Hoekstra, who appeared on the "Fox News Sunday" television program, made clear the operation in question was different from the wiretapping controversy or the covert monitoring of international financial transactions that the administration has been defending in recent weeks.

"There are lots of programs going on in the intelligence community," the committee chairman said. "But in this case, there was at least one major, what I consider significant, activity that we had not been briefed on."

US law requires that the intelligence panels of both the Senate and the House of Representatives be informed of the government's intelligence activities.

According to Hoekstra, he and other members of his committee learned about this and other undisclosed operations from whistleblowers, or concerned government employees who alerted Congress to what they saw as breaches of the law.

The disclosure prompted him last May to fire off an angry letter to Bush to remind his of his legal responsibility to "fully and currently" inform Congress of intelligence operations.

"If these allegations are true, they may represent a breach of responsibility by the administration, a violation of law, and, just as importantly, a direct affront to me and the members of this committee who have ardently supported efforts to collect information on our enemies," Hoekstra wrote.

He said Sunday the administration had since complied with his demand, but added he was taking the situation "very, very seriously."

"I want to set the standard there that it is not optional for this president or any president or people in the executive community not to keep the intelligence committees fully informed of what they are doing," Hoekstra told Fox.

Remarkably, Hoekstra has been a fervent supporter Bush in both the warrantless wiretap and financial monitoring controversies.

The monitoring that came to light last month involved millions of records held by the Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT), an international cooperative that serves as a clearing house for the transactions. Its database, officials say, has provided valuable information about ties between suspected terrorists and groups financing them.

But while key members of Congress agreed the financial monitoring may have been legal, they are far from certain in the case of warrantless wiretaps that has been making headlines since last December.

The Foreign Intelligence Surveillance Act of 1978 mandates that such surveillance be authorized by a special secret court.

The White House sought to play down the news controversy, with spokesman Alex Conant telling the AFP the administration continued "to work closely" with Chairman Hoekstra "and other congressional leaders on foreign and national security issues."

"It contained maps and bombing plans that were being prepared," Fatfat said in a local television interview.

Lebanese security officials told The Associated Press that they obtained "important information" from Hammoud's computer and CDs seized from his office at the Lebanese International University, where he taught economics.

"This information helped the investigators make Hammoud confess to his role in plotting a terror act in America," one official said, speaking on condition of anonymity because of the sensitivity of the case.

The FBI announced Friday that it had uncovered a plot to attack Hudson River tunnels that which carry more than 215,000 passengers each weekday between New York and New Jersey. U.S. officials said the plot involved at least eight people, including Hammoud. At least two besides Hammoud have been arrested, Lebanese officials said.

U.S. officials said the suspects hoped to pull off an attack involving "martyrdom and explosives" in October or November, but federal investigators working with six other countries intervened before the suspects could travel to the United States.

"We received information from the FBI in April about an attempt to plot a terror act in New York City through Internet communications in Lebanon," Fatfat said in the interview Saturday. "Based on this information, security forces acted and arrested Mr. Assem Hammoud."

Officials said Hammoud, 31, confessed to the plot, and to swearing allegiance to al-Qaida leader Osama bin Laden.

"During the investigation, Assem Hammoud admitted that he was planning to go to Pakistan for four months for training on the implementation of this operation in New York and that the implementation date was the end of 2006," Fatfat said.

Bin Laden and his closest aides are believed to be hiding in the mountains along the border of Pakistan and Afghanistan.

The Lebanese newspaper As-Safir reported that a Syrian suspect had been lured to Libya and arrested there, along with a third suspect whose nationality was unknown.

Other suspects still at large include a Saudi, a Yemeni, a Jordanian, a Palestinian, an Iranian Kurd and a sixth whose nationality was unknown, As-Safir said.

The suspect's family denied that he had any al-Qaida links. His mother, Nabila Qotob, said Hammoud was an outdoorsy person who drank alcohol, had girlfriends and bore none of the hallmarks of an Islamic extremist.

The Canadian Press, citing a source familiar with the case, reported that Hammoud attended Montreal's Concordia University in the mid-1990s.

Two other intelligence officials with experience in the field on extremist operations concurred--and expressed concern that what could have been an operation to eventually track known extremists (should they eventually make actual contact with funds and training,) seems to have been exposed for political gain.

