    [House Hearing, 110 Congress]
    [From the U.S. Government Publishing Office]

                     NATIONAL SECURITY LETTERS REFORM ACT
                                    OF 2007

    =======================================================================

                                    HEARING

                                   BEFORE THE

                       SUBCOMMITTEE ON THE CONSTITUTION,
                       CIVIL RIGHTS, AND CIVIL LIBERTIES

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                   H.R. 3189

                                   __________

                                 APRIL 15, 2008

                                   __________

                               Serial No. 110-96

                                   __________

             Printed for the use of the Committee on the Judiciary

          Available via the World Wide Web: http://judiciary.house.gov

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                           COMMITTEE ON THE JUDICIARY

                     JOHN CONYERS, Jr., Michigan, Chairman
    HOWARD L. BERMAN, California         LAMAR SMITH, Texas
    RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr.,
    JERROLD NADLER, New York                 Wisconsin
    ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
    MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
    ZOE LOFGREN, California              BOB GOODLATTE, Virginia
    SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
    MAXINE WATERS, California            DANIEL E. LUNGREN, California
    WILLIAM D. DELAHUNT, Massachusetts   CHRIS CANNON, Utah
    ROBERT WEXLER, Florida               RIC KELLER, Florida
    LINDA T. SANCHEZ, California         DARRELL ISSA, California
    STEVE COHEN, Tennessee               MIKE PENCE, Indiana
    HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
    BETTY SUTTON, Ohio                   STEVE KING, Iowa
    LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
    BRAD SHERMAN, California             TRENT FRANKS, Arizona
    TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
    ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
    ADAM B. SCHIFF, California
    ARTUR DAVIS, Alabama
    DEBBIE WASSERMAN SCHULTZ, Florida
    KEITH ELLISON, Minnesota

                Perry Apelbaum, Staff Director and Chief Counsel
          Sean McLaughlin, Minority Chief of Staff and General Counsel
                                     ------

      Subcommittee on the Constitution, Civil Rights, and Civil Liberties

                       JERROLD NADLER, New York, Chairman

    ARTUR DAVIS, Alabama                 TRENT FRANKS, Arizona
    DEBBIE WASSERMAN SCHULTZ, Florida    MIKE PENCE, Indiana
    KEITH ELLISON, Minnesota             DARRELL ISSA, California
    JOHN CONYERS, Jr., Michigan          STEVE KING, Iowa
    ROBERT C. ``BOBBY'' SCOTT, Virginia  JIM JORDAN, Ohio
    MELVIN L. WATT, North Carolina
    STEVE COHEN, Tennessee

                         David Lachmann, Chief of Staff

                        Paul B. Taylor, Minority Counsel

                                C O N T E N T S

                                  ----------

                                 APRIL 15, 2008

                                                                       Page

                               OPENING STATEMENTS

    The Honorable Jerrold Nadler, a Representative in Congress from
      the State of New York, and Chairman, Subcommittee on the
      Constitution, Civil Rights, and Civil Liberties................     1
    The Honorable Trent Franks, a Representative in Congress from the
      State of Arizona, and Ranking Member, Subcommittee on the
      Constitution, Civil Rights, and Civil Liberties................     3

                                   WITNESSES

    Mr. Glenn A. Fine, Inspector General, Office of the Inspector
      General, U.S. Department of Justice
      Oral Testimony.................................................     7
      Prepared Statement.............................................     9
    Ms. Valerie E. Caproni, General Counsel, Office of the General
      Counsel, Federal Bureau of Investigation
      Oral Testimony.................................................    14
      Prepared Statement.............................................    16
    Mr. Jameel Jaffer, Director, American Civil Liberties Union's
      National Security Project
      Oral Testimony.................................................    30
      Prepared Statement.............................................    32
    Mr. Bruce Fein, Chairman of the American Freedon Agenda, former
      Assistant Deputy Attorney General, U.S. Department of Justice
      Oral Testimony.................................................    44
      Prepared Statement.............................................    45
    Mr. Michael J. Woods, former Chief, FBI National Security Law
      Unit
      Oral Testimony.................................................    47
      Prepared Statement.............................................    49
    Mr. David Kris, former Associate Deputy Attorney General, U.S.
      Department of Justice
      Oral Testimony.................................................    91
      Prepared Statement.............................................    92

                                    APPENDIX

                   Material Submitted for the Hearing Record

    H.R. 3189, the ``National Security Letters Reform Act of 2007''..   132

                  NATIONAL SECURITY LETTERS REFORM ACT OF 2007

                                  ----------

                            TUESDAY, APRIL 15, 2008

                  House of Representatives,
                  Subcommittee on the Constitution,
                     Civil Rights, and Civil Liberties,
                                    Committee on the Judiciary,
                                                        Washington, DC.

        The Subcommittee met, pursuant to notice, at 1:12 p.m., in
    Room 2141, Rayburn House Office Building, the Honorable Jerrold
    Nadler (Chairman of the Subcommittee) presiding.
        Present: Representatives Conyers, Nadler, Wasserman
    Schultz, Ellison, Scott, Watt, and Franks.
        Staff present: David Lachmann, Subcommittee Chief of Staff;
    Robert Reed, Majority Counsel; Carole Angel, Majority
    Legislative Assistant; Caroline Mays, Majority Professional
    Staff Member; Paul B. Taylor, Minority Counsel; and Jennifer
    Burba, Minority Staff Assistant.
        Mr. Nadler. This hearing of the Subcommittee on the
    Constitution, Civil Rights, and Civil Liberties will come to
    order.
        Welcome, everyone.
        Without objection, the Chair is authorized to declare a
    recess, which the Chair will do when they call votes on the
    floor.
        The Chair will recognize himself now for 5 minutes for an
    opening statement.
        Today's hearing focuses on the law governing National
    Security Letters, the widespread abuses of the authority given
    to the FBI to issue NSLs is documented in two reports by the
    Department of Justice's Inspector General, and proposed
    legislation to address these threats to the liberty and privacy
    of law-abiding Americans.
        A National Security Letter can be issued to a third party,
    such as a health insurance company or an Internet service
    provider, ordering it to reveal all the information in its
    possession about you and your communications, your transactions
    or the books you read. The third party is prohibited from
    telling you or anyone else, aside from the attorney or those
    processing the information, about the order.
        So, you cannot object to the NSL in court, as you could to
    a subpoena, because you do not know about it. And the third
    party may have no interest in going to court to protect your
    rights.
        In fact, we invited many of these third parties here today
    to testify, but they were gagged from disclosing that they had
    received NSL requests and were chilled from engaging in this
    important debate, which directly impacts both them and the
    general public.
        When we debated the reauthorization of the PATRIOT Act a
    few years ago, Congress and the public was not yet aware of the
    extent of the abuses brought about by the FBI's overuse of NSLs
    outside the bounds of their proper authority.
        Indeed, even the changes made to the NSL provisions by the
    2005 PATRIOT Act Reauthorization Act were, for all practical
    purposes, meaningless. For example, the court is authorized by
    the 2005 amendment to modify or set aside the gag order, if it
    finds there is no reason to believe that disclosure would
    endanger national security, diplomatic relations or anyone's
    life or safety.
        But the court must accept the government's assertion of
    such harm as conclusive and cannot use its own judgment as to
    whether, in fact, such harm would result. Since the
    government's assertion is conclusive, there is no room for the
    court at all, and the provision is meaningless.
        In addition, the burden remains on the recipient of the NSL
    to challenge the order. This would seem to violate the first
    amendment's heavy burden of proof against prior restraints of
    publication.
        When these provisions were first debated, some of us had
    predicted that the unrestricted authority of the FBI to issue
    NSLs would be abused. Unfortunately, these fears have been
    realized. The I.G.'s audit (INAUDIBLE) the NSLs have been used
    by the FBI to collect and retain private information about
    American citizens who are not reasonably suspected of being
    involved in terrorism.
        That is why I have introduced, along with a number of
    others, the bipartisan National Security Letters Reform Act of
    2007. This legislation will protect Americans against
    unnecessary and unsupported intrusions into their private lives
    and, more importantly, should prevent abuse of power by the
    government. We need to fix the law to bring it in line with the
    Constitution, to enhance checks and balances, and in doing so,
    to better protect our national security.
        Already, courts have found parts of the NSL authority to be
    too broad and unconstitutional. The provisions that state the
    NSL recipients are forbidden from disclosing the demand to the
    targeted individual or to almost anyone else but their
    attorney, has already been struck down as a prior restraint,
    repugnant to the first amendment. Another Federal court found
    the NSL authority to be unconstitutional, because it violates
    the fourth amendment's protection against unreasonable searches
    and seizures.
        The bipartisan bill that I am the lead co-sponsor of would
    lawfully authorize intelligence agencies to use NSLs with
    proper safeguards.
        Specifically, it:
        Would restore the standard that the records sought pertain
    to a suspected terrorist or spy;
        Would give an NSL recipient the right to challenge the
    letter and its non-disclosure requirement--a real right to
    challenge, not one in which the government's assertion is
    dispositive--to place a time limit on the gag order and allow
    for court-approved extensions of that time limit;
        Would provide a course of action to any person aggrieved by
    the illegal provision of records pertaining to that person as
    the result of an NSL issued contrary to law, or of an NSL
    issued, based on the certification made without factual
    foundation;
        Would give notice to the target of an NSL if the government
    seeks to use the records obtained from the NSL in a subsequent
    proceeding;
        Would give the target an opportunity to receive legal
    counsel and challenge the use of those records in such a
    subsequent proceeding;
        Would provide for minimization procedures to ensure that
    information obtained pursuant to an NSL regarding persons that
    are no longer of interest in an authorized investigation is
    destroyed; and
        Would address the voluntary disclosure of customer
    communications or records that had been obtained through so-
    called ``exigent'' letters.
        I do not think it is too much to ask the FBI to follow the
    Constitution and the rule of law while it goes about its job of
    protecting us. The abuses of power by the DOJ and the FBI show
    that legislative fixes are needed to check the over-broad and
    unchecked investigatory power.
        By requiring that NSLs be issued only if the FBI has made a
    factual, individualized showing that the directive sought to
    obtain to a suspected terrorist or spy, we will help keep our
    law enforcement focused on real threats.
        The time for this over-broad power to be curtailed is now,
    and I am hopeful that we will be successful. The abuses by the
    DOJ and the FBI have proven that these legislative fixes are a
    necessary check on the investigatory power.
        Just today, the Electronic Frontier Foundation, EFF,
    disclosed that documents obtained by the EFF through a Freedom
    of Information Act request showed a misuse of the FBI's
    National Security Letter authority, issued at the direction of
    FBI headquarters went unreported to the Intelligence Oversight
    Board for almost 3 years.
        Self-policing has proven time and again to be both
    undemocratic and ineffective. It is not enough to mandate that
    the FBI fix internal management problems and record keeping,
    because the statute itself authorizes the unchecked collection
    of information of innocent Americans. Congress should act now
    to fix the underlying statutes authorizing this
    unconstitutional and unchecked authority, which has led to the
    abuses revealed in the I.G. report, and to hold those
    responsible for these violations accountable.
        We must have intelligence gathering. We need our safety.
    But we must do our intelligence gathering under constitutional
    and legal checks to protect our privacy and our liberties, as
    well as our safety.
        I want to welcome our witnesses. I look forward to their
    testimony.
        I yield back the balance of my time, and I now recognize
    the distinguished Ranking minority Member of the Committee, the
    gentleman from Arizona, Mr. Franks, for 5 minutes for an
    opening statement.
        Mr. Franks. Well, thank you, Mr. Chairman.
        Mr. Chairman, the bill that we address today at this
    hearing, H.R. 3189, would, in my sincere judgment, render
    National Security Letters as ineffective as they were prior to
    9/11, and would further squelch the initiation of vital
    terrorism investigations. By changing the standards for such
    terrorism investigations, the bill would preclude many
    investigations that would otherwise be able to go forward, and
    would do so in a manner directly contrary to the findings of
    two recent Inspector General's reports and the 9/11 Commission,
    which counseled against returning to the investigative model
    that failed before the 9/11 attack.
        H.R. 3189 would also provide the subjects of terrorism
    investigations with more protections than they enjoy by even
    ordinary domestic American criminals under the clear Supreme
    Court precedents, such as the United States v. Miller, that
    hold that no fourth amendment protections apply to business
    records handed over to a third party.
        The FBI has testified as follows: ``National security
    letters generally permit us to obtain the same sort of
    documents from third party businesses that prosecutors and
    agents obtain in a criminal investigation with grand jury
    subpoenas. National security letters have been instrumental in
    breaking up cells like the Lackawanna Six and the Northern
    Virginia Jihad, through the use of NSLs, the FBI has traced
    sources of terrorist funding, established telephone linkages
    that resulted in further investigations and arrests, and
    arrests of suspicious associates with deadly weapons and
    explosives. NSLs also allow the FBI to link terrorists together
    financially and pinpoint cells and operatives by following the
    money.''
        According to the Inspector General's first report on NSLs,
    issued in March 2007, NSLs were not an effective means of
    preventing terrorist attacks before the 9/11 attacks, because
    ``prior to the PATRIOT Act, agents could seek National Security
    Letters for telephone and electronic communication
    transactional records from telephone companies and Internet
    service providers, records from financial institutions and
    information from credit bureaus, only upon demonstrating
    `specific and articulable facts' giving reason to believe that
    the subject was `an agent of a foreign power.' FBI agents told
    us that this prediction standard limited the utility of NSLs as
    an investigative tool. FBI field and headquarters personnel who
    have worked with National Security Letters before and after the
    PATRIOT Act believe that their use and effectiveness has
    significantly increased after the PATRIOT Act was enacted.''
        FBI headquarters and field personnel told the Inspector
    General that they found National Security Letters to be
    indispensable for ``our bread and butter.''
        Mr. Chairman, H.R. 3189 would dramatically stem the flow of
    information throughout the investigative process by effectively
    precluding their availability before the very first steps can
    be taken down an investigatory trail.
        On the video screens right now, there is a diagram from the
    Inspector General's report that shows all of us the
    investigative process that would be halted, were National
    Security Letters' authorizations limited, from requests for
    FISA warrants to the general intelligence reports to be shared
    with other agencies.
        The Inspector General report that information derived from
    National Security Letters ``most often is used for intelligence
    purposes rather than for criminal investigation.'' Yet H.R.
    3189 would impose the failed model based on criminal
    prosecutions alone that failed to prevent the 9/11 attacks.
        As the 9/11 Commission itself concluded, ``The law
    enforcement process is concerned with proving the guilt of
    persons apprehended and charged. It was not designed to ask if
    the events might be harbingers of worse things to come. Nor did
    it allow for aggregating and analyzing facts to see if they
    could provide clues to terrorist tactics more generally.''
        Mr. Chairman, the Inspector General's report issued in
    March 2008 concluded that, while some irregularities remained
    in the administration of National Security Letters, the FBI had
    made great progress in implementing procedures that will
    correct errors before they are made. So, oversight has been
    successful.
        And I just want to add, it is commonplace to hear critics
    of national security programs to quote Benjamin Franklin as
    saying, ``If we surrender our liberties in the name of
    security, we shall have neither.''
        Mr. Chairman, those are not Mr. Franklin's actual words.
    Accurately quoted, Mr. Franklin's words are much more
    revealing. Ben Franklin wrote these words. He said, ``Those who
    would give up essential liberty to purchase a little temporary
    safety, deserve neither liberty nor safety.''
        H.R. 3189 would protect no essential liberties, and it
    would significantly weaken national security. And I am hoping,
    Mr. Chairman, that along with several other bills that have
    been before this Committee that seem to protect terrorists more
    than American citizens, that we can somehow get past this.
        And with that, I yield back.
        Mr. Nadler. The gentleman yields back, and I thank the
    gentleman.
        Without objection, other Members' opening statements will
    be included in the record.
        We have two distinguished panels of witnesses today.
        Our first witness is Glenn Fine, the Inspector General for
    the Department of Justice, since December 15, 2000. Mr. Fine
    has worked at the Department of Justice of the Inspector
    General since--or the Inspector General of the Department of
    Justice--since January 1995. Initially, he was special counsel
    to the I.G. In 1996, he became the director of the Office of
    Inspector General, Special Investigations and Review Unit.
        Before joining the Office of Inspector General, Mr. Fine
    was an attorney specializing in labor and employment law at a
    law firm in Washington, D.C. Prior to that, from 1986 to 1989,
    Mr. Fine served as assistant U.S. attorney in the Washington,
    D.C., U.S. Attorney's Office.
        He holds an A.B. from Harvard College, a B.A. and M.A.
    degrees from Oxford University--I think the first person I have
    seen with two B.A. degrees, an A.B. and a B.A.--and a law
    degree from Harvard Law School.
        Valerie Caproni has served as the general counsel for the
    Federal Bureau of Investigation since August of 2003. She holds
    a B.A. from Newcomb College at Tulane University and a law
    degree from the University of Georgia.
        Ms. Caproni clerked for the Honorable Phyllis Kravitch,
    United States Court of Appeals, 11th Circuit; was an assistant
    U.S. attorney in the Criminal Division of the U.S. Attorney's
    Office, Eastern District of New York; and a general counsel to
    the New York State Urban Development Corporation--a very
    challenging job.
        She served as Chief of Special Prosecutions and Chief of
    the Organized Crime and Racketeering Section before becoming
    Chief of the Criminal Division in 1994. As chief of the
    Criminal Division, she supervised approximately 100 assistant
    U.S. attorneys.
        Ms. Caproni remained chief of the Criminal Division until
    she departed in 1998, to become the regional director of the
    Pacific regional office of the Securities and Exchange
    Commission.
        I would note with some regret that we did not receive Ms.
    Caproni's testimony prior to the hearing. We do try to show
    some flexibility to our witnesses in recognition of the fact
    that their assistance to the Committee is work--but the rule
    that we should get the testimony in advance exists for a
    reason. Members do read the testimony ahead of time to prepare
    for these hearings. It is especially important, because the
    witnesses make only a 5-minute statement summarizing their
    written testimony.
        This is not a new issue for the Bureau or for the
    Administration. The Bureau has commented on the I.G.'s findings
    and provided testimony in the past. I am at a loss to
    understand why the Bureau was unable to provide the testimony
    in advance.
        In view of the importance of the issue and the importance
    of Ms. Caproni's testimony, I will allow her to proceed. But I
    must say that the Administration has too often refused to
    provide this Committee with answers to appropriate questions,
    documents necessary to our work, and in many instances refused
    to provide a legal basis for doing so.
        I do not take this conduct lightly. I hope that Ms. Caproni
    will take back to the Bureau and to the Administration the
    Committee's frustration with the seeming inability or
    unwillingness to cooperate in our work.
        The rights of all Americans at stake in this matter are
    great, and I do not appreciate the investigation being treated
    in a cavalier manner.
        Without objection, the written statements of the witnesses
    will be made part of the record in their entirety.
        We would ask each of you to summarize your testimony in 5
    minutes or less. To help you keep time, there is a timing light
    at your table. When 1 minute remains, the light will switch
    from green to yellow, and then to red when the 5 minutes are
    up.
        Before we begin, it is customary for the Committee to swear
    in its witnesses.
        If you could please stand and raise your right hand to take
    the oath.
        Do you swear or affirm under penalty of perjury that the
    testimony you are about to give is true and correct, to the
    best of your knowledge, information and belief?
        Thank you.
        Let the record reflect that the witnesses answered in the
    affirmative, and you may be seated.
        I will now recognize Mr. Fine for 5 minutes.

