Telcos 'Volunteered' To Hand Over Data To NSA... And Got Over $100 Million For It

from the the-industrial-intelligence-complex dept

We've written a few times about the questionable nature of the "intelligence-industrial complex" in which various private companies are very tightly intertwined with the government's surveillance efforts, and are profiting handsomely from those efforts, giving everyone the incentive to play up bogus "threats" and to continually expand surveillance without oversight. Julian Sanchez has a great piece exploring some of the details on one of the more recent leaks from the Snowden files, involving the Inspector General's report looking into the original warrantless surveillance program called Stellar Wind (which was revealed years ago) by whistleblowers like Bill Binney, as well as the NY Times.

As Sanchez notes, while Stellar Wind had been talked about extensively, there were still many important details that hadn't been know that were revealed in this report, including that the program was much broader than originally reported, that President Bush almost certainly lied in public about the extent of the program, that the decision to spy on Americans came from Cheney's office (without consulting the NSA) and the actual numbers of people being spied on, both domestic and foreign (37,644 people, 3,018 of whom were Americans -- though that only counts the "targets" and not the many Americans they likely emailed with or called, whose communications were also intercepted).

But perhaps the most interesting is the role of the telcos. As Sanchez notes, it would appear that AT&T and Verizon actively "volunteered" to hand over data to the government... and then proceeded to make over $100 million dollars as the government paid for this "voluntary" dismantling of the privacy of their customers.

After the attacks of September 11, 2001—but before President Bush authorized the program that would become STELLAR WIND on October 4—two major telecommunications companies approached the NSA to volunteer their assistance. Though they’re identified only as “COMPANY A” and “COMPANY B” in the reports, experts agree that they are almost certainly AT&T and Verizon. One of them, COMPANY B, had even done some of its own freelance intelligence work: it told the NSA that it had “noticed odd patterns in domestic calling records surrounding the events of 11 September and offered call records and analysis."

Then again, perhaps “volunteer” isn’t quite the right word. The report tallies the costs of the program, which came to a bit more than $146 million over fiscal years 2002–2006. But only about $44 million of that went to the software and hardware infrastructure needed to sift through all that data. By far the biggest expense category—accounting for the other $102 million in outlays—was the “metadata and content” itself, an apparent reference to payments to the participating telecoms.

It remains telling that AT&T and Verizon have remained almost entirely silent about all of this, as various other companies mentioned in much more limited programs, have been pretty vocal about things.


Reader Comments (rss)

(Flattened / Threaded)

  •  
    icon
    Zakida Paul (profile), Jul 11th, 2013 @ 7:14am

    You scratch my back, I'll scratch yours. That is how Capitalism works. Contrary to popular belief it is little to do with hard work and intelligence.

     

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    •  
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      Ninja (profile), Jul 11th, 2013 @ 7:37am

      Re:

      Well, the arms industry also needed some boost in the 1930's Germany, no?

       

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    •  
      identicon
      Anonymous Coward, Jul 11th, 2013 @ 7:37am

      Re:

      No, this is how cronyism works. Capitalism has nothing to do with it.

       

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        Zakida Paul (profile), Jul 11th, 2013 @ 8:45am

        Re: Re:

        I am still convinced that cronyism is the inevitable byproduct of capitalism.

         

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          John Fenderson (profile), Jul 11th, 2013 @ 10:26am

          Re: Re: Re:

          Cronyism is inevitable in every economic system. It's hardly a unique feature of capitalism.

           

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            Anonymous Coward, Jul 11th, 2013 @ 11:01am

            Re: Re: Re: Re:

            Not exactly. If there is no government there can be no cronyism regardless of economic system so it's not 100% inevitable.

             

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              John Fenderson (profile), Jul 11th, 2013 @ 1:12pm

              Re: Re: Re: Re: Re:

              If there is no government there can be no cronyism


              I don't see how this follows. You can totally have an economic system without a government, and you can totally have cronyism with any economic system.

              (This is ignoring the fact that it's literally impossible to have a society without some form of government and some form of economic system -- both of those are inevitable products of people living together. But they are logically independent.)

