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SPIEGEL ONLINE

10/27/2013 07:02 PM

Embassy Espionage

The NSA's Secret Spy Hub in Berlin

By SPIEGEL Staff

According to SPIEGEL research, United States intelligence agencies have not only targeted Chancellor Angela Merkel's cellphone, but they have also used the American Embassy in Berlin as a listening station. The revelations now pose a serious threat to German-American relations.

It's a prime site, a diplomat's dream. Is there any better location for an embassy than Berlin's Pariser Platz? It's just a few paces from here to the Reichstag. When the American ambassador steps out the door, he looks directly onto the Brandenburg Gate.

When the United States moved into the massive embassy building in 2008, it threw a huge party. Over 4,500 guests were invited. Former President George H. W. Bush cut the red-white-and-blue ribbon. Chancellor Angela Merkel offered warm words for the occasion. Since then, when the US ambassador receives high-ranking visitors, they often take a stroll out to the roof terrace, which offers a breathtaking view of the Reichstag and Tiergarten park. Even the Chancellery can be glimpsed. This is the political heart of the republic, where billion-euro budgets are negotiated, laws are formulated and soldiers are sent to war. It's an ideal location for diplomats -- and for spies.

Research by SPIEGEL reporters in Berlin and Washington, talks with intelligence officials and the evaluation of internal documents of the US' National Security Agency and other information, most of which comes from the archive of former NSA contractor Edward Snowden, lead to the conclusion that the US diplomatic mission in the German capital has not merely been promoting German-American friendship. On the contrary, it is a nest of espionage. From the roof of the embassy, a special unit of the CIA and NSA can apparently monitor a large part of cellphone communication in the government quarter. And there is evidence that agents based at Pariser Platz recently targeted the cellphone that Merkel uses the most.

The NSA spying scandal has thus reached a new level, becoming a serious threat to the trans-Atlantic partnership. The mere suspicion that one of Merkel's cellphones was being monitored by the NSA has led in the past week to serious tensions between Berlin and Washington.

Hardly anything is as sensitive a subject to Merkel as the surveillance of her cellphone. It is her instrument of power. She uses it not only to lead her party, the center-right Christian Democratic Union (CDU), but also to conduct a large portion of government business. Merkel uses the device so frequently that there was even debate earlier this year over whether her text-messaging activity should be archived as part of executive action.

'That's Just Not Done'

Merkel has often said -- half in earnest, half in jest -- that she operates under the assumption that her phone calls are being monitored. But she apparently had in mind countries like China and Russia, where data protection is not taken very seriously, and not Germany's friends in Washington.

Last Wednesday Merkel placed a strongly worded phone call to US President Barack Obama. Sixty-two percent of Germans approve of her harsh reaction, according to a survey by polling institute YouGov. A quarter think it was too mild. In a gesture of displeasure usually reserved for rogue states, German Foreign Minister Guido Westerwelle summoned the new US ambassador, John Emerson, for a meeting at the Foreign Ministry.

The NSA affair has shaken the certainties of German politics. Even Merkel's CDU, long a loyal friend of Washington, is now openly questioning the trans-Atlantic free trade agreement. At the Chancellery it's now being said that if the US government doesn't take greater pains to clarify the situation, certain conclusions will be drawn and talks over the agreement could potentially be put on hold.

"Spying between friends, that's just not done," said Merkel on Thursday at a European Union summit in Brussels. "Now trust has to be rebuilt." But until recently it sounded as if the government had faith in its ally's intelligence agencies.

In mid-August Merkel's chief of staff, Ronald Pofalla, offhandedly described the NSA scandal as over. German authorities offered none of their own findings -- just a dry statement from the NSA leadership saying the agency adhered to all agreements between the countries.

Now it is not just Pofalla who stands disgraced, but Merkel as well. She looks like a head of government who only stands up to Obama when she herself is a target of the US intelligence services. The German website Der Postillon published a satirical version last Thursday of the statement given by Merkel's spokesman, Steffen Seibert: "The chancellor considers it a slap in the face that she has most likely been monitored over the years just like some mangy resident of Germany."

Merkel has nothing to fear domestically from the recent turn of affairs. The election is over, the conservatives and the center-left Social Democrats are already in official negotiations toward forming a new government. No one wants to poison the atmosphere with mutual accusation.

