History > 2006 > USA > FBI (II-VI)

More Records Subpoenaed in Bruno Case

December 22, 2006
The New York Times
By DANNY HAKIM and MIKE McINTIRE

ALBANY, Dec. 21 — Joseph L. Bruno, the Senate majority leader and one of the three men who have run New York State for more than a decade, faced a widening federal investigation into his business affairs and the first open challenge from another Republican senator on Thursday.

Federal authorities issued subpoenas on Wednesday to Evident Technologies as part of their investigation, the company’s chief executive said. The executive, Clinton Ballinger, would say little about the inquiry, but acknowledged that investigators were looking into records involving Jared Abbruzzese, a former Evident director who is an investor in a group seeking control of New York’s horse-racing franchise.

Federal agents have subpoenaed records from the state lobbying commission, which has been investigating Mr. Bruno’s relationship with Mr. Abbruzzese, two government officials who have been briefed on the subpoena revealed on Thursday. Those officials said the commission received the subpoena about seven months ago, around the time Mr. Bruno has said he first learned that the F.B.I. was investigating his outside consulting work. The officials spoke on condition of anonymity because of the sensitivity of the investigation.

Federal authorities have declined to comment on or acknowledge an investigation.

Though the full nature of the investigation remains unclear, Mr. Bruno said this week that it is examining his “relationships and business interests” over the last six years. Mr. Bruno’s consulting firm and a company in which he was a partner that bought and sold land have also received subpoenas.

Mr. Bruno’s relationship with Mr. Abbruzzese, a friend and fellow horse-racing enthusiast, has been the focus of much scrutiny, including an inquiry by the lobbying commission, in recent months because Mr. Bruno will play a central role in awarding the racing franchise.

In an interview, Mr. Ballinger acknowledged that Evident had twice used Tejas Inc., a small Texas brokerage firm with close ties to Mr. Abbruzzese, to raise money as part of private stock deals.

Mr. Bruno purchased stock in Tejas in early 2005 after discussing the company with Mr. Abbruzzese, who a few months later merged his own financial-advisory firm with Tejas. Mr. Bruno’s spokesman said he lost money on his Tejas investment. Mr. Bruno has also directed at least $500,000 in state funds to Evident.

Referring to Evident, John McArdle, Mr. Bruno’s spokesman, said, “We had nothing to do with the inner workings of that company.”

Mr. Abbruzzese did not return calls for comment.

On the political front, Senator John Bonacic, whose district is in the Hudson Valley, became the first Republican to call openly for Mr. Bruno to step down as majority leader, a rare act of defiance among Senate Republicans.

“We can’t have a leader under investigation by the F.B.I. after we have taken such a beating in New York and nationally,” Mr. Bonacic said in an interview. “We deal in political perceptions, and in our business, perception is almost 90 percent of reality,” he added.

Few members of the Senate have been willing to talk publicly about Mr. Bruno and his political viability. Privately, some Senators have expressed concern that one of their first tasks next month will be re-electing Mr. Bruno as the temporary president of the Senate — even though he is facing a federal inquiry. They fear that the vote could further weaken the already wounded State Republican Party just as a popular Democrat, Eliot Spitzer, takes office as governor, promising to reform Albany’s reputation for corruption.

But Mr. Bruno, 77, has long held a firm grip on the party and is poised to become the state’s top Republican when Gov. George E. Pataki leaves office. He also enjoys close relationships with many senators.

“I’m sure the conference is very much behind Joe Bruno,” said Senator Martin Golden, a Brooklyn Republican. “I think it’s premature for Bonacic or any senators to come out with this statement, very premature.”

Mr. Bruno revealed the federal inquiry into his outside consulting work on Tuesday, after receiving calls about it from news organizations. He expressed confidence that no wrongdoing would be discovered, saying, “I am guilty of nothing.”

A review of state records shows that Mr. Bruno assisted companies linked to another Evident director, Walter Robb, a wealthy upstate investor and a former General Electric executive.

Mr. Bruno has steered state funds to two private companies in the Albany area on which Mr. Robb serves as a director, including grants worth $500,000 to X-Ray Optical Systems, Inc., as well as the $500,000 to Evident. While Evident received a cash grant, the funds for X-Ray were drawn from pools of borrowed funds that legislators use for pet projects.

Mr. Bruno has also invested in two publicly traded companies of which Mr. Robb is a director, Plug Power and Mechanical Technology.

Mr. McArdle said that money directed to any private companies was part of efforts by Mr. Bruno, along with other state officials, to bring high-technology jobs to the region. And he said many people in the area have invested in Plug Power and Mechanical Technology.

“He has been proud of the fact that he has been one of the most pro-business legislators,” Mr. McArdle said. “He knows probably every single businessman of note in this area.”

Mr. Abbruzzese was the first investor in Evident, a nanotechnology company, but no longer serves as a director.

Evident’s chief executive, Mr. Ballinger, a scientist who holds a doctorate in nuclear engineering, said he was shocked when he learned of the inquiry. “I don’t know what to make of it, to be honest,” he said. “I feel like we’re caught up in something that doesn’t really involve us.”

    More Records Subpoenaed in Bruno Case, NYT, 22.12.2006, http://www.nytimes.com/2006/12/22/nyregion/22bruno.html

U.S. to Declassify Secrets at Age 25

December 21, 2006
The New York Times
By SCOTT SHANE

WASHINGTON, Dec. 20 — It will be a Cinderella moment for the band of researchers who study the hidden history of American government.

At midnight on Dec. 31, hundreds of millions of pages of secret documents will be instantly declassified, including many F.B.I. cold war files on investigations of people suspected of being Communist sympathizers. After years of extensions sought by federal agencies behaving like college students facing a term paper, the end of 2006 means the government’s first automatic declassification of records.

Secret documents 25 years old or older will lose their classified status without so much as the stroke of a pen, unless agencies have sought exemptions on the ground that the material remains secret.

Historians say the deadline, created in the Clinton administration but enforced, to the surprise of some scholars, by the secrecy-prone Bush administration, has had huge effects on public access, despite the large numbers of intelligence documents that have been exempted.

And every year from now on, millions of additional documents will be automatically declassified as they reach the 25-year limit, reversing the traditional practice of releasing just what scholars request.

Many historians had expected President Bush to scrap the deadline. His administration has overseen the reclassification of many historical files and restricted access to presidential papers of past administrations, as well as contemporary records.

Practical considerations, including a growing backlog of records at the National Archives, mean that it could take months before the declassified papers are ready for researchers.

“Deadlines clarify the mind,” said Thomas S. Blanton, director of the private National Security Archive at George Washington University, which obtains and publishes historical government documents.

Despite what he called a disappointing volume of exemptions, Mr. Blanton said automatic declassification had “given advocates of freedom of information a real lever.”

Gearing up to review aging records to meet the deadline, agencies have declassified more than one billion pages, shedding light on the Cuban missile crisis, the Vietnam War and the network of Soviet agents in the American government.

Several hundred million pages will be declassified at midnight on Dec. 31, including 270 million pages at the Federal Bureau of Investigation, which has lagged most agencies in reviews.

J. William Leonard, who oversees declassification as head of the Information Security Oversight Office at the National Archives, said the threat that secret files might be made public without a security review had sent a useful chill through the bureaucracy.

