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<nettime> seymour hersh on the NSA


<http://cryptome.org/nsa-hersh.htm>

   29 November 1999. Thanks to The New Yorker and SH.
   Source: Hardcopy The New Yorker, December 6, 1999, pp. 58-76.
     _________________________________________________________________
   
                        ANNALS OF NATIONAL SECURITY
                            ___________________
   
                            THE INTELLIGENCE GAP
                                      
            How the digital age left our spies out in the cold. 
   
                            BY SEYMOUR M. HERSH
   
   THE National Security Agency, whose Cold War research into code
   breaking and electronic eavesdropping spurred the American computer
   revolution, has become a victim of the high-tech world it helped to
   create. Through mismanagement, arrogance, and fear of the unknown, the
   senior military and civilian bureaucrats who work at the agency's
   headquarters, in suburban Fort Meade, Maryland, have failed to prepare
   fully for today's high-volume flow of E-mail and fibre-optic
   transmissions -- even as nations throughout Europe, Asia, and the
   Third World have begun exchanging diplomatic and national-security
   messages encrypted in unbreakable digital code.
   
   The N.S.A.'s failures don't make the headlines. In May, 1998, India's
   first round of nuclear tests, which took place in Pokharan, southwest
   of New Delhi, caught Washington by surprise, and provoked criticism of
   the Central Intelligence Agency from the press and from Congress. But
   it was the N.S.A., in the days and weeks before the detonations, that
   did not detect signs of increased activity or increased communications
   at Pokharan. "It's a tough problem," one nuclear-intelligence expert
   told me, because India's nuclear-weapons establishment now sends
   encrypted digital messages by satellite, using small dishes that
   bounce signals beyond the stratosphere through a system known as VSAT
   ("very small aperture terminal") -- a two-way version of the system
   widely used for DirecTV.
   
   Similarly, the North Koreans, with the help of funds from the United
   Nations, according to one United States intelligence official, have
   bought encrypted cell phones from Europe, high-speed switching gear
   from Britain, and up-to-date dialling service from America -- a system
   that the N.S.A. cannot readily read. The official said of the North
   Koreans,"All their military stuff went off ether into fibre" -- from
   high-frequency radio transmission to fibre-optic cable lines, which
   transmit a vast volume of digital data as a stream of light. A former
   high-level Defense Department official told me, "It's a worldwide
   problem. You could wire up all of Africa for less than two billion
   dollars." This former official, like most of the two dozen
   signals-intelligence (SIGINT) experts interviewed for this account,
   agreed to speak only after being assured of anonymity. A 1951 federal
   law prohibits any discussion or publication of communications
   intelligence.
   
   The decline of the N.S.A. is widely known in Washington's
   national-security community. "The dirty little secret is that fibre
   optics and encryption are kicking Fort Meade in the nuts," a recently
   retired senior officer in the C.I.A.'s Directorate of Operations told
   me. "It's over. Everywhere I went in the Third World, I wanted to have
   someone named Ahmed, a backhoe driver, on the payroll. And I wanted to
   know where the fibre-optic cable was hidden. In a crisis, I wanted
   Ahmed to go and break up the cable, and force them up in the air" --
   that is, force communications to be broadcast by radio signals. The
   number of daily satellite-telephone calls in the Arab world, many of
   which are encrypted, is in the millions, creating severe difficulties
   for eavesdroppers. The mobile-telephone system used by Saddam Hussein
   at the height of Iraq's dispute last year with a United Nations
   arms-control inspection team operated on more than nine hundred
   channels. Each channel was separately encrypted, with multiple keys,
   and Saddam's conversations bounced from channel to channel with each
   call. A U.N. intelligence team eventually gained access to the
   telephone system's technical manuals and other data, and was able to
   record the encrypted conversations, but without these materials it
   could not have made sense of the intercepts. The code-makers are
   leaving the code-breakers far behind.
   
