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The federal law enforcement official said prosecutors plan to announce the filing of an indictment against Kerik at a news conference Friday. The official spoke on condition of anonymity because of the secrecy of grand jury proceedings.

Prosecutors have been presenting evidence to a federal grand jury in White Plains for several months to consider charges against Kerik including tax evasion and corruption.

A second person familiar with the investigation, who wasn’t authorized to speak publicly about the investigation, said Kerik will turn himself in Friday morning and be arraigned at noon in U.S. District Court. He would not disclose the specific charges.

Several calls to Kerik’s lawyer, Kenneth Breen, were not immediately returned.

Authorities have alleged that Kerik took tens of thousands of dollars in services from benefactors and never reported it as income. Earlier this year, he rejected a plea deal, and his attorney insisted he had done nothing wrong.

An indictment would be the latest chapter of a downfall that began within days of Kerik’s nomination in 2004 to head the Department of Homeland Security. At the time, he was billed by the former mayor as a no-nonsense, self-made lawman who helped restore calm following the Sept. 11 terrorist attacks.

A federal indictment of Kerik could complicate matters for Giuliani as the first presidential primaries draw near.

The ex-mayor frequently says that he made a mistake in recommending Kerik to be Homeland Security chief, but that might not be enough to avoid the political damage of a drawn-out criminal case involving his one-time protege.

During a campaign stop in Dubuque, Iowa, on Thursday, Giuliani was asked whether he still stands by Kerik. He sidestepped that question and said the issue has to be decided by the courts.

“A lot of public comment about it is inconsistent with its getting resolved in the right way in the courts,” Giuliani said.

A former undercover police officer with a bodybuilder’s physique and a knack for charming people in high places, Kerik has since been hit with a string of revelations about personal and professional improprieties.

His nomination was confronted with news reports about stock-option windfalls, his connections with people suspected of doing business with the mob and overlapping extramarital affairs with two women: Judith Regan, the publisher of his memoir, and a city correction officer. The liaisons reportedly occurred in an apartment near ground zero that had been set aside for rescue workers.

Kerik, 51, who married his current wife in 1998 and has two children with her, apparently became close with Regan while writing “The Lost Son,” in which he described being abandoned by his prostitute mother.

Kerik rose from cop to Giuliani’s correction commissioner in the late 1990s. From there, he became police commissioner and later went to work in Iraq rebuilding the country’s police force.

Then came the failed Homeland Security nomination. Democrats who opposed the nomination focused on Kerik’s recent windfall from exercising stock options in a stun-gun company that did business with the department. His take: $6.2 million.

Days after President Bush introduced Kerik as his nominee, Kerik announced he was withdrawing his name because of tax issues involving his former nanny. But by then, state investigators were already aware of the expensive renovations done to his Bronx apartment in 1999, including built-in cabinets and a rotunda with a marble entryway. They alleged the work was paid for by Mafia-connected builders who sought his help winning city contracts.

“Some of the evidence, which is relevant to what the Solicitor-General was considering, will, of course, come out in consideration of the charges under the Firearms Act,” he said.

“Some of the evidence will not come out under those considerations, that is evidence under interception warrants etc which, of course, is not relevant to the firearms charges.

“That evidence will never see the light of day.

But it turns out that statement seems not to apply to individuals targeted by government agencies that are able to convince a Canadian court to serve a court order on the company.

By Ellen Nakashima
Washington Post Staff Writer
Wednesday, November 7, 2007; D01

His first inkling that something was amiss came in summer 2002 when he opened the door to admit a visitor from the National Security Agency to an office of AT&T in San Francisco.

“What the heck is the NSA doing here?” Mark Klein, a former AT&T technician, said he asked himself.

A year or so later, he stumbled upon documents that, he said, nearly caused him to fall out of his chair. The documents, he said, show that the NSA gained access to massive amounts of e-mail and search and other Internet records of more than a dozen global and regional telecommunications providers. AT&T allowed the agency to hook into its network at a facility in San Francisco and, according to Klein, many of the other telecom companies probably knew nothing about it.

Klein is in Washington this week to share his story in the hope that it will persuade lawmakers not to grant legal immunity to telecommunications firms that helped the government in its anti-terrorism efforts.

The plain-spoken, bespectacled Klein, 62, said he may be the only person in the country in a position to discuss firsthand knowledge of an important aspect of the Bush administration’s domestic surveillance program. He is retired, so he isn’t worried about losing his job. He did not have security clearance, and the documents in his possession were not classified, he said. He has no qualms about “turning in,” as he put it, the company where he worked for 22 years until he retired in 2004.

“If they’ve done something massively illegal and unconstitutional — well, they should suffer the consequences,” Klein said. “It’s not my place to feel bad for them. They made their bed, they have to lie in it. The ones who did [anything wrong], you can be sure, are high up in the company. Not the average Joes, who I enjoyed working with.”

In an interview yesterday, he alleged that the NSA set up a system that vacuumed up Internet and phone-call data from ordinary Americans with the cooperation of AT&T . Contrary to the government’s depiction of its surveillance program as aimed at overseas terrorists, Klein said, much of the data sent through AT&T to the NSA was purely domestic. Klein said he believes that the NSA was analyzing the records for usage patterns as well as for content.

