Big Brother Is Watching

Contents

• Introductory Remarks
• James Bamford
• Q&A
• Conclusion

David Theroux

Good evening, ladies and gentlemen. My name is David Theroux and I’m the President of The Independent Institute. I’m delighted to welcome you to our Independent Policy Forum program this evening. As many of you know, the Independent Policy Forum is a series of lectures, debates, and seminars that are held by The Independent Institute, in the Bay Area, often at our conference center here in Oakland.

Our program tonight is entitled “Big Brother Is Watching,” and we’re delighted to have the investigative journalist and author James Bamford with us tonight, who will be speaking, based on his new book, Body of Secrets: Anatomy of the Ultra-Secret National Security Agency.

As many of you know, The Independent Institute regularly sponsors programs like this featuring outstanding authors, scholars, and policy experts on many issues. I also want to thank Robert Mondavi Winery for kindly donating the wine that many of us have enjoyed this evening. For those of you who are new to The Institute, you can find information in the registration packet that you received when you first came in. Our program is a scholarly, public policy, research program. We produce many books. We have a quarterly journal called, The Independent Review. This is the current issue, which has a cover story on the coming destruction of medical privacy in the Unites States. And, The Institute conducts many conference and media projects, based on its work, and that which dovetails with interest that we have in our work.

For those of you who are joining us on C-SPAN2, I invite you to join us and visit our website at Independent.org. You’ll find further information on research, publications, events and media programs.

I also want to point out that with the terrorist crisis and the stampede of special interest politics, there has been a proliferation of government programs, including pork, corporate welfare, new forms of protectionism, proposals that are clearly are not in keeping with the Bill of Rights, and many of these issues relate to a book by one of our senior fellows, which is called Crisis and Leviathan, by Robert Higgs. It’s published by Oxford University Press. Bob Higgs is also the editor of our journal, The Independent Review, and if you’re interested in getting a greater perspective on what to expect and why things are happening the way they are, I strongly encourage you to take a look at that.

As many of you know, this evening, just as opinion polls have been showing that American confidence in government has been returning to pre-9/11 levels, president Bush has outlined his proposal to create a new cabinet-level Department of Homeland Security.

The situation reminds me of an old story that some of you may have heard. It’s a story about a man who becomes President, and his predecessor, who’s showing him around, tells him, “This is a really tough job, and there will be times when you will just not know what to do. There are three envelopes in this drawer. When you reach a crisis, open the first one, and will help you get through it.” So a few months pass, sure enough, a crisis develops. And there are loud cries for the President’s head. He opens the first envelope. It says, “Blame your predecessor.” So he calls a press conference, blames his predecessor for the crisis, and the outcry dies down. A few months later, another crisis erupts, and there is heavy criticism of the President. He opens the second envelope. It says, “Announce a reorganization.” So he calls a press conference, announces the re-organization, and again, the hubbub dies down. Several months later a new crisis develops. There’s a new criticism of the President. He opens the third envelope and it says, “Prepare three envelopes.” [Laughter.]

This new department of Homeland Security, as some of you may know, consists of reassigning a massive series of entrenched intelligence, police bureaucracies, and other agencies, under a new name, with a predictable flag-waving pomp and ceremony. As some of us have mentioned in the past, one would have thought that the Department of Defense was there to protect the homeland. But apparently, this is not the case by the White House’s own admission. Instead, funded by a gargantuan budget, the Department of Defense has expanded its preparation to re-fight the previous wars, namely World War II and the Cold War, even if there is no Nazi, Soviet, or other army to target.

The terms, “military intelligence” and “government intelligence,” have all been viewed jokingly as oxymorons, but the collapse of the Soviet Union vividly show the world that government bureaucracy is fundamentally incompetent in assembling and processing information for a complex society. Through flexibility and dynamism, competitive markets are able to process a far more immense array of information than can bureaucracy and politics. Yet the most important need for information-gathering—that for our own protection—is totally controlled by government agencies that operate no more efficiently than Soviet collective farms and factories. And President Bush apparently believes that security can come only by expanding such bureaucracy. “Bureaucracy has failed; long live bureaucracy.”

Clearly, U.S. intelligence agencies themselves fail to warn Americans of the terrorist dangers of 9/11, despite the mega-billions in federal spending, and the astounding array of high-technology gadgets, and global-surveillance authority. For months afterward, government officials universally complained that there was absolutely “no indication of any such attack could occur, and that there was nothing that could have been done.” In fact, FBI Director, Robert Mueller claimed that the FBI had “no warning signs” of any sort of attacks.

As a result, the intelligence agencies were rewarded by their failure. Congress rewarded them, and the White House rewarded them, with a massive infusion of new government funding, along with unprecedented, new surveillance authority via the Orwellian USA PATRIOT Act and numerous justice department decrees, unrestricted by the inconvenience of the Fourth Amendment, I should add.

Apparently, Attorney General John Ashcroft believes that unless the FBI, for example—an agency that has proven to be incompetent time after time, and on occasion after occasion—is free to spy on all Americans, for any reason whatsoever, essential intelligence information cannot possibly be assembled to prevent future terrorist attacks.

However, it was the record of such abuses 30 years ago that resulted in President Gerald Ford implementing guidelines to rein in FBI actions. And even with such policies since that time, the FBI has been known for internal corruption and many other scandals.

Yet within the last few weeks, we have begun to learn that prior to 9/11, government officials did indeed have significant information; information that may not have indicated what the specification of an attack might be, but strong indication that an attack was imminent, that it might be targeted to certain buildings, it might well involve aircraft, and so on and so forth.

According to Richard Clark, White House National Coordinator for Anti-Terrorism, “The intelligence community was convinced 10 weeks before 9/11 that an al-Qaeda attack on U.S. soil was imminent.”

Dissent has since appeared from within the intelligence community. At one news conference, FBI Director Robert Wright stated, “Knowing what I know, I can confidently say that until the investigative responsibilities for terrorism are transferred from the FBI, I will not feel safe. The FBI has proven for the past decade, it cannot identify and prevent acts of terrorism against the United States and its citizens at home and abroad.”

Calling the Ashcroft-Mueller-Bush actions to expand the power of intelligence agency a “fraud,” columnist William Safire of the New York Times has recently noted that, “they had the power to collect intelligence, but lacked the intellect to analyze the data the agencies collected.” He goes on to say that, “thus we see the seizure of new powers of surveillance as a smoke-screen to hide the failure to use old power, the old power of the FBI.”

Safire then continues with the following very insightful quote. “Consider the new reach of federal power,” and this relates to our topic tonight, “the income tax return you provided your mortgage lender, your academic scores and personal ratings, credit card purchases, and E-Z Pass movements, your political and charitable contributions, charge account at your pharmacist, and insurance records, your subscription to non-mainstream publications like The Nation or Human Events, every visit to every website, and comment to every chat room, and every book or movie you bought or even considered on Amazon.com, all newly combined with the tickets, arrest, press clips, full-field investigations, and raw allegations of angry neighbors or rejected lovers, that flow into the FBI.”

But the problem goes even deeper. The problem is not just one of incompetence, or rival agencies. The more telling aspect of the terrorist attacks is that Bin Laden’s network of terrorists was recruited, created, funded, armed, and trained by the CIA itself in the early 1980s in Afghanistan. And the CIA and other agencies have continued to work to fund extremist Islamic fundamental groups in Central Asia, including Afghanistan, up until the present.

There’s far more that could be said about all this. But I think the important issue is that we have a lot of confusion and a lot of issues which are at stake and remain unaddressed.

Largely because of the work of James Bamford however, the public knows that the ultra-secret National Security Agency, the largest and most powerful of all espionage organizations in the United States, operates a global system of spy satellites. But few know of its roles in the Cold War, the hunt for Bin Laden, and Echelon, the world-wide NSA spying system that monitors untold millions of innocent people.

