Disclosures about a secret government intelligence effort called Prism have rocked some of Silicon Valley's leading Internet companies, but the program is hardly the first instance of U.S. military and intelligence officials turning to the tech industry for help.
"The industry has always tried to make it seem like it was all venture capitalists and free thinkers. And it does include those people," said longtime Silicon Valley watcher Lenny Siegel, who runs the nonprofit Pacific Studies Center in Mountain View. "But there's no question that the government, particularly the military, was a driving force in the development of the computer technology that we use today."
Experts say the government has had good reason to cultivate ties with Silicon Valley companies. The valley has what U.S. military and intelligence agencies want: cutting-edge technology and online services -- from social networks to Web-based email and video chat rooms -- that people all over the world use to communicate and share information.
And despite its libertarian bent, Silicon Valley, in turn, has benefited over the years from federal research funding, supply contracts and even regulators' good will.
Silicon Valley's ties to the government are decades old. Back in the 1980s, the valley's biggest employer was Sunnyvale's Lockheed Missiles and Space, which developed weapons and spy satellites for the Defense Department. The Internet itself started as a defense research project. And military contracts helped support the famed SRI think tank in Menlo Park, where researchers have developed and in some cases spun off pioneering technology used in robotics, mapping and the voice-recognition software that powers Apple's (AAPL) Siri personal assistant.
Today, the CIA has its own venture capital fund, In-Q-Tel, to help finance promising tech startups. Software-makers such as Palo Alto's Palantir Technologies sell sophisticated programs that law enforcement and intelligence agencies use to analyze vast amounts of data. Mainline companies such as Cisco Systems (CSCO), Oracle (ORCL) and Hewlett-Packard (HPQ) have multimillion-dollar contracts to supply computer hardware and tech services to the military and other government offices.
But while there has always been a government presence in the valley, most people don't associate those efforts with the more widely known commercial and consumer tech industry. That's why it was a surprise, at least to some, when a former National Security Agency contractor leaked details of the Prism program. Details are still murky, but the program appears to give U.S. spy agencies, while investigating overseas terror plots, access to information about the online activities of certain individuals who use Internet services operated by Silicon Valley companies.
"These worlds coexisted, but one was hidden in plain sight. They never collided until today," said Steve Blank, a serial tech entrepreneur and Stanford University lecturer who has studied Silicon Valley history.
The valley's leading Internet companies say they supply user information only in response to specific legal demands. Google (GOOG), Facebook, Apple and Yahoo (YHOO) have all said they review government data requests carefully and reject those that don't follow the law. In recent days, they have pressed the government for permission to disclose more about those requests, so they can reassure customers that they aren't handing over information on a broad scale.
Silicon Valley's relationship with the federal government is complex: Companies such as Google, Facebook and Apple are frequently scrutinized by regulators for compliance with antitrust and consumer protection laws. And the tech industry pours millions of dollars into lobbying on legislation and policies that affect it.
Civil liberties activists worry that those interactions, especially the threat of regulatory action, make it all the more difficult for tech companies to resist when the National Security Agency or FBI come asking for customer data.
"The government has its thumb on their rate of return for investment," said attorney Shayana Kadidal of the nonprofit Center for Constitutional Rights. "They have no incentive to fight the government back on any of this stuff."
Others note that at least one company fought a secret legal battle to challenge information requests made under the Foreign Intelligence Surveillance Act, or FISA, which governs Prism. The name of the company, which lost its appeal in the federal court that handles FISA matters, has been classified. But The New York Times, citing unnamed sources, has reported it was Yahoo.
The court's 2008 ruling in that case sent a strong message to other Internet companies that future legal challenges would be difficult, said Mark Rumold, an attorney with the Electronic Frontier Foundation.
Prism is not the only instance where authorities have used a Silicon Valley company's products to collect information. Networking equipment-maker Cisco, for example, says it's legally required to build a technical feature known as "lawful intercept" capability into some of the products it sells to phone and cable providers, so their systems can be accessible to court-ordered wiretaps by police or other authorities.
Tech companies have also collaborated voluntarily with U.S. authorities in areas such as computer security. In recent years, Intel's (INTC) McAfee unit and other security firms have shared information and advised government officials about computer viruses and other malicious Internet attacks.
The government, in turn, has provided access to some of its knowledge on the subject: A few years ago, according to Bloomberg News, U.S. authorities gave Google co-founder Sergey Brin a top-secret briefing on a Chinese army unit that was linked to an attack on Google's network.
Staff writer Troy Wolverton contributed to this report. Contact Brandon Bailey at 408-920-5022. Follow him at Twitter.com/BrandonBailey.