“Unfortunately, you sometimes need a two-by-four to get agencies to pay attention,” Mr. Leonard said. “Automatic declassification was essentially that two-by-four.”

What surprises await in the documents is impossible to predict.

“It is going to take a generation for scholars to go through the material declassified under this process,” said Steven Aftergood, who runs a project on government secrecy for the Federation of American Scientists.

“It represents the classified history of a momentous period, the cold war,” Mr. Aftergood said. “Almost every current headline has an echo in the declassified past, whether it’s coping with nuclear weapons, understanding the Middle East or dictatorship and democracy in Latin America.”

Anna K. Nelson, a historian at American University, said she hoped that the files would shed light on the Central Intelligence Agency role in Iran and deepen the documentation of the Jimmy Carter years, in particular the Camp David accords.

“Americans need to know this history, and the history is in those documents,” Ms. Nelson said.

She said the National Archives staff was buried in a 400-million-page backlog that awaits processing and is not publicly available.

Also, a budget shortfall has cut back on evening and weekend access to the major research center of the archives, in College Park, Md.

“They can declassify the records, but the archives don’t have the staff to handle them,” Ms. Nelson said.

The first deadline was imposed in an executive order that President Bill Clinton signed in 1995, when officials realized that taxpayers were paying billions of dollars to protect a mountain of cold war documents.

The order gave agencies five years to declassify documents or show the need for continued secrecy.

When agencies protested that they could not meet the 2000 deadline, it was extended to 2003. Mr. Bush then granted another three-year extension, but put out the word that it was the last one, despite the new emphasis on security after the Sept. 11, 2001, attacks and a new war in Iraq.

“The Bush administration could have said, ‘This is a Clinton thing,’ and abandoned it,” Mr. Aftergood, said. “To their credit, they did not.”

As an enforceable deadline loomed, the intelligence agencies that produce most secret material add workers to plow through files from World War II.

The C.I.A. has reviewed more than 100 million pages, released 30 million pages and created a database of documents, Crest, that is accessible from terminals at the National Archives. Although most of the documents are exempt, they can be requested under the Freedom of Information Act.

The National Security Agency, the eavesdropping and code-breaking agency, has released 35 million pages, including an extensive collection on the Gulf of Tonkin incident that led to the escalation of the Vietnam War. The agency plans a major release early next year on the Israeli attack on the Liberty, an American eavesdropping ship, in 1967.

The F.B.I., by contrast, negotiated an exemption from the 1995 executive order and concluded last year that the 2003 executive order ended its special status. It has rushed to review material, seeking exemption for 50 million pages on intelligence, counterintelligence and terrorism, but leaving 270 million pages to be automatically declassified now.

Among those files, said David M. Hardy, the bureau declassification chief, are those on investigations of Americans with suspected ties to the Communist Party. Reviewers will keep working on the exempt material to see what can be released, but it is a slow process, Mr. Hardy said.

“The numbers of documents are staggering,” Mr. Hardy said.

The bureau is studying digitizing documents and using computers to search for classified material. Some experts say mass declassification is not the smartest approach. L. Britt Snider, a former intelligence official who heads the Public Interest Declassification Board, which advises the White House, said most government records, even top-secret ones, were pretty boring.

“Rather than take this blunderbuss approach,” Mr. Snider said, “I’d like to see the agencies concentrate first on what’s interesting and what’s important.”

    U.S. to Declassify Secrets at Age 25, NYT, 21.12.2006, http://www.nytimes.com/2006/12/21/washington/21declassify.html?hp&ex=1166763600&en=280ee006d9c2e17d&ei=5094&partner=homepage

Bruno Is Subject of Inquiry by F.B.I.

December 20, 2006
The New York Times
By MICHAEL COOPER and DANNY HAKIM

ALBANY, Dec. 19 — The New York Senate majority leader, Joseph L. Bruno, one of the three men who effectively control state government, said Tuesday evening that the Federal Bureau of Investigation was looking into his business interests.

Mr. Bruno, 77, who will be the state’s top Republican when Gov. George E. Pataki leaves office in less than two weeks, offered few details about the nature of the inquiry, which he said he was announcing because it had been leaked to reporters.

He said that he has known of the inquiry since late spring, and that he recently retained a lawyer. He said the investigation “appears to be related to my outside business interests,” but added later that he was “not sure” if it involved any official actions he has taken as Senate leader. He said he was told that he was not a target of the investigation.

Mr. Bruno said he did not believe that the inquiry would affect his ability to serve as majority leader.

“I am guilty of nothing, so why would it impact my ability to do anything?” he said.

The F.B.I. refused to confirm or deny any investigation. But one law enforcement official who has knowledge of the investigation and spoke on the condition of anonymity said that it focuses on Mr. Bruno and how his private business dealings may relate to his official position. The official said the investigation was still in the early stages.

Mr. Bruno’s statement rippled through Albany, where for the last 10 years he has held an iron grip on the fate of all legislation along with Governor Pataki and the Assembly speaker, Sheldon Silver. And the inquiry comes as Albany awaits the inauguration of Eliot Spitzer, a Democrat who ran for governor on a pledge to clean up the ethics of the capital, on Jan. 1.

Several Republican state senators said that they were unaware of the federal investigation when they re-elected Mr. Bruno as their majority leader just last month.

“Did we know?” asked one Republican senator, who spoke anonymously because of his close ties to Mr. Bruno. “We didn’t. Would it have changed things if we’d known? Maybe. I would have definitely had more questions if I’d known this.”

Governor Pataki, referring to the investigation, said on NY1 News, “Hopefully, the senator has done everything right, and that will be what the conclusion is.”

Mr. Bruno’s announcement of the inquiry made him at least the 10th state lawmaker to be investigated, indicted or convicted in recent years.

And it came as many in the Capitol were waiting to learn the fate of another top official, State Comptroller Alan G. Hevesi, a Democrat, who could be indicted by an Albany County grand jury as early as Friday for using state workers as chauffeurs and personal aides for his wife, a law-enforcement official said.

Neither Mr. Bruno nor federal officials would say much about the investigation on Tuesday night. Mr. Bruno did say that the F.B.I. had issued subpoenas as part of it, and that he had gone to meet with the authorities.

“They’re going into background over the last five, six years and relationships and business interests,” Mr. Bruno said.

Mr. Bruno has a consulting business, Capital Business Consultants L.L.C., which has the same address as his home in Rensselaer County, across the Hudson from Albany.

Since selling his telecommunications equipment company, Coradian, in 1990 for about $10 million, Mr. Bruno has remained active in business, reporting income in most years from consulting arrangements as well as investments in real estate and stocks, according to financial disclosure reports he filed with the State Legislative Ethics Committee.

Mr. Bruno has also reported earning money in recent years from consulting work for a Connecticut investment firm, Wright Investors’ Service. The company’s president told The New York Sun in 2003 that Mr. Bruno was paid a part-time salary for referring clients to Wright, that Wright did not manage money for New York State, and that Mr. Bruno’s consulting did not involve his work as a senator.

Paul M. Holstein, a spokesman for the Albany office of the F.B.I., declined to comment on questions regarding Mr. Bruno last night. “We have no comment on any pending investigations or even about whether there is an investigation ongoing on Senator Bruno,” said Mr. Holstein, who is a supervisory special agent of and chief division counsel for the F.B.I. “We’re not going to confirm that there is an investigation.”