No outsider knows more about the NSA than James Bamford, who has been researching the issue for many years. In fact, his previous book, The Puzzle Palace, was published before most members of Congress even knew about the NSA!

Mr. Bamford is the author of Body of Secrets and The Puzzle Palace, as I mentioned. He’s been a Washington investigative reporter for ABC’s World News Tonight. He’s written cover stories for the New York Times Magazine, the Washington Post Magazine, and the Los Angeles Times Magazine. He’s currently Distinguished Visiting Faculty at the Goldman School of Public Policy at the University of California, Berkeley. I’m very pleased to introduce James Bamford. [Applause.]

James Bamford

Thank you David, I appreciate it. And, it’s a real honor to speak before you today, and follow such luminaries as Gore Vidal and so forth. So it’s a real honor to be here today. I appreciate it.

David mentioned that even some members of Congress didn’t know about NSA. When the The Puzzle Palace came out in 1982, I had to do a book tour and I had to go on one of the shows; it was a public broadcasting program—the “Dennis Wholey Show,” I think. He still has his show on TV. And I was going to go there to talk about the NSA, and one of the other people that was going to be on the show was going to be Senator Bill Bradley from New Jersey. So we got in the same car, rode over to the studio. He was going to talk about the economy and I was going to talk about NSA. So in the car he said, “What’s your book about?” And I said, “It’s about NSA, the National Security Agency.” And he said, “What’s that?” [Laughter.] So I proceeded for the rest of the car ride to explain what the largest intelligence agency was to the Senator. When we got on the show, the first question the host asked was, “How secret is NSA?” And I just couldn’t resist it. I said, “Even Senator Bradley said he’d never heard of it.” So he took a separate car back to the hotel after that. [Laughter.] And the next day his aide called me up and said, “That was really below the belt.” I said, “I’m just telling the truth. He’s one of 100 people that really should know how the government works.” And I said, “If I wanted to hit him below the belt, I would have said, ‘he probably confused it with the NBA.’” [Laughter, applause.] Which I didn’t.

But not only Congress. When the book came out, it got picked by Book of the Month Club Business Selection. So, like every author you get the New York Times Book Review and look at your little jacket on the back with all the famous authors, Stephen King and all that. And I just couldn’t believe it when I saw mine, because it said, “The Puzzle Palace, a report on NASA, America’s most secret agency.” And the ad agency thought I had made a mistake on my own book. So they voluntarily changed NSA to NASA. The only advantage was, I probably sold copies to a few astronauts that might not have ordinarily bought it. And even in bookstores. I’d go to where the book was supposed to be and it wouldn’t be there. And I’d go up to the desk and ask about it, and a lot of times they’d say, “Yes we have five copies. It’s back in the puzzle section.” So this time I changed it to Body of Secrets, but I think it was Barnes and Noble, one of those chains, began putting a discount sticker on it, and they covered up the “of.” So it says “Body Secrets.” [Laughter.] And so people were thinking I’m writing about the G-spot or something like that. [Laughter.]

But anyway, the NSA is an extremely secret agency. When I wrote The Puzzle Palace, it was the very first book ever written about NSA, and I never thought I’d have to write a second one, but after I wrote Puzzle Palace, nobody came along and followed in my footsteps. So I ended up writing Body of Secrets about 20 years later, which is only the second book written on NSA, so I sort of have a monopoly on the topic at this point.

The government was not very happy that I was writing The Puzzle Palace, and they twice threatened me with prosecution. Even though I never worked for NSA, I never signed any clearance forms with NSA, or anything else. They just didn’t like anybody writing on NSA. I mean, the old saying at NSA is that the NSA stands for “No Such Agency,” and internally, the joke is, it stands for “Never Say Anything.” And then when The Puzzle Palace came out, they said the joke now is it stands for “Not Secret Anymore.” But it was still very secret. I barely scratched the surface.

So they also were unhappy that I got documents out of a particular library down at the George C. Marshall Research Library down in Lexington, Virginia. It’s on the campus of the Virginia Military Institute. So they went down to the library after the book came out, and they actually raided the library. And they began pulling off things from the shelves and ordering the archivists to lock them in vaults, and so forth. This is after the book’s already come out. I didn’t really understand the logic of that. I mean, if you do it before the horse is out of the barn, I could see. But as a result of the government’s actions, the library, as well as the American Civil Liberties Union, the American Library Association, the American Historical Association—they all sued NSA over that, saying that NSA shouldn’t be able to go into a private library and pull out non-classified, private documents. These were not government documents. These were private letters by one of the individuals that formerly worked for NSA, one of the founders of NSA, William F. Friedman.

So the history of writing on NSA is not a history of ease. You have to fight the government every way.

Another problem with trying to write on it is the Freedom of Information Act, which is usually a very important tool. But NSA is the only agency that’s excluded from the Freedom of Information Act. A little thing called Public Law 8636, Subsection 6, which I know by heart, says, “Congress shall make no law requiring NSA to divulge any information about it’s organization, functions, structure, salary, personnel, or any other information.” So I had to find sort of loopholes in Public Law 8636, and I was successful in fighting the government over a number of documents I requested. I ended up getting more than 5,000 pages worth. So the history is just a lot of hard work in trying to get anything out of this agency.

When I wrote this new book, I approached the agency, and again, I got the same response. “We’re not going to help you. We’re not going to give you any interviews, or allow you in the agency or blah, blah, blah.” But then a new director came along and saw the logic in allowing at least a book to be written about it. I’d written The Puzzle Palace, and the world did not come to an end after that. As a matter of fact, the government ended up using the book as a textbook in the Defense Intelligence College. [Laughter.] And it was really only the NSA that was going crazy. The State Department actually invited me over to give an address to the senior officials of the State Department, a thing called the Secretary of State’s Open Forum, and they had me for lunch in the secretary’s dining room afterwards. At the same time, the NSA’s coming after me.

So with this book though, it was different. The new director came along and saw the value of having at least another book—the last one was 20 years ago when The Puzzle Palace came out—and one of the key reasons was that Hollywood was creating this image of NSA as an agency full of assassins. In “Enemy of the State,” for example, the Director of Operations or the Deputy Director, I think it was, assassinated a Congressman because of a bill he didn’t like. So NSA thought that if there are impressionable teenagers, or whatever, that see this movie, and they are interested in NSA, it might be useful to have a book that’s at least accurate in the library or in the bookstores. So they did agree to help me. And they let me in the door, and gave me tours through the agency, interviews with senior officials. And they didn’t help me with the documents, but once again, I found loopholes, and I got about another couple thousand pages worth of documents. At the same time, the agency, when the book came out, instead of threatening me with prosecution, this time had a book signing for me, which was very strange.

I think originally they wanted access to the book. They wanted to have access to the book before it was published so they could see what was in it, and whether it was good or not. And I just said, “Having done this for 25 years, I’m not going to start now giving censorship rights to government agencies.” So eventually they backed off and they gave me the access anyway. And I never ended up giving them any advance copy of the book. They saw the book when everybody else got it in the bookstore. So the book’s untainted by NSA’s own censorship.

Nevertheless, the agency I think realized the value of it, and I think they’ve appreciated the book. I think it came as a shock to everybody that they actually had a book signing. It actually went on for four hours up there. And originally, when The Puzzle Palace came out, they had basically told all the employees they couldn’t buy it and couldn’t discuss it, so it was very interesting during the book signing, and seeing all these employees walk up with copies of their Puzzle Palace. [Laughter.]

But I’d like to get into a little bit about what the agency’s about, how it works, some of the issues revolving around September 11th and so forth. I’ll just give a brief overview of what NSA is.

