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New GAK Bill

5 September 1997, MSNBC:

FBI Director Louis Freeh floats a new proposal at a congressional 
hearing to outlaw non-breakable crypto products.

A radical shift in crypto debate

Proposed bill outlaws non-crackable crypto products, restrict imports

By Brock N. Meeks, MSNBC

WASHINGTON -- The White House would likely be very sympathetic to a
controversial new bill that would outlaw all encryption software that 
doesn't allow law enforcement agencies to immediately decode scrambled 
messages, an administration official told MSNBC.

The new bill, still in draft form, is quietly circulating among members 
of the House and Senate. Although the administration hasn't formally 
endorsed any provisions of the bill, MSNBC has learned that the White 
House has been providing what is called technical drafting assistance
to members of Congress writing the bill. William Reinsch, the Commerce 
Department undersecretary for export administration, confirmed the White 
House involvement for MSNBC on Thursday night.

The draft bill was already in the hands of some members of the Senate's 
Subcommittee on Technology, Terrorism and Government Regulation when FBI 
Director Louis Freeh outlined its basic provisions while testifying before
the panel Wednesday. Freeh said "we would recommend" that legislation be 
written requiring all encryption software or services made in or imported 
to the United States to have a feature "which would allow for the immediate, 
lawful decryption" of any scrambled messages used for illegal purposes or 
in a national security matter.

The White House, FBI and intelligence agencies claim that the proliferation 
of unbreakable encryption products puts the nation at risk. Criminals and 
terrorists are increasingly using unbreakable encryption products, Freeh
testified Wednesday. 

U.S. makers of encryption software claim that any government-mandated decoding 
features would make their products unacceptable to clients in the global 
marketplace. The new proposals outlined by Freeh also drew the ire of civil
liberties groups, which fear that any government controls on encryption 
products raise serious First Amendment and privacy concerns.

Placing such government-mandated controls on the domestic use and manufacture 
of encryption software, as well as on the import of encryption products, 
stands in marked contrast to current White House crypto policies. Currently,
the United States places strict regulations on the export of any encryption 
products that do make decoding keys available to law enforcement agencies. 
However, the administration has steadfastly maintained throughout the often
contentious public debate over encryption policies that it would not place 
any restrictions on the domestic use of encryption software, nor would it
restrict the import of encryption products. 

Despite Freeh's testimony and the draft legislation written with White House 
assistance, Reinsch said the administration's policy on encryption hasn't 
changed. "I want to emphasize that [in providing drafting assistance] we are
responding to committee requests," he said. "And those requests have been 
fairly directive, such as: 'Give us some examples of how we can better 
accommodate law enforcement needs.' " 

Currently, the White House is backing an encryption bill in the Senate called 
the Secure Public Networks Act, also known as S. 909. This bill would 
encourage the use of and set up guidelines for encryption software products 
with decoding keys. Under this plan, all coded messages would spin off a 
decoding key that would be stored with a government-approved third party. 
Law enforcement agencies, foreign or domestic, would be allowed access to 
those keys if they obtained a court-ordered warrant. The bill would not 
restrict or require any encryption software used in the United States, or 
restrict the import of any foreign crypto products. 

However, MSNBC has learned that the draft bill now circulating among members 
of the House and Senate specifically outlaws the "manufacture, distribution 
or import" of any encryption software product or communication device that 
does not "allow the immediate decryption" of all scrambled messages or 
communications "if used for illegal purposes." The bill also targets 
"network services," such as Internet Service Providers, that provide 
encryption capabilities to their clients.

Under this proposed bill, if such encryption services are offered by a 
company like ISP, the service provider must build in a provision to allow
for immediate decryption of any scrambled messages, according to several 
sources that have seen the draft language. The software ban would
go into effect in January 1999.

Reinsch told MSNBC he wasn't sure that Freeh's testimony "accurately 
reflected" the language the White House offered in its technica
drafting for congressional committees. However, he indicated the 
administration was interested in Freeh's proposal.

"I'll be blunt about it," Reinsch said. If such a bill were approved by a 
congressional committee, the administration "would look very seriously at 
it and I imagine we would be very sympathetic to it," he said.

Opponents of proposals to require key for all encryption software blanched 
at Freeh's statements. "This proposal crosses a line that hasn't been 
crossed before in the area of domestic controls on crypto," said Alan
Davidson, policy analyst for the Center for Democracy and Technology. 
Davidson said a government mandate to provide immediate decryption 
capabilities would be like "forcing everyone to live in a glass house."
It also "trashes the Fourth Amendment," which guarantees a right to be 
protected from unlawful search and seizure, Davidson said.

Freeh told the Senate panel Wednesday that he isn't looking to expand law 
enforcement's investigative powers. Rather, he said, he is only looking for 
a "Fourth Amendment that works in the Information Age."