Growing Signs of Intelligence from Intelligence Community, or Just Another Turf War?

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On Saturday, I wrote about a remarkable about-face taken by AP’s George Jahn in his reporting on Iran’s nuclear technology. Instead of following his usual routine of parroting leaks from US and Israeli sources meant to put Iranian intentions on nuclear technology in the worst possible light, Jahn instead wrote about how dependent the UN’s IAEA is on US intelligence to develop its evaluation of what is happening in Iran. Further, Jahn highlighted how US credibility on WMD intelligence was forever harmed by the overstated evaluations of Iraqi WMD leading up the invasion of Iraq in 2003. My post was written from the point of view that somehow Jahn had realized how badly he has been played by the intelligence community over the years and has now decided to question the reliability of the information being fed to him.

In comments on the post, Marcy considered whether the reversal could be framed in a different way:

Not to get all 11-dimensional, but any chance his sources asked him to leak this? That is, more stenography, but to justify reversing course?

In what could be yet another framing of what is happening in the intelligence community, Lara Jakes of AP worte an article published Monday in which she described what may be a movement within the intelligence community to promote what appears to be a healthy move toward reasoned debate among the various agencies within the intelligence community. Couching the opening of the article within the uncertainty over whether Osama bin Laden really was at the compound in Abbottabad where he was eventually killed, Jakes describes what appears to be a new movement toward debate:

As the world now knows well, President Barack Obama ultimately decided to launch a May 2011 raid on the Abbottabad compound that killed bin Laden. But the level of widespread skepticism that Cardillo shared with other top-level officials — which nearly scuttled the raid — reflected a sea change within the U.S. spy community, one that embraces debate to avoid “slam-dunk” intelligence in tough national security decisions.

Wow. Here we have a second AP reporter making a reference to the failed Iraq intelligence in 2003 only two days after Jahn’s introspective that cited the same failure. But, when she finally revisits the “slam-dunk” reference many paragraphs later, Jakes elides the most important factor that led to the intelligence failure. Here is her description: Read more →

Jahn Does Complete Reversal, Questions Sources Instead of Transcribing Iran Nuke Propaganda

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Man Bites Dog

It was a development worthy of the proverbial mythical headline reversing the natural order of the world. For a very long time, I have mercilessly attacked George Jahn of the AP for the role he has played while serving to move anti-Iran propaganda into newspapers across the globe. Here’s how I described his usual role in my most recent post about him:

I have often described the process of “diplomats” close to the IAEA’s Vienna headquarters gaining access to documents and other confidential information relating to Iran’s nuclear activities and then selectively leaking the most damaging aspects of that information to George Jahn of AP. Sometimes, the information also is shared with Fredrik Dahl of Reuters, who, like Jahn, is also based in Vienna. Many believe that Israeli diplomats are most often responsible for these leaks and for shaping the stories to put Iran in the worst possible light.

Another key aspect of Jahn’s role has been his reliance on David Albright of the Institute for Science and International Security, whom Jahn has relied on regularly for adding that special “think-tank aura” to the propaganda that has been funneled to him.

Yesterday, the stage was set for Jahn to transcribe more propaganda into the record. A new IAEA report was available (pdf; I see that there is a typo on the date on the cover page, it is a 2013 report instead of the 2012 appearing there, note 2013 embedded in the document ID code) and David Albright had already taken to the fainting couch, proclaiming the evil portents of the sudden appearance of New Asphalt (!) at the Parchin site in Iran where the US and Israel claim Iran has carried out blast chamber experiments to develop a trigger for a nuclear weapon (and where the suspect building, and presumably the blast chamber itself, itself remains standing, despite a hilarious cat and mouse game Iran has played at the site). But, in true “man bites dog” fashion, Jahn chose not to play the New Asphalt game and instead published an article that puts much of the intelligence gathering of the IAEA into a perspective that calls into question the motives of those who supply the bulk of that intelligence to the UN’s nuclear watchdog agency.

