From: tcmay@got.net (Timothy C. May)
Date: Sat, 20 Jan 1996 02:43:42 +0800
To: cypherpunks@toad.com
Subject: Economic Surveillance, the NSA, and the 40+24 Lotus Position
Message-ID: <ad251960000210041a20@[205.199.118.202]>
MIME-Version: 1.0
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[Note: Once again, could I suggest that people take the effort to trim the
distribution list? I've trimmed out the several names getting separate
copies.]


At 11:06 AM 1/19/96, david d `zoo' zuhn wrote:

>//  Now how about the percentage of *foreign* people who trust the US govt.?
>//  Given that it has said that it'll spy commercially... (if memory
>//  serves).
>
>Memory serves me oppositely -- denial that it has done so in the past and
>saying that they would not do so in the future.  This came a couple of
>months ago during trade negotiations with the Japanese government.


I don't think anything is resolved on this "economic espionage" issue. I've
been interested in this topic since around 1988 (for an unfinished novel I
was working on then--don't ask).

Here are a few misc. points:

* There is direct information that business information was intercepted by
the NSA and other SIGINT agencies and used by the U.S. for economic
advantage. This goes back to the 1940s, with intercepts of ITT and other
cable traffic, and continues up to the present. Bamford gives a bunch of
examples.

* However, there is no direct knowledge that I am aware of that
non-DOD-linked companies (i.e., ordinary American companies) received
significant amounts of economic intelligence on their competitors. Thus, I
doubt that General Motors was fed production data on Nissan that NSA
plucked out of the ether in its Japanese listening posts (such as the huge
NSA SIGINT facility at Misawa). Some companies may have received selected
intercepts, sub rosa, but I doubt that this was a matter of regular policy.

* Reports came out in the last couple of years that the NSA aided the U.S.
trade negotiators in talks with Japan by providing intercepts covering the
Japanese trade position. (I'm not sure if this was denied by the
Administration, or acknowledged, or what. But it's pretty likely to be
true. This is of course a different type of economic intelligence than
helping individual American companies, though the effects are similar.)

* Over the past 5-7 years there have been noises coming out of the
intelligence community about redefining their mission to include economic
espionage of various sorts (from the type they have always done, as above,
to more direct aid to American industry). I first heard comments on this
circa 1990, and they may have even come from a current or former DIRNSA...I
can't recall. (I took meticulous notes on what I was reading in the press,
but these notes are squirrelled away in "Tornado Notes" (Info Select) on an
old Toshiba laptop!)

* Shifting to more active economic intelligence gathering has *NOT* been
announced as a new mission for the NSA, despite rumors here on the
Cypherpunks list. If anyone can show us a real statement, or a plausible
report that deduces this to be a new mission, I would be grateful. Rather,
what I think we've been hearing are a bunch of reports and rumors that such
a shift is being considered.

(One list member contacted me by phone when I expressed similar doubts,
some months back, and offered to put me in touch with a friend of his who
claims to have evidence that such a shift has occurred. Not being an
investigative reporter, and not being in the Beltway, I declined.)

* Having said all this, that a certain type of economic surveillance and
espionage is unlikely (e.g., Intel isn't being informed of Japanese chip
yields), certainly other types of surveillance of foreign companies is
likely. The NSA and its affiliated agencies are of course likely to surveil
Western companies for evidence of arms shipments to other countries (a la
Toshiba's propeller-quieting technology shipped the U.S.S.R., France's
shipments of Exocets to various countries, nerve gas precursors, etc.). In
this sense, economic surveillance _is_ one of the main missions of the NSA.

I think it unlikely that the "NSA-enabled" Lotus solution will fly in these
countries. Will Matra really be happy to use the "40+24" solution for
sensitive inter-site communications, knowing full well about the many large
NSA SIGINT dishes scattered throughout Europe? Knowing that the NSA has the
24-bit extra key material and that 40-bit keys are easily breakable?

Somehow I think that these foreign governments, notably Germany and France,
will explicitly block these products from being imported into their
countries. A matter of national pride and all.

(After all, imagine a product made in Japan that is known to be
"Chobetsu-enabled." The U.S. government would not be too happy to see U.S.
companies embracing such a product.)

By making crypto restrictions "slide down easily," Lotus and IBM have not
done us any favors. Fortunately, I think their scheme is doomed.

--Tim May

Boycott espionage-enabled software!
We got computers, we're tapping phone lines, we know that that ain't allowed.
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^756839 - 1  | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."