As more facts emerge in the NSA’s warrantless call-tracking scandal, it’s clear that this isn’t about government abuses alone: It’s also a delicate tango between security agencies and telecommunications executives. The government may lead, but its essential partners are the phone companies that own the switches, computers and call-routing software.

To me and other residents of at least one American city, this is a familiar dance. Beginning in 1964 New Haven police persuaded executives of the Southern New England Telephone Company (today part of AT&T) to let officers monitor traffic on the phone company’s mainframe. “Ordinary citizens” supposedly had nothing to fear: At first the warrantless taps were aimed at illegal gambling. But as the 1960s drew on and New Haven was roiled by protest, this limited collaboration between law enforcement and the private sectors turned into a massive twenty-four-hour-a-day operation–in its way a primitive, small-city form of data-mining. If someone on the NHPD wiretap list received or made a call, the party on the other end was identified from SNET’s records and added to the list. Soon it grew by the hundreds. When the program was shut down in 1971, the list included Black Panthers, law professors, feminists, a movie theater and a dry cleaner, with details of their calls hand-noted on 3-by-5 cards. As with the NSA it was only infighting and a leak to a journalist that exposed the wiretap program and led to a lawsuit against the city and SNET.

By the mid-1970s illegal phone company cooperation with surveillance had become a scandal nationwide. Though no city’s taps topped New Haven’s, in cities like New York and Chicago, local police red squads routinely relied on friendly telecommunications executives for access to records. Under J. Edgar Hoover, the FBI did the same. In 1975 the Senate committee investigating government surveillance activities, headed by Frank Church, revealed that phone companies had for years allowed warrantless surveillance by the National Security Agency under the code name Operation Shamrock: computerized monitoring of all telegraphic data into and out of the United States. As Jason Vest of the Project on Government Oversight notes on POGO’s blog, in 1976 Representative Bella Abzug did exactly what Senator Arlen Specter is threatening to do today–she subpoenaed top officials of Western Union, ITT and RCA Global.

Indeed, today’s NSA scandal and the Administration’s response to the revelations track directly back to that era. When Abzug issued her subpoenas, Dick Cheney and Donald Rumsfeld–President Ford’s Chief of Staff and Defense Secretary, respectively–persuaded the Justice Department to assert unprecedented claims of executive privilege not only over FBI and NSA testimony but also over that of Western Union and RCA. The companies, perhaps fearful of contempt citations from a Democratic Congress, refused to comply and provided Abzug with her documents.

In retrospect it’s clear that the Bush Administration has systematically sought a return to the days of phone company collaboration in warrantless surveillance. One key provision of the Patriot Act of 2001 allows modification of court-enforced consent decrees in cities like Chicago that blocked phone company cooperation with warrantless surveillance requests. In 2003 the White House went further, with Patriot Act II: Section 313, which passed the House but failed in the Senate and would have eliminated any civil liability for telecommunications companies cooperating with federal surveillance requests.

With the NSA scandal, the Administration smells opportunity. If Specter subpoenas telecom CEOs, look for this White House to reassert the executive privilege claims that failed in 1975–and this time, without fear of an opposition Congress, those CEOs may feel inclined to cooperate, establishing a new and dangerous zone of presidential power.

Will the phone companies become permanent auxiliary partners in illegal spying and pawns of an Administration bent on ever-expanding executive power? As Congress and the telecom companies decide how to respond to the burgeoning scandal, they should learn one thing from the New Haven case: The cost of corporate cooperation in illegal surveillance is ultimately huge. In New Haven taxpayers in a cash-strapped city paid 1,200 victims $1.75 million, while the officials who ordered the operation remained immune. That’s not just vast legal costs borne by the city and SNET. With a much-deserved lawsuit already filed in the NSA case, it is taxpayers, consumers and shareholders–not George W. Bush or telecom CEOs–who will eventually pay the bill.

But the cost is more than financial. The habit of casual illegal activity poisoned several successive New Haven administrations and damaged the reputations of phone company executives. The program, started as a law-enforcement expedient, fed a larger pattern of police and FBI spying, which, as the Church committee noted about New Haven, produced enormous volumes of dross “intelligence” without preventing crime. The question is not data-mining but whether the Senate Judiciary Committee–and perhaps the court system–will have the political will and legal fortitude to stand up for the rule of law, or whether the clock will be turned back and it will be as if the reforms of the 1970s had never happened.