From: Dave Banisar <cpsr@access.digex.net>
Date: Sat, 16 Apr 94 08:55:25 PDT
To: Cypherpunks@toad.com
Subject: FOIA- New Docs Reveal Criticisms of FBI Cost-Benefit Analysis of DT
Message-ID: <9404161156.AA20478@Hacker2.cpsr.digex.net>
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[1] FBI Wiretap Claims Questioned

Ever since it first proposed "Digital Telephony" legislation in 
1992, the Federal Bureau of Investigation has claimed that 
wiretapping enables law enforcement agencies to prevent billions 
of dollars in economic loss.  Most recently, in a briefing book on 
the proposed legislation dated March 8, 1994, the Bureau stated 
that "[t]he economic benefit from the continued use of electronic 
surveillance (fines, recoveries, restitution, forfeitures and 
prevented economic loss) is in the billions of dollars per year."

These FBI figures are derived from a cost-benefit analysis the 
Bureau drafted in May 1992 to justify the substantial cost the 
telecommunications industry would need to bear in order to comply 
with the legislation.  Among other things, the FBI analysis 
claimed that electronic surveillance had prevented more than $1.8 
billion in "potential economic loss" between 1985 and 1991.

CPSR has now obtained government documents under the Freedom of 
Information Act (FOIA) that raise substantial questions as to the 
accuracy of these numbers.  The documents contain comments on the 
Bureau's cost-benefit analysis from various components of the federal 
government, including the White House.  These internal 
critiques of the FBI analysis include the following:

* May 22, 1992 memo from the White House:

"The analysis should make consistent assumptions with respect to 
both costs and benefits.  The benefits analysis should reflect 
clearly that only some cases  involve electronic surveillance; 
that some surveillance could continue in the absence of this 
legislation (at least for some period of years); and that some 
convictions could probably still be obtained absent surveillance." 
...

"The analysis does not consider the existence of or the potential 
for other forms of surveillance that might compensate for the 
reduction in telephone wiretapping capabilities." ...

"On p. 4 and p. 6, certain figures representing 'prevented 
potential economic loss' are cited.  Please explain what losses 
are encompassed in those figures and how they are calculated."


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* May 22, 1992 memo from Office of the Vice President:

"In several places in the analysis, figures are cited without 
reference to their sources or to how they were derived.  For 
example, on p. 4 a figure of $1.8 billion is cited for potential 
economic loss. ..."

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* May 26, 1992 memo from Treasury Department:

"It is difficult to do a critical analysis of DOJ's cost benefit 
package without a full explanation of how DOJ arrived at its 
cost/benefit figures, and what costs and benefits were included in 
those figures.  It is not clear that DOJ knows, or could know, all 
the costs and benefits involved, but this should be clearly 
stated."


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In addition to these new documents, industry officials at a
Congressional hearing on March 18 sharply questioned the FBI's figures.
Roy Neel, President of the US Telephone Association, disputed the FBI's
figures that the bill would only cost around 300 million, citing that
just revising call forwarding would cost an estimated $1.8 billion.
  
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