Basically, as David said, it’s the largest intelligence agency in the world, and the most secret intelligence agency in the world. To compare it to the CIA: the CIA was formed in 1947 by the National Security Act; they had hearings; there was debate; there was nothing secret about the creation of the CIA. The NSA, however, was formed in 1952 by President Truman, and it was formed by a top-secret memorandum. And the contents of that memorandum were kept secret for many years. It was just declassified within the last few years. And that memorandum laid out the parameters of this very, very secret agency. Even the name was secret. Its very existence was secret. Congress was not told about it. There were eventually about two people in Congress that were told about it. And that was it.

Eventually, the name got out because of a spy scandal and so forth, but since that time NSA has remained extremely secret. Even today, when you hear about all these things happening with the intelligence community, you almost never read about the NSA. You read about the CIA, FBI, all the other agencies, but NSA virtually never appears in the press, or very rarely appears in the press. (I did, however, do a piece for the Washington Post last week in their Outlook section—a long piece on NSA’s responsibility during the September 11th attacks.)

The agency grew out of World War II. World War II had the greatest successes in breaking the German and Japanese codes—and the German Enigma Machine and the Japanese Purple Code. And the U.S. was in a bad position when the war was coming to an end, when we were about to go into the Cold War with Russia. Russia was our ally during World War II, so we had virtually never paid any attention to Russian codes, with one small exception known as Venona. But there was very little attention paid to Russian code-breaking, so at the end of the war, the U.S. and Britain decided they’d create this new, very secret organization known as TICOM, which even today is technically secret. The NSA still has secrecy wraps on TICOM for another five years, but I managed to get the documents dealing with TICOM.

The U.S. and Britain wanted to get into Germany as the war was coming to an end and capture German code-breakers and code-makers and a lot of their documents and machines. Because they wanted to find out two things. They wanted to find out whether the United States was vulnerable—if they had broken U.S. codes. And number two, they wanted to find out ways that the Germans used to break Russian codes.

So they went to Bletchley Park, where all the code-breakers were, outside of London. It’s sort of like a monastery. And these are people that spent the entire war sitting behind desks reading these intercepts. And a lot of them were not in very good shape in the first place. They were former college professors and so forth. And then somebody told them, “You’re going to have to show up at 05:00 (or whatever), and get into a plane and start parachute jumping.” And they just couldn’t believe it. But they were actually trying to train these code-breakers to drop into the frontline as the war was coming to an end, and use them to help capture these German code-breakers. But after the first two or three jumps, they decided to give up that idea. So they transported all the code-breakers to the frontline in trucks.

And it worked well. The U.S. found out that the Germans never did break the U.S. codes very much—they didn’t do very well at it—and they also found that the Germans actually had done an enormous job on breaking Russian codes. And the German prisoners led the U.S. and Britain to the location where they buried this enormous code-breaking machine. And once the U.S. and Britain dug it up, they were able to immediately begin intercepting and breaking Russian codes. It was an enormous machine; I think it was about 40 tons, something like that. So the U.S. was able to go seamlessly from breaking German-Japanese codes to breaking the Russian code. And that lasted until 1948, when there was a spy in NSA’s predecessor, who gave the secret away, and then Russia changed all its codes. At NSA, it was long known as “Black Friday” at that point.

During the 1950s, NSA poured a lot of money into the computer industry. It basically primed the pump for what is today America’s enormous computer industry, because if you’re breaking codes, the way to do it is to get faster and more powerful computers.

About this time, the NSA came up with another problem. During World War II, there was censorship, so the Western Union and all these other communications companies had to turn over their messages to the government code-breakers and intercept people. But once the war came to the end, they ended censorship. And as a result, NSA was to a large degree without the raw data for its interception and code-breaking. So they began working out a secret deal with Western Union and these other companies. And it lasted for more than three decades. And this was a very secret operation, totally illegal. NSA worked out this agreement with Western Union and the other companies, where Western Union would turn over every telegram going through that company during the entire day. At the end of the day, they would turn it over to NSA, and NSA would get copies of them. And this was totally without any kind of a warrant.

Normally, if FBI or DEA or one of the other agencies wanted to look at one message, one telegram, they would have to get a warrant from an impartial judge. So this was called “Operation Shamrock.” And the way it worked out was that NSA built this phony television tape-processing company in New York. It was actually in an office building made to look like a television tape-processing company. And NSA people would go to the rear door of Western Union and these other companies after midnight, every night, as per an agreement. The employee would, through the back door, pass all that day’s telegrams, which were on all these computer tapes, to the NSA employee, who would take them back to NSA, duplicate them in this place in New York City, and bring the originals back before daybreak, and then send the copies down to Fort Meade for analysis.

So it was probably the largest illegal eavesdropping operation ever created in the United States. And it was very successful. Nobody found out about it until 1975, when the Church Committee discovered it, and as a result of that, it came to an end. And a lot of reforms were created in the intelligence community.

One of those reforms was the creation of a very secret court known as the Foreign Intelligence Surveillance Court. Even a lot of lawyers I talked to have never heard of the FISA Court. But it’s a very interesting thing. It was created around 1978, and since 1978, it has the unique distinction of never, ever having turned the government down. And if the FISA Court does turn the government down, there is what’s known as a FISA Appeals Court—and the judges that sit on it are sort of the Maytag Repairmen of the Judiciary. Since they were created in 1978, they have never once heard a case.

So that’s one of the reforms that were created after the Church Committee. If the NSA now wants to eavesdrop on what’s known as a U.S. person, it has to get a warrant from this secret court. But to be fair, the Justice Department looks over these requests before they actually get to the court. And the Justice Department does turn these requests down occasionally. I mean, they have been known to scrutinize these. And the most controversial case came with the recent case involving Zacarias Moussaoui in Minnesota, because the Justice Department turned down the request for a FISA warrant and never sent it to the FISA Court.

Just to stay a little bit more on how NSA affected individual rights in terms of eavesdropping, NSA also had an operation known as Minaret, where Richard Nixon turned NSA inward and began using NSA’s advanced technology to spy domestically on U.S. citizens, primarily anti-war protestors.

Now just to give you an analogy here, when NSA was created, it was created to use against foreign enemies—people overseas and not domestically—for the same reason that we don’t give cruise missiles to local state police departments. I mean, they maybe would like those, but they’re not supposed to be used domestically, and we’re not supposed to use extremely powerful and somewhat dangerous intelligence agencies domestically. Otherwise, you’re going to be creating an Orwellian 1984. So that was why a lot of these reforms were created, and now there’s a movement to turn back a number of these reforms.

One of the other things I discovered had nothing to do with NSA. It was a thing called “Project Northwoods.” And it happened during the 1960s after the failed Bay-of-Pigs attack, when the CIA was sent into Cuba to try and instigate a rebellion and take over Cuba and oust Fidel Castro. That was a total failure. But after that failure, the Joint Chiefs of Staff, the senior military people in the country, wanted to go in and take over the country—but this time not do it covertly. They just wanted to send the army, navy, and airforce in to have an overt invasion—just invade the country, take it over, oust or kill Castro, and put in their own leader.

So the problem with that scenario, however, was that there was not going to be very much support, either within the United States—or especially within the OAS, the Organization of American States, or our European allies—for such an aggressive action against a country that was not at the time doing anything to the United States. It wasn’t attacking the United States or anything. So Operation Northwoods was to create a justification for this war against Cuba.

Operation Northwoods was a roadmap to create terrorism in the United States. The actual document said that people could be shot on American streets, bombs could be blown up in New York and Miami, refugee boats from Cuba could be sunk on the high seas. All this to create the impression that this is being done by terrorists from Cuba, and to lay out a justification for attacking Cuba. [Editor’s Note: Click here for more about Operation Northwoods, including a corroborating declassified memo that is considered authentic by George Washington University’s National Security Archive.]