     TESTIMONY OF GLENN A. FINE, INSPECTOR GENERAL, OFFICE OF THE
             INSPECTOR GENERAL, U.S. DEPARTMENT OF JUSTICE

        Mr. Fine. Mr. Chairman, Ranking Member Franks and Members
    of the Subcommittee, thank you for inviting me to testify about
    the Office of the Inspector General's recent reports on the
    FBI's use of National Security Letters and Section 215 orders.
        Over the last 2 years, the OIG has issued two sets of
    reports on these subjects. Our first two reports, issued in
    March 2007, found widespread and serious misuse of National
    Security Letters. Last month, as required by the PATRIOT
    Reauthorization Act, we completed two follow-up reports, which
    assessed the use of National Security Letters in 2006, the
    FBI's response to our first report and the FBI's use of Section
    215 orders.
        First, however, I would like to thank the OIG staff who
    worked on these reports for their outstanding efforts. The
    three leaders of the team--Roslyn Mazer, Mara Lee, and Michael
    Gulledge--are with me here today, and I would like to thank
    them for their work.
        My written statement details the findings of our two recent
    reports. In my oral statement today, I will briefly highlight
    some of these findings.
        First, our recent report on National Security Letters,
    NSLs, concluded that the FBI and the department have made
    significant progress in implementing the recommendations
    contained in our first report and in adopting other corrective
    actions. We found that the FBI has devoted substantial time,
    energy and resources toward seeking to ensure that its field
    managers and agents understand the seriousness of the FBI's
    shortcomings and their responsibility for correcting these
    deficiencies.
        Among the actions that the FBI has taken include:
    developing a new data system to facilitate issuance and
    tracking of NSLs and to improve the accuracy of required data
    in congressional and public reports; issuing numerous guidance
    memoranda and providing mandatory training to FBI employees on
    the proper use of NSLs; and prohibiting the use of exigent
    letters.
        The FBI also has created a new Office of Integrity and
    Compliance, modeled after private sector compliance programs.
    In addition, the department's National Security Division is
    conducting reviews to examine whether the FBI is using various
    intelligence techniques, including NSLs, in accordance with
    applicable laws, guidelines and policies.
        Yet, while the FBI and the department have taken positive
    steps, we also concluded that additional work remains to be
    done. For example, a department working group was directed to
    examine how NSL-derived information is used and retained by the
    FBI. We concluded that the working group's initial proposal did
    not adequately address measures to label or tag NSL-derived
    information or to minimize the retention and dissemination of
    such information.
        Our report also notes that the FBI still needs to address
    or fully implement several other key recommendations, such as
    reevaluating the reporting structure for the chief division
    counsel in each FBI field office.
        As required by the PATRIOT Reauthorization Act, our recent
    report also reviewed the FBI's use of NSLs in 2006, which, it
    is important to note, is a period before our first NSL report
    was issued in 2007.
        Our recent report found a continued upward trend in the use
    of NSLs, with 49,000 requests in 2006--a 4.7 percent increase
    from the previous year. The percentage of NSL requests that
    related to investigations of U.S. persons also continued to
    increase, to approximately 60 percent.
        We also examined the FBI's own reviews of field case files,
    which found a rate of NSL violations, 9.4 percent, that was
    even higher than what we found, 7.5 percent.
        The number of possible intelligence violations identified
    by the field reviews was 640, which is a substantial number.
    Moreover, in 2006, the number of violations reported by FBI
    field offices was significantly higher than the number of
    reported violations in prior years.
        Our recent review also found that 97 percent of the NSLs in
    2006 imposed non-disclosure and confidentiality requirements.
        It is also important to note that the most serious
    violations involving the use of NSL authorities in 2006 relate
    to the FBI's use of so-called exigent letters, a practice by
    which the FBI improperly obtained telephone toll billing
    records from three communication service providers without
    first issuing NSLs.
        The OIG is in the process of completing a separate
    investigation examining the use of these exigent letters, as
    well as the use of ``blanket NSLs'' and other improper requests
    for telephone records. Among other things, our upcoming report
    will assess the accountability of FBI personnel for these
    practices.
        As to our follow-up report on Section 215 orders, we found
    that FBI agents continued to encounter processing delays for
    obtaining these orders. The average processing time for such
    orders was 147 days.
        We did not identify any illegal use of Section 215 orders
    in 2006. However, our report discusses one case in which the
    FISA Court twice refused to authorize a Section 215 order,
    because of concerns that the investigation was based on
    protected first amendment activity. However, we found that the
    FBI subsequently issued NSLs to obtain information about the
    subject based on the same factual predicate.
        In conclusion, we believe the FBI has evidenced a
    commitment to correcting the serious problems we found in our
    first report on National Security Letters and has made
    significant progress in addressing the need to improve
    compliance in the FBI's use of NSLs. However, the FBI and the
    department's corrective measures are not yet fully implemented,
    and we believe it is too early to determine whether these
    measures will fully eliminate the problems we found with the
    use of these authorities.
        That concludes my prepared statement, and I would be
    pleased to answer any questions.
        [The prepared statement of Mr. Fine follows:]
                      Prepared Statement of Glenn A. Fine
        Mr. Chairman, Ranking Member Franks, and Subcommittee Members:
        Thank you for inviting me to testify about the Office of the
    Inspector General's (OIG) recent reports on the Federal Bureau of
    Investigation's (FBI) use of national security letters (NSL) and
    Section 215 orders to obtain business records.
        The Patriot Reauthorization Act of 2005 (Reauthorization Act)
    directed the OIG to review the FBI's use of NSLs and Section 215 orders
    in two separate time periods. The OIG's first reports, issued in March
    2007, examined the FBI's use of NSLs from 2003 through 2005, and its
    use of 215 orders from 2002 through 2005.
        As required by the Reauthorization Act, last month the OIG issued
    two follow-up reports that examined the use of these authorities in
    2006. In addition, our follow-up report on national security letters
    examined the measures taken or proposed by the FBI and the Department
    of Justice (Department) to address the serious misuse of national
    security letters that our first NSL report detailed.
        In this written statement, I summarize the findings of the two
    reports that we issued last month. I first discuss the findings
    regarding the FBI's and the Department's corrective actions to address
    the serious deficiencies we described in last year's NSL report. I then
    summarize the findings regarding the FBI's use of NSLs in 2006.
    Finally, I summarize our report on the FBI's use of Section 215 orders
    in 2006.
                          i. national security letters
        To conduct the follow-up review on the FBI's use of NSLs that we
    issued last month, the OIG interviewed FBI personnel at Headquarters
    and in FBI field offices, and Department personnel in the National
    Security Division and the Office of the Chief Privacy and Civil
    Liberties Officer. We analyzed more than 18,000 documents, including
    NSL-related guidance and training materials developed by the FBI since
    our first NSL report. OIG personnel also observed the FBI's new data
    system designed to manage and track NSLs, and they visited three FBI
    field offices to assess the accuracy of the FBI's review of NSLs issued
    by those offices. In particular, the OIG re-examined case files that
    had been reviewed by FBI inspectors and compared our findings to the
    FBI's findings. We also analyzed data in the FBI's NSL tracking
    database and examined the Department's annual public reports and the
    Department's semiannual classified reports to Congress to evaluate NSL
    requests in 2006 and trends in NSL usage. The following sections
    summarize the findings in our follow-up report based on this work.
    A. Corrective Actions Implemented or Proposed Since our March 2007 NSL
            Report
        Our review concluded that the FBI and the Department have made
    significant progress in implementing the recommendations contained in
    our first NSL report and in adopting other corrective actions to
    address the serious problems we identified in the FBI's use of NSLs. We
    also found that the FBI has devoted substantial time, energy, and
    resources toward ensuring that its field managers and agents understand
    the seriousness of the FBI's shortcomings in its use of NSLs and their
    responsibility for correcting these deficiencies.
        Our interviews of senior FBI officials found that the FBI's
    leadership is committed to correcting the serious deficiencies in the
    FBI's use of NSLs identified in our first report. In addition, the
    FBI's leadership has attempted to reinforce throughout the FBI the
    necessity for adhering to the rules governing the use of NSL
    authorities.
        We determined that the FBI has taken a variety of actions to
    address the deficiencies in its use and oversight of NSLs since
    issuance of our March 2007 report. The actions include:

              Developing a new NSL data system to facilitate
            issuance and tracking of NSLs and improve the accuracy of data
            on NSL usage in required congressional and public reports;

              Issuing numerous NSL policies and guidance memoranda
            and providing mandatory training to FBI employees on the proper
            use of NSLs; and

              Prohibiting the use of exigent letters.

        The FBI has also created a new Office of Integrity and Compliance
    (OIC), modeled after private sector compliance programs, to seek to
    ensure that national security investigations and other FBI activities
    are conducted in a manner consistent with appropriate laws, guidelines,
    regulations, and policies. We believe this office can perform a
    valuable function by providing a process for identifying compliance
    requirements and risks, assessing existing FBI control mechanisms, and
    developing and implementing better controls to ensure proper use of
    NSLs. However, we recommend that the FBI consider providing the OIC
    with a larger permanent staffing level so that the OIC can develop the
    skills, knowledge, and independence to lead or directly carry out the
    critical elements of this new compliance program.
        Our report also noted that the Department's National Security
    Division has implemented additional measures to promote better
    compliance with NSL authorities and to address other issues raised by
    our first report. For example, in 2007 the National Security Division
    began reviews to examine whether the FBI is using various intelligence
    techniques--including NSLs--in accordance with applicable laws,
    guidelines, and policies.
        Yet, while the FBI and the Department have taken positive steps to
    address the issues that contributed to the serious misuse of NSL
    authorities we described in our March 2007 report, we concluded that
    additional work remains to be done. For example, in response to the
    recommendations in our 2007 NSL report, the Department's Office of the
    Chief Privacy and Civil Liberties Officer convened a working group to
    examine how NSL-derived information is used and retained by the FBI,
    with special emphasis on the protection of privacy interests. Our
    assessment of the working group's initial proposal that was completed
    in August 2007 but subsequently withdrawn is that the proposal did not
    adequately address measures to label or tag NSL-derived information or
    to minimize the retention and dissemination of such information. In our
    recent report, we recommended that the working group consider further
    whether and how to provide additional privacy safeguards and measures
    for minimizing the retention of NSL-derived information.
        In addition, our report notes that the FBI still needs to address
    or fully implement several of the key recommendations in our March 2007
    report. For example, we recommended that the FBI address our concern
    about the reporting chain of Chief Division Counsels (CDCs), the chief
    lawyers in each FBI field office. Based on our concerns that some CDCs
    were reluctant to provide an independent legal review of NSLs for fear
    of second-guessing or antagonizing the Special Agents in Charge to whom
    they report, our recommendation was designed to ensure that CDCs
    provide close and independent review of NSL requests. While we
    recognize that the reporting chain of CDCs is an issue that affects
    many aspects of the CDCs' role and not just their approval of NSLs, we
    believe the FBI should address and resolve this important issue in a
    timely manner.
        Our report also analyzed three NSL reviews conducted by the FBI
    following release of our first NSL report in March 2007. One of the FBI
    reviews examined the use of NSLs in a random sample of 10 percent of
    counterterrorism, counterintelligence, and foreign computer intrusion
    cyber investigation case files active in FBI field offices between 2003
    and 2006. The FBI's 10 percent review confirmed the types of
    deficiencies and possible intelligence violations in the FBI's use of
    NSLs that we identified in our first report. In fact, the FBI's
    statistically valid sample of field case files found a rate of NSL
    violations (9.43 percent) higher than what we found (7.5 percent) in
    the non-statistical sample of NSLs we examined in our first report.
        Moreover, when we independently examined the FBI's 10-percent field
    review in detail, we determined that it did not identify all NSL-
    related possible intelligence violations and therefore does not provide
    a fully reliable baseline from which to measure future FBI compliance
    with NSL authorities. In addition, because the FBI was unable to locate
    information provided in response to a significant number of NSLs chosen
    for review in its sample, the results of the FBI field review likely
    understated the rate of possible intelligence violations.
        The FBI's reviews also confirmed two of the most significant
    findings in our first NSL report. First, the reviews confirmed that the
    FBI's use of NSLs resulted in many intelligence violations. For
    example, the FBI's 10 percent review of field office NSLs found at
    least 640 potential intelligence violations from 2003 through 2006.
    Extrapolating the results of the FBI's 10 percent statistical sample to
    the full number of NSLs means that the total number of possible
    intelligence violations among all NSLs issued over the 4-year period
    could be as high as 6,400.
        Second, the FBI's reviews confirmed that the FBI's internal
    policies requiring reports to FBI Headquarters of possible NSL-related
    intelligence violations had not been effective. For example, less than
    2 percent of the possible intelligence violations identified by FBI
    inspectors in the 2007 field review previously had been reported to FBI
    Headquarters as required.
        In short, our review of the FBI's corrective actions concluded that
    the FBI and the Department have evidenced a commitment to correcting
    the serious problems we found in our first NSL report and have made
    significant progress in addressing the need to improve compliance in
    the FBI's use of the NSLs. However, because only 1 year has passed
    since our first NSL report in March 2007, and because some measures are
    not fully implemented or tested, we believe it is too early to
    definitively state whether the new systems and controls developed by
    the FBI and the Department will eliminate fully the problems with NSLs
    that we identified. We believe the FBI must implement all of our
    recommendations in our first NSL report, demonstrate sustained
    commitment to the steps it has taken and committed to take to improve
    compliance, implement the additional recommendations described in our
    follow-up report, consider additional measures to enhance privacy
    protections for NSL-derived information, and remain vigilant in holding
    FBI personnel accountable for properly using and approving NSLs and for
    handling responsive records appropriately.
    B. Use of National Security Letters in 2006
        As required by the Patriot Reauthorization Act, we also reviewed
    the FBI's use of NSLs in 2006. As discussed in our report, under five
    statutory provisions the FBI can use NSLs to obtain records such as
    toll billing records and subscriber information from communication
    service providers, transactional records from Internet service
    providers, bank records from financial institutions, and full or
    limited consumer credit information from credit reporting agencies. The
    Patriot Act broadened the FBI's authority to use NSLs by lowering the
    threshold standard for issuing NSLs, allowing FBI field office Special
    Agents in Charge to sign NSLs, and permitting the FBI to use NSLs to
    obtain full credit reports in international terrorism investigations.
        First, it is important to note that the FBI's use of NSLs in 2006
    occurred before we issued our first NSL report in March 2007, which
    identified the serious deficiencies in the FBI's use of and oversight
    of NSLs, and before the FBI began to implement its corrective actions.
    Therefore, not surprisingly, our follow-up report on the use of NSLs in
    2006 contains findings similar to our March 2007 report regarding
    deficiencies in the FBI's use of NSLs.
        Our review of the FBI's use of NSLs in 2006 found a continued
    upward trend in the use of NSLs, with 49,425 NSL requests issued in
    2006, a 4.7 percent increase from the previous year. For the 4-year
    period 2003-2006, the FBI issued more than 192,000 NSL requests.

