Computer underground Digest Tue Dec 24, 1996 Volume 8 : Issue 92 ISSN 1004-042X Editor: Jim Thomas (cudigest@sun.soci.niu.edu) News Editor: Gordon Meyer (gmeyer@sun.soci.niu.edu) Archivist: Brendan Kehoe Shadow Master: Stanton McCandlish Field Agent Extraordinaire: David Smith Shadow-Archivists: Dan Carosone / Paul Southworth Ralph Sims / Jyrki Kuoppala Ian Dickinson Cu Digest Homepage: http://www.soci.niu.edu/~cudigest CONTENTS, #8.92 (Tue, Dec 24, 1996) File 1--Strong crypto can be exported, says judge, at least in SF (fwd) File 2--From EFF - Court Declares Crypto Restrictions Unconstitutional File 3--CWD-Cooking with Crypto File 4--Re: Strong crypto can be exported, says judge, at least in SF File 5--Cu Digest Header Info (unchanged since 13 Dec, 1996) CuD ADMINISTRATIVE, EDITORIAL, AND SUBSCRIPTION INFORMATION ApPEARS IN THE CONCLUDING FILE AT THE END OF EACH ISSUE. --------------------------------------------------------------------- Date: Thu, 19 Dec 1996 08:04:34 -0800 (PST) From: Declan McCullagh Subject: File 1--Strong crypto can be exported, says judge, at least in SF (fwd) Source fight-censorship@vorlon.mit.edu Date--Wed, 18 Dec 1996 23:44:59 -0500 From--Dave Banisar Headline: Encryption Restriction Nixed Wire Service: APO (AP Online) Date: Wed, Dec 18, 1996 By BOB EGELKO Associated Press Writer SAN FRANCISCO (AP) -- The State Department's refusal to let a mathematician post his encryption programs on the Internet was unconstitutional, a federal judge said. The ruling announced Wednesday was hailed by computer industry executives who say the export restrictions have allowed the rest of the world to take business away from U.S. companies. U.S. District Judge Marilyn Hall Patel stopped short of forbidding all restrictions on the export of codes that allow computer messages to be scrambled. But she said the current rules, which treat such computer programs as if they were military weapons, go too far. The immediate effect of Monday's ruling is that anyone in the federal district that includes San Francisco and Silicon Valley can post the forbidden cryptography on the Internet, said Mike Godwin, a lawyer for the Electronic Frontier Foundation, an online civil rights group. ------------------------------ Date: Fri, 20 Dec 1996 04:30:34 -0800 (PST) From: Stanton McCandlish Subject: File 2--From EFF - Court Declares Crypto Restrictions Unconstitutional EFFector Online Volume 09 No. 15 Dec. 20, 1996 editors@eff.org * See http://www.eff.org/Alerts/ or ftp.eff.org, /pub/Alerts/ for more COURT DECLARES CRYPTO RESTRICTIONS UNCONSTITUTIONAL Free Speech Trumps Clinton Wiretap Plan December 19, 1996, 16:50 Pacific time. Electronic Frontier Foundation Contacts: Shari Steele, Staff Attorney 301/375-8856, ssteele@eff.org John Gilmore, Founding Board Member 415/221-6524, gnu@toad.com Cindy Cohn, McGlashan & Sarrail 415/341-2585, cindy@mcglashan.com San Francisco - On Monday, Judge Marilyn Hall Patel struck down Cold War export restrictions on the privacy technology called cryptography. Her decision knocks out a major part of the Clinton Administration's effort to force companies to build "wiretap-ready" computers, set-top boxes, telephones, and consumer electronics. The decision is a victory for free speech, academic freedom, and the prevention of crime. American scientists and engineers will now be free to collaborate with their peers in the United States and in other countries. This will enable them to build a new generation of tools for protecting the privacy and security of communications. The Clinton Administration has been using the export restrictions to goad companies into building wiretap-ready "key recovery" technology. In a November Executive Order, President Clinton offered limited administrative exemptions from these restrictions to companies which agree to undermine the privacy of their customers. Federal District Judge Patel's ruling knocks both the carrot and the stick out of Clinton's hand, because the restrictions were unconstitutional in the first place. The Cold War law and regulations at issue in the case prevented American researchers and companies from exporting cryptographic software and hardware. Export is normally thought of as the physical carrying of an object across a national border. However, the regulations define "export" to include simple publication in the U.S., as well as discussions with foreigners inside the U.S. They also define "software" to include printed English-language descriptions and diagrams, as well as the traditional machine-readable object code and human-readable source code. The secretive National Security Agency has built up an arcane web of complex and confusing laws, regulations, standards, and secret interpretations for years. These are used to force, persuade, or confuse individuals, companies, and government departments into making it easy for NSA to wiretap and decode all kinds of communications. Their tendrils reach deep into the White House, into numerous Federal agencies, and into the Congressional Intelligence Committees. In recent years this web is unraveling in the face of increasing visibility, vocal public disagreement with the spy agency's goals, commercial and political pressure, and judicial scrutiny. Civil libertarians have long argued that encryption should be widely deployed on the Internet and throughout society to protect privacy, prove the authenticity of transactions, and improve computer security. Industry has argued that the restrictions hobble them in building