They even had a plan [that involved the launch of] John Glenn. John Glenn was about to go into space on his very first space mission. Actually, the very first [manned] space mission by the United States. And there was a plan in Operations Northwoods where if the rocket accidentally blew up, they would plant evidence showing that Cuba did it, Cuba sabotaged the rocket and killed Glenn and destroyed the U.S. space program.

They also had one other plan that involved flying an unmanned plane that was made to look like charter plane full of students over Cuba. It was an unmanned plane flown by remote control, but it would have been a full-sized airliner. It was supposed to fly in the vicinity of Cuba, and it would broadcast a message saying, “We’re being attacked by Cuban missiles,” or whatever. And a few minutes later, somebody at CIA would have pushed a button and exploded the plane over the ocean. And Cuba would have been blamed for destroying this plane and killing these students. They had one other one that was called, “Remember-the-Maine Incident Operation.” And they were actually talking about blowing up a U.S. Navy ship in Havana Harbor.

I mean, these were serious considerations. These were approved by every member of the Joint Chiefs of Staff, including the Chairman. And then it got to Secretary of Defense McNamara and he rejected it. At least there was one adult in the Pentagon.

So all these things lead to public skepticism about what government does. [Laughter.] And I only found these documents 40 years after the event. And they were only turned out now because of a demand by a group known as the Assassination Records Review Board, which had been set up by Congress to take one final look into the Kennedy Assassination. And they had an enormous ability to force Congress—to force government agencies to release a lot of documents, and that’s the only way these documents got out. Otherwise, they’d still be secret. Which leads me to wonder, 40 years from today what documents we’re going to be finding, pulled out of the archives or whatever.

So today, let me give you a little background and tell you a little about NSA today. I’ll give you a sort of a thumbnail sketch of the agency, and I’ll give you statistics that will give you a little bit of an idea of the size and what it’s like.

First of all, it’s located halfway between Washington and Baltimore, and it’s on a military base known as Fort George Meade. It’s an enormous facility. It’s so big, the nickname for it is Crypto City. And Crypto City is a very large area. There are 50 buildings including a chip manufacturing plant. It’s surrounded by three fences, including an electrified middle fence. Then there are anti-truck bomb boulders; these huge boulders act as anti-tank devices. And then, they have this group known as the “men in black,” which are people dressed in black ninja outfits that come out with Uzi machine guns, as sort of a last resort to defend the agency.

Once you’re inside, it’s a very unusual place. Some of the officials have very unusual titles. One of them was, “Chief of Anonymity.” [Laughter.] Anonymity is one of the foremost concepts within NSA. If you pick up their security book, that’s one of the first things they talk about. Basically, it means keeping NSA’s identity quiet. So you don’t talk about the fact that you work there. You just don’t talk about NSA at all. Its newsletters are unclassified, and normally contain very mundane things like what the menu is for next week, or whatever, in the cafeteria. But they’ve got a phrase on each one that says, “This newsletter should be destroyed as soon as it has been read.” So they take security very seriously there.

And again, to go back on the size. NSA uses the same amount of electricity that the entire city of Annapolis uses. And just a couple other statistics: They’ve got about 38,000 employees. Inside Crypto City, there are 32 miles of road, and 17,000 parking spaces covering 325 acres. There are 37,000 cars registered in Crypto City. The post office delivers about 70,000 pieces of mail a day. Crypto City has it’s own police force, about 700 uniformed officers, which puts NSA’s police force in the top 4.8 percent of the nation’s police forces.

One of the things NSA produces a great deal of is paper. There was a hearing at one point where an NSA employee testified that NSA produces somewhere between 50 and 100 million classified documents a year, which is more than all the rest of government combined. When all that is put into paper, it’s an enormous amount. And the way NSA handles it is to put it in burn-bags when they’re finished. These bags look like grocery bags. You staple them, put them in these chutes on the hallways, and the chutes drop down to conveyor belts all over the city. And they take these burn-bags to a central location. It’s to this big building known as the Pulp Plant. And they have this huge vat there that looks like a huge vat of oatmeal, and that’s the pulp. And they convert all of this paper into pulp. Last year, they sold a lot of that pulp to a company for $58,000. And the company takes the pulp and turns it into pizza boxes. So next time you order a Domino’s pizza, if you take the pizza out and hold the box up to a bright light, you just might see what’s left of a message from a North Korean general. [Laughter.]

So the NSA is a mammoth place with a lot of people in it that do extraordinary work. Just to give you an idea of the people to some degree, NSA tries to keep the people very sociable. They like to keep the agency sort of like a family, more of less. So there are clubs everywhere, and there are all kinds of clubs. And the idea is to try and get a lot of NSA employees to meet and marry other NSA employees. It cuts down on the clearance problems, if two NSA employees meet. So you find an awful lot of NSA employees who are married to spouses who work for NSA, and then their children grow up and work for NSA. So they have a lot of clubs. And one of the clubs, as a matter of fact, sort of shocks a lot of the people who’ve retired a number of years ago, when I tell them. It’s this new club founded a couple years ago called GLOBE, which stands for Gay, Lesbian or Bisexual Employees. GLOBE advertises in the NSA newsletter, and they hold their meetings in NSA offices, which is an enormous advance from a few years ago when it would have been certainly grounds for firing the employee.

NSA actually has its own film festival there, which is one that you’d never see anywhere else, especially in Hollywood. They have all these entries in their native language. At last year’s film festival, as a matter of fact, they had one in the native Lapp language, they had one in Woolof, which is spoken in Mauritania; one in More, which is spoken in Burkina-Faso; they had one in Mongolian; and they actually have an equivalent of a Blockbuster’s there, where employees can rent these movies out in 48 different languages, all in their native language.

So NSA has the largest collection of supercomputers in the world. It has the largest collection of linguists, at least in the United States. And the building that houses the supercomputers is known as the Tordella Supercomputer Center. And it’s a place where time is measured in femtoseconds, one million billionth of a second. And they’re working on computers now that will do one septillion operations a second—which is one with 24 zeroes after it—because in order to break code, you need super fast, super powerful computers.

So anyway, the way NSA gets its raw material is by intercepting it as it goes through the air, to a large degree. NSA has listening posts all around the world. And these are places that look like moon-bases. An average listening post, such as the one known as Menwith Hill Station in England, intercepts an average of about two million pieces of communications an hour. And that’s faxes, telephone calls, e-mail, data transfers, whatever. It just pulls it all in like a vacuum. And then they use super-computers to sift through it and try to pick out the wheat from the chaff.

They pull in so much information and make such heavy use of these computers that in February of 2000, all of the computers at NSA totally crashed. It was one of the worst days in NSA’s history. Absolutely every computer in the building crashed. Every computer in NSA crashed. They actually had to go to the British to have them help out, because the satellites were still picking the information up, but there was nothing there to analyze the information. The computers were crashed, so they redirected a lot of it to England, and it took four days to get the computers back online again.

So that’s one of the problems NSA has: there’s just so much information.

Well, just an idea of how they do the interception. A lot of it’s done by satellite, for example. You put satellites in space and ground stations on the ground, you pick up a lot of the satellite communications. Satellite communications is what NSA focuses on, largely. And that contains mostly, or a lot of the commercial communication, so if you’re going to call England or something, the odds are it’s going to go up to a satellite and bounce down. So NSA will have these satellites out there, collect all the information, and put it through the computers.

Another way is by collecting microwaves. If you see the little microwave towers around the city, and around the country—out in the country, in the wooded parts of the area, you see the towers with the little cones on them. Those are microwave antennas. And those are telephone calls being sent by microwave signals, from tower to tower. A microwave travels in a straight line. It always just travels in a straight line as opposed to high frequency signals, which bounce off the ionosphere. But a microwave always travels in a straight line, which is advantageous if you’re eavesdropping because that line continues because the earth is curved, that line continues out into deep space. So for example, from Moscow to Vladivostok across Siberia, there is a whole line of microwave towers. Which means that out in deep space, there are all these signals that are passing through. They are going from these towers. And they form an arc. So if you put a satellite out there in geostationary orbit over the equator, and you focus on that area, you’re actually eavesdropping on those communications. So that’s sort of in a nutshell how NSA does a lot of the eavesdropping.