Jahn wastes no time, opening the article by proclaiming that the US supplies the bulk of intelligence on Iran’s nuclear program to the IAEA and that US credibility on weapons intelligence took a huge hit in 2003 with the Iraq fiasco:

The U.N. nuclear agency responsible for probing whether Iran has worked on a nuclear bomb depends on the United States and its allies for most of its intelligence, complicating the agency’s efforts to produce findings that can be widely accepted by the international community.

Much of the world looks at U.S. intelligence on weapons development with a suspicious eye, given American claims a decade ago that Iraq had developed weapons of mass destruction. The U.S. used those claims to justify a war; Iraq, it turned out, had no such weapons.

Jahn even went so far as to get IAEA sources to provide an estimate of how the US and its allies dominate the intelligence that is provided: Read more →

Tamerlan Tsarnaev: Not a Step by Step Investigation

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Screen shot 2013-05-24 at 12.19.43 PMIn a piece summarizing investigators’ understanding of Tamerlan Tsarnaev based largely on their investigations in Russia, ABC unironically quotes Dana Rohrabacher — who used to play dress-up mujahadeen when they were fighting Russia in Afghanistan — on intelligence-sharing tensions with Russia.

That communication gap has become a target for a group of American lawmakers who plan to visit Russia next week to investigate the bombing.

“If there was a distrust, or lack of cooperation because of that distrust, between the Russian intelligence and the FBI, then that needs to be fixed and we will be talking about that,” Rep. Dana Rohrabacher (R-Calif.), the chairman of the House Committee on Foreign Affairs’ Subcommittee on Europe, Eurasia and Emerging Threats who is leading the Congressional delegation, told ABC News by telephone.

ABC makes no mention of the recent escalation of intelligence tensions, from the failed recruitment in March followed by the refused entry on May 5 of US lawyer Thomas Firestone, the May 14 exposure of Ryan Fogle, who allegedly was attempting to recruit FSB’s expert on Chechen extremists, and the May 17 exposure of someone FSB claimed was CIA’s Station Chief in Moscow.

That is, ABC doesn’t point to the pretty extraordinary ways Russia is trying to drive up tensions even as we’re supposed to be working together to understand the Boston Marathon attack.

Nor does it mention that the FBI “and other law enforcement personnel” killed Russian Ibragim Todashev, just as they were purportedly getting him to sign a confession to involvement, with Tamerlan, in a grisly 2011 triple murder.  The now-dead Todashev will not be able to shed any more light on what kind of relationship he had with Tamerlan, nor what relations with Russian nuts of all types they might have had.

There’s a lot it doesn’t mention.

It does, however, in the 25th and 26th paragraph (the last two), admit this:

While the officials described their cooperation with the Russians as “unprecedented,” they grumbled privately that they have been unable to do a methodical step-by-step investigation like they are used to doing in the U.S., or even in other countries where they have long-standing cooperation. American investigators from the FBI have been unable to travel to Dagestan without permission from the Russian authorities.

Still, they insist they have been able to confirm much of what they have been told by Russian government officials from what one official vaguely described as “other channels.”

I do hope these “other channels” are truly independent. Because it seems Russia is not only limiting the degree to which the FBI can investigate Tsarnaev, but inventing new reasons to add to tensions with the US.

“At the Highest Levels of the U.S. Government” … Like the President?

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Update: Obama did, in fact, take responsibility for ordering the killing.

And as President, I would have been derelict in my duty had I not authorized the strike that took out Awlaki.

There’s something missing from Eric Holder’s 8 paragraphs justifying the assassination of Anwar al-Awlaki.

In spite of the many sanctioned leaks asserting that President Obama “insist[s] on approving every new name on an expanding ‘kill list,'” Holder never explicitly says Obama did so with Awlaki. The Attorney General attributes the decision itself to “high-level U.S. government officials,” “senior officials,” and “senior officials” again.

