Intelligence Czar Can Waive SEC Rules

Here’s an interesting development (MSNBC/BusinessWeek)  El Presidente has decreed that our intelligence overlord, Mr. Negroponte, can let public companies off the hook for not telling their shareholders they’re involved in [possibly illegal] activities relating to national security.

From the article:

The timing of Bush’s move is intriguing. On the same day the President signed the memo, Porter Goss resigned as director of the Central Intelligence Agency amid criticism of ineffectiveness and poor morale at the agency. Only six days later, on May 11, USA Today reported that the National Security Agency had obtained millions of calling records of ordinary citizens provided by three major U.S. phone companies. Negroponte oversees both the CIA and NSA in his role as the administration’s top intelligence official.

So the question is whether the NSA can now let AT&T and others off the hook for breaking the law from both their consumer and shareholder suits. The consumer case will be difficult to win, as screwing customers is standard business practice for such near-monopolies. For the shareholders though, if AT&T willingly did something stupid that lowers share prices and didn’t disclose it, then they may have a case against the execs.

At least they did. This deal with the NSA makes is so that’s not a problem, at least going forward. The big question is whether Bush can legally or ethically delegate this responsibility (and accountability) and whether that’s just inviting another Hooveresque criminal security enterprise. It seems to me like a monstrously bad idea in any event. Is he saying that these sort of waivers are so unimportant that it doesn’t require his personal authorization? Or that there are so many he can’t handle the load? Or is he just avoiding responsibility?

The more interesting question from a "whodunnit" point of view sees a couple of hinted connections between Goss’ exit from the CIA and the USA Today phone records story. Among the more plausible are:

• Goss is a source of the USA Today story, before he left the CIA, as part of the ongoing power struggle with his boss, Negroponte, and/or some residual patriotism (defined as: protecting American freedom, not just wealth). I wouldn’t be surprised if the more immediate internal crisis was over NSA’s automated call-records dragnet flagging CIA operatives as suspicious and thereby risking their cover–you know, with all those FBI followup investigations that ultimately go nowhere. Or it could be over the waste of resources itself.

• Or Goss is a source of the USA Today story, after he left the CIA. Six days actually seems short for fact-checking on a story like this. But it’s certainly possible. Of course, the motivations could be purely vindictive in this case.

• Or it’s all just a big coincidence, as is the connection between any company’s cooperation with the government (or lack thereof) and any legislation on Net Neutrality or unrelated investigations of companies who don’t comply.

As far as the CIA/NSA power struggle, it seems to me this comes down to human intelligence vs. AI. The CIA is all about putting people inside the enemy’s organizations or otherwise getting access to the key information. Has that been discredited after the Iraq fiasco? Or did it fail because we simply didn’t invest enough to make it work? And the new high tech methods — sucking all information through a computer and then sorting out the mess — aren’t much better. They’re analogous to Rumsfield’s Transformation of the military, using hardware instead of bodies, and we see how well that’s working on the ground. Turns out that the "paperless office" hype was pretty much the same as the "soldierless battlefield" and the "warrantless wiretap" of late. Of course, the NSA won, as evidenced by Goss’ exit and Hayden’s replacement (Hayden, who notoriously claimed in a public Senate hearing that he was an expert on the 4th amendment and assured the Senator that "probable cause" was not the standard for "reasonable search and seizure" — it’s right there in the bill or rights).

Any for anyone who still thinks "If I did nothing wrong, I have nothing to hide," consider this (Brownian Emotion) and this (New Yorker).