Obama bans spying on leaders of U.S. allies, scales back NSA program

(Reuters) - President Barack Obama banned U.S. eavesdropping on the leaders of close friends and allies on Friday and began reining in the vast collection of Americans' phone data in a series of limited reforms triggered by Edward Snowden's revelations.

1 of 4. U.S. President Barack Obama is seen through a teleprompter as he speaks about the National Security Agency from the Justice Department in Washington January 17, 2014.

Credit: Reuters/Kevin Lamarque

In a major speech, Obama took steps to reassure Americans and foreigners alike that the United States will take into account privacy concerns highlighted by former spy contractor Snowden's damaging disclosures about the sweep of monitoring activities of the National Security Agency (NSA).

"The reforms I'm proposing today should give the American people greater confidence that their rights are being protected, even as our intelligence and law enforcement agencies maintain the tools they need to keep us safe," he said.

While the address was designed to fend off concerns that U.S. surveillance has gone too far, Obama's measures fell short of dismantling U.S. electronic spying programs.

Even as the White House put the final touches on the reform plan this week, media outlets reported that the NSA gathers nearly 200 million text messages a day from around the world.

Obama promised that the United States will not eavesdrop on the heads of state or government of close U.S. friends and allies, "unless there is a compelling national security purpose." A senior administration official said that would apply to dozens of leaders.

The step was designed to smooth over frayed relations between, for example, the United States and Germany after reports surfaced last year that the NSA had monitored the cellphone of German Chancellor Angela Merkel.

Brazilian President Dilma Rousseff postponed a state visit to Washington in protest of the NSA spying on her email and cellphone.

"The leaders of our close friends and allies deserve to know that if I want to learn what they think about an issue, I will pick up the phone and call them, rather than turning to surveillance," Obama said.

Still, he said, U.S. intelligence will continue to gather information about the intentions of other governments, and will not apologize simply because U.S. spy services are more effective.

Obama is trying to balance public anger at the disclosure of intrusion into Americans' privacy with his commitment to retain policies he considers critical to protecting the United States. In doing so, he bucked the advice of some U.S. intelligence leaders.

Some of his proposals drew scepticism from Republicans in Congress who expressed concerns that he was going too far in reining in essential spying programs.

"While we will need much more detail on the president's new policies before passing final judgment, I am concerned that some of his proposals go too far, limiting our ability to protect the nation with little benefit to civil liberties of Americans," said Republican Senator Bob Corker of Tennessee.

One of the biggest changes will be an overhaul of the government's handling of bulk telephone "metadata" - lists of millions of phone calls made by Americans that show which numbers were called and when. Obama said the program as it currently exists will end.

In a nod to privacy advocates, the government will not hold the bulk telephone metadata, a decision that could frustrate some intelligence officials.

A presidential advisory panel had recommended that the data be controlled by a third party such as the telephone companies, but Obama did not propose who should store the phone information in the future.

He asked Attorney General Eric Holder and the intelligence community to report back to him before the metadata program comes up for reauthorization on March 28 on how to preserve the necessary capabilities of the program, without the government holding the metadata.

In addition, Obama said the U.S. the government will need a judicial review by the secret Foreign Intelligence Surveillance Act (FISA) court every time intelligence agencies want to check the database of millions of telephone calls, unless there is a true emergency.

"The biggest deal is going to the court each time," said retired General Michael Hayden, a former director of both the NSA and the Central Intelligence Agency.