Trojan Horse: How Israeli Backdoor Technology Penetrated the US Government's Telecom System and Compromised National Security

by Christopher Ketcham

Since the late 1990s, federal agents have reported systemic communications security breaches at the Department of Justice, FBI, DEA, the State Department, and the White House. Several of the alleged breaches, these agents say, can be traced to two hi-tech communications companies, Verint Inc. (formerly Comverse Infosys), and Amdocs Ltd., that respectively provide major wiretap and phone billing/record-keeping software contracts for the US government.

Together, Verint and Amdocs form part of the backbone of the government's domestic intelligence surveillance technology. Both companies are based in Israel – having arisen to prominence from that country's cornering of the information technology market – and are heavily funded by the Israeli government, with connections to the Israeli military and Israeli intelligence (both companies have a long history of board memberships dominated by current and former Israeli military and intelligence officers).

Verint is considered the world leader in "electronic interception" and hence an ideal private sector candidate for wiretap outsourcing. Amdocs is the world's largest billing service for telecommunications, with some $2.8 billion in revenues in 2007, offices worldwide, and clients that include the top 25 phone companies in the United States that together handle 90 percent of all call traffic among US residents.

The companies' operations, sources suggest, have been infiltrated by freelance spies exploiting encrypted trapdoors in Verint/Amdocs technology and gathering data on Americans for transfer to Israeli intelligence and other willing customers (particularly organized crime).

"The fact of the vulnerability of our telecom backbone is indisputable," says a high level US intelligence officer who has monitored the fears among federal agents. "How it came to pass, why nothing has been done, who has done what – these are the incendiary questions."

If the allegations are true, the electronic communications gathered up by the NSA and other US intelligence agencies might be falling into the hands of a foreign government. Reviewing the available evidence, Robert David Steele, a former CIA case officer and today one of the foremost international proponents for "public intelligence in the public interest," tells me that "Israeli penetration of the entire US telecommunications system means that NSA's warrantless wiretapping actually means Israeli warrantless wiretapping."

As early as 1999, the National Security Agency issued a warning that records of US government telephone calls were ending up in foreign hands – Israel's, in particular. In 2002, assistant US Attorney General Robert F. Diegelman issued an eyes only memo on the matter to the chief information technology (IT) officers at the Department of Justice.

IT officers oversee everything from the kind of cell phones agents carry to the wiretap equipment they use in the field; their defining purpose is secure communications. Diegelman's memo was a reiteration, with overtones of reprimand, of a new IT policy instituted a year earlier, in July 2001, in an internal Justice order titled "2640.2D Information Technology Security." Order 2640.2D stated that "Foreign Nationals shall not be authorized to access or assist in the development, operation, management or maintenance of Department IT systems." 

This might not seem much to blink at in the post-9/11 intel and security overhaul. Yet 2640.2D was issued a full two months before the Sept. 11 attacks. What group or groups of foreign nationals had close access to IT systems at the Department of Justice? Israelis, according to officials in law enforcement. One former Justice Department computer crimes prosecutor tells me, speaking on background, "I've heard that the Israelis can listen in to our calls."

Retired CIA counterterrorism and counterintelligence officer Philip Giraldi says this is par for the course in the history of Israeli penetrations in the US He notes that Israel always features prominently in the annual FBI report called "Foreign Economic Collection and Industrial Espionage" – Israel is second only to China in stealing US business secrets.

The 2005 FBI report states, for example, "Israel has an active program to gather proprietary information within the United States. These collection activities are primarily directed at obtaining information on military systems and advanced computing applications that can be used in Israel's sizable armaments industry." A key Israeli method, warns the FBI report, is computer intrusion.

In the big picture of US government spying on Americans, the story ties into 1994 legislation called the Communications Assistance for Law Enforcement Act, or CALEA, which effected a sea-change in methods of electronic surveillance. Gone are the days when wiretaps were conducted through on-site tinkering with copper switches.

CALEA mandated sweeping new powers of surveillance for the digital age, by linking remote computers into the routers and hubs of telecom firms – a spyware apparatus linked in real-time, all the time, to American telephones and modems. CALEA made spy equipment an inextricable ligature in our telephonic life.

Top officials at the FBI pushed for the legislation, claiming it would improve security, but many field agents have spoken up to complain that CALEA has done exactly the opposite. The data-mining techniques employed by NSA in its wiretapping exploits could not have succeeded without the technology mandated by CALEA. It could be argued that CALEA is the hidden heart of the NSA wiretap scandal.