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▒▒▄ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒▄ ▒▒▄ ▒▒▒▄▄ ▒▒▄ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒▄ ▒▒█ ▒▒█▀▀▀▀ ▒▒█▀▀▀▀ ▒▒█▀▒▒█ ▒▒█ ▒▒█▒▒█▒▒█ ▒▒█▀▀▀▀ ▀▒▒█▀▀ ▒▒█ ▒▒▒▒▒▄ ▒▒█▒▒▒▄ ▒▒▒▒▒▒█ ▒▒█ ▒▒█ ▀▒▒▒█ ▒▒▒▒▒▄ ▒▒█ ▒▒█ ▒▒█▀▀▀ ▒▒█ ▒▒█ ▒▒█ ▒▒█ ▒▒█ ▒▒█ ▒▒█ ▒▒█▀▀▀ ▒▒█ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒█ ▒▒█ ▒▒█ ▒▒▒▒▒▒▄ ▒▒█ ▒▒█ ▒▒▒▒▒▒▄ ▒▒█ ▀▀▀▀▀▀ ▀▀▀▀▀▀ ▀▀▀▀▀▀ ▀▀ ▀▀ ▀▀▀▀▀▀ ▀▀ ▀▀ ▀▀▀▀▀▀ ▀▀ ▒▒▒▄▄ ▒▒▄ ▒▒▒▒▒▒▄ ▒▒▄ ▒▒▄ ▒▒▒▒▒▒▄ ▒▒█▒▒█▒▒█ ▒▒█▀▀▀▀ ▒▒█ ▒▒█ ▒▒█▀▀▀▀ ▒▒█ ▀▒▒▒█ ▒▒▒▒▒▄ ▒▒█ ▒▒█ ▒▒▒▒▒▒▄ ▒▒█ ▒▒█ ▒▒█▀▀▀ ▒▒█▒▒▄▒▒█ ▀▀▀▒▒█ ▒▒█ ▒▒█ ▒▒▒▒▒▒▄ ▀▒▒▒▒█▀▀ ▒▒▒▒▒▒█ ▀▀ ▀▀ ▀▀▀▀▀▀ ▀▀▀▀ ▀▀▀▀▀▀ Legal Net Newsletter Volume 1, Issue 6 -- May 14, 1993 Legal Net Newsletter is dedicated to providing information on the legal issues of computing and networking in the 1990's and into the future. The information contained in this newsletter is not to be misconstrued as a bona fide legal document, nor is it to be taken as an advocacy forum for topics discussed and presented herein. The information contained within this newsletter has been collected from several governmental institutions, computer professionals and third party sources. Opinion and ideological excerpts have been collected from many sources with prior approval. Legal Net News and the Legal Net News logo are Copyright (c) 1993 Paul Ferguson -- All rights reserved. This newsletter may be freely copied and distributed in its entirety. Singular items contained within this newsletter may also be freely copied and distributed, with the exception of individual copyrighted items which appear with the prior approval of the originating author. Legal Net News can be found at the following locations: Publicly Accessible BBS's ------------------------- The SENTRY Net BBS Arlington Software Exchange Centreville, Virginia USA Arlington, Virginia USA +1-703-815-3244 +1-703-532-7143 To 9,600 bps To 9,600 bps The Internet ------------ tstc.edu (161.109.128.2) Directory: /pub/legal-net-news Login as ANONYMOUS and use your net ID (for example: fergp@sytex.com) as the password. E-mail submissions, comments and editorials to: fergp@sytex.com - -- In this issue - o NIST public hearing on the "key escrow" implementation proposal o "Crypto-Schemes and Mobile Digital Services," article from the Sydney (Australia) Morning Herald o "Balancing Snoopers and Privacy," article from the Australasian Computerworld - -- Date: Tue, 11 May 93 13:42:18 EDT From: Clipper-Capstone Chip Info <clipper@csrc.ncsl.nist.gov> Organization: National Institute of Standards and Technology (NIST) Subject: NIST Advisory Board Seeks Comments on Crypto Note: This file has been posted to the following groups: RISKS Forum, Privacy Forum, Sci.crypt, Alt.privacy.clipper and will be made available for anonymous ftp from csrc.ncsl.nist.gov, filename pub/nistgen/cryptmtg.txt and for download from the NIST Computer Security BBS, 301-948-5717, filename cryptmtg.txt. Note: The following notice is scheduled to appear in the Federal Register this week. The notice announces a meeting of the Computer System Security and Privacy Advisory Board (established by the Computer Security Act of 1987) and solicits public and industry comments on a wide range of cryptographic issues. Please note that submissions due by 4:00 p.m. May 27, 1993. DEPARTMENT OF COMMERCE National Institute of Standards and Technology Announcing a Meeting of the COMPUTER SYSTEM SECURITY AND PRIVACY ADVISORY BOARD AGENCY: National Institute of Standards and Technology ACTION: Notice of Open Meeting SUMMARY: Pursuant to the Federal Advisory Committee Act, 5 U.S.C. App., notice is hereby given that the Computer System Security and Privacy Advisory Board will meet Wednesday, June 2, 1993, from 9:00 a.m. to 5:00 p.m., Thursday, June 3, 1993, from 9:00 a.m. to 5:00 p.m., and Friday, June 4, 1993 from 9:00 a.m. to 1:00 p.m. The Advisory Board was established by the Computer Security Act of 1987 (P.L. 100-235) to advise the Secretary of Commerce and the Director of NIST on security and privacy issues pertaining to Federal computer systems and report its findings to the Secretary of Commerce, the Director of the Office of Management and Budget, the Director of the National Security Agency, and the appropriate committees of the Congress. All sessions will be open to the public. DATES: The meeting will be held on June 2-4 1993. On June 2 and 3, 1993 the meeting will take place from 9:00 a.m. to 5:00 p.m. and on June 4, 1993 from 9:00 a.m. to 1:00 p.m. Public submissions (as described below) are due by 4:00 p.m. (EDT) May 27, 1993 to allow for sufficient time for distribution to and review by Board members. ADDRESS: The meeting will take place at the National Institute of Standards and Technology, Gaithersburg, MD. On June 2, 1993, the meeting will be held in the Administration Building, "Red Auditorium," on June 3 the meeting will be held in the Administration Building, "Green Auditorium," and on June 4, 1993 in the Administration Building, Lecture Room "B." Submissions (as described below), including copyright waiver if required, should be addressed to: Cryptographic Issue Statements, Computer System Security and Privacy Advisory Board, Technology Building, Room B-154, National Institute of Standards and Technology, Gaithersburg, MD, 20899 or via FAX to 