JetBlue ignited a huge privacy scandal when the news broke that the airline secretly provided more than 5 million passenger records to Torch Concepts, a military contractor. Yet the Army Inspector General Agency concluded [PDF] that JetBlue did not violate the Privacy Act. The reason: Torch never looked up individuals by name, but instead used a computer to dig through and analyze their private information.
The Privacy Act specifically bars the government from creating secret databases that track people by name and social security number. But the Army contends that Torch didn't create this kind of system. Torch employees didn't search for individuals; a Torch computer crunched data. "The evidence indicated that Torch neither created nor maintained a system of records as defined by the Privacy Act of 1974," reads the report. "There was no evidence that Torch retrieved individual records from the databases...by name or by any other identifying particular at any time in the course of the study."
So according to the Army Inspector General report, Big Brother is a-okay -- as long as the government outsources the dirty work to a computer.
For more information, see this Wired article and the Army Inspector General's redcacted report [PDF], obtained by Wired under the Freedom of Information Act.