CIA pays AT&T millions for data - report

The CIA is paying AT&T more than $10 million per year to gain limited access to the company's vast database of phone records, according to a report published Thursday in The New York Times.

The report, which cites anonymous government officials, says that AT&T provides the CIA with call data from phone numbers the agency believes are associated with overseas terrorism suspects. The arrangement not only covers the calls of AT&T customers, but also any call that travels through its telecom infrastructure.

While most of the calls in question are made overseas, some calls to and from the U.S. are included in the data haul, according to the report. Because the CIA is not allowed to spy on Americans living in the U.S., the identities of those callers are masked. In some cases, the FBI may issue an administrative subpoena to compel AT&T to provide uncensored data.

According to the Times, AT&T's participation in the program is voluntary and not compelled by a court order.

AT&T (T, Fortune 500) did not confirm or deny the reported deal with the CIA, but it did say that sometimes the company is paid by governments to provide information.

"In all cases, whenever any government entity anywhere seeks information from us, we ensure that the request and our response are completely lawful and proper," said AT&T in a statement to CNNMoney. "Like all telecom providers, we routinely charge governments for producing the information provided. We do not comment on questions concerning national security."

"As a matter of longstanding policy, the CIA does not comment on alleged intelligence sources or methods," the CIA said in a statement. "The CIA protects the nation and upholds the privacy rights of Americans by ensuring that its intelligence collection activities are focused on acquiring foreign intelligence and counterintelligence in accordance with U.S. laws."

The agency added: "Under Executive Order 12333, the CIA is expressly forbidden from undertaking intelligence collection activities inside the United States 'for the purpose of acquiring information concerning the domestic activities of U.S. persons,' and the CIA does not do so."

The report pulls back the curtain a little further on how personal data is collected by the U.S. government -- with or without the consent of the communications companies that hold it.

The activities of the National Security Agency have drawn the most attention. Documents leaked by former agency contractor Edward Snowden revealed that the NSA has apparently tapped into the fiber-optic cables that carry data between the servers of major tech companies such as Google and Yahoo.

Internet companies commonly send massive amounts of data between secure servers around the world, and security analysts have warned that a determined intelligence agency might be able to redirect, or copy, the information.

Both Yahoo (YHOO, Fortune 500) and Google (GOOG, Fortune 500) have said they were unaware of the activities. Google chairman and former CEO Eric Schmidt said the company was "shocked" and "outraged" by the NSA action.

Another program disclosed in recent months by Snowden revealed that the NSA can legally compel Internet companies to turn over data on foreign communications that match certain criteria.

The program, called PRISM, is authorized under a foreign intelligence law and overseen by the Foreign Intelligence Surveillance Court. It allows the NSA to collect audio and video chats, photographs, e-mails and other documents from foreign sources.

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The NSA's activities have roiled governments in countries where Google and Yahoo do business, and the tech companies could be put at a competitive disadvantage as a result. The companies have also, to varying degrees, staked their reputations on an ability to safeguard user information.

After the PRISM disclosure, Google filed a court petition demanding it be allowed to share information about government surveillance programs with the public. Google also asked for the ability to share the number of user accounts associated with those secret data requests.

AT&T has come under fire in the past for its relationship with the U.S. government. The company's cooperation with the NSA on the Bush Administration's wireless wiretapping program was the subject of a class action lawsuit.