From: Declan McCullagh <declan@well.com>
Date: Fri, 3 Oct 1997 05:51:45 +0800
To: cypherpunks@toad.com
Subject: Crypto-continuation in Washington: FBI/DoJ keep up the pressure
Message-ID: <v03007804b059bf795b9a@[168.161.105.141]>
MIME-Version: 1.0
Content-Type: text/plain



Crypto is hot in Washington. Don't think the battle's over; it's just
beginning:

* This afternoon when the Senate Intelligence committee met to consider a
new CIA deputy director, Sen. Bob Kerrey said "there's a real urgency" to
get an encryption bill passed. (Presumably, that would be his bill, the
"Key Escrow Infrastructure" McCain-Kerrey/S.909.) Anyone still think that
the Senate will do the right thing on crypto? Think again...

* Last week Janet Reno talked at her weekly press conference about
balancing law enforcement rights with privacy rights -- through mandatory
domestic key escrow.

* Yesterday Louis Freeh spoke at length before the House International
Relations committee about the spread of nuclear weapons... and reminded
committee members about the problems the FBI has with nonescrowed crypto...

* Sen. Jon "Mandatory Domestic Key Escrow" Kyl said on Sunday that the
Clinton administration's export controls on crypto were *not tight
enough*...

More info:

  http://cgi.pathfinder.com/netly/opinion/0,1042,1385,00.html
  http://www.jya.com/declan8.htm

-Declan

****************

	HEARING OF THE SENATE INTELLIGENCE COMMITTEE
	NOMINATION OF LT.-GEN. JOHN A. GORDON
	TO BE DEPUTY DIRECTOR OF THE CENTRAL INTELLIGENCE AGENCY
	CHAIRMAN:  SENATOR RICHARD SHELBY (R-AL)
	106 DIRKSEN SENATE OFFICE BUILDING
	WASHINGTON, DC
	2:00 P.M. EDT
	WEDNESDAY, OCTOBER 1, 1997

SEN. KERREY:  I hope no doubt that you've heard of and perhaps had the
opportunity to read the recommendations made by Senators Helms and
Moynihan, but I think they're excellent.  It's an excellent examination of,
first, the need in some instances to classify, as well as the need to
examine that classification system.
	It's not really a question, General Gordon.  I think it's
imperative that, on the issue of encryption, that the president exert some
authority and try to pull together the congressional leaders and say, "We
need a secure public network."  There's counter-intelligence concerns.
There's national security issues here at stake, obviously, balanced against
the concerns for civil liberties and the concern for commercial interests
and the need to develop.
	But there's lots of action up here on the Hill, both in the House
and the Senate, in half a dozen committees or eight or nine committees, or
Lord knows how many altogether, more than I realized existed.  And I think
there's a real urgency to get something passed both for the private sector,
so they can have some stability, but also on the public-sector side, so we
can protect the nation's interests.
	MR. GORDON:  Senator, I have not delved that deeply into the
encryption issue.  I certainly take your point on this point.  But I do
know that if the Senate does confirm me that that will be squarely on my
plate.

****************

	ATTORNEY GENERAL JANET RENO'S WEEKLY MEDIA AVAILABILITY
	U.S. DEPARTMENT OF JUSTICE
	WASHINGTON, DC
	THURSDAY, SEPTEMBER 26, 1997

	Q     No, wait -
	ATTY GEN. RENO:  You've got to be quicker than that.
	Q     (Inaudible) - yes, ma'am.  Director Freeh and Director
Constantine both have complained that U.S.-made encryption devices are
giving the drug cartels an advantage whereby interdiction becomes impaired.
Would you favor, as Mr. Freeh does, some kind of giving of the keys to
these devices to the FBI and DEA?
	ATTY GEN. RENO:  I don't think that Director Freeh favors giving
keys to the FBI and to the DEA.
	Q     No?
	ATTY GEN. RENO:  What Director Freeh has talked about is what we
have today - if someone is going to tap a phone, they don't just go in and
tap the phone, if they're going to do it legally.  What law enforcement
does is it develops probable cause to believe that the telephone is being
used to commit a crime and that to overhear would provide evidence of a
crime.  That is submitted to a judge, both in federal court and in many
states courts where wiretapping is authorized.  The judge reviews the
sufficiency of the affidavits in support of the petition and enters an
order directing the telephone company to provide that opportunity.
	What Director Freeh is hoping to achieve is the same thing with
respect to encrypted products; so that the court would direct that the key
be provided to the telecommunications system, or the other system, in order
to decrypt the encoded message.
	What we're trying - what the administration is trying to do is to
recognize that there are two important interests at stake here. One is the
law enforcement interest, which is so vital with respect to terrorists,
with respect to being able to decrypt the drug dealer's computer when I - I
can get a search warrant now and seize his black book and I can read his
black book or decipher what he's talking about.  But if he can encrypt the
information on his computer, that will be a significant obstacle to law
enforcement.
	At the same time, the whole purpose of encryption with modern
telecommunication is to provide for the privacy interest, of commercial
interest of the average citizen.  And so I think it's important that we
work together to ensure the law enforcement capacity and ensure that the
present capacity to get court-ordered authorities for surveillance are
continued and are made real, while at the same time ensuring privacy.
	Q     So you're saying that the phone company would have the
responsibility?  Do they have the capability of encrypting?
	ATTY GEN. RENO:  The phone company doesn't have it.  There would be
a system whereby a key would be provided through third parties or
otherwise.  But this is something that we need to work together on to
ensure that law enforcement interests are protected and that privacy
interests are protected as well.