Some see this latest "ploy" as a direct challenge to a New York Times report this week of the disbandment of Alec Station, the CIA unit responsible for tracking Osama bin Laden since before the September 11, 2001 attacks. Moreover, the article contends that officials say the unit was "disbanded late last year and its analysts reassigned within the C.I.A. Counterterrorist Center."

Some members of Congress have said that they were not informed of the unit's closure and expressed concern.

In response to reports that the unit was disbanded, Senator John Kerry (D-MA), who ran against President Bush in the 2004 election, responded earlier this week with a demand for the immediate reinstatement of the unit.

"I fully support efforts to adapt our response to the evolving nature of the threat," wrote Kerry in a letter to John Negroponte, Director of National Intelligence Office of the Director of National, "but this is not a compelling rationale for curtailing efforts to bring this mass murderer to justice."

The alleged bomb plot, sources suggest, may have been to alleviate Bush administration concerns that the Alec Station story would make them appear to be "weak on terror." It is not clear this early on, however, how much of a real and immediate threat the bomb plot may have been.

Director of Homeland Security Michael Chertof seemed unconcerned earlier today, when the news first broke. Chertoff told the Associated Press earlier today that, "It was never a concern that this would actually be executed... We were, as I say, all over this."

The FBI, however, contends that the threat was very much real. "This is a plot that involved martyrdom and explosives," targeting the "tubes that connect Jersey and lower Manhattan," Assistant Director Mark J. Mershon told the Associated Press today.

Special Agent Rich Kolko, a spokesperson for the FBI, told RAW STORY in a late Friday phone call that, "Mr. Mershon clearly stated the position of the FBI in this case."

Giraldi, however, says, "Despite press reports that they had asked Abu Musab Zarqawi for assistance, there is no information to confirm that. It is known that the members discussed the possibility of approaching Zarqawi, but none of them knew him or had any access to him."

Additionally, Giraldi stated that, "In sum, the plot, if that is what we would call it, was not well conceived, and there was no possibility of flooding Wall Street. There was no connection to a cell in the US. Finally, professional terrorists generally do not discuss targeting on open channels. As it was being monitored from the beginning of the open discussion, there was little chance anything concrete would have developed."

When referring to the alleged atrocities committed by U.S. Marines in Iraq, Gadahn also says, "It's hard to imagine that any compassionate person could see pictures...and not want to go on a shooting spree at the Marines' housing facilities at Camp Pendleton."

Camp Pendleton is located just south of where Gadahn grew up in California.

There was no immediate response from Gadahn's family, which still lives in California. They had previously denied he was the masked figure on al Qaeda tapes.

The FBI claims that expanding the 1994 Communications Assistance for Law Enforcement Act is necessary to thwart criminals and terrorists who have turned to technologies like voice over Internet Protocol, or VoIP.

"The complexity and variety of communications technologies have dramatically increased in recent years, and the lawful intercept capabilities of the federal, state and local law enforcement community have been under continual stress, and in many cases have decreased or become impossible," according to a summary accompanying the draft bill.

Complicating the political outlook for the legislation is an ongoing debate over allegedly illegal surveillance by the National Security Administration--punctuated by several lawsuits challenging it on constitutional grounds and an unrelated proposal to force Internet service providers to record what Americans are doing online. One source, who asked not to be identified because of the sensitive nature of last Friday's meeting, said the FBI viewed its CALEA expansion as a top congressional priority for 2007.

Breaking the legislation down The 27-page proposed CALEA amendments seen by CNET News.com would:

- Require any manufacturer of "routing" and "addressing" hardware to offer upgrades or other "modifications" that are needed to support Internet wiretapping. Current law does require that of telephone switch manufacturers--but not makers of routers and network address translation hardware like Cisco Systems and 2Wire.

- Authorize the expansion of wiretapping requirements to "commercial" Internet services including instant messaging if the FCC deems it to be in the "public interest." That would likely sweep in services such as in-game chats offered by Microsoft's Xbox 360 gaming system as well.

- Force Internet service providers to sift through their customers' communications to identify, for instance, only VoIP calls. (The language requires companies to adhere to "processing or filtering methods or procedures applied by a law enforcement agency.") That means police could simply ask broadband providers like AT&T, Comcast or Verizon for wiretap info--instead of having to figure out what VoIP service was being used.

