PART 5:THE SHADOW FACTORY THE ULTRA SECRET NSA FROM 9/11 TO THE EAVESDROPPING ON AMERICA

THE SHADOW FACTORY
The Ultra Secret NSA from 9/11 to the To The Eavesdropping on America 
BY JAMES BAMFORD 

BOOK 3

COOPERATION 

Shamrock 

Since the dawn of the space age, the NSA had eavesdropped on the world by mapping the heavens, determining the orbit of each communications satellite, analyzing its transponders, calculating frequencies, azimuths, and a thousand other details and then catching the signals as they poured down like rain. But by the late 1990's, more and more communications companies began switching their networks from satellites, with their half-second time delay and occasional atmospheric interference, to buried fiber-optic cables. There on the muddy seabed, inside thick black cables encased in tar-soaked nylon yarn, millions of voices chat away and terabytes of e-mail zap back and forth. With its bundles of tiny, hair-thin glass strands, fiber-optic technology offers greater volume, more security, and higher reliability. 

The problem for the NSA was that as telephone calls sank from deep space to deep oceans and deep underground, Echelon began living on borrowed time. “The powers that be are trying to kill it so fast because it’s a legacy outmoded system,” one NSA official told the author a few weeks before the attacks on 9/11. “We probably won’t even use it in two or three years. It’s an outdated mode of Sigint. Just 1 percent of the world’s communications travel by satellite now—and much of that is U.S. communications. The amount of intelligence gained from Echelon is still relatively high, because we’ve been so slow in going to those other modes of communications. There’s talk about a 300 percent growth in fiber-optic communications, and the packet switching [Internet and e-mail] is now up through the roof.” Many of the satellite companies were making up for their loss in phone calls and e-mail by catering to the enormous growth in cable television channels. 

Another NSA official agreed that Echelon has become largely obsolete but says it still provides useful, but limited, intelligence. “There are still things that you can pick up,” the official said. “You can get some limited cell phone stuff where you have access to people using cell phones on the ground. You can get a little bit of cell phone stuff from space, but not as good as we’d like it. It’s getting better, but it’s hard. The bad guys are pretty disciplined about how they use it.” 

By 2000, there were more than ninety million miles of fiber-optic cable in the U.S., and the NSA was facing a second, far more sophisticated generation of fiber technology. Also up was voice traffic, which had been increasing in volume at 20 percent a year. This was largely as a result of new digital cellular communications that were far more difficult for the NSA to analyze than the old analog signals. Rather than consisting of voices, the digital signals were made up of data packets that might be broken up and sent a myriad of different ways. 

“Today you have no idea where that information is being routed,” said one intelligence official. “You may have somebody talking on a telephone over a landline and the other person talking to them on a cell phone over a satellite. You don’t know how it’s being routed, it’s going through all kinds of switches, the information is not where you think it is, and that’s what has created the complexity and that’s what we have to figure out how to deal with.” 

Tapping into cables had always been a problem for the NSA—legally as well as technically. F.I.S.A largely gave the agency free rein to eavesdrop on satellite signals in the U.S. at listening posts such as Sugar Grove in West Virginia—only requiring a F.I.S.A warrant when an American was actually targeted. But the rules of the game were completely different for wires, such as transoceanic fiber-optic cables. With wires, the NSA needed a F.I.S.A warrant just to tap in. 

It was a rule that never made much sense to the agency’s top lawyer, Bob Deitz. “The need for a court order should not depend,” he said, “on whether the communications meet the technical definition of ‘wire communications’ or not. These factors were never directly relevant in principle, but in the context of yesterday’s telecommunications infrastructure were used as a proxy for relevant considerations. Today they are utterly irrelevant.” 

Now that the NSA had decided to secretly ignore F.I.S.A, the issue was moot and the time had come to reinvent Echelon from the seabed up. While the cooperative worldwide satellite-tapping program would remain in place, the agency would develop a new version, what might be dubbed Echelon II, targeting the fiber-optic cables that were encasing the world like a spider’s web. It would require an enormous change in technology, but more important, the NSA and the other members of Five Eyes—Britain, Canada, Australia, and New Zealand—would have to get access to the cables either through secret agreements or covertly, or both. 

For Hayden it meant going to the telecommunications industry and secretly asking for their cooperation. Despite its questionable legality, it was a practice that had begun long before Hayden—and it ended in the mid-1970's with the worst trauma in the NSA’s history, which came close to landing senior officials behind bars and exposing the NSA’s deepest secrets for all the world to see. Now Hayden had to decide whether to risk putting his agency through the nightmare once again, and put employees at legal risk, by secretly climbing back in bed with the telecoms. 

The rocky marriage between the NSA and the telecommunications industry began in a brownstone town house on Manhattan’s East Side during the days following World War I. The building, a few steps off Fifth Avenue, was the home of the NSA’s earliest predecessor, a highly secret organization known as the Black Chamber. 

Formed in 1919 to continue the code-breaking activities of the military during the First World War, the agency was run by Herbert O. Yardley, a poker-playing Hoosier who had been in charge of MI-8, the army’s cryptanalytic organization, during the war. To hide the Chamber’s existence, the town house at 3 East 38th Street masqueraded as a commercial code company. But after hiring his first novice code breakers, Yardley was faced with an immediate problem: how to get the messages to and from the foreign embassies and consulates in Washington and New York. Without messages there could be no solutions. 

During the war, companies like Western Union were required under censorship laws to turn over to the military all of those communications. But when the war ended, so did censorship, and the privacy of telegraph messages was again guaranteed by the Radio Communication Act of 1912. To the Black Chamber, however, the statute represented a large obstacle that had to be overcome—illegally, if necessary.

The first steps were taken by Yardley’s boss, General Marlborough Churchill, director of military intelligence, who made a very quiet call on the president of Western Union, Newcomb Carlton. After the men “had put all our cards on the table,” Yardley would later write, “President Carlton seemed anxious to do everything he could for us.” Under the agreed-on arrangements, a messenger called at Western Union’s Washington office each morning and took the telegrams to the office of the Military Intelligence Division in Washington. They were then returned to Western Union before the close of the same day. 

