By KATHERINE SHRADER

Associated Press Writer

Oct 7, 9:50 PM EDT

WASHINGTON (AP) -- Attempting to loosen decades-old restrictions, the Pentagon is asking Congress to allow its intelligence agents to go undercover when they approach Americans who may have useful national-security information, rather than identifying themselves as intelligence operatives.

The provision found in a wide-ranging intelligence bill would give the Defense Intelligence Agency new latitude to meet U.S. citizens without pulling out their DIA badges and later sending a formal notice of their rights under the landmark 1974 Privacy Act.

The regulations were imposed to prevent recurrence of the intelligence scandals of the 1960s and 1970s, when the Defense Department was caught spying on American anti-war protesters. Civil liberties advocates raise similar concerns now, worried that the powers the DIA is seeking could be abused.

But DIA General Counsel George Peirce says the agency is seeking flexibility that the FBI and CIA have had for years and is needed even more desperately since Sept. 11, 2001.

To make its case, the DIA is taking the unusual step of letting its lawyers brief reporters, concerned that public information available in years past didn't adequately explain their rationale for the new powers.

The DIA serves as an adviser to senior policy-makers, helps protect U.S. forces at home and abroad and supports war planners who need to know the military capabilities of other countries.

Peirce and his deputy, Jim Schmidli, say the changes they are seeking would be limited. The agency's intelligence officers could only go undercover to approach a U.S. citizen or foreign citizen living here permanently when they are making an initial contact to assess whether the person may have useful information. An operational plan would have to be approved by the agency's director or someone he designates.

Only then could the DIA official pretend to be the representative of another government agency, such as the Agriculture Department, or assume a more creative identity off the government payroll.

Schmidli stressed that the DIA is seeking this flexibility to protect its methods, officers and potential sources.

"In some of the communities, which are very tightly knit, if I walk up on the porch and show my badge, that's going to be well-known pretty quickly," he said. "That may not be warmly received by the neighbors."

The American Civil Liberties Union said the 30-year-old Privacy Act was intended to protect Americans from unknowingly becoming the subject of inquiries by defense officials.

"The notion that this is somehow different because they want to assess someone first, I think that is just a rhetorical nuance," said Lisa Graves, the ACLU's senior counsel for legislative strategy.

Joe Onek, senior policy analyst for the civil liberties advocates at the Open Society Institute, said he's concerned the information gleaned could disproportionately affect Muslims, compared with other immigrant populations. More Muslims, he said, may be deported.

"The question is what limits - if any - are there on the information they gain? Can that information be transferred to a law enforcement or immigration agency?" Onek asked.

DIA spokesman Don Black said the agency's officers are obligated to report illegal activity to the appropriate authorities.

The Senate Intelligence Committee, chaired by Republican Pat Roberts of Kansas, supported the measure in an annual intelligence authorization bill approved last week. Three other committees must also sign off, and the measure must be approved by the entire Congress.

Sen. Jay Rockefeller of West Virginia, the Senate Intelligence Committee's top Democrat, believes the measure strikes the right balance between national security and privacy, a spokeswoman said.

House Intelligence Committee Chairman Peter Hoekstra, R-Mich., is "very willing" to consider the measure, said his spokesman, Jamal Ware. The panel's top Democrat, Jane Harman of California, did not return calls seeking comment.