               

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          identicon
          Anonymous Coward, Jul 11th, 2013 @ 10:47am

          Re: Re: Re:

          Cronyism is a byproduct of government.

           

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      identicon
      iSynic, Jul 11th, 2013 @ 10:19am

      Re:

      This is how corporatism works. This is not capitalism.

       

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      Anonymous Coward, Jul 11th, 2013 @ 1:04pm

      Response to: Zakida Paul on Jul 11th, 2013 @ 7:14am

      This is an absolutely retarded comment.

      The government is an external actor who can do basically whatever the fuck they want, they are not part of the marketplace legitimatly.

      'I scratch your back and you scratch mine' is voluntary exchange. Sure sounds evil.

       

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      Anonymous Coward, Jul 11th, 2013 @ 1:11pm

      Re:

      America version of capitalism is; ill pay a single mom minimum wage to scratch my back 12 hours a day. will she be unhappy she needs to work that much instead of spending time with her kids?, sure she will, but where else is she going to go? Us rich folk did a number on the economy and now they have little choice.

       

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    identicon
    Anonymous Coward, Jul 11th, 2013 @ 7:28am

    Sounds like the Telcos screw all their customers -- including the NSA

    Regarding wiretaps in general:
    AT&T, for example, imposes a $325 "activation fee" for each wiretap and $10 a day to maintain it. Smaller carriers Cricket and U.S. Cellular charge only about $250 per wiretap. But snoop on a Verizon customer? That costs the government $775 for the first month and $500 each month after that, according to industry disclosures made last year to Congressman Edward Markey.
    From http://www.usatoday.com/story/money/business/2013/07/10/what-government-pays-to-snoop-on-you/2504819 /

     

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      John Fenderson (profile), Jul 11th, 2013 @ 10:28am

      Re: Sounds like the Telcos screw all their customers -- including the NSA

      Well, if they're going to sell us out, I at least need to give Verizon credit for not setting the price insultingly low.

       

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      letherial (profile), Jul 11th, 2013 @ 1:13pm

      Re: Sounds like the Telcos screw all their customers -- including the NSA

      is there a package deal, like ....spy on one full family and get 20% off.

       

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    Anonymous Coward, Jul 11th, 2013 @ 7:38am

    WOW $100 Million

    private companies are very tightly intertwined with the government's surveillance efforts, and are profiting handsomely from those efforts,

    100 mil, "handsomely" !!!! ??? WFT..

    $100 million dollars to the US Government or to Telco's IS very, very slightly above ZERO.. Freaking pocket change..

    20Cents per day for 1 week, off a third of your population would cover that !!!

    Paid handsomely.. yea right!!!!

     

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      Anonymous Coward, Jul 11th, 2013 @ 7:44am

      Re: WOW $100 Million

      Did you really think posting 'well to them $100 million isn't even that much' would be an effective diversionary tactic in your effort to draw everyone's attention away from the fact that they volunteered and were paid to betray their customer's trust? Somehow it's better that this betrayal came 'relatively' cheaply?

       

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      jupiterkansas (profile), Jul 11th, 2013 @ 7:49am

      Re: WOW $100 Million

      So you're saying AT&T should charge more?

       

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        Anonymous Coward, Jul 11th, 2013 @ 9:07am

        Re: Re: WOW $100 Million

        I, for one, expected a lot more from the telcos. Why haven't they capped the NSA's bandwidth yet? They could make BILLIONS in overage fees!

         

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      Anonymous Coward, Jul 11th, 2013 @ 8:26am

      Re: WOW $100 Million

      darryl is furious because solar panels don't make him $100 million.

       

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      Bengie, Jul 11th, 2013 @ 8:39am

      Re: WOW $100 Million

      60% net profit on $140m is pretty good for illegally selling private information.

      I bet the managers got to pocket a lot of that money because it was classified information that this was even happening.

      Hmm... Free money entering a publicly traded company. Gotta keep those books balanced to not reflect what is going on... Lets just shuffle around a few funds and no one will ever know.

       

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      RD, Jul 11th, 2013 @ 9:29am

      Re: WOW $100 Million

      "$100 million dollars to the US Government or to Telco's IS very, very slightly above ZERO.. Freaking pocket change..