All American Cable Company, which handled communications between North and South America, also agreed. Company executive W. E. Roosevelt had no hesitation. “The government can have anything it wants,” he declared. Eventually, the Black Chamber obtained the secret and illegal cooperation of almost the entire American cable industry. 

Concerned about ending up on a criminal docket, however, all the companies later withdrew their secret cooperation. One factor that may have had some influence was the enactment of the Radio Act of 1927, which greatly broadened the Radio Communication Act enacted in 1912. Whereas the 1912 act made it a crime only for the employees of the cable and telegraph companies to divulge the contents of the messages to unauthorized persons, the 1927 act closed the loophole by also making liable to criminal penalties those who received such unauthorized communications. One exception allowed for the acquisition of messages “on demand of lawful authority,” but Yardley and his ultra-secret Black Chamber could hardly avail themselves of this channel. 

Unwilling to give up in spite of the law and the refusals of the company executives, Yardley eventually resorted to a different method to obtain the messages needed to keep the Black Chamber in business: bribery. After developing sources in Western Union, Postal Telegraph, All American Cable, and Mackay Radio, he secretly put them on the Black Chamber’s payroll, paying them in untraceable cash. 

In the end, the Black Chamber faced doom not for lack of telegrams but for lack of support by Yardley’s own government. In March of 1929, with the inauguration of Herbert Clark Hoover, the conservative Henry L. Stimson became the new secretary of state. Upon discovery of the Black Chamber he became outraged that gentlemen would eavesdrop on other gentlemen—even if they were potential foreign adversaries. Branding the Black Chamber highly illegal, he at once cut off all money for it, and at midnight on Halloween 1929, the doors to the Black Chamber officially closed as quietly as they had opened. 

But following World War II, history repeated itself. As in the First World War, the end of hostilities also brought the end of censorship and thus the end of access to the millions of cables entering and leaving the country each year. This time instead of Yardley it was Brigadier General W. Preston Corderman, the chief of the Signal Security Agency, successor to the Black Chamber, who faced the same problem. Hoping like Yardley to work out a secret agreement with the telecoms, Corderman, on August 18, 1945, sent two trusted representatives to New York City for the delicate purpose of making “the necessary contacts with the heads of the commercial communications companies in New York, secure their approval of the interception of all foreign Government traffic entering the United States, leaving the United States, or transiting the United States, and make the necessary arrangements for this photographic intercept work.” 

Their first overture, to an official of I.T.T Communications, met with complete failure. He “very definitely and finally refused,” Corderman was informed, to agree to any of the proposals. Next, they approached a vice president of Western Union, who agreed to cooperate unless the attorney general of the United States ruled that such intercepts were illegal. 

Armed with this agreement, the two went back to I.T.T the next day and suggested to a vice president that “his company would not desire to be the only non-cooperative company on the project.” The implication was that to refuse was to be less than patriotic, so the vice president went to see the company president about the matter. A short while later he returned and indicated that I.T.T would be willing to cooperate provided that the attorney general decided the program was not illegal. That same day the two S.S.A officers shuttled across town to R.C.A corporate headquarters. With two-thirds of America’s cable industry already in their pocket, they met with R.C.A’s president, David Sarnoff, and asked him to join in the “patriotic” effort. The executive indicated his willingness to cooperate with the agency but withheld his final approval until he, like the others, had heard from the attorney general.

But a few days later the three telecom executives met with their corporate attorneys, who uniformly advised them against participating in the intercept program. The problem, the S.S.A officers told Corderman, was “the fear of the illegality of the procedure according to present F.C.C regulations.” The memo also noted, “In spite of the fact that favorable opinions have been received from the Judge Advocate General of the Army, it was feared that these opinions would not be protected.” Then the officers indicated a possible solution. “If a favorable opinion is handed down by the attorney general, this fear will be completely allayed, and cooperation may be expected for the complete intercept coverage of this material.” 

Nevertheless, despite the lack of an authorization by the attorney general and the warnings of their legal advisers, within a matter of weeks the chiefs of all three companies began taking part in what, for security reasons, was given the code name Operation Shamrock. By September 1, 1945, even before the Articles of Surrender were signed by Japan, the first batch of cables had been secretly turned over to the agency. Within a year, however, the complex arrangement threatened to come unglued when both Western Union and RCA again expressed concern over the illegality of their participation and the lack of attorney general approval. In a somewhat feeble effort to pacify the nervous executives, General Dwight Eisenhower, the army’s chief of staff, forwarded to each of them a formal letter of appreciation. 

Again, throughout 1947, the fear of criminal prosecution continued to hound the executives of all three companies. They were now demanding assurances, not only from the secretary of defense and the attorney general, but also from the president himself, that their participation was in the national interest and that they would not be subject to prosecution in the federal courts. To ease their concern, Secretary of Defense James Forrestal asked them to meet with him on Tuesday, December 16, 1947. It was an extraordinary meeting, attended by Sosthenes Behn, chairman and president of I.T.T, and General Harry C. Ingles, president of R.C.A Communications. Joseph J. Egan, president of Western Union, was invited but could not attend. 

At the meeting, Forrestal, telling the group that he was speaking for President Truman, commended them for their cooperation in Operation Shamrock and requested their continued assistance, “because the intelligence constituted a matter of great importance to the national security.” 

Forrestal then said that “so long as the present attorney general Tom C. Clark was in office, he could give assurances that the Department of Justice would also do all in its power to give the companies full protection.” One official was still unclear as to Shamrock’s level of authorization, however, and asked Forrestal if he was speaking not just for the office of the secretary of defense, but in the name of the president of the United States. Forrestal replied that he was. 

With an eye to the national elections, coming up in less than a year, Forrestal made it clear that “while it was always difficult for any member of the Government to attempt to commit his successor, he could assure the gentlemen present that if the present practices continued the Government would take whatever steps were possible to see to it that the companies involved would be protected.” The next month, Western Union president Joseph J. Egan and the company’s operating vice president were briefed on the December meeting. 

Forrestal’s assurances that Shamrock had the full backing of the president as well as the attorney general appeared to satisfy the three for the time being, but there was no guarantee just how long that would last. Then, on March 28, 1949, Forrestal resigned from office and in less than a week he was admitted to Bethesda Naval Hospital suffering from severe depression, anxiety, and acute paranoia. In the early morning hours of Sunday, May 22, he walked across the hallway into a small kitchen, tied one end of his dressing gown sash to a radiator just beneath a window, and knotted the other end around his neck. Seconds later, his body plunged from the hospital’s sixteenth-floor window. 