He referred questions about the matter to the United States attorney’s office in Syracuse. Officials there did not return calls for comment last night.

Mr. Bruno’s lawyer, William J. Dreyer, also did not return telephone calls or respond to e-mail messages last night.

A report in The New York Times on Saturday highlighted some of the ties between Mr. Bruno’s private and public interests. It found that in recent years, Mr. Bruno has steered state money to a business linked to Jared E. Abbruzzese, a wealthy investor in the Albany area, while also investing in a different company affiliated with Mr. Abbruzzese.

Mr. Bruno declined to say whether the inquiry was related to Mr. Abbruzzese.

He said Tuesday evening that he had decided to announce the federal investigation publicly because “I wanted to be upfront and assure that I have nothing to hide, and to avoid speculation, distortions or unfounded rumors.”

Al Baker, Mike McIntire and William K. Rashbaum contributed reporting from New York City.

    Bruno Is Subject of Inquiry by F.B.I., NYT, 20.12.2006, http://www.nytimes.com/2006/12/20/nyregion/20bruno.html?hp&ex=1166677200&en=f2cc0d577c8e5757&ei=5094&partner=homepage

FBI: Violent Crime Still on Rise in 2006

December 18, 2006
By THE ASSOCIATED PRESS
Filed at 1:16 p.m. ET
The New York Times

WASHINGTON (AP) -- Murders and robberies continued to rise across the country during the first six months of 2006, on pace for an increase in violent crime for a second straight year, preliminary FBI data released Monday show.

The overall 3.7 percent uptick in violent crime between January and June comes amid a still-incomplete Justice Department study of 18 cities for clues on why criminal activity is increasing.

Property crimes like auto theft and other larcenies were down by 2.6 percent over the same six-month period, the data show. But the number of arsons shot up by nearly 7 percent, the FBI reported.

The numbers reflect what police across the country have been saying for months: that the lull in crime between 2001 and 2004 appears to be over.

''This is a concern we've been focused on,'' said Gene Voegtlin, legislative counsel for the International Association of Chiefs of Police, which represents an estimated 20,000 law enforcement officials and has been pushing for more crime-fighting funding. ''A lot of (police) agencies are really stretched thin when it comes to the budget and their ability to aggressively combat crime.''

The Justice Department did not have an immediate comment.

Last month, the department launched what Attorney General Alberto Gonzales called a study ''to figure out the whys behind the numbers,'' but Justice researchers have not yet visited all of the targeted regions, a spokesman said Monday.

The early data show:

--Murders rose by 1.4 percent, felony assaults by 1.2 percent and robberies by a whopping 9.7 percent in 2006, compared to the first six months of 2005. The number of rapes decreased by less than one-tenth of 1 percent.

--Burglaries increased by 1.2 percent. But car thefts dropped by 2.3 percent and other stealing incidents by 3.8 percent.

--Arsons rose by 6.8 percent.

The data is based on crime reports from 11,535 police and other law enforcement agencies nationwide. The total number of actual crimes reported was not immediately available.

------

On the Net:

The FBI's Semiannual Uniform Crime Report can be found at: http://www.fbi.gov/ucr/prelim06/index.html 

    FBI: Violent Crime Still on Rise in 2006, NYT, 18.12.2006, http://www.nytimes.com/aponline/us/AP-Crime.html

'State secrets privilege' blocks fired translator from suing FBI

Updated 11/24/2006 12:17 AM ET
USA Today
By Catherine Rampell

Sibel Edmonds, who formed the 100-plus member National Security whistle-blowers Coalition in 2002, began working as a linguist for the FBI the week after the Sept. 11, 2001, terrorist attack.

Several months into her contract, she discovered "shoddy" translations relevant to 9/11 created by translators who had "failed the proficiency exams," she says.

A report by the Justice Department's inspector general subsequently confirmed that at least one translator had failed the FBI's language proficiency exams. Edmonds says the translator was sent to Guantanamo Bay to translate "the most sensitive terrorist-related information" from interviews of detainees.

Edmonds also notified her superiors that a co-worker was responsible for translating wiretaps of a company the latter used to work for. The co-worker "was blocking the intelligence coming from her family members and friends," Edmonds says.

Edmonds took a polygraph test and was investigated for typing her allegations — which contained classified information — on her home computer, even though her supervisor had given permission for her to do so, the inspector general's report said.

The Middle Eastern language specialist was fired in March 2002. When Edmonds asked why, she received a letter saying her contract had been "terminated completely for the government's convenience," according to legal briefings her lawyers filed in the lawsuit contesting her firing.

In its final report, the inspector general concluded that "we believe that many of (Edmonds') allegations were supported, that the FBI did not take them seriously enough, and that her allegations were, in fact, the most significant factor in the FBI's decision to terminate her services."

The same month the report was released, Edmonds' lawsuit to contest her firing was dismissed. Legal briefs show the government had invoked the so-called state secrets privilege, arguing that the lawsuit would jeopardize national security.

The state secrets privilege — a series of U.S. legal precedents — has been cited by the federal government at least 18 times since 9/11 and at least 81 times since the privilege was first recognized in 1953, according to the Reporters Committee for Freedom of the Press.

"Instead of protecting and standing up for whistle-blowers, this is just giving the complete green light to retaliate," says Edmonds, who lost her appeal.

FBI spokesperson Bill Carter declined to comment, citing privacy concerns.

    'State secrets privilege' blocks fired translator from suing FBI, NYT, 24.11.2006, http://www.usatoday.com/news/washington/2006-11-23-whistleblower-translator_x.htm

3 Americans Arrested by F.B.I. in Identity Thefts

November 3, 2006
The New York Times
By TOM ZELLER Jr.

At least three Americans and 11 Polish nationals have been arrested in the last month in a crackdown on an online black market in which users buy and sell credit card numbers, bank account log-ins and other personal information, federal investigators say.

The three Americans have been identified as Dana Carlotta Warren, 29, of Atlanta and Zanadu Lyons, 24, and Frederick T. Hale, both of Columbus, Ohio. The charges included conspiracy to commit bank fraud, identification fraud, identity theft and other violations in what the F.B.I. described as a plot linking those arrested in the United States and those in Poland.

The F.B.I. and federal prosecutors are expected to announce the arrests of two more Americans today.

The arrests follow a two-year operation in which the F.B.I. worked with Polish investigators to identify suspects trading in or enabling the use of stolen consumer information.

Warrants were also being served in Romania as part of a continuing investigation, an F.B.I. spokesman, Paul Bresson, said.

The proliferation and sale of stolen consumer data on the international black market, particularly through online forums, has been a nagging problem for law enforcement, given the restrictions in national legal systems.

But the assistant director of the F.B.I.’s Cyber Division, James Finch, suggested that this was slowly changing.

“We are sharing evidence and using sophisticated techniques like never before,” Mr. Finch said in a statement. “Cybercriminals will no longer be able to hide behind borders to conduct their illicit business. There will be no safe haven for cybercrime.”

    3 Americans Arrested by F.B.I. in Identity Thefts, NYT, 3.11.2006, http://www.nytimes.com/2006/11/03/business/03cyber.html

F.B.I. Struggling to Reinvent Itself to Fight Terror

October 10, 2006
The New York Times
By SCOTT SHANE and LOWELL BERGMAN

WASHINGTON, Oct. 9 — Last February, top F.B.I. officers from across the nation gathered in a high-security auditorium for the latest plan to reinvent the crime-fighting agency to take on terrorism.

