Freeh Testimony 7/25/96

["Dave Banisar" <banisar@epic.org>]

This is the written testimony of FBI Director Freeh before the
Senate Commerce Committee on S 1726, the Pro-Code legislation.

Freeh called for the adoption of an universal key escrow system
that would facilitate law enforcement access.Several Senators were 
critical of Freeh's testimony and asked why
he and the other panelists believed that savy criminals would
use escrowed encryption. Others questioned the possibility to any
kind of world wide agreement could be reached.

Director Freeh admitted in responding to one Senator that he would
seek legislation to ban non-escrow cryptography if it were not
widely adopted. He said, "we are not at the point yet that volutary
is not vialble. At that point, we would look at mandatory controls."
He also stated that he would also ask for import controls to be 
imposed "if the country was flooded with foreign robust encryption."

A html version of this document is available at 

http://www.epic.org/crypto/export_controls/freeh.html


------------


	U.S. Department of Justice
	Federal Bureau of Investigation
	Office of the Director		Washington, D.C 20535

STATEMENT
OF
LOUIS J. FREEH
DIRECTOR
FEDERAL BUREAU OF INVESTIGATION ON
JULY 25, 1996
BEFORE THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
REGARDING
IMPACT OF ENCRYPTION ON LAW ENFORCEMENT AND PUBLIC SAFETY

Thank you Mr. Chairman and members of the Committee for providing me with
this opportunity to discuss with you an issue of extreme importance and
of great concern to all of law enforcement, both domestically and abroad
-- the serious threat to public safety posed by the proliferation and use
of robust encryption products that do not allow for timely law
enforcement access and decryption.

First and foremost, the law enforcement community fully supports a
balanced encryption policy that satisfies both the commercial needs of
industry and law abiding individuals for robust encryption products while
at the same time satisfying law enforcement's public safety needs.  On
the one hand, encryption is extremely beneficial when used legitimately
to protect commercially sensitive information and communications.  On the
other, the potential use of such robust encryption products by a vast
array of criminals and terrorists to conceal their criminal
communications and information poses an extremely serious and, in my
view, unacceptable threat to public safety.  Recently, the President of
the International Association of Chiefs of Police sent a letter to
President Clinton expressing support for a balanced encryption policy
that addresses the public safety concerns of law enforcement.
Additionally, the National Sheriff's Association enacted a resolution
last month also expressing their support for a balanced encryption policy
and opposing any legislative efforts that would undercut the adoption of
such a balanced policy.

Since 1992, when AT&T announced its plan to sell a small, portable
telephone device that would provide users with low-cost but robust voice
encryption, public policy issues concerning encryption have increasingly
has been debated in the United States.  Since then, people concerned
about privacy, commerce, computer security, law enforcement, national
security, and public safety have participated in the dialogue regarding
cryptography.  On the international front, this past December, the
multi-national Organization for Economic Cooperation and Development
(OECD) meeting in Paris, France, convened an Experts Group to draft
global cryptography principles, thus reflecting an increased global
interest in and concern about the use and availability of encryption that
can be used to endanger a nation's public safety and national security.

In addition, several Members of Congress have also joined this public
discussion by introducing legislation which essentially would remove
existing export controls on encryption and which would promote the
widespread availability and use of any type of encryption product
regardless of the impact on public safety and national security.
However, the impact of these bills, should they be enacted, has not been
lost on other Members of Congress as reflected in the letters to the
sponsors of both Senate encryption bills by the Chairman and
Vice-Chairman of the Senate Select Committee on Intelligence.  Senators
Specter and Kerrey indicated in their letters that they had concerns
regarding these bills and expressed the opinion, which I fully endorse,
that there is a "... need to balance U.S. economic competitiveness with
the need to safeguard national security interests."  To that balance, I
would also add public safety and effective law enforcement.