301/948-1784. Submissions, including copyright waiver if required, may also be sent electronically to "crypto@csrc.ncsl.nist.gov". AGENDA: - Welcome and Review of Meeting Agenda - Government-developed "Key Escrow" Chip Announcement Review - Discussion of Escrowed Cryptographic Key Technologies - Review of Submitted Issue Papers - Position Presentations & Discussion - Public Participation - Annual Report and Pending Business - Close PUBLIC PARTICIPATION: This Advisory Board meeting will be devoted to the issue of the Administration's recently announced government-developed "key escrow" chip cryptographic technology and, more broadly, to public use of cryptography and government cryptographic policies and regulations. The Board has been asked by NIST to obtain public comments on this matter for submission to NIST for the national review that the Administration's has announced it will conduct of cryptographic-related issues. Therefore, the Board is interested in: 1) obtaining public views and reactions to the government-developed "key escrow" chip technology announcement, "key escrow" technology generally, and government cryptographic policies and regulations 2) hearing selected summaries of written views that have been submitted, and 3) conducting a general discussion of these issues in public. The Board solicits all interested parties to submit well-written, concise issue papers, position statements, and background materials on areas such as those listed below. Industry input is particularly encouraged in addressing the questions below. Because of the volume of responses expected, submittors are asked to identify the issues above to which their submission(s) are responsive. Submittors should be aware that copyrighted documents cannot be accepted unless a written waiver is included concurrently with the submission to allow NIST to reproduce the material. Also, company proprietary information should not be included, since submissions will be made publicly available. This meeting specifically will not be a tutorial or briefing on technical details of the government-developed "key escrow" chip or escrowed cryptographic key technologies. Those wishing to address the Board and/or submit written position statements are requested to be thoroughly familiar with the topic and to have concise, well-formulated opinions on its societal ramifications. Issues on which comments are sought include the following: 1. CRYPTOGRAPHIC POLICIES AND SOCIAL/PUBLIC POLICY ISSUES Public and Social policy aspects of the government-developed "key escrow" chip and, more generally, escrowed key technology and government cryptographic policies. Issues involved in balancing various interests affected by government cryptographic policies. 2. LEGAL AND CONSTITUTIONAL ISSUES Consequences of the government-developed "key escrow" chip technology and, more generally, key escrow technology and government cryptographic policies. 3. INDIVIDUAL PRIVACY Issues and impacts of cryptographic-related statutes, regulations, and standards, both national and international, upon individual privacy. Issues related to the privacy impacts of the government-developed "key escrow" chip and "key escrow" technology generally. 4. QUESTIONS DIRECTED TO AMERICAN INDUSTRY 4.A Industry Questions: U.S. Export Controls 4.A.1 Exports - General What has been the impact on industry of past export controls on products with password and data security features for voice or data? Can such an impact, if any, be quantified in terms of lost export sales or market share? If yes, please provide that impact. How many exports involving cryptographic products did you attempt over the last five years? How many were denied? What reason was given for denial? Can you provide documentation of sales of cryptographic equipment which were lost to a foreign competitor, due solely to U.S. Export Regulations. What are the current market trends for the export sales of information security devices implemented in hardware solutions? For software solutions? 4.A.2 Exports - Software If the U.S. software producers of mass market or general purpose software (word processing, spreadsheets, operating environments, accounting, graphics, etc.) are prohibited from exporting such packages with file encryption capabilities, what foreign competitors in what countries are able and willing to take foreign market share from U.S. producers by supplying file encryption capabilities? What is the impact on the export market share and dollar sales of the U.S. software industry if a relatively inexpensive hardware solution for voice or data encryption is available such as the government-developed "key escrow" chip? What has been the impact of U.S. export controls on COMPUTER UTILITIES software packages such as Norton Utilities and PCTools? What has been the impact of U.S. export controls on exporters of OTHER SOFTWARE PACKAGES (e.g., word processing) containing file encryption capabilities? What information does industry have that Data Encryption Standard (DES) based software programs are widely available abroad in software applications programs? 