   IN its heyday, during the Cold War, the N.S.A. had nearly ninety-five
   thousand employees, more than half of them military, monitoring
   communications from hundreds of sites around the world. It played a
   dominant role in American intelligence gathering behind the Iron
   Curtain and elsewhere, producing by the end of the nineteen-sixties
   more than a thousand intelligence reports a day. The N.S.A.'s
   intercepts were the government's most reliable and important sources
   of intelligence on the Soviet Union -- far outstripping the
   intelligence collected by the C.I.A. and its agents abroad. In Western
   Europe, N.S.A. linguists and Army G.I.s sat in unmarked vans
   monitoring the daily conversations of Soviet tank units on the other
   side of the Berlin Wall. In the Pacific, Air Force radiomen and N.S.A.
   technicians, in specially configured Boeing 707s, flew huge figure
   eights over the ocean, copying Morse-code transmissions from North
   Korea and the Soviet Far East. In the Mediterranean, Navy signalmen
   worked hectic shifts with their N.S.A. colleagues, eavesdropping on
   government communications in the Middle East. Many of the most
   sophisticated Soviet codes were broken, including the diplomatic
   traffic to Moscow from its Embassy in Washington. By the time
   President Nixon was in office, the agency was listening to telephone
   conversations of Soviet leaders as they were driven in limousines to
   and from the Kremlin. In the upper reaches of the United States
   government, access to the agency's daily top-secret "take" was a sign
   of importance and success. Henry A. Kissinger, Nixon's
   national-security adviser, went as far as to order the agency to scan
   the diplomatic traffic from Washington, isolate references to him, and
   deliver the cables to his office, without any further distribution
   inside the government. Many of his successors have received the same
   service.
   
   These successes were the payoff for years of painstaking technical
   research. In the nineteen-fifties and sixties, the N.S.A.'s engineers,
   working closely with the American computer industry, coordinated and
   financed much of the early work in telecommunications, underwriting
   research on semiconductors, high-speed circuitry, and transistorized
   computers. With its research into microelectronics, the agency also
   helped to develop the early guidance systems for intercontinental
   ballistic nuclear missiles. And the agency's team of mathematicians --
   aided by outside advisers, many of whom were tenured at places such as
   Harvard, Dartmouth, and Princeton -- steadily tore through the Soviet
   cipher systems.
   
   By the mid-seventies, as the world began routinely communicating by
   microwave, the agency maintained its edge with innovative use of
   satellite intelligence, and its mathematicians and computer experts
   were sometimes able to thwart the Russians' attempts to scramble their
   signals. Even undersea and underground coaxial cables -- the most
   secure means then of relaying telephone conversations and electronic
   communications -- could be intercepted. Books and newspaper articles
   have described the penetration of Soviet cables at sea by N.S.A. units
   aboard Navy submarines as some of the most daring intelligence
   operations of the Cold War.
   
   The collapse of Communism, in 1989, and the collapse of the Soviet
   Union, in 1991, led to a revised mission for the N.S.A., with more
   focus on international terrorism and drug dealing -- both highly
   elusive targets. The agency's budget was cut back. In the early
   nineties, as more nations turned to fibre optics, the N.S.A. shut down
   twenty of its forty-two radio listening posts around the world. (In
   some cases, equipment was left behind to be monitored remotely.) The
   agency's overseas military personnel have been reduced by half.
   
   The N.S.A.'s status within the government has also been diminished.
   Last year, Richard Lardner, a reporter for the Washington newsletter
   Inside the Pentagon, revealed that the agency had been "reined in" and
   would no longer be authorized to report directly to the Secretary of
   Defense. The N.S.A. was ordered instead to report through an Assistant
   Secretary. In recent years, according to a congressional study, the
   N.S.A.'s contribution to the President's daily intelligence brief -- a
   secret summary prepared at the C.I.A. every morning for the White
   House -- has fallen by nearly twenty per cent. The N.S.A. was being
   jarred by the difficulties of tracking terrorism, and by the rapid
   spread of unbreakable codes. The agency also discovered that it had
   few advocates in the White House and among those officials at the
   Office of Management and Budget who control the flow of money to the
   top-secret world. The agency was not allowed to keep the funds it had
   saved by reducing manpower and drastically cutting overseas stations.
   