Without question, the use of strong cryptography is important if the
Global Information Infrastructure (GII) is to fulfill its promise.  Data
must be protected -- both in transit and in storage -- if the GII is to
be used for personal communications, financial transactions, medical
care, the development of new intellectual property, and a virtually
limitless number of other applications.  Our support for robust
encryption stems from a commitment to protecting privacy and commerce.

But we are also mindful of our principal mission responsibilities:
protecting America's public safety and national security in the myriad of
criminal, terrorist, and espionage cases that confront us every day.
Notwithstanding the accepted benefits of encryption, we have long argued
that the proliferation of unbreakable encryption -- because of its
ability to completely prevent our Nation's law enforcement agencies from
understanding seized computer files and intercepted criminal
communications which have been encrypted and then being able to promptly
act to combat dangerous criminal, terrorist, and espionage activities as
well as successfully prosecute them -- would seriously and fundamentally
threaten these critical and central public safety interests.  The only
acceptable answer that serves all of our societal interests is to foster
the use of "socially-responsible" encryption products, products that
provide robust encryption, but which also permit timely law enforcement
and national security access and decryption pursuant to court order or as
otherwise authorized by law.

Law enforcement is already beginning to encounter the harmful effects of
conventional encryption in some of our most important investigations:

-  In the Aldrich Ames spy case, where Ames was told by his Soviet
handlers to encrypt computer file information to them.

-  In a child pornography case, where one of the subjects used encryption
in transmitting obscene and pornographic images of children over the
Internet.

-  In a major drug-trafficking case, where one of the subjects of one of
the court-ordered wiretaps used a telephone encryption device which
frustrated the surveillance.

-  Some of the anti-Government Militia groups are now advocating the use
of encryption as a means of preventing law enforcement from properly
investigating them.

It is important to understand, as one can see from the cases I have
cited, that conventional encryption not only can prevent electronic
surveillance efforts, which in terms of numbers are conducted sparingly,
but it also can prevent police officers on a daily basis from conducting
basic searches and seizures of computers and files.  Without an ability
to promptly decrypt encrypted criminal or terrorist communications and
computer files, we in the law enforcement community will not be able to
effectively investigate or prosecute society's most dangerous felons or,
importantly, save lives in kidnappings and in numerous other life and
death cases.  We simply will not be able to effectively fulfill our
mission of protecting the American public.

In a very fundamental way, conventional encryption has the effect of
upsetting the delicate legal balance of the Fourth Amendment, since when
a judge issues a search warrant it will be of no practical value when
this type of encryption is encountered.  Constitutionally-effective
search and seizure law assumes, and the American public fully expects,
that with warrant in hand law enforcement officers will be able to
quickly act upon seized materials to solve and prevent crimes, and that
prosecutors will be able to put understandable evidence before a jury.
Conventional encryption virtually destroys this centuries old legal
principle.

There is now an emerging opinion throughout much of the world that there
is only one solution to this national and international public safety
threat posed by conventional encryption -- that is, key escrow
encryption.  Key escrow encryption is not just the only solution; it is,
in fact, a very good solution because it effectively balances fundamental
societal concerns involving privacy, information security, electronic
commerce, public safety, and national security.  On the one hand, it
permits very strong, unbreakable encryption algorithms to be used, which
is essential for the growth of commerce over the GII and for privacy and
information security domestically and internationally.  On the other
hand, it permits law enforcement and national security agencies to
protect the American public from the tyranny of crime and terrorism.  We
believe, as do many others throughout the world, that technology should
serve society, not rule it: and that technology should be designed to
promote public safety, not defeat it.  Key escrow encryption is that
beneficial and balanced technological solution.

American manufacturers that employ encryption in their hardware and
software products are undoubtedly the technology leaders in the world.
American industry has the capability of meeting all of society's basic
needs, including public safety and national security, and we, as
responsible government leaders, should be sending a clear signal to
industry encouraging them to do so.  Key escrow encryption is "win-win"
technology for societies worldwide.  I know you agree that it would be
irresponsible for the United States, as the world's technology leader, to
move towards the adoption of a national policy that would knowingly and
consciously unleash on a widespread basis unbreakable, non-key escrow
encryption products that put citizens in the U.S. and worldwide at risk.