Here’s how he describes the review process:

The decision to use lethal force is one of the gravest that our government, at every level, can face. The operation to target Anwar al-Aulaqi was thus subjected to an exceptionally rigorous interagency legal review: not only did I and other Department of Justice lawyers conclude after a thorough and searching review that the operation was lawful, but so too did other departments and agencies within the U.S. government.

The decision to target Anwar al-Aulaqi was additionally subjected to extensive policy review at the highest level of the U.S. Government, and senior U.S. officials also briefed the appropriate committees of Congress on the possibility of using lethal force against al-Aulaqi. Indeed, the Administration informed the relevant congressional oversight committees that it had approved the use of lethal force against al-Aulaqi in February 2010 — well over a year before the operation in question — and the legal justification was subsequently explained in detail to those committees, well before action was taken against Aulaqi. This extensive outreach is consistent with the Administration’s strong and continuing commitment to congressional oversight of our counterterrorism operations — oversight which ensures, as the President stated during his State of the Union address, that our actions are “consistent with our laws and systems of checks and balances.”

Sure, the code words meaning “the President” are in there: “at every level,” “at the highest level of the U.S. Government.” It quotes Obama’s State of the Union address at the very end, like a flourish detached from the nasty killing bit.

And the process described here, where “the Administration” informs the intelligence committees of the lethal force operations “it had approved,” is clearly that of a covert op, which requires the President’s to inform Congress of covert ops he has approved.

But unlike DOJ and the congressional committees, he’s not named in the decision process that ended up killing Awlaki. (Though Holder does later say that Obama approved the Disposition Matrix which he describes will soon be briefed to Congress, which of course implies Presidential approval for all the drone deaths to come, but not Awlaki’s.)

This might be a picayune observation if this Administration had not, secretly, made almost unprecedented efforts to keep a short phrase indicating the President (Bush) had authorized the torture program.

In his letter, Holder references Obama’s Archives Speech pledge that “whenever possible, my administration will make all information available to the American people so that they can make informed judgments and hold us accountable” (though in Holder’s letter, the “us” becomes “their Government”). He ends this letter by assuring its recipients “that the President and his national security team are mindful of this Administration’s pledge to public accountability for our counterterrorism efforts.”

But on the specific issue of Anwar al-Awlaki’s killing, this letter allows Obama (along with the CIA and DOD, presumably to avoid helping the ACLU in its FOIA — though it may be too late) to avoid any accountability.

Perhaps tomorrow Obama will stand before a bunch of cameras and admit “I personally ordered an American citizen to be drone killed.” But this letter feels like an effort to help him avoid publicly accepting just that responsibility.

Update: As QuietAmerican reminded me, Obama is quoted in that NYT piece as saying the decision to kill Awlaki was “an easy one.”

The Laughable Currently Operative AP Pushback Story

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It has taken several days for the government — apparently, almost exclusively DOJ — to try to spin its secret seizure of AP call records. The new version of the government’s ever-evolving story is that the reason the AP story was so damaging was because it prevented CIA from using the mole to locate Ibrahim al-Asiri, AQAP’s bomb-maker.

Here’s how the guy who headed DOJ’s Office of Legal Policy until last year explained this on Friday.

About a year ago, someone within the government who had access to highly classified information about an intelligence operation in Yemen involving a double agent saw fit to talk about it with the Associated Press. When senior government officials learned that the Associated Press had this story and intended to publish it, those officials realized that the agent’s cover had been blown. Anxious for his safety, the officials prevailed on the AP to delay publication so that first the agent’s family and then the agent himself could be extracted to safety. The AP then published its story, which focused on thwarting a plot to use a new and improved underwear bomb to blow up an airplane bound for the United States.