Among those stunned by Forrestal’s death were the company chiefs he had secretly assured fifteen months earlier. On hearing of Forrestal’s resignation and hospitalization, they had sought a renewal of the assurances against prosecution from his successor, Louis Johnson. On Wednesday, May 18, 1949, only four days before Forrestal’s suicide, Johnson met with these officials and stated that President Truman, Attorney General Tom Clark, and he endorsed the Forrestal statement and would provide them with a guarantee against any criminal action that might arise from their assistance. 

Confirming the fact that the knowledge of Shamrock went well beyond the office of the secretary of defense were two handwritten notes penned on the memorandum of the meeting. One approval bore the initials T.C.C., those of Attorney General Tom C. Clark; the other, signed by Secretary Johnson, stated, “OK’d by the President and Tom Clark.” The May 18 meeting was the last time any of the companies ever sought assurances against prosecution from the government. 

In 1952, the NSA was formed and took over the program, running it largely unchanged until the early 1960's, when the paper telegrams gave way to computer discs containing all messages entering, leaving, or transiting the country. NSA employees would secretly collect the discs from the telecom companies during the midnight shift, copy them, and then send the copies to Fort Meade and take the originals back to the companies before the end of the shift. The operation was discovered during the intelligence investigations of the mid-1970's and NSA officials came close to going to jail. To prevent future NSA directors from ever again turning this agency inward on the American public, Congress passed F.I.S.A in 1978 giving the F.I.S.A court the “exclusive” authority to approve or deny any NSA request to spy on Americans. The penalty was five years in prison for every violation. 

Despite the law, like Yardley and Corderman before him, Hayden decided to ignore the court and secretly begin seeking the cooperation of the country’s telecoms. Testing the water even before 9/11, Hayden made an initial approach to Joseph P. Nacchio, the head of Qwest Communications and one of the leaders of the fiber-optic revolution. On February 27, 2001, Nacchio was waved through the gates and quickly disappeared into the NSA’s secret city.

Qwest 

A small, sassy upstart based in Denver, Qwest was building a worldwide infrastructure of hyper fast fiber-optic cables to channel e-mail, data, and phone calls to the exploding Internet. Packed tightly with hair thin strands of glass, each capable of 1.5 million calls, the fiber-optic cables were quickly making the existing copper cables seem as archaic as smoke signals. By the time Nacchio joined the company in 1997, it had a thirteen-thousand-mile network of fiber-optic cable, laid alongside railroad tracks around the country, serving four and a half million customers. With a goal of quickly extending the fiber coast-to-coast, Nacchio claimed that when his network was completed in the summer of 1999, it would have greater capacity than those of AT&T, MCI WorldCom, and Sprint—combined. He was also pushing to expand the company’s European network and branching out to Japan. 

Among those impressed by the young company and its new boss were senior officials at the NSA. At the time, the agency was looking to contract with a U.S. company for a secure fiber-optic network connecting a number of the agency’s key listening posts in the U.S. to its Maryland headquarters. But because it would be used to pass encrypted, ultra-secret intercepts, it was essential that the network be both very secret and very secure. That meant an “air gap”—a physical separation between the NSA’s fibers and those of other networks. Based on their analysis, agency officials determined that the best system for both speed and security belonged to Qwest.

Wasting little time, an official from the “Maryland Procurement Office,” the cover name for the NSA’s contracting department, telephoned a cryptic request to Dean Wandry, the chief of Qwest’s government business unit. A general, said the caller, would like to meet with him and Nacchio very soon. Two weeks later the mysterious three-star lieutenant general turned up with a military aide at Nacchio’s corporate suite atop Denver’s fifty-two-story Qwest Tower. He said he had heard of Qwest’s new network and asked to meet privately with Wandry, whom the agency had already secretly vetted. As the two stepped into a separate conference room, the general told Wandry he had looked at Qwest’s network and wanted his agency to become a customer. Nacchio was excited; it would be his company’s first major government contract—and his entree into the black world of the cyber spies. 

Although the agency solicited bids from other companies, it was mostly pro forma because only Qwest could provide the agency with a custom “virtual private network,” complete with hardware, engineering, communications services, and network management. By May 1998—lightning fast by government standards—Qwest was awarded the ten-year, $430 million contract. Nacchio, who by then had also received his NSA clearance, wanted to publicly announce the deal to boost the company’s reputation, but the NSA forbade even a whisper. That same year, Qwest also built a similar secure network for the NSA linking listening posts in Europe and the Middle East to a transatlantic cable. 

Realizing the potential of the company’s new cloak-and-dagger role, Wandry told Nacchio: “If managed correctly,” the relationship with the N.S.A “would become extremely lucrative for Qwest.” It would also become extremely lucrative for Nacchio. A man who once sprinted miles to the finish line of the New York marathon despite oozing blood from one foot, Nacchio had become the Gordon Gekko of the telecom world as growth, profit, and personal wealth quickly became obsessions. In meetings, his nervous energy would cause his hands to fidget and in conversations he would answer questions before they were completely asked. Above all, he thrived on taking calculated risks, combining gut instinct with hard analysis. It was a philosophy he dubbed “informed opportunism” while earning a master of science degree in management at MIT. 

By 2000, thanks to a $45.2 billion merger with U.S. West, a “Baby Bell” that served fourteen western states, he had turned his small company into the fourth-largest telecom in the country. He started with fewer than a thousand employees, but following the merger Qwest ballooned to 71,000 employees, more than 29 million customers, about $18.5 billion in sales, and a 25,000-mile network extending from Los Angeles to New York and Washington, D.C. 

Like hyperactive moles, Qwest employees crisscrossed the U.S. and Europe burying super fast cable in four-foot trenches to connect cities, towns, and companies to the Internet. The company’s slogan became “Ride the Light,” and Nacchio would boast that Qwest would soon be bigger than his previous employer, AT&T. “I feel like an emerging oil baron,” he told one reporter. Addressing a crowd of executives, he declared, “Qwest is all about being aggressive. We’re going to dominate.” 