Philip Mudd, who had just joined the bureau from the rival Central Intelligence Agency, was pitching a program called Domain Management, designed to get agents to move beyond chasing criminal cases and start gathering intelligence.

Drawing on things like commercial marketing software and the National Security Agency’s eavesdropping without warrants, the program is supposed to identify threats. Mr. Mudd displayed a map of the San Francisco area, pocked with data showing where Iranian immigrants were clustered — and where, he said, an F.B.I. squad was “hunting.”

Some F.B.I. officials found Mr. Mudd’s concept vague and the implied ethnic targeting troubling. How were they supposed to go “hunting” without colliding with the Constitution? Would the C.I.A. man, whom some mocked privately as Rasputin, take the bureau back to the domestic spying scandals of the 1960’s? And why neglect promising cases to, in Mr. Mudd’s words, “search for the unknown”?

The skepticism is just one sign of unfinished business at the bureau. Five years after the Sept. 11 attacks spurred a new mission, F.B.I. culture still respects door-kicking investigators more than deskbound analysts sifting through tidbits of data. The uneasy transition into a spy organization has prompted criticism from those who believe that the bureau cannot competently gather domestic intelligence, and others, including some insiders, who fear that it can.

Eight months after his talk, Mr. Mudd admits that some in the bureau do not accept his guiding premise: that arresting bad guys is sometimes less important than collecting intelligence to uncover the next terrorist plot.

“There’s 31,000 employees in this organization and we’re undergoing a sea-change,” he said in an interview. “It’s going to take a while for what is a high-end national security program to sink down to every officer.”

The top counterterrorism job has turned over repeatedly — seven people in five years — filled mostly by veterans with little expertise on Islamist movements and terrorist networks. Many counterterrorism agents have minimal specialized training. A National Security Agency executive brought in to reshape the bureau’s intelligence capabilities, Maureen Baginski, departed after clashing with F.B.I. old-timers. The intelligence units Ms. Baginski created in the 56 field offices lack clear instructions and some are “struggling,” a recent Congressional study found.

And some bureau traditionalists believe that Mr. Mudd, too, will move on from his job as second in command of the bureau’s new National Security Branch. “They’ll just wait him out,” a counterterrorism official said.

After interviewing more than 60 intelligence officials for a new book on counterterrorism, Amy Zegart, of the University of California, Los Angeles, reached a dismal verdict on the F.B.I.

“If you look at, for example, the four key ingredients for counterterrorism success — agents, analysts, managers and computers — the F.B.I. is struggling to get the basics right on all of them,” Ms. Zegart said. “New agents still get more time for vacation than they do for counterterrorism training. Analysts are still treated as glorified secretaries.”

In interviews by The New York Times and the Public Broadcasting System documentary series “Frontline,” even critics acknowledged the sweeping structural changes at the bureau under Robert S. Mueller III, who took over as director a week before the Sept. 11 attacks.

The number of Joint Terrorism Task Forces, in which F.B.I. agents collaborate with state and local agencies, has ballooned to 101, from 35. The number of intelligence analysts has doubled to 2,161, and the number of linguists has doubled to 1,371. And the F.B.I. points out that there has been no new terrorist attack.

Mr. Mudd said agents were encouraged to postpone the arrest of a terrorism suspect until his ties to other operatives, financial supporters and foreign networks were fully understood.

“I don’t want to take him down too quickly,” he said. “I want to understand what we know and what we don’t know. If we’re focused solely on cases, I can’t have confidence that we know what’s going on.”

But the drive to bring criminal charges often eclipses the intelligence imperative. In cases from Lodi, Calif., where a 23-year-old man was convicted this year of training in a terrorist camp in Pakistan, to Miami, where seven Haitian men are charged with waging war against the United States government, defendants who seemed nowhere near ready to mount an attack were arrested with a news media splash rather than quietly kept under surveillance.

Christopher D. Hamilton, who retired last year after 22 years at the F.B.I., half of it working on counterterrorism, said agents still believed that their careers would rise or fall on the cases they brought.

“Supervisors will say, ‘Why don’t you have any cases?’ ” said Mr. Hamilton, now at the Washington Institute for Near East Policy. “Cases are good for getting resources, good for publicity and good for morale.”

Even a Los Angeles case that federal officials describe as the most operationally advanced of post-2001 plots uncovered in the United States appears to show a gap between public relations and reality.

In that case, three men are charged with committing robberies to raise money for jihadist attacks on synagogues and military recruiting stations, in what Director Mueller has described as a bid to create “Al Qaeda in California.” Their actions are said to have been directed by Kevin James, who headed a Muslim group behind bars.

But agents checked on more than 100 prisoners with links to Mr. James and charged none. And though Mr. James has been portrayed as the mastermind, reporters for The New York Times and “Frontline” were repeatedly able to visit him in jail in Santa Ana, Calif. Such access is almost never granted to people accused of terrorism because the authorities fear that they could direct a plot from prison.

But if making arrests is no longer the top priority, many agents fear that an ill-defined quest for domestic intelligence is likely to lead to political trouble, as the hunt for Communists in the 1960’s led to surveillance on the Rev. Dr. Martin Luther King Jr. and John Lennon. Michael Rolince, a veteran F.B.I. counterterrorism official who retired last year, said the attorney general’s investigative guidelines, first imposed as a reform in 1976, “are absolutely necessary to keep F.B.I. agents out of trouble.”

But the guidelines, largely classified, have been loosened repeatedly in the last 30 years, most recently in 2003 to permit “threat assessments” without evidence of a crime. Officials say uncertainty in field offices about how the rules apply today has slowed the move to intelligence. They plan to issue new instructions to top agents from each field office this month.

Mr. Mudd said he knew that concern about civil liberties was “in the DNA” at the F.B.I., and he recently read a biography of J. Edgar Hoover, whose long tenure as director was marred by abuses, to recall the dangers of uncontrolled domestic spying.

Still, he said, “I do bristle a bit at people saying, ‘You want to just go back to the 60’s and 70’s.’ ”

Intelligence on the terrorist threat involves not just spying, Mr. Mudd said, but also building a close relationship with leaders in Muslim communities.

To help agents and analysts distinguish genuine threats from routine Islamist rhetoric, the bureau has just doubled its basic training on counterterrorism to about 80 hours. Skeptics note, however, that more time is devoted to firearms training.

“The F.B.I. needs to follow the lead of the small group of agents who’ve made themselves experts,” said Evan F. Kohlmann, a consultant to the bureau and Scotland Yard and author of a book and Web site devoted to Al Qaeda.

Mr. Kohlmann said the dozen agents who knew international terror networks best were rarely brought in on local cases.

Knowledgeable employees say Muslim agents number no more than a dozen of the bureau’s 12,664 agents. (The bureau says it does not track employees by religion.) And an F.B.I. tradition that values leadership and personal connections more than specialized knowledge has resulted in counterterrorism bosses with minimal background.

“You need leadership. You don’t need subject-matter expertise,” said Gary M. Bald, whom Mr. Mueller named last year as the first head of the National Security Branch, admitting in a 2005 deposition that he knew little about Islam. Mr. Bald has since left for a security job with a cruise line.