secure products, both for U.S. and worldwide use, risking America's current dominant position in computer technology. Government officials in the FBI and NSA argue that the technology is too dangerous to permit citizens to use it, because it provides privacy to criminals as well as ordinary citizens. "We're pleased that Judge Patel understands that our national security requires protecting our basic rights of free speech and privacy," said John Gilmore, co-founder of the Electronic Frontier Foundation, which backed the suit. "There's no sense in 'burning the Constitution in order to save it'. The secretive bureaucrats who have restricted these rights for decades in the name of national security must come to a larger understanding of how to support and preserve our democracy." Reactions to the decision "This is a positive sign in the crypto wars -- the first rational statement concerning crypto policy to come out of any part of the government," said Jim Bidzos, President of RSA Data Security, one of the companies most affected by crypto policy. "It's nice to see that the executive branch does not get to decide whether we have the right of free speech," said Philip Zimmermann, Chairman of PGP, Inc. "It shows that my own common sense interpretation of the constitution was correct five years ago when I thought it was safe to publish my own software, PGP. If only US Customs had seen it that way." Mr. Zimmermann is a civil libertarian who was investigated by the government under these laws when he wrote and gave away a program for protecting the privacy of e-mail. His "Pretty Good Privacy" program is used by human rights activists worldwide to protect their workers and informants from torture and murder by their own countries' secret police. "Judge Patel's decision furthers our efforts to enable secure electronic commerce," said Asim Abdullah, executive director of CommerceNet. Jerry Berman, Executive Director of the Center for Democracy and Technology, a Washington-based Internet advocacy group, hailed the victory. "The Bernstein ruling illustrates that the Administration continues to embrace an encryption policy that is not only unwise, but also unconstitutional. We congratulate Dan Bernstein, the Electronic Frontier Foundation, and all of the supporters who made this victory for free speech and privacy on the Internet possible." "The ability to publish is required in any vibrant academic discipline," This ruling re-affirming our obvious academic right will help American researchers publish without worrying," said Bruce Schneier, author of the popular textbook _Applied Cryptography_, and a director of the International Association for Cryptologic Research, a professional organization of cryptographers. Kevin McCurley, President of the International Association for Cryptologic Research, said, "Basic research to further the understanding of fundamental notions in information should be welcomed by our society. The expression of such work is closely related to one of the fundamental values of our society, namely freedom of speech." Background on the case The plaintiff in the case, Daniel J. Bernstein, Research Assistant Professor at the University of Illinois at Chicago, developed an "encryption algorithm" (a recipe or set of instructions) that he wanted to publish in printed journals as well as on the Internet. Bernstein sued the government, claiming that the government's requirements that he register as an arms dealer and seek government permission before publication was a violation of his First Amendment right of free speech. This is required by the Arms Export Control Act (AECA) and its implementing regulations, the International Traffic in Arms Regulations (ITAR). In the first phase of this litigation, the government argued that since Bernstein's ideas were expressed, in part, in computer language (source code), they were not protected by the First Amendment. On April 15, 1996, Judge Patel rejected that argument and held for the first time that computer source code is protected speech for purposes of the First Amendment. Details of Monday's Decision Judge Patel ruled that the Arms Export Control Act is a prior restraint on speech, because it requires Bernstein to apply for and obtain from the government a license to publish his ideas. Using the Pentagon Papers case as precedent, she ruled that the government's "interest of national security alone does not justify a prior restraint." Judge Patel also held that the government's required licensing procedure fails to provide adequate procedural safeguards. When the Government acts legally to suppress protected speech, it must reduce the chance of illegal censorship by the bureaucrats involved -- in this case, the State Department's Office of Defense Trade Controls (ODTC). Her decision states: "Because the ITAR licensing scheme fails to provide for a time limit on the licensing decision, for prompt judicial review and for a duty on the part of the ODTC to go to court and defend a denial of a license, the ITAR licensing scheme as applied to Category XIII(b) [i.e., as applied to encryption material] acts as an unconstitutional prior restraint in violation of the First Amendment." Professor Bernstein is now free to publish his ideas without asking the government's permission first. She also ruled that the export controls restrict speech based on the content of the speech, not for any other reason. "Category XIII(b) is directed very specifically at applied scientific research and speech