A bill currently working its way through Congress would allow the U.S. Department of Defense to establish a domestic spy network, according to critics. And that’s not the worst part.

The Pentagon would be granted new powers to conduct undercover intelligence gathering inside the United States — and then withhold any information about it from the public — under a series of little noticed provisions now winding their way through Congress.

Citing in part the need for “greater latitude” in the war on terror, the Senate Intelligence Committee recently approved broad-ranging legislation that gives the Defense Department a long sought and potentially crucial waiver: it would permit its intelligence agents, such as those working for the Defense Intelligence Agency (DIA), to covertly approach and cultivate “U.S. persons” and even recruit them as informants — without disclosing they are doing so on behalf of the U.S. government. The Senate committee’s action comes as President George W. Bush has talked of expanding military involvement in civil affairs, such as efforts to control pandemic disease outbreaks.

The provision was included in last year’s version of the same bill, but was knocked out after its details were reported by NEWSWEEK and critics charged it could lead to “spying” on U.S. citizens. But late last month, with no public hearings or debate, a similar amendment was put back into the same authorization bill — an annual measure governing U.S. intelligence agencies — at the request of the Pentagon. A copy of the 104-page committee bill, which has yet to be voted on by the full Senate, did not become public until last week.

At the same time, the Senate intelligence panel also included in the bill two other potentially controversial amendments — one that would allow the Pentagon and other U.S. intelligence agencies greater access to federal government databases on U.S. citizens, and another granting the DIA new exemptions from disclosing any “operational files” under the Freedom of Information Act (FOIA). “What they are doing is expanding the Defense Department’s domestic intelligence activities in secret — with no public discussion,” said Kate Martin, director of the Center for National Security Studies, a civil-liberties group that is often critical of government actions in the fight against terrorism.

But Don Black, a DIA spokesman, said Wednesday that the new provisions were limited in scope and would only give the DIA the same investigative powers as the FBI and CIA — powers that are crucial to the agency’s expanded mission in tracking the terrorist threat. “We’re not trying to do investigations of people inside the United States,” he said. “What we’re trying to do is follow leads about terrorist activities.” — Newsweek

That’s right, they want to set up domestic spy networks, comprised of U.S. citizens spying on U.S. citizens for military intelligence. And the proposed spies won’t even have any idea who they’re working for. Er, how exactly is that supposed to work?

(Hat tip to Schneier on Security.)