The Section 702 economic risks that few are talking about

Corporations and investors are rightfully examining their geopolitical risk exposure in light of this past weekend’s Iranian strike against Israel and the Israeli response.  

However, there’s an underappreciated political risk far closer to home that could significantly impact the U.S. and United Kingdom business communities and which geopolitical analysts should add to their risk portfolio – the potential lapse of U.S. Section 702 authority. The Senate moved to extend the authority on Thursday after a rocky path in the House of Representatives, but challenging politics around Section 702 could constitute an ongoing threat to American and British investors and corporations alike, even if the Senate passes the extension in short order.       

The authority is uniquely suited to address threats that either did not exist or have metastasized since FISA’s last reauthorization in 2018.  For example, U.S. energy companies have faced a wave of cyber threats over the last five years. The May 2021 ransomware attack on the Colonial Pipeline, which resulted in significant delays in gasoline deliveries to Americans, epitomized increasing cyberattacks against U.S. critical infrastructure. Section 702 has become the primary tool to detect and thwart these attacks.   

This cyber threat will likely increase in light of Iran’s strike, and both the U.S. and the U.K. could be targets given their defense of Israel against Iranian missiles. Iran will not strike them directly; instead, it will likely rely on shadow cyber attacks, along with proxy forces, such as the Houthis, to harass U.S. and U.K. interests. 

American and British companies should expect enhanced cyber attacks out of Tehran, similar to what Iran launched in 2022 against Britain and what it constantly unleashes on the U.S. These threats will become harder to stop were Section 702 to disappear.   

The Intelligence Community likewise relies on 702 to derive critical information on Russian atrocities in Ukraine, increased Chinese spying and fentanyl trafficking — all threats that have proliferated since 2018.  

Finally, 702 is vital to protecting the U.S. homeland and our allies from foreign threats. For example, a recent letter circulated by American Jewish leaders touted the authority as a key means to protect their community against terrorist threats, which have risen significantly since the events of Oct. 7: “When antisemitic threats are surging to historically high levels, the U.S. government needs adequately calibrated tools to protect our institutions.” (link)   

Notwithstanding Section 702’s critical security function, criticisms abound, and the waters surrounding the debate are highly muddied. Donald Trump, who tweeted “KILL FISA” shortly before a House vote this week, mistakenly views the authority through the lens of investigations into Russian election interference in 2016. In that case, surveillance of a former Trump campaign aide was conducted under a different part of FISA, not Section 702.  

Others have pushed to require the government to obtain a warrant or similar court order before it can examine data collected under Section 702, and an amendment to the FISA legislation failed by one vote in the House, with the Speaker unusually casting the tiebreaker. 

And there is a hardcore group of critics, particularly privacy advocates, that view Section 702 as the tainted offspring of President Bush’s wiretap surveillance program, unmasked in 2005. No matter how many reforms have been put in place over the last two decades, they view the authority as fundamentally rotten.      

The compromise text the House of Representatives passed last week addresses many of these critiques. The bill includes reforms that privacy groups demanded, albeit without requiring a warrant, such as heightened requirements when the FBI conducts a sensitive search and increased congressional oversight mechanisms. 

However, House passage could be viewed as detente rather than acceptance. Speaker Johnson ultimately got the bill through the House by reducing the reauthorization to two years, giving a Trump administration the opportunity to reform or even kill the authority.   

Recent threats sadly have created new coalitions of support for Section 702. The U.S. business community and its British partners should be fully invested in Section 702’s reauthorization, and, equally important, pay attention to evolving politics on Section 702 if there is a change of administration.  

Our adversaries certainly will.

Daniel Silverberg is a managing director at Capstone LLC, an adjunct senior fellow at the Center for a New American Security and a former national security adviser to Rep. Steny Hoyer of Maryland. Elena McGovern is a co-leader of Capstone’s national security practice. 

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