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EFF analysis: Anti-Electronic Racketeering Act (S.974)
From: [email protected] (Shari Steele)
***** FEEL FREE TO DISTRIBUTE WIDELY *****
On June 27, Senator Grassley (R-Iowa) introduced the Anti-Electronic
Racketeering Act, S.974. The bill was designed "to prohibit certain acts
involving the use of computers in the furtherance of crimes, and for other
purposes." Its immediate effect, among other things, would be to
criminalize the posting of any encryption software on any computer network
that foreign nationals can access (in other words, any computer network
period). Because of poor wording, the bill would probably also criminalize
data compression and other non-cryptographic encoding schemes available on
networks. This includes the compression used in most of the images on
Internet user's WWW homepages, not to mention uu and binhex encoding for
transferring binary files via email, and even language encoding used to
represent non-English characters, such as the SJIS scheme for representing
Japanese characters.
In addition, the bill seems to be directed at undermining two big fights
we've successfully waged in the past: the Steve Jackson Games decision
against the United States Secret Service and the government's Clipper Chip
proposal.
Re: Steve Jackson Games -- this bill would permit the government to avoid
the notice requirements of the Privacy Protection Act if "there is reason
to believe that the immediate seizure of such materials is necessary to
prevent the destruction or altercation [very Freudian sic!] of such
documents." Furthermore, the government could use electronic evidence
seized that had not been particularly described in a warrant if
"the seizure is incidental to an otherwise valid seizure, and the
government officer or employee-
''(A) was not aware that work product material was among the data seized;
''(B) upon actual discovery of the existence of work product materials, the
government officer or employee took reasonable steps to protect the privacy
interests recognized by this section, including-
''(i) using utility software to seek and identify electronically stored data
that may be commingled or combined with non-work product material; and
''(ii) upon actual identification of such material, taking reasonable steps
to protect the privacy of the material, including seeking a search warrant."
Re: Clipper Chip -- The bill would make it a crime "to distribute computer
software that encodes or encrypts electronic or digital communications to
computer networks that the person distributing the software knows or
reasonably should know, is accessible to foreign nationals and foreign
governments, regardless of whether such software has been designated as
nonexportable." However, there is an exception: "It shall be an
affirmative defense to prosecution under this section that the software at
issue used a universal decoding device or program that was provided to the
Department of Justice prior to the distribution." This is essentially an
attempt to sneak the key "escrow" provisions of the Clipper scheme in
through a legislative back door.
Fortunately, the bill does not have a very promising future. The bill has
no co-sponsors. It was immediately referred to the Committee on the
Judiciary, where it currently sits. LEXIS's bill tracking report only
gives it a 10% chance of passing out of the committee.
I thought Senator Grassley's own statement when he introduced the bill is
worth reading, so I'm attaching it here. My favorite line is "Elliott Ness
needs to meet the Internet." This is especially ironic in light of recent
comparisons of hysteria about "dangerous" material on the internet, and
Prohibition.
The bill itself follows.
Shari
------------------------------------------------------------------------
Shari Steele, Director of Legal Services [email protected]
Electronic Frontier Foundation 202/861-7700 (voice)
1667 K Street, N.W., Suite 801 202/861-1258 (fax)
Washington, DC 20006-1605 202/861-1224 (BBS)
---------- Senator Grassley's Statement to the Senate ----------
Mr. President, I rise this evening to introduce the Anti-electronic
Racketeering Act of 1995. This bill makes important changes to RICO and
criminalizes deliberately using computer technology to engage in criminal
activity. I believe this bill is a reasonable, measured and strong response
to a growing problem. According to the computer emergency and response
team at Carnegie-Mellon University, during 1994, about 40,000 computer
users were attacked. Virus hacker, the FBI's national computer crime squad
has investigated over 200 cases since 1991. So, computer crime is clearly
on the rise.
Mr. President, I suppose that some of this is just natural. Whenever man
develops a new technology, that technology will be abused by some. And that is
why I have introduced this bill. I believe we need to seriously reconsider the
Federal Criminal Code with an eye toward modernizing existing statutes and
creating new ones. In other words, Mr. President, Elliot Ness needs to meet the
Internet.