He said the NSA built a special room to receive data streamed through an AT&T Internet room containing “peering links,” or major connections to other telecom providers. The largest of the links delivered 2.5 gigabits of data — the equivalent of one-quarter of the Encyclopedia Britannica’s text — per second, said Klein, whose documents and eyewitness account form the basis of one of the first lawsuits filed against the telecom giants after the government’s warrantless-surveillance program was reported in the New York Times in December 2005.

Claudia Jones, an AT&T spokeswoman, said she had no comment on Klein’s allegations. “AT&T is fully committed to protecting our customers’ privacy. We do not comment on matters of national security,” she said.

The NSA and the White House also declined comment on Klein’s allegations.

Klein is urging Congress not to block Hepting v. AT&T, a class-action suit pending in federal court in San Francisco, as well as 37 other lawsuits charging carriers with illegally collaborating with the NSA. He was accompanied yesterday by lawyers for the Electronic Frontier Foundation, which filed Hepting v. AT&T in 2006. Together, they are urging key U.S. senators to oppose a pending White House-endorsed immunity provision that would effectively wipe out the lawsuits. The Judiciary Committee is expected to take up the measure Thursday.

In summer 2002, Klein was working in an office responsible for Internet equipment when an NSA representative arrived to interview a management-level technician for a special job whose details were secret.

“That’s when my antennas started to go up,” he said. He knew that the NSA was supposed to work on overseas signals intelligence.

The job entailed building a “secret room” in an AT&T office 10 blocks away, he said. By coincidence, in October 2003, Klein was transferred to that office and assigned to the Internet room. He asked a technician there about the secret room on the 6th floor, and the technician told him it was connected to the Internet room a floor above. The technician, who was about to retire, handed him some wiring diagrams.

“That was my ‘aha!’ moment,” Klein said. “They’re sending the entire Internet to the secret room.”

The diagram showed splitters, glass prisms that split signals from each network into two identical copies. One fed into the secret room, the other proceeded to its destination, he said.

“This splitter was sweeping up everything, vacuum-cleaner-style,” he said. “The NSA is getting everything. These are major pipes that carry not just AT&T’s customers but everybody’s.”

One of Klein’s documents listed links to 16 entities, including Global Crossing, a large provider of voice and data services in the United States and abroad; UUNet, a large Internet provider in Northern Virginia now owned by Verizon; Level 3 Communications, which provides local, long-distance and data transmission in the United States and overseas; and more familiar names such as Sprint and Qwest. It also included data exchanges MAE-West and PAIX, or Palo Alto Internet Exchange, facilities where telecom carriers hand off Internet traffic to each other.

“I flipped out,” he said. “They’re copying the whole Internet. There’s no selection going on here. Maybe they select out later, but at the point of handoff to the government, they get everything.”

Qwest has not been sued because of media reports last year that said the company declined to participate in an NSA program to build a database of domestic phone-call records out of concern about its legality. What the documents show, Klein contends, is that the NSA apparently was collecting several carriers’ communications, probably without their consent.

Another document showed that the NSA installed in the room a semantic traffic analyzer made by Narus, which Klein said indicated that the NSA was doing content analysis.

Steve Bannerman, Narus’s marketing vice president, said in an interview that the NarusInsight system is “the world’s most powerful Internet traffic processing engine.” He said it is used to detect worms, as well as to capture information to help authorities stop criminal activity. He said it can track a communication’s origin and destination, as well as its content. He declined to comment on AT&T’s use of the system.

Klein said he decided to go public after President Bush defended the NSA’s surveillance program as limited to collecting phone calls between suspected terrorists overseas and people in the United States. Klein said the documents show that the scope was much broader.

The dollar, which has dropped 30 percent against the euro in the past five years, reflects a correction of the U.S. currency’s overvaluation from 1997 to 2002, Rosenberg said in a research note dated Nov. 2. The dollar, measured by the Federal Reserve’s trade-weighted index, is little changed compared with its value a decade ago, he said.

U.S. rice exports fell sharply after Bayer CropScience, a division of Bayer, reported in 2006 that trace amounts of its biotech LibertyLink rice variety LLRICE601 were found in a widely grown variety of U.S. rice called Cheniere. Later, a second variety called Clearfield 131 was found to be contaminated with LLRICE604.

“Until we’ve seen the report, we really can’t comment,” said Bayer spokesman Greg Coffey.

The discovery of GMO-tainted rice triggered the largest financial and marketing disaster in the history of the U.S. rice industry, according to Greenpeace. At least 30 countries were affected by the contamination and many closed their markets to U.S. rice, including major importers such as the European Union and the Philippines.

The overall cost to the industry, estimated at $1.2 billion, included losses of up to $253 million from food-product recalls in Europe, U.S. export losses of $254 million in the 2006/07 crop year and future export losses of $445 million, Greenpeace said.

“It’s impossible to know what the cost is,” said David Coia of trade group USA Rice Federation. “It’s certainly the most significant event in the history of the U.S. rice industry. The current rice crop is in pretty good shape. We’ve been able to eliminate most of the genetically engineered material.”

Hundreds of U.S. farmers and European businesses have filed lawsuits against Bayer in attempts to recoup their losses, said the environmental group.