Editor's note: This story was updated with additional information on July 31, 2008 at 9:59 a.m. EST.

The extent of data available to authorities through the nationwide network of intelligence fusion centers raises legal and privacy questions that require increased congressional oversight, according to a report released today by the American Civil Liberties Union.  Authorities in those centers have access to numerous intelligence databases.

The civil liberties group said the activities of state and local fusion centers, which the Bush administration identified as the primary way for sharing terrorism related information between state, local and federal authorities, represent part of “a nascent domestic surveillance system.” State and local authorities started forming the centers after the terrorists attacks of September 2001 to upgrade information sharing. The centers are partially funded through grants from the Homeland Security Department.

The ACLU said the use of the centers as a way to pass on suspicious activity reports (SARs) gathered by local authorities and federal efforts to standardize SAR reporting amount to deputizing local and state law enforcement authorities.

Federal authorities have been working to set SAR standards as well as further functional guidance for the centers, which officials say will improve information sharing and protect privacy rights.

However, in a conference call ACLU officials called for Congress to play a greater role in regulating the centers.

National authorities have become increasingly involved — particularly DHS and the FBI, who have officials assigned to many of the centers. There are more than 50 centers in states and major urban areas around the country.

“Rather than letting these fusion centers continue to grow in an organic or ad-hoc way — in a way that can lead to flagrant abuses and violations of rights — Congress really needs to have a debate and discussion and to impose controls,” said Caroline Fredrickson, director of the ACLU Washington Legislative Office.

However, John Cohen, a senior advisor to the Office of the Director of National Intelligence's Program Manager for the Information Sharing Environment (PM-ISE), said authorities in his office and in the Justice Department are in the process of putting out increased guidance and controls to address many of the issues brought up in the ACLU report. The examples used in the report predated these efforts, he said.

“We are building into this process multiple levels of vetting…this comes from training and the development of a standardized approach that is clearly defined to all participants in the system,” Cohen said.

The ACLU said that because activities that could be described as suspicious are “non-criminal" and are often protected by the First Amendment, policing those activities opens the door to “racial profiling and other inappropriate police behavior.”