With all the acquisitions, however, also came sky-high debt as Nacchio poured truckloads of cash into improving U.S. West’s long history of lackluster customer service (giving it the nickname “U.S. Worst”). At the same time, with all the overbuilding there was a glut in capacity. While Qwest’s extensive network was capable of carrying all the voice and data traffic in the entire U.S., its share of telecom traffic never exceeded 4 or 5 percent. That meant thousands of miles of unused or “dark” cable. Qwest’s debt would soon balloon to more than $26 billion. 

Fearing that Wall Street investors would nervously begin backing away from his company if they saw signs of a setback, Nacchio turned increasingly ruthless. He slashed eleven thousand employees from the payroll—mostly inherited from U.S. West—and created a culture of fear for those who remained. He demanded that managers continue to match or better Wall Street’s predictions of double-digit revenue growth—or join the unemployment lines. The “most important thing we do is make our numbers,” he warned employees in January 2001. During a sales conference at the swank Bellagio Hotel in Las Vegas, he threw out tennis balls stuffed with cash into a ballroom packed with his neatly attired marketing force. Then he laughed as they scrambled, pushed, and dived like hungry packs of wolves for the prizes. 

To keep from being fired, managers resorted to shell games and smoke and mirrors in place of proper accounting methods. Revenue from deals spread out over years was instead counted as cash up front. One-time sales were recorded on the ledger as recurring revenue. Capacity was traded with other companies in trouble and made to look like profitable sales. “Our experience told us that any time you puff up the revenue like a giant souffle,” said one vice president who quit, “sooner or later it all rushes back out.” 

By January 2001, the stock was sliding and Qwest executives and auditors began worrying about what the S.E.C would find if it started snooping around. Seeing the coming meltdown, that month Nacchio quietly began unloading more than $100 million worth of his stock in the company while at the same time telling stockholders, potential investors, and the public that Qwest’s future could not be brighter. In the world of high finance, it was known as insider trading, a very serious crime. 

As Nacchio was dumping his stock by the truckload, he learned of a new and potentially sweet contract with the N.S.A. Known as Project Groundbreaker, the plan involved allowing outside contractors, for the first time, to come in and upgrade and manage many of the agency’s powerful computer and telecommunications systems. With the agency simultaneously falling behind technologically and needing to continue to downsize, Groundbreaker was designed to bring the agency into the twenty-first century technologically while also reducing its workforce. 

Under the terms of the contract, the hundreds of employees who previously worked in the I.T billets would be let go by the agency and then hired by the outside companies to work on the contracts. Thus, most would simply stay at their jobs while their paychecks came from a new employer. The idea was to free up the agency to focus on its core missions,eavesdropping, code breaking, and code making. “Essentially, the problem for this agency is we downsized a third over the past twelve years while the larger world has undergone the most significant revolution in human communications since Gutenberg,” said Hayden. “We have got to get the technology of the global telecommunications revolution inside this agency.” 

On February 27, 2001, two weeks after Qwest inaugurated local broadband service in Washington and Baltimore, Nacchio and the new head of Qwest’s government business unit, James F. X. Payne, arrived at the N.S.A. They had come to present their proposal to become part of the Groundbreaker project. Although the company was on the list of potential subcontractors, Nacchio was looking to up the ante by outlining a much larger role for the company. Neither, however, was prepared for the agency’s counteroffer: to give the N.S.A secret, warrant less access to Qwest’s database containing the calling records of its millions of American customers. And possibly later, to give Nacchio’s blessing to install monitoring equipment on the company’s Class 5 switching facilities, the system over which most of the company’s domestic traffic flows. 

No doubt to Hayden’s surprise, despite Nacchio’s penchant for risk taking, he declined to have anything to do with the agency illegally installing its monitoring equipment on the company’s switching facilities. Although some international traffic passed through those switches—the traffic Hayden was interested in—they primarily transmitted only localized calls, such as neighborhood to neighborhood. While he never flatly said no, Nacchio wanted no part of the operation. Having spent his entire career in the long distance telephone business, he felt such an agreement would be illegal—a view shared by his in-house attorneys in Denver. They believed any such cooperation—even if limited to e-mail—would violate the Electronic Communications Privacy Act. 

Enacted in 1986, the law extended the telephone wiretap provisions to include electronic information transmitted by and stored in computers. If the N.S.A wanted to obtain his data, Nacchio decided, all it had to do was enter the company through the front door with a warrant from the Foreign Intelligence Surveillance Court, not through the back door with a whisper and a wink. “Nacchio said it was a legal issue, and they should not do something their general counsel told them not to do,” said Payne. “Nacchio projected that he might do it if they could find a way to do it legally.” 

According to Payne, the N.S.A did not take the rejection well. “Subsequent to the meeting,” he said, “the customer came back and expressed disappointment at Qwest’s decision.” The agency, he said, would never let it drop. “It went on for years,” said Payne. “In meetings after meetings, they would bring it up.” At one point Payne suggested to Nacchio “that they just tell them no.” But, Payne noted, he “realized at this time that ‘no’ was not going to be enough for them.” While Qwest eventually was added as one of about thirty-five subcontractors for Groundbreaker, the company never received the other, larger slice of the action it was seeking. Later, when charged with insider trading, Nacchio would claim the rejection was retaliation for his refusing to go along with what his lawyers told him was an illegal request by the NSA. 

Despite being turned down flat by Nacchio in 2001, Hayden was hoping that by waving the flag after the 9/11 attacks he could convince the wary executives to overlook a possible jail term and endless lawsuits by angry customers should the secret come out. Without their cooperation, there was no way to gain access to the critical fiber-optic transmission lines.

Cables 

Once a lonely place with a few dozen copper cables carrying expensive conversations between continents, the seabed now resembles a ball of string and has truly become the world’s information superhighway. There’s the TAT-14 from Tuckerton, New Jersey, to Widemouth, England; the northern branch of Gemini from Charlestown, Rhode Island, to Porthcurno, England; and the southern branch from Manasquan, New Jersey, to Porthcurno. If you want to go to the Middle East and Asia you can hitch a ride on FLAG. And ARCOS-1 will take you from Miami to fourteen countries in Central America, South America, and the Caribbean. 