on the topic of encryption." The Government had argued that it restricts the speech because of its function, not its content. The judge also found that the ITAR is vague, because it does not adequately define how information that is available to the public "through fundamental research in science and engineering" is exempt from the export restrictions. "This subsection ... does not give people ... a reasonable opportunity to know what is prohibited." The failure to precisely define what objects and actions are being regulated creates confusion and a chilling effect. Bernstein has been unable to publish his encryption algorithm for over four years. Many other cryptographers and ordinary programmers have also been restrained from publishing because of the vagueness of the ITAR. Brian Behlendorf, a maintainer of the popular public domain "Apache" web server program, stated, "No cryptographic source code was ever distributed by the Apache project. Despite this, the Apache server code was deemed by the NSA to violate the ITAR." Judge Patel also adopted a narrower definition of the term "defense article" in order to save it from unconstitutional vagueness. The immediate effect of this decision is that Bernstein now is free to teach his January 13th cryptography class in his usual way. He can post his class materials on the Internet, and discuss the upcoming class's materials with other professors, without being held in violation of the ITAR. "I'm very pleased," Bernstein said. "Now I won't have to tell my students to burn their notebooks." It is presently unclear exactly where Judge Patel's decision applies -- in the Northern District of California (containing San Francisco and Silicon Valley) or throughout the country. Check with your own lawyer if you contemplate taking action based on the decision. It is not yet clear from the decision whether the export controls on object code (the executable form of computer programs which source code is automatically translated into) have been overturned. It may be that existing export controls will continue to apply to runnable software products, such as Netscape's broswer, until another court case challenges that part of the restrictions. ABOUT THE ATTORNEYS Lead counsel on the case is Cindy Cohn of the San Mateo law firm of McGlashan & Sarrail, who is offering her services pro bono. Major additional pro bono legal assistance is being provided by Lee Tien of Berkeley; M. Edward Ross of the San Francisco law firm of Steefel, Levitt & Weiss; James Wheaton and Elizabeth Pritzker of the First Amendment Project in Oakland; and Robert Corn-Revere, Julia Kogan, and Jeremy Miller of the Washington, DC, law firm of Hogan & Hartson. ABOUT THE ELECTRONIC FRONTIER FOUNDATION The Electronic Frontier Foundation (EFF) is a nonprofit civil liberties organization working in the public interest to protect privacy, free expression, and access to online resources and information. EFF is a primary sponsor of the Bernstein case. EFF helped to find Bernstein pro bono counsel, is a member of the Bernstein legal team, and helped collect members of the academic community and computer industry to support this case. Full text of the lawsuit and other paperwork filed in the case is available from EFF's online archives at: http://www.eff.org/pub/Legal/Cases/Bernstein_v_DoS/ The full text of Monday's decision is available at: http://www.eff.org/pub/Legal/Cases/Bernstein_v_DoS/Legal/961206.decision ------------------------------ Date: Fri, 20 Dec 1996 07:53:01 -0800 (PST) From: "Brock N. Meeks" Subject: File 3--CWD-Cooking with Crypto CyberWire Dispatch // Copyright (c) 1996 // December 20 Jacking in from the "Two Flew Over the Crypto Nest" port: Washington -- The encryption issue continues to bubble up all over the boneyard of D.C. On Thursday, in the wake of the U.S. District Court decision in San Francisco, that declared current U.S. restrictions on exporting *printed* crypto code violates First Amendment rights, crypto came to the fore, if only briefly. The following instances, one during a congressional hearing, the other during a news conference by U.S. Attorney General Janet "Say Hallelujah, I've Saved My Job" Reno, point out the widening rift between congress and the Administration over the encryption issue. During a hearing to discuss the FBI's handling of the bombing in Centinneal Park in Atlanta during the summer Olympics, Sen. Arlan Spector (R-Pa.) couldn't resist tossing a dart at FBI Dir. Louis Freeh when he said: "And the very last thing is: I know the federal court decision which came down -- on export restrictions on certain encryption software --yesterday is not one you may have had a chance to review. But, Director Freeh, with my concern on what I have thought has been a misguided policy by the administration on their export restriction encryption policy, it's probably safe to assume that you and I may have a chance to discuss this latest court case, and whether it goes up on appeal, or whether we try one more time on some -- on a legislative fix." Freeh did not respond to Spector's question. But Spector's comments are important on two fronts. One, he comes out as vocal opponent of the Administration's policy, calling it "misguided" and signalling that it's likely he will ally himself with Sen. Conrad Burns (R-Mont.) to resurrect pro-encryption legislation during the 105th Congress. Spector is clearly dialed into the issue; good news for a Congress that has, with a few notable exceptions, essentially