I’ll move onto September 11th. Given everything that I just said, and the size, and the complexity, and the power, and the number of personnel, a logical question is, “How is it that NSA missed this September 11th?”

It was an enormous intelligence failure. Much worse than Pearl Harbor, because prior to World War II, and prior to Pearl Harbor, the U.S. had actually broken the Japanese high-level code, the Purple Code. They were reading the Japanese intercepted communications. And we were intercepting their signals in real-time as they were sending them between Tokyo and the embassy in Washington. So they actually picked up the 13-part message that indicated they were about to go to war. It was a message that said, “At a certain time tomorrow, destroy all your crypto equipment.” This was a message from Tokyo to the embassy in Washington. “Destroy all your codes and crypto equipment.” To anybody who reads that, you understand that something bad is going to happen pretty soon.

So they sent out a message to a lot of places around the world that something may happen. It got to Pearl Harbor a little late because they sent it by Western Union, as opposed to using high frequency, because of the atmospheric conditions. So you had this very sad situation. I wrote about this in The Puzzle Palace. After the smoke started dying down, the employee in the Western Union office took out the telegrams, and went up to Pacific Fleet headquarters, and handed the warning message to him. So, a little late.

But the difference is, in Pearl Harbor we had broken their high level code, intercepted their communications, found out that they were about to attack some place, and actually sent out warning messages. And none of those things took place on September 11th. Al-Qaeda didn’t really use many codes, but whatever codes they used, the NSA hadn’t broken. They weren’t intercepting al-Qaeda communications in real-time. There was no warning sent out, and as a result the attack took place.

At the time, at 9:00 in the morning, or quarter to nine when the attack started, the Director of Central Intelligence, George Tenet was in a restaurant having a leisurely breakfast in downtown Washington with an old friend of his. So you have this strange concept of coach potatoes across the United States, lying on a couch or in bed watching TV, and learning about the attack minutes before the Director Central Intelligence. So it was a total intelligence disaster.

NSA is probably the most embarrassed of it all. Because NSA, like I said, is located halfway between Washington and Baltimore, right outside this little bedroom community, NSA’s bedroom community of Laurel, Maryland. Well, the terrorist cell that took over the Flight 77 that crashed in the Pentagon, the place they picked to live, and plan, and do all their exercise, and conduct their training, was Laurel, Maryland æv literally in the shadow of NSA. And so you have this very strange irony of on the morning of September 11th, the terrorist’s got in their cars at the Valencia Hotel, took a right turn on Route One heading south towards Dulles Airport. At the same time, they were passing all the NSA employees in the other lane going north a few more miles to NSA’s parking lots. So that morning you had the actual terrorists coming within two or three feet of the people going to work to find the terrorists. So it was a real intelligence disaster.

Now the reason for this was that the NSA was designed for one purpose, basically. It was designed to focus on the Soviet Union and give early warning about a nuclear missile attack. And the NSA did a very good job of that during the Cold War. It could tell immediately if a plane took off from some remote airbase in Russia. NSA would know about it. Or if a submarine pulled out of a pen, or if instead of the normal Tuesday when they load up the missile silos with fuel, they did it on a Thursday this time, there would be an alert throughout NSA because they would know about it.

Well, the world changed when the Soviet Union ended and the Soviet Union became a third world country as far as the intelligence community was concerned. And all of a sudden, the attention was paid on all these crises that were breaking out. And NSA was not prepared to handle all these crises, because it was loaded with Russian linguists who were no longer useful. The listening posts were all basically targeted to the Soviet Union. Everything was geared to the Cold War and the Soviet Union. So when U.S. troops went into Haiti, for example, NSA had a total of one Creole linguist. When we went into the Balkans, NSA had nobody that spoke Albanian and very few people that spoke Serbo-Croatian. They had to scramble to find people that could speak it. So you’ve got a problem of languages.

When September 11th happened, there were less than five people that spoke Pashto and Dari, the languages of Afghanistan. Languages are a real major problem. According to the senior person at NSA dealing with linguists, the world has about 6,500 languages and the number is increasing because as ethnic nationalism increases, there’s more of a move to speak these sort of dying dialects to some degree. Out of the 6,500, NSA could handle about 115. So language is a key problem.

Another major problem is the swamp of information out there. If you think back 15 years ago, if you were going to send a piece of written communications, it would be in a letter, or in a document form that would be sealed in an envelope and sent through the mail. Well, that doesn’t happen anymore. People use the e-mail, they use the Internet, they use World Wide Web, they communicate electronically. So all that information that was once kept from NSA because of envelopes and postal systems is now available to NSA or anybody that has the technical capability to intercept signals going through the air. So NSA has all this additional information that’s out there to go through. In addition, there are all the cell phones that are out there that weren’t out there 15 years ago. So you’ve got this influx of computers and so forth. So you’ve got this enormous amount of information out there that needs to be gone through if NSA’s going to find this electronic needle in the haystack. So those are two of the problems, languages and an influx of communications.

Finally, I’ll just say a little bit about how this incident took place and why they missed this specific incident. What NSA was geared up to do, basically, was to watch for indicators of terrorist incidents. There are about three of them. One is the movement around the world of known terrorists who are on watch-lists and so forth. Another thing is the movement of large amounts of money to various suspicious people. And the third thing is the transfer of large amounts of explosives. In September 11th, none of those things took place. The people that came into the United States, came in legally, they lived here legally—all but two of them. Only two of that group of about 20 were on any kind of a watch-list. All the rest came in without being under any kind of suspicion.

And you’ve got the problem of the way they were communicating. They communicated in the form of cells, so they would just talk face-to-face with each other. They did communicate occasionally by using the Internet, but they would go to Internet cafes and libraries, use anonymous computers and servers, and communicate using very innocuous messages, the equivalent of, “Remember Uncle Harry’s birthday’s next week, and the package is due to arrive on Monday,” which if you’re doing word spotting, you’re not able to find. And you’re not able to target those computers anyway, because you don’t know they’re using them. And you’re not able to target them because you don’t know they even exist.

And then finally, there was the problem of always looking outward when these people were actually living inward in the United States. So all those problems contributed to NSA’s failure and those are some of the things that are probably going to be on the agenda to correct.

I worry a lot about these new policies and procedures coming out of Washington, especially the creation of this new Office of Homeland Defense, which according to government officials will be the second largest government agency in the entire country—second only to the Pentagon. This is one enormous agency. One of the functions is supposed to be analysis of intelligence, but I thought that was what the CIA was supposed to be doing. And in addition to that, this is supposed to be analyzing all the intelligence from all the different agencies, to look for terrorism. But that’s why they set up the National Center for Counter-Terrorism at the CIA, to be an all-source analysis from all the different agencies.

So, there are a lot of questions that have to be asked about all this new re-organization, and what it’s going to do, how much duplication. And one of the key questions is, how much is it going to eavesdrop, or how much of this intelligence is going to begin focusing on U.S. citizens? There’s a big problem of tearing down the firewall that was built up in the 1970s to separate the intelligence agencies from the American public, so it doesn’t go back to creating the oppressive situation that existed in the ’60s and ’70s that led to a lot of illegal spying on U.S. citizens.

All these questions have to be asked. The President’s speech was only 11 minutes and certainly didn’t answer many of those questions.

Audience

I have a question about Operation Northwoods. It was apparently originally put together in the waning days of the Eisenhower administration, was it not?

