THE WALL STREET JOURNAL

February 25, 2014

White House Weighs Four Options for Revamping NSA Phone Surveillance

Proposals Range From Running Program Through Phone Companies to Ditching It Altogether

By SIOBHAN GORMAN and DEVLIN BARRETT CONNECT

Feb. 25, 2014 7:32 p.m. ET

WASHINGTON—Administration lawyers have presented the White House with four options for restructuring the National Security Agency’s phone-surveillance program, from ditching the controversial collection altogether to running it through the telephone companies, according to officials familiar with the discussions.

President Barack Obama in January asked U.S. intelligence agencies and the attorney general to report by March 28 on alternatives for revamping the program in a way that would take it out of the NSA’s hands.

The Office of Director of National Intelligence and the Justice Department have provided the options ahead of schedule, these people said.

None of the three options for relocating the data have gained universal favor. But failure to agree on one of them would leave only the option of abolishing the program, which would be a setback for intelligence agencies and other backers of the surveillance effort. Of the three options for relocating the data, two of them—with phone companies or another government agency—appear most technically possible.

Under the current program, the NSA collects millions of U.S. phone records from three phone companies, which former officials have identified as AT&T Inc., Verizon Communications Inc. and Sprint Corp.

Since the start of revelations about NSA surveillance last year by former NSA contractor Edward Snowden, the phone-records program has sparked the most controversy. Some lawmakers and government officials have defended it as critical to fighting terrorism, while others argue it amounts to a massive violation of constitutional rights.

Obama administration officials have sought to preserve the collection of phone records in a way that raises fewer concerns about privacy.

One way of doing that would have the phone companies retain the data, officials said. The NSA would then tell the companies when it needs searches of call records concerning specific phone numbers the agency believes are connected to terrorism. The companies would provide the results to the NSA.

Under this model, the NSA would only collect the data that comes in response to the search, rather than millions of unrelated American phone records.

Several lawmakers have proposed legislation on Capitol Hill that would take this approach. But telecommunications companies oppose this option. Phone companies likely would demand liability protection and possibly other conditions to avoid outside demands for data—for instance, for run-of-the-mill legal cases such as divorce proceedings.

Already, some criminal defendants have sought access to the NSA records, claiming the data could help show their innocence.

The phone-company option is also opposed by the chairman of the House intelligence committee, Rep. Mike Rogers (R., Mich.), who told The Wall Street Journal this week that the proposal doesn’t have enough support for committee approval and a House floor vote.

Phone companies have not yet been consulted on options, a telecommunications-industry official said.

A second option presented to the White House would have a government agency other than the NSA hold the data, according to a U.S. official. Candidates for this option could include the Federal Bureau of Investigation, which some current former intelligence officials have recommended.

Another possibility floated in policy circles was turning the program over to the custody of the Foreign Intelligence Surveillance Court, which oversees the phone-data and other NSA surveillance programs, but judges have balked at an expanded role for the court.

A third option would be for an entity outside the phone companies or the government to hold the data, officials said. This approach has been criticized by privacy groups who say such a third party would just become an extension of the NSA and would provide no additional privacy benefit.

A final alternative would be to scrap the phone-data program and instead bolster investigative efforts under current authorities to obtain the information about possible terrorist connections some other way, an official said. Mr. Obama acknowledged this approach in his January speech, but said “more work needs to be done to determine exactly how this system might work.”

Caitlin Hayden, a spokeswoman for the White House National Security Council, declined to speak about specific proposals.

She said that since the president’s Jan. 17 speech unveiling surveillance-overhaul measures, the Justice Department and intelligence agencies have worked on developing options.

“They have kept us abreast of their progress, and we look forward to reviewing those options,” she said. “Beyond that, I’m not in a position to discuss the details of an ongoing process.”

Mr. Obama will consult with Congress and will seek legislation, as needed, she added.

Two of the options echo recommendations of the president’s review panel, which issued a report in December that proposed the NSA phone program be overhauled so the data be held by either the phone companies or a third party.

In his January speech, Mr. Obama said both of those approaches “pose difficult problems.” Retaining the data at the phone companies, he said, “could require companies to alter their procedures in ways that raise new privacy concerns.”

Establishing a third party to hold the data, he said, could be even more difficult. “Any third party maintaining a single consolidated database would be carrying out what’s essentially a government function, but with more expense, more legal ambiguity, potentially less accountability, all of which would have a doubtful impact on increasing public confidence that their privacy is being protected,” he said.

Separately on Tuesday, the Justice Department notified a convicted terror suspect that NSA bulk-data surveillance had been used against him before he pleaded guilty to a charge of attempted material support for terrorism.

The defendant, an Albanian immigrant named Agron Hasbajrami, pleaded guilty in federal court in Brooklyn in 2012, after he was accused of sending more than $1,000 to someone in Pakistan to finance terrorism.

Since the revelations about NSA spying, the government has notified two criminal defendants that they intended to offer evidence derived from NSA interception of electronic communications. The Hasbajrami notification marks the first time such a notice has been given to a defendant who has already pleaded guilty, officials said.

The letter notifying Mr. Hasbajrami noted that he is still seeking to have his conviction vacated. Mr. Hasbajrami’s attorney, Steve Zissou, said he would seek more information about the surveillance of his client.

Patrick Toomey, a lawyer at the American Civil Liberties Union, said the new filing shows “warrantless surveillance has played a role in more criminal cases than the government has ever before admitted, and the government has been improperly withholding that fact from defendants for years.”

Write to Siobhan Gorman at siobhan.gorman@wsj.com and Devlin Barrett at devlin.barrett@wsj.com