U.S. says missed intelligence after spy act expired

WASHINGTON (Reuters) - U.S. spy agencies have missed intelligence in the days since terrorism surveillance legislation expired, the Bush administration said on Friday, but Democrats accused it of fear mongering and blamed it for any gaps.

U.S. Attorney General Michael Mukasey and Director of National Intelligence Michael McConnell fired the latest shot in the administration's battle with Congress to obtain new legislation to wiretap terrorism suspects.

The officials told Congress telecommunications firms have been reluctant to cooperate with new wiretaps since six-month temporary legislation expired last weekend.

"We have lost intelligence information this past week as a direct result of the uncertainty created by Congress' failure to act," the two officials told House of Representatives Intelligence Committee Chairman Silvestre Reyes in a letter.

They urged Reyes, a Texas Democrat, to reconsider his opposition to legislation passed last week by the Senate.

But House Speaker Nancy Pelosi said Republican lawmakers and the administration had failed to participate on Friday in congressional staff negotiations over the bill, and noted President George W. Bush opposed extending the temporary act.

"The president and congressional Republicans have only themselves to blame," for any missed intelligence, said Pelosi, a California Democrat.

The measure passed by the Senate would provide retroactive lawsuit immunity to firms which cooperated with warrantless wiretaps that Bush authorized after the September 11 attacks.

Civil-liberties advocates oppose the immunity provision, and disagreement over the issue led to the collapse of efforts to pass a permanent overhaul of a 1978 surveillance bill that the administration says is obsolete.

Congress passed the temporary law last August in response to urgent administration warnings of gaps in U.S. intelligence capabilities.

The 1978 bill remains in effect, as do one-year wiretap authorizations made under the temporary law. But administration officials say the old bill is dangerously obsolete and their ability to collect new intelligence is hampered.

Mukasey and McConnell gave no details of the missed intelligence. They told Reyes, however, that some communications firms have balked at cooperating out of uncertainty over their legal exposure.

"In particular, they have delayed or refused compliance with our requests to initiate new surveillance of foreign intelligence targets," they said.

Democratic leaders of congressional intelligence and judiciary committees issued a statement that they were committed to passing new legislation and they urged Bush to support an extension of the temporary law.

Senate Majority Leader Harry Reid, a Nevada Democrat, said Bush was "crying wolf."

"No amount of fear mongering will change the fact that our intelligence collection capabilities have not been weakened since last week," Reid said.

(Editing by Sandra Maler)