James Bamford

It may have been. I’d have to go back and look at the exact dates of the documents. Actually, what was put together in the waning days of the Eisenhower administration was the Bay of Pigs operation, which was a total failure. Northwoods came after the failed Bay of Pigs. There may have been some elements that pre-existed or predated the Kennedy administration, but most of it took place during the months following the Bay of Pigs, which was 1961.

Audience

Did Kennedy ever approve Northwoods, and what was the general impression of the NSA and our intelligence agencies toward Kennedy? What was their relationship with him?

James Bamford

Yeah, they’re good questions. As far as I know—and most of the documents have been destroyed that deal with this entire period—neither John Kennedy nor Robert Kennedy, although there’s more of a chance that Robert Kennedy might have known, because he was in charge of this Operation Mongoose, which was sabotage within Cuba. But, as far as I know, it got as far as McNamara, and had McNamara approved it, he probably would have taken it to the President or to Robert Kennedy for approval. But since McNamara turned it down, as far as I know, it never went any higher than McNamara.

And the other question was, what was the attitude of NSA toward—?

Audience

Toward Jack Kennedy.

James Bamford

Oh, towards Jack Kennedy. NSA had always been, and still is to a large degree, a very apolitical organization. There were exceptions during its 50-year history, but mostly, it’s run by a general or an admiral who comes in for three years, leaves, and then is replaced by another general or admiral. The Deputy Director, who actually runs day-to-day operations, is a career cryptologist who rises up through the ranks and has almost no political connections whatsoever. So, the NSA is a very apolitical organization and didn’t really play much of a role in terms of political atmosphere in the Kennedy administration. So I don’t know whether they liked him or didn’t like him there. I don’t think there was much of a feeling about him.

Within the CIA—that was run by Alan Dulles at the time, and he was more or less an Eisenhower protégé to a large degree, and I think, there was some mistrust by the CIA of Kennedy. There was a great deal of mistrust of Kennedy by the Joint Chiefs of Staff, the people who created Operation Northwoods. I found documents where the Chairman, Lyman Lemnitzer, sent messages by courier to his generals in Europe saying things critical of the Kennedy administration, and sending them so that they wouldn’t be transmitted electronically, so the NSA wouldn’t pick them up and the Kennedy administration wouldn’t read them. But I actually found some of these documents.

It was a very dangerous time. I’ll just finish with this little anecdote. If you remember, that book and later movie that came out called “Seven Days of May,” about a military takeover of Washington, that didn’t come out of the blue sky. There was that atmosphere around Washington at the time, and I did research on it for Body of Secrets. And it’s very interesting how the military disliked Kennedy and didn’t trust him, and there was this atmosphere of fear, to some degree, of a military takeover, which led Fletcher and Bell to write the book. Next question? Yes, sir.

Audience

Just two questions. The first one is, who is NSA ultimately accountable to? Second question, if there were a military takeover today, do we know what it would look like?

James Bamford

Those are interesting questions. The first one is very easy, the second one is not. The Director of NSA, Michael V. Hayden, who is a three-star Air Force General, reports to the Secretary of Defense, like most of the intelligence agencies.

What most people don’t realize is that the Director of Central Intelligence controls only 15 percent of the intelligence community. The person who really runs the intelligence community is the Secretary of Defense. He controls the other 85 percent. He controls NSA; he controls the Defense Intelligence Agency; he controls the National Reconnaissance Office; he controls the National Imagery and Mapping Agency; he controls all the military intelligence bureaus, and so forth. And it goes on and on. So the structure of Central Intelligence controls the 5,000-man clandestine service of the CIA, that’s about it.

Audience

How large is the U.S. intelligence budget, and why didn’t it prevent the September 11th terrorist attacks?

James Bamford

Well, $30 billion a year is basically the budget, and it didn’t work for the reason that I explained, as far as the NSA goes. It didn’t work for the CIA for another reason, because of lack of imagination to a large degree, and this complex of thinking about the last war all the time, thinking about the Cold War. So you have this weird situation of the CIA people graduating from the Farm—that’s their training school down in Williamsburg, Virginia—to be clandestine officers within the CIA. And the tradition in the Cold War was that they get sent to an embassy some place and pose as a cultural attaché, or whatever, and they go to cocktail parties and they try to recruit members of the host government to steal secrets for them, or become spies for them. And, to a large degree, that’s what continued during the post-Cold War period. And the problem is, you’re not going to find many al-Qaeda members at a cocktail party in Vienna, Austria. [Laughter.]

They should have done what John Walker Lindh did, which was grow a beard, study the Koran, wander around the Middle East for a few years to establish your bona fides, and then walk into Afghanistan. And it turns out they welcomed John Walker Lindh, and they welcomed a number of Brits and Germans, French, Australians, a number of other people from Western countries.

So that was the failure, I think, of the CIA. I mean, you have John Walker Lindh and all these other people that were in there, but there wasn’t one CIA officer that ever got in—and that’s their job, to sort of infiltrate these organizations. So, the CIA claimed for years it was impossible, because these are clan-based organizations, they have family ties, they know each other. Well, if it’s impossible, then how did these other people get in? So, I think that’s something that the CIA’s going to have to have an interesting answer for during these hearings.

The second question had to do with if there was a military coup in the United States, what would it look like? I’d have to actually sit down and think about that for a while, because I’ve never really thought about it. Off the top of my head, I wouldn’t have any idea. The military has far more restrictions on them now than they did back in the early ’60s, but it’s an interesting question. I can’t really give an answer off the top of my head, because it wouldn’t be accurate, and I’d really like to think about it, but it’s a good question to think about. Thank you. Next question? Back there.

Audience

I’ve studied disarmament issues with the U.N., and there a lot of human rights experts talking about these new weapons that target the mind, and I was wondering if you in your research ran across any of the so-called mind-control weapons, or heard rumors about it?

James Bamford

I’d heard rumors about it. I heard a number of things. For years the intelligence community has been involved with various aspects of psychic phenomena—remote viewing, and so forth. The CIA actually did a whole study on remote viewing, where you can read some memo in a Moscow vault or something like that. I don’t know how useful it is. I’m a very big skeptic on that. But I don’t know very much about that topic.

One of NSA’s responsibilities, however, is cyber-warfare, and they’ve been spending a lot of time and money developing capabilities to alter the world, and particularly enemies, by altering the communications infrastructures within the country. In other words, like going to war with Milosevic in former Yugoslavia and using cyber-warfare to destroy the communications infrastructure, empty his bank account, turn off all the electricity of power plants around the country, and so forth. NSA is involved in that. It’s called information operations. But in terms of actual mind control, I really don’t know. Sorry.

Audience

When you wrote The Puzzle Palace 20 years ago, you must have had certain conceptions about the NSA. Now, 20 years later, and you had some inside view or tour. What were the top two misconceptions you had 20 years ago that have been corrected by your additional research?

James Bamford

These are all good questions here. One of the things that I always had a misconception of, and I think most people do—when you find an NSA employee, and you start talking to that employee, you think, these people work at the actual forefront of technology, they’re involved in intercepting and looking for Bin Laden. But a lot of times the first thing they talk about is how far they have to park from the building. That makes you think again. This is a bureaucracy like any other bureaucracy. These people worked there for 20 years. The intial thrill of doing the work to some degree has passed, and it’s become a job. It’s an average, everyday job. And I found that back then, I found that today also.

The employees are very average when you talk to them. They’re like every other government employee. They’re good workers, and they’re very patriotic and honest and all that, and they have mundane concerns like everybody else. So that was one of the big surprises. I thought they’d be talking about this latest computer they just developed or whatever, but they first start talking about mundane issues, such as whether they are going to get an increased cost-of-living allowance or something like that.

The other surprising thing from the last book to this one, I think, was, again, the enormous change in focus. During The Puzzle Palace, everything was focused on the Soviet Union. “Are we going to get enough Russian linguists in here and build more listening posts around the Soviet Union?” And today it’s completely the opposite. It’s, “How are we going to find enough Lingala linguists?” Lingala is spoken in the Congo. Or enough Karen linguists, which is spoken along the Burmese-Thai border, and so forth.