   The N.S.A. is also getting very little help from its colleagues in the
   American intelligence community. One legislative aide told me that
   George Tenet, the director of Central Intelligence, who has nominal
   responsibility for all intelligence gathering, had expressed alarm
   upon taking office about the N.S.A.'s weakness, and told congressmen
   of his desire to rescue the agency from what appeared to be a
   "precipitous calamity." But, the aide added," he didn't do it."
   
   The N.S.A.'s strongest supporters -- the members and staffs of the
   Senate and House intelligence committees -- are also its most vocal
   critics. The agency is now facing the most caustic congressional
   scrutiny in its history, amid much pessimism that it can right itself
   without major changes in its management. Staff members of the
   intelligence-oversight committees traditionally prefer not to be
   quoted by name, but John Millis, a former C.I.A. officer who is staff
   director of the House intelligence committee, openly discussed the
   N.S.A.'s problems in the fall of 1998 at a luncheon meeting with a
   group of retired C.I.A. officers. "Signals intelligence is in a
   crisis," Millis told his former colleagues, who reprinted the speech
   in a newsletter. "We have been living in the glory days of SIGINT over
   the last fifty years, since World War II." He went on, "Technology has
   been the friend of the N.S.A., but in the last four or five years
   technology has moved from being the friend to being the enemy." Millis
   also made it clear that any significant increase in the agency's
   budget was made more difficult by the fact that"there is no management
   of the intelligence community. There is no one in a position to make
   the tradeoffs within the intelligence community that will make a
   coherent, efficient organization that will function as a whole. So we
   end up doing it on Capitol Hill. And I've got to tell you, if you are
   depending on Capitol Hill to do something as important as this, you're
   in trouble."
   
   SENATOR ROBERT KERREY, of Nebraska, the ranking Democrat on the
   Senate's intelligence committee, told me that there was little he
   could add to Millis's assessment, because most information dealing
   with the agency and its work is highly classified. Kerrey also pointed
   out that secrecy "does not equal security," and can be self-defeating.
   For example, the agency is in desperate need of more money to get
   started on information-retrieval programs for the Internet which
   should have been under way years ago. "But I can't tell you how much
   they need," Kerrey said, "and I can't tell you how much they have. The
   public doesn't know about the N.S.A., or what it is. There are no
   editorials in the New York Times, no advocates. Does the public know
   that the nation might be more secure if more was invested? Out of
   sight, out of mind."
   
   Last July, during a little-noticed Senate colloquy on an
   intelligence-spending bill, Kerrey hinted at the N.S.A.'s problems.
   "The signals are becoming more complex and difficult to process," he
   said. "And they are becoming more and more encrypted." Because of the
   sophistication of current encryption systems for E-mail and other
   communications," he said, "we will find our people on the intelligence
   side coming back and saying, 'Look, I know something bad happened . .
   . I couldn't make sense of the signal. We intercept, and all we get is
   a buzz and background noise. We cannot interpret. We can't convert
   it.' "
   
   Kerrey says that his concern was heightened by a report on the N.S.A.
   that was filed last year by an unusual study group that he and Senator
   Richard C. Shelby, Republican of Alabama and the committee's chairman,
   had put together. Secret congressional studies are routine, but the
   Senate team, known as the Technical Advisory Group, included a number
   of prominent outsiders -- men who were in charge of re search and
   technology for major American high-tech corporations, such as George
   Spix, of Microsoft, Bran Ferren, of the Walt Disney Company, and a
   nuclear-weapons physicist, Dr. Lowell Wood, of the Lawrence Livermore
   National Laboratory. The outsiders were given full clearance and
   access to many of the most sensitive areas at the Fort Meade
   headquarters. Their conclusions were devastating. "We told them that
   unless you totally change your intelligence-collection systems you
   will go deaf," one involved official told me. "You've got ten years."
   