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        FBI data showed that, on average, approximately one-third of all
    FBI counterterrorism, counterintelligence, and cyber investigations
    that were open at any time during 2006 used NSLs. Our review also found
    that the percentage of NSL requests that related to investigations of
    U.S. persons (as opposed to non-U.S. persons) continued to increase,
    rising from about 39 percent of all NSL requests in 2003 to
    approximately 60 percent of all NSL requests in 2006.
        Similar to findings in our first report on the effectiveness of
    NSLs, our follow-up report found that FBI personnel continued to
    believe that NSLs were indispensable tools in national security
    investigations in 2006. They reported that NSLs were used to identify
    the financial dealing of investigative subjects, confirm the identity
    of subjects, support the use of enhanced intelligence techniques, and
    establish predication for the initiation of preliminary and full
    counterterrorism and counterintelligence investigations.
        As required by the Reauthorization Act, our review also examined
    whether NSLs issued after the effective date of the Reauthorization Act
    contained the required certifications to impose non-disclosure and
    confidentially requirements on NSL recipients. In the random sample of
    NSLs we reviewed, we found that 97 percent of the NSLs imposed non-
    disclosure and confidentiality requirements, and almost all contained
    the required certifications. We found that a small percentage of the
    justifications for imposing this requirement were perfunctory and
    conclusory, and a small number of the NSL approval memoranda failed to
    comply with internal FBI policy.
        We also determined that 17 NSL approval memoranda (5 percent of the
    random sample) contained insufficient explanations to justify
    imposition of these obligations. We also identified eight NSLs in our
    sample that contained recitals about non-disclosure that were
    inconsistent with the corresponding approval memoranda, signifying that
    case agents, their supervisors, and Chief Division Counsels were not
    careful in reviewing and approving these documents to ensure
    consistency. In addition to these non-compliant NSLs that were part of
    the random sample, we identified eight ``blanket'' NSLs issued by
    senior Counterterrorism Division officials in 2006 that did not contain
    the required certifications.
        With regard to intelligence violations arising from the use of NSLs
    in 2006, our report's findings were consistent with the findings in our
    first report on NSL usage from 2003 through 2006 and with the results
    of the FBI's 10 percent review of field office NSLs, which identified
    at least 640 potential intelligence violations over the 4-year period.
        In addition, in our review we determined that FBI personnel self-
    reported 84 possible intelligence violations involving the use of NSLs
    in 2006 to FBI Headquarters. Of these 84 possible violations, the FBI
    concluded that 34 needed to be reported to the President's Intelligence
    Oversight Board (IOB) in 2006. The 34 matters reported to the IOB
    included errors such as issuing NSLs without proper authorization,
    improper requests, and unauthorized collection of telephone or Internet
    e-mail records. We found that 20 of these violations were attributable
    to mistakes made by the FBI, while 14 resulted initially from mistakes
    by recipients of NSLs.
        We found that of the 84 possible intelligence violations identified
    and reported to the FBI Office of the General Counsel in 2006, the FBI
    received information it was not entitled to receive in 14 matters. In
    one of the matters the FBI requested information it was not entitled to
    under the applicable NSL statute. In the other 13 matters, the FBI made
    proper requests but, due initially to third party errors, obtained
    information it was not entitled to receive under the pertinent NSL
    statutes.
        We noted that the number of possible NSL-related intelligence
    violations identified by FBI personnel in 2006 was significantly higher
    than the number of reported violations in prior years. From 2003
    through 2005, the FBI had self-identified only 26 possible intelligence
    violations, of which 19 were reported to the IOB. We believe that the
    increase in 2006 may be explained in large part by the attention that
    our first NSL review, which was ongoing in 2006, focused on these
    issues and also to increased training, guidance, and oversight by the
    FBI.
        Our follow-up report also noted that a large number of possible
    intelligence violations were initially attributable to mistakes made by
    NSL recipients. However, we believe the FBI may have compounded these
    errors by not recognizing the overproductions and using or uploading
    the inappropriately obtained information. The FBI Office of the General
    Counsel is in the process of determining whether the FBI will report
    these matters to the IOB.
        It is important to note that the most serious violations involving
    the use of NSL authorities in 2006 related to the FBI's use of exigent
    letters. Our first NSL report generally described this practice by
    which the FBI improperly obtained telephone toll billing records from
    three communication service providers pursuant to more than 700 exigent
    letters without first issuing NSLs. We found that these exigent letters
    contained inaccurate statements, circumvented the requirements of the
    Electronic Communications Privacy Act NSL statute, and violated
    Attorney General Guidelines and internal FBI policy. The OIG is in the
    process of completing a separate investigation examining the use of
    exigent letters, as well as the use of ``blanket NSLs'' and other
    improper requests for telephone records. Among other things, our
    upcoming report will assess the accountability of FBI personnel for
    these practices.
        Our NSL report also contains 17 additional recommendations to help
    improve the FBI's use and oversight of this important intelligence
    tool. These include recommendations that the FBI provide additional
    guidance and training for FBI agents on the proper use of NSLs and on
    the review, filing, and retention of NSL-derived information; reinforce
    the need for FBI agents and supervisors to determine whether there is
    adequate justification for imposing non-disclosure and confidentiality
    requirements on NSL recipients; regularly monitor the preparation and
    handling of NSLs; and provide timely reports of possible intelligence
    violations to FBI Headquarters. We also recommended that the
    Department's working group consider further measures for minimizing the
    retention of NSL-derived information. In its response to our report,
    the FBI agreed with all of these recommendations and stated that it
    would implement additional actions to address our findings.
                             ii. section 215 orders
        As also required by the Patriot Reauthorization Act, in a second
    follow-up report issued along with the NSL report the OIG examined the
    FBI's use of Section 215 orders to obtain business records in 2006.
    Section 215 of the Patriot Act allows the FBI to seek an order from the
    FISA Court to obtain ``any tangible thing,'' including books, records,
    and other items, from any business, organization, or entity, provided
    the item or items are for an authorized investigation to protect
    against international terrorism or clandestine intelligence activities.
    Examples of the types of business records that can be obtained through
    Section 215 orders include driver's license records, public
    accommodations records, apartment records, and credit card records.
        The OIG's first Section 215 report in March 2007 examined the FBI's
    use of this authority in calendars years 2002 through 2005. Our recent
    follow-up report examined the FBI's use of Section 215 authorities in
    2006 and, as required by the Patriot Reauthorization Act, also assessed
    the minimization procedures for business records that the Attorney
    General was required to adopt in 2006.
        Our follow-up review found that, similar to the findings in our
    first report, the FBI and the Department's Office of Intelligence
    Policy and Review (OIPR) processed FBI requests submitted to the FISA
    Court for two different kinds of applications for Section 215 orders in
    2006: ``pure'' Section 215 applications and ``combination'' Section 215
    applications. A ``pure'' Section 215 application is a term used to
    refer to a Section 215 application for any tangible item, and it is not
    associated with any other FISA authority. A ``combination'' Section 215
    application is a term used to refer to a Section 215 request that is
    added to a FISA application for pen register/trap and trace orders,
    which identify incoming and outgoing telephone numbers called on a
    particular line.
        In 2006, the FBI and OIPR processed 15 pure Section 215
    applications and 32 combination Section 215 applications that were
    formally submitted to the FISA Court. All 47 applications were approved
    by the FISA Court. Six additional Section 215 applications were
    withdrawn by the FBI before they were formally submitted to the FISA
    Court.
        The OIG's follow-up report found that FBI agents encountered
    similar processing delays for Section 215 applications as those
    identified in our previous report. Overall, the average processing time
    for Section 215 orders in 2006 was 147 days, which was similar to the
    processing time in 2005. However, the FBI and OIPR were able to
    expedite certain Section 215 requests in 2006, and when the FBI
    identified two emergency requests the FBI and OIPR processed both
    requests quickly.
        Our follow-up report did not identify any illegal use of Section
    215 orders in 2006. However, we identified two instances in 2006 when
    the FBI received more information than it had requested in the Section
    215 orders. In one of the cases, approximately 2 months passed before
    the FBI recognized it was receiving additional information that was
    beyond the scope of the FISA Court order. The FBI reported this
    incident to the IOB, and the additional information was sequestered
    with the FISA Court.
        In the other case, the FBI quickly determined that it had
    inadvertently received information not authorized by the Section 215
    order and isolated the records. However, the FBI subsequently concluded
    that the matter was not reportable to the IOB and that the FBI should
    be able to use the material as if it were ``voluntarily produced''
    because the information was not statutorily protected. We disagreed
    with the FBI's conclusion, and our report recommended that the FBI
    develop procedures for identifying and handling information that is
    produced in response to, but outside the scope of, a Section 215 order.
        The Reauthorization Act also directed the OIG to identify any
    ``noteworthy facts or circumstances'' related to the use of Section 215
    orders. Our report discussed another case in which the FISA Court twice
    refused to authorize a Section 215 order based on concerns that the
    investigation was based on protected First Amendment activity. The FBI
    subsequently issued NSLs to obtain information about the subject based
    on the same factual predicate and without a review to ensure the
    investigation did not violate the subject's First Amendment rights. We
    questioned the appropriateness of the FBI's actions because the NSL
    statute contains the same First Amendment caveat as the Section 215
    statute.
        As noted throughout the report, the FBI determined that much of the
    information about this and other cases described in the Section 215
    report was classified and therefore had to be redacted from the public
    report. However, the full classified report contains the details about
    this case and other cases, and describes other uses of Section 215
    authority. The full classified report has been provided to the
    Department and Congress.
        Finally, as directed by the Reauthorization Act, we examined the
    interim minimization procedures adopted by the Department in 2006 for
    Section 215 orders. Such procedures are intended to minimize the
    retention and prohibit the dissemination of non-publicly available
    information about U.S. persons. We concluded that the interim
    minimization procedures adopted in September 2006 do not provide
    specific guidance for minimization procedures that the Reauthorization
    Act appears to contemplate. Consequently, our report recommends that
    the Department develop specific minimization procedures relating to
    Section 215 orders.
                                iii. conclusion
        In sum, we believe that the FBI has devoted significant time,
    energy, and resources to ensuring that its employees understand the
    seriousness of the FBI's shortcomings with respect to use of national
    security letters and the FBI's responsibility for correcting these
    deficiencies. However, the FBI's and the Department's corrective
    measures are not yet fully implemented, and it is too early to
    determine whether these measures will eliminate the problems we found
    with use of these authorities. Ensuring full compliance with the proper
    use of these authorities will require continual attention, vigilance,
    and reinforcement by the FBI, the Department, the OIG, and the
    Congress.
        That concludes my prepared statement. I would be pleased to answer
    any questions.

        Mr. Nadler. I thank the gentleman.
        Ms. Caproni is recognized for 5 minutes.

    TESTIMONY OF VALERIE E. CAPRONI, GENERAL COUNSEL, OFFICE OF THE
            GENERAL COUNSEL, FEDERAL BUREAU OF INVESTIGATION

        Ms. Caproni. Good afternoon, Chairman Nadler, Ranking
    Member Franks and Members of the Committee.
        Thank you for inviting me to testify today concerning
    National Security Letters.
        First, let me apologize to Chairman Nadler for the late
    submission of my written statement. As you know, as a component
    of the department, my statement has to be cleared by OMB and
    the Department of Justice before submission, and that took
    longer than expected. But I will certainly take back to the
    department your concerns and your objections to the late
    submission.
        The Inspector General has now issued two reports regarding
    the FBI's use of National Security Letters. Although those
    reports revealed a number of ways in which the FBI fell short
    of what is expected, today I would like to address three of his
    findings.
        First, the I.G. found no deliberate or intentional misuse
    of NSLs, although there were clearly failures of internal
    controls, as well as instances in which we had inadequate
    controls and training. The I.G. did not find any evidence of
    the FBI seeking records without a legitimate investigative
    purpose.
        With the exception of the exigent letter problem that I
    will come back to, the vast majority of errors involved third
    party errors, that is, the recipient of the NSL giving us more
    information than we asked for, or inattention to detail--
    shortcomings that are not to be excused, but which are far
    different from intentionally obtaining records that we are not
    entitled to.
        Second, the recent I.G. report provides numerous examples
    of cases in which NSLs were critical to investigations of
    individuals who wished to do the United States harm, either
    through terrorist acts or counterintelligence activities. FBI
    personnel told the I.G. that NSLs are critical tools.
        Put in the current vernacular, NSLs are needed to connect
    the dots that the American people and Congress have told us,
    loudly and clearly, that they expect us to connect.
        Finally, the I.G. has acknowledged that the FBI has made
    substantial strides forward in correcting the lapses previously
    identified, and we appreciate him acknowledging that. We agree
    with him that it is too early to know for sure whether these
    actions will solve everything. But we fervently hope and
    believe that, with sustained efforts, the controls, policies,
    procedures and training that we have implemented should
    eliminate the sorts of errors identified by the Inspector
    General.
        Before I end, I would like to address briefly exigent
    letters, which was, in my view, the single most troubling
    discovery by the Inspector General.
        As your staffers have been briefed, we are in the process
    of cleaning up the exigent letter problem, including unraveling
    the so-called ``blanket NSLs'' that were mentioned in the
    I.G.'s recent report. We are looking at every telephone number
    that appears on a so-called blanket NSL or on an exigent letter
    that we are aware of. In some instances we have found that
    appropriate process has previously been issued.
        In other instances we have found that, although a number
    appears on an exigent letter or one of the blanket NSLs, we
    have no records at all regarding that telephone number. If we
    have records and no evidence that appropriate legal process has
    previously been issued for the records, we are evaluating
    whether the number is relevant to any investigation currently
    open.
        If so, a corrective National Security Letter or grand jury
    subpoena will be issued. But the phone company will be directed
    to give us no further records, since we already have the
    record.
        If there is no open investigation because of the passage of
    time between getting the records and now--and you will recall
    that the exigent letter problem has been going on for some
    period of time--at that point, we will evaluate whether, at the
    time we received the records, there was a true emergency that
    would have justified disclosure of those records without legal
    process under 18 U.S.C. 2702. If so, the emergency that existed
    at that time is documented, and the records are retained.
        One example of such a situation would be the emergency that
    existed, and the phone records that we retained, in the
    immediate wake of the disrupted plot to blow up jetliners as
    they flew over the Atlantic Ocean.
        If there is no currently open investigation, and there was
    no emergency at the time we received the records, the records
    are removed from our files and destroyed. This has been a
    laborious, time-consuming process.
        And I can assure this Committee that our efforts have been
    designed to ensure that the FBI does not retain any record that
    it should not have, while maintaining those records that could
    be a dot that needs to be connected, in order to keep the
    country safe.
        In conclusion, the FBI believes that National Security
    Letters are important tools in our national security arsenal,
    and we are committed to using them effectively and legally.
        I am happy to answer any questions the Committee may have.
        [The prepared statement of Ms. Caproni follows:]
                    Prepared Statement of Valerie E. Caproni

