The New York Times  [Printer-friendly version]
January 14, 2007


By Eric Lichtblau And Mark Mazzetti

Washington, Jan. 13 -- The Pentagon has been using a little-known
power to obtain banking and credit records of hundreds of Americans
and others suspected of terrorism or espionage inside the United
States, part of an aggressive expansion by the military into domestic
intelligence gathering.

The C.I.A. has also been issuing what are known as national security
letters to gain access to financial records from American companies,
though it has done so only rarely, intelligence officials say.

Banks, credit card companies and other financial institutions
receiving the letters usually have turned over documents voluntarily,
allowing investigators to examine the financial assets and
transactions of American military personnel and civilians, officials

The F.B.I., the lead agency on domestic counterterrorism and
espionage, has issued thousands of national security letters since the
attacks of Sept. 11, 2001, provoking criticism and court challenges
from civil liberties advocates who see them as unjustified intrusions
into Americans' private lives.

But it was not previously known, even to some senior counterterrorism
officials, that the Pentagon and the Central Intelligence Agency have
been using their own "noncompulsory" versions of the letters.
Congress has rejected several attempts by the two agencies since 2001
for authority to issue mandatory letters, in part because of concerns
about the dangers of expanding their role in domestic spying.

The military and the C.I.A. have long been restricted in their
domestic intelligence operations, and both are barred from conducting
traditional domestic law enforcement work. The C.I.A.'s role within
the United States has been largely limited to recruiting people to spy
on foreign countries.

Carl Kropf, a spokesman for the director of national intelligence,
said intelligence agencies like the C.I.A. used the letters on only a
"limited basis."

Pentagon officials defended the letters as valuable tools and said
they were part of a broader strategy since the Sept. 11 attacks to use
more aggressive intelligence-gathering tactics -- a priority of former
Defense Secretary Donald H. Rumsfeld. The letters "provide tremendous
leads to follow and often with which to corroborate other evidence in
the context of counterespionage and counterterrorism," said Maj.
Patrick Ryder, a Pentagon spokesman.

Government lawyers say the legal authority for the Pentagon and the
C.I.A. to use national security letters in gathering domestic records
dates back nearly three decades and, by their reading, was
strengthened by the antiterrorism law known as the USA Patriot Act.

Pentagon officials said they used the letters to follow up on a
variety of intelligence tips or leads. While they would not provide
details about specific cases, military intelligence officials with
knowledge of them said the military had issued the letters to collect
financial records regarding a government contractor with unexplained
wealth, for example, and a chaplain at Guantanamo Bay erroneously
suspected of aiding prisoners at the facility.

Usually, the financial documents collected through the letters do not
establish any links to espionage or terrorism and have seldom led to
criminal charges, military officials say. Instead, the letters often
help eliminate suspects.

"We may find out this person has unexplained wealth for reasons that
have nothing to do with being a spy, in which case we're out of it,"
said Thomas A. Gandy, a senior Army counterintelligence official.

But even when the initial suspicions are unproven, the documents have
intelligence value, military officials say. In the next year, they
plan to incorporate the records into a database at the
Counterintelligence Field Activity office at the Pentagon to track
possible threats against the military, Pentagon officials said. Like
others interviewed, they would speak only on the condition of

Military intelligence officers have sent letters in up to 500
investigations over the last five years, two officials estimated. The
number of letters is likely to be well into the thousands, the
officials said, because a single case often generates letters to
multiple financial institutions. For its part, the C.I.A. issues a
handful of national security letters each year, agency officials said.
Congressional officials said members of the House and Senate
Intelligence Committees had been briefed on the use of the letters by
the military and the C.I.A.

Some national security experts and civil liberties advocates are
troubled by the C.I.A. and military taking on domestic intelligence
activities, particularly in light of recent disclosures that the
Counterintelligence Field Activity office had maintained files on Iraq
war protesters in the United States in violation of the military's own
guidelines. Some experts say the Pentagon has adopted an overly
expansive view of its domestic role under the guise of "force
protection," or efforts to guard military installations.

"There's a strong tradition of not using our military for domestic
law enforcement," said Elizabeth Rindskopf Parker, a former general
counsel at both the National Security Agency and the C.I.A. who is the
dean at the McGeorge School of Law at the University of the Pacific.
"They're moving into territory where historically they have not been
authorized or presumed to be operating."

Similarly, John Radsan, an assistant general counsel at the C.I.A.
from 2002 to 2004 and now a law professor at William Mitchell College
of Law in St. Paul, said, "The C.I.A. is not supposed to have any law
enforcement powers, or internal security functions, so if they've been
issuing their own national security letters, they better be able to
explain how they don't cross the line."

The Pentagon's expanded intelligence-gathering role, in particular,
has created occasional conflicts with other federal agencies. Pentagon
efforts to post American military officers at embassies overseas to
gather intelligence for counterterrorism operations or future war
plans has rankled some State Department and C.I.A. officials, who see
the military teams as duplicating and potentially interfering with the
intelligence agency.

