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Surveillance Bill Offers Protection To Telecom Firms
Deal Would Extend U.S. Wiretap Power, Shield Providers Facing Privacy Lawsuits

By Dan Eggen and Paul Kane
Washington Post Staff Writers
Friday, June 20, 2008

House and Senate leaders agreed yesterday on surveillance legislation that could shield telecommunications companies from privacy lawsuits, handing President Bush one of the last major legislative victories he is likely to achieve.

The agreement extends the government's ability to eavesdrop on espionage and terrorism suspects while effectively providing a legal escape hatch for AT&T, Verizon Communications and other telecom firms. They face more than 40 lawsuits that allege they violated customers' privacy rights by helping the government conduct a warrantless spying program after the Sept. 11, 2001, attacks.

The breakthrough on the legislation came hours after the White House agreed to Democratic demands for domestic spending additions to an emergency war funding bill. Taken together, the bills -- two of the last major pieces of legislation to be approved by Congress this year -- suggest that Bush still wields considerable clout on national security issues but now must acquiesce to Democratic demands on favored domestic priorities to secure victory.

The war spending bill, for example, includes $162 billion for the conflicts in Iraq and Afghanistan and an additional $95 billion worth of domestic spending on programs such as unemployment insurance and higher-education benefits for veterans. Bush, who had threatened for months to veto the legislation, said he will sign it.

Leading Democrats acknowledged that the surveillance legislation is not their preferred approach, but they said their refusal in February to pass a version supported by the Bush administration paved the way for victories on other legislation, such as the war funding bill.

"When they saw that we were unified in sending that bill rather than falling for their scare tactics, I think it sent them a message," said House Speaker Nancy Pelosi (D-Calif.). "So our leverage was increased because of our Democratic unity in both cases."

Under the surveillance agreement, which is expected to be approved today by the House and next week by the Senate, telecoms could have privacy lawsuits thrown out if they show a federal judge that they received written assurance from the Bush administration that the spying was legal.

The proposal marks a compromise by Republicans and the Bush administration, which had opposed giving federal judges any significant role in granting legal immunity to the phone companies.

The legislation also would require court approval of procedures for intercepting telephone calls and e-mails that pass through U.S.-based servers -- another step that the White House and GOP lawmakers previously resisted.

"It is the result of compromise, and like any compromise it is not perfect, but I believe it strikes a sound balance," said House Majority Leader Steny H. Hoyer (Md.), the lead Democratic negotiator in talks between lawmakers and the White House.

But overall, the deal appears to give Bush and his aides, including Attorney General Michael B. Mukasey and Director of National Intelligence Mike McConnell, much of what they sought in a new surveillance law.

White House spokesman Tony Fratto called the measure "a bipartisan bill" that "will give the intelligence professionals the long-term tools they need to protect the nation, and liability protection for those who may have assisted the government after the 9/11 attacks."

The sharpest critics of the administration's surveillance policies were not mollified. Sen. Russell Feingold (D-Wis.) said the legislation "is not a compromise; it is a capitulation."

"Allowing courts to review the question of immunity is meaningless when the same legislation essentially requires the court to grant immunity," he said.

Caroline Frederickson, a lobbyist for the American Civil Liberties Union, said, "The telecom companies simply have to produce a piece of paper we already know exists, resulting in immediate dismissal."

Senate Majority Leader Harry M. Reid (D-Nev.), who has opposed retroactive immunity for the companies, said he was reviewing the legislation. "There have been, from what I see, some improvements," he said yesterday. "There's good things in this bill."

Other Democrats said the bill could be more popular than a version approved in February that 20 Senate Democrats favored.

Pelosi said the most important part of the deal is "exclusivity" language making it clear that the surveillance law is the only legal authority when it comes to government spying. In defending its warrantless spying program in the past, Bush administration lawyers argued that the commander in chief's warmaking powers trumped such considerations.

Yesterday's agreement ended a four-month standoff that began after House leaders refused to pass a Senate-approved bill that would have made permanent a temporary surveillance law enacted last August. According to the administration, some wiretap orders that allowed the surveillance of foreign terrorism suspects would have begun to expire two months from now unless new legislation was approved.

The negotiations underscored the political calculation made by many Democrats who were fearful that Republicans would cast them as soft on terrorism during an election year. Earlier this week, Hoyer told reporters that many Democrats, particularly those from conservative districts, were prepared to side with Republicans and approve the Senate version of the bill if talks broke down completely.

The immunity would cover companies that helped the government between Sept. 11, 2001, and Jan. 17, 2007, when the warrantless surveillance program was brought under the authority of the secret Foreign Intelligence Surveillance Court. That program had allowed the National Security Agency to monitor communications to and from the United States without court oversight.

The retroactive legal protection would apply only in lawsuits filed against telecommunications firms. Any lawsuits against the government would proceed and would have to be defended by other means.

Staff writer Carrie Johnson contributed to this report.

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