Los Angeles Times
March 13, 2000
Pg. 1

By Bob Drogin, Times Staff Writer

FT. MEADE, Md.--Lt. Gen. Michael Hayden, director of the National Security Agency, was home watching television after dinner on Jan. 24 when he got a frantic call: America's global eavesdroppers suddenly had gone deaf.

NSA's main computer network--acres of underground machines devoted to deciphering communication stolen from foreign embassies, missile bases and telephones around the world--had crashed for the first time ever. And no one knew why.

Three days later, the NSA spymaster issued a grim warning to his worried work force. "I said the fact that we're down is an operational secret," Hayden recalled. "Our adversaries cannot know that our intelligence capabilities have been crippled."

To his relief, the news held until after the system was rebooted early Jan. 28. Although teams of experts still are studying the four-day outage, Hayden blames a software "anomaly" in a "complex network running near capacity"--not hackers or enemy agents.

But the blackout of the world's most powerful collection of supercomputers is hard evidence of the vast problems facing America's largest and most secretive intelligence agency. By all accounts, the NSA has lost its lead--and perhaps its way--in the information revolution it helped create.

"The NSA used to have the best computers in the world, bar none," said an official who has been briefed on the recent crisis. "Now they can't even keep them running. What does that tell you? Do you know a modern company that goes off-line for four days? They're struggling."

Intelligence experts blame NSA's woes on budget and staffing cuts since the Cold War, tougher targets and countermeasures and, most important, a hidebound bureaucracy that remains wedded to telex technology in the e-mail age.

"Most of what they were expert in is no longer relevant," a former NSA director complained. "Getting them to embrace the new world has been traumatic. . . . All they're trying to do is hang on and survive."

Rep. Porter J. Goss (R-Fla.), chairman of the House Select Committee on Intelligence, is just as blunt. "Believe me, it's patch, patch, patch out there. We no longer are capable of doing what we used to do."

To some extent, NSA is a victim of its own success. The agency helped spark the new age of intelligence by investing in early computers and telecommunications. Now it is drowning in a daily deluge of data from digital phones, faxes and e-mail--technology that barely existed a decade or so ago.

"The truth is, until the late 1980s, U.S. signals intelligence was way out in front of the rest of the world," said Robert M. Gates, head of the Central Intelligence Agency from 1991 to 1993. "But with the high-tech explosion, there's no way any government agency could keep up with the pace of change."

Take fiber optics. During the Cold War, NSA excelled at intercepting electronic emissions from undersea copper cables, microwave radio relay stations and other systems as the agency snooped on governments and military forces in the Soviet Union, its Warsaw Pact allies and other targets.

Now private industry is girdling the globe with millions of miles of high-capacity fiber-optic cable to replace the old transmission technologies. The new cables carry huge volumes of TV, fax, telephone and other signals in bursts of light. And they are far harder to tap.

"The NSA is really at sea on fiber optics," said a Senate staff member. "They don't know where to begin."

Not everyone agrees. James Bamford, author of "The Puzzle Palace," the only book written about the NSA, argues that the agency is overplaying the fiber-optic threat to confuse America's enemies and to win more sympathy in Congress.

"The places the NSA is interested in today are not going to fiber optics," Bamford said. "North Korea is not fiber optic. Neither is Kosovo or Somalia. The fact is far more is going through the air today than ever before."

In any case, some help is coming. In December, the Navy awarded an $887-million contract to Electric Boat to extensively modify the still-to-be launched Jimmy Carter to become America's most advanced spy submarine.

When completed in 2004, sources said, the Seawolf-class sub will be able to place and recover top-secret "pods" that will tap undersea fiber-optic cables for the first time. The Navy says that the upgrade is for "surveillance, mine warfare, special warfare, payload recovery and advanced communications."

Still, NSA has lost its monopoly on cryptography, the making and breaking of codes. Supposedly uncrackable encryption software is now available on the Internet. The CIA says that several terrorist groups, including Hezbollah, Hamas and Osama bin Laden's organization, now use encryption.

"It's a real challenge," said Jeffrey T. Richelson, who tracks NSA for the National Security Archive, an independent nonprofit group in Washington.

So is another problem: more elusive targets in more and different places.

Since the collapse of the Soviet Union, NSA has tried to track far more nebulous networks of transnational terrorists, drug lords, organized crime figures and other non-state villains, as well as rogue regimes from Serbia to North Korea.

"They've got a much broader drugs-and-thugs focus," said John Pike, an intelligence specialist at the American Federation of Scientists in Washington. "So they're looking for smaller needles in a bigger haystack."

At the same time, NSA often collects signal intelligence--known in the trade as "sigint"--that is ambiguous at best, according to a senior intelligence official who regularly reads NSA intercepts on terrorism.