4.A.3 Exports - Hardware Measured in dollar sales, units, and transactions, what have been the historic exports for: Standard telephone sets Cellular telephone sets Personal computers and work stations FAX machines Modems Telephone switches What are the projected export sales of these products if there is no change in export control policy and if the government- developed "key escrow" chip is not made available to industry? What are the projected export sales of these products if the government-developed "key escrow" chip is installed in the above products, the above products are freely available at an additional price of no more than $25.00, and the above products are exported WITHOUT ADDITIONAL LICENSING REQUIREMENTS? What are the projected export sales of these products if the government-developed "key escrow" chip is installed in the above products, the above products are freely available at an additional price of no more than $25.00, and the above products are to be exported WITH AN ITAR MUNITIONS LICENSING REQUIREMENT for all destinations? What are the projected export sales of these products if the government-developed "key escrow" chip is installed in the above products, the above products are freely available at an additional price of no more than $25.00, and the above products are to be exported WITH A DEPARTMENT OF COMMERCE LICENSING REQUIREMENT for all destinations? 4.A.4 Exports - Advanced Telecommunications What has been the impact on industry of past export controls on other advanced telecommunications products? Can such an impact on the export of other advanced telecommunications products, if any, be quantified in terms of lost export sales or market share? If yes, provide that impact. 4.B Industry Questions: Foreign Import/Export Regulations How do regulations of foreign countries affect the import and export of products containing cryptographic functions? Specific examples of countries and regulations will prove useful. 4.C Industry Questions: Customer Requirements for Cryptography What are current and future customer requirements for information security by function and industry? For example, what are current and future customer requirements for domestic banking, international banking, funds transfer systems, automatic teller systems, payroll records, financial information, business plans, competitive strategy plans, cost analyses, research and development records, technology trade secrets, personal privacy for voice communications, and so forth? What might be good sources of such data? What impact do U.S. Government mandated information security standards for defense contracts have upon demands by other commercial users for information security systems in the U.S.? In foreign markets? What threats are your product designed to protect against? What threats do you consider unaddressed? What demand do you foresee for a) cryptographic only products, and b) products incorporating cryptography in: 1) the domestic market, 2) in the foreign-only market, and 3) in the global market? 4.D Industry Questions: Standards If the European Community were to announce a non-DES, non-public key European Community Encryption Standard (ECES), how would your company react? Include the new standard in product line? Withdraw from the market? Wait and see? What are the impacts of government cryptographic standards on U.S. industry (e.g., Federal Information Processing Standard 46-1 [the Data Encryption Standard] and the proposed Digital Signature Standard)? 5. QUESTIONS DIRECTED TO THE AMERICAN BUSINESS COMMUNITY 5.A American Business: Threats and Security Requirements Describe, in detail, the threat(s), to which you are exposed and which you believe cryptographic solutions can address. Please provide actual incidents of U.S. business experiences with economic espionage which could have been thwarted by applications of cryptographic technologies. What are the relevant standards of care that businesses must apply to safeguard information and what are the sources of those standards other than Federal standards for government contractors? What are U.S. business experiences with the use of cryptography to protect against economic espionage, (including current and projected investment levels in cryptographic products)? 5.B American Business: Use of Cryptography Describe the types of cryptographic products now in use by your organization. Describe the protection they provide (e.g., data encryption or data integrity through digital signatures). Please indicate how these products are being used. Describe any problems you have encountered in finding, installing, operating, importing, or exporting cryptographic devices. Describe current and future uses of cryptographic technology to protect commercial information (including types of information being protected and against what threats). Which factors in the list below inhibit your use of cryptographic products? Please rank: -- no need -- no appropriate product on market -- fear of interoperability problems -- regulatory concerns -- a) U.S. export laws -- b) foreign country regulations -- c) other -- cost of equipment -- cost of operation -- other Please comment on any of these factors. In your opinion, what is the one most important unaddressed need involving cryptographic technology? Please provide your views on the adequacy of the government-developed "key escrow" chip technological approach for the protection of all your international voice and data communication requirements. Comments on other U.S. Government cryptographic standards? 