From: Declan McCullagh <declan@well.com>
Date: Wed, 23 Jul 1997 16:13:46 +0800
To: cypherpunks@toad.com
Subject: House crypto-vote echoes classified briefing (plus: COWS!)
Message-ID: <Pine.GSO.3.95.970723005201.14455E-100000@well.com>
MIME-Version: 1.0
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---------- Forwarded message ----------
Date: Wed, 23 Jul 1997 00:43:48 -0700 (PDT)
From: Declan McCullagh <declan@well.com>
To: fight-censorship-announce@vorlon.mit.edu
Subject: House crypto-vote echoes classified briefing (plus: COWS!)

Another House panel approved the SAFE encryption bill
Tuesday afternoon after a tense debate, capped by the
surprise testimony of a phalanx of law enforcement lobbyists
who appeared at what was scheduled to be a straightforward
vote.

The International Relations committee rejected 22-13 an
amendment that would gut the generally pro-crypto measure
by returning complete control over crypto-exports to the
president, then passed the SAFE bill unchanged.

In the process, the committee replayed an off-the-record
debate that took place on June 26 at a classified briefing
in the Capitol. The 64-page transcript of last month's
hearing, now redacted and declassified, reveals the same
tension between law enforcement and national security
lobbyists and two SAFE backers: Rep. Bob Goodlatte (R-Va)
and Rep. Lofgren (D-Ca).

Much of the talk at the classified briefing centered around
how to coerce Americans -- and more importantly, high tech
firms -- to adopt and use a "key recovery infrastructure"
that would allow the government to have ready access to the
secret keys used for encryption and decryption. Bill
Reinsch, Commerce Department undersecretary, said, "The
question is, how do we get there? We were trying to get
there through export controls. That may or may not be the
best way. Arguably import control might be the better way,
but nobody wants to do import controls, and they are off
the map."

Rep. Howard Berman (D-Ca) suggested banning unapproved
encryption altogether: "Why don't you treat it like heroin
or something?" Replied FBI Director Louis Freeh: "Within
the administration there have been long and not harmonious
discussions about what approach is more requisite. The law
enforcement components perhaps have more immediate view,
and that debate is pretty much over within the
administration..."

Then Reinsch complained that Microsoft wasn't playing ball
with the administration: "They appear not to believe that
key recovery is the way of the future." (I don't make this
stuff up, folks.)

He wasn't the only one to sound an Orwellian note. The
NSA's Crowell said, "There is a need for an instrument,
just like the FCC has. When you get a garage door opener,
it is licensed so you will not turn on your neighbor's TV
with the garage door opener. There is a need for a
licensing process
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx."

The rest of his statement is gone from the transcript,
crossed out by the thick, eager pens of government
censors. This is why reading redacted documents is
always a nerve-wracking experience: you feel like you're
being teased with not enough information.

That also happened this afternoon. I've never seen
lobbyists as nervous as they were today before the
International Relations committee met for the SAFE vote.
Everyone expected the chair of the committee, Rep. Benjamin
Gilman (R-NY), to introduce amendments that would tilt the
bill to favor national security, but how would they be
phrased? Nobody knew. Why was the hearing postponed three
times -- was it official House business, or last-minute
deal-cutting? And why was Clipper Chip proponent James
Kallstrom, assistant director of the FBI, sitting in the
front row -- would he testify as an unscheduled
administration expert?

In the end, of course law enforcement and national security
advocates launched a full-court press -- and lost. Gilman,
the committee chair, introduced an amendment that would gut
the generally pro-crypto SAFE bill by returning complete
control over crypto-exports to the president. Industry
groups and civil libertarians denounced it (correctly) as
nullifying SAFE. It would be just as bad, and arguably
worse, than Congress not passing any bill in the first
place. Worse yet, they said, Gilman cloaked his amendment
in "national security" language that would appeal to
members of his committee who are used to approving such
measures.

Then there were the cows. Again, I'm not making this up.
Apparently if a cow is out of the barn, it no longer makes
sense to shut the barn door to prevent any more cows from
leaving. (I can't attest to this personally. Perhaps
cows have an inherent sense of occasion.) "Do we open the
doors to let all the cows out?" asked one committee member.
The FBI's Kallstrom rebutted: "There are many, many still
left inside the barn." No, said Lofgren. "The cows are
tromping all over America. Cows can replicate. They're
being born all over the world. There's plenty of beef
available!"

SAFE now moves to three more committees simultaneously:
Commerce, National Security, and Intelligence, which have
until early September to vote on the bill. Since the
Clinton administration lobbyists met with a bitter defeat
in the International Relations committee, expect them to
use the August recess to redouble their lobbying attempts.
They may concentrate hardest on House Rules committee
members, who will be tasked with reconciling any
amendments to SAFE.

Yet even after today's vote, the overall encryption outlook
in Congress remains dismal. SAFE's companion bill in the Senate,
ProCODE, is dead and gutted. It's been replaced with the
McCain-Kerrey bill, which is pro-key escrow legislation
that the administration supports. And, most importantly,
the president has said he'll veto any pro-crypto bill that
comes across his desk...

---

Gilman's amendment offered today:
	
	NATIONAL SECURITY EXCEPTION -- Notwithstanding any other
	provision of this subsection, the President shall have
	the authority to regulate, including through the approval
	or denial of licenses or other means deemed appropriate,
	the export or reexport of encryption items, including
	hardware and software with encryption capabilities, if
	the President find that the export of such items would
	adversely affect the national security. National security
	shall include, but not be limited to, the ability of law
	enforcement agencies, including Federal, State, and local
	agencies, to combat espionage, terrorism, illicit drugs,
	kidnapping, or other criminal acts, or otherwise would
	involve the potential for loss of human life.

---

Excerpt from Secretary of Defense William Cohen's letter to
Congress, dated July 21, 1997:	

	It is also important to note that the Department of Defense
	relies on the Federal Bureau of Investigation for the
	apprehension and prosecution of spies. Sadly, there have
	been over 60 espionage convictions of federal employees
	over the last decade. While these individuals represent
	a tiny minority of government employees, the impact of
	espionage activities on our nation's security can be
	enormous. As the recent arrests of Nicholson, Pitts, and
	Kim clearly indicate, espionage remains a very serious
	problem. Any policies that detract from the FBI's ability
	to perform its vital counterintelligence function,
	including the ability to perform wiretaps, inevitably
	detract from the security of the Department of Defense
	and the nation...

	Encryption legislation must also address the nation's
	domestic information security needs. Today, approximately
	95% of DoD communications rely on public networks; other
	parts of government, and industry, are even more
	dependent on the trustworthiness of such networks.
	Clearly, we must ensure that encryption legislation
	addresses these needs. An approach such as the one
	contained in S.909 can go a long way toward balancing the
	need for strong encryption with the need to preserve
	national security and public safety. I hope that you will
	work with the Administration to enact legislation that
	addresses these national security concerns as well as the
	rights of the American people...

---

More info:

  http://pathfinder.com/netly/opinion/0,1042,1022,00.html

  http://pathfinder.com/netly/editorial/0,1012,931,00.html

  http://www.jya.com/declan3.txt

  http://www.jya.com/declan2.txt

  http://www.jya.com/declan1.txt

  http://www.well.com/~declan/fc/

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