America's eavesdropper loses lead in a world it helped create

Date: 16/03/00

By BOB DROGIN in Fort Meade, Maryland

Lieutenant-General Michael Hayden, director of the National Security Agency, was at home watching television after dinner on January24 when he got a frantic call: America's global eavesdroppers had suddenly gone deaf.

The NSA's main computer network - hectares of underground machines devoted to deciphering communication stolen from foreign embassies, missile bases and telephones around the world - had crashed for the first time. And no-one knew why.

Three days later, the NSA spymaster issued a grim warning to his worried workforce. "I said the fact that we're down is an operational secret," General Hayden recalled. "Our adversaries cannot know that our intelligence capabilities have been crippled."

To his relief, the news held until after the system was rebooted early on January28. Although experts are still studying the four-day outage, General Hayden blames a software "anomaly" in a "complex network running near capacity" - not hackers or enemy agents.

But the blackout of the world's most powerful collection of supercomputers is hard evidence of the vast problems facing America's largest and most secretive intelligence agency. By all accounts, the NSA has lost its lead - and perhaps its way - in the information revolution it helped to create.

"The NSA used to have the best computers in the world, bar none," said an official who has been briefed on the recent crisis. "Now they can't even keep them running. What does that tell you? Do you know a modern company that goes offline for four days? They're struggling."

Intelligence experts blame the NSA's woes on budget and staffing cuts since the Cold War, tougher targets and countermeasures and, most important, a hidebound bureaucracy that remains wedded to telex technology in the email age.

To some extent, the NSA is a victim of its own success. It helped spark the new age of intelligence by investing in early computers and telecommunications. Now it is drowning in a daily deluge of data from digital phones, faxes and email - technology that barely existed 10 years ago.

"Until the late 1980s, US signals intelligence was way out in front of the rest of the world," said Mr Robert Gates, head of the CIA from 1991 to 1993. "But with the high-tech explosion, there's no way any government agency could keep up with the pace of change."

Take fibre optics. During the Cold War, the NSA excelled at intercepting electronic emissions from undersea copper cables, microwave radio relay stations and other systems as it snooped on governments and military forces in the Soviet Union, its Warsaw Pact allies and other targets.

Now private industry is girdling the globe with millions of kilometres of high-capacity fibre-optic cable to replace the old transmission technologies. The new cables carry huge volumes of TV, fax, telephone and other signals in bursts of light. And they are far harder to tap.

"The NSA is really at sea on fibre optics," a Senate staff member said. "They don't know where to begin."

Not everyone agrees. James Bamford, author of The Puzzle Palace, a book about the NSA, argues that the agency is overplaying the fibre-optic threat to confuse America's enemies and to win more sympathy in Congress.

"The places the NSA is interested in today are not going to fibre optics," Bamford said. "North Korea is not fibre-optic. Neither is Kosovo or Somalia. The fact is far more is going through the air today than ever before."

In any case, some help is coming. In December, the US Navy awarded an $US887million ($1.45billion) contract to Electric Boat to modify extensively the still-to-be launched Jimmy Carter to become America's most advanced spy submarine.

When completed in 2004, sources said, the Seawolf-class sub will be able to place and recover top-secret "pods" that will tap undersea fibre-optic cables for the first time. The navy says that the upgrade is for "surveillance, mine warfare, special warfare, payload recovery and advanced communications".

Still, the NSA has lost its monopoly on cryptography, the making and breaking of codes. Supposedly uncrackable encryption software is available on the Internet. The CIA says that several terrorist groups, including Hezbollah, Hamas and Osama bin Laden's organisation, now use encryption.

"It's a real challenge," said Mr Jeffrey Richelson, who tracks the NSA for the National Security Archive, an independent non-profit group in Washington.

So is another problem: more elusive targets in more and different places.

Since the collapse of the Soviet Union, the NSA has tried to track far more nebulous networks of transnational terrorists, drug lords, organised crime figures and other non-state villains, as well as rogue regimes from Serbia to North Korea.

"They've got a much broader drugs-and-thugs focus," said Mr John Pike, an intelligence specialist at the American Federation of Scientists in Washington. "So they're looking for smaller needles in a bigger haystack."

At the same time, the NSA often collects signal intelligence - known in the trade as "sigint" - that is ambiguous at best, according to a senior intelligence official who regularly reads NSA intercepts on terrorism.

"You rarely get a sigint smoking gun," the official said. "It's usually very fragmentary ... Very often you don't even know who you're listening to."

Again, help is coming. Congress has agreed to fund a multi-billion-dollar constellation of small, low-altitude spy satellites over the next five to seven years. The new "birds" should help the NSA improve its ability to intercept and locate communication and radar signals around the globe, starting in 2002.

Largely invisible to most Americans, the NSA has been a cornerstone of US intelligence since it was created by secret executive order in 1952. Long known jokingly as "No Such Agency", it still seeks anonymity: No sign points to the vast complex of mirrored-glass buildings and satellite dishes behind tall trees midway between Baltimore and Washington.

The NSA is said to employ about 35,000 people worldwide. That is only a fraction of its top Cold War strength but still twice the size of the CIA, which handles human intelligence. The NSA's annual budget is estimated at $US5billion. But overall spending for signal intelligence is about $US10billion, or more than one-third of the total that Congress allots to America's 13 intelligence agencies.

The NSA faces its harshest criticism in Europe. The European Parliament denounced the agency in hearings last month, as well as its sister services in other English-speaking countries, for allegedly misusing their power. Critics singled out the NSA for allegedly using secret intercepts to help US companies overseas.

They are partly right. The NSA has no authority to distribute intelligence to the private sector. But a senior official said that NSA intercepts have been used to "blow the whistle" on foreign companies that used bribery or other wrongdoing to beat US companies.

In an interview, General Hayden chafed at what he calls the two chief complaints levelled by his critics since he took over in May. "One is we're omniscient and we're reading all your email," he said. "And the other is we're incompetent. Neither is true."

But he conceded that the NSA desperately needs reform. "This is an incredibly insular agency. It's had high walls around it. It was to keep the secrets in. But it also kept fresh ideas out."

To fight back, General Hayden has ambitious plans to change the NSA's ethos and mission. He has set new cryptologic goals, reorganised divisions and streamlined decision-making.

Los Angeles Times

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