   The advisory group put much of the blame for the agency's problems on
   the stagnation and rigidity of the senior civilian management. "The
   N.S.A.'s party line to Congress is 'We're fine. We don't need to
   change,' " the official told me. "It's like a real Communist
   organization. Free thought is not encouraged" among the managers.
   Referring to the senior bureaucracy, the official said that the agency
   would "have to fire almost everyone." This official and others singled
   out Barbara A. McNamara, the current N.S.A. deputy director, as
   someone especially resistant to change. "She's leading a cohort of
   thirty-year veterans who go back to radio" -- a reference to
   high-frequency radio transmissions -- "and think nothing is needed,"
   the official said. In secret testimony this fall before Congress, he
   added, McNamara talked about "how good the N.S.A. is -- how it caught
   this and that drug guy. They got a whole bunch of horseshit from
   Barbara."
   
   In subsequent interviews, many former N.S.A. managers endorsed the
   advisory group's findings. One former official described the civilian
   leadership as "a self-licking ice-cream cone," with little tolerance
   for dissent or information it did not wish to hear. "If you didn't
   support their position, you weren't considered a team player," this
   person told me. "You couldn't go into a meeting, put your best ideas
   on the table, have it out, get the best idea, and then go have a
   beer." McNamara's authority stems from her longevity: the admirals and
   generals who serve the agency director remain on the job for an
   average of three years before retiring or going on to other military
   assignments. The agency's top civilians have worked together, in many
   cases, for nearly thirty years, and inevitably share the same insular
   points of view. Another recently retired official told me that the
   N.S.A. has become a dynastic bureaucracy, in which the fathers have
   made room for their sons, with the wives and mothers of favored
   employees hired as mid-level staff in the human-resources office. "The
   place is full of warlords and fiefdoms," the former official said.
   "Now we're getting to the grandchildren." Such insider hiring has led
   to the quip, which I heard from a number of officials, that the N.S.A.
   functions as a "Glen Burnie W.P.A. project." Glen Burnie is a nearby
   suburb, and home to many N.S.A. employees. Questions also were raised
   during my interviews about the effectiveness of many of the senior
   military officers who are routinely assigned to the N.S.A. for two-,
   three-, or four-year tours of duty. Some perform brilliantly, but far
   too many find themselves put in charge of units for which they are
   unqualified, and end up relying extensively on their civilian staffs.
   "We call them the summer help," a former manager told me, adding that
   the smart ones generally seek to get reassigned as soon as possible.
   
   The Technical Advisory Group urged that the agency immediately begin a
   major reorganization, and start planning for the recruitment of
   several thousand skilled computer scientists. One of their missions
   would be to devise software and write information-retrieval programs
   that would enable the agency to make sense of the data routinely
   sucked up by satellite and other interception devices. The vast
   majority of telephone calls, E-mails, and faxes are not encrypted --
   almost all are sent as plain text -- but the N.S.A. has been
   overwhelmed by the sheer volume of the intercepted data, much of which
   is irrelevant. "They're still collecting a lot of digital," one of the
   agency's consultants told me,"and can't do anything with it." The
   consultant added that agency managers recently estimated that Fort
   Meade had three years' worth of storage capacity for intercepted
   Internet traffic. "They filled it in eleven months," he said.
   
   "The bottom line is they've got to retool," the advisory-group
   official said. "It will take a lot of money and effort -- like
   starting the N.S.A. again." Far from being able to retool, the agency
   has suffered a severe brain drain in recent years, losing mid-career
   managers to the high pay and upward mobility of private industry. One
   former senior official described the process as self-defeating: the
   agency's recognized need for more outside contact with, and
   stimulation by, the computer world is offset by the fact that its
   budding young experts "meet new people and then get hired away by
   them."
   
