Though DHS has addressed the need to develop and conduct training on civil liberties issues, the department, according to the GAO, “has not indicated how the NAO would address other significant issues, including the potential for improper use or retention of intelligence information by customers and the potential for overly broad annual memorandums about customers’ planned uses, which may facilitate the acceptance of requests that should be rejected.”

The report recommends a number of executive actions to DHS including establishing clear definitions for law enforcement and homeland security requests to ensure legal and policy issues are resolved, defining procedures for developing and approving annual memorandums for all categories of classified satellite information, establishing procedures for monitoring the legal review process to ensure it is achieving its objectives and establishing specific procedures to fully address issues raised within the civil liberties impact assessment.

Since its original statement of certification in April DHS has denied claims that NAO lacks sufficient legal, privacy and civil liberties standards and oversight.

In written comments provided to GAO, the DHS Deputy Undersecretary for Mission Integration stated that the department had taken or would take steps to ensure that GAO’s recommendations are incorporated in to the functioning of the NAO. However, with respect to the report’s recommendation regarding the definitions of law enforcement and homeland security requests, the Deputy Undersecretary stated that the definitions outlined in the charter were sufficiently clear for the NAO to operate in an effective and lawful manner.”

The Wall Street Journal and other news outlets reported last month that, despite GAO's claims, DHS was proceeding with the first phase of a controversial satellite-surveillance program.

In a speech last month at the GEOINT Conference in Nashville, Tennessee, Charles E. Allen, Under Secretary for Intelligence and Analysis/Chief Intelligence Officer at DHS stated that, “The NAO charter, signed by the Secretaries of Homeland Security, Defense, Interior, as well as the Director of National Intelligence and the Attorney General, certifies that the NAO complies with all existing laws, including all applicable privacy and civil liberties standards. The NAO is prepared to begin operations to support civil and Homeland security domains. This program is another step in the right direction to leverage geospatial intelligence as we work to secure the Homeland.”

In the aftermath of the report the issue of NAO’s deployment is likely to become a focal point for political debate in the coming months.

Though president-elect Barack Obama has never publically taken a position on NAO as a candidate or while in the Senate, the project has been under intense critical scrutiny in Congress, particularly by the House Committee on Homeland Security, chaired by Bennie Thompson (D-MS). In a letter to Secretary Chertoff last April the committee wrote, “Turning America's spy satellites on the homeland for domestic law enforcement purposes is no trivial matter. Although we support any Department effort to engage in more effective and responsive information sharing with our nation's first preventers, the serious privacy and civil liberties issues that the NAO raises are manifold and multifaceted. Doing business with the NAO's law enforcement and other customers therefore requires a robust and detailed legal framework and SOPs that provide clearly defined privacy and civil liberties safeguards.”