6. OTHER Please describe any other impacts arising from Federal government cryptographic policies and regulations. Please describe any other impacts upon the Federal government in the protection of unclassified computer systems. Are there any other comments you wish to share? The Board agenda will include a period of time, not to exceed ten hours, for oral presentations of summaries of selected written statements submitted to the Board by May 27, 1993. As appropriate and to the extent possible, speakers addressing the same topic will be grouped together. Speakers, prescheduled by the Secretariat and notified in advance, will be allotted fifteen to thirty minutes to orally present their written statements. Individuals and organizations submitting written materials are requested to advise the Secretariat if they would be interested in orally summarizing their materials for the Board at the meeting. Another period of time, not to exceed one hour, will be reserved for oral comments and questions from the public. Each speaker will be allotted up to five minutes; it will be necessary to strictly control the length of presentations to maximize public participation and the number of presentations. Except as provided for above, participation in the Board's discussions during the meeting will be at the discretion of the Designated Federal Official. Approximately thirty seats will be available for the public, including three seats reserved for the media. Seats will be available on a first-come, first-served basis. FOR FURTHER INFORMATION CONTACT: Mr. Lynn McNulty, Executive Secretary and Associate Director for Computer Security, Computer Systems Laboratory, National Institute of Standards and Technology, Building 225, Room B154, Gaithersburg, Maryland 20899, telephone: (301) 975-3240. SUPPLEMENTARY INFORMATION: Background information on the government- developed "key escrow" chip proposal is available from the Board Secretariat; see address in "for further information" section. Also, information on the government-developed "key escrow" chip is available electronically from the NIST computer security bulletin board, phone 301-948-5717. The Board intends to stress the public and social policy aspects, the legal and Constitutional consequences of this technology, and the impacts upon American business and industry during its meeting. It is the Board's intention to create, as a product of this meeting, a publicly available digest of the important points of discussion, conclusions (if any) that might be reached, and an inventory of the policy issues that need to be considered by the government. Within the procedures described above, public participation is encouraged and solicited. /signed/ Raymond G. Kammer, Acting Director May 10, 1993 - -- Date: Thu, 13 May 1993 08:55:32 EDT Sender: Computer Professionals for Social Responsibility <uunet!VTVM2.CC.VT.EDU!CPSR%GWUVM.BITNET> From: uunet!anu.edu.au!Roger.Clarke Subject: Crypto-Schemes and Mobile Digital Services At CFP'93, there was considerable debate about whether cryptographic schemes should be designed to be 'crackable' by national security and law enforcement agencies. The Australian situation is that the licences issued for mobile digital telephone services all require the cryptography to be crackable. Now read on ... The Sydney Morning Herald, Wednesday 28 April, 1993 New digital phones on line despite objections By BERNARD LAGAN and ANNE DAVIES CANBERRA: The Federal government has over-ridden the objections of law enforcement agencies and allowed Telecom and Optus to start new digital mobile phone networks which are so secure that conversations can escape officially authorised telephone bugging. While law enforcement agencies can still intercept calls from mobile phones to an ordinary phone, calls from one digital mobile phone to another cannot be tapped. The Government agreed to waive the bugging requirement, originally a condition of Telecom and Optus's mobile phone network licences, late last week after strong pressure from both carriers to begin their services without providing technology to allow law enforcement agencies to listen into conversations. The changes to the system to allow official bugging will take up to two years to complete and will cost more than $25 million, a cost which the Government has agreed to bear. The Government's waiving of the bugging requirement was made despite strong opposition from law enforcement agencies, who wanted the start of the new digital mobile phone networks delayed until there was technology available to allow conversations conducted on these networks to be intercepted. The law enforcement agencies argued that once criminals and others who had reason to avoid officially authorised interceptions of their telephone conversations became aware of the loopholes in the new system, they would exploit it. The exemption was given by the Minister for Communications, Mr Beddall after talks held last week with the acting Attorney-General, Mr Kerr. It enabled Telecom to launch the country's first digital mobile phone network yesterday. The Federal Government is reticent about the decision to let the new network go ahead. A spokesman would only say that the Attorney-General was "satisfied" with the operational aspects of the new system. A spokesman for Minister for Communications, Mr Beddall, said that "the matter had been resolved", and any further queries should be addressed to Telecom