Nevertheless, Merkel must now answer the question of how much she is willing to tolerate from her American allies.

Posing as Diplomats

A "top secret" classified NSA document from the year 2010 shows that a unit known as the "Special Collection Service" (SCS) is operational in Berlin, among other locations. It is an elite corps run in concert by the US intelligence agencies NSA and CIA.

The secret list reveals that its agents are active worldwide in around 80 locations, 19 of which are in Europe -- cities such as Paris, Madrid, Rome, Prague and Geneva. The SCS maintains two bases in Germany, one in Berlin and another in Frankfurt. That alone is unusual. But in addition, both German bases are equipped at the highest level and staffed with active personnel.

The SCS teams predominantly work undercover in shielded areas of the American Embassy and Consulate, where they are officially accredited as diplomats and as such enjoy special privileges. Under diplomatic protection, they are able to look and listen unhindered. They just can't get caught.

Wiretapping from an embassy is illegal in nearly every country. But that is precisely the task of the SCS, as is evidenced by another secret document. According to the document, the SCS operates its own sophisticated listening devices with which they can intercept virtually every popular method of communication: cellular signals, wireless networks and satellite communication.

The necessary equipment is usually installed on the upper floors of the embassy buildings or on rooftops where the technology is covered with screens or Potemkin-like structures that protect it from prying eyes.

That is apparently the case in Berlin, as well. SPIEGEL asked British investigative journalist Duncan Campbell to appraise the setup at the embassy. In 1976, Campbell uncovered the existence of the British intelligence service GCHQ. In his so-called "Echelon Report" in 1999, he described for the European Parliament the existence of the global surveillance network of the same name.

Campbell refers to window-like indentations on the roof of the US Embassy. They are not glazed but rather veneered with "dielectric" material and are painted to blend into the surrounding masonry. This material is permeable even by weak radio signals. The interception technology is located behind these radio-transparent screens, says Campbell. The offices of SCS agents would most likely be located in the same windowless attic.

No Comment from the NSA

This would correspond to internal NSA documents seen by SPIEGEL. They show, for example, an SCS office in another US embassy -- a small windowless room full of cables with a work station of "signal processing racks" containing dozens of plug-in units for "signal analysis."

On Friday, author and NSA expert James Bamford also visited SPIEGEL's Berlin bureau, which is located on Pariser Platz diagonally opposite the US Embassy. "To me, it looks like NSA eavesdropping equipment is hidden behind there," he said. "The covering seems to be made of the same material that the agency uses to shield larger systems."

The Berlin-based security expert Andy Müller Maguhn was also consulted. "The location is ideal for intercepting mobile communications in Berlin's government district," he says, "be it technical surveillance of communication between cellphones and wireless cell towers or radio links that connect radio towers to the network."

Apparently, SCS agents use the same technology all over the world. They can intercept cellphone signals while simultaneously locating people of interest. One antenna system used by the SCS is known by the affable code name "Einstein."

When contacted by SPIEGEL, the NSA declined to comment on the matter.

The SCS are careful to hide their technology, especially the large antennas on the roofs of embassies and consulates. If the equipment is discovered, explains a "top secret" set of classified internal guidelines, it "would cause serious harm to relations between the United States and a foreign government."

According to the documents, SCS units can also intercept microwave and millimeter-wave signals. Some programs, such as one entitled "Birdwatcher," deal primarily with encrypted communications in foreign countries and the search for potential access points. Birdwatcher is controlled directly from SCS headquarters in Maryland.

With the growing importance of the Internet, the work of the SCS has changed. Some 80 branches offer "thousands of opportunities on the net" for web-based operations, according to an internal presentation. The organization is now able not only to intercept cellphone calls and satellite communication, but also to proceed against criminals or hackers. From some embassies, the Americans have planted sensors in communications equipment of the respective host countries that are triggered by selected terms.

How the Scandal Began

There are strong indications that it was the SCS that targeted Chancellor Angela Merkel's cellphone. This is suggested by a document that apparently comes from an NSA database in which the agency records its targets. This document, which SPIEGEL has seen, is what set the cellphone scandal in motion.

The document contains Merkel's cellphone number. An inquiry to her team revealed that it is the number the chancellor uses mainly to communicate with party members, ministers and confidants, often by text message. The number is, in the language of the NSA, a "Selector Value." The next two fields determine the format ("raw phone number") and the "Subscriber," identified as "GE Chancellor Merkel."