- Eliminate the current legal requirement saying the Justice Department must publish a public "notice of the actual number of communications interceptions" every year. That notice currently also must disclose the "maximum capacity" required to accommodate all of the legally authorized taps that government agencies will "conduct and use simultaneously."

Jim Harper, a policy analyst at the free-market Cato Institute and member of a Homeland Security advisory board, said the proposal would "have a negative impact on Internet users' privacy."

"People expect their information to be private unless the government meets certain legal standards," Harper said. "Right now the Department of Justice is pushing the wrong way on all this."

Neither the FBI nor DeWine's office responded to a request for comment Friday afternoon.

DeWine has relatively low approval ratings--47 percent, according to SurveyUSA.com--and is enmeshed in a fierce battle with a Democratic challenger to retain his Senate seat in the November elections. DeWine is a member of a Senate Judiciary subcommittee charged with overseeing electronic privacy and antiterrorism enforcement and is a former prosecutor in Ohio.

A panel of the U.S. Court of Appeals in Washington, D.C., decided 2-1 last month to uphold the FCC's extension of CALEA to broadband providers, and it's not clear what will happen next with the lawsuit. Judge Harry Edwards wrote in his dissent that the majority's logic gave the FCC "unlimited authority to regulate every telecommunications service that might conceivably be used to assist law enforcement."

The organizations behind the lawsuit say Congress never intended CALEA to force broadband providers--and networks at corporations and universities--to build in central surveillance hubs for the police. The list of organizations includes Sun Microsystems, Pulver.com, the American Association of Community Colleges, the Association of American Universities and the American Library Association.

If the FBI's legislation becomes law, it would derail the lawsuit because there would no longer be any question that Congress intended CALEA to apply to the Internet.

"We should consider this a major security threat, because these people are motivated by an ideology that calls for race war and revolution. Any one of them could turn out to be the next Timothy McVeigh," he said.

McVeigh was the decorated Gulf War veteran and white supremacist who detonated a truck bomb outside a federal office building in Oklahoma City, Oklahoma, in April 1995, killing 168 people.

After the Oklahoma City bombing and incidents involving active duty troops, the Pentagon took steps to keep racist extremists from the ranks.

But the center said standards have been relaxed because of wartime recruiting pressures, allowing large numbers of people with links to neo-Nazi and white supremacist groups to join the military.

It cited neo-Nazi and white supremacist publications that encourage their followers to join the military to get combat training.

The report quoted a Defense Department gang investigator, Scott Barfield, as saying neo-Nazis "stretch across all branches of service, they are linking up across the branches once they're inside, and they are hard-core."

"We've got Aryan Nations graffiti in Baghdad," he was quoted as saying. "That's a problem."

"Recruiters are knowingly allowing neo-Nazis and white supremacists to join the armed forces, and commanders don't remove them from the military even after we positively identify them as extremists or gang members," Barfield said.

A Pentagon spokesman acknowledged there have been incidents involving gang-related graffiti, but said dealing with it was the responsibility of military commanders.

"Good order and discipline is the responsbility of commanders and to the extent there are any activities that are inconsistent with good order and discipline it is incumbent upon the commanders to address those," said spokesman Bryan Whitman.

That might not be a bad thing, say some reform advocates who view the proposals as much too weak.

"I'd much rather see Congress fall on its face and not pass anything this year," said Craig Holman, a campaign-finance lobbyist for the nonpartisan group Public Citizen. "What they're considering is really nothing but a PR gimmick to placate the American voters."

Inaction could hurt Republicans if the U.S. Justice Department brings charges in any one of several ongoing corruption probes, others say.

"I don't think it's dead, only because I think the public's attention is going to return to this when members of Congress begin to get indicted," said Mike Surrusco, director of ethics campaigns for Common Cause, another nonpartisan reform group that has pushed for tighter regulations.

No lawmakers have been charged since former California Republican Rep. Randy "Duke" Cunningham pleaded guilty to accepting $2.4 million in bribes last year, including a Rolls-Royce.

PROBE CONTINUES

But the Justice Department is apparently continuing to investigate Cunningham's former colleagues on the House Appropriations Committee.

A separate influence-peddling scandal centered on disgraced lobbyist Jack Abramoff -- who flew powerful Republicans to Scotland for rounds of golf on the fabled course at St. Andrews -- has so far yielded three guilty pleas from former House Republican aides.