What went completely without mention in the initial coverage was the fact that thwarting this plot was not the objective of the ongoing undercover operation. Its true objective was to gain enough intelligence to locate and neutralize the master bomb builder, Ibrahim Hassan al-Ashiri, who works with an Al-Qaeda affiliate, Al-Qaeda in the Arabian Peninsula (AQAP). Penetrating AQAP is incredibly difficult. This double agent provided a rare opportunity to gain critical, life-saving information. Whoever disclosed the information obtained by the AP had not only put the agent’s life and his family’s life in danger. He also killed a golden opportunity to save untold more lives that now remain at risk due to al-Ashiri remaining at large.

Here’s how three former high-ranking DOJ officials explained it in an op-ed today.

The United States and its allies were trying to locate a master bomb builder affiliated with Al Qaeda in the Arabian Peninsula, a group that was extremely difficult to penetrate. After considerable effort and danger, an agent was inserted inside the group. Although that agent succeeded in foiling one serious bombing plot against the United States, he was rendered ineffective once his existence was disclosed.

And here’s how Walter Pincus reported it today.

Whoever provided the initial leak to the Associated Press in April 2012 not only broke the law but caused the abrupt end to a secret, joint U.S./Saudi/British operation in Yemen that offered valuable intelligence against al-Qaeda in the Arabian Peninsula.

One goal was to get AQAP’s operational head, Fahd Mohammed Ahmed al-Quso. That happened one day before the AP story appeared.

A second goal was to find and possibly kill AQAP bombmaker Ibrahim Hassan al-Asiri, whose first underwear device almost killed Prince Mohammed bin Nayef, Saudi Arabia’s anti-terrorism chief.

[snip]

Hitting targets in the United States is one of AQAP’s goals. In association with Saudi intelligence, the CIA inserted a Saudi who convinced AQAP that he wanted to be a suicide bomber. Eventually he was outfitted with Asiri’s newest device, which he was to use on a U.S. aircraft. After the device was delivered to U.S. officials, someone or several people leaked the information to the AP. [my emphasis]

Now, Pincus’ story is generally balanced. Unlike the other two, he admits that Fahd al-Quso got killed while the AP held their story and that, in killing Quso, the government accomplished at least one objective of the mole’s mission and did so thanks to AP’s willingness to cede to government requests about this story. He also admits that before the AP ever came to the government with the story, the mole’s UndieBomb had already been delivered to the US.

That chronology is important. And it is one backed by the government’s official timeline (not to mention the CNN report that said the mole had turned over the bomb around April 20 and the report that Robert Mueller traveled to Yemen for an unscheduled 45 minute meeting on April 24). The day after the AP story, Jay Carney said that Obama had been informed about the plot in “early April.”

Q Do you expect that he’ll address at all — I know we got statements yesterday, but the Yemeni al Qaeda plot, do you think he will address that at all in his remarks today?

MR. CARNEY: I don’t expect him to address that issue in his remarks. I mean, I will say that he’s certainly pleased with the success of our intelligence and counterterrorism officials in foiling the attempt by al Qaeda to use this explosive device. It is indicative of the kind of work that our intelligence and counterterrorism services are performing regularly to counter the threat posed by al Qaeda in general, and AQAP in particular.

So he was regularly — as you know, he was made aware of this development in early April and he was regularly briefed on it by John Brennan. [my emphasis]

The NSC’s official statement on that day also said Obama had been informed of the plot in April.

So the government rolled up the plot in April — almost certainly by April 24 — and then the AP came to the CIA and White House with their story about a foiled plot on May 2.

It’s that timing that undermines the claim that the government still hoped to use the mole to get at Ibrahim al-Asiri. Because to maintain that claim, you’d have to explain how an AQAP operative who had been entrusted with the latest version of Ibrahim al-Asiri’s UndieBomb sometime in early April, had left (at least as far as Sanaa), had not apparently succeeded in his mission (which was, after all, meant to be a suicide bombing), could return to AQAP without the UndieBomb and infiltrate even further than he had the first time.

“Oh, hi, AQAP gatekeeper” — their story must imagine the mole saying as he returned to AQAP — “I’ve both failed in my mission and somehow lost the bomb you gave me, but based on that would you be willing to let me spend some quality time with even higher-ranking AQAP operatives?”

