By Siobhan Gorman

The idea, which Chertoff tossed out at an April 27 meeting with security-industry officials, is reminiscent of the Defense Department's now-dead Total Information Awareness program that sought to sift though heaps of foreign intelligence information to root out potential terrorist activity.

According to one techie who attended the April 27 meeting, Chertoff told the group, "Maybe we can create a nonprofit and track people's activities, and an algorithm could red-flag individuals. Then, the nonprofit could give us the names."

Chertoff also suggested that private industry form a group to collect proprietary information about cyber- and other infrastructure-security breaches from companies; scrub it of identifying information; aggregate it; and pass it along to the department. The financial services industry already has such a group.

"The secretary was responding to a hypothetical question with a hypothetical answer," said Homeland Security Department press secretary Brian Roehrkasse. "He did not offer specific programmatic content or discuss any specific proposed approach. Rather, he was discussing, in general terms, the importance of this issue of balancing security and privacy."

Harris Miller, president of the Information Technology Association of America, organized the gathering of about 50 security-industry executives from companies such as Microsoft, Oracle, and Verizon. Reached by phone at the meeting, he characterized the event as "an organizational meeting to discuss how the [information-technology] industry can work more effectively with each other" and with the Homeland Security Department.

Because the meeting was closed to the press, Miller would not discuss Chertoff's comments.One meeting participant said that Chertoff told the group that having a nonprofit collect names rather than the government "would alleviate some of the concerns people have." Not so for this participant: "This is what made me sort of shift in my seat. It sounds like investigating every person for no reason." He was particularly concerned that an unknown formula created by this new group would determine the red flags.