestically. “It will terrify you if you really understand the capabilities of satellites,” warned Jane Harman, a Democratic member of Congress from California, who represents a coastal area of Los Angeles where many of the nation’s satellites are built. As Harman well knows, military spy satellites are far more flexible, offer greater resolution, and have considerably more power to observe human activity than commercial satellites. “Even if this program is well-designed and executed, someone somewhere else could hijack it,” Harman said during the hearing.

The NAO was supposed to open for business on October 1, 2007. But the Congressional complaints have led the ODNI and DHS to delay their plans. The NAO "has no intention to begin operations until we address your questions," Charles Allen of DHS explained in a letter to Thompson. In an address at the GEOINT conference in San Antonio, Allen said that the ODNI is working with DHS and the Departments of Justice and Interior to draft the charter for the new organization, which he said will face “layers of review” once it is established.

Yet, given the Bush administration’s record of using U.S. intelligence agencies to spy on U.S. citizens, it is difficult to take such promises at face value. Moreover, the extensive corporate role in foreign and domestic intelligence means that the private sector has a great deal to gain in the new plan for intelligence-sharing. Because most private contracts with intelligence agencies are classified, however, the public will have little knowledge of this role. Before Congress signs off on the NAO, it should create a better oversight system that would allow the House of Representatives and the Senate to monitor the new organization and to examine how BAE, Boeing, Harris and its fellow corporations stand to profit from this unprecedented expansion of America’s domestic intelligence system.


Tim ­Shorrock has been writing about U.S. foreign policy and national security for nearly 30 years. His book, Spies for Hire: The Secret World of Outsourced Intelligence, will be published in May 2008 by Simon & Schuster. He can be reached at timshorrock {at} gmail.com