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        Mr. Nadler. I thank the witnesses, and we will now have a
    round of questioning for the witnesses.
        I will grant myself 5 minutes for questioning.
        I will start with Ms. Caproni.
        Ms. Caproni, you testified that the FBI has done a
    sufficient job of self-reporting and does not need any
    statutory remedies to address the abuses uncovered by the
    I.G.'s report. Just today, however, the Electronic Frontier
    Foundation disclosed that documents obtained by the EFF to a
    Freedom of Information Act request show that a misuse of the
    FBI's National Security Letter authority--issued at the
    direction of FBI headquarters, not a field office--went
    unreported to the Intelligence Oversight Board for almost 2
    years.
        Given that, and the numerous reports of abuse, how is
    Congress and the public supposed to trust that the department
    is capable of self-policing? Don't we need to restore the trust
    in our intelligence community and checks on our process? And
    why didn't anyone formally report this matter to the OIG until
    February of last year?
        Ms. Caproni. The incident that you are referring to that
    was reflected in documents that the EFF recently released was,
    first off, well before the reforms that we put into place
    subsequent to the I.G.'s March 2007 report.
        Mr. Nadler. Subsequent to what? I am sorry?
        Ms. Caproni. The events occurred prior to the actions that
    we have taken following the I.G.'s earlier report. That is, we
    have put into place a number of controls now, that I believe
    would have first resulted in that NSL not being issued. Or
    second, if it was issued, being reported much more promptly.
        In terms of why there was such a delay between the time
    that there was public knowledge of that NSL--and there was
    public knowledge, because it was reported in the press--and
    March of 2007, is unclear to me. There was a direction made to
    report the incident. It did not get reported. When we
    discovered it had not been reported, it was directed to be
    reported, and it then was reported.
        Mr. Nadler. Thank you.
        Now, both you and the Inspector General have expressed the
    lack of intentional misuse of the NSL authority, all due to
    improper--I should not say ``improper''--insufficient training,
    and so forth. But the ``Washington Post'' has reported that
    there was at least one IOB report of willful and intentional
    misconduct.
        Does the FBI consider the use of an NSL to seek records
    beyond the scope of this statute at the specific direction of
    FBI headquarters not deliberate or intentional?
        Ms. Caproni. Chairman Nadler, again, I am not quite sure
    why the direction was given to issue an NSL in that case. As I
    look at what I believe they were seeking from the university,
    an NSL was not the appropriate way to go.
        It was unclear to me whether this was simply a
    miscommunication. I find it hard to believe that the intent,
    since we were entitled to the records, and we obtained the
    records, pursuant to a grand jury subpoena, with the approval
    of a court.
        This was not an issue of we were seeking records that we
    were not entitled to. An NSL was the wrong tool to use.
        So it is unclear to me why headquarters directed that an
    NSL be used.
        Again, I think my--what I am stressing is, there is no
    evidence of the Bureau using these NSLs to get documents----
        Mr. Nadler. That they were not----
        Ms. Caproni. They were simply irrelevant to our
    investigative mission.
        Mr. Nadler. Now, you stated that the majority of abuses
    were made by third parties, not by the FBI.
        Now, when a third party gives you too much improper
    information, what do you do with it? Can you look at it and
    issue another NSL to get that very information or more? And
    wouldn't that be along the line of using evidence that is the
    fruit of the poisonous tree?
        Ms. Caproni. Let me address both issues.
        First let me say that we now have in place policies and
    procedures that require the case agents to review the returns
    to make sure there is no overproduction. They cannot know
    whether they have got an overproduction unless they actually
    look at what they received.
        If they have received information that is in excess of what
    the NSL has called for, they have to sequester the information.
        They can then make a decision. If what has happened is the
    provider has provided us 2 extra weeks of bank records--so
    those records are still relevant to the investigation, it would
    be unusual that they would not be relevant--they can issue a
    new NSL for that additional information.
        If it is totally irrelevant--that is, maybe they
    inadvertently provided us the wrong customer--that information
    is not relevant to the investigation, so it cannot be used in
    any way, nor can they issue another NSL for it. That will be
    sequestered, and eventually be returned to the provider or
    destroyed.
        Mr. Nadler. Okay.
        Ms. Caproni. More generally, though, your question about
    fruit of the poisonous tree, I would like to address.
        Fruit of the poisonous tree is a constitutional doctrine
    that derives from a constitutional violation. It is important
    to stress that these are not constitutional violations.
        These are third party records held by third parties. There
    is no violation of the customer's fourth amendment rights. When
    we obtain the records that may be in excess of----
        Mr. Nadler. But wait a minute. If the third party violated,
    you could very well have a violation of the customer's fourth
    amendment rights.
        Ms. Caproni. With all due respect, sir, that would not be
    correct under current Supreme Court precedents.
        Mr. Nadler. Because it is not the government doing it
    directly.
        Ms. Caproni. No. It is because the records--the customer,
    the customer's privacy interests in the records is not
    constitutionally protected. Under existing Supreme Court
    precedent, once they share the information with a third party,
    the third party is free to disclose that information.
        Mr. Nadler. And doesn't that argue that, in order to
    protect those privacy records, there have got to be some checks
    on the third party?
        Ms. Caproni. There are checks on the third party. Congress
    has passed a number of different privacy statutes that provide
    statutory protection for the documents.
        Mr. Nadler. And given the fact that everything here is
    secret, how are those protections guaranteed or enforced?
        Ms. Caproni. The issue of the secrecy versus the protection
    are kind of two separate things.
        Mr. Nadler. Well, but they interact with each other.
        Ms. Caproni. The provider is still subject to a statutory
    requirement that they not release the records without
    appropriate process. That is their obligation.
        Whether they comply, or even if they violate the statute,
    there is not a constitutional violation. There is a statutory
    violation.
        Mr. Nadler. My time has expired, and I recognize the
    gentleman from Arizona for 5 minutes.
        Mr. Franks. Well, Mr. Chairman, thank you.
        Ms. Caproni, you have testified that National Security
    Letters generally permit us to obtain the same sort of
    documents from third party businesses and prosecutors that
    agents obtain in criminal investigations with grand jury
    subpoenas, essentially all the time. But these are, of course,
    domestic criminal investigations.
        NSLs have been instrumental in breaking up cells like the
    Lackawanna Six and the Northern Virginia Jihad. Through the use
    of NSLs, the FBI has traced sources of terrorist funding,
    established telephone linkages that resulted in further
    investigations and arrests, and allow the FBI to link
    terrorists together financially and pinpoint cells and
    operatives by following the money.
        In other words, it gives us some dots to connect. It is not
    just a line. We do not just get a few triangles. We get a
    picture that helps us solve or prevent some of these very
    serious potential acts of terrorism against Americans.
        Can you elaborate on what the loss of such a tool would be?
    And perhaps even answer first, are we somehow thwarting the
    constitutional rights of American citizens here?
        Ms. Caproni. Again, absolutely not. These are records that
    are being held by third parties. There is not a fourth
    amendment constitutional protection for those vis-a-vis the
    customer of the record.
        In terms of the importance of National Security Letters,
    they are critically important to our ability to do our job. By
    getting records with National Security Letters, things like
    phone records and bank records, those are the basic building
    blocks of any investigations.
        In a criminal investigation, they are critical. They are
    there, kind of grand jury subpoenas, or, depending on the type
    of case, with an administrative subpoena.
        In the national security context, when we are looking at
    terrorists, or intelligence officers for spies, where the risk
    to the country is much higher, we use National Security Letters
    to get the documents.
        But the same underlying need exists, which is to build
    enough information about the person, about the subject of our
    investigation, to know whether or not this is someone who
    intends to do us harm, and therefore, we need to follow them,
    figure out who their compatriots are, so that we can disrupt
    and dismantle their organization, or whether in fact they
    intend no harm, in which case we close the investigation and
    move on.
        Without the ability to get these sorts of records, we will
    be stopped in our tracks before we ever begin.
        Mr. Franks. Well, you know, many FBI personnel have told us
    that the NSLs are an essential and indispensable intelligence
    tool.
        And I guess, Ms. Caproni, I do not want to put words in
    your mouth. I mean, from my perspective, this seems that
    through the use of these NSLs, that we are doing everything
    that we can to get at terrorists, while at the same time doing
    everything we possibly can to observe the constitutional rights
    of anyone in America, whether they be citizen or otherwise,
    that the effort here is to truly protect American citizens and
    to defend ourselves in a preventative capacity from being
    attacked in this country.
        So, I will just ask a couple of basic questions, put it in
    your words. Do you think, once again, that we are thwarting the
    Constitution here, that somehow we are subjecting people on
    American soil to unconstitutional search and seizure, or
    somehow thwarting their civil rights?
        Ms. Caproni. Absolutely not.
        Mr. Franks. And yet you are saying to me that this is a
    vital tool in being able to help prevent--identify, prevent and
    defend this country against terrorism?
        Ms. Caproni. Absolutely. I do not believe that we could do
    the job that Congress and the American people expect us to do,
    in terms of keeping us safe from terrorism and from spies and
    those who would steal our secrets, without National Security
    Letters.
        Mr. Franks. Well, Ms. Caproni, I could probably elaborate,
    but I just wish that those basic points could be put forward.
    Because sometimes there is a lot of noise that goes around here
    and a lot of political grandstanding. But the reality is here
    that the desire of this country is to protect its citizens, to
    protect their constitutional rights. And unfortunately,
    terrorists have other ideas, and they have to be dealt with in
    ways that we really have little alternative.
        It is about an intelligence gain. If we knew where every
    terrorist was in the world today and what they were up to, the
    war on terror would be over in 2 months. But unfortunately, we
    do not.
        So, I just thank you for your service to the country and
    for doing everything you can to protect the citizens of this
    country.
        Mr. Nadler. I thank the gentleman.
        I now recognize the gentleman from Virginia for 5 minutes.
        Mr. Scott. Thank you.
        Ms. Caproni, I am sure some of the letters are necessary.
    Are all of these NSLs necessary?
        Ms. Caproni. I am sorry. Are all of these----
        Mr. Scott. Are all of them absolutely necessary for the
    protection of the national security?
        Ms. Caproni. Well, I believe they are. I do not think
    agents issue National Security Letters to get records that are
    not relevant to their investigations and needed, in order
    either to close out a lead, you know, to--for us to ascertain
    that the person does not pose a risk to the country, or, in
    fact, to disclose that the person does pose a risk.
        Mr. Scott. Now, exactly where is the oversight in all of
    this?
        Ms. Caproni. The oversight comes in a number of different
    ways. First off, there are congressionally mandated juries. And
    the Inspector General's reports obviously provided a great deal
    of oversight.
        Subsequent to the March 2007 report, we have mandated that
    there are--there must be legal review of any NSL before it is
    issued. I think that is one----
        Mr. Scott. Say that again?
        Ms. Caproni. Subsequent to the March 2007 Inspector
    General's report, as a matter of internal policy, the FBI has
    mandated that there must be legal review of any NSL before it
    is issued.
        Mr. Scott. And so, the check and balance is within the same
    agency that is doing the issuing of the NSL?
        See, some of us think check and balance means you check
    with another branch of government. And we have another concept
    of check and balance. You check with your co-workers. And if
    your co-worker says what you are doing is okay, then it is
    okay. That is not what some of us thought really was a check
    and balance.
        Ms. Caproni. If I could just continue on the other
    controls.
        And might I also say that I think the lawyers in the
    Bureau, many of whom work directly for me, take their
    responsibility relative to reviewing National Security Letters
    very seriously. And if the material that is laid out in the
    document supporting the NSL does not support the issuance of an
    NSL, the lawyer will not sign off on it.
        Mr. Scott. And these are all people who are hired by the
    same attorney general. I mean, it is all within the same
    agency.
        Ms. Caproni. That is correct.
        Mr. Scott. So, when that person says, this is what I want,
    all of his employees are checking and balancing themselves.
        Ms. Caproni. Again, the director of the FBI has made it
    very clear that he wants to achieve the mission of the FBI, but
    to achieve it lawfully. So, the mission of the employees of the
    FBI is to achieve these goals consistent with the law.
        Mr. Scott. But what happens if they--what happens if he
    decides that he wants to do a little political shenanigan? What
    happens then? What are the checks and balances?
        Ms. Caproni. There is absolutely no evidence that this
    director of the FBI would ever engage in political shenanigans.
        Mr. Scott. Okay. Well, you know, the attorney----
        Ms. Caproni. If I could get to the third----
        Mr. Scott. Well, let me just say this. As part of--when I
    listen to this, we are also listening and trying to get an
    answer out of the Department of Justice as to whether or not
    U.S. attorneys were fired because they did not indict Democrats
    in time affect the next election. And so, we have not had a
    credible response to that.
        So, sometimes we suspect that there may be some political
    shenanigans going on. And we are just asking where the checks
    and balances are.
        Ms. Caproni. Well again, I would say, Mr. Fine works for
    the Department of Justice, too. And it seems to me he has
    provided very vigorous oversight. So I think, merely because
    your paycheck comes from the Department of Justice does not
    mean that you are not capable or desirous of obeying the law
    and providing the appropriate legal advice to your client.
        Mr. Scott. Under the----
        Ms. Caproni. If I could just--I cannot answer for the
    Department of Justice in why they are not providing the
    documents. That is not within the scope of my responsibilities.
        But the third element of oversight that I think is
    important for this Committee to recognize is, again, subsequent
    to the March 2007 report and subsequent to Congress
    establishing the National Security Division within the
    Department of Justice, the National Security Division has set
    up an oversight within the National Security Division.
        Those attorneys go out to field offices and do what are
    called national security reviews. They have access to
    everything in the file. They can go through it from soup to
    nuts.
        Mr. Scott. And this is the same agency, though. They are
    employed by the same agency.
        Ms. Caproni. Well, they are Department of Justice
    attorneys.
        Mr. Scott. Okay.
        What happened with this--what did the Supreme Court decide
    in--decided it was unconstitutional in September 6, 2007?
        Ms. Caproni. I am sorry. Say again?
        Mr. Scott. Excuse me. The district court in 2007, what did
    the court strike down, and what is the status of those----
        Ms. Caproni. Is that the Southern District case?
        Mr. Scott. Yes.
        Ms. Caproni. I do not know the date----
        Mr. Scott. Southern District of New York, yes.
        Ms. Caproni. That case is pending on appeal. I believe it
    has been fully briefed in the Second Circuit, but it might not
    quite be fully briefed. So I would anticipate argument in the
    next few months.
        That case did, as Chairman Nadler pointed out, hold that
    there was, even after the PATRIOT Act Reauthorization Act,
    which changed the rules on disclosure and nondisclosure of
    National Security Letters by the recipient, Judge Marrero
    found, nonetheless, that the new statute continues to be
    unconstitutional under the first amendment. That is what is
    pending on appeal, is whether, in fact, the structures that the
    Congress passed in the PATRIOT Reauthorization Act was
    constitutional under the first amendment.
        There is also an issue about whether the gag provisions of
    that bill are severable. That is, would Congress prefer there
    to be no national security statute, that there is not a
    requirement, or can we sever the requirement as being
    unconstitutional and keep the balance of the statute?
        Those are the two primary issues that are pending on appeal
    before the Second Circuit.
        Mr. Nadler. The gentleman's time has expired.
        I believe the court, the lower court has decided it was not
    severable. Correct?
        Ms. Caproni. That is correct.
        Mr. Nadler. Thank you.
        We thank the witnesses from the first panel.
        We ask that the members of the second panel come forward
    and take their seats.
        And while they are taking their seats, let me perform the
    introductions.
        Jameel Jaffer is the director of the American Civil
    Liberties Union's National Security Project. The project
    litigates civil liberties and human rights cases related to
    detention, torture, surveillance, censorship and secrecy. Mr.
    Jaffer's own litigation docket includes Doe v. Mukasey, a
    challenge to the FBI's National Security Letter authority.
        Before joining the staff of the ACLU, Mr. Jaffer served as
    law clerk to the Honorable Amelia First, U.S. Court of Appeals
    to the Second Circuit, and then to the Right Honorable Beverly
    McLaughlin, Chief Justice of Canada. He is a graduate of
    Williams College, Cambridge University, and Harvard Law School.
        Bruce Fein needs no introduction, but I will introduce him
    anyway. He is a graduate of Harvard Law School. He joined the
    U.S. Department of Justice, where he served as assistant
    director of the Office of Legal Policy, legal adviser to the
    assistant attorney general for antitrust, and the associate
    deputy attorney general.
        Mr. Fein then was appointed general counsel of the Federal
    Communications Commission, followed by an appointment as
    research director for the Joint Congressional Committee on
    Covert Arms Sales to Iran.
        Mr. Fein is an adjunct scholar with the American Enterprise
    Institute, a resident scholar at the Heritage Foundation, a
    lecturer at the Brookings Institution and an adjutant professor
    at George Washington University.
        Michael J. Woods served as chief of the FBI's National
    Security Law Unit from 1997 to 2002, as counsel to the National
    Counterintelligence Executive in 2002, and as a Department of
    Justice prosecutor from 1993 to 1997.
        During his time at the FBI, Mr. Woods and the lawyers under
    his supervision were responsible for providing legal advice to
    agents and analysts involved in counterintelligence and
    counterterrorism operations, and for the production and review
    of National Security Letters. Mr. Woods is a graduate of
    Harvard Law School and of Oxford University.
        David Kris is a graduate of Haverford College and Harvard
    Law School. He clerked for Judge Stephen Trott of the Ninth
    Circuit, joined the Department of Justice through its honors
    program. He worked as a prosecutor for 8 years from 1992 to
    2000, conducting several trials and arguing appeals across the
    country.
        From 2000 to 2003, he was associate deputy attorney
    general. In that role, his unclassified responsibilities
    included supervising the government's use of the Foreign
    Intelligence Surveillance Act, or FISA, which has been somewhat
    in the news lately, representing the Justice Department to the
    National Security Council and in other interagency settings,
    briefing and testifying before Congress and assisting the
    attorney general in conducting oversight of the U.S.
    intelligence community. He is an adjunct professor at
    Georgetown University Law Center.
        Without objection, your written statements will be made
    part of the record in their entirety. We would ask each of you
    to summarize your testimony in 5 minutes or less.
        As a reminder, there is a timing light at your table. When
    1 minute remains, the light will switch from green to yellow,
    and then to red when the 5 minutes are up.
        Before we begin, it is customary for the Committee to swear
    in its witnesses.
        If you would please stand and raise your right hand to take
    the oath.
        Do you swear or affirm under penalty of perjury that the
    testimony you are about to give is true and correct to the best
    of your knowledge, information and belief?
        Thank you.
        Let the record reflect that the witnesses answered in the
    affirmative.
        You may be seated.
        We will now call upon the first witness for 5 minutes.
        Mr. Jaffer?