Unfortunately, in recent months, the nearly exclusive focus of the public
discussion concerning the encryption issue has been on its commercial
aspects, particularly with regard to removing export controls.  This
narrow focus ignores the very real threat that conventional, non-key
escrow encryption poses both domestically and internationally to public
safety.  We continue actively to seek industry's cooperation, assistance,
and great expertise in producing key escrow encryption products as a
critical part of an overall, balanced, and comprehensive encryption
policy that would logically include an appropriate relaxation of export
controls for key escrow products.

As for export controls, we have had ongoing discussions with industry,
and industry has articulated the view that export controls needlessly
hurt U.S. competitiveness overseas.  But once again we need to carefully
consider the facts and balance a number of competing interests.  Although
some strong encryption products can be found overseas, they are simply
not ubiquitous, and, as of yet, they have not become embedded in the
basic operating systems and applications found overseas.

Importantly, when the U.S. recently let it be known that it was
considering allowing the export of encryption stronger than that now
permitted, several of our close allies expressed strong concerns that we
would be flooding the global market with unbreakable cryptography,
increasing the likelihood of its use by criminal organizations and
terrorists throughout Europe and the world, and thereby imperiling the
public safety in their countries.  Ironically, the relaxation of export
controls in the U.S. may well lead to the imposition of import controls
overseas.  The international implications and likely reactions of foreign
governments to the U.S. unilaterally lifting such export controls must be
fully considered.

Given the fact that the use and availability of robust encryption is an
issue of concern internationally, it is important to understand what
steps other countries are taking to address these concerns.  Recently,
France, Russia and Israel have established domestic restrictions on the
import, manufacturer, sale and use of encryption products, as not to
endanger their public safety and national security.  The European Union
is moving towards the adoption of a key recovery-based key management
infrastructure similar to that proposed for use within the United States.
This plan, based upon the concept of using a "Trusted Third Party,"
allows for encryption keys to be escrowed with an independent but
non-governmental party, thus allowing for lawful government access to
such escrowed key pursuant to proper legal authority.

Lastly, we have heard the oft-repeated argument that the "genie is out of
the bottle," and that attempts to influence the future use of
cryptography are futile.  This is simply not true; and we strongly
disagree.  If strong, key escrow encryption products proliferates both
overseas and domestically which will not interoperate (at least in the
long-term) with non-key escrow products, then escrowed encryption
products will become the worldwide standard and will be used by almost
everyone, including the criminal elements, in countries participating in
the GII.  It is worth noting that we have never contended that a key
escrow regime, whether voluntarily or mandatorily implemented, would
prevent all criminals from obtaining non-key escrowed encryption
products.  But even criminals need to communicate with others nationally
and internationally, including not just their criminal confederates but
also legitimate organizations such as banks. Accessible, key escrow
encryption products clearly will be used by most if widely available,
inexpensive, easy to use, and interoperable worldwide.

In closing, if one considers the broad range of public safety
responsibilities that fall upon the law enforcement community, there is
only one responsible course of action that we as government leaders must
embark upon -- to promote socially#031#responsible encryption products,
products that contain robust cryptography but which also provide for
timely law enforcement access and decryption -- that is, key escrow
encryption.  The entire law enforcement community believes not only that
the removal of export controls for encryption products that are non#031#law
enforcement accessible is unwise, but that such an action would
jeopardize our national security and the interests and safety of
law-abiding citizens worldwide.

We look forward to working with you and your staff on this difficult
issue and would be pleased to answer any questions you might have.



_________________________________________________________________________
Subject: Freeh Testimony 7/25/96
_________________________________________________________________________
David Banisar (Banisar@epic.org)       * 202-544-9240 (tel)
Electronic Privacy Information Center * 202-547-5482 (fax)
666 Pennsylvania Ave, SE, Suite 301  *  HTTP://www.epic.org
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