Bloomberg: Spy agencies sharing data with "thousands" of firms

What was it that I was saying earlier this week about the intelligence-industrial complex? Bloomberg reported last night that Edward Snowden may have only scratched the surface on the cooperation between American intelligence agencies and commercial firms. In fact, the partnership is much wider than first thought — and the intel agencies provide their partners with some significant quid pro quo:

Thousands of technology, finance and manufacturing companies are working closely with U.S. national security agencies, providing sensitive information and in return receiving benefits that include access to classified intelligence, four people familiar with the process said.

These programs, whose participants are known as trusted partners, extend far beyond what was revealed by Edward Snowden, a computer technician who did work for the National Security Agency. The role of private companies has come under intense scrutiny since his disclosure this month that the NSA is collecting millions of U.S. residents’ telephone records and the computer communications of foreigners from Google Inc (GOOG). and other Internet companies under court order.

Many of these same Internet and telecommunications companies voluntarily provide U.S. intelligence organizations with additional data, such as equipment specifications, that don’t involve private communications of their customers, the four people said.

Just how chummy do these firms get with the NSA, the FBI, and the CIA?

Some U.S. telecommunications companies willingly provide intelligence agencies with access to facilities and data offshore that would require a judge’s order if it were done in the U.S., one of the four people said.

In these cases, no oversight is necessary under the Foreign Intelligence Surveillance Act, and companies are providing the information voluntarily.

You can look at this as American industry doing its patriotic duty in wartime. You can also look at this as trusted corporations selling out their customers to curry favor with the government to pick up some secret benefits. There’s probably a little of both going on, but it’s difficult to say which is most prevalent, in part because no one revealed that this was going on until now. Most sophisticated users would know that the capability exists but assume that the companies they choose to patronize would require a valid search warrant before surrendering the kind of data being shared. We know what happens when we assume, especially these days.

This raises a number of interesting questions and concerns. First, are cooperating firms gaining competitive advantages against non-cooperating (and/or unaware) firms in the same market? That kind of distortion would corrupt markets in favor of snitching as a survival tactic, would it not? Second, are there political organizations that have this kind of friendly relationship with intelligence services that give them a competitive advantage? Two months ago, one might have laughed off such a suggestion, but after what took place at the IRS, it’s a little more difficult to dismiss.

The part about the Microsoft bug reporting is especially interesting in light of the Attkisson story today, too.

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