Editor's note: This story was updated at 12:23 p.m. PST to add more information about the Senate votes and the upcoming House action, and at 2:56 p.m. PST to add information about the final vote.
In a setback for privacy and civil liberties groups, the U.S. Senate on Tuesday voted to protect telephone and Internet companies from lawsuits alleging illegal cooperation with government spy agencies.
By a 31-67 vote, senators failed to approve a Democratic-sponsored amendment that would have allowed lawsuits against AT&T and other telecommunication companies accused of illegal activities to continue. Because the broader bill being considered currently includes retroactive immunity for those companies--something that President Bush--scores of pending legal challenges, including high-profile cases against AT&T and Verizon, are likely to disappear if the entire Congress ultimately approves it.
No Republicans voted for the amendment, but 18 Democrats joined the body's Republicans and Independent Sen. Joe Lieberman to vote against it. Then, around 3pm PT, the entire Senate voted by a 68-29 margin to approve the legislation with retroactive immunity included.
Sen. Chris Dodd (D-Conn.), who cosponsored the unsuccessful amendment with Sen. Russ Feingold (D-Wisc.), said it's dangerous to "grant that retroactive immunity without insisting the courts, as they're designed to do, determine the legality or illegality of this program."
But Sen. Kit Bond (R-Mo.), ranking member of the Senate Intelligence Committee, argued the immunity is an "essential" part of the bill. "If we permit the carriers who may or may not have participated in this to be sued in court, then the most important partners the government has, the private sector, will be discouraged from assisting us in the future," he said just before the vote.
The bill is designed to replace a temporary expansion of a spy law, known as the Protect America Act, which is. The Bush administration in recent weeks . In addition, the president has threatened to veto any bill that does not fully immunize telephone companies from legal action.
The debate goes back to a New York Times report in late 2005 that the president had authorized the National Security Agency to conduct wiretaps, allegedly involving Americans' conversations and Internet communications, without a court order. The news ultimately led to proposed changes to a 1978 law known as the Foreign Intelligence Surveillance Act, or FISA.
Members of both political parties generally agree that some updates to FISA are necessary to reflect changing technologies. What has divided politicians, however, is how much unchecked surveillance authority to give the attorney general and what to do about lawsuits against private companies who have been accused of cooperating with the feds' warrantless eavesdropping regime.
The Senate bill, which has already been approved by the Senate Intelligence Committee by a 13-2 vote, contains broad language immunizing not only telephone companies, but Web sites, e-mail providers and more, from lawsuits.
That immunity would apply both to future lawsuits and to any suits filed during the period from September 11, 2001, to January 17, 2007, the day the Justice Department announced that the secret NSA program would be revamped and brought under the scrutiny of the Foreign Intelligence Surveillance Court.
Civil liberties groups were quick to blast the latest vote. Caroline Fredrickson, director of the American Civil Liberties Union's Washington office, said the move amounted to "a get-out-of-jail-free card" and a "multimillion dollar favor" for the telephone companies. (The ACLU, for its part, has been actively involved in filing such suits.)
The Senate on Tuesday morning also rejected a handful of amendments designed to increase checks on government spy programs.
By a 35-63 vote, politicians defeated a Democratic amendment designed to set a higher legal standard for wiretapping of communications between Americans and their overseas friends, family members, and business colleagues. The pending bill would allow the attorney general to authorize collection of foreign intelligence information without a court warrant for up to a year so long as the target was "reasonably believed to be located outside the United States," but civil liberties groups have argued that's far too permissive.
Republicans and some Democrats, including Senate Intelligence Committee Chairman John Rockefeller (D-W.V.), however, said they strongly opposed the proposal, arguing it would make it too difficult to listen in on foreign terrorists who happen to be on U.S. soil.
The Senate also rejected by a 30-68 vote an amendment proposed by Senators Arlen Specter (R-Penn.) and Sheldon Whitehouse (D-R.I.) that attempted to broker a sort of compromise on the legal immunity question.
That proposal would have "substituted" government attorneys for telecommunications companies being sued, which supporters said would allow court scrutiny of government spying programs to continue without putting corporations in a difficult position. But opponents contended that was a bad idea because the government can already be sued directly and because it would have put "sensitive" intelligence information at risk.
Now that the Senate has approved its version of the legislation, it will still have to be reconciled with the House of Representatives' version, which does not grant immunity to telephone and Internet companies.
It wasn't immediately clear whether the House would be willing to back down on that provision. But with a veto threat looming if a bill is passed without corporate immunity, it seems unlikely that the House will be able to keep its approach intact. An aide to House Majority Leader Steny Hoyer (D-Md.) said leaders are discussing how they will move forward but was unable to provide any details on what options are being considered.
Still, Rep. John Conyers (D-Mich.), the chairman of the House Judiciary Committee and a co-sponsor of the House's spy law rewrite, issued a statement Tuesday that said the Senate's vote for corporate "amnesty" is not justified by documents about the NSA program supplied by the Bush administration so far.
Some House Democrats signaled, in a letter to House Speaker Nancy Pelosi on January 28, that they believe the Senate bill is perfectly "satisfactory" and should be approved without any substantial changes.
In a new letter to White House general counsel Fred Fielding, Conyers renewed his request for complete documentation about the so-called Terrorist Surveillance Program, including "agreements or understandings between the White House, the Department of Justice, the National Security Agency, or any other entity of the Executive Branch and telecommunications companies, Internet service providers, equipment manufacturers, or data processors regarding criminal or civil liability for assisting with or participating in warrantless electronic surveillance program(s)."
News.com's Declan McCullagh contributed to this report