As satellite dishes began sprouting like toadstools in the 1960's, undersea cables became almost an anachronism, like the telegraph. But thanks to the Internet and low-cost, high-density glass fiber, the volume of international communications transmitted over sub sea cables zoomed from 2 percent in 1988 to 80 percent by 2000. At the same time, new technologies such as wave division multiplexing (W.D.M) and synchronous digital hierarchy (S.D.H) enabled companies to squeeze ever more information into the same cables without the need to expand their size. 

The revolution was not limited to the deep seas. For decades, many of the world’s domestic and regional communications were carried over microwaves. Pencil-thin signals that carried thousands of phone conversations, they were beamed between conical and horn-shaped antennas over giant networks of towers like needles on a porcupine. For the N.S.A, all that was required to tap into those communications was to hide their own antenna somewhere within the twenty-mile beam of the microwave signal as it zapped from one tower to the next. 

Another advantage for the N.S.A was that microwaves traveled in a straight line. Thus, because of the curvature of the earth, they would eventually pass into deep space. By putting a geostationary satellite in their path, the agency would be able to relay all those conversations in real time down to a listening post and then to headquarters. This technique was a boon to the N.S.A during the Cold War. Because much of Russia’s Siberia is permanently sealed under a deep layer of permafrost, burying landlines was impossible. Therefore, a series of microwave towers stretched from Moscow to its commands in the far eastern parts of the country, such as Vladivostok. As the microwave signals passed from tower to tower and on into space, the NSA was there, 22,300 miles above, listening in with a satellite named Rhyolite. 

But as the fiber-optic revolution took hold, microwave towers around the world slowly began disappearing like steel dinosaurs, and satellite dishes gave way to underground trenches and cable-laying ships. Not only were the new cables more reliable than the satellites, which had to contend with atmospheric interruptions, they were also much faster—of critical importance for both standard voice communications and the rapidly growing Voice over Internet Protocol (VoIP). Satellite signals must travel at least forty-five thousand miles as they zap from caller to deep space and then back down to the receiver, producing an annoying time delay of between one-quarter and one-half a second. But the time delay across the ocean by cable is only about one-thirtieth of a second and unnoticeable. 

Finally, there was the relatively low cost of undersea communications—partly as a result of massive overbuilding in anticipation of greater and greater Internet demand, such as that done by Nacchio’s Qwest. Between 1999 and 2002, the capacity of the global undersea grid grew more than fifteen times, a development not lost on Michael Hayden. 

In order to tap into the U.S. telecommunications system, the NSA studied a variety of “switches,” central nodes and key crossroads where millions of communications come together before being distributed to other parts of the country. Among them were the half dozen or so cable landing stations on each coast. Like border crossings, they are the points of entry for all international cable communications. Small, nondescript buildings in little towns near the shore, they usually give no hint that tens of millions of communications are constantly passing through them—more than 80 percent of all international communications. 

Typical is AT&T’s landing station at Tuckerton, New Jersey, one of the busiest communications hubs in the world. It is the gateway for a number of international cables to Europe, the Caribbean, and South America, including TAT-14 (for Trans-Atlantic Telephone). Containing nearly ten million circuits and operating at 640 gigabits per second, TAT-14 connects the U.S. with Britain and much of Europe. Built as a nine-thousand mile loop, it goes from Tuckerton to England, France, the Netherlands, Germany, Denmark, and back to New Jersey. Communications to and from the Middle East and elsewhere are funneled into and out of the European landing stations by microwave, landline, or satellite. TAT-14 then transports the traffic between those points and Tuckerton at the speed of light. 

Tuckerton has a long history of international communications; in 1912 the nation’s tallest radio tower was built just to the south. At the time, it was the only transmitter capable of broadcasting to Europe without a relay. Today the town still keeps the U.S. connected to Europe and beyond, but now instead of a giant transmitter, it does so from a nondescript, sandy-colored two-story building on a small rural road about a mile from the Jersey shore. Surrounded by pines, at first glance the AT&T landing station appears to be a modern apartment complex for beach goers. But on closer examination, the windows are all blacked out and the heavy-duty, electrically operated gate looks more like it should be at an American embassy than a remote summer vacation spot. In reality, much of the facility is deep underground. 

After transiting the Atlantic, the cable, buried in a trench in the sand, continues underground, where it is accessible through manhole covers, and then finally enters through the subterranean wall of the station. There the signals are converted and transmitted to other AT&T locations for further distribution around the country. Some customers connect directly to the station and then “backhaul” their data to a distant location, such as New York City. It is at switches such as these that the NSA began placing its equipment, capturing mirror images of what was coming in.

Then, over encrypted fiber-optic cables, it would back haul the millions of phone calls and messages in real time to its headquarters in Fort Meade or to one of its key analytical facilities elsewhere in the country. 

But while the consolidation of so much of America’s worldwide communications into a few thin cables on each coast might make life easy for the NSA in its fight against terrorists, it also presents an extremely tempting target for terrorists. By 2002, the total capacity of the ten international cables entering the east coast was nearly 8.5 billion circuits, with the ability to transfer over 206 gigabytes of data per second. Six of the ten cables come ashore in a small cluster of just four cities on the east coast: Tuckerton, Manasquan, and Manahawkin along the Jersey coast, and Charlestown in Rhode Island. Like the Internet, AT&T’s voice calls have also ballooned in recent years, from 37.5 million on an average business day in 1984 to 300 million in 1999. 

“Theoretically, an attack on two or three of these sites—at the point where the cables come together in the undersea trench before coming ashore—could cause enormous damage to the entire system,” said a 2002 RAND study. “For instance, a successful attack on trenches in Tuckerton and Manasquan and Charlestown would eliminate all but 11 gigabytes per second of carrying capacity in that region—a 95 percent cut.” As an example of the chaos that might result from such a loss, a few years ago one cut cable on the S.W.M 3 network leading from Australia to Singapore caused Australia’s largest Internet provider—Telstra—to lose up to 70 percent of its Internet capacity. 