been brain dead on this issue and completely spun by the fictitious horror stories that the FBI's Freeh takes every opportunity tell on Capitol Hill. Sadly, the nation's top cop, Janet Reno, appears to be hopelessly lost on the crypto issue. During her weekly news conference, she was asked about the court decision and "why does the government feel that it's so important to place those restrictions on that type of technology, and will you appeal this decision?" Reno punted on the latter question, saying she hadn't seen the opinion. On the meat of the question, she simply muddled through. She emphasized wiretaps and how encrypting real time conversations can be a threat to law enforcement investigations. The problem, according to Reno, is this: "What we're faced with now is that there is the developing capacity -- and it will become more so --the power to encrypt or to code a system so that it cannot be intercepted through new high-tech systems." To counter this threat, Reno said, "We have got to have the capacity to intercept that." This has always, from day one of this crypto debate, been the real jones of the FBI: Real time interception and decryption of voice communications. Stored data and Email make up the FBI's crypto hat trick, but it's the wiretapping and decryption of coded voice communications that really gives the FBI a hard on. Reno short-hopped a common meme among civil libertarians, that being the notion that the FBI is simply looking to expand its current wiretap authority. Remember, Freeh has been dogged in saying that the Bureau is not looking to expand its authority, but simply maintain the status quo. Reno answered this "expansion" theory, saying: "What's expanding is not our authority, really, but the technology that permits such tremendous communication systems in the world. And what we've got to be prepared to do is to have a system that will permit us to get a court order, just as we do now for simple telephones, to intercept the communication and, if it is encrypted or coded, to decode it." Now... don't we all feel better? It's not "really" an expansion of authority. Nope, just an expansion of the technological law enforcement capacity. It's typical cheapjack bureaucratic Washington bullshit. Reno is convinced that people will "appreciate" the FBI's capability to do this and then tells this story: "A businessman says, 'Well, I don't want you messing with my business,' but if his competitor comes in and steals trade secrets and stores that in a coded computer, he's not going to like it if the FBI doesn't have the capacity to get a lawful search warrant and search that computer because they can't decode it." However, as Reno's own leutinent, Jamie Gorelick, admitted before a congressional panel earlier this year: If the FBI can't crack a code, it has, in the past, called on the "technical assistantance" of the National Security Agency, the nation's top spooks and the world's best equipped code crackers. As for the ban on crypto exports? "We're going to continue to work with everyone," Reno said, "because I think as people work through this issue, they understand that it is in everybody's best interest to be able to do it." Well, apparently Reno hasn't been in the loop on the industry's about face on this issue lately. Where only a few months ago the computer and software industry seemed to have turned into White House lap dogs by voicing initial approval of the new crypto initiatives put forth by the President via executive order, now that industry has revolted. Industry now claims that the Administration essentially kicked them in the balls, the term "bait and switch" has been used. Surprise, surprise. Industry got what it deserved for being cozy with an Administration famous for having blinders on when it comes to this issue. Now industry feels hurt and dismayed. Excuse me if I can't gin up any sympathy for these guys... what the fuck were they thinking in the first place? As Spector and Reno's comments show, this issue isn't likely to die a slow quiet death in the coming years. Indeed, it looks like battle lines are being drawn already; a kind of digital line in cyberspace. Who will win? Don't bet on the FBI... even their own turncoat spies aren't clever enough to encrypt their self-incriminating files. So, Mr. Freeh, tell me again why you need the keys to my encrypted messages? Even your own troops let you walk right through the digital front door. Meeks out... ------------------------------ Date: Thu, 19 Dec 1996 19:43:34 -0800 From: "James S. Tyre" Subject: File 4--Re: Strong crypto can be exported, says judge, at least in SF Source - fight-censorship@vorlon.mit.edu My congratulations to Professor Bernstein, his lawyers, the EFF and all who contributed to the side of the angels. I do have two nits to pick, however (one not so small), with the publicity surrounding Judge Patel's decision. The first is stated twice in Declan's post, although later clarified in his post. The second has not been stated in anything which I have read in the last day or so. First, many articles have said that Judge Patel's decision is NOT binding on courts outside of the United States District Court for the Northern District of California (roughly, the San Francisco bay area). True enough, but most have said that it IS binding within the Northern District. Not true. The U.S. District Court, like the Superior Courts in most states (New York being the notable exception) is a general jurisdiction trial court, not an appellate