      20Cents per day for 1 week, off a third of your population would cover that !!!

      Paid handsomely.. yea right!!!!"

      Ok so now we are clear: you are FINE with the telcos BETRAYING their customers and the American People to government interests, and the ONLY part you have a problem with is how much they got PAID to do it (not enough, in your estimation.) Got it.

      You are a traitor and human waste.

       

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    Anonymous Coward, Jul 11th, 2013 @ 7:43am

    AT&T

    They made revenue of $127.4 BILLION dollars (1212), so their share of $100 mil (probably $50 mil).. is ALOT LESS that

    $127434 THOUSAND MILLION.

     

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    Anonymous Coward, Jul 11th, 2013 @ 7:57am

    So, to recap, the cost of betraying your costumers these days is $100 million and immunity from prosecution?

     

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      Nurlip (profile), Jul 11th, 2013 @ 8:16am

      Re:

      $100 million and immunity is the price to betray AT&T and Verizon customers' privacy. The cost falls on the government, which happily doled out $100 million dollars of our money to violate our rights.

       

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    identicon
    Paul, Jul 11th, 2013 @ 8:14am

    So, when are some of our "Leaders/Officials" going to be charged with criminal offenses? Will it require a "revolt" by "We the People". I'm ready for it. We cannot trust or present Officials & Leaders. They have been purchased, they make secret laws & changes to our current laws for those who bribe them. The NSA & DOJ are completely out of control. "In Greed We Trust" is not what our forefathers and I fought for. As a 100% disabled Naval Veteran, I would like my "Constitution" and my "Privacy" back....

     

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    identicon
    Anonymous Coward, Jul 11th, 2013 @ 8:26am

    that's just crazy. I dont' get it

     

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    Anonymous Coward, Jul 11th, 2013 @ 9:20am

    and, of course, that $100million is to be distributed amongst all the customers at the first opportunity?

     

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    Anonymous Coward, Jul 11th, 2013 @ 9:56am

    I received an email this morning from AT&T about new programs related to their privacy policy. They informed me they would be sharing my data with other companies, I in turn informed them they did not have my consent and if they are found to have shared one word about me I would be turning the matter over to my attorney.

     

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    TDR, Jul 11th, 2013 @ 10:18am

    You know, this would be the perfect opportunity for a new telco or one of AT&T & Verizon's competitors, such as Sprint, to advertise themselves with a new slogan:

    "Come get a phone from us! Unlike our competitors, we won't give your information to the government or anyone else!"

     

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      identicon
      Anonymous Coward, Jul 11th, 2013 @ 11:19am

      Re:

      This would also be a good time to break out of your contract without early contract termination fees.

       

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      Josh in CharlotteNC (profile), Jul 11th, 2013 @ 11:40am

      Re:

      If you don't think Sprint, T-Mobile, and the other smaller telcos weren't also turning their information over, then I've got a bridge to sell you.

      They might not have been raking in extra cash for doing various data analysis stuff, but I'm sure the data is still sitting in the NSA's databases.

       

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    identicon
    Anonymous Coward, Jul 11th, 2013 @ 11:25am

    To get it right... the Telcos SOLD your personnel data for profit. They were not compelled by law.

     

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    Anonymous Coward, Jul 11th, 2013 @ 1:40pm

    They sold out their customers for profit! I would advise people to use another cellphone service, but they have a monopoly on the cell phone market too!

    This is a total fail of American democracy and a free market. Unacceptable.

     

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    ofb2632 (profile), Jul 11th, 2013 @ 3:07pm

    Double Dipping

    What i took from this article is that i'm paying Verizon twice for the crappy service i have. First, my monthly bills, now the taxes i pay. This should be illegal just on that issue.

     

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    The Real Michael, Jul 12th, 2013 @ 5:20am

    Seems to me that the telcos betrayed the trust of the public. AT&T, Verizon, etc. sell out your expectation of privacy to the government; their 'service' is nothing more than a front for the NSA to snoop.

     

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    cypherpunk, Jul 16th, 2013 @ 7:24am

    WHAT!

    Telecom companies sell us their service and sell us as a service to NSA, FBI and CIA? Wtf?

     

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