and Optus. General manager of Telecom, MobileNet, Mr John Dearn, refused to confirm or deny that calls made from the new GSM (General System Mobile), mobile phones to other GSM mobile phones could not be intercepted, or that an exemption had been sought from the Government to allow the new GSM service to begin. "We have an agreement with the Department of Communications that we will not discuss the licence conditions," he said. Referring to the fact that most mobile phone calls are to fixed phones attached to the ordinary telephone network, Optus chief operating officer, Mr Ian Boatman said that most calls carried on Optus's GSM network would be interceptable by the security agencies. Optus is understood to have met with the Attorney General last Thursday, and has been given similar exemptions to its licence conditions. A third licensed operator is Vodaphone. Managing director, Mr Phillip Cornish, said: "These are Government and security matters and Vodaphone had no comment". Vodaphone is not likely to begin its service until late this year. The three mobile licensees Telecom MobileNet, Optus and Vodaphone Australia - are 'required by their licences to introduce the new digital mobile system, or GSM, as soon as the standard is available. However it became clear that the formula used to encode the new service, known as the A5 algorithm, was so secure that not even the police or security agencies could listen in. The dilemma for the Government was that having insisted on the the early introduction of GSM, it faced the prospect of substantial delays if it did not waive the licence condition. Because the standard was so secure, nobody anticipated the difficulty of re-coding and re-encrypting the algorithm to give access to law enforcement agencies. The Telecom system, costing in excess of $10O million to establish, covers more than 55 per cent of Australian consumers in Sydney, Melbourne, Canberra, Brisbane, Perth, Adelaide, the Gold Coast, Newcastle, Geelong and the Mornington Peninsula, Victoria. Its high security - compared to the existing 018 mobile telephone network - together with greater clarity is being used by Telecom to attract new customers. Under the 018 radio phone network, people using sophisticated scanners could pick up private conversations. But the digital technology ensures the telephone transmissions are scrambled and cannot be understood by people with scanners. - -- Date: Thu, 13 May 1993 08:56:07 EDT Sender: Computer Professionals for Social Responsibility <uunet!VTVM2.CC.VT.EDU!CPSR%GWUVM.BITNET> From: uunet!anu.edu.au!Roger.Clarke Subject: Short Report on CFP'93 >From Australasian Computerworld, 2 April 2 1993: Balancing snoopers and privacy Suppose, just suppose, that employees of ASIO, the Australian Federal Police, the Australian Taxation Office and the Credit Reference Association got together at a conference with privacy advocates and hackers. Well, I've just visited the US equivalent of precisely such a meeting. The Third Computers, Freedom and Privacy Conference was held last week in San Francisco, attracting 500 delegates from all walks of life and generating some very wide-ranging and dynamic discussions. The conference's title reflects the essential tension that exists between information openness and data protection, and most sessions involved panels of people with distinctly different perspectives. The conference started by considering applications of IT to the electoral process (a matter very timely for Australian delegates). This was followed by a discussion of electronic voting, and especially of the scope for subversion of the democratic process. One session dealt with arts and the Internet; and another with free speech and censorship on the net. Hackers met in a public forum with public prosecutors and the FBI, to explain how the proliferating laws to criminalise hacking miss the point. One burning issue examined was whether the FBI should be permitted to restrict the use of highly secure encryption techniques. The FBI's proposal that trapdoors be compulsorily built into cryptographic methods (so that law enforcement agencies can continue to monitor communications) stimulated vigorous debate. A topic of considerable relevance to Australia, in the light of our government's proposed Health Communications Network, was the discussion of health records and confidentiality. It was pointed out that attempts in the US to provide legal protection for highly sensitive medical data foundered as long ago as 1980, and that as a result data about what videos people hire enjoys much greater protection than does medical data. The situation in Australia is even worse. The Australian Parliament needs to create laws far more detailed than the Privacy Act, and to firmly encourage our State Parliaments to at last pass the privacy protection legislation that was due in the early 1970s. Unfortunately there is no chance of the gladiatorial arena that poses as our Federal Parliament taking a pro-active stance on such an important matter. In the present climate, people who expect their medical data to be protected against snoops and potential political opponents, and its use by government agencies to be restricted to justified access, would do well to lobby hard against the use of IT in the health care and health insurance fields. Another recurring topic at the CFP conference