    TESTIMONY OF JAMEEL JAFFER, DIRECTOR, AMERICAN CIVIL LIBERTIES
                   UNION'S NATIONAL SECURITY PROJECT

        Mr. Jaffer. Chairman Nadler, Ranking Member Franks, thank
    you for inviting me to testify today about National Security
    Letters and H.R. 3189, the National Security Letter Reform Act.
        The NSL statutes invest the FBI with sweeping power to
    collect information about innocent people, and they allow the
    agency to impose unconstitutional gag orders on NSL recipients.
        Mr. Nadler's bill would introduce much needed safeguards
    for civil liberties, while preserving the executive's ability
    to collect information about people who actually pose threats.
        I want to highlight two serious problems with the NSL
    statutes: their impact on wholly innocent people and their
    authorization of unconstitutional gag orders.
        The statutes permit the government to obtain records about
    people who are not known, or even suspected, to have done
    anything wrong. Because of changes made by the PATRIOT Act, the
    FBI can compile vast dossiers about innocent people--dossiers
    that could include financial information, credit information
    and even information that is protected by the first amendment.
        The Inspector General's audits confirm that the FBI is
    collecting information about people two and three times removed
    from actual suspects. Roughly 50,000 NSLs are being issued
    every year--most seeking information about U.S. persons.
        The FBI stresses that NSLs are used only to collect
    transactional or non-content information. But NSLs reach
    information that is extremely sensitive.
        The FBI can compel an Internet service provider to disclose
    the identities of people who have visited a particular Web
    site, a list of e-mail addresses with which a particular person
    has corresponded, or even the identity of a person who has
    posted anonymous speech on a political Web site.
        Privacy concerns aside, Congress must ask whether it serves
    national security to create vast databases of information about
    innocent people. Post-9/11 investigations found that over-
    collection can divert resources away from the most important
    investigations and bury the most important information.
        Mr. Nadler's bill will protect the privacy of innocent
    people, while at the same time refocusing the government's
    antiterrorism resources on actual terror.
        Mr. Nadler's bill will also address a second problem with
    the NSL statutes. The problem is that each of the NSL statutes
    allows the government to impose gag orders on NSL recipients.
    These gag orders are not subject to prior judicial review; the
    FBI imposes them unilaterally.
        NSL recipients can challenge the gag orders in court, but
    the judicial review is toothless. It is the FBI that decides
    whether secrecy is necessary, and the courts are required to
    defer to the FBI's decision.
        Now, obviously, secrecy is necessary in some national
    security investigations. But the FBI's power to impose gag
    orders should be subject to meaningful judicial review. Without
    that review, the power is easily abused.
        The ACLU currently represents someone--I will call him John
    Doe--who was served with an NSL. Doe believes that the NSL was
    illegal, but a gag order bars him from explaining why he holds
    that opinion, or even from disclosing his own identity. For 4
    years now, Mr. Doe has been prohibited from telling the public
    why he believes the FBI is abusing its power. And the FBI
    continues to enforce the gag order today, even though it
    abandoned its demand for records more than a year ago.
        The Chairman's bill would prevent this sort of abuse.
        This past September, a Federal court struck down one of the
    NSL's statutes in its entirety. The court held that gag orders
    must be subject to prompt judicial review, and the courts must
    be permitted to invalidate gag orders that are not narrowly
    tailored to a compelling government interest. As long as the
    NSL statutes foreclose a sign of judicial review, the statutes
    are unconstitutional, and the government risks losing the NSL
    authority altogether.
        Mr. Nadler's bill will align the NSL statutes with the
    first amendment. Gag orders will not be barred under the bill
    when secrecy is truly necessary, but rather, they will be
    limited to those circumstances. Moreover, the bill will ensure
    that gag orders are no broader than absolutely necessary.
        Absent an actual need for secrecy, an Internet service
    provider should be able to tell the public if it receives an
    NSL that seeks information about thousands of people. And
    absent an actual need for secrecy, a library should be able to
    tell the public if it receives an NSL that seeks information
    about first amendment activities.
        Mr. Nadler's bill would protect first amendment rights,
    while at the same time allowing for secrecy where legitimate
    national security concerns compel it. The ACLU commends Mr.
    Nadler for introducing the bill.
        Thank you again for the opportunity to appear today.
        [The prepared statement of Mr. Jaffer follows:]
                       Prepared Statement of Jamel Jaffer

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Nadler. I thank the gentleman.
        And I now recognize Mr. Fein for 5 minutes.

       TESTIMONY OF BRUCE FEIN, CHAIRMAN OF THE AMERICAN FREEDON
        AGENDA, FORMER ASSISTANT DEPUTY ATTORNEY GENERAL, U.S.
                         DEPARTMENT OF JUSTICE

        Mr. Fein. Thank you, Mr. Chairman and Members of the
    Subcommittee.
        I would like to begin with some cardinal principles about
    the United States Constitution and the theory of government
    itself, that I think should inform the relative balance between
    law enforcement and privacy that is at issue in discussing
    National Security Letters.
        John Adams remarked that the fuel of the American
    Revolution was James Otis' protest against King George III's
    customs collectors invading every home in search of contraband
    or otherwise. It was a privacy issue that was the heart of the
    American Revolution.
        And the idea that was descendent was that the right to be
    left alone from government intrusions, as Justice Louis
    Brandeis explained, is the most cherished amongst civilized
    people--the right to be left alone. It did not mean the
    government could never intercede--there are obviously problems
    with many mischievous people in the community--but that the
    government had to make a very powerful case to show why that
    right to be left alone should be disturbed.
        Moreover, the Founding Fathers believed not that government
    should be weak, but that in exerting aggressive powers, there
    should be checks and balances. This is an idea that was
    explained by Justice Robert Jackson in United States v.
    Johnson.
        Now, Jackson spoke from some experience. He was the
    Nuremberg prosecutor. He had seen the Nazis first hand.
        And he explained that, what the police often fail to
    remember is not that the law is against detecting criminals,
    but that the decisions to make intrusions on privacy need to be
    checked and supervised by an outside party--there, a judge
    issuing a judicial warrant--drawing inferences based from a
    neutral perspective, rather than from the perspective, as
    Justice Jackson put it, the competitive enterprise of seeking
    to punish and capture criminals.
        That is the background in which we come to approach the
    National Security Letters. The right to be left alone is
    cherished. The burden is on the government to show why these
    rights should be invaded; and moreover, if so, why there should
    not be customary checks and balances.
        Let me outline what are the ways in which traditionally we
    try to check aggressiveness or needless intrusion on the right
    to privacy.
        First, with a grand jury, those are citizens who decide
    whether to issue a subpoena for records that are the type that
    are sought in National Security Letters. And the grand jury is
    overseen by a judge, an Article III judge.
        Moreover, as pointed out, typically the subpoena is subject
    to disclosure in the sunshine. We know, as Louis Brandeis said,
    sunshine is the best disinfectant. So, that publicity is an
    additional deterrent to wrongdoing or misuse.
        Now, the National Security Letters fall outside that
    customary framework that balances privacy against law
    enforcement. There is no outside party that reviews the
    issuance of National Security Letters. It is the FBI deciding
    on its own. Moreover, with the non-disclosure rule, you do not
    have the sunshine that can act as a deterrent, as well.
        Now, it has been observed correctly, I think, by
    Congressman Franks in the previous exchanges, that certainly,
    National Security Letters, if you look, have they produced
    useful information? Certainly, they have.
        But the decisive issue, I think, for the Committee is, why
    couldn't that information have been obtained through a
    customary grand jury proceeding or gathering intelligence under
    FISA, where typically you have a judge decide whether or not
    there is sufficient reason to intrude upon that cherished right
    to be left alone?
        And I do not think the FBI has been able to explain what it
    is that they got with National Security Letters that they could
    not possibly have gotten, had they used the regular way that
    the Founding Fathers thought was sufficient.
        I think that, when you ask about internal reviews, let us
    remember FISA. That was a warrantless national security program
    which had internal reviews every 45 days. And mirabile dictu,
    every 45 days it was approved.
        These kinds of internal checks do not work. I worked in the
    Department of Justice. You do not need to have an explicit
    order in the bureaucracy to know which way it will come out.
    And we have seen that in some respects, I think, between the
    lines, if you read John Yoo's unclassified document relating to
    what was torture and what was not, whether the President had
    supreme commander-in-chief authority to flout any law this body
    enacted in the name of national security.
        And that is what the Founding Fathers understood. If men
    were angels, we would not need separation of powers. But they
    relied upon checks and balances. As President Reagan put it,
    ``Trust, but verify.''
        And I think that is the spirit of Congressman Nadler's
    bill, and I highly support it and commend it.
        Thank you.
        [The prepared statement of Mr. Fein follows:]
                        Prepared Statement of Bruce Fein
        Mr. Chairman and Members of the Subcommittee:
        I welcome the opportunity to share my views on H.R. 3189, the
    National Security Letters Reform Act of 2007. I support the bill. It
    strikes a balance between privacy and law enforcement vastly superior
    to existing law in honoring the charter principles of the American
    Revolution and the Constitution.
        The Declaration of Independence sets forth the purpose of the
    United States government: to secure the unalienable rights to life,
    liberty, and the pursuit of happiness enjoyed by ever y American
    citizen. The signature creed of the United States has been that
    individual freedom is the rule. Government intrusions are the exception
    that can be justified only by clear and substantial community
    interests. Justice Louis D. Brandeis lectured in Olmstead v. United
    States (1928) that the right to be left alone is the most cherished
    freedom among civilized people. Privacy is not only a good in itself;
    it also nurtures a sense of assertiveness, robust independence, and
    even rebelliousness which are the lifeblood of democracy. The greatest
    danger to freedom is an inert or docile people fearful that the
    government has access to every detail of their private lives.
        In the typical federal criminal investigation, a grand jury
    composed of ordinary citizens, supervised by an independent and neutral
    federal judge, issues subpoenas for records relevant to determining
    whether an indictment should be voted. The prosecutor cannot act as a
    surrogate for the collective view of the grand jury because of the
    temptation to overreach in a quest for fame, vindictiveness or
    otherwise. Supreme Court Justice Robert Jackson captured the idea in
    Johnson v. United States (1948) in addressing the Fourth Amendment's
    protection against unreasonable searches and seizures and the customary
    requirement of a judicial warrant based on probable cause: ``Its
    protection consists in requiring inferences [of crime] be drawn by a
    neutral and detached magistrate instead of being judged by the officer
    engaged in the often competitive enterprise of ferreting out crime.''
        The recipient of a grand jury demand may move to quash the subpoena
    as unconstitutional or otherwise in violation of law. The target may
    also publicize the subpoena to expose possible abuse or overreaching or
    the need for remedial legislation. Sunshine is frequently the best
    disinfectant.
        Of course, there are exceptions to every rule. The Constitution is
    not a suicide pact. It seems worth noting, however, that the United
    States Supreme Court has refused to carve out a Fourth Amendment
    exception for murder investigations despite the alarming annual number
    of murders. (The FBI estimated the murder toll in 2006 at more than
    17,000, or approximately six times 9/11 fatalities). National security
    letters (NSLs), which deviate sharply from customary law enforcement
    methods, might be justified in principle if there were a substantial
    showing that espionage or international terrorism crimes were eluding
    detection because available investigatory tools were insufficiently
    muscular; and, that NSLs would provide the necessary muscle to thwart
    national security crimes. (The Patriot Act's elimination of the wall
    between intelligence collection and law enforcement makes NSL requests
    indistinguishable from grand jury subpoenas for documents), NSLs should
    are presumptively disfavored because they may be issued by the
    government without any citizen or judicial supervision and lack the
    transparency that is a cornerstone deterrent to abuses.
        I do not believe either benchmark for NSLs has ever been satisfied
    to overcome the presumption. Before their enshrinement in the Patriot
    Act, Congress was not presented with a roster of international
    terrorist incidents that probably would have been foiled if NSLs had
    been available. The 9/11 Commission did not find that the terrorist
    abominations might have been forestalled with NSLs. After years of
    intensive use, this Committee has not been presented with a list of
    espionage or international terrorism crimes that were prevented or
    solved because of NSLs and could not have been prevented or solved
    otherwise. NSLs are the twin of the quest to emasculate the individual
    warrant protection of the Foreign Intelligence Surveillance Act with
    general warrants rubber stamped after the fact by a FISA judge.
        H.R. 3189 should be supported because it diminishes (although it
    does not eliminate) the gratuitous encroachments on citizen privacy
    under the existing laws governing NSLs. There is not a crumb of hard
    evidence that enactment of the bill would cause a single act of planned
    espionage or international terrorism to go undetected.
        The bill would confine NSLs to investigations where there are
    specific and articulable facts indicating the target is a foreign agent
    or foreign power. The former standard was simple relevancy to an
    espionage or international terrorism investigation. The bill also
    saddles NSLs with the same standards of reasonableness as would obtain
    if a grand jury subpoena had been issued in conjunction with an
    espionage or international terrorism investigation. It also places
    reasonable limits on the secrecy of NSLs. The democratic values
    advanced by transparency cannot be overstated. Secret government wars
    with self-government and deterring misconduct. The Constitution does
    not permit secret detentions and trials of suspected international
    terrorists even if public knowledge might clue Al Qaeda where its
    network might be vulnerable. Of course, a disclosure of an NSL to
    assist obstruction or evasion of justice is itself a crime.
        The bill would require minimization procedures to diminish the
    volume of private information unrelated to foreign intelligence or
    crime in government files. The standards for retention, however, are
    inescapably nebulous, and will easily blunt the purpose of minimization
    as they have regarding FISA. Deterrence of government wrongdoing is
    buttressed by creating a criminal justice suppression remedy for
    violations and a civil cause of action for the target. Regarding the
    latter, I would bring the suit within the universe of civil rights
    claims subject to the Civil Rights Attorneys' Fees Award Act of 1988.
    The recipients of NSLs have little or no incentive to challenge their
    legality because compliance with an administrative subpoena ordinarily
    shields the recipient from liability to the target. See e.g., 18 U.S.C.
    2703(e).
        Freedom requires a certain level of risk that tyrannies might find
    unacceptable. The risk of international terrorism in China may be less
    than in the United States, but who among us would prefer the former to
    the latter? We should never forget that the revolutionary idea of
    America was that government exists to secure the unalienable individual
    rights of every citizen period, with no commas, semi-colons or question
    marks. There can be no doubt that NSLs have been fueled by post-9/11
    fears. But we should be steeled against capitulation by James Madison's
    admonition: ``If Tyranny and Oppression come to this land, it will be
    in the guise of fighting a foreign enemy.''

        Mr. Nadler. I thank the gentleman.
        I recognize Mr. Woods for 5 minutes.

             TESTIMONY OF MICHAEL J. WOODS, FORMER CHIEF,
                     FBI NATIONAL SECURITY LAW UNIT

        Mr. Woods. Thank you, Mr. Chairman, Mr. Franks and Members
    of the Committee.
        I am very pleased to have been invited to this hearing this
    afternoon to assist you.
        My interest in this area is really twofold.
        First, I was, as chief of national security law in the FBI
    prior to the PATRIOT Act and shortly thereafter, supervising
    the lawyers, who at that time prepared National Security
    Letters. I have calculated roughly that 75 to 80 percent of
    them were prepared within 10 or 15 feet of my office where I
    sat. So, I am happy to give the Committee the benefit of that
    experience.
        I was also part of the discussion and part of the process,
    at least in the FBI, of making proposals at the time for the
    PATRIOT Act. And so, I can explain, if the Committee is
    interested, the background and the change in legal standard.
        But I am also fascinated from an academic perspective
    since, with the idea of transactional information. We all
    generate enormous amounts of this. And technology and the
    changes in our society are increasing the amount of that
    information. And although it does not contain the content of
    private communication, it is revealing a steadily more detailed
    picture of what we do every day.
        That information--unlike our content, unlike things that we
    have a more direct privacy interest in--resides in the hands of
    third parties in quantities, formats and conditions of which
    most of us remain unaware. The constant expansion in the
    capacity of storage systems and in the power of search engine
    technology makes this transactional information more
    permanent--and more easily accessible--than ever before.
        So, the question is: Under what circumstances do we want
    the government in its intelligence gathering function to have
    access to that information? How should they use it? How should
    they store it?
        How can their use of it be challenged? How can their
    acquisition of it be challenged? And I am hoping that I can
    contribute something to the Committee's discussion of that
    today.
        It is an enormous challenge. On the one hand, the explosion
    of transactional information has opened a new front in the
    fight against terrorism and foreign intelligence services. Our
    very sophisticated adversaries have long since learned to
    conceal their direct communications from us, but now may be
    detected in their digital footprint.
        After 9/11, transactional information was key to
    reconstructing the terrorists' operations, and it is probably
    one of our best hopes, one of our most effective means of
    detecting another imminent attack.
        Yet, this information, as I say, is revealing more than
    just the transaction, just the outside nature. Its quantity and
    quality are raising the amount that it tells us about a
    subject.
        And so, I believe that the tool that the FBI has to acquire
    that information, though it must be flexible and it must be
    efficient, and it must, as it does now, allow the acquisition
    of information relevant to an investigation, it needs to be
    controlled. It needs to have effective minimization rules,
    effective retention rules.
        And beyond the sort of legal effectiveness or legal
    elegance of them, they have to be rules that inspire confidence
    in the American public, confidence that this authority is under
    control, confidence that it is being used correctly.
        My hope is to contribute to that discussion today with the
    Committee, and I am very happy to answer any questions.
        [The prepared statement of Mr. Woods follows:]
                     Prepared Statement of Michael J. Woods

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                                   ATTACHMENT

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        Mr. Nadler. I thank the gentleman.
        I now recognize Mr. Kris for 5 minutes.