As the NSA began secretly approaching the telecommunications executives, once again Joe Nacchio and Qwest became a stumbling block. In early 2001 he had refused to allow the agency permission to install monitoring equipment on its Class 5 switching facilities, over which traveled primarily domestic communications. Now, approached again by the NSA following the 9/11 attacks, he again refused. “Mr. Nacchio made inquiry as to whether a warrant or other legal process had been secured in support of that request,” said his lawyer, Herbert J. Stern. “When he learned that no such authority had been granted, and that there was disinclination on the part of the authorities to use any legal process,” Nacchio concluded that the requests violated federal privacy requirements “and issued instructions to refuse to comply.” But Qwest was a small player compared to some of the others and Hayden set his sights on them, especially AT&T and Verizon. 

By then AT&T had discovered the answer to one of the key technical problems facing the NSA as its giant eavesdropping dishes became relics of a bygone time: how to tap into the delicate fiber-optic cables now linking continent to continent, country to country, and caller to caller. 

Little ever happens in the sleepy town of Bridgeton, just outside of St. Louis, on the muddy banks of the Mississippi. “The original 15 blocks were platted in 1794, shortly after our nation was founded,” its Web page proudly boasts. “We also hold the oldest continuous state charter, which was granted in 1843.” But since then it had been quiet times, until 2002. That year a long-held secret was revealed, and another event became shrouded in utmost secrecy. 

It had been a dry, hot summer, and as the chocolate river slowly retreated, the outline of a giant rib cage began to emerge. It was the skeletal hull of a nineteenth-century steamboat coming into view for the first time in 120 years. At 280 feet, the Montana had been one of the longest paddle wheeler ever to ply the Mississippi. It was a time of grandeur, when more than seven hundred steamboats regularly cruised the river, pulling into the Port of St. Louis to take on passengers and off-load cargo. Along the city’s lively riverfront, colorful boats decked out with flags and bunting in red, white, and blue lined up for miles. But in June 1884, as the Montana neared Bridgeton, it collided with a railroad crossing, began taking on water, and sank into the gooey bottom. Soon the era of the steamboat came to an end, just as that of the telephone began to take hold. 

That same summer, as Missourians from miles around crowded into Bridgeton to watch the river giving up its long-held secret, another group in Bridgeton was going to elaborate lengths to keep a secret. In a boxy, one-story redbrick building that once housed offices for the Western Union telegraph company, employees of AT&T were plastering over the windows, installing steel doors, and constructing a “mantrap.” A bionic security portal containing retinal and fingerprint scanners, it was designed to keep curious workers out and allow the few with Top Secret NSA clearances in. 

The secret hidden in the room had its beginnings five years earlier and 934 miles to the northeast, in a laboratory in New Jersey. In the mid 1990's, the Internet revolution met the fiber-optic revolution, raising questions for scientists at AT&T regarding how fiber-optic systems operate under a variety of conditions. They needed ways to measure and analyze the photons as they flashed over the hair-thin strands of fiber bundled together inside the thick, heavily insulated cable. And the only way to conduct truly valid tests and measurements was to carry out the experiments on actual live and stored customer traffic, including that from other telecoms that passed data through AT&T equipment. This meant developing a way “to tap the network passively,” according to confidential AT&T documents. 

In 1996, the year AT&T inaugurated its WorldNet Internet service, the task of inventing the tap was given to a small team of scientists at AT&T’s Research Labs in Florham Park, New Jersey. The leafy campus was once the estate of Vanderbilt descendants. What the team came up with was a device they called the Packet Scope. 

Among the locations chosen for the taps was AT&T’s Bridgeton, Missouri, Network Operations Center. A one-story building with a two-story annex at 12976 Hollenberg Drive, it served as the telecom’s technical command center, a major hub through which AT&T’s domestic and international data circuits were managed. “They are in command of the network,” said Mark Kline, a longtime AT&T employee. It was thus an ideal place to tap into and analyze a large portion of the system. Another location was its WorldNet Router Center at the AT&T Building at 32 Sixth Avenue in New York City, where most of the domestic and international cables converged. “The New York monitor taps into T3 [a high speed cable] links connecting W.N [WorldNet] to the rest of the Internet,” according to the documents. And a third was set up at AT&T Labs in Florham Park, New Jersey. 

At the Internet hubs in Bridgeton, New York City, and Florham Park, data flows through D.S.X-3 panels that are basically automatic switchboards redirecting the traffic to other locations. Each link in the panel has a jack through which the traffic could be monitored. To tap into the data, lines from the jacks were plugged into the Packet Scope, which consisted of a Compaq 500-MHz UNIX workstation, 10-Gbyte striped disk arrays, and 140-Gbyte tape robots. As the systems became more complex, however, it would be necessary to actually tap into the cables themselves. “An approach others have used is to have an optical splitter, much like the tap  for a T1 or T3 link,” said the documents. This optical splitter would create a mirror image of the contents of the entire cable. 

Once intercepted by the Packet Scopes, the information was transmitted in real time to Florham Park, where AT&T constructed its World Net Data Warehouse to analyze and store information. According to one of the AT&T engineers working on the project, “The amount of data to be stored is truly enormous.” To hold and manage it all, the warehouse was home to Daytona, AT&T’s monster data storage computer. Engineers at the Data Warehouse could also remotely control the Packet Scopes to target what to intercept. “That on-site presence of personnel to manage the monitoring equipment is not essential,” said the AT&T documents. 

For the AT&T engineers, ensuring the confidentiality of customers’ e-mail and other data was critical. Thus only packet headers—the address information—were intercepted, not the full contents of the e-mail. The headers were then encrypted to further hide the true identity of the senders and receivers. 