The awkward tension between intelligence and prosecution was on vivid display in the Lodi case. The investigation began in late 2001 as an intelligence operation to size up two imams from Pakistan whom the authorities believed had ties to extremists.

After four years of surveillance, agents had found no evidence of terrorism-related crimes by the imams, who were deported to Pakistan. Instead, the government prosecuted Hamid Hayat, 23, who faces a maximum sentence of 39 years in prison for attending a terrorist training camp in Pakistan. His father, Umer Hayat, 48, is free after a mistrial and a guilty plea to making a false statement.

The Lodi case produced worldwide headlines about an “Al Qaeda cell” in California, and John D. Negroponte, the director of national intelligence, called it the prime example of a “homegrown jihadist cell” in Congressional testimony. But critics of the case, including several former agents, say it has serious and revealing shortcomings.

The informant in the case, a convenience store clerk who was paid more than $200,000 over four years in salary and expenses, could be heard on tape angrily ordering Hamid Hayat to seek terrorist training. His claim that he saw Ayman al-Zawahri, Al Qaeda’s second in command, at the Lodi mosque in 1998 or 1999 was admitted by the government to be inaccurate.

The video of Hamid Hayat’s confession showed agents prompting his answers and sometimes insisting on their own version. And his account of the camp bore no resemblance to that of his father, who said it was an underground facility where would-be terrorists dressed as “Ninja turtles” and practiced pole-vaulting.

The interrogation tapes so outraged James J. Wedick, who retired in 2004 after 35 years as an F.B.I. agent, that he worked for the defense without charge. “It’s shameful, because I’ve never seen the department do this before,” Mr. Wedick said.

The Hayats, he concluded, were saying whatever they thought the agents wanted to hear, and little effort was made to corroborate their confessions.

The case also raised questions about agents’ familiarity with Islam, as some scholars say agents misinterpreted a scrap of paper with a Muslim prayer as a jihadist vow.

Finally, several other Pakistani Americans whom the Hayats said had visited terrorist camps have not been charged, suggesting that the F.B.I. does not believe at least some parts of the Hayats’ confessions. The management of the case appears at odds with the new philosophy of following up all leads before any public charges are brought.

A lingering question in the Lodi case is the effect on Pakistanis in the area. Some mosque leaders who saw the Pakistani imams as militant interlopers are glad they are gone. But few believe that the Hayats ever posed a threat.

Taj Khan, a retired engineer and leader among the Pakistanis in Lodi, said the Hayats’ experience had made residents more reluctant to cooperate with the F.B.I.

“Everybody’s clear that as soon as they talk to the F.B.I.,” Mr. Khan said, “they might be, you know, put in the slammer.”

There is, he added, “not much trust at all.”

Drew S. Parenti, the special agent in charge of the Sacramento office of the F.B.I., defended the case, saying, “Everything we did in this case was lawful, ethical, proper, was reviewed by a judge and was determined by a jury of peers to be sufficient evidence to sustain conviction.”

But Mr. Scott, the United States attorney, now says it was a mistake to label the case as a Qaeda plot.

“We probably, at the end of the day, should not have used that term,” he said. “One of the biggest mistakes that we can make is to overhype these cases on the front end. And if it is a widely held perception out there that we did that in this case, then I regret that, because that was never our intent.”

Jordan deBree, Rob Harris and Jeff Kearns contributed reporting from Lodi, Calif.

    F.B.I. Struggling to Reinvent Itself to Fight Terror, NYT, 10.10.2006, http://www.nytimes.com/2006/10/10/us/10fbi.html?hp&ex=1160539200&en=3653c553953dea48&ei=5094&partner=homepage

Op-Ed Contributor

Law Enforcement, American Style

September 14, 2006
The New York Times
By JOHN MILLER
Washington

WITH the fifth anniversary of the 9/11 attacks coming shortly after British authorities disrupted the plot to bomb airliners over the Atlantic, we are seeing another round of calls to break up the F.B.I. or to create a domestic intelligence agency separate from the F.B.I. with no police powers, similar to Britain’s MI5.

But these critics, who have been joined by the prominent federal appeals court judge Richard Posner, seem to be unaware of two critical things. One is how far the F.B.I. has come in transforming itself into an intelligence-driven organization in the last five years; the other is how many attacks we have prevented in that span.

Using intelligence and technology — and our authority to make arrests — the F.B.I. has stopped five terrorist plots in progress in roughly the last year alone:

• On Aug. 31, 2005, in Los Angeles, we arrested four members of a group of radicals that had grown out of the prison system and was planning to attack military recruiting centers and synagogues.

• In February, in Toledo, Ohio, we arrested three men who had conspired to travel to Iraq and attack American forces there.

• In a case out of Atlanta, indictments were handed down in March and July against two men who had traveled to Washington to videotape possible targets near the Capitol and then met with other extremists in Canada to compare notes.

• In Miami in June, seven extremists were arrested after being recorded on F.B.I. surveillance tapes swearing allegiance to Al Qaeda and making plans to attack targets in Miami and Chicago, including the Sears Tower.

• In July a plot to attack subways in New York was disrupted with the arrest of the mastermind in Lebanon.

In addition, we worked closely with our law enforcement partners in Canada and Britain to help uncover plots in those countries that made headlines worldwide this summer. This recent record suggests two things: that the operational tempo of Al Qaeda’s followers is still high, and that the F.B.I. is doing a good job.

So why tear apart the bureau now and start a new agency? How long would it take this new agency to get rolling? A year? Two? What would it use for a database? How would it address privacy and civil liberties? How long would it take the officers of this new agency to develop trusting relationships with America’s 18,000 local law enforcement agencies?

There is a more fundamental question for the “domestic intelligence agency” proponents: Who says the other system is better? When we visit our colleagues at domestic intelligence agencies abroad to compare systems, those without police powers tell us they wish they could make arrests.

Israel and Britain have domestic intelligence agencies staffed by some of the finest operators in the world. Since 9/11, both countries have suffered terrorist attacks on home soil while we have not. That doesn’t mean their systems don’t work best for them; it simply proves that the domestic-intelligence model is not a magic bullet against our enemies.

The proponents of creating a new agency assume the F.B.I. always makes arrests at the first opportunity, scooping up the little fish while the masterminds get away. They seem unaware of the existence of our intelligence directorate, or the 56 field intelligence groups spread throughout the nation. The critics don’t understand how intelligence is leveraged in each investigation.

At any moment, we are involved in joint operations with American and foreign intelligence agencies that go on for months or even years, gathering intelligence and disrupting plots by means other than high-profile arrests. These operations allow the F.B.I. and our partners to continue to follow the thread of intelligence until we have learned the identities of all the players or found the last safe house. In those cases no one takes a bow or holds a press conference, but the work gets done quietly and effectively. When we do make arrests, it is because making arrests was the most effective way to disrupt a plot.

The bureau’s director, Robert Mueller, has made a priority of merging our longtime strength of being a premier investigative agency with the new goal of being an intelligence-led agency. We have started a national security branch, with special agents and talented analysts, to control our counterterrorism, intelligence and counterespionage efforts. This branch is now home to about 40 percent of the bureau’s employees.

We have added a directorate that handles investigations involving weapons of mass destruction and also conducts research to stay on the cutting edge of terrorist capacities.