       TESTIMONY OF DAVID KRIS, FORMER ASSOCIATE DEPUTY ATTORNEY
                  GENERAL, U.S. DEPARTMENT OF JUSTICE

        Mr. Kris. Chairman Nadler and Ranking Member Franks,
    Members of the Subcommittee, thank you for inviting me to
    testify today.
        I support new legislation in this area, and I believe that
    H.R. 3189 is an excellent vehicle for further discussion
    leading to reform. And I have submitted a few comments on the
    bill to your staff.
        But I must say that I would go further. I believe that
    Congress should enact a single statute providing for national
    security subpoenas to replace all of the current NSL
    provisions.
        And the principal reason for this recommendation is that it
    would streamline and simplify current law, which is both
    intricate and idiosyncratic, to the detriment of both our
    liberty and our security.
        A single statute would also allow a well considered and
    global resolution of the difficult policy questions that
    necessarily attend the enactment of any national security
    subpoena or related power.
        Now, I believe any new statute should satisfy 10 essential
    elements that are discussed in my written submission. But let
    me just outline three of the most important, many of which are
    in H.R. 3189 in one form or another.
        First, I think national security subpoenas, like grand jury
    subpoenas, should be issued by DOJ lawyers.
        Second, the subpoenas should be limited to acquiring
    certain specified types of foreign intelligence or other
    protective information.
        And third and finally--and this is critically important in
    my view--use of the subpoenas should be governed by rigorous
    minimization procedures concerning acquisition, retention and
    dissemination of information. The absence of such procedures in
    current law, I think, is a very notable omission. H.R. 3189
    would deal with this problem, as well, and I think it is
    vitally important.
        So, again, I appreciate the invitation to testify, and I
    look forward to answering any questions.
        Thank you.
        [The prepared statement of Mr. Kris follows:]
                        Prepared Statement of David Kris

