TL;DR:
- Anthropic blacklisted by Pentagon. Defense Secretary Hegseth declared the AI company a "supply chain risk" after it refused to drop guardrails against mass surveillance and autonomous weapons. OpenAI signed a military deal hours later.
- DHS hearing tomorrow. Secretary Noem testifies before Senate Judiciary at 9 AM on March 3. PenLink deadline Wednesday.
- Texas AG expands Conduent investigation. Paxton calls it "likely the largest breach in U.S. history." 4 million Texans affected. 10+ federal lawsuits filed.
- EFF: Free surveillance tech feeds ICE. New report traces how donated Flock cameras and Ring partnerships create data pipelines to federal immigration enforcement.
- FISA 702: 49 days until sunset. Administration still pushing for clean extension with no warrant requirements.
Pentagon Blacklists Anthropic Over AI Guardrails
Defense Secretary Pete Hegseth designated Anthropic a "supply chain risk to national security" on February 27, barring all military contractors from doing business with the AI company [1].
The ultimatum came after weeks of negotiations. The Pentagon wanted Anthropic to allow unrestricted military use of its Claude AI models. Anthropic wanted assurances that Claude wouldn't be used for autonomous weapons or mass surveillance of Americans [2].
Hegseth's statement was blunt: "No contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic." Federal agencies have six months to stop using Anthropic products [1].
Hours later, OpenAI announced it had reached a deal with the Pentagon. CEO Sam Altman said the agreement includes "appropriate safeguards" but didn't specify what those guardrails actually prevent [3].
The dispute traces back to January, when Anthropic suspected its AI had been misused in an operation targeting Venezuela through a Palantir partnership. The company pushed back. The Pentagon escalated. Now Anthropic says it will challenge the designation in court [4].
Why it matters: The message to the AI industry is clear: cooperate fully with military use or get cut out of federal contracts. EFF called the government's approach "bullying" and urged tech companies to hold their ethical lines [5].
Sources: [1] CBS News, [2] Axios, [3] NPR, [4] CNBC, [5] EFF
DHS Hearing Tomorrow: What to Watch
Secretary Kristi Noem testifies before the Senate Judiciary Committee tomorrow at 9 AM. This is the oversight hearing we've been tracking [6].
Expect questions about:
- Mobile Fortify: The facial recognition app ICE agents use to scan faces anywhere in the country. One database. 200+ million images. 15-year retention—even for U.S. citizens with no match [7].
- PenLink contracts: House Democrats set a March 5 deadline for DHS to explain its acquisition of location-tracking tools that can monitor phones across entire neighborhoods [8].
- The "domestic terrorist" database: Acting ICE Director Todd Lyons told Congress there's no database tracking Americans. Three weeks earlier, a masked ICE agent in Portland told a legal observer they were being added to "a nice little database" as a "domestic terrorist" [9].
Whether anyone asks the hard questions remains to be seen. But the contradictions are piling up.
Sources: [6] Senate Judiciary Committee, [7] American Immigration Council, [8] Rep. Shontel Brown, [9] State of Surveillance
Texas AG Expands Conduent Breach Investigation
Attorney General Ken Paxton issued civil investigative demands to both Conduent and Blue Cross Blue Shield of Texas, calling the breach "likely the largest in U.S. history" [10].
The numbers keep growing. Current confirmed: 26 million Americans affected nationwide, including 4 million Texans. Exposed data includes Social Security numbers, medical records, health insurance details, and Medicaid information [11].
The breach happened between October 2024 and January 2025. Conduent didn't notify victims until months later. Now there are 10+ federal class action lawsuits, and the free credit monitoring enrollment deadline is March 31 [12].
Paxton's investigation focuses on whether Conduent and BCBS complied with Texas data protection laws. His office is demanding security audit records, breach response communications, and evidence of compliance measures [10].
If you're affected: The credit monitoring deadline is March 31. Check if you received a breach notification letter. If you had coverage through BCBS Texas, BCBS Montana, Premera Blue Cross, Humana, or any state Medicaid program processed by Conduent, assume your data was exposed.
Sources: [10] Texas AG Press Release, [11] TechCrunch, [12] All About Lawyer
Full coverage: Conduent GovTech Breach
EFF: "Free" Surveillance Tech Still Costs Everything
The Electronic Frontier Foundation published a new analysis of how "free" surveillance equipment creates dangerous data pipelines [13].
The pattern: Vendors like Flock Safety and Amazon Ring offer free or heavily discounted cameras to local police. The catch? That data flows to regional networks. Those networks connect to federal agencies. ICE gets access to footage from communities that never voted to help immigration enforcement [13].
Key findings:
- At least 60 Flock "Condor" AI cameras were left completely open to the internet, exposing live feeds and admin controls to anyone [14].
- Ring's cancelled partnership with Flock would have connected doorbell footage directly to police surveillance networks [15].
- Donated equipment bypasses local oversight. City councils never vote on "free" surveillance.
The February 12 Ring-Flock cancellation was a rare win. Public pressure killed the partnership before it launched. But Flock still operates in 5,000+ communities. The data keeps flowing.
Sources: [13] EFF, [14] SAN, [15] State of Surveillance
Related: School Cameras Feed ICE
FISA 702: 49 Days
Section 702 expires April 20. The administration wants a clean extension—no warrant requirements, no reforms, no changes to how the government searches Americans' communications collected under foreign surveillance programs [16].
The SAFE Act would require warrants before accessing American communications content, but not before running queries. Senators Durbin and Lee reintroduced it, but the White House isn't interested in compromise [17].
What makes this fight different from 2024: ICE is now openly using 702-derived intelligence for immigration enforcement. A program sold as foreign surveillance is being used domestically. That's driving new opposition from both privacy hawks and immigration advocates.
Sources: [16] Brookings, [17] Senate Judiciary
Quick Hits
- Government Surveillance Transparency Act introduced. Sen. Mike Lee cosponsored a bill requiring public reporting of the hundreds of thousands of sealed surveillance orders issued by courts each year. Most orders stay hidden indefinitely [18]. Sen. Lee
- San Jose ALPR lawsuit proceeds. SIREN and CAIR, represented by EFF and ACLU, are suing to stop warrantless searches of license plate data. Nearby cities Mountain View, Los Altos Hills, and Santa Cruz are reconsidering their programs [19]. EFF
- DHS IG auditing ICE biometric data. Inspector General reviewing how DHS collects, stores, shares, and secures PII and biometric data related to immigration enforcement [20]. Federal News Network
What to Watch
Tomorrow, March 3: DHS Secretary Noem testifies before Senate Judiciary at 9 AM. Watch for questions on Mobile Fortify, PenLink, and the "domestic terrorist" database claims.
Wednesday, March 5: House deadline for DHS briefing on PenLink surveillance tools. No response could trigger escalation.
March 31: Conduent breach credit monitoring enrollment deadline. Don't miss it.
April 20: FISA Section 702 sunset. 49 days and counting.
Last updated: March 2, 2026