In the next field, labeled "Ropi," the NSA defines who is interested in the German chancellor: It is the department S2C32. "S" stands for "Signals Intelligence Directorate," the NSA umbrella term for signal reconnaissance. "2" is the agency's department for procurement and evaluation. C32 is the unit responsible for Europe, the "European States Branch." So the order apparently came down from Europe specialists in charge of signal reconnaissance.

The time stamp is noteworthy. The order was transferred to the "National Sigint Requirements List," the list of national intelligence targets, in 2002. That was the year Germany held closely watched parliamentary elections and Merkel battled Edmund Stoiber of Bavaria's Christian Social Union to become the conservatives' chancellor candidate. It was also the year the Iraq crisis began heating up. The document also lists status: "A" for active. This status was apparently valid a few weeks before President Obama's Berlin visit in June 2013.

Finally, the document defines the units tasked with implementing the order: the "Target Office of Primary Interest": "F666E." "F6" is the NSA's internal name for the global surveillance unit, the "Special Collection Service."

Thus, the NSA would have targeted Merkel's cellphone for more than a decade, first when she was just party chair, as well as later when she'd become chancellor. The record does not indicate what form of surveillance has taken place. Were all of her conversations recorded or just connection data? Were her movements also being recorded?

'Intelligence Target Number One'

Among the politically decisive questions is whether the spying was authorized from the top: from the US president. If the data is accurate, the operation was authorized under former President George W. Bush and his NSA chief, Michael Hayden. But it would have had to be repeatedly approved, including after Obama took office and up to the present time. Is it conceivable that the NSA made the German chancellor a surveillance target without the president's knowledge?

The White House and the US intelligence agencies periodically put together a list of priorities. Listed by country and theme, the result is a matrix of global surveillance: What are the intelligence targets in various countries? How important is this reconnaissance? The list is called the "National Intelligence Priorities Framework" and is "presidentially approved."

One category in this list is "Leadership Intentions," the goals and objectives of a country's political leadership. The intentions of China's leadership are of high interest to the US government. They are marked with a "1" on a scale of 1 to 5. Mexico and Brazil each receive a "3" in this category.

Germany appears on this list as well. The US intelligence agencies are mainly interested in the country's economic stability and foreign policy objectives (both "3"), as well as in its advanced weapons systems and a few other sub-items, all of which are marked "4." The "Leadership Intention" field is empty. So based on the list, it wouldn't appear that Merkel should be monitored.

Former NSA employee Thomas Drake does not see this as a contradiction. "After the attacks of September 11, 2001, Germany became intelligence target number one in Europe," he says. The US government did not trust Germany, because some of the Sept. 11 suicide pilots had lived in Hamburg. Evidence suggests that the NSA recorded Merkel once and then became intoxicated with success, says Drake. "It has always been the NSA's motto to conduct as much surveillance as possible," he adds.

A Political Bomb

When SPIEGEL confronted the government on Oct. 10 with evidence that the chancellor's cellphone had been targeted, the German security apparatus became deeply unsettled.

The Chancellery ordered the country's foreign intelligence agency, the Federal Intelligence Service (BND), to scrutinize the information. In parallel, Christoph Heusgen, Merkel's foreign policy adviser, also contacted his US counterpart, National Security Adviser Susan Rice, to tell her about SPIEGEL's research, which had been summarized on a single sheet of paper. Rice said she would look into it.

Shortly afterwards, German security authorities got back to the Chancellery with a preliminary result: The numbers, dates and secret codes on the paper indicated the information was accurate. It was probably some kind of form from an intelligence agency department requesting surveillance on the chancellor's cellphone, they said. At this point, a sense of nervousness began to grow at government headquarters. It was clear to everyone that if the Americans were monitoring Merkel's phone, it would be a political bomb.

But then Rice called the Chancellery on Friday evening to explain that if reports began to circulate that Merkel's phone had been targeted, Washington would deny it -- or at least that is how the Germans understood the message. White House Press Secretary Jay Carney assured his counterpart, Merkel's spokesperson Steffen Seibert, of the same thing. The message was passed on to SPIEGEL late that evening without comment, at which point editors decided to continue investigating.