Mr. President, I sit on the Board of the Office of Technology Assessment.
That Office has clearly indicated that organized crime has entered cyberspace in
a big way. International drug cartels use computers to launder drug money and
terrorists like the Oklahoma City bombers use computers to conspire to commit
crimes.
Computer fraud accounts for the loss of millions of dollars per year. And
often times, there is little that can be done about this because the computer
used to commit the crimes is located overseas. So, under my bill, overseas
computer users who employ their computers to commit fraud in the United States
would be fully subject to the Federal criminal laws. Also under my bill, Mr.
President, the wire fraud statute which has been successfully used by
prosecutors for many users, will be amended to make fraudulent schemes which use
computers a crime.
It is not enough to simply modernize the Criminal Code. We also have to
reconsider many of the difficult procedural burdens that prosecutors must
overcome. For instance, in the typical case, prosecutors must identify a
location in order to get a wiretapping order. But in cyberspace, it is often
impossible to determine the location. And so my bill corrects that so that if
prosecutors cannot, with the exercise of effort, give the court a location, then
those prosecutors can still get a wiretapping order. And for law enforcers-both
State and Federal-who have seized a computer which contains both contraband or
evidence and purely private material, I have created a good-faith standard so
that law enforcers are not shackled by undue restrictions but will also be
punished for bad faith.
Mr. President, this brave new world of electronic communications and global
computer networks holds much promise. But like almost anything, there is the
potential for abuse and harm. That is why I urge my colleagues to support this
bill and that is why I urge industry to support this bill.
On a final note, I would say that we should not be too scared of technology.
After all, we are still just people and right is still right and wrong is still
wrong. Some things change and some things do not. All that my bill does is say
you can't use computers to steal, to threaten others or conceal criminal
conduct.
Mr. President, I ask unanimous consent that the text of the bill be printed
in the Record.
There being no objection, the bill was ordered to be printed in the Record,
as follows:
S. 974
SECTION 1. SHORT TITLE.
This Act may be cited as the ''Anti-Electronic Racketeering Act of 1995''.
SEC. 2. PROHIBITED ACTIVITIES.
(a) Definitions .-Section 1961(1) of title 18, United States Code, is
amended-
(1) by striking ''1343 (relating to wire fraud)'' and inserting ''1343
(relating to wire and computer fraud)'';
(2) by striking ''that title'' and inserting ''this title'';
(3) by striking ''or (E)'' and inserting ''(E)''; and
(4) by inserting before the semicolon the following: ''or (F) any act that is
indictable under section 1030, 1030A, or 1962(d)(2)''.
(b) Use of Computer To Facilitate Racketeering Enterprise .-Section 1962 of
title 18, United States Code, is amended-
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following new subsection:
''(d) It shall be unlawful for any person-
''(1) to use any computer or computer network in furtherance of a
racketeering activity (as defined in section 1961(1)); or
''(2) to damage or threaten to damage electronically or digitally stored
data.''.
(c) Criminal Penalties .-Section 1963(b) of title 18, United States Code, is
amended-
(1) by striking ''and'' at the end of paragraph (1);
(2) by striking the period at the end of paragraph (2) and inserting '';
and''; and
(3) by adding at the end the following new paragraph:
''(3) electronically or digitally stored data.''.
(d) Civil Remedies .-Section 1964(c) of title 18, United States Code, is
amended by striking ''his property or business''. [*S9181]
(e) Use as Evidence of Intercepted Wire or Oral Communications .-Section 2515
of title 18, United States Code, is amended by inserting before the period at
the end the following: '', unless the authority in possession of the intercepted
communication attempted in good faith to comply with this chapter. If the United
States or any State of the United States, or subdivision thereof, possesses a
communication intercepted by a nongovernmental actor, without the knowledge of
the United States, that State, or that subdivision, the communication may be
introduced into evidence''.