court. Judge Patel's decision, insofar as other courts are concerned, has no binding effect at all. Another trial court judge within the Northern District could just as easily rule another way as could a federal trial judge in Wisconsin or D.C. Declan's post gets to this point well into the text, but only after contradictory statements earlier in the post. My second nit, however, is more important. In EFF's release included in Declan's post, it is said that: "American scientists and engineers will now be _free_ to collaborate with their peers in the United States and in other countries. This will enable them to build a new generation of tools for protecting the privacy and security of communications." (My emphasis on "free".) Judge Patel did NOT rule that Prof. Bernstein could "freely" distribute his source code. Instead, she ruled that the export restrictions were an unconstitutional prior restraint on speech (having previously ruled that source code indeed is speech). This is not a mere semantic distinction, but a significant, substantive one. As Judge Patel wrote in her decision: > It is axiomatic that the First Amendment is more tolerant of > subsequent criminal punishment of speech than it is of prior restraints > on the same speech. > > The thread running through all these cases is that prior > restraints on speech and publication are the most serious and > the least tolerable infringement on First Amendment rights. A > criminal penalty or a judgment in a defamation case is subject > to the whole panoply of protections afforded by deferring the > impact of the judgment until all avenues of appellate review > have been exhausted. . . . > > A prior restraint, by contrast and by definition, has an > immediate and irreversible sanction. If it can be said that a > threat of criminal or civil sanction after publication "chills" > speech, prior restraint "freezes" it at least for the time. > > Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 559 (196). > In other words: a government prosecutor or a defamation plaintiff has to make a much stronger showing to prevent speech from happening in the first instance (a prior restraint) than to impose liability for the speech after the fact. Judge Patel ruled that Bernstein could not be restrained in advance from speaking his source code. She did not rule, however, that that he cannot be prosecuted after the fact if, as and when he does speak his code. Specifically, near the end of her decision, Judge patel wrote that: > The court notes that an injunction appears hasty given the relative > positions of the parties. The government seems to suggest that teaching > a class on cryptography, regardless of the nationality of the students, > is not the problem; the concern is with posting material on the Internet > without limiting access. Assuming the government is sincere about its > limited objections and that plaintiff could easily limit access to the > class material he posts so that it is not available internationally, it > is not clear why the parties could not enter into a stipulation. > > In view of the fact that the court has ruled on the merits and > has found certain provisions of the ITAR invalid, plaintiff cannot be > prosecuted _under those provisions_ absent reversal on appeal. > Therefore, at this time there is no immediate threat of injury and no > need to rule on the preliminary injunction.[15] The motion for a > preliminary injunction is denied without prejudice. If plaintiff is > threatened with prosecution, he may return to this court and renew the > motion. (My emphasis on "under those provisions.") Like any good judge, Judge Patel did not speculate on whether Bernstein could be prosecuted under existing laws other than the specific ITAR provisions held to be invalid, if and when he puts his code on the net. Nor did she write that the mere fact that source code is speech would prevent Congress from enacting new laws seeking to punish crypto-speech. Are there existing laws, other than the invalid ITAR provisions, under which Bernstein theoretically could be prosecuted if he speaks his code on the net? I believe so. Could Congress enact such laws? Certainly. Would such laws be constitutional as applied to this type of a case? I won't speculate any more than did Judge Patel. I truly HATE to use OJ I and II and as an analogy for anything, but, unfortunately, the analogy is useful here. Because the burden of proof is so much higher in criminal cases than in civil cases, OJ's acquittal in the criminal case does not prevent the families from suing for wrongful death. Because the government has a higher burden when it attempts to stop speech before it happens than when it attempts to impose liability afterward, Judge Patel's ruling, even if upheld on appeal, does NOT mean that Bernstein or others can speak freely, without fear of consequence. That may turn out to be the case, but that was not decided in this case. None of this is intended to diminish Professor Bernstein's victory. Far from it. But let's understand what was decided and what was not. This certainly was a skirmish, and may be a good battle, but its not close to being the war. Or so I think. Jim Tyre ------------------------------ Date: Thu, 15 Dec 1996 22:51:01 CST From: CuD Moderators Subject: File 5--Cu Digest Header Info (unchanged since 13 Dec, 1996) Cu-Digest is a weekly electronic journal/newsletter. Subscriptions are available at no cost electronically. 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