We have expanded our partnerships with local law enforcement by increasing the number of joint terrorist task forces to 101 today from 33 before 9/11.

In those squads in cities across the country, local police detectives, our agents and analysts and investigators from other federal agencies work side by side, sharing information and running down leads.

We have also developed a database, called the Investigative Data Warehouse, that can search more than 700 million records from more than a dozen agencies and match them against our own investigative records.

As we break down the structure of Al Qaeda, we see the very shape of the terrorist threat changing and adapting. Our approach has to continually evolve to keep up. Starting over from scratch will only set us back and make America less safe.

John Miller is an assistant director of the F.B.I. and a former chief of counterterrorism for the Los Angeles Police Department.

    Law Enforcement, American Style, NYT, 14.9.2006, http://www.nytimes.com/2006/09/14/opinion/14miller.html

Competitors Concerned After the Arrest of a Major Figure in Internet Gambling

July 19, 2006
The New York Times
By HEATHER TIMMONS

LONDON, July 18 — The multibillion-dollar online gambling industry was thrown into turmoil Tuesday after the United States government arrested a top executive from a London-based betting company, leaving his competitors wondering whether they could be next.

Stock prices of the industry’s biggest names, including PartyGaming and SportingBet, plummeted on Tuesday on fears that they could fall under the Department of Justice’s spotlight next after prosecutors in St. Louis charged the London company, BetOnSports, with criminal racketeering and wire fraud on Monday.

In addition to arresting the chief executive of BetOnSports, David Carruthers, when he touched down in the United States on a flight from Britain to Costa Rica, prosecutors charged the company and 10 others who worked with the company.

Investors and executives are concerned that the charges reflect a new get-tough posture on the part of prosecutors as well as legislators. The House of Representatives passed a bill last week that would ban Internet gambling sites from knowingly accepting money from United States citizens. The Senate has not voted on the bill.

“This is clearly sending a message that Washington is paying attention,” said Sebastian Sinclair, president of Christiansen Capital Advisors, an industry research company.

The arrest of Mr. Carruthers, whose 10-year-old 2,000-employee company is one of the top sports betting Web sites, is a sign of how serious prosecutors are about cracking down, Mr. Sinclair said.

The industry has “some real cowboys and some real shady characters, but David is not one of them,” Mr. Sinclair said.

The BetOnSports Web site continued operating on Tuesday, though trading in its stock, which fell 17 percent on Monday, was suspended. Stock in PartyGaming, which is based in Gibraltar, fell 17 percent on Tuesday on the London Stock Exchange; its decline even dragged the exchange’s FTSE index lower. SportingBet, which is also based in London, fell 36 percent Tuesday after falling 13 percent on Monday.

Analysts in London said that investors overreacted.

“The indictment seems to be very BetOnSports specific and the market seems to be treating all online gaming companies in the same manner,” said Wayne Brown, an analyst with Altium Securities in London.

Companies and analysts combed through the 27-page BetOnSports indictment Tuesday, trying to predict where the Department of Justice could be headed next. The indictment listed charges against executives stemming back to 1992 and focuses on the company’s sports betting operations, which it says violate a federal wire act that prohibits making sports bets across state lines. That gave some companies that have only casino games hope they could be left alone.

On Tuesday, some online gambling executives challenged the idea that their business would be affected. Others conceded they were consulting with lawyers and not planning any trips to the United States. None, though, wanted to speak on the record for fear of drawing the attention and ire of the authorities in the United States.

“This has nothing to do with us whatsoever,” insisted an executive from one of the largest online gambling sites listed in London when asked about the BetOnSports situation. Still, the company would not comment on the issue, he said.

Online betting has grown to an industry that generates $12 billion profit a year, a figure that is expected to double by 2010.

In addition to attracting customers from the United States and Europe, companies are turning to Asia for growth.

Some forms of online gambling are illegal in countries outside the United States. Playing online casino games for money is illegal in Australia, for example. But the United States has been the most aggressive about prosecuting the operators.

It is illegal to operate an online gambling site in the United States, but many lawyers say that the legality of a Web site that is based elsewhere, but attracts American customers, is up for interpretation. An American bookie, Jay Cohen, who ran a gambling Web site out of Antigua, served jail time after being convicted in 2000 of violating the wire act.

The Federal Bureau of Investigation’s actions come as sentiment against United States prosecutors is running high in Britain’s business circles.

It follows the extradition last week of three British bankers to a Houston court to face Enron-related charges; their extradition prompted protests in Britain. Now, the concern is that the same controversial extradition treaty could be used to force British online gambling executives to stand trial in the United States.

    Competitors Concerned After the Arrest of a Major Figure in Internet Gambling, NYT, 19.7.2006, http://www.nytimes.com/2006/07/19/business/worldbusiness/19gamble.html

With only a letter, FBI can gather private data

Updated 7/6/2006 12:04 AM ET
USA TODAY
By Richard Willing

When the FBI office in New Haven, Conn., received an e-mail in February 2005 that looked like a terrorist threat, agents followed a familiar routine. They asked the service provider, a group of Connecticut public libraries, for the real name, street address and Internet logs of the sender.
They had no search warrant, grand jury subpoena or court order. Instead, a local FBI official hand-delivered a National Security Letter — one of more than 9,000 sent to finance, telephone and Internet companies last year — that described the records needed.

Under a federal law expanded by the anti-terrorism USA Patriot Act of 2001, the written request was all the authority the FBI needed. The Patriot Act also barred the librarians from disclosing the request to anyone.

The librarians refused to hand over the information. Instead, they filed a federal lawsuit challenging the secret letters as an unconstitutional infringement on free speech.

The e-mailed threat proved to be a hoax. Yet the lawsuit it sparked, only the second legal challenge to National Security Letters in their 20-year history, provides a rare public glimpse of the vast amount of banking, credit, telephone and Internet records that anti-terrorism or counterintelligence investigators can have simply by asking.

National Security Letters are the key to the trove of personal data. When the law authorizing them was passed by Congress in 1986, the letters could be authorized only by a high-ranking FBI official in pursuit of an "agent of a foreign power."

The Patriot Act, passed six weeks after the Sept. 11, 2001, terrorist attacks, expanded the letters' reach. Now they can be issued if a local FBI official merely certifies that the information sought is "relevant" to an international terrorism or foreign intelligence investigation.

"People have no idea how much of what they probably consider their private information is readily available to government," says Susan Brenner, a University of Dayton law professor who advises the U.S. Secret Service on technology and privacy. The letters, she says, raise the question: "How do we balance law enforcement's needs with what's left of privacy in an age where technology permeates everything?"

According to Michael Woods, chief of the FBI's national security law unit from 1999 to 2002, National Security Letters can be used to retrieve:

•Internet and telephone data, including names, addresses, log-on times, toll records, e-mail addresses and service providers.

•Financial records, including bank accounts and money transfers, provided the FBI says they are needed to "protect against international terrorism or clandestine intelligence activities."

•Credit information, such as an individual's banks, loan companies, mortgage holders or other financial institutions.

•Consumer, financial and foreign travel records held by "any commercial entity," if the investigation's target is an executive branch employee with a security clearance.