(f) Authorization for Interception of Wire, Oral, or Electronic
Communications .-Section 2516(1) of title 18, United States Code, is amended-
(1) by striking ''and'' at the end of paragraph (n);
(2) by striking the period at the end of paragraph () and inserting '';
and''; and
(3) by adding at the end the following new paragraph:
''(p) any violation of section 1962 of title 18.''.
(g) Procedures for Interception .-Section 2518(4)(b) of title 18, United
States Code, is amended by inserting before the semicolon the following: ''to
the extent feasible''.
(h) Computer Crimes .-
(1) New prohibited activities .-Chapter 47 of title 18, United States Code,
is amended by adding at the end the following new section:
'' 1A1030A. Racketeering-related crimes involving computers
''(a) It shall be unlawful-
''(1) to use a computer or computer network to transfer unlicensed computer
software, regardless of whether the transfer is performed for economic
consideration;
''(2) to distribute computer software that encodes or encrypts electronic or
digital communications to computer networks that the person distributing the
software knows or reasonably should know, is accessible to foreign nationals and
foreign governments, regardless of whether such software has been designated as
nonexportable; and
''(3) to use a computer or computer network to transmit a communication
intended to conceal or hide the origin of money or other assets, tangible or
intangible, that were derived from racketeering activity; and
''(4) to operate a computer or computer network primarily to facilitate
racketeering activity or primarily to engage in conduct prohibited by Federal or
State law.
''(b) For purposes of this section, each act of distributing software is
considered a separate predicate act. Each instance in which nonexportable
software is accessed by a foreign government, an agent of a foreign government,
a foreign national, or an agent of a foreign national, shall be considered as a
separate predicate act.
''(c) It shall be an affirmative defense to prosecution under this section
that the software at issue used a universal decoding device or program that was
provided to the Department of Justice prior to the distribution.''.
(2) Clerical amendment .-The analysis at the beginning of chapter 47, United
States Code, is amended by adding at the end the following new item:
''1030A. Racketeering-related crimes involving computers.''.
(3) Jurisdiction and venue .-Section 1030 of title 18, United States Code, is
amended by adding at the end the following new subsection:
''(g)(1)(A) Any act prohibited by this section that is committed using any
computer, computer facility, or computer network that is physically located
within the territorial jurisdiction of the United States shall be deemed to have
been committed within the territorial jurisdiction of the United States.
''(B) Any action taken in furtherance of an act described in subparagraph (A)
shall be deemed to have been committed in the territorial jurisdiction of the
United States.
''(2) In any prosecution under this section involving acts deemed to be
committed within the territorial jurisdiction of the United States under this
subsection, venue shall be proper where the computer, computer facility, or
computer network was physically situated at the time at least one of the
wrongful acts was committed.''.
(i) Wire and Computer Fraud .-Section 1343 of title 18, United States Code,
is amended by striking ''or television communication'' and inserting
''television communication, or computer network or facility''.
(j) Privacy Protection Act .-Section 101 of the Privacy Protection Act of
1980 (42 U.S.C. 2000aa) is amended-
(1) in subsection (a)-
(A) by striking ''or'' at the end of paragraph (1);
(B) by striking the period at the end of paragraph (2) and inserting '';
or''; and
(C) by adding at the end the following new paragraph:
''(3) there is reason to believe that the immediate seizure of such materials
is necessary to prevent the destruction or altercation of such documents.''; and
(2) in subsection (b)-
(A) by striking ''or'' at the end of paragraph (3);
(B) by striking the period at the end of paragraph (4) and inserting '';
or''; and
(C) by adding at the end the following new paragraph:
''(5) in the case of electronically stored data, the seizure is incidental to
an otherwise valid seizure, and the government officer or employee-
''(A) was not aware that work product material was among the data seized;
''(B) upon actual discovery of the existence of work product materials, the
government officer or employee took reasonable steps to protect the privacy
interests recognized by this section, including-
''(i) using utility software to seek and identify electronically stored data
that may be commingled or combined with non-work product material; and
''(ii) upon actual identification of such material, taking reasonable steps
to protect the privacy of the material, including seeking a search warrant.''.