   THE N.S.A.'s current alienation from the computer gurus in industry
   and academia might not have occurred if two Californians with a
   fascination for the mathematics of cryptoanalysis hadn't decided to
   compare notes more than two decades ago. A 1951 law gave the
   government the right to classify as secret any invention considered
   potentially harmful to national security, but in November, 1976,
   Whitfield Diffie, a computer scientist, and Martin E. Hellman, a
   Stanford University electrical engineer, published a revolutionary
   technical paper on what has become known as public key cryptography
   Before their work, an encrypted message could be understood only if
   the sender and receiver had the same key, or decoder, to turn the
   scrambled letters into readable text. The beauty of the Diffie-Hellman
   breakthrough was its simplicity: the message would have two keys --
   one could be registered in a public directory (today it might be on
   the Internet) and the other would be known only to the intended
   recipient. One key would be used to encipher the message and the other
   to decipher it. A senior N.S.A. official has described the
   Diffie-Hellman concept as a series of computations that are easy to do
   but hard to reverse, like breaking a window.
   
   To the agency's dismay, the world now had access to a sophisticated
   level of cryptography that had not been previously fully understood
   even by N.S.A. analysts. In 1978, when George I. Davida, a computer
   scientist at the University of Wisconsin, tried to patent an
   encryption device he had invented, the N.S.A. invoked the 1951 secrecy
   law. Davida took his case to the media, and the agency, prodded by
   attorneys in the Carter Administration, eventually backed down, but
   the message was clear -- the agency would do all it could to prevent
   public access to encryption techniques.
   
   By the early nineties, the telephone system had been deregulated, the
   computer market was booming, and the Internet was beginning its ride,
   but the N.S.A.'s policy remained static: encryption was defined as a a
   weapons system whose export was controlled by the government. The
   debate over encryption was now a public controversy, with the
   government arrayed against privacy advocates, academics, and a
   computer industry that was bemoaning the annual loss of billions of
   dollars to foreign manufacturers whose computers included high-powered
   encryption.
   
   In 1993, law-enforcement officials further infuriated the computer
   industry by beginning a criminal investigation of Philip R.
   Zimmermann, a software engineer then living in Boulder, Colorado.
   Zimmermann's crime was being a free-spirited hacker; he cobbled
   together a cryptography program called P.G.P. -- for Pretty Good
   Privacy -- and gave it away. P.G.P. was the agency's nightmare -- it
   offered the average computer user a nontechnical and nonthreatening
   entry into easy, daily use of cryptography. P.G.P. soon found its way
   to the Internet, and it quickly spread around the world -- making
   Zimmermann, in the government's view, an exporter of munitions. A
   grand jury inquiry began. The computer industry rallied around
   Zimmermann, and after three years the case was dropped. Zimmermann
   eventually explained to a Senate committee, "I wrote P.G.P. from
   information in the open literature.... This technology belongs to
   everybody." By the mid-nineteen-nineties, the Software Publishers
   Association was telling journalists that the number of cryptographic
   products being sold by foreign companies had reached three hundred and
   forty.
   
   President Clinton and his senior advisers, under pressure from the
   law-enforcement and national-security communities, tried to compromise
   on the issue. The export of encryption for computers could go forward,
   the government said, if the industry agreed to install a
   government-approved encryption chip, known as the Clipper Chip, that
   could be directly accessed by law-enforcement officers. Under another
   proposal, American computer manufacturers would have been permitted to
   export new encryption products if a spare set of decoding keys were
   accessible to the government. The proposals, known as key recovery or
   key escrow, were assailed by privacy proponents, who demanded to know
   whether the Clinton Administration would have dared to advocate that
   citizens be required to give the keys to their house or safety-deposit
   box to a third person.
   
