According to a report in the New York Times, the National Security Agency knew in 2013 that the Australian spy agency, the Australian Signals Directorate (ASD), was conducting surveillance on a U.S.-based law firm representing the Indonesian government in a trade dispute with the U.S. government. The dispute was over the United States banning the import of clove cigarettes into the U.S. from Indonesia.
The Indonesian government protested and filed a complaint with the WTO. According to a 2013 bulletin sent to the NSA liaison office in Canberra, Australia (revealed by another set of documents provided by former NSA contractor Edward Snowden) from the ASD, the Australian spy agency asked for the NSA's blessing and apparently received it. The memo seems to indicate that the ASD offered to share any information it collected and was looking for guidance from the NSA on how to proceed.
The ASD told the NSA that the 'information covered by attorney-client privilege may be included' in the intelligence gathering, according to the [February 2013] document, a monthly bulletin from the Canberra office. The law firm was not identified in the document, but the NYT believes that the firm in question is Mayer Brown, a Chicago-based law firm with a global practice. At the time it was advising the Indonesian government on trade issues.
The NYT also reports that the leaked documents show a strong collaboration between the US and Australia in trying to break encryption – particularly related to communications between China and Indonesia – and that they "secretly share broad access to the Indonesian telecommunications systems."
An NSA spokeswoman told the NYT that the agency’s Office of the General Counsel was consulted when issues of potential attorney-client privilege arose and could recommend steps to protect such information…
While we're not shocked that the NSA spies on foreign entities, it is always surprising to hear that it is spying on targets in the United States, as the agency's role has always been to keep tabs on activities outside the borders of the United States….