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Nadler. Thank you very much.
        We will now have a round of questions, and I will recognize
    myself for 5 minutes to begin the questioning.
        Let me ask first. We have heard that we should not go back,
    as the bill that I have introduced would do, to a specific and
    articulable fact indicating that somebody is an agent of a
    foreign power, because that would cut off investigations at the
    outset. I believe someone has testified--maybe Mr. Woods
    testified to that effect.
        Mr. Fein, why is it safe to do that?
        Mr. Fein. Well, first of all, it does not cut off the
    investigation at the outset. You can have a grand jury, which
    has a broader mandate, because there are checks.
        And specific and articulable facts are the customary way in
    which we conduct stop and frisk. Those situations where, short
    of probable cause, it is thought that an immediate danger to
    safety required something less than probable cause.
        And there has been no showing that the stop and frisk
    standard, the reasonable and particularized suspicion standard,
    in that context has proved insufficient to protect the national
    security. There is no reason to think that the same standard
    applied, when you are trying to gather information that is
    important to the safety of the American people, that it should
    be any less effective.
        Now, it is certainly to be--it is self-evident that, say,
    if you have no restraints on gathering information, then you
    can gather more information, and it is less likely anything
    will slip through the cracks.
        Mr. Nadler. But we do not need a broad fishing expedition.
    Thank you.
        Mr. Woods, would you comment on that?
        Mr. Woods. Yes. I think the example of a stop and frisk
    illustrates the difference. Stop and frisk is a physical
    environment. I see someone walking down the street. I am a
    police officer, and I decide to stop that person. I have a
    target, who is a known individual.
        In the case of National Security Letters, and particularly
    in the intelligence gathering case, that is not the dominant
    situation. The dominant situation is, we have unknown subjects.
    We have generalized threat information that we need to pin
    down.
        And when this standard was selected for National Security
    Letters, it very much reflected the sort of traditional, spy-
    catching counterintelligence that was going on at the time.
        And I think, my own experience was that that did not serve
    as appropriate as we moved into more counterterrorism
    operations toward--through the end of the 1990's. And that that
    is what justified the change----
        Mr. Nadler. Thank you.
        Mr. Kris, would you comment on that?
        Mr. Kris. Well, I guess two things.
        First, the grand jury standard, which has been referred to
    by analogy here, is actually quite broad. And a grand jury is
    entitled to investigate on something far less than reasonable
    suspicion or a specific and articulable fact. It can
    investigate on any kind of suspicion that the law is being
    broken, or even just to assure itself that the law is not being
    broken.
        Second, my own view is somewhere in between these two
    positions. I do not necessarily support the reversion to the
    pre-PATRIOT Act standard.
        But I think it would be useful to focus the information
    sought by the subpoena on the definition of foreign
    intelligence information in FISA, which essentially is
    information that is either relevant or necessary to the ability
    of the United States to protect against these various specified
    foreign threats.
        Mr. Nadler. Is that so general that you could not apply it
    to a specific case, what you just said?
        Mr. Kris. No, I think you could--I mean, you could apply
    that standard to a specific case. But the value of it, I think,
    is that it would keep the agents focused on the ultimate goal,
    which is to keep us safe, unmediated by the sort of more
    nebulous contours of their investigation, which may expand in
    one direction or another.
        Mr. Nadler. Thank you.
        Mr. Fein, courts have ruled that the fourth amendment does
    not protect records held by third parties.
        Do you agree with this? And what is the interest in
    protecting these records, if the fourth aendment does not
    demand a warrant?
        Mr. Fein. Well, the fourth amendment protects reasonable
    expectations of privacy. And whether you agree with the Smith
    case and some of the others, that suggest people do not have
    any expectation of privacy in the phone numbers they dial or in
    bank records, can disagree. But that is the standard they have
    used.
        They can reverse themselves, based upon the fact that this
    kind of information more and more is able to be utilized to
    develop a footprint, if you will, a signature of someone, that
    was not a danger years ago before you had the Internet.
        Mr. Nadler. So, would you say, in other words, that with,
    as Mr. Woods put it, more and more transactional information
    being made available, simply by the way we live our lives these
    days, that in fact, people, without thinking about it, do
    expect privacy, where perhaps the court----
        Mr. Fein. Perhaps they would, yes.
        Mr. Nadler [continuing]. Didn't think about it before?
        Mr. Fein. And it is also quite clear, Mr. Chairman, that
    the Congress is not prohibited by the Constitution from
    providing greater privacy. And soon after some of these
    decisions on bank records, Congress did enact the Right of
    Financial Privacy Act that went beyond the particular fourth
    amendment. And I think that is the spirit of the United States
    Constitution.
        The right to be left alone is the rule. The government has
    to make a strong showing for an exception.
        Mr. Nadler. Thank you.
        Without objection, I am going to ask one more question to
    Mr. Jaffer.
        Can you elaborate on why it is particularly important that
    the gag provision be tailored? Why doesn't the first
    amendment--the bill tailors the gag provision. It does not
    eliminate it, but it tailors it in various ways.
        And why doesn't the first amendment allow the government to
    gag an NSL recipient without any court review? Which, in
    effect, is what you have now, because the court review--any
    court review where the court has to take whatever the
    government says as dispositive, is not a real review,
    obviously, because it leaves no discretion of the court.
        So, why doesn't the first amendment allow the government to
    gag an NSL recipient without any court review, when it is a
    matter of national security?
        Mr. Jaffer. Well, a couple of things. Let me speak to it
    from my own experience representing entities or individuals
    that were served with National Security Letters.
        In some cases, the entities that are served with National
    Security Letters have information about government abuse. They
    would like to disclose that information to the public. They
    would like to disclose it to Congress.
        We represent one client that wanted to disclose information
    to Congress during the PATRIOT Act reauthorization debate, and
    was not permitted to do that.
        So, the gag orders have a very serious effect, not just on
    the first amendment rights of NSL recipients, but on the public
    access to information about the government's use of these
    surveillance authorities.
        But just as a matter of protecting against abuse, it is
    very important that there be this kind of public oversight.
        And if I could just underscore a distinction that was made
    by one of the other panelists, between the grand jury subpoena
    context and the National Security Letter context, the
    recipients of grand jury subpoenas are ordinarily not
    foreclosed from disclosing to other people that they received a
    subpoena. And the fact that they can disclose that information
    serves as a kind of check against abuse. And that check is
    missing in the National Security Letter context.
        So, it would not make sense just to take the standards that
    apply in the grand jury context and export them wholesale to
    the National Security Letter context. The contexts are quite
    different, because there is no check. Exactly.
        Mr. Fein. If I could just add a footnote, Mr. Chairman. You
    may recall in the Pentagon Papers case, the government
    unilaterally said you cannot--the courts have to suppress any
    disclosure of the Pentagon Papers, because there would be
    national security danger. And the Supreme Court said no. They
    were published, and the sky did not fall.
        Mr. Nadler. Well, that is very true. Thank you.
        With the indulgence of the Committee, I must note that, at
    a hearing of this Subcommittee, I think a week or two ago, on
    the state secrets issue, we had a witness here who testified
    that, in the--who was the brother of the plaintiff in a Supreme
    Court case 50 years ago, 55 years ago, that established the
    state secrets doctrine--that the accident report which the
    courts upheld as a state secret, because they revealed state
    secrets, she found in the incident a couple of years ago, and
    declassified, and there were no state secrets in it.
        In fact, it was just self-serving on the part of the
    Administration 55 years ago to use that excuse. So, we know
    that that happens.
        Thank you very much.
        I will now recognize the gentleman from Arizona for a very
    flexible five minutes.
        Mr. Franks. Well, thank you, Mr. Chairman.
        Mr. Chairman, Mr. Woods wrote in his testimony that a clear
    goal of counterintelligence is to identify spies and
    international terrorists.
        If an investigator has specific and articulable facts that
    a target is an international terrorist, then essentially, they
    have already achieved that goal. And I think that was extremely
    insightful.
        One of the things we have to separate here, in my judgment,
    in Mr. Fein's case, he has pointed out some things that I
    respect very deeply, that we need to leave our citizens alone.
    And I believe that. But we also have a responsibility to leave
    them alive.
        And we want to make sure that we separate those things that
    are directly having to do with their privacy, and these things
    that are just kind of--that are not fourth amendment-protected
    things--the information that would give us the ability to
    identify whether someone is a potential terrorist that then we
    can take to the court in the first place.
        Without some of this information, we would not be able to
    go to a judge, because we do not have enough information even
    to suggest that there is any issue. The police officer cannot
    go to the judge before he takes a blindfold off to look at the
    neighborhood. We have to kind of try to get a little bit
    commonsense and reasonable here, in my opinion.
        Mr. Woods, in your written testimony, you criticize the
    idea of returning to the pre-9/11 standard of specific and
    articulable facts. You write that the FBI counterterrorism
    operations will suffer if the FBI cannot expeditiously obtain
    relevant information in these settings, and that you think that
    the need for the harmonization of criminal and national
    security legal standards for the acquisition of transactional
    information remains as vital now as it was at the time of the
    PATRIOT Act.
        Can you elaborate on that a little bit? You are very
    articulate, and talk to us about that.
        Mr. Woods. The reasoning behind that is reflected in your
    question, which is--and I tried to lay out in my testimony, and
    I have laid out in truly mind-numbing, fully annotated detail
    in my law review article attached to it--how these authorities
    developed. And they--the specific and articulable fact
    standard, as I said, worked very well in the traditional
    counterintelligence environment when we often worked from known
    individuals, intelligence officers that we had under
    surveillance, that we were sort of moving outward from.
        It, however, began to run into difficulty in the
    counterterrorism environment, when you are working sort of the
    other direction, from INCOINT threat information, from threats
    that point you toward perhaps a large number of people that you
    need to sort through and focus very quickly on the people who
    are going to be relevant to the investigation.
        And the problem is, when you address that sort of situation
    under specific and articulable facts, you did not have specific
    and articulable facts with reference to all of the people in
    that group. The information was relevant, but you were short of
    that standard, just as you would be short of the probable cause
    standard in FISA.
        And so, this is the reason why the FBI came to Congress
    asking for the standard to be made relevant, in my view, the
    principal reason.
        The second reason was simply the--as has been pointed out
    in other parts of the testimony--to make these authorities
    roughly equivalent to the criminal authorities, recognizing,
    though, that we have to do something.
        And I agree with everyone that has been testifying. We have
    to do something about the secrecy provisions. We have to do
    something about retention and dissemination. But the general
    intent was to make these authorities roughly equivalent to
    criminal authorities, and make them appropriate to the threat.
        And I do not think that rolling back to the old standard
    addresses--neither does it address the problems that were
    brought up in the I.G. reports, nor does it leave us well
    positioned to address the threat in the environment that we are
    encountering.
        Mr. Franks. Mr. Chairman, I will try to squeeze one more
    quick question here.
        Mr. Woods, in your written testimony, you also expressed
    deep concerns with the provision in H.R. 3189 that would
    prevent the use of National Security Letter information for
    intelligence purposes. You wrote that the sections of the bill
    that address the dissemination of NSL enforcement to law
    enforcement--information to law enforcement--would be a
    thoroughly unwarranted revival of the wall separating
    intelligence and law enforcement that operated to such a
    crippling effect prior to 9/11. And this is not justified by
    the significant--interests at stake here.
        And I think that is obviously, again, an articulate point
    of view. And I wonder if you could elaborate on that.
        Mr. Woods. I will try to do so briefly.
        The wall situation was a very complicated one. Mr. Kris and
    I and others could talk about it for hours.
        But the difficulty I have with that provision of 3189, I
    think it mirrors provisions in the FISA statute, which are
    there for a little bit different reason. But when we did have
    that requirement, when we had to track FISA-derived information
    that might get into law enforcement channels, we very quickly
    got ourselves into a very complex situation that had very
    negative effects on counterterrorism operations prior to 9/11.
    And this is all documented in the 9/11 Commission Report.
        I think proposing to take the same approach now in National
    Security Letters, which are 10 times, 20 times the number of
    FISAs, is essentially asking for trouble. And we are going down
    a road that was proven to have difficulty. And it is
    inconsistent with our counterterrorism strategy at the moment.
        If we obtain useful information through a National Security
    Letter, we should be sharing it with law enforcement, with
    homeland security. The idea that we would hold back
    intelligence reports, trying to figure out if there was
    National Security Letter information in it, that we would slow
    down the sharing of information among Homeland Security and
    other protective services, State and local law enforcement, is
    not going to help us.
        And so, I think that provision needs to be looked at. And
    in fact, I would advocate taking it out and having--sort of
    defaulting to the dissemination guidelines in the attorney
    general's guidelines. That would make it far easier to
    disseminate to those entities.
        Mr. Franks. Thank you, Mr. Chairman, and thank all of you.
        Mr. Nadler. Thank you.
        I now yield 5 minutes for questioning to the distinguished
    Chairman of the full Committee, the gentleman from Michigan.
        Mr. Conyers. Thank you, Chairman Nadler. Welcome, all
    witnesses.
        Let us see if during my in-and-out during this hearing,
    Jaffer for the Nadler--and recently added Member to the bill,
    Conyers--proposal. Fein, for the proposal. Woods, partially for
    it. Kris, somewhat for it. Is that unfair characterization? Or
    am I giving you too much support for it than you deserve?
        Mr. Woods. I think the part of it that I do not support may
    well be very significant to the legislation's author. So,
    perhaps I am a little bit more in the----
        Mr. Conyers. I am over-complimentary this afternoon.
        Mr. Woods. But I certainly support the idea of legislation.
        Mr. Conyers. How can we get it fixed so that you could go
    along with Nadler, Conyers and the Chairman of the Crime
    Subcommittee? I mean, what would we have to do to make it, that
    you would say, okay? Tell me.
        Mr. Woods. I am primarily concerned with the standards. My
    experience with the specific and articulable fact standard
    showed that, to me, to be a very frustrating, clumsy standard,
    which was outmoded by the time I encountered it in the 1990's.
        So, my principal objection is the standard. And as I said,
    I think the sharing with law enforcement and Homeland Security
    needs to be fixed, as well.
        But certainly, what is--many of the other provisions of the
    legislation are quite good and the direction we need to go. And
    I am not trying to do--you know, I am certainly not here to
    defend the FBI over the last 3 years and what you saw in the
    I.G. report. I think what is in the legislation addresses that.
    And so, but there's a lot of it I do support.
        Mr. Conyers. Mr. Fein, how can we help him sleep more
    comfortably in his bed at night? How can we help Mr. Woods? How
    can we fix this thing up?
        Mr. Fein. Well, I think what is needed to try to test
    whether or not Mr. Woods' anxieties are justified is, maybe in
    executive session, you need people to say we could not have
    gotten this NSL, if there was a specific and articulable facts
    standard, and to show whether that is more a theoretical or a
    practical problem.
        Because remember, this element, there is a backup here. If
    you want to go just for the relevant standard, which was the
    situation before, have a grand jury do it. Grand juries can
    investigate, as Mr. Kris pointed out, on virtually anything.
    But you have the check, one, it is more in the sunshine, and
    second, it is an independent branch of government that does
    that.
        And this is the reason why you would want to keep the
    specific and articulable standard in, is because then you
    create an incentive to use more of the checks-and-balances
    approach than the unilateral approach. That is why the Supreme
    Court has explained the rule is a warrant rather than any
    exceptions, because you want to have an incentive to the police
    to use the checks and balances where at all feasible.
        That is what I would suggest.
        Mr. Conyers. Thank you.
        Mr. Jaffer. Mr. Conyers, could I add something to that?
        Mr. Conyers. Of course.
        Mr. Jaffer. I think that the reasonable and articulable
    grounds standard is actually--it is a very low standard. And it
    just asks the FBI to provide some sort of basis for its demand
    for the records. It just asks the FBI to explain to somebody
    why it needs the records it is asking for.
        And I think that if the FBI cannot articulate why it needs
    the records, then there is a very good question about why the
    FBI needs the records, or whether it should be collecting the
    records in the first place.
        Mr. Conyers. How do you feel about that, Mr. Fein?
        Mr. Fein. I think that is accurate. And I think there is a
    similar situation that arose in the U.S. Supreme Court, the
    case out of Michigan, U.S. v. U.S. District Court case. I was
    there at the Department of Justice at the time. It was a claim
    made by then-Attorney General John Mitchell, that in domestic
    national security situations, you did not need any judicial
    warrant, because it was too complex to explain national
    security issues to judges.
        And the court unanimously said, that is nonsense. Maybe the
    reason you cannot articulate a national security dimension is
    because it is not there. And the court ruled no, if you have
    some genuine belief that something mischievous is afoot, you
    should be able to articulate it.
        And I think that is exactly applicable to this standard
    here.
        Mr. Conyers. Now, Mr. Kris, it is your turn.
        What is the reluctance, the genuine reserve that you hold
    back on the Nadler-Conyers-Scott approach?
        Mr. Kris. Well, I think I am somewhere in the middle here
    between these various witnesses.
        Mr. Conyers. Well, that is a good place to start.
        Mr. Kris. Yes, you know, just consider me the lukewarm
    water inbetween the fire and the ice.
        First, I agree with Mr. Fein that an executive session
    might be helpful here, because I think these kinds of
    discussions in the abstract can devolve rapidly into angels on
    the head of a pin. These words in a vacuum are very hard to
    sort of get a feel for.
        I, based on my now substantially outdated operational
    experience, have some doubts about the specific and articulable
    facts relating the records to a foreign power or an agent of a
    foreign power. I am not sure I would go quite as far in opening
    it up as Mr. Woods.
        Again, I think here the standard that ought to apply is the
    same standard, essentially, that applies under FISA. The
    information should be essentially a subset of foreign
    intelligence information--information that is relevant to our
    ability to protect against these threats. I think that is where
    the agents ought to be focused at all times.
        And so, I think that is probably the right way to go. But
    again, I would want to have this discussion where you could
    really get some hard facts and some concrete examples going
    around.
        Mr. Conyers. Absolutely. Then you might go from lukewarm to
    warm. Yes. All right.
        Thank you very much, Mr. Chairman.
        Mr. Nadler. Thank you.
        I now recognize the gentleman from Virginia for 5 minutes.
        Mr. Scott. Thank you.
        Mr. Fein, I was intrigued when you said that the judge will
    decide when you have a warrant. Well, the judge, really, does
    not really decide, because that assumes he has got both sides
    of the forum. It is an ex parte decision. He makes a decision
    based on only one side presented, but I guess that is a
    decision.
        But let me ask you about checks and balances generally.
        You know, I always thought checks and balances, as I
    indicated to the previous panel, checking with another branch
    of government. What is wrong with checking with just
    subordinates to see if you are doing a good job?
        Mr. Fein. Like putting the fox in charge of the chicken
    house.
        The problem is that everyone knows that you are on a team.
    As part of the executive branch, I was. And you are expected to
    fulfill the mission of the team. And there are a thousand ways
    that are undetectable that someone can lose promotions, can be
    otherwise marginalized in their jobs, given the equivalent of a
    transfer to Butte, Montana, if they come up with an opinion
    that is not liked.
        And that is just what human nature is about. That is why we
    do not let people be judges in their own case. Why do you have
    the executive branch being the judge in its own case here?
        And we know the problems that can be created. You know
    that, because the issues concerning a device, as to the
    legality of waterboarding, now the department takes the
    position, we told the CIA interrogators this was legal. Then,
    if they follow it, we cannot get at them, because we are the
    final say on this.
        And it is a very incestuous, what I would call an
    intellectually endogamous situation. And that is not the way
    you get reliable judgments. No one is infallible.
        And the situation with regard to a judge ex parte deciding
    on warrants, it is true. He only hears one side, but he does
    not have a benefit like someone in law enforcement, that he
    gets promoted if there is an arrest made or not.
        That is why, even though it is not a perfect system, it is
    superior to the unilateral action.
        Mr. Scott. And why is the necessity for an outside check
    and balance even more important in this case, when you have the
    relevance to an investigation--what is the standard on these
    NSL--what standard are you using?
        Mr. Fein. Sir, with the current statute it is the relevance
    to a terrorist investigation, which is rather broad.
        Mr. Scott. Well, you know it covers some stuff that needs
    to be covered. Where is the limitation?
        I mean, you could almost investigate anything using that
    standard, it seems to me.
        Is there any limitation? I mean, what is terrorist? What is
    relevant? Whose records?
        Mr. Fein. Well, I think you are pointing out the
    elusiveness of a relevance standard with regard to terrorism.
    You can try to connect dots all around the world. It is
    conceivable that something that looks innocuous 99,000 out of
    99,001 times maybe turns up something, so maybe you are looking
    for something that is relevant. That is why it is so open-
    ended.
        And if it is going to be that broad, the way in which we
    traditionally have a check is through grand jury and then the
    sunshine aspect after the fact, where abuses could be exposed.
        Mr. Scott. Any definition of what a terrorist investigation
    is?
        Mr. Woods?
        Mr. Woods. Don't forget, these National Security Letter
    statutes were intended and make explicit reference to the
    attorney general guidelines, which are now called the
    guidelines for national security investigations, which define
    in great detail--unfortunately, classified detail--the
    standards for opening investigations, the definitions
    applicable to----
        Mr. Scott. Well, you know, that is kind of--the attorney
    general makes up his own guidelines, and he can investigate
    what he wants.
        I mean, we have in the back of our minds the fact that we
    have not gotten a good answer to the allegations that they
    fired U.S. attorneys for failing to indict Democrats in time to
    affect an upcoming election. And these are the people who are
    writing their little guidelines to get at things they want.
        You are getting information on people who are not charged
    with a crime.
        Mr. Woods. Well, the guidelines are intended to cover the
    collection of intelligence, which often does involve that.
    Intelligence officers, for example, working in this country,
    often go out of their way not to commit crimes, but yet, need
    to be surveilled, terrorist cells----
        Mr. Scott. Now, if it is relevant to the investigation, you
    are getting information on the secrets of people who are not
    even charged with a crime, if you say that information might be
    relevant to somebody else's criminal activity.
        Mr. Woods. As you would in a criminal investigation, yes.
        Mr. Scott. With a warrant.
        Mr. Woods. With a National Security Letter, as you would
    use a grand jury subpoena----
        Mr. Scott. A grand jury, you have got two different
    branches of government working at that point.
        Mr. Woods. In theory.
        Mr. Scott. And see, this is why we like a little oversight
    from somebody other than the one doing the chasing.
        Mr. Woods. I am not disagreeing on the point about
    oversight. I think there does need to be oversight outside the
    executive branch. And we have struggled with this. Congress has
    struggled with this for years in regulating intelligence
    operations. And it is difficult to do that.
        But we do need it ultimately in the statute. I would favor
    it.
        Mr. Scott. Well, if just I could comment, Mr. Chairman,
    that is why we have a FISA Court kind of in secret, at least
    looking over the proceedings. That is all ex parte. But at
    least you have got somebody in another branch of government
    watching what is done with these vague standards, and somebody
    that has the authority to put an end to it, if they are going
    into areas that are more shenanigans than investigation.
        Mr. Jaffer. Mr. Scott, could I just add to that?
        I actually think we have direct--we have direct evidence
    that judicial oversight in this area would be effective in a
    way that internal executive branch oversight is not. And I am
    thinking of the two cases that the ACLU brought challenging
    National Security Letters, one served on a library organization
    and the other one served on a John Doe organization.
        In both of those cases, the FBI served an NSL, and then
    once we brought the challenge, the FBI made the decision,
    rather than defend the NSL before a judge, to drop the NSL. So,
    the FBI made the decision initially that the information was
    necessary. But when there was the threat of judicial review,
    the FBI backed down.
        I think that shows that judicial oversight is effective in
    a way that executive branch oversight alone is not.
        Mr. Fein. Can I also add, Mr. Scott, that the need for an
    outside check of the National Security Letters is greater now
    than it would have been earlier, because Congress, given the
    status of the claims of executive privilege and state secrets,
    is not and cannot exercise oversight, because you repeatedly
    encounter the claim, ``Can't show you this. Executive
    privilege.'' That is why the FISA oversight is a joke.
        And if this body cannot, through the customary hearing
