European Parliament



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TEMPORARY COMMITTEE ON THE ECHELON INTERCEPTION SYSTEM

THE SECRETARIAT

NOTICE TO MEMBERS

Members will find attached a series of documents forwarded to the committee by Mr Bo Elkjaer and Kenan Seeberg during the last meeting.

The Secretariat

CM/430420EN.doc PE 295.000

PRESENTATION TO THE EU PARLIAMENT'S ECHELON COMMITTEE

We wish to thank the Parliament's Echelon Committee for the opportunity to present our work.

We will present some of the findings of our research on the surveillance network that has come to be known as Echelon.

1: We will give an account of the Danish angle - i.e. Danish participation in international surveillance.

2: We will present several whistleblowers - i.e. defectors from the System - and relate their concerns.

3: We will briefly describe some specific cases relating to American surveillance of European businesses.

4: Finally, we will present as yet unpublished information.

This presentation is based on a series of articles, 'The Secret Deals', in the Danish newspaper Ekstra Bladet. The series has been running since 17 September 1999. We are both employed as journalists by Ekstra Bladet.

Bo Elkjær

Kenan Seeberg

Ekstra Bladet

1: Denmark has worked with the USA on surveillance since 1947. Collaboration was formalised in 1950 with the Danish Defence Minister Rasmus Hansen as signatory on Denmark's behalf.[1]

The collaboration was established through the then second-in-command in the Defence Intelligence Agency, P. A. Mørch, who set up the Central Defence Radio on premises at Aflandshage in Amager, Copenhagen.

At the time the cooperation agreement was established, Denmark was strategically important to the signal intelligence services because of it's location with respect to the Eastern Bloc.

During the course of cooperation, surveillance centres were set up in several locations in Denmark: on Bornholm, in South Jutland, North Jutland and near the capital Copenhagen.

Most surveillance centres have been shut down. For instance, the surveillance centre in Løgumkloster, whose function was to monitor the movement of eastern European ships and long wave transmissions in the North Sea.

Three relatively large surveillance centres exist today in Denmark: Aflandshage, near Copenhagen, Skibsbylejren near Hjørring in North Jutland and a centre near Christiansfeld in southern Jutland. We will present a brief description of Aflandshage and Skibsbylejren.

Aflandshage has undergone regular expansion since the fall of the wall. Documentation thereof includes satellite pictures from 1992, showing the addition to the surveillance centre of, among other things, two large radomes, which conceal the reception equipment. Seen from the outside, Aflandshage surveillance centre is similar in several ways to, among others, the Waihopai surveillance centre in New Zealand.[2]

Visiting Aflandshage in September 1999, we found discarded computer equipment that was identical to, and labelled in the same way as computers forming part of the Echelon system. Margaret Newsham, one of our sources, confirms this. We will get back to her.

In addition to the discarded computer equipment, we found indications that new computer equipment had been delivered and installed at the surveillance centre.

Skibsbylejren is currently undergoing substantial expansion. 18-metre wide satellite dishes are to be installed at the surveillance centre, three for the time being, six in total. The satellite dishes will be concealed by six 25-metre high radomes.[3]

We have had the opportunity to see the satellite dishes,[4] and we have acquired right of access to the case file pertaining to the construction of the facility.

We do not know what the facility will target, but there are some pointers.

The insertion of clauses prohibiting the construction of tall buildings in the area is worth noting. Emitting electromagnetic noise, for instance from welding or installing radio equipment for mobile telephones, is also prohibited.[5]

This is probably to avoid ‘muffling’ a weak reception signal.

This suggests, along with the size of the satellite dishes, that the latter will be aimed at satellites that are located low above the horizon, outside the normal 'footprint' left by a satellite when it communicates with the earth’s surface. They could for instance be LEO (Low Earth Orbit) satellites.

The building was opened in the last half of the 1990s at a time when satellite communication systems such as Iridium, which is just such a LEO system, experienced significant growth.

