When Deputy Interior Minister August Hanning starts talking about his latest official visit to the United Kingdom, the otherwise unemotional security expert waxes altogether enthusiastic.

The former head of Germany's foreign intelligence service, the BND, describes a superforce of highly-trained specialists who sit at the most powerful and expensive computers where, in loyal service to Her Majesty the Queen, they pursue the delicate task of monitoring, recording, and evaluating electronic communications. Everything top secret, of course, and extremely effective.

Government Communications Headquarters (GCHQ) is the name of the agency that made such an impression on Interior Minister Wolfgang Schäuble's deputy minister. The listening post is situated on the outskirts of Cheltenham and is housed in a ring-shaped complex that cost €1.8 billion ($2.8 billion) to build. It employs a staff of around 4,000 and is considered by experts to be the most modern facility of its kind in the world, on a par with the National Security Agency (NSA) in the United States. Enigma, the legendary German encryption machine used during World War II, is on display in an in-house museum and is the organization's most prized trophy. It was the staff of GCHQ's predecessor who cracked the supposedly unbreakable code, making it possible to decipher German radio communications from 1940 onwards.

As was the case with the cracking of the Enigma code back then, Hanning is convinced that agencies like GCHQ will make all the difference in today's world -- except that today security authorities see their main enemy as being Islamist terrorism inspired by Osama bin Laden.

The only problem is that no agency comparable to GCHQ exists in Germany. There is the Federal Office of Criminal Investigation (BKA), the Federal Office for the Protection of the Constitution (BfV), the Federal Intelligence Service (BND), and the Federal Police. All four currently have their own separate systems for monitoring communications. And that's just at the national level -- there are also numerous law enforcement and security agencies at the level of Germany's 16 federal states. All in all, there are more than 75 separate monitoring facilities in operation nationwide -- and they are frankly not very effective compared to the central monitoring stations in the UK and US.

This is likely to change in the near future. On orders from Schäuble's ministry, a BKA project group has been working since April on the ambitious plan of giving Germany its own central agency for communications monitoring, known in the trade as signals intelligence. This large-scale monitoring initiative is the latest in a series of bold security policy reforms Schäuble has proposed -- and is one that is particularly controversial.

The new technology is to be installed at the Federal Office of Administration (BVA) in Cologne. Housed in a star-shaped reinforced concrete structure, this federal authority has so far been responsible for such things as student loan administration, maintaining the central register of resident aliens, and deciding who will be granted permission to use German national emblems abroad. The only ornament in the austere lobby is a plaque with the names of all Germany's presidents to date.

Among the various suborganizations in this complex is the Federal Agency for Information Technology (BIT). This is where a communications monitoring system capable of rivaling those in other countries is to be put into operation by the middle of next year.

This would upgrade the Cologne-based federal authority to the status of what officials mockingly refer to a "mini-NSA." According to a memo from his ministry, Wolfgang Schäuble's senior officials are looking to establish a specialized computer center with a view to "harmonizing the fragmented signals intelligence landscape among the country's law enforcement and intelligence agencies."

In a letter addressed to members of the German parliament, the Bundestag, Hanning argues that a state-of-the-art monitoring facility is needed to stay abreast of the changes taking place in communications technology. The security authorities say they are "no longer able to adequately address" technological developments like Internet telephony, chat rooms, wireless Internet access, and widely available encryption programs. "The amount of information gathered by police and intelligence agencies is bound to decline dramatically unless decisive action is taken to counteract this trend," an Interior Ministry source said.

Restructuring Germany's Intelligence Landscape

In an initial phase, a communications monitoring system costing over €40 million that has been commissioned by the Federal Office for the Protection of the Constitution will largely be operated from a "service center" in Cologne. Parallel to this, Hanning wants to set up a "competence center" at the BKA where police and domestic intelligence agents can pool their knowledge, although formally the work done by the different agencies will continue to be kept separate for the time being. It is planned to merge the service and competence centers at some time in the future.

But plans being discussed internally at the ministry clearly go a lot further. Schäuble's second-in-command would like to win more than just the support of the domestic agencies for the project. He would also like to see the BND, which is responsible for gathering intelligence abroad, brought on board. The ministerial memo noted that, in order to keep pace with the "increasing internationalization of communications," it will be necessary to think about "new ways of combining the methods of domestic and international signals intelligence (BND communications intelligence)."

Hanning is particularly interested in getting the BND's Department 26 to come to Cologne, namely those five units that are responsible for the politically controversial task of carrying out online surveillance of individuals' computers.

