SPECIAL REPORT ESPIONAGE November 12th 2016 Shaken and stirred 20161012_SR_ESPIONAGE_001.indd 1 27/10/2016 13:41 SPECIAL REPORT ESPIONAGE Shaken and stirred Intelligence services on both sides of the Atlantic have struggled to come to terms with new technology and a new mission. They are not done yet, writes Edward Carr IN THE SPRING thaw of 1992 a KGB archivist called Vasili Mitrokhin CONTENTS walked into the British embassy in Riga. Stashed at the bottom ofhis bag, beneath some sausages, were copies of Soviet intelligence files that he 5 Technology had smuggled out of Russia. Before the year was out MI6, Britain’s for- Tinker, tailor, hacker, spy eign-intelligence service, had spirited away Mitrokhin, his family and six large cases packed with KGB records which he had kept hidden in a milk 7 Governance Standard operating churn and some old trunks under the floor ofhis dacha. procedure The pages of “The Mitrokhin Archive”, eventually published in 1999, are steeped in vodka and betrayal. They tell the stories of notorious 8 Edward Snowden spies like Kim Philby, a British intelligence officer who defected to Russia You’re US government in 1963. And they exposed agents like Melita Norwood, who had quietly property worked for the KGB for 40 years from her home in south-east London, then shot to fame as a great-gran- 10 China and Russia Happenstance and enemy ny. Her unrelenting Marxist refus- action al to shop at Britain’s capitalist su- permarkets earned her the 12 How to do better headline: “The Spy Who Came in The solace of the law from the Co-op”. Mitrokhin’s record for the largest-ever haul of intelligence was smashed in 2013 when an American contractor, Edward Snowden, fled from Hawaii to Hong Kong with a secret archive of his own that contained more than 1.5m classified files from America’s National Security Agency (NSA). Mr Snowden un- covered programmes with names like DISHFIRE and OPTIC NERVE under which the NSA and its British counterpart, GCHQ, were alleged to be monitoring phones and computers around the world. Mr Snowden’s accusa- tion was not that foreign agents had infiltrated Western intelligence agencies but that Western agencies were spying on ordinary people, including their own citizens. To look at Mitrokhin’s meticulous typed-up transcriptions side by side with Mr Snowden’s capacious pen-drives conveys a sense of how deeply and rapidly the business of intelligence has changed. Western in- telligence agenciesused to inhabita parallel world where spy battled spy. Their trade was stealing or guarding secrets. Their masters were the men and women in government. Today the intelligence services are part of everyone’s world. Their main taskhas been to protect society from terro- ristsand criminals. Theyare increasinglyheld to accountin the press, par- liaments and courts. This special report is about their struggle in the past 15 years to come to terms with this transition. They are not done yet. ACKNOWLEDGMENTS Many of the people who helped with Who can spy on the spies? this special report prefer to remain The intelligence revolution ispartlythe resultofnewtechnology. As anonymous, for understandable recently as1999, on becoming director ofthe NSA, Michael Hayden asked reasons. As well as acknowledging them, the author would like to single to send an e-mail to all staff. He was told: “We can’t actually do that.” The out three people: Jeffrey Hiday, Oleg organisation used computers to break codes rather than to surf the web A list of sources is at Kalugin and Nigel Inkster. as everyone else did. The NSA’s new facility in Bluffdale, Utah, the first of 1 Economist.com/specialreports The Economist November 12th 2016 1 SPECIAL REPORT ESPIONAGE 2 several, now stores exabytes of data drawn from everyday com- munications. At Britain’s GCHQ, most code-breaking was done on paper until well into the 1980s. Today, inside its doughnut- shaped building in Cheltenham, south-west England, the hum from banks of computers that stretch away into the half-light is drowned out by the roar ofair-conditioning. The revolution has brought spying closer to ordinary peo- ple. After the attacks on America on September 11th 2001, coun- ter-terrorism and counter-insurgency became the focus for the American intelligence agencies, says John Parachini, who heads intelligence policy for RAND, a think-tank. Almost two-thirds of today’s intelligence personnel have been hired since 9/11. As the world hasmoved online, so the spookshave become involved in monitoring organised crime and paedophiles as well as terro- rists. That might mean tracking a drugs syndicate from Latin America to Europe, or working out how criminal gangs launder their money, or following paedophiles on the web. In Mitrokhin’s days spies sent coded messages using short- wave radios and dead letter boxes. Now the communications of precondition for intimacy, trust and individuality, says David the spooks’ new targets are mixed in with everyone else’s, shut- Anderson, a