We presented this information to Wayne Madsen, who has worked for the NSA but has now severed his connections with the intelligence agency. He says:

"It is not surprising that they are building new powerful facilities. Quite a few new satellites are being launched at the moment, to support commercial mobile and satellite telephony. The area from which the new satellites can be monitored is smaller for satellites orbiting at a lower altitude, that's why you need more ground stations".

"The American intelligence agency is also about to build new radomes in Misawa, Japan. Menwith Hill is also about to develop. Denmark is most certainly an integral part of the process."[6] That is what Wayne Madsen says. We will get back to him.

During the course of our research we have discovered that American intelligence agencies have sent at least one team of antenna specialists, led by a surveillance expert, to Denmark to set up antennas. We don't know which antennas, nor do we know whether it has to do with the new facility in Skibsbylejren. But we know that the same team of antenna experts has also been to Germany, Belgium and Holland to set up antenna facilities.[7]

We have found evidence that the radomes at Skibsbylejren's new facility, at least, are of American origin.

2: During the course of our research we interviewed several former intelligence officers, American and Canadian.

The following brief introduction to the most important sources and their statements relates directly to the subject of this meeting, namely the impact of Echelon and other similar systems on privacy, human rights, trade and so forth in Europe. It is our conviction that the committee should itself take the initiative to obtain a full statement from the three former intelligence officers mentioned below.

Margaret Newsham is a former computer programmer and operator. She is currently living in Las Vegas but one of her former postings was to Menwith Hill in England.

Wayne Madsen used to work for NSA and for companies that have contracted for the NSA.

Fred Stock used to work for the Canadian signal intelligence agency Communications Security Establishment (CSE).

Margaret Newsham was originally trained and cleared by the NSA and has worked for Lockheed Missile and Space, developing the system that later acquired the codename Echelon.[8]

Margaret Newsham was involved in the programming and implementation of the system. Her job title was Programme Plans Assistant. She was responsible for Software Configuration Control and developed Datatrieve programmes and Library Operations that were part of the Echelon system.

Margaret Newsham says:

”Echelon was already very big and advanced at the end of the seventies. In 1979 we could trace a particular person and zoom in on his telephone conversation, real time. In 1984 our satellites could film a stamp on the ground. So it is almost impossible to imagine how all-encompassing the system is today.”[9]

That the system is bigger than one can imagine is a recurring remark among all the insiders that we spoke to who have worked in England, the USA and Canada. Even among those we cannot quote for reasons of discretion.

The original Echelon system was developed on VAX 11/780 computers – the same type that we found discarded at the Aflandshage surveillance centre in Denmark. That computer was labelled VAX RED – a recurring definition in the CIA’s ’Glossary of Intelligence Terms and Definitions”, in which computers are organised according to the RED versus BLACK concept, depending on the classification of the material that is stored and processed on the computer.

Margaret Newsham was herself involved in the installation of these computers at Menwith Hill in Harrogate, England, and has prepared similar computers for installation in Hong Kong.

We asked Margaret Newsham whether she could understand that people find it hard to believe the existence of such a wide-ranging surveillance apparatus. To this she answered:

”Yes, but it is a fact. We (USA) spy on our own citizens and the rest of the world - even our allies in Europe. If I say Amnesty or Margaret Newsham (on the telephone) it will be intercepted, analysed, correlated, forwarded and registered."[10] [11]

”With the technology that is available today, any electronic communication is a target for the intelligence agencies: your money transfers, your stock-exchange transactions, your political conversations, your private communication. Everything is laid bare, not just for the NSA’s eyes and ears, but also for other countries’ espionage agencies.”[12]

Marty Bloem, who was working in Sunnyvale at the same time as Newsham, though on other classified projects, backs up Margaret Newsham's account. Marty Bloem can be contacted on the following numbers: 001 650 873 81 12 – 001 650 799 47 87.

Anne Lee, in Yorkshire, 0044 1943 46 68 25, has in her possession large quantities of documents from within Menwith Hill, including drawings of the operations buildings and British Telecom’s little room (she is one of few outsiders who have seen the fully automatic surveillance system at work).

