NSA using spyware that bypasses Net

WASHINGTON - The National Security Agency has implanted software in nearly 100,000 computers around the world that allows the U.S. to conduct surveillance on those machines and can also create a digital highway for launching cyber attacks.

While most of the software is inserted by gaining access to computer networks, the agency has increasingly made use of a secret technology that enables it to enter and alter data in computers even if they are not connected to the Internet, according to agency documents, computer experts and U.S. officials.

The technology, which the agency has used since at least 2008, relies on a covert channel of radio waves that can be transmitted from tiny circuit boards and USB cards inserted surreptitiously into the computers. In some cases, they are sent to a briefcase-size relay station that intelligence agencies can set up miles away from the target.

The radio frequency technology has helped solve one of the biggest problems facing U.S. intelligence agencies for years: getting into computers that adversaries, and some U.S. partners, have tried to make impervious to spying or cyber attack. In most cases, the radio frequency hardware must be physically inserted by a spy, a manufacturer or an unwitting user.

The National Security Agency calls its efforts more an act of “active defense” against foreign cyber attacks than a tool to go on the offensive. But when Chinese attackers place similar software on the computer systems of U.S. companies or government agencies, U.S. officials have protested, often at the presidential level.

Among the most frequent targets of the National Security Agency and its Pentagon partner, U.S. Cyber Command, have been units of the Chinese army, which the U.S. has accused of launching regular digital probes and attacks on U.S. industrial and military targets, usually to steal secrets or intellectual property.

But the program, codenamed Quantum, also has been successful in inserting software into Russian military networks and systems used by the Mexican police and drug cartels, trade institutions inside the European Union, and sometime partners against terrorism like Saudi Arabia, India and Pakistan, according to officials and a map that indicates sites of what the agency calls “computer network exploitation.”

“What’s new here is the scale and the sophistication of the intelligence agency’s ability to get into computers and networks to which no one has ever had access before,” said James Andrew Lewis, the cyber security expert at the Center for Strategic and International Studies in Washington. “Some of these capabilities have been around for a while, but the combination of learning how to penetrate systems to insert software and learning how to do that using radio frequencies has given the U.S. a window it’s never had before.”

There is no evidence that the National Security Agency has implanted its software or used its radio frequency technology inside the U.S. While refusing to comment on the scope of the Quantum program, the agency said its actions were not comparable to China’s.

“NSA’s activities are focused and specifically deployed against - and only against - valid foreign intelligence targets in response to intelligence requirements,” Vanee Vines, an agency spokesman, said in a statement. “We do not use foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of - or give intelligence we collect to - U.S. companies to enhance their international competitiveness or increase their bottom line.”

Over the past two months, parts of the program have been disclosed in documents from the trove leaked by Edward Snowden, a former agency contractor. A Dutch newspaper published the map of areas where the U.S. has inserted spy software, sometimes in cooperation with local authorities, often covertly. Der Spiegel, a German newsmagazine, published the agency’s catalog of hardware products that can secretly transmit and receive digital signals from computers, a program called ANT.

The New York Times withheld some of those details, at the request of U.S. intelligence officials, when it reported, in the summer of 2012, on U.S. cyberattacks on Iran.

President Barack Obama is scheduled to announce Friday what recommendations he is accepting from an advisory panel on changing National Security Agency practices. The panel agreed with Silicon Valley executives that some of the techniques developed by the agency to find flaws in computer systems undermine global confidence in a range of U.S.-made information products such as laptop computers and cloud services.

According to people briefed on his thinking, Obama will not embrace the most far-reaching proposals of his advisers and will ask Congress to help decide some of the toughest issues.

Obama plans to increase limits on access to bulk telephone data, call for privacy safeguards for foreigners and propose the creation of a public advocate to represent privacy concerns at a secret intelligence court.

But he is not planning to take the storage of bulk data out of government hands, as recommended by a review panel he appointed, and will instead leave it in place for now and ask lawmakers to weigh in. He also is not planning to require court permission for all so-called national security letters seeking business records.

The emerging approach was described by current and former government officials who insisted on anonymity in advance of Obama’s widely anticipated speech.

The White House said the president’s review is incomplete and would not comment further Tuesday.

The developments came as the nation’s judiciary waded into the highly charged debate. In a letter made public Tuesday, a judge designated by Supreme Court Chief Justice John Roberts Jr. to express the views of the judicial branch warned that some changes under consideration would have a negative “operational impact” on a secret foreign intelligence court.

Judge John Bates, a former chief judge of the Foreign Intelligence Surveillance Court, urged Obama and Congress not to alter the way the court is appointed or to create an independent public advocate to argue against the Justice Department in secret proceedings. Any such public advocate, he wrote, should instead be appointed only when the court decided one was needed.

Bates objected to the workload of requiring that courts approve all national security letters, which are administrative subpoenas allowing the FBI to obtain records about communications and financial transactions without court approval.

And he raised concerns about greater public disclosure of court rulings, arguing that unclassified summaries would be “likely to promote confusion and misunderstanding.”

Meanwhile, a top German official said Tuesday that failure to reach a U.S.-German “no spy” accord risks harming ties between the allies.

Thomas Oppermann, the parliamentary caucus leader for Germany’s ruling Social Democrats, responded to a report in the Sueddeutsche Zeitung newspaper Tuesday that German intelligence officials had received no solid commitments from American counterparts and that prospects for a pact had dwindled.

A rift between the United States and Germany opened last October after reports that the National Security Agency had tapped Chancellor Angela Merkel’s phone.

Talks by U.S. and German officials are continuing and have yielded “a better understanding of the requirements and concerns that exist on both sides,” Caitlin Hayden, a spokesman for the White House National Security Council, said in an emailed statement.

Information for this article was contributed by David E. Sanger, Thom Shanker, Peter Baker and Charlie Savage of The New York Times and by Patrick Donahue of Bloomberg News.

Front Section, Pages 1 on 01/15/2014

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