The government must believe AQAP has far worse counterintelligence than Asiri’s longevity would seem to suggest. Alternately, they’re just inventing stories right now to justify their seizure.

Read more →

The James Rosen Affidavit Was the 20th Document in the Docket

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Screen shot 2013-05-20 at 3.45.46 PMThe is sort of a weedy point.

But if you look at the docket associated with DOJ’s attempt to get James Rosen’s communications, you’ll see it is listed as document 20 in the docket.

Yet no other documents — aside from the order approving the warrant — appear, unsealed, in the docket.

We can’t be sure, but I wonder whether the 19 earlier, still-sealed documents in the docket constitute unsuccessful efforts to get this material. For example, I wonder whether Google initially balked at supplying the material based on the Privacy Protection Act, so DOJ invented the language claiming Rosen was a co-conspirator in Espionage which (at pages 4-5) exempted the materials in question from privacy protection.

In addition, the return associated with the affidavit shows how Google would narrow the search to just those communications between Rosen and Stephen Jin-Yoo Kim. Which suggests some of those 19 earlier documents may have been Google’s successful attempt to limit an earlier much broader request including all of Rosen’s communications.

Particularly given Kim’s quoted blame for being snookered on Rosen, I wonder whether DOJ initially really was going to claim he was responsible for the leak?

In any case, if I were Fox News, I would move to unseal the docket.

Did AP Learn about Fake UndieBomb 2.0 because Real Marshals Deployed to Prevent It?

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In my next post, I’m going to revisit this post, where I showed 372 days ago that at least one or two of the major early sources for the most damning information on UndieBomb 2.0 came from non-US based sources.

But before that, check out this passage from the ABC story that first revealed UndieBomb 2.0 was an inside job.

The plot appeared timed to coincide with the first anniversary of Osama bin Laden’s death, but the bomber did not get as far as purchasing plane tickets or choosing a flight. As ABC News first reported last week, the plot led the U.S. to order scores of air marshals to Europe to protect U.S.-bound aircraft. Flights out of Gatwick Airport in England received 100 percent coverage, according to U.S. officials.

While I haven’t been able to find the reporting in question [update: see below], at least according to the article, ABC had been told the previous week — around the same time the AP first learned about the purported UndieBomb 2.0 plot — that there was a massive effort on the part of the US Air Marshals to cover a bunch of US-bound planes …

… that the Intelligence Community knew had no UndieBomb on board.

Read more →

Dzhokhar’s Sharpie Manifesto

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CBS had a fascinating scoop this morning, reporting that (presumably in the hours when he was holed up and authorities searched just blocks away), Dzhokhar Tsarnaev wrote a part-confess part-manifesto on the wall of the boat.

The note — scrawled with a marker on the interior wall of the cabin — said the bombings were retribution for U.S. military action in Afghanistan and Iraq, and called the Boston victims “collateral damage” in the same way Muslims have been in the American-led wars. “When you attack one Muslim, you attack all Muslims,” Tsarnaev wrote.

Tsarnaev said he didn’t mourn older brother Tamerlan, the other suspect in the bombings, writing that by that point, Tamerlan was a martyr in paradise — and that he expected to join him there soon.

The CBS version of the story suggests this sharpie manifesto may make up for any evidentiary problems given the FBI’s refusal to give Dzhokhar a lawyer.

Miller explained that while Tsarnaev admitted many of the same details to authorities during his 16 hours [sic] in custody, those admissions came “during the time he was interrogated but before he was given his Miranda warning.” The note gives prosecutors supporting and clearly admissible evidence even if there is an fight over whether things Tsarnaev said before he was given his Miranda rights are admissible as evidence.

Though it’s unclear whether CBS’s reporter came to this conclusion on his own or that’s what his sources told him.

Which brings us to this laughable detail in the ABC version of the story.

Spokespeople for the Massachusetts State Police and the Watertown police had denied the existence of the writings when first asked about them by ABC News two weeks ago.