Fred Stock worked for the Canadian signal intelligence agency Communications Security Establishment, CSE, from 1978 to 1995. From 1978 to 1987 he was a spy at almost all Canada’s monitoring centres inside and outside Canada: Inuik in Alaska, Alert on the North Pole, as well as bases in Bermuda and in Masset, Canada.

From 1990 to 1995, Fred Stock worked in CSE’s headquarters in Ottawa as a communications operator. He was based in the department for incoming and outgoing intelligence intercepted by the global surveillance network.

”CSE received about 165 000 messages every day. This amounts, approximately, to 60 million intercepted intelligence messages per year”, Fred Stock told us in mid-March 2000.[13]

”In 1990 a communication directly from NSA said that we should consider the European Union, with Germany in the middle, as an enemy. They specifically used the term enemy. This angered me. Why should our allies (in NATO) suddenly be defined as enemies.”

On a daily basis, Fred Stock examined intelligence that was obviously espionage against European businesses, interest groups and high-ranking politicians. Fred Stock mentions specifically the common European aeroplane producer Airbus as well as Amnesty International, the Red Cross and Greenpeace.

That the Red Cross is an Echelon surveillance target is confirmed by information from the American Airforce Intelligence Agency, which runs an Echelon centre in Sugar Grove, Virginia. In connection with a lecture for the American electronics industry, AIA showed how they work with signal intelligence, and how the focus has shifted from the old East-West conflict to the present, where there are many scattered ’fish to catch’, among them the Red Cross.[14]

Fred Stock says the following about the monitoring of Greenpeace:

”The messages were about their vessels, where they were located, where one predicted they were headed and what they planned to do. We were very accurately informed about what they would do—in advance. Before they actually did anything.”

”A whole load of messages (intelligence) were coming in, about Europe, that were intercepted by some of the English spy bases."

”It was the NSA that was running the whole operation and everything was forwarded to them. Even information about national Canadian matters.”

Since 1990, Stock has tried to make the Canadian government and Members of Parliament aware of the fact that things were going on at CSE that were against the law and the allies' interests.

Fred Stock has communicated with John Manley, the current Canadian Minister of Foreign Affairs, as well as all the Canadian Defence Ministers spanning the period from Kim Campbell in 1990 to the current Minister Art Eggleton. In 1998 Eggleton handed Fred Stock’s case over to the newly appointed Parliamentary Commissioner for Canadian Defence, Andre Marin.[15]

Fred Stock can be contacted here:

(001 – 519) 272-1894. Address: 45 BUCKINGHAM DR STRATFORD ON

The information provided by Fred Stock is confirmed by another former CSE employee, whose name we have not yet disclosed. We are willing to establish contact between the committee and the intelligence officer in question.

Wayne Madsen worked for the NSA and for two companies that were attached to the NSA as contractors from 1990 to 1997. He was trained as a computer expert in the American navy, where he served from 1975. The two companies that he worked for were RCA, for a short period, and CSC, Computer Science Corporation, for many years. CSC operates in many European countries including Denmark, where they manage large quantities of sensitive national data about citizens and businesses.

Over the course of several days of conversation in Washington in November 1999, Wayne Madsen expressed concern on behalf of Europeans and said ”confidential Danish (European) information can fall into the hands of the NSA”.[16]

Madsens' point is that CSC is so closely linked to and dependent on the NSA that the information CSC administrates in the individual countries can easily be intercepted by the NSA, if they need it.

In fact the view recurs throughout our research that the National Security Agency and its partners are trying to influence electronic communication and data storage in all areas and at every level of European society--nothing less.