which mirrored Australian concerns was the discussion of motor vehicle records. The NSW ICAC report recently disclosed wholesale abuse of the personal data of Australian drivers and car owners. Some US States sell data to support themselves financially, despite the data having been acquired under force of law, and for quite specific purposes. One State administrator drew attention to the ridiculous anomaly of his being required to preclude on-line access to individual records, but also being required to sell the complete file to all comers. My own contribution related to the "digital persona". I devised the notion to convey how dangerous it was to make decisions about people based on surveillance of their data shadows. The audience response was quite remarkable. Far from being just a theoretical notion of limited applicability, a group of us are now using passive and active variants of the idea to explain a variety of Internet constructs, and to examine the potential of personal agents which, among many other things, can be devised to filter our mail, and monitor the news for items of interest. A most interesting variant on the usual debating panel was a "hypothetical" in which the audience acted as a jury. The scenario was that a virus had migrated from a bulletin board operated at a university, over the Internet, to a hospital. The hospital machines were down for 24 hours as a result, and a patient died for want of access to data. The audience heard arguments by lawyers for the parties involved, and were asked to decide whether a prima facie case of criminal negligence existed against any of them. Much debate took place over the lawyers' decision to arraign the hospital's CEO, but not the hospital's systems manager! Another valuable session concerned the coming US National Information Infrastructure. Some people want to apply ISDN now, while others argue for cable television-like solutions (taking the power out of the hands of the telecommunications providers), and still others would like to wait a few years until ATM is available. Given the highly political manner in which telecommunications policy is decided in Australia (remember the forced merger of OTC with Telecom, and the recent amateurish attempt by the Government to sink the proposed MDS pay-TV service), it seems futile to expect a similarly coherent discussion to take place in Australia. If anyone thinks that we could attract all sides of such important arguments to an Australian version of CFP, e-mail to me at Roger. Clarke@anu.edu.au. Or, if you're one of the information-poor and have no access to the Internet, fax me on (06) 249 5005. Roger Clarke is Reader in Information Systems at the Australian National University, and a 1992 Computerworld Fellow. - -- Date: Sun, 9 May 1993 14:59:47 -0500 From: TELECOM Moderator <telecom@DELTA.EECS.NWU.EDU> Subject: FBI Raids Telco Manager's Home (TELECOM DIGEST SPECIAL) > From--jsaker@cwis.unomaha.edu (James R. Saker Jr.) > Subject--FBI Raid on Curtis Nebr. Telco, Family > Organization--University of Nebraska at Omaha > Date--Sun, 9 May 1993 16:34:53 GMT The following article detailing a FBI raid on a small-town family and local exchange carrier was printed in this morning's Sunday {Omaha World Herald}: "FBI Probe, Raid Anger Curtis Man" Stephen Buttry, {Omaha World Herald}, Sunday May 9, 1993 Curtis Neb. -- The evening was winding down for the Cole family. Ed Cole, general manager of the Curtis Telephone Co., had dozed off on the living room couch. His wife, Carol, was running water for her bath. The 10-year-old identical twins, Stephanie and Jennifer, had gone to bed. Amanda, 14, was watching "48 Hours" on television in the living room. "It had something to do with fingerprints and catching criminals," Amanda remembers of the TV show. At 9:40 p.m., Amanda heard a knock and answered the door. In marched the FBI. Thus began a year of fear, anger and uncertainty for the Coles. Mrs. Cole, 40, still has nightmares about the night of May 13, 1992, when federal agents stormed into her bedroom, startling her as she was undressing for her bath, naked from the waist up. "I used to go to bed and sleep the whole night," she said last week. "I can't anymore." Federal agents did not find the illegal wiretapping equipment they were seeking, and a year later no one has been charged. The agents seized nothing from the house and later returned the cassette tapes they took from the phone company office. Ronald Rawalt, the FBI agent in North Platte who headed the investigation that led to the raid, declined to comment, referring questions to the Omaha office. "It's still a pending investigation, and we're not allowed to make a statement," said agent Doug Hokenstad of the FBI's Omaha office. If the investigation comes up empty, he said "we normally don't make a statement at the end of the investigation." That infuriates Cole, 39, who says the raid cast suspicion on him and the phone company and left them with no way to clear their names. "Either file charges or say there's nothing there," he said. "This was done in a highly visible manner, and there was no finality to it." Request for Help Cole has asked Sen. Bob Kerrey, D-Neb., to investigate. Beth Gonzales, Kerrey's press secretary, said the senator received Cole's letter and is assessing the situation. The case that brought FBI agents from