BUSINESSWEEK ONLINE / MAY 31, 1999 ISSUE SCIENCE & TECHNOLOGY They're Listening to Your Calls Echelon monitors phones, E-mail, and radio signals You think the Internet brings grave new threats to privacy? Then you probably don't know about Echelon. Run by the supersecret National Security Agency, it's the granddaddy of all snooping operations. Business and political leaders are waking up to the alarming potential of this hush-hush system. A combination of spy satellites and sensitive listening stations, it eavesdrops on just about every electronic communication that crosses a national border -- phone calls, faxes, telexes, and E-mail -- plus all radio signals, including short-wave, airline, and maritime frequencies. Echelon's globe-straddling system also listens in on most long-distance telecom traffic within countries. Ditto for local cell-phone calls. Indeed, if a phone call or message travels via satellite or microwave relay during any part of its journey, it probably gets picked up by Echelon. So the lion's share of all telecommunications traffic is bugged because even undersea phone cables and fiber-optic terrestrial systems often have microwave links somewhere in the loop. ''Americans should know that every time they place an international call, the NSA is listening,'' says John E. Pike, a military analyst at the Federation of American Scientists in Washington. ''Just get used to the fact -- Big Brother is listening.'' In Europe, Big Brother may soon get a second set of ears. The European Parliament is working on a junior version of Echelon. A resolution outlining the technical standards for tapping such new-tech systems as the Internet was approved on May 7. Encryption is no guarantee of privacy either. The NSA, which is bigger than the Central Intelligence Agency and runs Echelon from its headquarters at Ft. Mead, Md., has little trouble unscrambling messages encoded with most commercial encryption software. With a little more time, NSA can probably break ''crypto'' schemes with so-called Keys almost 1,000 bits long, says Lisa S. Dean, vice-president for technology at the Free Congress Research & Education Foundation, a conservative think tank in Washington. ''That's why 1,028 bits is used by most organizations that are concerned about confidentiality.'' If it's any consolation, the vast bulk of all communications are never heard or seen by people. Echelon's chief task is sifting through civilian telecom traffic for clues about terrorist plots, drug-smuggling cartels, political unrest, and other intelligence requested by the Pentagon, government strategists, and law-enforcement agencies. Supercomputers screen the so-called intercepts for key words related to such matters. If the computers don't spot anything suspicious, the tapes get erased after a month or so. LEAKS AND POACHERS. Still, like any technological tool, Echelon is subject to political abuses -- and there have been some. During the Reagan Administration, Echelon intercepted phone calls by Michael Barnes, then a Democratic Congressman from Maryland, to Nicaraguan officials, and transcripts were leaked to the press. Echelon can also backfire: On two occasions, Canadian spooks who collaborate with the NSA used Echelon to pick up information on pending U.S.-China grain deals and steal the business with lower prices. Echelon has been operating with little fanfare for decades. It springs from a secret pact signed in 1948 by the U.S., Australia, Britain, Canada, and New Zealand -- the countries running Echelon's main listening posts (map). Then, last year, the system was hauled into the glare of public scrutiny by a study prepared for the European Parliament by Omega Foundation, a British market researcher. Europeans were enraged by its finding that ''within Europe, all E-mail, telephone, and fax communications are routinely intercepted'' by the NSA. ''Unlike many of the electronic spy systems developed during the Cold War,'' the report noted, ''Echelon is designed for primarily non-military targets: governments, organizations, and businesses in virtually every country.'' In fact, the NSA's biggest base for electronic spying is at Menwith Hill in England's Yorkshire Moors. It is operated jointly with Britain's Government Communications Headquarters, or GCHQ, which is the equivalent of the NSA. Dotting the sprawling site are at least 25 giant soccer-ball-like structures, each hiding a high-tech antenna tuned to intercept a specific telecom target. The Omega revelations jolted many Europeans, despite earlier disclosures such as "Spyworld," a 1995 book by Mike Frost, a retired spook who was a deputy director of Canada's NSA partner, the Communications Security Establishment (CSE). In particular, leaders in continental Europe bristled when newspaper accounts suggested that Echelon might be providing competitive intelligence to Anglo-based companies. ''Absolutely not,'' declares Bobby Ray Inman, a retired Navy Admiral who headed the NSA in 1979 when the CIA proposed sharing intelligence with business. ''I won that one,'' says Inman, by arguing that the multinational status of companies would make it tough to pick beneficiaries. For instance, he says, ''Would you give it to IBM in Paris, but not Nissan in Tennessee?'' The NSA declined to speak with BUSINESS WEEK, but it has reiterated that it doesn't share intercepts with companies. While economic intelligence has always been an Echelon priority, Inman says the main targets are ''fair trade issues and trade violations -- that sort of thing.'' Canadian Frost adds that economic intelligence gained importance ''as the cold war started to wane,'' but there was a firm policy ''not to share this information with the private sector.'' But to executives in non-English-speaking countries, Echelon smacks of an Anglo conspiracy. Under the 1948 UKUSA Agreement, the NSA is head honcho, with America's Anglo allies as ''second parties.'' Even though most NATO countries and a few others, including Japan and Korea, have since joined the UKUSA society, they are deemed ''third parties'' -- meaning they get to funnel intelligence to the NSA but are rarely allowed to see anything from other contributors. The NSA soothes any bruised feelings by providing gee-whiz eavesdropping technology and a lot of money. WIDE NET. That puts the NSA in the catbird seat. It alone sees all of the so-called comint, or communications intelligence. Vast amounts flow continually from the primary eavesdropping stations plus scores of smaller listening posts in Germany, Japan, the Middle East, and elsewhere. Many of these are operated by U.S. armed forces, so even the host country's intelligence agency doesn't know what's collected. In addition, the NSA has at least five ear-in-the-sky spy satellites that are so exquisitely sensitive they can monitor signals on the ground from hundreds or even thousands of miles up. So much information gets sucked up that it would overwhelm human analysis. So NSA relies on supercomputers and artificial intelligence. Advanced speech-recognition and text-search programs sift through the traffic, hunting for specific words and phrases. Each main snooping post has its own list of key words, called the Dictionary, tailored to the intelligence tasks in its geographic area. When the computers spot, say, a terrorist's pseudonym or a slang term for narcotics, the message gets sent to a human expert. ''If I'm talking to someone in Germany and we use enough Dictionary key words, Echelon will certainly mark our conversation,'' says analyst Pike. ''Then NSA will try their best to identify the German. But they're required by law to blank my name and substitute 'U.S. person.''' However, the NSA can easily get around that protection of U.S. law by letting the CSE or the GCHQ deal with the suspect conversation, since neither agency is bound by the laws of America or Germany. Some of the handwringing in Europe over the Omega report may have been for show. The French secret service has been accused repeatedly by the FBI with spying on U.S. companies. Bonn has its own miniversion of Echelon for tapping international telecom traffic to and from Germany. And the scheme being hatched by European justice ministers, which is designed to combat terrorism and other serious crime, contains essentially no regulatory checks -- and has critics and privacy advocates up in arms. To Pike, things are getting out of hand. Surveillance technology is becoming so competent, he explains, that snooping systems soon may outstrip ''the wildest dreams of George Orwell.'' It's enough to make anyone paranoid. By Otis Port in New York, with Inka Resch in Paris =================================================== *** NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. ***