There are several concrete examples of this:

All charge card transactions in Denmark are protected by an encryption system, the strength of which has been halved following pressure from the NSA.[17]

All mobile telephones complying with the original European developed GSM standard use an encryption system in which the last 10 bits are set to zero following pressure from the English signal intelligence agency GCHQ.[18]

A large part of the financial sector uses Frame Relay to move financial information. The NSA takes part in the Frame Relay standardisation group.[19]

Several European countries have made significant advances on practical initiatives for a public encryption standard and digital signature for citizens, the so-called PKI systems. NATO has meanwhile developed a military PKI structure that will have full access to the civilian systems. NATO’s PKI system is in large part developed by the NSA who, through full access to civilian systems, will be able to verify all electronic communication.[20]

The NSA has sent a high-level encryption expert on missions to several European countries to pressure governments into endorsing the use of encryption methods with built-in back doors.[21]

Wayne Madsen confirms the information supplied by Margaret Newsham and Fred Stock:

”A global surveillance system exists, targeting businesses, interest groups and politicians.”

Wayne Madsen also confirms that Denmark is a third party to the UKUSA surveillance agreement.

Wayne Madsen can be contacted here:

Wayne Madsen

001 703 841 54 25

EPIC: 001 202 544 92 40

2001 North Adams Street 227

Arlington, Virginia

22201

JEFFREY RICHELSON

The National Security Archive

The Gelman Library

George Washington University

2130 H Street, NW, Suite 701

Washington, DC 20037

Phone: 202-994-7000 / Fax: 202-994-7005

Jeffrey – home (Virginia): 001 703 684 82 74

3: Those cases concerning the monitoring of European businesses that are disclosed almost always reflect badly on the businesses, typically because of their trade partners or because of the way the deals are done. Former CIA director Woolsey speaks in favour of unlimited surveillance in cases of bribery.

In this regard it is worth bearing in mind that mass monitoring does not distinguish between good and bad, legal and illegal, morally correct behaviour and immoral behaviour. Nor do the analysts who process the intercepted data. The distinction is in the sole hands of the government officials and politicians who choose to use or disclose the information.

No doubt all of us can easily see that selling missile engines to Iran is wrong. But what we forget to look at when we focus on the ‘bad guys’ is perhaps the most important thing: the methods the ‘good guys’ use to obtain the information.

A: We will now present an actual case from May 1997 that shows how French companies’ economic transactions are monitored. In 1997 the American State Department accused a French company of selling missile engines to Iran. The engines were allegedly smuggled via a Belgian port to China, and sent on from there to the Iranians. The French deny that they were missile engines and insist that they were harmless generators.

The interesting point is that the American intelligence agencies became aware of the case when the National Security Agency intercepted some electronic financial transactions amounting to 1,1 million dollars from the private company Jetpower in Hong Kong to the French company Microturbo SA.[22]

The documents relating to the case were obtained by the National Security News Service in the USA.[23]

B: A facility in Al-Kaim in Iraq was one of the first targets to be bombed by the Americans during the Gulf War. The facility was held to be a uranium reprocessing plant and a bulk supplier of base elements for mustard gas production. The American Ministry of Defence has released several intelligence reports about the facility. The reports show that Al-Kaim was initially built by the Belgian consortium Sybetra and thereafter by the German company Kloeckner. The Danish company F. L. Schmidt was a subcontractor for the facility.[24]

These companies were monitored by the American intelligence agencies towards the end of the seventies and throughout the eighties, at a time when the USA itself was a bulk supplier to the Iraqi army.

C: In 1989 the USA officially admitted that the NSA had intercepted communications between West German businesses and government offices in Libya. The intercepted communications showed that the West German chemical company Imhausen was supplying equipment to the now burned down factory in Rabta. The factory was officially a pharmaceutical factory, though the Americans claimed that it was intended for the production of poison gas. In August last year David Fischer, who is ‘diplomat in residence’ at San Francisco State University, said publicly for the first time, that he, as American Consul-General in Munich, supervised the American surveillance centre in Bad Aibling. David Fischer has stated that it was he who delivered the documented interceptions of German businessmen’s conversations to the government in Bonn. These interceptions were of German businesses and they took place in Bad Aibling.[25]

As we said, all the cases outlined above focus on trade with the 'bad guys'. But all of them also suggest that American intelligence agencies systematically monitor financial transactions and communication between businesses in Europe and between Europe and the rest of the world.

