The Obama administration is considering ending spying on allied heads of state, a senior administration official said, as the White House grappled with the fallout from revelations that the U.S. has eavesdropped on German Chancellor Angela Merkel.
The official said late Monday that a final decision had not been made and an internal review was still underway.
The revelations about National Security Agency (NSA) monitoring of Merkel were the latest in a months-long spying scandal that has strained longstanding alliances with some of America's closest partners. Earlier Monday, Sen. Dianne Feinstein, chairwoman of the Senate Intelligence Committee, called for a "total review of all intelligence programs."
Feinstein, D-Calif., said in a statement that the White House had informed her that "collection on our allies will not continue." The administration official said that statement was not accurate, but added that some unspecified changes already had been made and more were being considered, including terminating the collection of communications from friendly heads of state.
The official was not authorized to discuss the review by name and insisted on anonymity.
As a result of the spying allegations, German officials said Monday that the U.S. could lose access to an important law enforcement tool used to track terrorist money flows. As possible leverage, German authorities cited last week's non-binding resolution by the European Parliament to suspend a post-9/11 agreement allowing the Americans access to bank transfer data to track the flow of terrorist money.
A top German official said she believed the Americans were using the information obtained from Merkel to gather economic intelligence apart from terrorism and that the agreement known as SWIFT should be suspended.
Feinstein said while the intelligence community has kept her apprised of other issues, like the court orders on telephone record collection, intelligence officials failed to brief her on how they followed foreign leaders.
Her statement follows reports based on new leaks from former NSA systems analyst Edward Snowden indicating that the NSA listened to Merkel and 34 other foreign leaders.
"With respect to NSA collection of intelligence on leaders of U.S. allies -- including France, Spain, Mexico and Germany -- let me state unequivocally: I am totally opposed," Feinstein said. She added that the U.S. should not be "collecting phone calls or emails of friendly presidents and prime ministers" unless in an emergency with approval of the president.
European Union officials who are in Washington to meet with lawmakers ahead of White House talks said U.S. surveillance of their people could affect negotiations over a U.S.-Europe trade agreement. They said European privacy must be better protected.
Many officials in Germany and other European governments have made clear, however, that they don't favor suspending the U.S.-EU trade talks which began last summer because both sides stand to gain so much through the proposed deal, especially against competition from China and other emerging markets.
As tensions with European allies escalate, the top U.S. intelligence official declassified dozens of pages of top secret documents in an apparent bid to show the NSA was acting legally when it gathered millions of Americans' phone records.
Director of National Intelligence James R. Clapper said he was following the president's direction to make public as much information as possible about how U.S. intelligence agencies spy under the Foreign Intelligence Surveillance Act. Monday's release of documents focused on Section 215 of the Patriot Act, which allows the bulk collection of U.S. phone records.
The document release is part of an administration-wide effort to preserve the NSA's ability to collect bulk data, which it says is key to tracking key terror suspects, but which privacy activists say is a breach of the Constitution's ban on unreasonable search and seizure of evidence from innocent Americans.
The release of the documents comes ahead of a House Intelligence Committee hearing Tuesday on FISA reform.
The documents support administration testimony that the NSA worked to operate within the law and fix errors when they or their systems overreached.
One of the documents shows the NSA admitting to the House Intelligence Committee that one of its automated systems picked up too much telephone metadata. The February 2009 document indicates the problem was fixed.
Another set of documents shows the judges of the FISA court seemed satisfied with the NSA's cooperation. It says that in September 2009, the NSA advised the Senate Intelligence Committee about its continuing collection of Americans' phone records and described a series of demonstrations and briefings it conducted for three judges on the secretive U.S. spy court.
The memorandum said the judges were "engaged throughout and asked questions, which were answered by the briefers and other subject matter experts," and said the judges appreciated the amount and quality of information the NSA provided.
It said that two days later, one of the judges, U.S. District Judge Reggie Walton, renewed the court's permission to resume collecting phone records.
The documents also included previously classified testimony from 2009 for the House Intelligence Committee by Michael Leiter, then head of the National Counterterrorism Center. He and other officials said collecting Americans' phone records helped indict Najibullah Zazi, who was accused in a previously disclosed 2009 terror plot to bomb the New York City subways.
The documents also show the NSA considered tracking targets using cellphone location data, and according to an April 2011 memo consulted the Justice Department first, which said such collection was legal. Only later did the NSA inform the FISA court of the testing.
NSA commander Gen. Keith Alexander revealed the testing earlier this month to Congress but said the agency did not use the capability to track Americans' cellphone locations nor deem it necessary right now.
Asked Monday if the NSA intelligence gathering had been used not only to protect national security but American economic interests as well, White House spokesman Jay Carney said: "We do not use our intelligence capabilities for that purpose. We use it for security purposes."
But National Security Council spokeswoman Caitlin Hayden later clarified that: "We do not use our intelligence capabilities to give U.S. companies an advantage, not ruling out that we are interested in economic information."
Carney acknowledged the tensions with allies over the eavesdropping disclosures and said the White House was "working to allay those concerns," though he refused to discuss any specific reports or provide details of internal White House discussions.
The Associated Press