The fact that BND specialists have made generous use of this technique and been quite successful at it is something they were forced to admit only recently, much to their chagrin. Department 26 is that part of the BND that launched a clandestine attack on the computer of Afghan Commerce Minister Amin Farhang and in doing so also intercepted e-mails from a SPIEGEL reporter. The ensuing scandal was politically damaging for BND president Ernst Uhrlau -- but it also showed that the online surveillance experts in the BND have the edge on their counterparts in the domestic intelligence agencies. For that reason, BND communications intelligence experts are the last piece in the puzzle that would complete Hanning's vision.

The inspiration for these plans is definitely no secret at the Interior Ministry. A planning paper clearly states: "The American NSA or the British GCHQ could serve as models for an agency of this kind." The paper goes on to say that the combination of technology and competence being aimed for in Cologne is well suited to be the "nucleus of a new agency".

Were this all to become reality, a center for espionage activities would be created unlike anything post-war Germany has ever seen. It would immediately challenge certain German taboos, such as the traditional separation of police and intelligence agencies as well as the traditional divide between internal and external security.

German intelligence service expert Erich Schmidt-Eenboom says it is "very doubtful" whether such an institution would be compatible with Germany's constitution. After all, the NSA and GCHQ are far more than technical support organizations in the digital age. They both act as secret service agencies in their own right with their own independent operations. They not only monitor the communications of specific individuals, they also filter global communications networks with a kind of electronic dragnet. The secret services refer to this vacuuming-up of intelligence as strategic communications monitoring, which is also used by the BND in its intelligence-gathering activities abroad.

For example, BND experts managed to filter out a telephone call that was conducted between the office of an aid organization in Afghanistan and its headquarters in Saudi Arabia on September 11, 2001. In the course of the conversation, the plans that had been made by the 9/11 hijackers were discussed with obvious insider knowledge.

Secretive and Powerful

The huge size and scope of the communications monitoring centers operated by the British and Americans makes the German project looks pretty modest by comparison. The National Security Agency is located in the state of Maryland in a complex the size of a town, nicknamed "Crypto City," that does not appear on any maps. The NSA is by far the largest US intelligence service, having a total of around 38,000 employees. James Bamford, author of two bestselling books on the NSA, describes it as the "largest, most secretive, and most powerful intelligence agency in the world."

One of the most infamous results of the NSA's intelligence activities is Echelon, a signals intelligence collection and analysis system that the NSA and GCHQ used for decades to monitor global satellite communications. It was also the NSA that provided the information that led to the arrest of the three Islamic extremists in the terror cell led by Fritz Gelowicz in Germany's Sauerland region in September 2007. US experts had intercepted e-mails between Pakistan and southern Germany.

But the NSA was also involved in a number of equally spectacular scandals. In 2003, AT&T technician Mark Klein discovered a secret room next to a central AT&T Internet room in San Francisco. As it turned out, the room was packed full of surveillance hardware. This accidental discovery revealed that the NSA was systematically tapping Internet nodes and monitoring domestic American Internet traffic. The NSA had apparently recorded the data of more than a billion electronic messages sent between US citizens after September 11, 2001.

In another case, there was considerable indignation when it was revealed that, prior to the Iraq war, GCHQ had eavesdropped on members of the UN Security Council on behalf of the NSA. Allegedly they even listened in on then UN Secretary-General Kofi Annan's telephone conversations.

No wonder, then, that the response to the prospect of having a German counterpart to these organizations is mixed. Both partners in Germany's ruling grand coalition government, the conservative Christian Democratic Union and the center-left Social Democratic Party, have praised the plan to pool technical resources, with the SPD's security expert Fritz-Rudolf Körper describing it as "a necessary step" and the CDU's Clemens Binninger calling it "an ideal concentration of know-how." "We will not undermine the existing requirement for separation (of different intelligence agencies)," promises the CDU's deputy floor leader Wolfgang Bosbach, adding that coalition politicians agreed to the project with this proviso when Schäuble first presented it.

But the Green Party's security spokesman, Wolfgang Wieland, admits that he has a "very bad feeling about the whole thing." Despite all assurances to the contrary, he is afraid that "the police and intelligence agents will end up monitoring communications together" and the result will be the formation of an agency outside any kind of control. Schmidt-Eenboom warns that the country's security architecture is being restructured "block by block," adding that "this plan is a very, very far-reaching step." There is also resistance from within the intelligence agencies, with many agents worried about losing their power and influence.

Hanning and Schäuble are aware of this. For this reason, they actively promoted their plan in great detail at a conference of interior ministers from Germany's federal states in mid-April. They feel that they need to move forward cautiously, a little at a time. As the ministry's memo puts it: "Given the political sensitivity of a new German 'surveillance authority,' it would seem advisable to take an incremental approach in close cooperation with the state governments."