And the other major problem is, “Are we going deaf?” That’s another major issue at NSA right now. Are we going deaf? Because the technology which used to be NSA’s friend has now become its enemy. Telecommunications companies are switching from satellites to fiber optics. Satellites—you just put a big dish out there and it’s like catching rain, collecting these signals. Fiber optics are light signals that go through glass fibers in a buried cable. That’s much more difficult for NSA to tap. I mean, they can tap into them, they can intercept that, but they have to access the cable, which is very difficult, and it’s an enormously more difficult problem. So the question is, with all the data out there, the new use of fiber optics and so forth, is NSA going deaf? And that never would have been a question 20 years ago.

Audience

Given what you said regarding the large percentage of the materials at NSA that are secret, and the lack of knowledge by our representatives, who’s there during these Congressional hearings to ask the right questions?

James Bamford

Well, yeah, the problem you have with Congressional oversight is that of numbers. NSA, for example, has 38,000 employees, approximately. That’s just NSA. It’s not counting CIA, DIA, ONI and every other alphabet soup agency out there. The total number of the staff and members of the Senate and House Intelligence Committees is maybe 200, give or take 100 or whatever. And the Senators and Congressmen—this is only one committee among many they serve on. And the employees, to a large degree, are former employees of the agencies they’re looking into. Not all, but a number of them are.

So you get a problem of this small little group: Can they adequately look at an agency that’s enormously gigantic and that has so many classifications? “Top Secret” is just the starting point in NSA. Most documents, it’s Top Secret Umbra with about five other code words after it. I mean, these are well above Top Secret. So you have a small group of people responsible for these enormous agencies with unlimited amount of secrecy.

And the other factor that I think is important is that when these intelligence committees in Congress were formed in 1975, they were formed for largely the sole purpose of protecting the American public from these big intelligence agencies. That’s our only line of defense, basically. And what went before, showed that we needed that line of defense.

But now, after all these years, the atmosphere, or the culture, or the attitude has changed, and it’s not so much protecting the American public from these agencies, it’s the attitude of the Congressional committees. It’s “Put more money to these agencies. Build these agencies up bigger. Make them able to spy better.” Depending on your point of view, that’s probably an important aspect. But if your point of view is that you want to be protected from the agencies, that’s not really in the forefront of the intelligence committees any more. In their defense, the agencies haven’t reverted to those tactics they used back then—

Audience

As far as you know.

James Bamford

I was about to say, at least as far as I know. Having done two books on NSA and interviewed a lot of people, I haven’t found anybody doing these illegal things. But again, I’m an outsider looking in, so that’s why I do like intelligence committees to have a very big responsibility to work to find whether the agencies are obeying the law or not. Yes, next question?

Audience

I’d be interested to hear to what extent you talk to people who have left the NSA, and what are they doing now?

James Bamford

Well, there’s a whole range of occupations. Most of the people that go to work for NSA these days have technical backgrounds. They employ the largest number of mathematicians on earth because mathematicians are what you need to break codes a lot of times. They employ a lot of computer scientists, electrical engineers, and linguists. And then a number of liberal arts people who do work in the non-operational side of NSA, or else in area studies, that kind of thing.

So a lot of them when they leave NSA go to work for computer companies. A lot of the people actually go to work for the defense contractors. During the Eisenhower administration, there was all this worry about the military-industrial complex. And today, there’s this enormous crypto-industrial complex that involves NSA and these defense contractors. I’m not saying it in a necessarily pejorative way, but it is a very big activity.

And now something that there really is to worry about, to some degree, is this new thing, the government “security-industrial complex” We have all these companies out there building security devices, new ways to bug people, new ways to spy on people. And they’re all out there trying to sell them to the Office of Homeland Defense or the intelligence community. And the problem is, once they’re built, they’re also out there selling them to private industry, which doesn’t have as many restrictions on it as government [so long as privacy rights are not enforced].

There was a piece on, I think, CBS Evening News a few weeks ago about this guy who invented what’s known in the community as Magic Lantern–type technology—a software program that immediately transmits the actual keystrokes a person is typing on their computer, so you can actually secretly watch from a remote locations, what a person is typing. You could have the best encryption system in the world, but the actual keys are always going to be the right keys that you’re pressing. “Hello”—you’re always going to press the H and the other letters to form that letter. That’s very dangerous. Somebody 1,000 miles away is sitting there, watching on their computer as you’re typing everything. And so if you backtrack and erase something, the person’s already seen it. It’s really one of the most intrusive things I’ve ever heard of. And the person sold it to the U.S. government, which is using it, and they’re commercially selling it to the public, too. So that’s one of the things I worry about, this security-industrial complex that’s developing now with this huge, semi-hysterical rush on anti-terrorism.

Audience

Thanks. A couple of times you mentioned that years ago—1975, ’76, ’77—there was another way of getting information from submarines and underwater cables, and I wonder if you have any information. Is that still happening now?

James Bamford

Yes. That was an operation known as Ivy Bells, and it was one of the most spectacular of all NSA’s operations in terms of the audacity and the success of it.

Some of the Russians’ most sensitive information would not go by microwave or by satellite, or would be encrypted. They were sending enormous amounts of information by undersea cable, especially the cable that went from the Russian Far East, under the Sea of Okhotsk, to Kamchatka Peninsula.

So the NSA developed this idea of using a submarine, and they would sail at periscope length along the coastline of the Sea of Okhotsk, and what they were looking for was a sign, because whenever you have a cable going under the sea, there’s usually a sign on the beach to warn fishermen and other people not to drag their nets in that area. So they were going secretly along the coast, and they saw that sign, and then that’s where they had this specially-built submarine with skids on the bottom so it would just sit on the bottom. And they went down and sat very near the cable. And I actually interviewed the NSA person who was on the submarine in charge of the entire operation. (This wasn’t through permission of NSA, it was developed my own way.)

So it was very interesting. They had divers that were kept in a capsule on the submarine for about two weeks to acclimate them to certain atmospheres, gases, and so forth. Then, when it was on the bottom, they were released from this little capsule and they swam to this repeater, which is this sort of device between where the cable gets amplified, and it turns the cable into an electrical pulse. And that’s one of the things that they look for. So the divers came out of the submarine, they went to the side of the submarine, opened this little sliding door, and pulled out these two long cables—they looked like jumper cables—pulled them out and attached them to the repeater, and immediately they began tapping the Russian communications. They spent about a month down there tape-recording all these conversations. And at the end, they sailed back to their port—I think they went back to Guam—flew all the tapes back to NSA, and it was very successful.

Eventually they developed this bug that was actually buried under the silt on the floor bed, and the cable would just sort of rest on top, and through induction they were picking up all the signals. So if the cable had to be repaired, the Russians could pull it up and there would be nothing on it. And they could even send a diver down there. Unless the diver pushed away the silt, he wouldn’t see the bug.

But the operation came to an end because this guy Ronald Pelton, who was a former NSA employee, needed money, and he sold that secret to the Russians for, I don’t know how much, which led to a really worse situation, because he sold the secret around 1981. The U.S. didn’t discover that he sold the secret until around 1985, so between 1981 and 1985, the Russians knew everything that was going over that cable, so there was a large potential of sending disinformation over that for about four years. Yes, two more questions.

Audience

When we began reading Orwell about five decades ago, we were left with sort of a doomed outlook toward the state, and I’m wondering if the lesson of September 11th might be that, given the complexity of information and bureaucratic sluggishness of governmental organizations, that political systems might simply be incapable of dealing with a complex world.