seniorlawyerasked by the British government to re- tling between computers and smartphones that are identical to viewintelligence legislation. Itsecuresrightssuch as the freedom those on yourdeskand in yourpocket. Counter-terrorism, in par- ofassemblyand fairtrials. The knowledge thatan all-seeing state ticular, is pre-emptive. Hence the security services have had to is watching has a chilling effect even if you have done nothing act as hunters ofconspiracies rather than gatherers of evidence. wrong. Perhaps your words will be used against you later, under laws passed by a different government. Perhaps the state will try I don’t believe you any more to crush the dissent that prefigures desirable social change—as And the revolution is taking place amid growing popular America’s FBI tried to destroy Martin Luther King by sending a suspicion of everyone in charge. The days are gone when the letter, supposedlyfrom a disillusioned admirer, thataccused him word of Congress, the home secretary and the odd judge com- ofbeing a “colossal fraud and an evil, vicious one at that”. manded enough public confidence to see offthe accusations ofa But privacy is not an unalloyed good. A society that gives it private individual such as Mr Snowden. Belated official ac- primacy over security invites paralysing disorder and injustice knowledgment of secret programmes has often been met by that would inhibit the very intimacy and freedom of expression public dismay, even after assurances that they have been proper- which privacy is supposed to promote. ly overseen. “It is not enough for the authorities just to say ‘trust Likewise, although the public needs to know what is being us’,” writes Paul Bernal, of Britain’s University of East Anglia. done in its name, some spying techniques lose their potency if “The public needs to know.” they are discovered. Early Enigma decrypts in 1940 from Bletch- Privacy advocates complain that the spooks have unprece- ley Park, Britain’s code-breaking centre, were given the “CX” pre- dented scope to pry into people’s lives. They warn of a burgeon- fix of MI6 reports so that the Nazis would think they were based ing surveillance state. The spooks retort that, on the contrary, on standard human intelligence (known in the jargon as HU- they cannot keep up with terrorists and criminals cloaked by en- MINT). A former CIA employee who is now at RAND tells how, cryption, the dark web and the fact that, as the world builds in- after a successful raid in 1998, journalists learned that the NSA ternet infrastructure, a smaller share of total traffic is routed was interceptingcalls from the satellite phone ofOsama bin Lad- through accessible Western networks. en, the founder ofal-Qaeda. Immediately after the news got out, At the heart of the debate lies a conflict. The goal of a mod- the phone fell silent. ern intelligence service, in the formulation of Sir David Omand, Since the Snowden revelations, Western security services, a former British intelligence chief, is for citizens to trust the state and particularly those of America and Britain, have come in for to manage the threats to their everyday lives. To maintain public savage criticism. Much of this has focused on the intense years safety, the intelligence services must be able to employ secret immediately after 9/11. The CIA subjected prisoners to brutal in- ¤ ¡¢ sources and methods that inevitably involve intrus £et to terrogation techniques, including simulated drowning, or water- command that public trust, they must also be transparent and boarding. For some years the NSA operated a telephone-surveil- prepared to live by rules that protect individual privacy. lance programme without judicial oversight. That programme These contradictions cannot be wished away. Privacy is a was later judged to be illegal. This special report will lookat those transgressions in great- ¦ ¤ £ er det ¥et, even taking them into account, the criticism of American and British intelligence is overblown. Rather than be- ing James Bonds, real-life intelligence officers are bureaucrats. Rather than acting as freewheeling individualists, most set out to live by the rules. It is possible to argue about the merits of inter- cepting and warehousing data, about access to databases and large-scale hacking, but the idea that controlling masterminds at the NSA and GCHQ are plotting mass surveillance is a myth. Such criticism is especially unfair when it comes from out- side the English-speakingintelligence alliance embracing Ameri- ca, Australia, Britain, Canada and New Zealand, known as the Five Eyes. Few countries say much about their intelligence ser- 1 2 The Economist November 12th 2016 SPECIAL REPORT ESPIONAGE 2 vices or have a clear frameworkforgoverning them. Britain’s op- of the infrastructure of the internet, and much of the rest passed erated almost entirely in the shadows until the 1990s and ac- through Britain, even if it originated and terminated elsewhere.