This is the problem that the competing FISA amendments were apparently trying to resolve, and both the Democratic bill (which failed) and the White House bill (which passed) addressed it by allowing surveillance of persons who are "reasonably believed" to be outside the U.S. The FISA court would determine if NSA's procedures are reasonable. Over at Obsidian Wings, Publius spells out the difference:
The Democratic bill...and this is critical...explicitly excluded (1) communications with a U.S. person inside the United States and (2) communications in which all participants are in the United States. Thus, the bill provided protections against domestic surveillance. For these types of calls, the government needed an old-fashioned warrant. (The Democratic bill's carve-out provisions are in Sec. 105B(c)(1)(A).)
The White House bill (pdf) — soon to be law — took a much different approach. It just flatly withdrew all of this surveillance from the FISA regime. More specifically, the bill (Sec. 105A) states that any "surveillance directed at a person reasonably believed" to be outside the United States is completely exempt from FISA (i.e., it's not considered "electronic surveillance"). Lederman spells all this out very well and in more detail, but the upshot is virtually anything — including calls inside the United States or involving U.S. citizens — is fair game.
The White House bill not only fails to prohibit domestic surveillance, but opens a huge hole for just that purpose. It exempts from FISA scrutiny any communication that is "directed at" persons reasonably believed to be outside the U.S., and then leaves this phrase undefined and therefore wide open:
For surveillance to come within this exemption, there is no requirement that it be conducted outside the U.S.; no requirement that the person at whom it is "directed" be an agent of a foreign power or in any way connected to terrorism or other wrongdoing; and no requirement that the surveillance does not also encompass communications of U.S. persons. Indeed, if read literally, it would exclude from FISA any surveillance that is in some sense "directed" both at persons overseas and at persons in the U.S.
If this is right, it means that Democrats caved in on a simple provision meant to prohibit domestic surveillance without a warrant. Under the White House bill, the only oversight against abuse of the "directed at" clause is the Attorney General's say-so, and the FISA court is required to accept the AG's reasoning unless it's "clearly erroneous." This is about as toothless as oversight comes.
Democrats pretty clearly got steamrolled on this. Until Thursday they were negotiating productively with Director of National Intelligence Mike McConnell and had reached agreement on the bill's language. Nobody was making a big deal out of it because things seemed to be going smoothly. Then, at the last second, the White House rejected the language its own DNI had accepted and suddenly all hell broke loose. Democrats weren't ready for it, and with Congress about to adjourn and no backup strategy in place, they broke ranks and caved in.
The only concession they got was a six-month sunset in the bill.http://www.cbsnews.com/stories/2007/08/05/politics/animal/main3135604.shtmlWe've got six months to get our shit together to kill this bill.