"You rarely get a sigint smoking gun," the official said. "It's usually very fragmentary. You get a small part of something. Very often you don't even know who you're listening to."

Again, help is coming. Congress has agreed to fund a multibillion-dollar constellation of small, low-altitude spy satellites over the next five to seven years. The new "birds" should help NSA improve its ability to intercept and locate communication and radar signals around the globe, starting in 2002.

Largely invisible to most Americans, NSA has been a cornerstone of U.S. intelligence since it was created by secret executive order in 1952. Long known jokingly as "No Such Agency," it still seeks anonymity: No sign points to the vast complex of mirrored-glass buildings and satellite dishes behind tall trees midway between Baltimore and Washington.

Although exact figures are classified, NSA is said to employ about 35,000 people worldwide. That's only a fraction of its top Cold War strength but still twice the size of the CIA, which handles human intelligence. The NSA's annual budget is estimated at $5 billion. But overall spending for signal intelligence is about $10 billion, or more than one-third of the total that Congress allots to America's 13 intelligence agencies.

In a speech last month, Hayden said that he wanted to "wipe away some of the mystique" surrounding NSA. "Despite what you've seen on television, our agency doesn't do alien autopsies, track the location of your automobile by satellite, nor do we have a squad of assassins," he told American University students.

NSA successes are real enough. Over the years, NSA operatives have listened to Cuban captains in their ships and Kremlin leaders in their limos. They bugged the Chinese embassy in Australia, tapped Cali drug cartel phone calls in Colombia and identified the Libyan suspects in the bombing of a Pan Am jet. They even bugged arms control and trade talks.

"If you've got the other guy's basic negotiating plan and his three fallback plans on a piece of paper when you're sitting down, you're in pretty good shape," said a former Reagan White House intelligence official. "That's what the NSA gave us. . . . There was a constant stream of incredibly good stuff."

Its failures are hard to ignore, however. Many blame NSA for missing warnings that India was preparing to test a series of nuclear weapons in May 1998. India's archrival, Pakistan, soon tested its own bomb, turning the subcontinent into the world's most dangerous flash point.

But now NSA is listening. Shortly after the 1998 tests, an Orion satellite was launched into orbit to help NSA eavesdrop on thousands of government and military communication circuits and frequencies in the two nuclear nations.

NSA faces its harshest criticism in Europe. The European Parliament denounced the agency in hearings last month, as well as its sister services in other English-speaking countries, for allegedly misusing their power. Critics singled out the NSA for allegedly using secret intercepts to help U.S. companies overseas.

They are partly right. NSA has no authority to distribute intelligence to the private sector. But a senior intelligence official said that NSA intercepts have been used to "blow the whistle" on foreign companies that used bribery or other wrongdoing to beat U.S. firms.

In the early 1990s, for example, Indonesia called for competitive bids on a major telecommunications contract. "We found out it was rigged, that the deal already was cut with the Japanese," the official recalled. "We called Indonesia on it. As a result, an American company got a piece of the contract."

In an interview, Hayden chafed at what he calls the two chief complaints leveled by his critics since he took over in May. "One is we're omniscient and we're reading all your e-mail," he said. "And the other is we're incompetent. Neither is true."

But Hayden concedes that the agency desperately needs reform. "This is an incredibly insular agency. It's had high walls around it. It was to keep the secrets in. But it also kept fresh ideas out."

To fight back, Hayden has launched ambitious plans to change the NSA's ethos and mission. He has set new cryptologic goals, reorganized divisions and streamlined decision-making. Perhaps most remarkably for an agency based on keeping secrets, he has reached out to the work force.

Each Monday, Hayden does a 15-minute closed-circuit TV show for NSA employees. He has discussed his testimony on Capitol Hill, done a stand-up in the NSA operations center and phoned in from Europe.

He also sends out a classified e-mail message daily to NSA workers around the world. Recent "dirgrams," as the director's messages are known, have explained how a new "transformation office" will oversee modernization and have sought feedback on a new strategic plan.

"They've hit the reply button 11,000 times," Hayden said with a grin. "I'd rather they do sigint than send me messages. But I look at every one."

Thus did Hayden call an emergency meeting of the NSA's entire headquarters work force early Jan. 27. It was Day Three of what he calls the "Great Outage of '00," and because a blizzard had shut offices for two days, many staffers had just learned that all the computers were dead.

Hundreds of linguists, mathematicians, engineers and others jammed the Friedman Auditorium in the main building. Thousands more watched on closed-circuit TV monitors throughout the complex.

Hayden explained what he knew. Satellites and other systems were still collecting raw intelligence. But until the computers that sift and analyze the data went back up, he warned, U.S. national security was at risk as rarely before.

The response was stunned silence. "You could have heard a thought drop," Hayden said.