- At 7 p.m. on January 24, the massive electronic brain
of the U.S. intelligence system hiccuped, sighed, then shut down. In a
twinkling, billions of dollars' worth of supercomputers, high-speed modems,
and top-secret electronics fell silent. The central data network of the
National Security Agency in leafy Fort Meade, Md., would remain that way
for an agonizing three days - an unprecedented event in the history of
the nation's intelligence services.
- The computer failure illustrates the perilous state of
the NSA, but it also shows how America's role in the high-stakes game of
intelligence collection has changed since the end of the Cold War. During
the decades-long face- off between Washington and Moscow, human spies grabbed
the headlines and captured the public's imagination. But it was in the
field of signals intelligenceSIGINT in the argot of the spy tradewhere
America had the real edge. And that was because of the NSA. Since Harry
Truman created it in 1952, the supersecret eavesdropping agency (the joke
was that the letters stood for "no such agency") has scooped
up electronic signals from everything from faxes and phone calls to radar
waves and missile launches. At its closely guarded campus in Maryland,
teams of linguists and analysts decoded the data and determined what they
meant. The resulting reports, among the most highly classified in the government,
were devoured by presidents, generals, and cabinet secretaries. Around
the globe, the NSA plucked countless secrets from the air. It was a weapon
none could match.
- Now, however, the NSA and America's intelligence community
face a crisis of existential proportions. A number of current and former
NSA officials broke their customary code of silence to speak to U.S. News
about the agency and its future. All say America's security will be increasingly
at risk if the NSA does not manage to pull itself into the futureand soon.
"We've run out of time," one official says. "The world changed
on us, and we didn't change the talent, the culture, the technology fast
- The enemy within. The technology challenges should have
come as no surprise. Enemies who once communicated over the airwaves now
use underground fiber-optic cable. Encryption software that creates nearly
unbreakable codes is available to businessmen and bad guys, depriving the
NSA of an edge it enjoyed for decades. The sheer volume of the data gathered
by the agencymillions and millions of feet of tape recordingsfar outstrips
the ability of its analysts to keep up.
- But the NSA's biggest enemy may be itself. Larger and
more hidebound than the CIA (with its $3.6 billion-a-year budget and 38,000
workers worldwide, it is the largest employer in Maryland), the NSA has
stubbornly resisted change. For decades, NSA headquarters was cut off from
the outside world. Technologically, its elite employees were miles ahead
of the rest of the world. So much so, it seems, that they discounted the
technology revolution roaring around them. "There is . . . a total
inability to come to grips with what's happening to us," an official
says. "There is an incredible self-centered arrogance about how brilliant
we are, how successful we've been for the nation. That's all true, but
it's blinding us to the future."
- That smugness lay behind last month's computer failure.
Two years ago, the Senate Intelligence Committee ordered its technical
advisory group to study the NSA. The experts found an agency "in desperate
need of organizational restructuring and modernization of its information
technology infrastructure," committee chairman Sen. Richard Shelby
said. Sources tell U.S. News that private contractors warned the NSA's
Q Group that its proposed design to begin upgrading its data networks,
a project dubbed Light Core, would not work. The NSA went ahead with it
anyway. Today the system requires frequent technological band-aids.
- The most damning assessment of the NSA's recent management
came from two study panels that its new director, Air Force Lt. Gen. Michael
Hayden, convened before launching what may be a do-or-die effort to shake
up the agency. "The individual capabilities at NSA far surpass the
totality," one report concluded. The implication: The agency's mathematicians,
linguists, analysts, and technologists are being impeded by their own institution.
- Listening in. Surprisingly, the NSA's intelligence failures
have been relatively fewso far. But more crises loom because of the proliferation
of encryption technology. "The crypto revolution is, in some ways,
a storm out to sea," says former NSA general counsel Stewart Baker.
"But one day, it's going to roar in and just wipe out large chunks
of what the agency does."
- The NSA still performs well in emergencies like Kosovo,
officials say. But while it can marshal its forces to cover individual
targets, officials say the NSA is stretched so thin that it no longer provides
the sustained reporting vital for early warnings to U.S. officials.
- Ironically, this should be the golden age of electronic
espionage. Global com- munications have explod- ed in a dizzying array
of mobile phones, Internet nodes, and computer networks, providing rich
targets for Fort Meade's electronics wizards.
- But the NSA seems ill-prepared for the new opportunities.