With this, both the US agencies and Berlin won themselves more time to come up with a battle plan for approaching the deep crisis of confidence between the two countries. And it was clearly already a crisis of confidence, because Berlin obviously doubted the statements coming from the US and hadn't called off its probe. And, as later became clear, there were also inquiries taking place in the US, despite the denial from Rice.

Over the weekend, the tide turned.

Rice contacted Heusgen once again, but this time her voice sounded less certain. She said that the possibility the chancellor's phone was under surveillance could only be ruled out currently and in the future. Heusgen asked for more details, but was put off. The chief adviser to the president on Europe, Karen Donfried, and the Assistant Secretary of State for Europe and Eurasia at the US State Department, Victoria Nuland, would provide further information midweek, he was told. By this time it was clear to the Chancellery that if Obama's top security adviser no longer felt comfortable ruling out possible surveillance, this amounted to confirmation of their suspicions.

Going on the Offensive

This detail only served to intensify the catastrophe. Not only had supposed friends monitored the chancellor's cellphone, which was bad enough on its own, but leaders in Berlin were also left looking like a group of amateurs. They had believed the assurances made this summer by Obama, who downplayed the notion of spying in Germany on a visit to Berlin. German Interior Minister Hans-Peter Friedrich had even gone so far as to say at the time that Germany's concerns had "dissipated."

On Tuesday morning Merkel decided to go on the offensive. She had seen how strongly French President François Hollande had reacted to allegations that US intelligence agencies had conducted widespread surveillance on French citizens. Hollande called Obama immediately to air his anger. Merkel now wanted to speak with Obama personally too -- before her planned meeting with Hollande at the upcoming EU summit in Brussels.

Heusgen made a preliminary call to Obama to let him know that Merkel planned to make some serious complaints, with which she would then go public. At stake was control over the political interpretation of one of the year's most explosive news stories.

Merkel spoke with Obama on Wednesday afternoon, calling him from her secure landline in her Chancellery office. Both spoke English. According to the Chancellery, the president said that he had known nothing of possible monitoring, otherwise he would have stopped it. Obama also expressed his deepest regrets and apologized.

Around 5:30 p.m. the same day, Merkel's chief of staff, Pofalla, informed two members of the Parliamentary Control Panel, the body in Germany's parliament charged with keeping tabs on the country's intelligence agencies, of what was going on. At the same time, the administration went public with the matter. It contacted SPIEGEL first with a statement containing Merkel's criticism of possible spying on her cellphone. Her spokesman Seibert called it a "grave breach of trust" -- a choice of phrase seen as the highest level of verbal escalation among allied diplomats.

Surprising Unscrupulousness

The scandal revives an old question: Are the German security agencies too trusting of the Americans? Until now, German agencies have typically concerned themselves with China and Russia in their counterintelligence work, for which the domestic intelligence agency, the Federal Office for the Protection of the Constitution (BFV), is responsible.

A year ago, there was already debate between the agencies, the Interior Ministry and the Chancellery over whether Germany should be taking a harder look at what American agents were up to in the country. But the idea was jettisoned because it seemed too politically sensitive. The main question at the time came down to whether monitoring allies should be allowed.

Even to seasoned German intelligence officials, the revelations that have come to light present a picture of surprising unscrupulousness. It's quite possible that the BFV could soon be tasked with investigating the activities of the CIA and NSA.

The ongoing spying scandal is also fueling allegations that the Germans have been allowing the NSA to lead them around by the nose. From the beginning of the NSA scandal, Berlin has conducted its attempts to clarify the allegations with a mixture of naivety and ignorance.

Letters with anxious questions were sent, and a group of government department leaders traveled to Washington to meet with Director of National Intelligence James Clapper. The BND was also commissioned with negotiating a "no-spying pact" with the US agencies. In this way, Merkel's government feigned activity while remaining largely in the dark. In fact, it relied primarily on the assurance from the US that its intentions were good.

It also seems to be difficult for German intelligence agencies to actually track the activities of the NSA. High-level government officials admit the Americans' technical capabilities are in many ways superior to what exists in Germany. At the BFV domestic intelligence agency, for example, not even every employee has a computer with an Internet connection.