Washington, Denver, Houston and Omaha, as well as nearby North Platte, to this tiny southwest Nebraska town in the Medicine Creek valley apparently started with a personnel squabble in the phone company office. Cole said two women complained of their treatment by two other workers. The women who complained threatened to quit if the company did not take action against the other women, he said. Cole and his assistant manager, Steve Cole, who is not related, observed the office workers for a while. "We found the same two making the ultimatum were the aggressors," Ed Cole said. He gave the complaining employees written reprimands, and they quit Jan 16, 1992. The two women contended in a hearing concerning state unemployment benefits that personality differences with Ed Cole led to the reprimands and their resignations. Both women declined to comment on the matter. 300-Hertz Tone In an affidavit filed to obtain the search warrants, agent Rawalt said one of the two, Carol Zak, contacted the FBI in March 1992 and told them of "unusual electronic noises (tapping noises) on her telephone line at the inception of a call received." Later in the affidavit, the noise is described not as tapping, but as a 300-hertz tone. Steve and Ed Cole demonstrated the tone last week on phone company equipment. It is caused, they said, by a defective 5-by-7 circuit board, or card. The defect is common, and the company replaces the card if a customer complains. The tone is not heard if a customer answers between rings, but if the customer answers during a ring, the tone blares into the earpiece for an instant, about the duration of the ring. Ed Cole, who has placed wiretaps for law officers with warrants, said wiretaps don't cause such a sound. "Most wiretaps, don't they have a loud, blasting noise to announce there's an illegal wiretap?" he asked sarcastically. Surveillance After Mrs. Zak told agent Rawalt of the noise on her line, the FBI began recording her calls, the affidavit says. On April 30, the affidavit says, the FBI began surveillance of Ed Cole -- not an easy task in a town of 791 people. During the weeks before the raid, phone company employees noticed a stranger watching the office and workers' houses. They guessed that a private investigator was watching, possibly gathering information for the former workers. "When somebody sits around in a car in a small-town Curtis, especially at 3:30 when grade school lets out, people take notice," Steve Cole said. "We had a suspicion that we were under surveillance." The affidavit says agent Robert Howan, an electrical engineer from FBI headquarters, analyzed tapes of Mrs. Zak's phone calls and concluded that a wiretap on the line "is controlled from the residence of Eddie Cole Jr. and is facilitated through a device or computer program at the Curtis Telephone Company." Based on Rawalt's affidavit, U.S. Magistrate Kathleen Jaudzemis in Omaha issued warrants to search Cole's house and company offices. Federal agents gathered in North Platte and headed south to Curtis for the late-evening raid. Flashlights, Commotion When Amanda Cole opened the door, she said "The first people that came in went past me." They rushed through the living room into the kitchen to let more agents in the back door. The agents wore black jackets and raincoats, with large, yellow letters proclaiming "FBI." Neighbors and passersby began to notice the commotion as other agents searched the outside with flashlights. The agents showed Cole the search warrant and told him and Amanda to stay in the living room. The agents asked where the other girls were, and Cole replied that it was a school night and they were in bed. Rather than flipping the hall light switch, the agents went down the darkened hall with flashlights, "like they think my kids are going to jump up and shoot them," Cole said. The twins recalled that they were puzzled, then scared, to wake up as FBI agents shined flashlights on them. The intruders did not enter gently, either. "After they left, our doorknob was broken," Jennifer said. Farther down the hall, the agents found the embarrassed and angry Mrs. Cole. "They didn't knock or anything, and I was undressing," she said. "They told me to get a T-shirt on." After Mrs. Cole put her clothes back on, agents allowed her to go with them to get the frightened twins out of bed. Mrs. Cole and the twins also were instructed to stay in the living room. Interrogation As agents searched the house, Cole said, Rawalt told him to step out on the porch. While he was outside, Mrs. Cole decided to call the phone company's attorney. "They told me I couldn't do that," she said. "I worked at the Sheriff's Office for several years, and I know no matter what you're accused of, you're entitled to an attorney." She called anyway. Meanwhile, according to Cole, Rawalt was interrogating and berating him loudly on the front porch, creating what Cole considered a "public spectacle." "I've lived here 15 years. I've built up a reputation," said Cole, who is president of the Curtis Housing Authority, chairman of the Nebraska Telephone Association, and coach of the twins' softball team. "And there's cars going by real slow. Here Rawalt brings me out on the front porch, turn on the light for everyone to see and starts interrogating me." Cole said Rawalt tried to pressure him to admit he was wiretapping and tell