By the summer of 1997, the Packet Scopes were fully in operation. But what the AT&T engineers never counted on was a massive terrorist attack and a president’s decision to ignore existing privacy law. By the late fall of 2001, Hayden succeeded in gaining the secret cooperation of nearly all of the nation’s telecommunications giants for his warrant less eavesdropping program. Within a year, engineers were busy installing highly secret, heavily locked rooms in key AT&T switches, among them Bridgeton, New York City, and the company’s major West Coast central office in San Francisco. From then on the data,including both address information and content,would flow through the Packet Scopes directly to the NSA. And Bridgeton would become the technical command center for the operation. “It was very hush-hush,” said one of the AT&T workers there at the time. “We were told there was going to be some government personnel working in that room. We were told, ‘Do not try to speak to them. Do not hamper their work. Do not impede anything that they’re doing.’ ” 

“Bridgeton, Missouri, was chosen” for the Packet Scope, said Dr. Brian Reid, a former AT&T scientist at Bell Labs, “because it’s roughly close to the center of North America geographically, and therefore if you’re going to run a lot of wires to it, they don’t have to be as long. Whereas if you put this in New Jersey, then the wires from Phoenix and Los Angeles would be too long. And so if you’re going to build a hub for analysis, you put it somewhere in Missouri or Kansas, and they put it in Missouri . . . In the world of AT&T, all you had to do was go to Bridgeton and say, ‘Hi guys, I’d like to listen,’ and you would hear everything you needed to hear.” The problem for the N.S.A today, says Reid, is the large number of other telecom companies, all of which would require separate secret agreements. “Now you’d have to go to the Qwest hub in Denver, and you’d have to go to the Sprint hub in St. Louis, and you’d have to go to the Vonage hub in Norway—it’s increasingly global, it’s increasingly decentralized, and there’s no longer a small number of places to go to take advantage of other people’s having drawn stuff together. There could be a hundred places.” 

Modeled after Bell Labs, birthplace of the transistor and winner of eleven Nobel Prizes for brilliant innovations in communications, AT&T Labs now spent much of its time helping the government conduct mass surveillance of its customers and seeking patents for ever more sophisticated bugs. One AT&T Labs patent application was called “Secure detection of an intercepted targeted IP phone from multiple monitoring locations,” and another was titled “Monitoring selected IP voice calls through activity of a watchdog program at an IP-addressing mapping check point.” 

For decades, AT&T and much of the rest of the telecommunications industry have had a very secret, very cozy relationship with the N.S.A through the National Security Agency Advisory Board (N.S.A.A.B), made up of top company executives. With the advent of the warrant less eavesdropping program, the knowledge, expertise, and help of those executives became even more critical. Because of this, the agency has tried hard to keep the names of those industry leaders and details of their regular meeting at the N.S.A secret. Among the previous members was Dr. William O. Baker, who designed much of America’s telecommunications infrastructure. During the two decades he served on the board he also served, at various points, as research chief, president, and chairman of the board of Bell Labs, long the epicenter of telecommunications research. Because the first operational fiber-optic system was developed under Baker at Bell Labs, the NSA had a large head start in finding ways to penetrate it. 

The backgrounds of other recent members of the N.S.A.A.B also show the secret linkage between the NSA and the commercial telecom world. They include: 

• Dr. Alf L. Andreassen, an information systems expert. In 1983 he founded and became director of Bell Labs Command, Control, Communication and Intelligence Center and later did similar intelligence work for AT&T. 

• Dr. George H. Heilmeier, chairman emeritus of Telcordia Technologies, Inc., formerly known as Bell Communications Research, Inc. (or Bellcore). At the time of the breakup of AT&T, the highly regarded Bell Labs stayed with the parent company, and as a result the regional Bell operating companies, the Baby Bells, formed their own research and development company, which was Bellcore, later Telcordia. According to the company’s literature, “We’re one of the world’s foremost providers of software and services for IP, wireline, wireless, and cable networks.” 

• David W. Aucsmith, security architect and chief technology officer for Microsoft Corp.’s Security Business & Technology Unit. From 1994 to 2002 he was the chief security architect for Intel Corporation, the company whose integrated circuit chips are in millions of personal computers around the world. Speaking of computer security, he once said, “The actual user of the PC—someone who can do anything they want—is the enemy.” 

• John P. Stenbit, on the board of directors of Loral Space & Communications Inc., a satellite communications company that owns and operates telecommunications satellites used to distribute broadband data and provide access to Internet. 

As on the East Coast, during the late 1990's the amount of telephone and Internet traffic flowing across the Pacific to the United States boomed. Among the new pipes through which much of this communication passed was the eighteen-thousand-mile Southern Cross fiber-optic cable network, which offered a quantum leap in carrying capacity across the Southern Pacific—up to 160 gigabytes per second. But the cable in which the NSA likely had the most interest was China-U.S., owned by a consortium of companies including AT&T and S.B.C Communications. Completed in 2000, the southern end of the fourteen-thousand-mile ring begins its long journey at a landing station in Shantou, a bustling port in the southern Chinese province of Guangdong known for its tea consumption. 

While there was an obvious foreign intelligence value to monitoring that cable, there was also a terrorism connection. Many of the communications from Southeast Asia, including Indonesia and Malaysia, where al-Qaeda has been very active, were transmitted over the SEA-ME-WE 3 (Southwest Asia–Middle East–Western Europe) cable. That cable then linked to China-U.S. in Shantou. 

Thus if an American businesswoman in Surabaya, Indonesia, sent an e-mail to her husband in Cincinnati, the signal would likely be routed first to the Ancol landing station on a beach area about five miles from the Indonesian capital of Jakarta. At Ancol, like a passenger boarding a very fast ship, it would travel over the SEA-ME-WE 3 cable to the Shantou landing station, arriving a millisecond or so later. At Shantou, the e-mail would transfer to the China-U.S. cable, which, in a few blinks of an eye, would transport it across the floor of the Pacific Ocean. 

In the U.S., the message would arrive unceremoniously a few feet beneath a sandy beach at California’s Montana De Oro State Park, near Morro Bay. Then, after another 2,200 feet inside a five-inch drill pipe under the drifting dunes, it would emerge in a manhole at the park’s Sand Spit parking lot. Passing beneath the feet of surfers and beachcombers heading for the shore, the e-mail would zip another mile inland, arriving at 9401 Los Oso Valley Road in San Luis Obispo, a small, tan-colored windowless building surrounded by a high steel fence topped with barbed wire that is AT&T’s landing station. 

Despite its quiet surroundings, it is a very busy place. Five of the six transpacific cables pass under the beach and into that small building. Together, the cables contain 80 percent of all communications to and from virtually every nation in the Pacific and the Far East—dozens of countries, hundreds of languages, thousands of cities, tens of millions of simultaneous conversations and messages. Sealed in layers of polyethylene, Mylar tape, stranded steel wires, aluminum sheathing, copper tubing, and petroleum jelly are the heavily protected hair-thin glass fibers. Converted into photons and passing through them at the speed of light are cries and laughter, hopes and dreams, romance and commerce, voices and pictures, e-mail and faxes, bank statements and hotel reservations, love poems and death notices. The only thing they all have in common is a reasonable expectation of privacy. 

