President Obama vowed last week to rein in the use of a legal privilege that allows the administration to discard lawsuits that involve "state secrets," promising that a new policy is in the works that will quell criticism by civil libertarians.

Judge Vaughn Walker. (Photo: AP)

    But hours after Obama's speech laid out a "delicate balance" on national security, his Justice Department was criticized by a federal judge in California overseeing a case that has delved deeper than any other into one of the government's most highly classified data-gathering programs.

    The Obama administration has invoked the state-secrets privilege in resisting a lawsuit filed by an Oregon charity whose attorneys may have been subjected to warrantless wiretapping. Late Friday, Chief U.S. District Judge Vaughn R. Walker issued a terse order that raised the prospect of "sanctions" for government lawyers who have not responded to his order for a plan for how the case should proceed. The sanctions may include awarding monetary damages to the charity, the al-Haramain Islamic Foundation.

    The document amounts to "Judge Walker's enough-is-enough order," said Jon Eisenberg, an attorney for the now-defunct charity.

    A Justice Department spokesman declined to comment on the judge's order, which requires the government to respond in court by Friday.

    The Haramain case is one of the national security battles left over from George W. Bush's presidency. Civil liberties groups and left-leaning members of Congress have used the matter to argue that Obama's approach as president conflicts with his campaign promises of transparency.

    In a speech at the National Archives on Thursday, Obama said that the administration is "nearing completion of a thorough review" of the way in which his predecessors invoked the state-secrets privilege. The president said that his lawyers would apply a stricter legal test for the kinds of material that can be protected and that the attorney general must personally sign off on any future cases involving the privilege.

    "We must not protect information merely because it reveals the violation of a law or embarrasses the government," Obama said.

    His words came on the heels of an appeals court ruling in late April striking down the government's use of the state-secrets privilege in a separate case, involving the "extraordinary rendition" of terrorism suspects to countries where they allegedly faced torture. A panel of the U.S. Court of Appeals for the 9th Circuit narrowed the scope of the privilege and argued for judges to play a greater role in assessing the validity of such claims by the executive branch.

    A bill moving through the Senate, written by Judiciary Committee Chairman Patrick J. Leahy (D-Vt.), would empower federal judges to review sensitive evidence and test government assertions. Neither the White House nor the Justice Department has taken a position on the legislation.

    In the Haramain case, officials at the National Security Agency have determined that attorneys for the charity, who mistakenly received documents reflecting that they may have been the subject of government eavesdropping, do not have a "need to know" about the electronic surveillance program.

    That has set Justice Department lawyers who are defending the NSA on a collision course with Walker. Both sides in the case must appear before the judge in San Francisco on June 3 to explain their positions and discuss ways to proceed.

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