UPDATE: 7/12/13, 12:05 p.m. EDT. The Guardian reports that Microsoft helped the NSA get around its encryption systems in order to gather data on its customers. Microsoft has said in a statement that "legal obligations" forced it to cooperate with the government.
Two sources knowledgeable about the matter have confirmed to The Am Law Daily that Covington & Burling is advising AOL and Microsoft in connection with the National Security Agency’s ongoing requests for information from both companies as part of a secret government surveillance program, as the ex–government contractor who leaked details about that program earlier this month is reportedly seeking asylum in Ecuador with the help of lawyers from WikiLeaks.
Late Friday, the U.S. Department of Justice officially charged Edward Snowden, the self-proclaimed NSA leaker and whistle-blower, with criminal spying charges in connection with his decision to divulge confidential information about NSA practices. As of midday Monday, Snowden’s exact location was unknown, although he reportedly had not boarded a flight from Moscow to the Cuban capital of Havana.
U.S. Secretary of State John Kerry has made vague threats of "consequences" to those the federal government believes have helped Snowden—whose revelations about the NSA’s vast surveillance and warrantless searching capabilities have created strange political bedfellows, embarrassed the U.S. government, and threatened to undermine the latter's credibility and proclaimed commitment to Internet freedom—leave temporary sanctuary in Hong Kong while he continues to try to avoid extradition.
One of the NSA programs Snowden disclosed, PRISM, has seen many of the world’s largest technology companies hand the government reams of metadata detailing emails, phone calls, and private Internet activity on foreign users. The program's backers, including NSA director Keith Alexander, claim PRISM is a legal intelligence program that is critical in catching terrorists and cannot be used in the U.S. or to target American citizens abroad.
As reported earlier this month by sibling publication The National Law Journal, the American Civil Liberties Union has filed suit in federal court in Manhattan over what it claims are domestic surveillance programs maintained by the NSA. On a related front, the Obama administration is facing sharp criticism for arguing such programs are carefully monitored by the “transparent” court that oversees the Foreign Intelligence Surveillance Act. (The Justice Department is currently fighting a civil liberty group's request to get the FISA court to unseal a key surveillance ruling, according to the NLJ.)
Google, one of the tech giants targeted in the PRISM program, is among several companies that have sought to deny knowledge of the program and push back against NSA access to their servers by asking the FISA court to allow them to disclose details of the agency’s electronic data requests. Facebook and Microsoft have also released vague details of requests made by the NSA, with the latter’s deputy general counsel, John Frank, publicly disclosing earlier this month that “Microsoft received between 6,000 and 7,000 criminal and national security warrants, subpoenas, and orders affecting between 31,000 and 32,000 consumer accounts from U.S. governmental entities.”
Microsoft is a longtime client of Covington, which advised the company two years ago on its $8.5 billion acquisition of Internet voice and video chat service Skype Global, which The New York Times reported last week was cooperating with the NSA long before the PRISM program became a Hollywood-esque reality.
Covington white-collar defense and litigation partner James Garland, global privacy and data security partner David Fagan, and associate Alexander Berengaut have been advising Microsoft on NSA–related issues for the past two years, according to a source briefed on the matter. Garland and Fagan did not return The Am Law Daily's requests for comment.
U.S. Senate records reveal that Microsoft also paid Covington $100,000 in the first quarter of this year for lobbying work on “legislation affecting federal procurement and management of information technology.” Alan Pemberton, the head of Covington’s government contracts practice, is identified as the lead firm partner working on the matter. Microsoft general counsel Bradford Smith is a former Covington partner.
Covington received $30,000 from Microsoft in 2012 for lobbying work on international trade issues, and another $170,000 in 2011, mostly for representing the world’s largest software company on privacy and cloud computing legislation, according to Senate filings. The firm also advised Microsoft on its $1.1 billion acquisition of a portfolio of more than 800 patents from AOL and a subsequent sale of some of those patents to Facebook, according to our previous reports.