From the landing station, the e-mail from Surabaya, together with millions of additional communications from all five cables, zaps 241 miles north to 611 Folsom Street in downtown San Francisco. Tall, forbidding, and nearly windowless, the titanium-colored nine-story building is, in essence, one big telecommunications switch—the nerve center where all of AT&T’s regional trunk lines converge. Beneath the road, the message enters through the reinforced concrete walls of an underground vault. There it begins a climb toward the upper floors inside metal duct work. 

Along the way the messages pass floor after floor of wires—hanging like spaghetti from ceilings, tied in bundles along the floor, stretched like insulation along every wall. Old copper wire pairs, they connect neighborhood to neighborhood and local homes to the corner store. Another entire floor contains the actual “switch,” a Northern Telecom D.M.S-100. Made up of rows of chocolate-brown cabinets that contain whirring drives and humming air conditioning, the super processor has the ability to juggle 100,000 calls while at the same time broadcasting annoying messages about miss-dialed calls and numbers no longer in service. 

On the eighth floor, the cables finally emerge into the World Net Internet spaces where their signals are de-multiplexed—sorted out between voice and data, various frequencies, and other details. Then they drop down to the seventh floor, an expansive space packed with gray electronic bays and steel racks. Stacked from floor to ceiling are Cisco routers and modems with flashing red, green, and yellow lights. It is the key choke point through which millions of e-mail and other data are constantly passing, from across the country and around the world. In addition to traffic from the international cables, the room is also a hub for a large percentage of America’s domestic communications. The biggest “pipes” deliver 2.5 gigabits of data—the equivalent of one-quarter of the Encyclopedia Britannica’s text—per second. 

“There’s lots of Internet traffic, as you can imagine, that goes in and out of this office,” said Mark Kline, the AT&T technician in charge of the room. For over twenty-two years, Kline had worked for the company as a communications technician and computer network specialist, first in New York and then in California. “Probably hundreds of fiber-optic lines go out, carrying billions—that’s billions with a B—of bits of data going in and out every second every day. So all the Web surfing you’re doing, whatever you’re doing on the Internet—the pictures, the video, the Voice over Internet—all that stuff’s going in and out of there. And then of course there’s also the traditional phone switch, which is doing what it’s been doing since before the Internet—handling millions and millions of phone calls.” 

Following its merger with S.B.C, AT&T had become the biggest telecommunications company in the United States and one of the largest in the world, providing long-distance service to approximately 34.4 million customers. Its international voice service carried more than 18 billion minutes per year, reaching 240 countries, linking 400 carriers, and offering remote access via 19,500 points of presence in 149 countries around the globe. And much of those communications passed through its Folsom Street facility. 

In a sense, the World Net Internet room was also a meeting place for dozens of the nation’s major Internet service providers (I.S.P's). This was because only a fraction of all the Internet communications flowing into the room were from actual AT&T World Net customers. The rest were from customers of other Internet companies, such as Sprint, Level 3, and U.U.NET. In order to cheaply and efficiently exchange these packets, the companies enter into “peering” arrangements with one another and with AT&T, and then bring their pipes together in the World Net room at Folsom Street. Thus, when the e-mail from Surabaya arrives, it can quickly be shifted over to the businesswoman’s own company, Sprint, for final delivery to Cincinnati. 

At the same time, many other pipes are also entering Folsom Street from smaller I.S.P's. But rather than each running cables from their companies all the way to downtown San Francisco, they get together at central locations away from the city, known as Internet exchange points, or I.X.P's. There the companies exchange Internet traffic that is addressed to one another. By coming together, they need only lay a few feet of cable—to one another’s routers—rather than many miles to a variety of locations. From the I.X.P, a single cable then goes to Folsom Street, which is another savings. 

As the Internet has grown, so have the I.X.P's. Some have taken over entire buildings and become “carrier hotels.” But historically, the two most important I.X.P's have been M.A.E (for Metropolitan Area Ethernet) East in Virginia and M.A.E West in California. M.A.E East began in the parking garage of a high-rise office building at 8100 Boone Boulevard in Vienna, Virginia, just outside Washington, D.C. “A group of network providers in the Virginia area got together over beer one night and decided to connect their networks,” said the Internet architect Steve Feldman. It soon exploded as U.U.NET, MCI, Sprint, America Online, and others joined, turning it into the busiest Internet hub in the world, a sort of massive outlet mall for I.S.P's. It later moved up to a nicer set of offices on one of the upper floors, Suite 400. Then as it filled up, another major I.X.P, the Equinix co-location facility, opened at 21830 U.U.NET Way in Ashburn, Virginia. It is now overshadowing M.A.E East. 

In California, M.A.E West developed in the heart of Silicon Valley and quickly became the second-busiest I.X.P in the world. As the World Wide Web grew, so too did the nation’s “Internet backbone,” which largely stretched between the two M.A.E's. Today M.A.E West sits on the eleventh floor of 55 Market Street, a gold-mirrored building in downtown San Jose. Every day, behind its steel door secured with a cyber lock, as much as 40 percent of the nation’s Internet traffic speeds by. Inside are rows and rows of black cabinets, each containing a stack of quietly humming routers belonging to scores of different I.S.P's. Connected together with bright orange cables, they are constantly exchanging Internet packets. The routers, in turn, are all wired to the M.A.E, three bread-box-sized switches capable of handling a total of 30 billion bits a second. But like M.A.E East, M.A.E West is also becoming upstaged by another I.X.P: One Wilshire, in Los Angeles, where over 260 I.S.P's connect their networks to one another. It has become the main connecting point for the Pacific Rim countries. 

From M.A.E West, a fiber-optic cable runs to AT&T’s World Net Internet room on Folsom Street, where it joins more than a dozen other cables—“peering links”,from northern California I.X.P's. But rather than being connected directly to the routers, which would speed the Internet packets on to their ultimate destination—the e-mail from Surabaya to Cincinnati, for example—the cables instead pass into an odd, rectangular white box. Labeled “Splitter Cabinet,” it is in reality a super sophisticated opto-electronic “bug” designed to tap into fiber-optic cables. 

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Splitter 


 

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