James Bamford

Well, I think that’s true to some degree, although you have sort of the reverse situation here in September 11th. You have a complex organization not being able to deal with a simple organization. You’re dealing with taking this enormously complex agency known as the National Security Agency, with computers that they’re working on to do a septillion operations a second, and more mathematicians than anyplace else on earth. And what the other side had was a group of individuals with weapons that they bought in True Value Hardware—some box cutters and some plastic knives or whatever—and plane tickets they bought over the Internet. All the rest was a clever plan. But in terms of technological organization, it was the ultimate in simplicity. So you had the ultimate in complexity being defeated by the ultimate in simplicity, in this case.

However, there is also a parallel today to Orwell’s 1984. In 1984, there was always a war going on. They were either fighting East Asia or Eurasia, but it was always a war because war is what got people together behind the government, and it really made no difference whether it was East Asia or Eurasia. So I see that a bit in this war on terrorism. You’ve got to have this thing going constantly, and you don’t look at the origins of it, which is the Middle East.

George Bush came in apparently not even knowing where the Middle East was, or if he did, it never entered his radar screen that maybe there may be a problem there sometime until the whole thing explodes. And if they don’t start paying attention to resolve the enormous crisis in the Middle East, then what’s happening there is just going to come this way like a tidal wave. Yes, another question.

Audience

Thank you very much. And the subject about the military being involved, and George Bush’s father is on the board of the seventh largest military defense contractor. Some of you probably know that.

James Bamford

It’s the Carlisle Group, I think.

Audience

Yes. And also connecting the dots, which is what I’ve been trying to do, Dyn Corporation, I don’t know if people are familiar with that group.

James Bamford

I know, DynCorp.

Audience

Do you know them?

James Bamford

Yes.

Audience

And a man named Herbert Winokur, who was on the board of Enron, is also the head of DynCorp, and he’s also on the board of the Harvard Development Corporation. And it’s just interesting to watch who these players are and how they’re interconnected. And a lot of it is involved with the military.

James Bamford

I focus on NSA, so I’m not familiar with all the intricacies of the connections there, but I think you really do have to focus on it. If this were Bill Clinton in office, the Republicans would be finding all kinds of scandals involving Carlisle Group, just like Whitewater or whatever. I mean, they’d be digging up every single scandal there was. If Bill Clinton knocked over a ashtray, they’d have a Congressional investigation. But they’re not out there doing it, and the press doesn’t seem to be doing too much probing into any of the backgrounds of some of the people and their connections with this security-industrial complex and so forth. So I agree, it’s an area that needs to be probed more closely.

Audience

I have a question concerning cost. It seems to me that there would be enormous outlay of funds. Cost/benefit analyses perhaps are irrelevant in this kind of scenario, where you have this enormous structure and then suddenly the world becomes simpler in terms of perhaps some of the enemies that might be out there today, as opposed to perhaps Russia 10, 15 years ago. So if you look at the funds, is there a certain kind of ideology that permeates our thinking and gives some direction to our focus on various parts of the world? And does the fact that our country is becoming more diverse affect that kind of ideology and expenditure of funds over time?

James Bamford

Well, just on the topic of budget, NSA has an enormous budget. It’s $4 billion just for NSA, and then another $3 billion for NSA satellites, so about $7 billion a year. In terms of cost/benefit analysis, during the Cold War the idea was that if they prevented a nuclear attack on the United States, obviously there’s a good cost/benefit there. Here it’s not quite so simple as that, and that has to be looked into.

You have to separate the semi-hysteria out there over terrorism. I see parallels with the hysteria over Communism during the ’50s, hysteria over anti-war protestors during the 1970s, and so forth. And you have to look at it in hard, cold terms to some degree. If you’re going to take $40 billion, and you’re going to put it to something that’s supposed to help the American public, what if you put $40 billion into trying to cure colon cancer, which kills 50,000 people a year, as opposed to putting it toward building bigger walls around airports where you may have a hijacking?

I think the government has to come out and say, “We can’t protect you from everything all the time everywhere.” The government can’t protect us from every bank robbery, from every mugger, from every earthquake, from every tornado, from every employee who comes into a building and shoots up his other employees. They can’t protect you from everything like that, and they can’t protect you—they shouldn’t try to protect you—from every single harm.

And I think you have to use the money where it will do the most good. I have yet to see what this $40 billion is going to go for, but if you spend it all on protecting the planes, then the hijackers will go out and get a cruise ship and blow it up. So, again, I think there’s got to be some rationality to all this before we just go out and throw all this money away on new security devices.

But in terms of the culture, the problem with that is that the public sees all the [bad news] and the press adds to this. There’s an anthrax outbreak and six people were killed, which is tragic, but immediately you’ve got every airwave flooded with reports that there’s going to be 500 million people killed if you release one anthrax spore within Grand Central Station or whatever, this enormous encouragement of fear around the world. And you had the Aum Shinrikyo incident in Tokyo where you had anthrax released and there were 12 people killed, I think. So I think there’s got to be a more realistic look at this whole issue and not scare tactics that generate enormous amounts of money being spent for things.

Audience

Hi. I don’t know if you saw the announcement for your talk, but at the end it says, Mr. Bamford will explain why he believes the NSA is dangerous and what all Americans should know to protect themselves. Would you like to address that?

James Bamford

Yeah, NSA does have a history of illegally eavesdropping on U.S. citizens. I wrote all about it in The Puzzle Palace, and I wrote more about it here. I mean, that is dangerous when you have an agency that can do that. I don’t think NSA is necessarily a “bad” organization. But, I think it’s got to be watched, and I think we’ve got to be careful. I’m not [by defintion] an anti-NSA person. But, I’m not for doubling its budget either. There’s somewhere in between there, where I think NSA can [possibly] do some good. Their [predecessors] did useful things during World War II, they did useful things during the Cold War, and it might be able to do useful things during this so-called “war on terrorism.”

But, I’m a skeptic. I want to see what happens and how it works, and I’m also worried, as I’ve mentioned numerous times tonight, about the dangers of using this technology, of letting it get out of control. And I think that’s the danger with NSA. The people I’ve interviewed there, as I mentioned before, I think are very honorable and honest, and do a “good” job, and do what they’re supposed to do, and they’re not out there trying to illegally eavesdrop on people.

The problem comes when you have an administration in the White House that directs them to do that. They’re not going to go out there and think, oh, why don’t we go eavesdrop on everybody in Cincinnati today? That’s not the way it works. The President comes out and says, “I think anti-war protestors are being funded by foreign organizations, and therefore they’re a national security threat, and therefore we should begin eavesdropping on anti-war protestors, Dr. Benjamin Spock, and so forth.” That’s what happened during the Nixon administration. That’s what worries me.

What you have here is the “perfect storm.” You’ve got an administration where you have an enormous amount of secrecy coming in all of a sudden, enormous secrecy over everything. You’ve got an enormous new agency [Department of Homeland Security] being built up that’s going to be second only to the Pentagon, and largely what it’s going to deal with is domestic intelligence. And at the same time, you’ve got the tearing down of the reforms that came during the 1970s. All that’s a very dangerous time.

Is NSA itself dangerous? It could be dangerous if a President decides to use it in a dangerous method. That’s the way it was done during the Nixon administration. So per se, and prior to September 11th, I would say, no, it wasn’t necessaily a very big danger because the people there don’t seem to be interested in creating a 1984 situation. Post-September 11th, who knows? That’s why I want more people like you, more journalists, and more people in Congress to take a closer look at this agency and keep it honest [if that’s at all possible].

So anyway, thanks very much for your attention. I appreciate it.

David Theroux

I want to thank you, Jim. Jim will be available for autographing copies of his book, Body of Secrets. I also want to remind you that for further information about The Independent Institute, please visit us at Independent.org. If you’re interested, we also have a weekly e-mail newsletter, The Lighthouse, which you can sign up for also on our Web site. And, I want to thank you all for joining with us and making this such a successful evening. See you next time. Good night.

END