4: SIGNIT and COMINT people are also human, and as such they too make human mistakes. Such a mistake has provided the opportunity of obtaining astonishing and compromising insight into what goes on within the secured areas where surveillance is planned and enacted.

The enclosed CD-ROM contains the job descriptions of a little over 200 current and former American intelligence officers who have worked with SIGNIT and COMINT. The job descriptions are downloaded from a database of intelligence offices who are seeking employment in civilian industry. The job descriptions are all written by these intelligence officers.

They are enclosed in raw and unedited form. Contact addresses and telephone numbers accompany almost all descriptions.

We would like to emphasise a few of our observations concerning the many job descriptions.

1: ‘Echelon Reporting’ occurs at the American navy base Rota in Spain. Equipment that matches the Echelon system’s computer system as described by Margaret Newsham is or has formerly been set up there.

2: Several operators are trained in the analysis and surveillance of civilian communication equipment such as the GSM and the now closed Nordic NMT mobile telephone systems.

3: Intelligence officers speak mainly European languages. A count in August last year produced the following breakdown:

Spanish 84

English 50

German 38

Russian 32

Korean 23

French 23

Morse 13

Arabic 13

Japanese 11

Chinese 10

Italian 9

Portuguese 8

Serbo-Croat 5

Croat 5

Greek 4

Czech 4

Polish 3

Latin 3

Sign Language 3

Ukrainian 2

Malay-Indonesian 2

Thai 2

Hebrew 2

Bosnian 2

Turkish 1

Creole 1

Persian 1

Jamaican (patois) 1

Tagalog 1[26]

-----------------------

[1] Danish Record Office, Poul Adam Mørch's archive, box 165, FCR (Central Defence Radio) file, Haugsted report. Jeffrey Richelson, senior fellow, National Security Archive, Washington D.C. confirms that the cooperation agreement was extended later on and is still in force.

[2] Ekstra Bladet, 18 September 1999. Satellite photo by SovInformSputnik, 19 May 1992.

[3] Ekstra Bladet, 17 September 1999, 19 June 2000, 21 June 2000; rights of access from Hjørring District and North Jutland County.

[4] See photos on enclosed CD-ROM.

[5] District plan for the area around Skibsbylejren.

[6] Ekstra Bladet, 19 June 2000.

[7] Job summary for former US Airforce employees who were assigned NSA tasks.

[8] See enclosure.

[9] Ekstra Bladet, 17 November 1999.

[10](Translator's note: there is no footnote number 10).

[11] Ekstra Bladet, 18 November 1999.

[12] Ekstra Bladet, 18 May 2000.

[13] Ekstra Bladet, 21 March 2000.

[14] Slide show presentation, AIA Industry Days, originally from Airforce Intelligence Agency's website, but removed after exposure. Copy on enclosed CD-ROM.

[15] Andre Marin - Parliamentary Commissioner for National Defence and Canadian Airforces, Carriageway Building 55 Murray Street, Suite 500, Ottawa Ontario. Postal code K1N5M3 (001) 613 992 0787.

[16] Ekstra Bladet, 28 November 1999.

[17] Ekstra Bladet, 5 January 2001.

[18] Ekstra Bladet, 5 January 2001, 9 January 2001. Enclosure: e-mail from James Moran, GSM organisation.

[19] Ekstra Bladet, 26 September 1999.

[20] Ekstra Bladet, 10 November 2000, 24 November 2000. Enclosure: answer from the Danish Defence Intelligence Agency.

[21] Ekstra Bladet, 24 November 2000.

[22] Washington Post, 3 April 1999, John Mintz, 'Tracking Arms: a Study in Smoke'.

[23] National Security/Natural Resources News Service, 1100 Connecticut Avenue, NW Suite 1310, Washington, D.C. 20036, 202-466-4310, 202-466-4344 fax.

[24] American intelligence report, released in connection with statement about the Gulf War.

[25] David Fischer in an e-mail to the Intelligence Forum discussion group, 15 August 2000. E-mail enclosed.

[26] Spanish and Portuguese are quite probably aimed at South and Central America.

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