In the United States, the Federal Bureau of Investigation has
complained about military officials dealing directly with local police
-- rather than through the bureau -- for assistance in responding to
possible terrorist threats against a military base. F.B.I. officials
say the threats have often turned out to be uncorroborated and, at
times, have stirred needless anxiety.

The military's frequent use of national security letters has sometimes
caused concerns from the businesses receiving them, a counterterrorism
official said. Lawyers at financial institutions, which routinely
provide records to the F.B.I. in law enforcement investigations, have
contacted bureau officials to say they were confused by the scope of
the military's requests and whether they were obligated to turn the
records over, the official said.

Companies are not eager to turn over sensitive financial data about
customers to the government, the official said, "so the more this is
done, and the more poorly it's done, the more pushback there is for
the F.B.I."

The bureau has frequently relied on the letters in recent years to
gather telephone and Internet logs, financial information and other
records in terrorism investigations, serving more than 9,000 letters
in 2005, according to a Justice Department tally. As an investigative
tool, the letters present relatively few hurdles; they can be
authorized by supervisors rather than a court. Passage of the Patriot
Act in October 2001 lowered the standard for issuing the letters,
requiring only that the documents sought be "relevant" to an
investigation and allowing records requests for more peripheral
figures, not just targets of an inquiry.

Some Democrats have accused the F.B.I. of using the letters for
fishing expeditions, and the American Civil Liberties Union won court
challenges in two cases, one for library records in Connecticut and
the other for Internet records in Manhattan. Concerned about possible
abuses, Congress imposed new safeguards in extending the Patriot Act
last year, in part by making clear that recipients of national
security letters could contact a lawyer and seek court review.
Congress also directed the Justice Department inspector general to
study the F.B.I.'s use of the letters, a review that is continuing.

Unlike the F.B.I., the military and the C.I.A. do not have wide-
ranging authority to seek records on Americans in intelligence
investigations. But the expanded use of national security letters has
allowed the Pentagon and the intelligence agency to collect records on
their own. Sometimes, military or C.I.A. officials work with the
F.B.I. to seek records, as occurred with an American translator who
had worked for the military in Iraq and was suspected of having ties
to insurgents.

After the Sept. 11 attacks, Mr. Rumsfeld directed military lawyers and
intelligence officials to examine their legal authorities to collect
intelligence both inside the United States and abroad. They concluded
that the Pentagon had "way more" legal tools than it had been using,
a senior Defense Department official said.

Military officials say the Right to Financial Privacy Act of 1978,
which establishes procedures for government access to sensitive
banking data, first authorized them to issue national security
letters. The military had used the letters sporadically for years,
officials say, but the pace accelerated in late 2001, when lawyers and
intelligence officials concluded that the Patriot Act strengthened
their ability to use the letters to seek financial records on a
voluntary basis and to issue mandatory letters to obtain credit
ratings, the officials said.

The Patriot Act does not specifically mention military intelligence or
C.I.A. officials in connection with the national security letters.

Some F.B.I. officials said they were surprised by the Pentagon's
interpretation of the law when military officials first informed them
of it. "It was a very broad reading of the law," a former
counterterrorism official said.

While the letters typically have been used to trace the financial
transactions of military personnel, they also have been used to
investigate civilian contractors and people with no military ties who
may pose a threat to the military, officials said. Military officials
say they regard the letters as one of the least intrusive means to
gather evidence. When a full investigation is opened, one official
said, it has now become "standard practice" to issue such letters.

One prominent case in which letters were used to obtain financial
records, according to two military officials, was that of a Muslim
chaplain at Guantanamo Bay, Cuba, who was suspected in 2003 of aiding
terror suspects imprisoned at the facility. The espionage case against
the chaplain, James J. Yee, soon collapsed.

Eugene Fidell, a defense lawyer for the former chaplain and a military
law expert, said he was unaware that military investigators may have
used national security letters to obtain financial information about
Mr. Yee, nor was he aware that the military had ever claimed the
authority to issue the letters.

Mr. Fidell said he found the practice "disturbing," in part because
the military does not have the same checks and balances when it comes
to Americans' civil rights as does the F.B.I. "Where is the
accountability?" he asked. "That's the evil of it -- it doesn't
leave fingerprints."

Even when a case is closed, military officials said they generally
maintain the records for years because they may be relevant to future
intelligence inquiries. Officials at the Pentagon's
counterintelligence unit say they plan to incorporate those records
into a database, called Portico, on intelligence leads. The financial
documents will not be widely disseminated, but limited to
investigators, an intelligence official said.

"You don't want to destroy something only to find out that the same
guy comes up in another report and you don't know that he was
investigated before," the official said.

The Counterintelligence Field Activity office, created in 2002 to
better coordinate the military's efforts to combat foreign
intelligence services, has drawn criticism for some domestic
intelligence activities.

The agency houses an antiterrorist database of intelligence tips and
threat reports, known as Talon, which had been collecting information
on antiwar planning meetings at churches, libraries and other
locations. The Defense Department has since tightened its procedures
for what kind of information is allowed into the Talon database, and
the counterintelligence office also purged more than 250 incident
reports from the database that officials determined should never have
been included because they centered on lawful political protests by
people opposed to the war in Iraq.