   The cultural divide between Fort Meade and Silicon Valley was
   widening. The agency's senior managers were unable to comprehend what
   every programmer and researcher in academia and industry intuitively
   understood: encryption could not be stopped. The managers had ample
   warning. In 1991, a secret study predicted that the use of encryption
   would grow exponentially -- a prediction largely ignored by the
   agency's senior management. A former N.S.A. director recalled that in
   the early nineties he had had a series of conversations with the
   civilian managers, urging them not to insist on their version of key
   recovery. "I couldn't believe their proposals," he said, adding that
   he had warned the managers that, given the public's attitude toward
   privacy, key recovery "could not work if the government held the key.
   They were so arrogant. They knew all there was to know."
   
   "Export control is a legitimate concern to the agency," one former
   senior official told me, but the issue made the top managers
   "paralyzed and afraid to move into the future." He and many colleagues
   had argued for a two-prong approach -- continuing to do all that was
   possible to maintain export controls while also planning for a fully
   encrypted world. The agency's long fight against encryption delayed
   its widespread use by many years, but the agency's senior managers
   spent those years "holding on to what we have today" instead of
   seeking ways to lessen encryption's impact. The official lamented, "We
   were squandering time" while continuing to make more enemies inside
   the computer industry.
   
   Today, the encryption fight is all but over. The Commerce Department
   is scheduled to issue new export regulations on December 15th that,
   many experts believe, will permit American computer companies to
   include advanced cryptography, with fewer restrictions, on equipment
   sold worldwide. "We've won," Phil Zimmermann told me, jubilantly. "And
   they tried to put me in prison! Now we can export strong crypto and
   they can't stop us. We can do whatever we wish."
   
   N.S.A.'s short-term solution to the encryption dilemma has been to
   urge the C.I.A. to go back to the world of dirty tricks and
   surreptitious entry. According to a 1996 congressional staff study,
   the next century will require a clandestine agency that "breaks into
   or otherwise gains access to the contents of secured facilities, safes
   and computers" and "steals, compromises and influences foreign
   cryptographic capabilities so as to make them exploitable" by the
   N.S.A.
   
   Such information theoretically could help Washington policymakers
   disrupt future terrorist activity, intercept illicit shipments of
   nuclear arms, or uncover acts of espionage against American defense
   corporations. Unfortunately, several C.I.A. officers I spoke with
   found the proposal too ambitious. One retired case officer told me
   that while he was on a clandestine assignment years ago in the Third
   World, "I was designated to get a certain black box. I worked on it
   for three and a half years, and I got nowhere. If I had worked on it
   for ten years, and with a true stroke of luck, I might have gotten
   within ten feet of it." Another retired operations officer, similarly
   skeptical of the C.I.A.'s chances of obtaining cryptological
   intelligence, told me that sometimes the clandestine operatives in the
   field have to report back, "This is too hard. "
   
   Many Americans, of course, are deeply distrustful of the N.S.A. -- a
   view reflected in recent Hollywood movies like "Enemy of the State"
   and "Mercury Rising." The traditional American belief in privacy and
   constitutional protection is at odds with a superspy agency capable of
   monitoring unencrypted telephone conversations and E-mail exchanges
   anywhere in the world. Abuses have occurred. In the
   nineteen-seventies, the Senate intelligence committee revealed that
   the agency had systematically violated the law by surveilling American
   citizens, including more than twelve hundred anti-war and civil-rights
   activists. The revelations led to a public outcry and to the 1978
   Foreign Intelligence Surveillance Act, which made monitoring of
   American targets illegal without a warrant from a special federal
   court. (The court rarely turns down such requests from the
   government.) The act, and a supporting executive order, set rules for
   the handling of intercepts or other intelligence involving Americans
   who were overheard or picked up in the course of legitimate foreign
   surveillance.
   