Today, both departments referred reporters to the FBI. A federal law enforcement official confirmed reports first broadcast by CBS News that writings had been discovered inside the boat.

The discovery of writings intensified tensions between the FBI and local police when FBI agents believed some Boston officers and state police had taken cell phone pictures of the writing.

Agents demanded the phones of all officers at the scene the night of the capture of Dzhokhar be confiscated to avoid the photos becoming public before being used as evidence at trial, according to two law enforcement officials.

A FBI spokesperson said agents cannot confiscate phones without a warrant and officials said none of the police approached would agree to turn over their phones to the FBI.

Hahahaha! The cops would turn over their phones, with their evidence of Dzhokhar’s manifesto, without a warrant!!!

Hahahaha!

Only, there’s something funny about the story. Why would cell phone pictures of the manifesto matter if the FBI had properly documented photos taken immediately after the arrest when the chain of custody was intact? I mean, I could see worrying about tainting the jury pool, but the leaked content of the interrogations already said all this stuff anyway.

Putin’s Game

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‘I declare it’s marked out just like a large chessboard!’ Alice said at last. ‘There ought to be some men moving about somewhere–and so there are!’ she added in a tone of delight, and her heart began to beat quick with excitement as she went on. ‘It’s a great huge game of chess that’s being played–all over the world–if this is the world at all, you know. Oh, what fun it is!’

As you may have heard, the Russians rather ostentatiously outed an alleged American spy, Ryan Fogle, yesterday. Before I talk about that, I wanted to make sure folks had Garry Kasparov’s op-ed in the WSJ from the other day. Among other questions about whether we really want to be partnering closely with Vladimir Putin, Kasparov notes how selective Putin’s attentiveness to terrorism can be.

Terror would seem to be a more likely area for U.S.-Russian collaboration, especially regarding the virulent brand of Islamist extremism that has been bubbling over in Russia’s southwestern Caucasus region since the fall of the Soviet Union. Yet the Kremlin’s cooperation on the Islamist threat has been remarkably selective.

Soon after the suspects’ names in the Boston bombing became known, the Russian security services announced that they had warned the FBI about the elder Tsarnaev, Tamerlan, in 2011. But what about during and after Tamerlan’s visit to Russia’s North Caucasus in 2012? That’s when he reportedly was indoctrinated and trained by radicals in Dagestan.

Why were there no communications in 2012 from the FSB (the successor of the KGB) about a suspected radical, an American no less, training in the hottest of Caucasus terrorist hotbeds and then returning to the U. S.? It is beyond belief that the extensive police state that monitors every utterance of the Russian opposition could lose track of an American associating with terrorists.

Tamerlan reportedly met with Makhmud Mansur Nidal, a known terror recruiter, and William Plotkin, a Russian-Canadian jihadist. Both men were killed in Dagestan by the Russian military just days before Tamerlan left Russia for the U.S. If no intelligence was sent from Moscow to Washington, all this talk of FSB cooperation cannot be taken seriously.

This would not be the first time Russian security forces seemed strangely impotent in the face of an impending terror attack. In the Nord-Ost theater siege by Islamist Chechens in 2002 and the Beslan school hostage attack by Chechen and other Islamist radicals in 2004, it later came to light that there were FSB informants in both terror groups—yet the attacks went ahead unimpeded. Beslan was quickly used by Mr. Putin to justify shredding the last vestiges of Russian democracy by eliminating the election of regional governors.

It’s not just Kasparov doubting Putin’s cooperation on the Boston Marathon investigation.

House Intelligence Chair Mike Rogers complained about it back on April 26.

“The Russians I think have a lot more information here than they are sharing today,” Rogers told Fox News. “They’ve kind of let us peek under the curtain a little bit, but it’s very clear to me that they have valuable information that, A, they should have provided earlier, and B, that we need to get now to understand what happened when he went back to Russia.”