Names of the Covington lawyers serving as outside counsel to AOL, which has also denied knowledge of PRISM, on NSA issues were not immediately available. Julie Jacobs serves as AOL’s general counsel, while John Reid-Dodick, a former general counsel of news service Reuters, is the company’s chief people officer.
Senate records show that AOL paid Steptoe & Johnson $60,000 in the first quarter of this year for lobbying work on “privacy, cybersecurity, consumer protection, net neutrality, piracy, and intellectual property rights.” The firm received another $240,000 from AOL in 2012 for similar work. Covington is not listed as a registered lobbyist for AOL.
While Silicon Valley stalwarts keep their outside lawyers busy coping with the fallout from the NSA spying scandal, one company that has sought to stay out of the fray is Booz Allen Hamilton, the Washington, D.C.–based consulting giant that employed Snowden until terminating him two weeks ago.
Booz Allen released a statement earlier this month confirming that Snowden, a former technical assistant at the CIA, had been an employee for less than three months assigned to a team based in Hawaii and that it was investigating “a grave violation of the code of conduct and core values of our firm.”
Robert Osborne, a former Kirkland & Ellis partner, chair of the corporate practice at Jenner & Block, and legal chief for General Motors, serves as Booz Allen’s general counsel. Neither Osborne nor deputy general counsel Douglas Manya responded to requests for comment on whether Booz Allen has retained outside counsel in connection with the Snowden matter. Two media representatives for Booz Allen also did not return requests for comment.
Booz Allen, which Bloomberg BusinessWeek recently called the “world’s most profitable spy organization,” has seen its stock price slip in recent weeks amid fears that the company’s own credibility has taken a critical hit that could put its lucrative government contracting work under review. Almost all of Booz Allen’s annual revenue comes from the federal government. The company is largely owned by private equity giant The Carlyle Group, which bought a $910 million controlling stake in Booz Allen in 2008. (Forbes reported this month that Carlyle has made $2 billion from Booz Allen since that initial investment.)
The Snowden saga isn’t Booz Allen’s first leaks fiasco. Politico reported this month that the consulting giant was embroiled in an incident last year with the U.S. Air Force in which it sought to gain a “competitive advantage” by employing a former officer who brought it nonpublic information. Jenner & Block litigation chair Anton Valukas and Wiley Rein advised Booz Allen in that matter, according to an administrative agreement signed with the Air Force.
Spokeswomen for both Wiley Rein and Jenner & Block did not respond to requests for comment on whether their firms were advising Booz Allen this time around, nor did media representatives for Debevoise & Plimpton and Latham & Watkins. The latter two firms reaped roughly $4.2 million in fees from the company’s $238 million initial public offering in 2010. (Earlier this month, shortly before Snowden went public, Booz Allen was sued for discrimination, the latest bias suit to be filed against the firm in recent years, according to sibling publication The Blog of Legal Times.)
One lawyer who has stepped into the public spotlight is Glenn Greenwald, a former Wachtell, Lipton, Rosen & Katz litigation associate. Greenwald, who closed down his own New York litigation shop in 2006 to focus on a career as an author, blogger, journalist, and commentator on First Amendment and privacy issues, has found himself at the center of a national security debate as a result of bringing Snowden's NSA revelations to light in British newspaper The Guardian.
Greenwald’s reporting may have put him in federal prosecutors' sights, according to a story published by The Times earlier this month. Greenwald, who currently lives in Rio de Janeiro and has a long history of clashing with authority figures, has pushed back aggressively against suggestions that he may have broken the law by cultivating the 29-year-old Snowden as a source in order to disclose the massive secret online and telephonic surveillance programs run by mysterious federal agencies.
“The NSA is kind of the crown jewel in government secrecy,” Greenwald told The Times in a phone interview this month. “I expect them to react even more extremely.”
Greenwald, who is the author of three books, did not respond to an emailed request for comment from The Am Law Daily about whether he has retained outside counsel of his own. Nor did Sarah Davis, in-house legal director for Guardian Media Group, owner of The Guardian.