Only FBI agents can obtain phone, computer and financial records. Other federal agencies that gather intelligence on international terrorism can get consumer credit reports and credit agency data. They include the CIA, Defense Intelligence Agency and Transportation Security Administration.

9,254 letters served in 2005

The government swears by the National Security Letters. In papers filed last year in the Connecticut case, David Szady, the FBI's assistant director for counterintelligence, said the letters are vital to the bureau's post-9/11 mission: to disrupt terrorist plots and other national security threats before attacks occur.

The letters, Szady said, are especially valuable in providing leads because they establish relationships between suspects who may be linked only by records. Letters help investigators move "from target to target, unearthing the different layers and conspirators of an international terrorist or foreign counterintelligence organization," he said.

According to U.S. Justice Department figures, the FBI served 9,254 National Security Letters concerning 3,501 individuals in 2005.

By comparison, the secret Foreign Intelligence Surveillance Court, which authorizes search warrants and electronic surveillance in terrorism and spying cases, approved 2,072 warrants and wiretaps and 155 applications for business records last year.

Before the Patriot Act was revised in March, the FBI was not required to disclose how many letters it issues. The number of letters from previous years, and whether they led to successful terrorism prosecutions, remains classified.

Details of success story

Because the recipients of National Security Letters are hardly ever named, little is known about how the letters have been used.

The details of one successful computer surveillance operation can be pieced together from public records:

In the spring of 2004, federal investigators noted that Mohammad Junaid Babar had a home computer yet frequently visited the New York Public Library to use its Internet service. The library's records showed Babar, a Pakistani-born U.S. citizen and suspected al-Qaeda associate, was e-mailing "other terrorist associates around the world," Ken Wainstein, the U.S. attorney for the District of Columbia, said last year while lobbying Congress to reauthorize the Patriot Act.

After his arrest in April 2004, Babar told the FBI that because the library's hard drives were erased after each use, he believed he could use the system without being monitored. Even so, investigators were able to learn Babar's name, address and e-mail destinations through records the library had stored.

Babar has pleaded guilty to providing material support for terrorism and faces a sentence of up to 70 years in prison.

"Libraries should not be carved out as safe havens for terrorists and spies," Wainstein told a congressional committee in April 2005.

Present and former government lawyers say the letters are on firm legal ground. They've been validated by several votes of Congress and used "thousands of times," says Kevin O'Connor, the U.S. attorney in Connecticut.

Woods, the former FBI lawyer, says that in most cases the letters allow access to information that the U.S. Supreme Court has ruled is not private. Requiring a National Security Letter, he says, was considered a "step up" in privacy protection from the way federal investigators previously sought records: simply visiting banks and phone companies and asking for the information, which was almost always provided.

The American Civil Liberties Union and some privacy advocates do not agree. Ann Beeson, an ACLU lawyer who represents the Connecticut librarians, says the letters are a "dangerous" and underexamined threat to civil liberties.

Giving the FBI authority to decide what's "relevant" to its own investigations, Beeson says, "is an open invitation to perform fishing expeditions" that trample the privacy rights of citizens. Because the Patriot Act allows checks of individuals who are not an investigation's target, Beeson says, the FBI is free to gather "sensitive information about innocent people."

Lee Tien, an attorney with the San Francisco-based Electronic Frontier Foundation, a privacy advocacy group that opposed many elements of the Patriot Act, says the secrecy requirement contained in the law makes it impossible for the public to know how intrusive the letters are or how often they help stop terrorists.

"The government has always had a door (to access) private records, but it has gotten a lot larger," Tien says. "Now the lock has been taken off the door. Patriot (Act) did that."

Requiring recipients of letters to remain silent is a particular concern, says George Christian, director of the Library Connection, the consortium that received a letter in the New Haven case.

"Being gagged has been an extremely frustrating experience," he said on the ACLU website in May, after a federal appeals court allowed the names of recipients of letters to be made public for the first time.

"The entire Patriot Act was up for renewal last winter, and I very much wanted to focus public attention ... on my concerns. ... I was shocked by the restraints the gag order imposed on me."

In papers filed in the Connecticut case, FBI espionage and terrorism specialist Szady wrote that letters must be kept secret to keep targets from learning that they are being watched.

'God forbid it isn't a hoax'

The New Haven case shows how the conflict can play out.

FBI agents, U.S. attorney O'Connor says, suspected the threatening e-mail was from a "crank" but believed they had an "obligation" to pursue it. "We weren't tying up librarians or reading through books," he says. "All we wanted was identifying information. God forbid it isn't a hoax."

For librarian Christian, however, the records request, and the fact that he had to keep it secret from his colleagues for more than a year, left him "shocked," "incensed" and feeling "compromis(ed)."

"The idea that the government can secretly investigate what the public is informing itself about is chilling," Christian says.

The lawsuit, and a separate case begun in 2004, already have produced some changes in how the letters are administered.

In September 2004, after a still-unidentified Internet provider filed suit, a federal district court judge in New York City found that the letters were unconstitutional because they provided no way for a recipient to challenge them in court. The judge also struck down the letter's non-disclosure provision as a violation of the First Amendment's protection of free speech.

The judge in the Connecticut case went further, granting an injunction that allowed the librarians served with letters to disclose that fact, as well as their names.

The government appealed and made concessions. In Connecticut last April, the FBI and Justice Department dropped their opposition to letting the librarians identify themselves and disclose they had been served with a letter.

In March, while both appeals were pending, the Justice Department proposed changes to the Patriot Act to bring the letters in line with the lower court decisions. Now, recipients are permitted to challenge a letter in court and to petition to have their names made public, though a judge need not grant the requests. So far, the Connecticut and New York cases are the only known challenges.

In May, a three-judge panel of the U.S. Court of Appeals in New York cited those changes in dismissing the Connecticut appeal and returning the New York case to the district court. One judge, Richard Cardamone, said retaining the provision that keeps letters secret forever is "antithetical to democratic concepts."

Continuing battle in court

The ACLU plans to continue its fight in the lower court. Beeson says the laws are still unconstitutional because they allow the FBI to launch "phony investigations" under the guise of national security if "they just promise what they want is relevant."

Christian, the Connecticut librarian, says the FBI's "ineptitude," not the end of the supposed terrorist threat in New Haven, caused the government to allow his name to be made public. By failing to black out all identifying information in the legal papers, Christian said, the FBI unwittingly allowed his name to be deduced by some reporters before the appeals court acted.

"The fact that I can speak now is a little like being permitted to call the Fire Department only after a building has burned to the ground," he says.

O'Connor says he doubts the letters will be found unconstitutional. Still, he worries that the lawsuit and the "unfortunate way" in which the FBI has been accused of censorship could lead other companies and institutions to resist "perfectly legitimate" demands for sensitive information.

"Ninety percent (of threatening e-mail) is going to be nothing," he says. "But the good men and women of the FBI are inundated every day with that kind of stuff, and they've got a responsibility.

"If there's information on a potential terrorist that can help, wouldn't you want them to have it?"

TROVE OF INFORMATION

Federal laws expanded by the USA Patriot Act of 2001 give anti-terrorism and counterintelligence investigators access to an array of consumer information beyond what the FBI can obtain through National Security Letters. Consumers seldom learn that their records have been reviewed unless they are prosecuted.

Some examples of records accessible to investigators:

• Driver's licenses, hotel bills, storage rental agreements, apartment leases and other commercial records. The Patriot Act permits investigators to obtain warrants from the secret Foreign Intelligence Surveillance Court.

