Spy bill to shield phone companies from lawsuits

By Thomas Ferraro

WASHINGTON (Reuters) - U.S. telephone companies that took part in President George W. Bush's warrantless domestic spying program could be shielded from billions of dollars in lawsuits under a electronic spy bill finalized on Thursday by congressional and White House negotiators.

Under the measure, federal courts would determine if the evidence supports protection of companies from civil liability.

They would be able to dismiss a suit if there is written certification that the White House asked a company to participate and assured it of the legality of the warrantless surveillance that Bush secretly began after the September 11 attacks.

With legal action pending against major telecommunications companies, House Republican Whip Roy Blunt said courts will make the call but predicted, "The lawsuits will be dismissed."

The bill would provide the most sweeping overhaul of U.S. spy powers in decades. In addition to court review of lawsuits, it would increase judicial and congressional oversight of U.S. intelligence activities and bolster protection of civil liberties -- but not as much as some advocates would like.

A vote on the bipartisan bill was set for Friday in the Democratic-led House of Representatives, which was expected to approve it overwhelmingly.

It would then be sent to the Democratic-led Senate, which is expected to give it final congressional approval next week and send it to Bush to sign into law.

"It's a balanced bill," said House Speaker Nancy Pelosi, a California Democrat. She did not say how she would vote, however. "I could argue it either way," she told reporters.

"The bill meets the standards the president called for," said White House spokesman Tony Fratto. "We encourage members of both parties to pass it."

House Democratic Leader Steny Hoyer, a chief negotiator of the measure, said, "This bipartisan bill balances the needs of our intelligence community with Americans' civil liberties, and provides critical new oversight and accountability.

But Sen. Christopher Dodd, a Connecticut Democrat, denounced the measure as "deeply flawed."

"The president should not be above the rule of law, nor should the telecommunications companies who supported his quest to spy on American citizens," Dodd said.

CRITICS ACCUSE BUSH

Critics charged Bush violated the 1978 Foreign Intelligence Surveillance Act in authorizing warrantless surveillance after the September 11 attacks. Bush maintains he had the wartime power to do it. He put the program under FISA jurisdiction last year. Terms remain secret.

The new bill would replace a temporary law that expired in February that expanded U.S. power to conduct surveillance of foreign targets without court approval. Law-abiding Americans were also swept up in surveillance, particularly if they came in contact with these targets.

About 40 civil lawsuits have been filed accusing AT&T Inc, Verizon Communications Inc and Sprint Nextel Corp of violating Americans' privacy rights. Damages could total billions of dollars.

Some Democratic lawmakers along with civil liberties groups have opposed shielding phone companies from lawsuits, saying the courts should first determine what the companies did.

But Bush and others have argued that these companies should be thanked, not punished, for agreeing to help protect the United States.

The bill would amend FISA, which requires the government receive secret-court approval to conduct surveillance on foreign targets in the United States.

As part of any bill to update FISA, Bush had demanded retroactive immunity for phone companies.

The Senate agreed to provide such immunity, but House Democratic leaders refused to even bring the Senate bill up for a vote in their chamber, forcing a compromise.

"Democrats obtained some concessions from the White House, but unfortunately the bill continues to allow unconstitutionally broad access to untold numbers of private international e-mails and phone calls of American residents and businesses," said Lisa Graves, deputy director of the Center for National Security Studies, a Washington watchdog group.

(Additional reporting by Donna Smith and Jeremy Pelofsky; Editing by David Alexander and Eric Walsh)

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Schoolboy hacker Omar Khan who upped his grades faces 38 years in jail

Omar Khan

Chris Ayres in Los Angeles

It could be a long time before Omar Khan goes to college: as long as 38 years, according to Orange County prosecutors, who have arrested and charged the 18-year-old student with breaking into his prestigious high school and hacking into computers to change his test grades from Fs to As.

If convicted on all 69 counts, including altering and stealing public records, computer fraud, burglary, identity theft, receiving stolen property and conspiracy, Mr Khan could spend almost four decades in prison.

He is currently being held on $50,000 (£25,500) bail and is scheduled to appear in court today.

Mr Khan’s defence lawyer, Carol Lavacol, described her client as “a really nice kid” and said: “There’s a lot more going on than meets the eye.”

Prosecutors claim that between January and May, Mr Khan, who lives in Coto de Caza, one of Orange County’s oldest and most expensive gated communities, repeatedly broke into Tesoro High School, which was made famous by the reality TV series Real Housewives of Orange County.

In an alleged plot that resembles the script to the 1986 high school comedy Ferris Bueller’s Day Off, prosecutors claim that he then used teachers’ passwords to hack into computers and change his test scores. In at least one test, an English exam, Mr Khan had been given an F grade because he was caught cheating.

Prosecutors claim that the teenager, who is alleged to have broken into the school late at night with a stolen master key, also changed the grades of 12 other students, and that he installed spyware on school hard drives that allowed him to access the computers from remote locations.

Tesoro High has 2,800 pupils and often appears in Newsweek magazine’s annual list of best high schools.

Mr Khan’s plan, the prosecution argues, was to get a place at one of the colleges within the University of California system. After his application was rejected, he requested copies of his student records, known as “transcripts” in the US educational system, so he could appeal. But when teachers looked at his files and noticed all the A grades that had magically appeared next to all the courses he had taken they realised something was wrong.

“School administrators alerted law enforcement after noticing a discrepancy in Mr Khan’s grades,” the Orange County District Attorney’s office said. “Subsequent investigation revealed that Mr Khan was in possession of original tests, test questions and answers, and copies of his altered grades. Khan is accused of stealing master copies of tests, some of which were e-mailed to dozens of students.”

The case has once again raised the question of whether technology, in particular mobile phones that can access the internet, has resulted in an epidemic of cheating in the high-school system. The Orange County Register, a local newspaper, asked its readers yesterday to respond to a poll asking if “technology is giving [students] an advantage”, or whether it is just “the same stuff using new tools”.

Another student, Tanvir Singh, also 18, is accused of conspiring with Mr Khan and faces up to three years in prison. The pair allegedly exchanged text messages last month while organising a break-in.

Jim Amormino, of the local sheriff’s department, said that he was astonished by the sophistication of the scheme, especially given the age of the defendants. “I think they [now] wish they would have put their talents into studying,” he said.

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Britain is the world’s biggest arms exporter

London Britain was the world’s biggest arms seller last year, accounting for a third of global arms exports, the Government’s trade promotion organisation said.

UK Trade and Investment (UKTI) said that arms exporters had added £9.7 billion in new business last year, giving them a larger share of global arms exports than the United States.

“As demonstrated by this outstanding export performance, the UK has a first-class defence industry, with some of the world’s most technologically sophisticated companies,” Digby Jones, the Minister for Trade and Investment, said.

UKTI said that the figures were boosted by orders for Eurofighter Typhoon jets from Saudi Arabia, the world’s biggest arms buyer, which has imported $31 billion (£16 million) in weapons over the past five years. There were also orders from Oman and Trinidad and Tobago for offshore patrol vessels.

The US is still the world’s biggest exporter over the past five years, with $63 billion in total arms exports. Britain was second with $53 billion and Russia third with $33 billion.

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