    process and oversight, impose a check after the fact, all the
    more need at the outset to have some other branch--here, the
    third branch of government--be involved in some way.
        And I want to underscore, this is not an effort to handcuff
    investigations. It is saying, be muscular, but do it with
    checks and balances, because abuse is what happens with
    unilateral, unchecked power.
        Mr. Nadler. The gentleman's time is well expired. We are
    going to have a second round of questioning, however, so he
    will be able to come back to these gentlemen, if he wishes.
        I will now yield myself 5 minutes for further questioning.
        Mr. Woods, I wanted to explore some of the distinctions you
    were drawing. On the one hand, you said that the particular--
    what was that--particularly the articulable fact standard is a
    two----
        Mr. Woods. Significant and articulable fact.
        Mr. Nadler [continuing]. Significant and articulable--
    whatever it is, it is too--specific and articulable facts--it
    is too specific. So, I think it is too difficult.
        Mr. Woods. Yes.
        Mr. Nadler. Okay. On the other hand, the relevance
    standard, especially when you are talking about a preliminary
    investigation where there is basically nothing there, seems to
    be completely and totally open-ended.
        Could you think of some standard that might meet your
    practical problems, that would give us some protections that
    the relevance standard does not? Might we look for some other
    standard?
        Mr. Woods. Yes. Sure. I actually think that what Mr. Kris
    is talking about in terms of foreign intelligence information,
    and by importing that language from the FISA, is quite a
    reasonable requirement.
        Mr. Nadler. What language is that?
        Mr. Woods. Well, what he is citing is the definition of
    foreign intelligence information drawn from the FISA statute.
    And it basically says, this is the kind of information that is
    relevant----
        Mr. Nadler. Okay.
        Mr. Woods [continuing]. To the section of the national----
        Mr. Nadler. Thank you.
        Mr. Fein, you look as though----
        Mr. Fein. I cannot sustain that. Number one, if you look at
    the definition of national security or foreign intelligence
    information, it includes everything under the sun. The bank
    reserves in Hong Kong, you know, trade flows--that sort of
    thing. It is very open-ended.
        And the second thing that is clearly different in FISA is
    that, under the standard before the Protect America Act, and I
    guess which has been expired, you still need probable cause to
    believe that your target was a foreign agent or----
        Mr. Nadler. Whereas you do not need probable cause here.
        Mr. Fein [continuing]. Some lone ranger terrorist.
        And there is not any such limitation with regard to the
    NSL.
        Mr. Nadler. Mr. Jaffer, do you think there is any validity,
    first of all, to Mr. Woods' being upset with the significant
    and particular standard? And if there is, do you think we could
    come up with some other standard without going all the way over
    to relevancy, which seems to be no standard at all?
        Mr. Jaffer. I think that, again, that the reasonable and
    articulable grounds standard is a very low standard. It is not
    probable cause. It just requires an articulation of a reason
    why the records are necessary.
        And again, I think if the FBI cannot articulate that, it
    should not be collecting the information.
        Mr. Nadler. Very good.
        Mr. Jaffer. I think that the fact that it is issuing
    200,000 NSLs over a 4-year period shows you how widely that
    power will be used, unless there is a real limit placed on it.
        Mr. Nadler. Thank you.
        Mr. Woods, I want to explore something else you said. You
    mentioned with respect to a different provision of the bill,
    that essentially says, if I recall correctly, that you cannot
    use material--information, I should say--gathered under the
    foreign intelligence provisions in a prosecution. You separate
    the law enforcement. You said that that was--what we have done
    pre-9/11 is a real problem.
        My question is the following. The fourth amendment says you
    cannot wiretap or get certain information without a warrant and
    probable cause. Now we come along and say, but wait a minute.
    The fourth amendment was dealing with criminal prosecutions,
    but we now have a problem with foreign spies, or with
    terrorists, or whatever.
        In order to fight the war against terrorism, or against
    Soviet spies, or whoever, we will have a lower standard that
    does not meet the fourth amendment. But we will not use this
    for criminal prosecutions. We will only use it to protect
    ourselves. And that is how we have FISA and some of the
    provisions here.
        If you then said, but we certainly cannot use that
    information, that we gathered by a lower standard than the
    fourth amendment standards and the probable cause standard, we
    cannot use that in prosecutions.
        Two questions. One, has that compromised national security,
    because we can use it in national security investigations? And
    two, even if it did compromise national security, how could we
    use it in criminal prosecutions without violating the fourth
    amendment by definition?
        Mr. Woods. And your question reveals the reason for it.
        Mr. Nadler. Well, let me just say, because it seems to me
    we have it backwards. That to say that we could not use
    criminal investigation-derived information for national
    security would endanger national security. But to say that we
    cannot use national security information in a criminal
    prosecution, I do not see how that would endanger national
    security.
        Mr. Woods. We have to start with FISA, as you sort of laid
    it out. And this prohibition of sharing FISA-derived
    information freely with criminal prosecution derives from the
    fact that the standards are different.
        The standards on FISA are actually not lower than the
    criminal standards, they are different. They comply with the
    fourth amendment, the reasonableness standard of the fourth
    amendment. That is the whole, you know, line of court cases
    that come from (INAUDIBLE).
        But it is not probable cause that a crime has been
    committed. It is probable cause that a person is an agent of a
    foreign power.
        And so, if you want to construe that as lower, it is very
    vital, then, that that is not sort of fed wholesale into the
    criminal process. That is why the distinction is there in FISA.
        The difference here is, FISA is dealing with full-blown,
    fourth amendment-protected content. Okay. It is stuff that is
    surveillance----
        Mr. Nadler. NSLs, or not.
        Mr. Woods. NSLs, or not. We are talking--it seems to me
    that one of the problems with the discussion is, you know, the
    level of protection and the complexity of the protection will
    vary, depending on the level of intrusion involved and what is
    being protected.
        Now, where you have content, the government entering your
    house and searching your papers, the government----
        Mr. Nadler. Transactional is not as protected as content.
        Mr. Woods. Correct. And this is, if I could tell you the
    whole history of National Security Letter legislation, it is
    kind of the neglected stepchild of FISA. No one paid much
    attention to it. That is why the statute----
        Mr. Nadler. We are trying to remedy that now.
        Mr. Woods. And so, there is a lot of work that needs to be
    done to this. But I do not think we need to build it into a
    replica of FISA for us to achieve----
        Mr. Nadler. But you still did not answer my key question.
        Mr. Woods. Okay.
        Mr. Nadler. How does saying that information gleaned from
    National Security Letters, issued under whatever standards they
    are issued, can be used for national security, but cannot be
    used for criminal prosecution? How does that endanger national
    security?
        Mr. Woods. Well, for one thing, you need to do something
    with that information--I mean, we need to prosecute the
    terrorist, or the spy, in some situations. So we need to
    transfer it from the national security environment into the
    terrorism--sorry--into the criminal environment, if there is a
    prosecution.
        But second, if I, through the use of National Security
    Letters, develop, say, information about a terrorist threat,
    and I want to disseminate that to the people who are the first
    responders, the State and local law enforcement, is that
    dissemination to law enforcement?
        Well, it is, even though it might not--you know, could that
    information find its way into a criminal prosecution? That is
    the issue that is raised.
        Mr. Nadler. Thank you.
        Would Mr. Fein and Mr. Jaffer comment on that?
        Mr. Fein. Number one, at least at present, oftentimes
    people are detained without trial. Just go to Guantanamo Bay.
    And the President can detain U.S. citizens as enemy combatants,
    and they never have a trial.
        So, the idea that you have to have a trial to do something
    certainly is not the standard that this Administration
    employes.
        Secondly, what is it that you can do with that national
    security information? You can thwart the plot. You do not have
    to have a criminal prosecution. It is oftentimes said by this
    Administration, especially, you do not want law enforcement to
    be backward looking. You want it to be forward looking.
        So, you can foil the plot in ways that do not require----
        Mr. Nadler. So, you are agreeing that, if you can use that
    information to foil the plot, then not giving it to law
    enforcement for prosecution is not a problem.
        Mr. Fein. It does not prevent the safety to the Americans
    that comes from preventing the terrorist act.
        Now, we could call it a problem in the sense that, if you
    want to have and ease their way to publicize how well you are
    doing in criminal prosecutions, that would be useful. And
    moreover, there may be a difficulty, if you thwart a plot and
    you do not have them in prison, that they could then return to
    that particular fray----
        So I do not want to say there is no difference. But
    certainly, the main idea that is promoted, that you need the
    intelligence to prevent the crime, not prosecute it, certainly
    is not disturbed.
        Mr. Nadler. Thank you very much.
        Once again, I have gone over my 5 minutes, and the
    gentleman from Arizona is recognized for a very flexible 5
    minutes.
        Mr. Franks. Well, thank you, Mr. Chairman. You are always
    kind in that regard. I wish we could figure out a way to bring
    that into philosophical terms here.
        Mr. Chairman, I guess, first of all, when we are gathering
    information that law enforcement--it is just information that
    is out there--I think it is very important to make this
    distinction. We know that, like Pseudofed and some of these
    other kinds of over-the-counter drugs can be purchased and then
    used to make other kinds of drugs that are very, very
    dangerous.
        If someone goes into the drugstore, they have a right to
    have privacy about what kind of drugs they buy. But if they buy
    400 boxes of Pseudofed, that might cause law enforcement
    eyebrows to go up.
        And if we make that to where that the law enforcement--
    before he can even gather that information to even look at it--
    to be something that would go through the standard process of
    probable cause, I mean, we would never get anything done. The
    policemen would have to go around with their eyes closed.
        And I just think it is very important, as someone who
    believes so strongly in the foundational, constitutional
    principles, to make sure that we apply them in the correct way.
        And Mr. Fein, in all due respect, I do not think there are
    any American citizens at Guantanamo. And, you know, we have got
    to be careful how we throw these things around.
        If we apply constitutional rights to terrorists that we
    fight in the, say, the outland of Afghanistan, and we have got
    to read them their rights before we arrest them, that would
    pretty much do away with any ability for us to fight a war on
    terror. And so, we have to be somewhat practical minded here,
    while in keeping with the basic foundations of justice.
        With that said, you know, there was a time when Congress
    was trying to do this in the PATRIOT Act. And when this PATRIOT
    Act was debated in Congress, and they changed the standard for
    NSLs from requiring a government statement of specific and
    articulable facts to one of relevance, they did so after
    carefully considering the FBI supplies of examples from actual
    operations.
        And even Senator Patrick Leahy, the Democratic Chairman of
    the Senate Judiciary Committee, found that--this is Patrick
    Leahy that said, ``And the FBI has made a clear case that a
    relevant standard is appropriate for counterintelligence and
    counterintelligence investigations, as well as for criminal
    investigations.''
        Now, Mr. Leahy is not my mentor, so I do not suggest that
    you all go out and follow his perspective in every case, but it
    should be something maybe for the Democrats on the Committee to
    consider.
        So, with that, let me ask Mr. Kris, if I could. H.R. 3189
    provides that, ``No information acquired by a National Security
    Letter shall be disclosed for law enforcement purposes unless
    such disclosure is accompanied by a statement that such
    information, or any information derived therefrom, may only be
    used in a criminal proceeding with the advanced authorization
    of the attorney general.''
        Do you support that provision? And if you do not, why not?
        Mr. Kris. I mean, first of all, let me just say that that
    is not a prohibition on the use of NSL-derived information in a
    criminal prosecution. I sympathize with what I understand to be
    the rationale behind that, which is the same as the rationale
    behind the corresponding language in FISA, which is that you do
    not want accidental disclosure through localized criminal
    prosecution of information that reveals a national security
    investigation, which has to be kept secret for longer than
    might otherwise occur.
        And I am in favor, I think, within the context of these, by
    definition, national and international investigations of some
    kind of centralized monitoring, because they are not just local
    problems the way some street crime, for example, is.
        Having said that, given the volume of National Security
    Letters--some 50,000 a year--it might be a bit steep to ask the
    attorney general each time to approve the way he does, or she
    does, in respect to FISA applications, where there are only
    about 2,000 a year.
        So, I mean, I sympathize with the idea behind it. I am not
    sure that it would be administrable. And it may be better to
    get at the same issue through minimization procedures, which
    are also part of 3189, and which I do strongly support.
        Mr. Franks. The bill would also raise the standard for the
    government's access to business records in terrorism
    investigations by requiring that the government show ``specific
    and articulable facts, giving reason to believe that the
    information or records sought by that NSL would pertain to a
    foreign power or an agent of a foreign power.''
        Mr. Kris. Yes, as I say, I think I am sort of the lukewarm
    water on that. I have some concerns about that language. And I
    do think that the use of the definition of foreign intelligence
    information is right.
        And I just want to point out, foreign intelligence
    information has two separate subsections. The one that Mr. Fein
    referred to with respect to Hong Kong banking information is in
    a second and different subsection than the one we have been
    talking about, which is, I think, rather rigorously defined to
    be information that relates to the ability of the United States
    to protect against sabotage, international terrorism,
    espionage, attack and other array of hostile acts, carried out
    by foreign powers or agents of foreign powers.
        I mean, this is a standard that has some meat on the bones.
    And I think it would be a reasonable way to go. And it has the
    advantage--as compared, say, to the current reference to the
    A.G. Guidelines, which are classified--that it refers to
    statutory language with definitional subsections that are
    pretty well known and could be discussed and debated publicly,
    at least in the abstract.
        Mr. Franks. Mr. Chairman, I do not know if there is time
    for Mr. Woods to say a word on that.
        Mr. Woods. I think the point I would make about sharing
    with law enforcement information--and Mr. Kris makes some
    excellent points on the relationship to FISA. But we have to
    also consider this in the context of our homeland security and
    counterterrorism strategy.
        If I have information, threat information about something
    that would occur in New York City, criminal prosecution is not
    the first thing on my mind. The first thing I want to do is
    tell the NYPD.
        Now, if I have to worry about, you know, is this piece of
    paper or e-mail that I am sending to the NYPD, does that
    contain National Security Letter information? If so, do we need
    to go to the attorney general first?
        I would just say, on the basis of practical experience,
    that backs up the system, and you get the situation in which
    that stuff is not disseminated the way I think all of us would
    want it to be disseminated.
        And I think that is not the intent of the statute, but that
    is an effect. That is what I am concerned about.
        Mr. Nadler. Would the gentleman yield to me for a----
        Mr. Franks. I would. Yes, sir.
        Mr. Nadler. Thank you.
        Mr. Woods, following up on what you were just saying, if
    you have information about a plot in New York, and you want to
    disseminate that information to the NYPD for helping prevent
    it, is that for law enforcement purposes?
        Mr. Woods. Well, in one sense it is not. And you would say,
    well, that is not a problem. But our experience with FISA
    information was, if you are disseminating it to a law
    enforcement organization, that is dissemination to law
    enforcement.
        It is dissemination that, once it is in that organization,
    it could come back in the form of--it could be used in an
    affidavit somewhere. It could go into the process. So, the
    position always was that, before you give it to the law
    enforcement organization, you have to clear it for law
    enforcement purposes.
        Mr. Nadler. So, would you be happier if the provision said
    essentially the same thing, that you cannot disclose it for law
    enforcement purposes, except for antiterrorism prevention
    purposes, or something like that?
        Mr. Woods. I think you could craft some language to deal
    with the threat dissemination--the dissemination of threat
    information, that would probably solve this problem. I think
    that would be a very wise thing to consider.
        Mr. Nadler. Thank you. I yield back, and I thank the
    gentleman.
        Thank you.
        I now recognize the gentleman from Virginia.
        Mr. Scott. Thank you.
        I think all the witnesses have indicated that the term
    ``foreign intelligence'' includes fights against terrorism. Mr.
    Fein has also suggested that it includes a lot more than that.
        Let me just ask on terrorism, Mr. Kris, you indicated that
    terrorism--does it have to be related to a State-supported
    terrorist? Or can you have a free, kind of a loosely organized
    group of terrorists that are not State supported? Would they be
    included in all of this?
        Mr. Kris. Yes. Non-state-supported terrorism would be
    included. FISA's legislative history is pretty clear in saying
    you could have the Larry, Moe and Curly terrorist organization.
    I mean, three guys who are actually engaged in terrorism would
    be a terrorist group.
        Mr. Scott. Okay. Now, you indicated two sections. When we
    talk about foreign intelligence for the purpose of National
    Security Letters, are both sections of the foreign
    intelligence, the terrorism part and the trade deal part, are
    both of them subject to National Security Letters?
        Mr. Kris. Well, you mean currently, or what I think should
    be?
        Mr. Scott. Both.
        Mr. Kris. Well, currently, it depends on--you know, there
    are several different NSL statutes. And it depends on which
    statute. But most of them are focused on international
    terrorism, most of the broad ones. So, they would not include
    the so-called affirmative foreign intelligence, the banking
    sort, if you want, or the foreign trade stuff.
        My own view is--but then there are some statutes that do
    refer to the foreign trade, as long as it does not concern a
    U.S. person. So that basically, what some of the----
        Mr. Scott. But what is concerning, if it is relevant to a
    foreign intelligence investigation, you are getting information
    relevant to that investigation, can you not get information,
    records pertaining to an innocent United States citizen?
        Mr. Kris. Well, you may, but----
        Mr. Scott. That is what the whole NSL letter is about,
    isn't it?
        Mr. Kris. I may be messing this up by causing more
    confusion than I am resolving.
        But in current law, there is a distinction between this
    protective information, the information you need to fight
    against terrorism and all these other threats, and affirmative
    foreign intelligence information, the sort you want to get when
    we are spying on them, for example, trying to get trade-related
    information, or what have you.
        And by and large--there are a number of different laws, so
    I do not want to make an absolute blanket statement--by and
    large, the second category of affirmative foreign intelligence
    information in this context has to be information that does not
    concern a U.S. person. So, it might be, for example----
        Mr. Scott. So, using that section, where you--the trade
    deal section----
        Mr. Kris. Yes.
        Mr. Scott [continuing]. You cannot get information
    pertaining to an innocent United States citizen.
        Mr. Kris. Or any, guilty or innocent.
        Mr. Scott. With an NSL.
        Mr. Kris. I mean, at least under the standard that I am
    talking about, I----
        Mr. Scott. Is this should be, or is?
        Mr. Kris. Well, it is what I propose, yes. And it also has
    a basis in current law. But there are several different
    provisions of current law that have different standards, so I
    want to be careful----
        Mr. Scott. Is there any provision in present law where you
    can get information, records of an innocent United States
    citizen, pertaining to an investigation--a trade deal type
    investigation, foreign intelligence--where you can get
    information on an innocent United States citizen?
        Mr. Kris. I don't think so, sir, but I mean, I----
        Mr. Scott. Does anybody want to comment?
        Mr. Fein. I think at least under FISA--now, that is not a
    national security----
        Mr. Scott. Right. Well, FISA, you have got a judge looking
    at it, which you have some protection.
        Mr. Fein. Yes.
        Mr. Jaffer. Mr. Scott, could I just jump in on this whole
    discussion?
        I may be misunderstanding Mr. Kris' proposal, and if I am,
    I apologize in advance. But if the proposal is simply to
    replace the current--or effectively to replace--the current
    relevance language in the NSL statutes with the language that
    is in the foreign intelligence definition, which uses the
    phrase ``relates to,'' I am not sure that actually solves any
    of the problem that at least the ACLU is concerned about.
        It does not solve the problem that the FBI can go on
    fishing expeditions and collect information about innocent
    people, many degrees removed from actual suspects. And it does
    not in itself solve the oversight problem, either.
        Mr. Scott. Well, let me try to get in another question.
        Is there any difference of the information you can get
    under FISA--anything you can get under FISA that you cannot get
    under--with a National Security Letter, or vice versa?
        Mr. Jaffer. Yes.
        Mr. Scott. What can you get----
        Mr. Jaffer. Well, under FISA you can get all kinds of
    information. You can get records relating to fourth amendment
    activity. You can get phone calls. You can get the content of
    phone calls. You can get e-mails.
        But National Security Letters, you can get a narrower class
    of information.
        Now, the fact that it is a narrower class does not mean
    that it is a non-sensitive class or a not constitutionally
    protective class. But it is nonetheless a narrower class of
    information than is available to the FBI through FISA.
        Mr. Nadler. Has the gentleman concluded?
        Mr. Scott. Not really. But if you insist, let me ask
    another question. [Laughter.]
        Mr. Nadler. Without objection.
        Mr. Scott. If you find information on an innocent United
    States citizen in one of these investigations, what happens to
    that information if it turns out not to be relevant to the
    investigation?
        Do you keep that information? Do you turn it over to--if it
    turns out not to be relevant, can you have a collateral
    criminal case?
        Mr. Jaffer. I think that the OIG has documented that the
    information--at least the practice has been--to keep some of
    that information. That is one of the problems that the
    Inspector General identified.
        Mr. Scott. But let me say, if you have got somebody with a
    terrorist trying to bomb something, and you find out somebody
    unrelated--that you thought might have been related was
    unrelated, but you tripped over some drug use, can you have a
    criminal investigation of that drug use?
        And can you backdoor investigate drug use with these NSLs
    using foreign intelligence as a pretext? Can you run a criminal
    investigation without probable cause, just out of suspicion,
    not probable cause, then you know he is dirty. And so, let us
    do a little pretext and call it one of these foreign
    intelligence investigations, and see what we trip over?
        Mr. Fein. Well, that would seem to me to violate the act,
    if you could ever get inside someone's head and be able to
    prove that this was a pretense all along. Other than
    confessions, I doubt whether that is something that would ever
    be detected. Certainly, it is a possibility.
        Mr. Scott. Well, we changed the standard from primary
    purpose to----
        Mr. Fein. Significant purpose.
        Mr. Scott [continuing]. To a significant purpose, which
    suggests that if it is significant, not primary, it invites the
    question, well, what was the primary purpose. And in fact, the
    attorney general, in one answer to the question, blurted out
    criminal investigation without probable cause--he did not say
    without probable cause, but that is what he meant.
        Mr. Fein. That is exactly what the danger is of lowering
    the standard, is you get the criminal investigation to
    piggyback on an intelligence investigation, and not subject to
    the same constraints.
        Mr. Scott. Without the burdensome requirement of having
    probable cause before you start delving into people's personal
    papers.
        Mr. Fein. Exactly.
        Mr. Woods. A criminal investigation can be initiated
    without probable cause. Criminal investigation can obtain
    materials that we have been talking about--transactional
    materials--without probable cause through the use of the grand
    jury subpoena.
        The requirement of probable cause only attaches when I
    would execute a search warrant or do electronic surveillance in
    a criminal investigation to get to that level.
        The same hierarchy applies in intelligence investigations.
    You know, I would use a National Security Letter, which is not
    a probable cause instrument, to get transactional information.
    I would use the FISA to conduct a search warrant or use
    electronic surveillance for these purposes.
        It is very hard--and part of the definition that Mr. Kris
    has been talking about of foreign intelligence information, the
    purpose of that definition is to prevent FISA, the surveillance
    and search authority, to be used as a subterfuge for criminal
    investigations.
        So, regardless of whether it is significant purpose or
    primary purpose in FISA, it still has to be for the collection
    of foreign intelligence.
        Mr. Scott. Yes, but if it is a significant purpose, but the
    primary purpose is really trying to catch somebody that you
    knew was dirty, but you could not initiate a criminal
    investigation, because you did not have probable cause to start
    searching his house, but can--with an NSL and all of these
    other things--can do a foreign intelligence investigation and
    backdoor, because you do not have the probable cause problem,
    get subpoenas and warrants to start searching somebody's house.
        Mr. Woods. But I cannot. I cannot under FISA. I have to
    convince a judge to get a warrant that I am--that this person
    is an agent of a foreign power.
        Now, if the question is, can I use the NSLs, because that
    does not require a judge, then I--you know, the restraint
    there--and this is something we have already----
        Mr. Nadler. The time of the gentleman has expired. All time
    has expired.
        I want to thank you, and I want to thank our witnesses for
    their testimony.
        Without objection, Members will have 5 legislative days to
    submit any additional written questions for the witnesses,
    which we will forward, and ask that you answer as promptly as
    you can, to be made part of the record.
        Without objection, the record will remain open for 5
    legislative days for the submission of any other additional
    materials.
        And again, thanking our witnesses, the hearing is
    adjourned.
        [Whereupon, at 3:16 p.m., the Subcommittee was adjourned.]

                                A P P E N D I X

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