****************

	HEARING OF THE HOUSE INTERNATIONAL RELATIONS COMMITTEE
	SUBJECT:  ORGANIZED CRIME
	CHAIRED BY:  REPRESENTATIVE BEN GILMAN (R-NY)
	LOUIS FREEH, DIRECTOR, FEDERAL BUREAU OF INVESTIGATION
	2172 RAYBURN HOUSE OFFICE BUILDING
	WEDNESDAY, OCTOBER 1, 1997
	10:00 A.M EDT

	REP.     :  Following up on what Mr. Hyde said on your need to
fight international crime and terrorism, what do you need, as an agency
director and for your agency, in terms of specifics to wage a fight that
you can win?
	MR. FREEH:  Yes, sir.  As I mentioned in my statement, I think we
need it on three levels.  We need the permanent and minimal FBI presence
overseas to develop the kinds of relationships that Dr. de Gennaro and I
have had now for 18 years.
	We have asked for, and the Congress approved last year, in August
of 1996, a plan to expand the FBI's Ligat (sp) program from approximately
23 to 43 Ligats.  That would call for, by the end of 1999, 146 special
agents in 42 different countries with 116 support employees.  That's a
total of 262 people.  As I mentioned, the plan was submitted last year.  It
wasn't just an FBI plan.  It was jointly submitted by the State Department
and the attorney general.  And we've asked for funding in the 1998 and 1999
budgets to reach that level.
	We've also asked for a continuation of the training.  As I
mentioned, we've been able to train thousands of police officers around the
world.  The benefit of that training is two-fold.  First of all, we can
give them what they need most of all, which are the basic tools to conduct
their own investigations.
	Just as importantly, we develop through those relationships, as Dr.
de Gennaro described it, the cop-to-cop contacts and relationships.  So an
FBI agent or a DEA agent can pick up the phone and speak to a police
commander in Uzbekistan or Kazakhstan, if that's the place where we need to
do our work.  So the training is a very important part of the whole program.
	And again, and finally, we need the technological tools to do our
work.  We have to be able to communicate rapidly and securely.  We have to
deal with encryption.  We have to deal with cyber-crime.  And those are all
part of a larger technological challenge which we're trying to meet.

[...]

	REP. LINDSEY GRAHAM  (R-SC):  Thank you, John.
	Director Freeh, appreciate your testimony.  It's been quite
riveting, actually.  One of the briefing papers we have indicates that the
American public, in a recent poll, whatever you want to take polls worth,
say that 70 percent of the American people who were surveyed found it
likely that the United States could be attacked by terrorist groups within
the next decade using smuggled nuclear devices.  If you were asked that,
what category would you be in?
	MR. FREEH:  I think it's a threat and a possibility that should
occupy our highest priority.  I think we've seen attacks certainly in
Oklahoma, in New York City.  We know that many of the state sponsors of
terror, including Iran, are rapidly and very aggressively acquiring nuclear
technology, both in terms of warheads and launching devices. We know that
many of the state sponsors of terrorism, particularly Iran, sponsor and
fund and control Hezbollah groups, including groups which have connections
and operations in the United States.
	So the links, although I don't think I've seen them in a documented
form, clearly suggest that if a terrorist is willing to use a truck bomb to
blow up a building with thousands of people at risk, the accomplishment of
the particular objective would not be changed or influenced by the
opportunity to use a much more devastating (nuclear?) or biological or
chemical agent.
	So I think we have to take the possibility extremely seriously and
we have to take drastic steps to try to prevent and detect that.

****************

[This thanks to John Young. --Declan]

  Remarks by Senator Jon Kyl at the First International Conservative
                      Congress--September 28, 1997

[...]

     The Clinton Administration pursues a foreign policy without
     clear goals or the will to act decisively and is squandering
     the national security means left to it by a dozen years of
     Republican presidency. It emphasizes hope over reality and
     reliance on arms control agreements like the Comprehensive
     Test Ban Treaty (CTBT), the Anti-Ballistic Missile (ABM)
     Treaty, and the Chemical Weapons Convention (CWC) over a
     stronger defense. And political benefit over national
     security, as in its decisions to cave in to the concerns of
     some in industry in irresponsibly relaxing export controls on
     key items like encryption technology and supercomputers.

****************




-------------------------
Declan McCullagh
Time Inc.
The Netly News Network
Washington Correspondent
http://netlynews.com/