5 March 1998

Date: Thu, 5 Mar 1998 13:35:01 -0800 (PST)
From: Declan McCullagh <declan@well.com>
To: cypherpunks@cyberpass.net
Subject: Freeh tells Congress crypto will "devastate" crimefighting

Note: I don't forward all politech stuff to cypherpunks. It's a roughly
four-message-a-day moderated list. http://www.well.com/~declan/politech/ 
to sign up.

---------- Forwarded message ----------
Date: Thu, 5 Mar 1998 13:34:17 -0800 (PST)
From: Declan McCullagh <declan@well.com>
To: politech@vorlon.mit.edu
Subject: Freeh tells Congress crypto will "devastate" crimefighting

An excerpt:

[JYA Note: Original text of Freeh's remarks in capitals; retyped here]

>Both you and Senator Rollings should take pride in the
>leadership shown in the areas of ensuring counterterrorism
>preparedness and protecting our children from sexual
>predators and pedophiles.

***

STATEMENT OF LOUIS J. FREEH
DIRECTOR, FEDERAL BUREAU OF INVESTIGATION
BEFORE THE SENATE APPROPRIATIONS COMMITTEE
SUBCOMMITTEE ON COMMERCE, JUSTICE, STATE AND JUDICIARY
MARCH 3, 1998

[...][Snip by McCullagh]

ENCRYPTION

One of the most difficult challenges facing all of law
enforcement is how rapidly terrorists and criminals adopt
advanced technologies to thwart law enforcement's ability
to ingestigate those who wish to do harm to our nation and
its citizens. That is why encryption is one of the most
important issues confronting law enforcement. Law
enforcement remains in unanimous agreement that the
widespread use of robust non-recoverable encryption will
ultimately devastate our ability to fight crime and
terrorism. Uncrackable encryption allows, and will continue
to allow with increasing regularity, drug lords,
terrorists, and even violent gangs to communicate about
their criminal intentions with impunity and to maintain
electronically stored evidence of their crimes impervious
to lawful search and seizure.

Convicted spy Aldrich Ames was told by his Soviet handlers
to encrypt computer file information that was to be passed
to them. Ramzi Yousef, convicted with others for plotting
to blow up 11 United States owned commercial airliners in
the Far East, used encryption to protect files on his
laptop computer. A major international drug trafficker
recently used a telephone encryption device to frustrate
court-authorized electronic surveillance. The EEL [as written] is
encountering a growing number of cases where 56 bit Data
Encryption Standard (DES) and 128 bit "Pretty Good Privacy"
encryption are being used for protection by criminals. As
Congress continues its work this session towards a balanced
approach to the important issue of encryption, I urge you
to consider public safety and national security concerns
regarding encryption products and services manufactured for
use in the United States or imported into the United
States.

[...] [Snip by McCullagh]

COUNTERTERRORISM AND CYBERCRIME

The criminal exploitation and illegal electronic intrusion
into public and private sector computer networks is rapidly
escalating into a major crime problem. The national and
economic security of the United States relies extensively
on a National Information Infrastructure (NII) that is
vulnerable to disruptive forces. These forces include
natural events, mistakes, technical failures, and malicious
acts by hackers, disgruntled employees, criminals,
industrial spies, foreign agents, and terrorists. The
advent of complex computer and communications networks has
produced a tandem capability for the potential of illegal
information retrieval, disruption and/or destruction from
various sources. White-collar criminals, economic espionage
agents, organized crime members, foregin intelligence
services, and terrorist groups have all beem identified as
"electronic intruders" with the potential to have
immediate and severe consequences for every facet of
government and industry.