   The N.S.A.'s bitter fight over encryption, with its tell-all computer
   chips and key-recovery proposals, has renewed long-standing fears that
   one of the agency's satellite-data collection programs, code-named
   ECHELON, is routinely collecting and analyzing unencrypted telephone
   conversations and Internet chatter around the world. ECHELON was
   launched, in the mid-nineteen-seventies, to spy on Soviet satellite
   communications. "Imagine," the BBC exclaimed last month -- one of
   hundreds of such reports in the past ten years -- "a global spying
   network that can eavesdrop on every single phone call, fax, or E-mail,
   anywhere on the planet. It sounds like science fiction, but it's
   true." The agency does routinely collect vast amounts of digital data,
   and it is capable of targeting an individual telephone line or
   computer terminal in many places around the world. But active and
   retired N.S.A. officials have repeatedly told me that the agency does
   not yet have the software to make sense out of more than a tiny
   fraction of the huge array of random communications that are
   collected. If the agency were able to filter through the traffic, the
   officials noted, international terrorists like Osama bin Laden would
   not be able to remain in hiding.
   
   The fact is that ECHELON, far from being one of the N.S.A.'s secret
   weapons, as some believe, is viewed as a fiscal black hole by the
   Senate and House intelligence committees. John Millis, in his private
   talk to the retired C.I.A agents, complained that the United States
   was spending "incredible amounts of money" on satellite collection.
   "It threatens to overwhelm the intelligence budget." Using satellites
   to sweep up communications indiscriminately, he said, "doesn't make a
   lot of sense.... You shouldn't be spending one more dollar than we do
   to try and intercept communications from space." Millis's point was
   that the data collected from satellites, like the data collected from
   the Internet, cannot be sorted or analyzed in any meaningful way.
   
   THE agency's critics, in and out of the government, told me that they
   see a glimmer of hope for the N.S.A. in the appointment, last May, of
   Lieutenant General Michael Hayden as its new director. Hayden, who
   joined the Air Force after earning a master's degree in American
   history at Duquesne University, in Pittsburgh, has been praised for
   his intelligence and open-mindedness. "Hayden gets it," one
   intelligence-committee aide told me. "But he's parachuted in there,
   and faced with a deputy director whose job is to foil what the
   director wants to do. There's no question that it's the hardest job in
   the intelligence community. He's got to manage a multibillion-dollar
   corporation that has a blue-collar mentality."
   
   General Hayden's initial goal will be to convince Congress and the
   White House that he can do what his predecessors did not -- develop a
   specific management plan and a budget for analyzing intelligence from
   the Internet and other digital sources. "We've criticized the N.S.A.
   for not having a well-coordinated strategy," one legislative aide told
   me, "but we're not in a position to tell them where to go." The
   issues, of course, are highly technical, and it's not clear that more
   money -- even billions of dollars -- will get the job done. The amount
   of data flowing through the Internet is growing exponentially, and
   skilled computer scientists are at a premium. The agency's war against
   encryption has left a legacy of bitterness throughout the computer
   industry, and today's technical advances are taking place not at Fort
   Meade but on university campuses and in corporation laboratories
   across America. Those computer whizzes who might have been attracted
   to high-level government work are instead being attracted by the far
   higher pay scales offered by private industry.
   
   There also is little evidence that President Clinton and his
   national-security team view the agency's signals-intelligence plight
   as significant. This year's classified Defense Department budget
   request included a boost of nearly two hundred million dollars for the
   agency, with the funds ear-marked for long-range research into signals
   intelligence. The money never made it through the White House's Office
   of Management and Budget, however. "George Tenet didn't support it," a
   former congressional aide explained. A similar secret request, for
   four hundred million dollars or more to modify the Jimmy Carter, a
   Seawolf-class nuclear submarine, for top-secret agency intelligence
   work, was approved -- evidence that the White House believes that more
   covert operations will solve the nation's coming intelligence
   problems.
   