him where the equipment was. "He pointed at my wife and kids and said, 'Look at what you're putting them through,'" Cole said. Three-Hour Search Cole said it would take about 20 minutes for an expert to examine the phones in the house -- a teen line, the main line plus two extensions, a 24-hour repair prone that rings at his home as well as the main office, and an alarm that rings in from the central office. "The search continued for more than three hours, as agents looked in closets, cabinets and drawers. The family could hear Garth Brooks singing as agents played the children's tapes, apparently hunting for recorded phone conversations. At the same time the Coles' house was being searched, agents visited Steve Cole and Roger Bryant, a phone company employee who is a neighbor of Mrs. Zak's. "They insinuated I had broken into my neighbor's house to put in a wiretap," he said. The agents "asked me if I knew if Ed was making electrical devices in his basement." (Cole said he wasn't. Agents found no such devices.) The agents told Steve Cole to take them to the phone company office so they could search the switch room. Number of Agents The Coles were not sure how many agents participated in the raid. They saw at least five at the house but thought they heard others outside and entering the back door and going into the basement. They said seven agents were at the office, but they weren't sure which agents searched both sites. When the agents said they were looking for wiretap equipment, Steve Cole said "I told them it just couldn't be right. If Ed were to do something or I were to do something, the other one would know." Steve Cole said agents searching the phone company, including Howan, did not appear to understand the equipment very well. They would not tell him why they suspected a wiretap. After 1 a.m., Ed Cole said, the search of his house ended, with agents empty-handed and taking him to the office. About 4 a.m., the agents told Steve Cole about the 300-hertz tone. "The minute they told me, I knew what it was," he said. He said he quickly found the defective card for Mrs. Zak's line, demonstrated the sound for the agents, then replaced it and showed that the sound was gone. "I demonstrated it, and then they both got white," Steve Cole said. Card Analyzed Howan then went to Rawalt, who was with Ed Cole outside the switch room and explained what had caused the tone, Ed and Steve Cole said. "I'm jubilant," Ed Cole recalled thinking. "I've been exonerated." But he said Rawalt told him: "I've investigated this for two months. I've flown agents in from around the country ... I may charge you on circumstantial evidence." "My heart just sunk," Cole said, "because that means they're not here to find the truth. They're just trying to support their pre- conceived ideas." He said Rawalt told him he would take the card for analysis. Cole said the searches could have, and should have, been conducted without the embarrassing fanfare -- during normal business hours, while the children were in school and his wife was at work. Because of the highly public nature of the raid, Cole said, the company has hired a lawyer to investigate the investigation. The company is trying, with little success, Cole said, to get information from the FBI so it can reassure regulators, lenders, stockholders and customers of the company's integrity. Tapes of Calls Rawalt visited the Cole's house again in January. Although this time it wasn't a raid, his presence upset the family. He returned tapes seized in the raid but told Cole that the circuit card was still at the FBI lab being analyzed. It still has not been returned, Cole said. "The FBI, the most respected law enforcement agency in the world, has had this card in their laboratory in Washington, D.C., for almost one year, and they still cannot determine if it has a tape recorder strapped to it," Cole said. The bureau also has refused to give the phone company of its tapes of Mrs. Zak's phone calls, which could show whether the sound on her line was the tone from the defective card, Cole said. "It makes one wonder if they'd put a family and a company through this just because they don't want to admit a mistake," he said. "If they'll just give me my life back by making a public statement, it would be over." (End of article forwarded to TELECOM Digest.) Jamie Saker jsaker@cwis.unomaha.edu Systems Engineer Business/MIS Major Telenational Communications Univ. Nebraska at Omaha (402) 392-7548 [Moderator's Note: Thank you very much for sending along this report. This is just another example of the clumsy, oafish and unprofessional organization which has become such a big joke in recent years in the USA: The Federal Bureau of Inquisition. Imagine: a telephone line out of order which turns into a massive FBI assault on a private family. And of course there will be no apology; no reparations; nothing like that. The FBI is too arrogant and powerful to bother with making amends for the damage they have done. I hope Ed Cole and his telco demand and obtain revenge on everyone concerned, including first and foremost Mrs. Zak, the scorned woman who set the whole thing in motion when she got fired for her bad attitude at work. I know if it was myself, I would not be content until I had turned the screws very hard on all of them, especially her. PAT] - -- End of Legal net News v1, i6