The world it once knew so well suddenly went C2Cthat's geekspeak for "computer
to computer," a networked planet where good guys and bad guys communicate
on the same electronic grid. The NSA, however, still relies heavily on
eavesdropping satellites built for the Soviet era. The result? The NSA
intelligence "catch" becomes less useful each year.
- Staffing is another problem. In recent years, the NSA
has lost 7,000 employees, mostly intelligence analysts and linguists whose
skills take years to replace. Thanks to a de facto policy against layoffs,
the NSA has a work force that doesn't have all the skills it needs and
has some skills that are now obsolete.
- Congress and the White House share blame for neglecting
an agency once showered with funds. NSA's classified capital budget has
been chopped 35 percent in the past eight years, one source says. While
it has received small increases the past two years, it will have to risk
cutting back on intelligence it provides U.S. leaders now.
- That's not all. The NSA will have to de-emphasize passive
intelligence collection from a distance in favor of more-intrusive methods
because of encryption and other advances, officials inside and outside
the agency said. That means electronic high jinks of a type usually associated
with the CIA: swiping computer passwords, spreading software viruses, infiltrating
listening devices into enemy communications systems. Some see as a model
for the NSA's future an even more secretive (and unacknowledged) U.S. agency,
the Special Collection Service. Staffed jointly by CIA and NSA operatives,
its elite teams of eavesdroppers are dispatched on covert missions worldwide.
- Even if the NSA is up to the challenge, it's not clear
the country is. The House may hold hearings this year on Echelon, a global
scanning system operated by the NSA and its counterparts in Britain, Canada,
Australia, and New Zealand. Critics say Echelon is used to steal trade
secrets from nonparticipants and allows the five countries to monitor one
another's citizens. (The charge is ironic. Even congressional watchdogs
say the NSA abides scrupulously by 1970s laws against spying on Americans.)
Still, obtaining quality signals intelligence in the years ahead will certainly
mean taking more risks, and the cost of failure could be high for the NSA's
eavesdroppers. "I'm just not sure the government and the people will
back them up if they get caught doing it," says Baker, the NSA's former
- In the bubble. Not surprisingly, given the arcane nature
of its work, the NSA is a peculiar place to work. "You can always
tell an NSA extrovert," an agency joke goes. "He looks at your
shoe tips instead of his." There's a darker side to the NSA's insular
bureaucratic culture, though. Risk-taking is sapped, officials say, by
zealous internal investigators who pounce on minor infractions (the agency
has almost 100 lawyers). Endless hours are spent in a byzantine system
to achieve perfect fairness in promotions. (The NSA had 485 promotion boards
until Hayden disbanded most of them.)
- Reforming the NSA won't be easy, but Hayden is trying.
In a six-minute address to agency employees on November 15, Hayden announced
what he called "100 Days of Change." He then moved rapidly, creating
his own small leadership team to enforce reforms. Layoffs, he warned, were
now a possibilityif that's what is needed to make the agency work. Inside
the NSA's sleek Ops 2B headquarters building, an elevator traditionally
reserved for executives is now available for all employees to use.
- "DIRgrams." Most strikingly, as director, Hayden
has tried to open up the NSA and break down the wall of secrecy that has
deprived it of both a Washington constituency and private-sector innovations.
Hayden, who broadcasts his moves in regular "DIRgrams" to the
NSA work force, went to the investment firm Legg Mason Wood Walker Inc.
to fill a new top slot, chief financial manager. "The agency needs
to do some adapting," Hayden said in an interview. The pillars it
rested on during the Cold War "are now all up for grabs."
- Hayden, 54, has received strong reviews from a worried
Congressand strong initial resistance from some of the agency's civilian
oligarchs. "Their response to '100 Days of Change' has been business
as usual," says one official. Among the most caustic defenders of
the agency's old ways has been his civilian deputy, Barbara McNamara. U.S.
News was told that members of the NSA Advisory Board, an outside panel
of military and industry leaders, recommended to Hayden that he replace
her. He has yet to do so.
- With its military director rotating every three years,
the NSA is run in practice by civilian career employees. A former top official
recalled having to explain to an incredulous agency director, a three-star
officer, why his orders weren't being followed. "They're so used to
people coming and going, there's a tendency to wait for a while,"
the official said.
- In the end, all the new technology may prove to be the
least of the NSA's problems. "Overcoming technological challenge is
what NSA does best," says a top intelligence official. Acknowledging
it no longer has all the answers may be harder.
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