   Hayden also will have to contend with those, in and out of the
   government, who remain dubious about the N.S.A. One firm skeptic is
   the encryption expert Whitfield Diffie, who is now at Sun
   Microsystems. Diffie, a leading advocate of computer privacy, was
   quick to suggest that the current alarm in the N.S.A. may be a
   self-interested ruse. When I brought up the N.S.A.'s problems with new
   technology, he replied, "What bothers me is that you are saying what
   the agency wants us to believe -- they used to be great, but these
   days they have trouble reading the newspaper, the Internet is too
   complicated for them, there is so much traffic and they can't find
   what they want. It may be true, but it is what they have been 'saying'
   for years. It's convenient for N.S.A. to have its targets believe it
   is in trouble. That doesn't mean it isn't in trouble, but it is a
   reason to view what spooky inside informants say with skepticism."
   
   Shortly after his appointment, Hayden assembled a group of highly
   regarded mid-level managers and gave them free rein to evaluate the
   agency. He also began a series of meetings, outside Fort Meade, to get
   independent advice. The evaluations were consistently "brutal,"
   according to one official, in terms of the ongoing management
   problems. On November 15th, Hayden announced to the N.S.A. workforce
   that he was beginning what he called One Hundred Days of Change. The
   next day, he made his move against the establishment. He dissolved the
   agency's leadership structure, despite a bitter protest from Barbara
   McNamara, and announced the formation of a five-member executive
   group, under his leadership, which would be responsible for
   decision-making.
   
   LAST month, General Hayden agreed to speak to me, at his unpretentious
   top-floor offices at Ops 2, the N.S.A. headquarters building. He is an
   affable spymaster, who laughs easily, offers no slogans, and promises
   no quick fixes for the agency's problems. He seemed to understand that
   his new troops -- computer gurus and mathematicians -- are unlike any
   others he had commanded before.
   
   When I brought up the agency's long-standing war against the export of
   encryption, Hayden quickly dismissed it as yesterday's lost battle. He
   also took issue with those who criticized Barbara McNamara and other
   civilian managers for their failure to anticipate the communications
   upheaval. "Barbara McNamara has been a good deputy to me," he said.
   "But I make the decisions."
   
   Hayden emphasized that the personnel problems are far less significant
   than the technological ones: "The issue is not people but external
   changes. For the N.S.A., technology is a two-edged sword. If
   technology in the outside world races away from us -- at breakneck
   speed -- our mission is more difficult. It can be our enemy."
   
   When I asked Hayden about the agency's capability for unwarranted
   spying on private citizens -- in the unlikely event, of course, that
   the agency could somehow get the funding, the computer scientists, and
   the knowledge to begin making sense out of the Internet -- his
   response was heated. "I'm a kid from Pittsburgh with two sons and a
   daughter who are closet libertarians," he said. "I am not interested
   in doing anything that threatens the American people, and threatens
   the future of this agency. I can't emphasize enough to you how careful
   we are. We have to be so careful -- to make sure that America is never
   distrustful of the power and security we can provide."
   
   General Hayden made no effort to minimize his agency's plight. During
   the Cold War, he said, the N.S.A. was "technologically more adept than
   our adversary. Now it's harder to predict where America!s interests
   will need to be in the future." His goal in the near future, he added,
   speaking carefully, is to determine which of the agency's past
   practices are applicable to today's high-tech world -- "and which of
   them may be counterproductive."
   
   "A lot of the choices are Sophie's choices," he said. "The trade-off
   is between modernizations (recruiting computer scientists and
   beginning long-range programs to tackle the Internet) "and readiness"
   -- that is, meeting the hectic operational needs of the Defense
   Department and the White House for immediate intelligence. "We have a
   high ops tempo," he added, "but choices have to be made." In other
   words, he made clear, some ongoing N.S.A. intelligence-collection
   programs will have to be curtailed, or eliminated, so that funds are
   available for futuristic research.
   
   "In its forty-year struggle against Soviet Communism," Hayden noted,
   "the N.S.A. was thorough, stable, and focussed." Then he asked "What's
   changed?" and he answered, "All of that."
   
   © The New Yorker 1999
     _________________________________________________________________
   
   Transcription and HTML by Cryptome.

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