• Cash deposits, wire and digital money transfers, casino credit records, unusual bank transactions. The Patriot Act expanded the list of financial institutions required to file "suspicious activity reports" to include money-transfer businesses. Suspicious activity reports jumped from about 170,000 in 2000 to nearly 1 million last year, according to the Treasury Department.

• Patient business records and personal health information. The Patriot Act allows access to patient business records through a Foreign Intelligence Surveillance Court order. The Health Insurance Portability and Accountability Act, under rules that took effect in 2003, allows release of health information for national security purposes.

    With only a letter, FBI can gather private data, UT, 6.7.2006, http://www.usatoday.com/news/washington/2006-07-05-fbi-letters_x.htm

F.B.I. Killed Plot in Talking Stage, a Top Aide Says

June 24, 2006
The New York Times
By SCOTT SHANE and ANDREA ZARATE

WASHINGTON, June 23 — A plot to topple the Sears Tower in Chicago and attack the F.B.I. headquarters in Miami was "more aspirational than operational," a top bureau official said Friday, a day after seven Florida men were arrested on terrorism charges.

The official, John S. Pistole, deputy director of the F.B.I., and Attorney General Alberto R. Gonzales said at a news conference that authorities chose to head off the would-be plot, involving scouting potential targets in Florida, when it was largely at the discussion stage.

Mr. Gonzales acknowledged that the men, who had neither weapons nor explosives, posed "no immediate threat." But he added, "they did take sufficient steps that we believe does support this prosecution."

In general, Mr. Gonzales said, homegrown terrorists "may prove to be as dangerous as groups like Al Qaeda."

News of the arrests touched off widespread television coverage of the plot against the Sears Tower, one of the tallest buildings in the world. But details of the indictment disclosed Friday at news conferences in Washington and Miami presented a less alarming picture. The indictment made clear that a pivotal role was played by an unidentified undercover F.B.I. informer who posed as a Qaeda member and met repeatedly with the reported ringleader of the group, Narseal Batiste.

Last month, after months of meeting the fake Qaeda representative, Mr. Batiste told him that "he was experiencing delays because of various problems within his organization" but still hoped to continue his mission of building an "Islamic army" to wage jihad against the United States, the indictment said.

In Chicago, Police Superintendent Philip J. Cline said there was "never any imminent danger to the Sears Tower or to the city of Chicago."

Florida officials emphasized that the reported attack plans apparently never passed the discussion stage.

The seven defendants, 21 to 32 years old, include five Americans, a legal immigrant from Haiti and an illegal Haitian immigrant. They voiced grandiose goals in the yearlong investigation by the federal agents and the police, officials said.

The indictment charged that Mr. Batiste recruited the others beginning in November "to wage war against the United States government." Mr. Gonzales said the men said they wanted to "kill all the devils we can" in attacks that would be "just as good or greater than 9/11."

The men are accused of conspiring to blow up buildings and to provide "material support" to Al Qaeda. The indictment suggests that they mostly sought support from the fake Qaeda agent.

In one of the first acts, the court papers say, the conspirators gave the informer their shoe sizes so he could buy them military boots. Later, the documents continue, Mr. Batiste gave the informer lists of other items needed for the proposed war like uniforms, binoculars, radios, vehicles, bulletproof vests, machine guns and $50,000 in cash.

The suspects received their boots, the indictment says, but it does not make clear which other items were delivered.

Neighbors said at least some of the men were in a religious group called the Seas of David that appeared to mix Christian and Muslim beliefs. The group wore uniforms bearing a Star of David and met for Bible study, prayer and martial arts in a one-story warehouse in the heart of the predominantly Haitian section of the impoverished Liberty City area.

Workers in Bar-B's Grocery next door said the men were always quiet and polite when they stopped in. But at least five men had been previously arrested on charges of assault, drug and weapons charges, Miami-Dade County records show.

"My husband had an idea that something was up in there," said Tonya Poole, who lives across the street from the warehouse. "He would tell me, 'Baby, something's going on.' We would see them in and out at all times at night."

In addition to Mr. Batiste, 32, who was known as Brother Naz or Prince Manna, the authorities identified others born in the United States as Burson Augustin, 21; Rothschild Augustine, 22; Naudimar Herrera, 22; and Stanley G. Phanor, 31. The two Haitian-born defendants are Patrick Abraham, 27, and Lyglenson Lemorin, 31.

All appeared briefly in court in Miami on Friday except Mr. Phanor, who was jailed for violating his probation on an earlier charge, and Mr. Lemorin, who was arrested in Atlanta.

At Mr. Phanor's neatly landscaped peach-colored house, relatives cried and wailed as they answered questions. "This is tearing this family to pieces," said Mr. Phanor's mother, Elizene Phanor. She said her son was a skilled construction worker and pointed to a tile floor he laid.

"My son would wake up every morning and say he loves Jesus," Ms. Phanor said. "Stan is my son, my friend, my life, and if he dies, I die with him."

Sylvain Poantin, 30, who said he grew up with Mr. Phanor, added, "I'm feeling confused and stressed, because Stan isn't that type of person."

Mr. Poantin said that a year and a half ago he was hanging out with Mr. Phanor when Mr. Batiste approached, wearing a long robe and a cap. "We were all intrigued by him," Mr. Poantin said. "He never spoke of violence, and he would call us beloved or brother."

Mr. Poantin said he attended a Bible study session but found Mr. Batiste "arrogant" and did not join the group.

The indictment follows by three weeks the arrest in Canada of 17 men accused of plotting attacks using fertilizer bombs. Some of those suspects were in contact with two Georgians previously charged in a terrorism investigation.

In his news conference at the Justice Department, Mr. Gonzales linked those cases to the Madrid train bombing in 2004 and the London subway attack last July, saying the attacks represented "a new brand of terrorism" from "smaller, more loosely defined cells that are not affiliated with Al Qaeda, but who are inspired by a violent jihadist message."

"The terrorists and suspected terrorists in Madrid and London and Toronto were not sleeper operatives sent on suicide missions," Mr. Gonzales said. "They were students and business people and members of the community."

At a later briefing, Deputy Attorney General Paul J. McNulty answered critics who have said terror prosecutions have often picked out seemingly unsophisticated extremists who are more talk than action. Mr. McNulty said the goal was "prevention through prosecution."

Rather than allow a genuine threat to take shape, he added, investigators move in as soon as there is sufficient evidence to prosecute.

"Today's example is a good example of that approach," he said.

Mr. McNulty said 261 people had been convicted or pleaded guilty in "terrorism or terrorism-related cases" since the Sept. 11, 2001, attacks. An additional 180 people have been charged and are awaiting trial or have been acquitted, had their charges dismissed, are awaiting extradition or are fugitives, according to statistics released Friday.

Mr. McNulty acknowledged that some of the convictions counted as "terrorism related" included crimes that turned out to have no link to terrorism. He said the statistics might be revised to give a more precise accounting of cases with true terrorist connections.

    F.B.I. Killed Plot in Talking Stage, a Top Aide Says, NYT, 24.6.2006, http://www.nytimes.com/2006/06/24/us/24terror.html?hp&ex=1151208000&en=6958d6da29a82188&ei=5094&partner=homepage