Standoff intensifies over spying legislation

The U.S. attorney general and intelligence director warned Friday that the nation has lost potentially critical intelligence during the last week because telecommunications companies cut their cooperation with the government after a controversial espionage law was allowed to lapse.

In an unusually blunt letter to Congress, Atty. Gen. Michael B. Mukasey and Director of National Intelligence J. Michael McConnell said the country “is now more vulnerable to terrorist attack and other foreign threats” because lawmakers failed to act.

The dire language marked a significant escalation in the standoff between the Bush administration and congressional Democratic leaders over legislation that would expand the government’s eavesdropping authorities and protect telecommunications companies from facing lawsuits for cooperating.

Democrats denounced the letter, saying the administration was “further politicizing the debate” even as it has refused to allow the extension of existing authorities while the House and Senate work out differences on a complex new bill.

“They cannot have it both ways,” four Democrats said in a written statement. “If it is true that the expiration of the [Protect America Act] has caused gaps in intelligence, then it was irresponsible for the president and congressional Republicans to openly oppose an extension of the law.”

The statement was issued by the leaders of the House and Senate Intelligence and Judiciary committees: Sen. John D. Rockefeller IV of West Virginia, Sen. Patrick J. Leahy of Vermont, Rep. Silvestre Reyes of Texas and Rep. John Conyers Jr. of Michigan.

The lawmakers said their staffs had been meeting throughout the week to seek compromise on an issue that has polarized Congress since it was disclosed more than two years ago -- that President Bush had secretly launched a program of eavesdropping without court warrants on international calls and e-mails by U.S. citizens.

Since then, the administration has pushed Congress to pass legislation that would allow the government to continue the wiretapping operation -- which Bush launched shortly after the Sept. 11 attacks -- under the supervision of a secret Foreign Intelligence Surveillance Court.

The House and Senate have passed separate versions of the legislation and remain at odds over whether to grant retroactive liability protection to phone companies that took part in the espionage operation before it was publicly disclosed.

AT&T;, Verizon and other major carriers are facing about 40 lawsuits filed by consumers and civil liberties groups alleging violations of wiretapping and privacy laws. The suits seek billions of dollars in damages.

Both chambers of Congress have agreed to inoculate the companies against future lawsuits.

But the House has resisted retroactive immunity, with some members saying the companies should not be protected for taking part in what at the time may have been an illegal spying operation.

Laws passed in the late 1970s barred U.S. intelligence agencies from eavesdropping on the conversations of Americans without court warrants.

In their letter, McConnell and Mukasey said that the telephone companies have withdrawn their cooperation this week out of fear that their assistance may no longer be legally protected.

“We have lost intelligence information this past week as a direct result of the uncertainty created by Congress’ failure to act,” the two said. “Because of this uncertainty, some partners have reduced cooperation.”

The letter, addressed to Reyes, also was sent to Rockefeller; Rep. Peter Hoekstra of Michigan, the ranking Republican on the House Intelligence Committee; and Sen. Christopher S. Bond of Missouri, the senior GOP member of the Senate Intelligence Committee.

In particular, McConnell and Mukasey said, certain companies have “delayed or refused compliance with our requests to initiate new surveillance of terrorist and other foreign intelligence targets.”

Bush administration officials refused to say which companies were resisting, or even how many wiretapping requests had been issued or rejected.

McConnell has testified to Congress that phone company cooperation is crucial to U.S. intelligence agencies’ ability to track Al Qaeda and other terrorist groups. That is because much of the world’s phone and e-mail traffic flows across data networks inside the United States, including calls or messages that begin and end overseas.

Most of the companies involved “intend to cooperate for the time being,” McConnell and Mukasey said. But “they have expressed deep misgivings about doing so in light of the uncertainty and have indicated that they may well cease to cooperate if the uncertainty persists.”

The government can still intercept such communications without passage of the new law, but officials said the process is cumbersome because a warrant is required in each case. Delays in obtaining those warrants mean crucial calls or e-mails could be missed, officials said.

The magnitude of the problem has been a source of dispute, because even though the Protect America Act expired Feb. 16, eavesdropping activities initiated under its authorities can continue for a year before they have to be reauthorized by the FISA court.

In a conference call with reporters, senior Bush administration officials said the government had issued a series of requests to the phone companies over the last week, seeking to put newly identified foreign terrorism suspects under surveillance.

“Some have been delayed, and some have just not been complied with,” said one of the officials, who said they were authorized to speak only on the condition of anonymity.

The official said that the companies’ concern “is that maybe . . . immunity is no longer viable now that the Protect America Act has expired. We don’t believe that’s the case. But that’s something the attorneys for various companies that are assisting us are looking closely at.”

The officials struggled to explain why the administration would allow crucial intelligence gaps to emerge rather than accept the Democrats’ offer to pass a stopgap measure that would extend the existing authorities for 15 days while congressional talks continue.

In rejecting such an extension, Bush has said Congress has had ample time to reach compromise.

“Our concern is we’re just going to be going into the same pattern over and over again,” said one of the officials on the call. “The longer that this is temporary, the more disruptive it is to our operations.”

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greg.miller@latimes.com