But now, as a consequence of the spying scandal, the German agencies want to beef up their capabilities. "We're talking about a fundamental realignment of counterintelligence," said one senior security official. There are already more than 100 employees at the BFV responsible for counterintelligence, but officials are hoping to see this double.

One focus of strategic considerations is the embassy buildings in central Berlin. "We don't know which roofs currently have spying equipment installed," says the security official. "That is a problem."

Trade Agreement at Risk?

When the news of Merkel's mobile phone being tapped began making the rounds, the BND and the BSI, the federal agency responsible for information security, took over investigation of the matter. There too, officials have been able to do nothing more than ask questions of the Americans when such sensitive issues have come up in recent months.

But now German-American relations are threatened with an ice age. Merkel's connection to Obama wasn't particularly good before the spying scandal. The chancellor is said to consider the president overrated -- a politician who talks a lot but does little, and is unreliable to boot.

One example, from Berlin's perspective, was the military operation in Libya almost three years ago, which Obama initially rejected. When then-Secretary of State Hillary Clinton convinced him to change his mind, he did so without consulting his allies. Berlin saw this as evidence of his fickleness and disregard for their concerns.

The chancellor also finds Washington's regular advice on how to solve the euro crisis irritating. She would prefer not to receive instruction from the country that caused the collapse of the global financial system in the first place. Meanwhile, the Americans have been annoyed for years that Germany isn't willing to do more to boost the world economy.

Merkel also feels as though she was duped. The Chancellery now plans once again to review the assurances of US intelligence agencies to make sure they are abiding by the law.

The chancellor's office is also now considering the possibility that the much-desired trans-Atlantic free trade agreement could fail if the NSA affair isn't properly cleared up. Since the latest revelations came out, some 58 percent of Germans say they support breaking off ongoing talks, while just 28 percent are against it. "We should put the negotiations for a free-trade agreement with the US on ice until the accusations against the NSA have been clarified," says Bavarian Economy Minister Ilse Aigner, a member of the Christian Social Union, the Bavarian sister party to Merkel's Christian Democrats.

Outgoing Justice Minister Sabine Leutheusser-Schnarrenberger has used the scandal as an excuse to appeal to the conscience of her counterpart in Washington, Attorney General Eric Holder. "The citizens rightly expect that American institutions also adhere to German laws. Unfortunately, there are a number of indications to the contrary," she wrote in a letter to Holder last week.

EU Leaders Consider Consequences

The American spying tactics weren't far from the minds of leaders at the EU summit in Brussels last Thursday, either. French President Hollande was the first to bring it up at dinner, saying that while he didn't want to demonize the intelligence agencies, the Americans had so blatantly broken the law on millions of counts that he couldn't imagine how things could go on this way.

Hollande called for a code of conduct among the intelligence agencies, an idea for which Merkel also showed support. But soon doubts emerged: Wouldn't Europe also have to take a look at its own surveillance practices? What if a German or French Snowden came forward to reveal dirty spy tactics? British Prime Minister David Cameron pointed out how many terror attacks had been prevented because of spying capabilities. Then it was asked whether it has been proven that Obama even knows what his agencies are doing. Suddenly, mutual understanding seemed to waft through the group.

That was a bit too rich for Hollande: No, he interjected, spying to such an immense degree, allegedly on more than 70 million phone calls per month in France alone -- that has been undertaken by only one country: the United States. The interruption was effective. After nearly three hours, the EU member states agreed on a statement that can be read as clear disapproval of the Americans.

Merkel no longer wants to rely solely on promises. This week Günter Heiss, Chancellor Merkel's intelligence coordinator, will travel to Washington. Heiss wants the Americans finally to promise a contract excluding mutual surveillance. The German side already announced its intention to sign on to this no-spying pact during the summer, but the US government has so far shown little inclination to seriously engage with the topic.

This is, of course, also about the chancellor's cellphone. Because despite all the anger, Merkel still didn't want to give up using her old number as of the end of last week. She was using it to make calls and to send text messages. Only for very delicate conversations did she switch to a secure line.

BY JACOB APPELBAUM, NIKOLAUS BLOME, HUBERT GUDE, RALF NEUKIRCH, RENÉ PFISTER, LAURA POITRAS, MARCEL ROSENBACH, JÖRG SCHINDLER, GREGOR PETER SCHMITZ AND HOLGER STARK

Translated from the German by Kristen Allen and Charly Wilder

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