ZoneFlood

From Tim Grieve at Salon.com:

Cruising through the White House Web site earlier this month, we noticed a rather cryptic Memorandum for the Director National Intelligence. In the memorandum, dated May 5, 2006, and posted a few days later, George W. Bush delegated to John Negroponte “the function of the president under section 13(b)(3)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m(b)(3)(A)).”

We didn’t know what it meant, and — the Securities Exchange Act of 1934 not being our first choice for leisure reading — we didn’t take the time to find out. But Think Progress is connecting the dots this morning, and the picture that’s emerging is a pretty interesting one.

The Securities Exchange Act requires companies to “make and keep books, records, and accounts” which “accurately and fairly” reflect their transactions. But the Securities Exchange Act provision Bush cited in his memorandum waives that requirement for transactions involving national security in which a company has cooperated with the federal government after receiving a “directive” from a government official who has been authorized by the president to give one. In issuing his memorandum, Bush gave Negroponte the authority to issue such a directive.

What does that mean? It means that Negroponte now has the authority to free companies that cooperate with him from the obligation to record — and potentially reveal — the activities in which they’re engaged. And what does that mean? Negroponte now apparently has the power to allow the telephone companies that have been turning over telephone records to the NSA to keep their “transactions” — the payments they’re getting from the NSA — off of their books.

Verizon Communications Inc. and BellSouth Corp., facing consumer lawsuits seeking massive damages, have issued carefully worded denials of a report that they turned over millions of customers’ calling records to a U.S. spy agency.

USA Today reported last week that the National Security Agency has had access to records of billions of domestic calls and collected tens of millions of telephone records from data provided by BellSouth, Verizon and AT&T Inc..

BellSouth and Verizon denied the part of the USA Today report that said the companies had received a contract from the NSA and that they turned over records. However, Verizon declined to comment on whether it provided access to the NSA.

“One of the most glaring and repeated falsehoods in the media reporting is the assertion that, in the aftermath of the 9/11 attacks, Verizon was approached by NSA and entered into an arrangement to provide the NSA with data from its customers’ domestic calls,” Verizon said in a statement on Tuesday.

However, “Verizon cannot and will not confirm or deny whether it has a relationship to the classified NSA program,” the company said.

BellSouth said on Monday that “based on our review to date, we have confirmed no such contract exists and we have not provided bulk customer calling records to the NSA.” A BellSouth spokesman was not immediately available for further comment.

AT&T has been more circumspect, saying it has an obligation to assist law enforcement and other government agencies but has refused to comment specifically on national security matters.

A company spokesman on Tuesday declined to comment about whether it provided the NSA access.

Electronic Privacy Information Center Executive Director Marc Rotenberg said the statements by government officials and phone carriers were “legal hair splitting.”

“There’s a tremendous amount of parsing going on,” Rotenberg said.

[New York Times | May 16, 2006]

Verizon Communications Inc. on Tuesday joined fellow phone company BellSouth Corp. in denying key points of a USA Today story that said the companies had provided records of millions of phone calls to the government.

Verizon has not provided customer call data to the National Security Agency, nor had it been asked to do so, the company said in an e-mailed statement. The statement came a day after BellSouth Corp. made a similar denial….

Tuesday’s denial did not apply to MCI, the long-distance carrier Verizon acquired in January. In an earlier statement, Verizon said it is in the process of ensuring that its policies are put in place in the former MCI business.

[Associated Press | May 16, 2006]

CNN – “Lawsuit asks Verizon and government to end phone snooping and seeks $1,000 for each of phone company’s 50 million customers.”

 New York Times:

Orin Kerr, a former federal prosecutor and assistant professor at George Washington University, said his reading of the relevant statutes put the phone companies at risk for at least $1,000 per person whose records they disclosed without a court order.

‘This is not a happy day for the general counsels’ of the phone companies, he said. ‘If you have a class action involving 10 million Americans, that’s 10 million times $1,000 — that’s 10 billion.’

Verizon Sued for Giving NSA Phone Records

Two New Jersey public interest lawyers sued Verizon Communications Inc. for $5 billion Friday, claiming the phone carrier violated privacy laws by turning over phone records to the National Security Agency for a secret government surveillance program.

Attorneys Bruce Afran and Carl Mayer filed the lawsuit Friday afternoon in federal district court in Manhattan, where Verizon is headquartered.

The lawsuit asks the court to stop Verizon from turning over any more records to the NSA without a warrant or consent of the subscriber.

Verizon Faces $20 Billion Lawsuit Over NSA Spying Complicity

Upping the ante in what may be a high-stakes legal battle, an Upstate New York lawyer filed a $20 billion class-action lawsuit against Verizon last week, charging that the company violated customer confidentiality in aiding warrantless eavesdropping by a federal spy agency. The civil suit is the second to challenge corporations for helping the National Security Agency carry out a secret order by the president to spy on communications between people in the United States and parties overseas without first obtaining warrants.

Customers are hearing from AT&T, BellSouth and Verizon.

•  A customer’s conversation with a Verizon customer service rep.
• Verizon Media Relations e-mail message to concerned customers.
• An AMERICAblog reader hears from AT&T.
• More statements from the telcos.
• As we know, QWEST bowed out of the NSA program. Folks are congratulating them at ThankYouQuest.org.

We better hope nothing happens to Arlen Specter, the Republican head of the Judiciary Committee, because he might be all that’s standing between us and a full blown dictatorship in this country. He’s vowed to question these phone company executives about volunteering to provide the government with my telephone records and yours, and tens of millions of other Americans.

Shortly after 9-11, AT&T, Verizon and BellSouth began providing the super secret NSA with information on phone calls of millions of our citizens, all part of the war on terror, President Bush says.

Why don’t you go find Osama Bin Laden and seal the country’s borders and start inspecting the containers that come into our ports?

The President rushed out this morning in the wake of this front page story in USA Today and he declared the government’s doing nothing wrong and all of this is just fine.

Is it? Is it legal?

Then why did the Justice Department suddenly drop its investigation of the warrantless spying on citizens? Because the NSA said Justice Department lawyers didn’t have the necessary security clearance to do the investigation.

Read that sentence again.

A secret government agency has told our Justice Department that it’s not allowed to investigate it. And the Justice Department just says okay and drops the whole thing.

We’re in some serious trouble here boys and girls.

[CNN/Jack Cafferty | May 11, 2006]