Shortly thereafter, Putin and President Obama had their second conversation on the topic, after which Putin publicly professed to have little of value to offer because the Tsarnaev’s hadn’t been living in Russia.

Mr. Putin said last week that the Federal Security Service was unable to provide “information which had operative value” about the Tsarnaev brothers, “due to the fact that the Tsarnaevs had not lived in Russia for many years.”

Mr. Putin’s spokesman, Dmitri S. Peskov, repeated that phrase after the two presidents spoke on Monday, but he said cooperation between the countries’ counterterrorism and intelligence services had improved to new levels as a result of the Boston bombing.

“This aroused praise from Putin and Obama, and their satisfaction,” Mr. Peskov told the Interfax news service, adding that cooperation on intelligence “on the whole promotes mutual confidence in bilateral relations.”

The White House offered a more reserved account of the two leaders’ conversation, noting “the close cooperation that the United States has received from Russia on the Boston Marathon attack.”

Meanwhile, a WSJ story from last week catalogued all the things Russia either did not turn over in timely fashion or did turn over with errors:

  • (Possibly) that Canadian alleged extremist William Plotnikov –whom Russia killed last July — had implicated Tamerlan as an associate in 2010
  • The original tip from the FSB provided incorrect birth dates for Tamerlan
  • FSB provided no response to three requests for more information from FBI
  • Texts from Tamerlan’s mother telling another relative he’d be interested in joining jihad
  • Details from Tamerlan’s trip to Russia in which FSB alleges he met with militants

To be sure, some of this reluctance to share information is a very normal imperative to protect sources and methods, Read more →

Mike Bloomberg’s Fondness for Spying Extends to the Banksters

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In the wake of the Boston bombing, Mayor Bloomberg had some fairly alarming things to say about privacy.

“The people who are worried about privacy have a legitimate worry,” Mr. Bloomberg said during a press conference in Midtown. “But we live in a complex world where you’re going to have to have a level of security greater than you did back in the olden days, if you will. And our laws and our interpretation of the Constitution, I think, have to change.”

But apparently he — or at least his company — even has a cavalier approach to the privacy of those in his own class.

Goldman Sachs recently discovered that Bloomberg reporters were monitoring Goldman activity on their $20,000 a year Bloomberg terminals.

The ability to snoop on Bloomberg terminal users came to light recently when Goldman officials learned that at least one reporter at the news service had access to a wide array of information about customer usage, sources said.

In one instance, a Bloomberg reporter asked a Goldman executive if a partner at the bank had recently left the firm — noting casually that he hadn’t logged into his Bloomberg terminal in some time, sources added.

Goldman later learned that Bloomberg staffers could determine not only which of its employees had logged into Bloomberg’s proprietary terminals but how many times they had used particular functions, insiders said.

The matter raised serious concerns for the firm about how secure information exchanged through the terminals within the firm actually was — and if the privacy of their business strategy had been compromised.

“You can basically see how many times someone has looked up news stories or if they used their messaging functions,” said one Goldman insider.

[snip]

“Limited customer relationship data has long been available to our journalists, and has never included clients’ security-level data, position data, trading data or messages,” said Bloomberg spokesman Ty Trippet.

“In light of [Goldman’s] concern as well as a general heightened sensitivity to data access, we decided to disable journalist access to this customer relationship information for all clients,” he noted.

Now, normally I’d be laughing my ass off at MOTUs spying on MOTUs. Particularly the thought of MOTUs paying $20,000 a year for the privilege of being spied on.

But I am worried about what this will do for Bloomberg’s business model. Bloomberg News happens to do a lot of (freely-accessible) journalism, subsidized by MOTUs paying for these terminals. If MOTUs get squeamish, it might cut back on actual journalism.

For the moment, at least, it does confirm that MOTU reticence about surveillance has more to do with their belief that their most guarded activities aren’t watched than with a real disinterest in spying.

Update: See this Quartz article for a description of everything Bloomberg employees could snoop on.