The United States is increasingly reliant on complex,
networked infrastructures for its national and economic
security and the welfare of its citizens. The movement of
the United States towards an information-based economy, and
the rapid expansion of electronic commerce, has greatly
increased dependence upon the NII. Any protracted loss of
critical infrastructure would severely impact national
security and the national welfare. In recent years, unknown
intruders have penetrated telecommunications carriers,
internet service providers, and other government, private
and university systems. Lists of frequently asked questions
(FAQs) outlining the specifics of system vulnearbilities
are widespread. "The Unofficial Web Hack FAQ," "The Hacker
FAQ," and "How to Hack A Website" are popular, accessible,
and easily downloaded from the Internet. Knowledgeable
observers and recent surveys predict that malicious acts
directed against the NII will only increase in frequency
and sophistication, and will continue to pose grave
consequences and potential harm.

The challenge facing ghe FBI today in the area of
cybercrime is building the requisite capabilities to
address this rapidly growing and evolving problme.
Technology exploitation is an emerging problem which
touches virtually every area of the FBI's mission,
including white-collar crime, counterterrorism, foreign
counterintelligence, violent crime, organized crime and
drugs. The FBI must act now to identify, train, equip and
deploy investigative resources to stay abreast of the
growing caseload, as well as meet its responsibilities for
infrastructure protection. We are building this capability
at two levels: through specialized and highly trained field
squads; and, the operation of a national-level center that
supports field investigations and coordinates with other
federal, state and local agencies and the private sector.

[...][Snip by McCullagh]

TELECOMMUNICATIONS CARRIER COMPLIANCE

I am very appreciative of the efforts of the Committees on
Appropriations to move along the Communications Assistance
for Law Enforcement Act (CALEA) initiative. Preserving the
ability of federal, state, and local law enforcement to
lawfully conduct electronic surveillance continues to be
one of my top priorities. For 1999, $100,000,000 is
requested in the department's telecommunications carrier
compliance fund to reimburse telecommunications carriers
and others for eligible costs incurred in modifying
equipment and facilities to comply with the CALEA.

NARROWBAND RADIO COMMUNICATIONS

The FBI operates the largest civilian land-based mobile
radio system in the United States which provides clean and
encrypted radio communications for 56 field offices and
nearly 400 resident agencies. The fixed infrastructure for
this system includes base stations in each field office and
larger resident agencies, more than 12,000 mobile or
vehicular radios, over 12,000 portable or hand-held radios,
and nearly 4,000 leased antenna microwave repeater and
antenna sites and data communications links. The FBI also
operates specialized radio communications systems that
support national security operations, task forces, and
other activities. By January 1, 2005, we are requred to
change-over from the current 25 Megahertz radio bandwidth
technology to more spectrally efficient 12.5 Megahertz
bandwidth equipment. To comply with this mandate, it will
be necessary to implement an entirely new radio system.
None of the existing wideband equipment can be upgraded or
retrofitted with narrowband technology.

In order to comply with the narrowband radio communications
mandate, the FBI is propsoing a five-year effort to plan,
design, and implement a single nationwide communications
system that will replace the existing nationwide and
specialized systems. Within the department's narrowband
communications fund, the FBI is requesting a total of
$64,079,000, of which $60,220,000 is new funding, to begin
these processes. Additionally, direct FBI funding totaling
$780,000 is requested to hire 7 engineers and specialists
to serve on the EEL project team for the narrowband radio
communications project. Conclusion up,.[as written] Chairman, I would
like again to express my gratitude for the Committee's
strong support and confidence in the FBI.

Both you and Senator Rollings should take pride in the
leadership shown in the areas of ensuring counterterrorism
preparedness and protecting our children from sexual
predators and pedophiles. I believe your approach of
balancing targeted increases in FBI investigative resources
and capabilities in select areas with an emphasis on
training fedral, state and local law enforcement, encourages
partnerships and cooperation that are the keys to an
effective response to crime. I know that with your
continued support, the FBI can build upon its successes and
serve the American people proudly and effectively as the
nation moves into the 21st centurt. This concludes my
prepared remarks. At this time, I would like to respond to
any questions that you may have.

END