Leaked US spying budget reveals investments in 'groundbreaking' cryptanalysis

The U.S. intelligence community is reportedly using a fifth of its US$52.6 billion annual budget to fund cryptography-related programs and operations.

Some of those funds are invested in finding weaknesses in cryptographic systems that would allow breaking encrypted communications collected from the Internet and elsewhere, according to a portion of a top-secret document published Thursday by The Washington Post and obtained from former National Security Agency contractor Edward Snowden.

The document is the fiscal year 2013 budget proposal summary for the National Intelligence Program, which spans 16 agencies with over 107,000 employees. The entire report called "FY 2013 Congressional Budget Justification" has 178 pages, according to the Post, but the newspaper only published 17, including a 5-page statement signed by U.S. Director of National Intelligence James Clapper.

In his statement, Clapper listed the primary areas of investment for the intelligence community which included Signals Intelligence (SIGINT). In respect to SIGINT he wrote: "We are bolstering our support for clandestine SIGINT capabilities to collect against high priority targets, including foreign leadership targets. Also, we are investing in groundbreaking cryptanalytic capabilities to defeat adversarial cryptography and exploit internet traffic."

Cryptanalysis is the science of analyzing cryptographic systems in order to find weaknesses that would allow obtaining the contents of encrypted messages without advance knowledge of the encryption key.

Previous documents leaked by Snowden revealed that the NSA is collecting Internet communications en-masse with the help of telecommunication and technology companies. U.S. companies that operate the backbone telecommunications and Internet infrastructure are paid millions of dollars every year by the government to allow the NSA to collect data as it moves through their fiber-optic cables and networks, the Post reported Thursday.

The newly leaked budget reveals that this money is paid through a project called the "Corporate Partner Access" that was expected to cost $278 million during fiscal year 2013, the newspaper said. There are some other payments for "Foreign Partner Access" totalling $56.6 million, although it's not clear if these are for foreign companies, foreign governments or other entities.

The NSA's mass upstream interception of Internet traffic has prompted many people in the security community to wonder what the agency's crypto-cracking capabilities might be in relation to encryption schemes and protocols that are in widespread use on the Internet today. Some crypto experts believe that there is not reason to believe the NSA can crack strong encryption algorithms vetted by scientists, but others said that the feasibility of breaking widely used encryption protocols like SSL/TLS depends on various factors, like key size and other configurations.

While the leaked budget document does not provide details about the NSA's ability to crack encrypted communication, it does confirm that cryptography and cryptanalysis are one of the U.S. intelligence community's key areas of interest.

Twenty-one percent, or roughly $11 billion, of the 2013 budget was intended for the Consolidated Cryptologic Program (CCP), which includes NSA programs and is staffed by around 35,000 employees. This makes it the second most expensive program of the intelligence community after the Central Intelligence Agency program, which was supposed to receive 28 percent of the funds.

Of the $11 billion used to fund the CPP, around $2.5 billion, or 23 percent, were intended for "collection and operations" and $1.6 billion, or 15 percent, for "processing and exploitation." The program's biggest expenses were estimated in the "enterprise management and support" category which was set to receive 26 percent of the funds.

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Tech giants demand spying openness

 

 NSA boss Gen Keith Alexander said sharing more data about requests must not harm investigations Apple, Google and dozens of other technology companies have urged US authorities to let them divulge more details about security requests.

 
The companies want to be able to report regular statistics about the nature and scope of what data is being asked for.

Whistle-blower Edward Snowden's revelations about US spying capabilities has left the tech firms keen to assert their independence.

Authorities are said to be considering the companies' request.

"We just want to make sure we do it right," said Gen Keith Alexander, director of the National Security Agency.

"We don't impact anything ongoing with the FBI. I think that's the reasonable approach."
Limited scope

  The companies sent a letter outlining their request on Thursday to Gen Alexander, as well as President Obama and Congress.

It was co-signed by some of the most influential companies in the tech world, including Facebook, Twitter and LinkedIn.

Campaign groups such as the Electronic Frontier Foundation and Human Rights Watch are also backing the action.

Companies are currently allowed to release limited data regarding security requests and their nature.
But as it stands those disclosures must be limited in scope, and in many cases require that the firms ask the courts for permission to make the information public.

Many users of popular services, particularly social networks, reacted angrily to the news that companies regularly make available information about users when requested to do so.

"They don't have a choice. Court order, they have to do this," Mr Alexander from the NSA said, suggesting that security authorities could be open to the idea.

"What they want is the rest of the world to know that we're not reading all of that email, so they want to give out the numbers.

"I think there's some logic in doing that."

Evidence of Huawei Spying, Former Intelligence Chief Says

Michael Hayden, also the former head of the U.S. National Security Agency (NSA), said in an interview with the paper that Huawei had "shared with the Chinese state intimate and extensive knowledge of the foreign telecommunications systems it is involved with".


"I think that goes without saying," he was quoted as saying.


The newspaper reported Hayden said intelligence agencies have hard evidence of spying activity by the world's No. 2 telecoms equipment maker. It did not detail that evidence.


Huawei, founded in 1987 by former People's Liberation Army officer Ren Zhengfei, has repeatedly denied being linked to the Chinese government or military or receiving financial support from either.