Federal prosecutors said they found a $90,000 payoff in the freezer of Rep. William Jefferson, a Louisiana Democrat, in a Justice Department probe of his relationship to telecommunications deals in Africa and elsewhere.

Since Republican leaders said in January that ethics reform would be a top priority this year, the Senate passed a bill that would require lobbyists to disclose more about their activities and ban gifts from them to members of Congress and their staff. It would also extend to two years the "cooling off" period a retired lawmaker must wait before lobbying his former colleagues.

The bill passed by the House also requires greater disclosure by lobbyists, though it does not change the current $50 limit on gifts and "cooling off" period of one year.

House Speaker Dennis Hastert, an Illinois Republican, and Senate Majority Leader Bill Frist, a Tennessee Republican, had hoped to resolve their differences before July 4.

A spokesman for Hastert said passage of a final bill was still possible.

"This is a complex bill and it takes time to accomplish, but the fact that both the House and the Senate passed their own versions shows the seriousness with which Congress is addressing this issue," said spokesman Ron Bonjean.

Republican insiders respond to these numbers by saying rank-and-file GOP voters will abandon Giuliani once they realize his position on abortion, gay rights and gun control. Party strategists calculate that if he actually runs, he must change on at least one of these issues.

DEMOCRAT LIEBERMAN

Supporters of Sen. Joseph Lieberman promise he will continue as a member of the Senate Democratic caucus even if he loses the Democratic primary in Connecticut Aug. 8 and is elected as an independent.

Lieberman's decision announced last week to seek petitions to give him an independent ballot position probably helped businessman Ned Lamont's antiwar Democratic primary campaign. Although Lieberman's support of President Bush on the Iraq war is not popular in Connecticut, he would be heavily favored in a three-way race against Lamont and Republican former state Rep. Alan Schlesinger.

Lieberman's Republican Senate colleagues privately despair of the GOP picking up the Connecticut seat. But they hope Lieberman, if elected as an independent, would be more inclined to vote with Republicans than he is now, even if he still caucuses with the Democrats.

WOOING HISPANICS

Presidential adviser Karl Rove and Sen. Sam Brownback, two conservative Republicans who favor a guest-worker program for immigrants, will address the left-wing Hispanic advocacy group La Raza in Los Angeles this week.

La Raza was active in increasing participation in nationwide work stoppages and demonstrations April 10 after the House passed a tough border enforcement bill. La Raza in Spanish means "The Race."

Former President Bill Clinton heads the list of speakers for the annual meeting of La Raza's national council. The Rev. Jesse Jackson will appear on a panel.

TRIAL LAWYER POLITICS

Although it attracted no news media attention, a subcommittee hearing of the normally bipartisan House Financial Services Committee erupted in partisan furor June 28 when Republican Rep. Richard Baker of Louisiana proposed controls on lawyers engaged in securities litigation.

Baker's subcommittee focused on the recent federal indictment of the Milberg Weiss Bershad & Schulman law firm in connection with class-action lawsuits. The firm in recent years has contributed $2.78 million to Democratic candidates and $22,000 to Republicans.

The Financial Services Committee's top two Democrats -- Barney Frank of Massachusetts and Paul Kanjorski of Pennsylvania -- vigorously objected to a federal judge testifying about current defendants in a federal prosecution. Vaughn R. Walker, chief district judge for Northern California, gave the subcommittee his views on the indictments and Baker's legislation.

NO DIRTY TRICKS

Independent, pro-labor candidate Bill Scheurer remained on the ballot after last Monday's deadline without challenge in the Chicago suburban congressional district where freshman Democratic Rep. Melissa Bean is a priority Republican target for 2006.

It had been widely expected that state House Speaker Mike Madigan, the Illinois Democratic chairman, would challenge Scheurer collection of the necessary 14,000 petition signatures for ballot access. Scheurer had filed a lawsuit alleging dirty tricks by Madigan and other Democratic leaders.

Bean was the most spectacular Democratic winner in the 2004 elections with a victory over Phil Crane, the senior Republican member of the House. She had considerable labor support in that campaign, but she lost Teamsters and state AFL-CIO backing after reneging on her campaign commitment to oppose the Central American Free Trade Agreement (CAFTA). Labor votes switching over to Scheurer would benefit the Republican candidate, investment banker David McSweeney.