Hayden is a director of Motorola Solutions, which provides radios, smart tags, barcode scanners and safety products. Huawei and Motorola Solutions Inc had previously been engaged in intellectual property disputes for a number of years.


Huawei Global Cyber Security Officer John Suffolk described the comments made by Hayden as "tired, unsubstantiated defamatory remarks" and challenged him and other critics to present any evidence publicly.

"Huawei meets the communication needs of more than a third of the planet and our customers have the right to know what these unsubstantiated concerns are," Suffolk said in a statement emailed to Reuters. "It's time to put up or shut up."


The report came a day after Britain announced it would review security at a cyber centre in southern England run by Huawei to ensure that the British telecommunications network is protected.


In October 2012, the U.S. House of Representatives' Intelligence Committee urged American firms to stop doing business with Huawei and ZTE Corp., warning that China could use equipment made by the companies to spy on certain communications and threaten vital systems through computerized links.


The Australian government has barred Huawei from involvement in the building of its A$37.4 billion ($34.25 billion) National Broadband Network. 

Stop spying on us, European Parliament tells US

The European Parliament gave European Commissioners and national ministers some extra ammunition Thursday in discussions with the U.S. following allegations about American spying and the Prism scandal: possible suspension of data-sharing agreements.

The Parliament called on the U.S. to provide full disclosure of any spying activities, and set up an inquiry to look into the allegations, but stopped short of suspending bilateral trade talks due to start on Monday. The resolution was approved by 483 votes to 98 with 65 abstentions.

Members of the European Parliament (MEPs) said that the European Commission, the Council of Ministers and E.U. member states should consider "all levers at their disposal" in negotiations with the U.S., including suspending deals for sharing air passenger (Passenger Name Record) data and bank data (the Terrorist Finance Tracking Programme).

The resolution also expresses grave concern that similar surveillance programs may be run by E.U. member states, including the U.K., Sweden, the Netherlands, Germany, and Poland. It calls on those countries to examine whether their programs are compatible with E.U. law.

The inquiry will be conducted by the Parliament's Civil Liberties Committee and will look into the alleged bugging of E.U. by the U.S. National Security Agency. It will assess the impact of the alleged surveillance activities on E.U. citizens' right to privacy and data protection, freedom of expression, the presumption of innocence, and the right to an effective remedy, and will publish its findings by the end of the year.

Parliament's resolution is not legally binding, but it also calls on E.U. countries to speed up their work on the whole data protection package. Jan Philipp Albrecht, the MEP charged with steering the E.U.'s data protection overhaul through Parliament said, "Boundaries need to be set on both sides of the Atlantic to protect the interests of E.U. citizens. Strict and consistent data protection rules are needed in the E.U. and the United States."

He also said that the current Safe Harbor Agreement between the E.U. and the U.S. should be reviewed.

Some MEPs had called for a suspension of the Transatlantic Trade and Investment Partnership (TTIP) talks. "We refuse to accept that consumer and data protection could be sacrificed for the sake of the TTIP," said Dany Cohn-Bendit and Rebecca Harms in a statement released Wednesday night.

In the final resolution, MEPs said it would be "unfortunate" if E.U.-U.S. trade talks were to be affected by the allegations, but added that "placing increasing free trade above fundamental rights and the rule of law will destroy citizens' trust in the E.U."

The talks will be handled by the European Commission. Commission President Jose Manuel Barroso said in a statement on Thursday that "negotiations on TTIP are and will remain top priority."

But he accepted that concerns over the spying allegations must be addressed. "We expect that the E.U.-U.S. working groups will analyze the oversight of the intelligence activities, intelligence collection, and also the question of privacy and data protection," he said.

"In a recent letter to the Commissioners responsible, the Attorney General of the United States, Eric Holder, said that the United States are ready, as soon as possible, to create these groups to analyse these matters. This Transatlantic Trade and Investment Partnership is of major importance. For it to be a success, we need confidence among partners and confidence can come better if there is a clarification of some issues that are of very serious concern at European level," Barroso said.

Pretty Little Liars: Hanna's Mom Warns Her to Stop Spying

Is Ashley Marin telling the truth about being out of town the night detective Darren Wilden was murdered? In the June 25 episode of Pretty Little Liars, the single banker continues to raise eyebrows as her whereabouts come into question. After learning that her daughter Hanna found her muddied heels in the trash, she decides to address the situation.

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"I do not appreciate you spying on me," Ashley (Laura Leighton) tells her.

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"I was not spying," Hanna (Ashley Benson) retorts. "I just happened to look in the wastebasket." Given her daughter's propensity for getting into trouble, Ashley fires back, "You deliberately looked."

Ashley confronts her daughter Hanna in the June 25, 2013 episode of Pretty Little Liars.
Credit: ABC Family

Hanna accuses her mom of providing a false alibi, but as Ashley reminds her, "I do not have to account for myself to you."

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"Mom, I don't care about the stupid play, all right?" Hanna yells. "But why would you lie about it?" Ashley then pleads with her daughter to not "ask me any more questions." Just before she leaves Hanna's room, Ashley stops and says, "Hanna, if anyone asks you . . . don't lie. Just don't say anything."

Pretty Little Liars airs Tuesday, June 25, at 8 p.m. EST on ABC Family.