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Is Encryption Becoming Illegal Again?

Way back in 1993, the Internet was a very different place. SSL would not be released for another two years; it would take some time after that until it was used commonly. The Clipper Chip project had just been announced, threatening to offer an explicit, physical back door to all electronic communications devices for the US Justice Department and anyone with a basic understanding of computer science.

In 1993, Encryption was a weapon.

Washington viewed encryption's only function as a wartime tool to protect military and intelligence communications. The notion that encryption could or should be used as a foundation of protecting online commerce and banking simply did not occur to Big Brother.

Into this situation came Phil Zimmerman. Phil had designed and programmed an encryption application called Pretty Good Privacy in 1991. Before that time, cryptography tools were almost entirely the purview of those with the biggest of Smarty Pants: mathematicians, logicians, researchers, hackers. Things had started to change a little bit. The internet was taking networking technology out of the university and placing it in peoples homes. Some computer enthusiasts were becoming aware of encryption, but tended to use tools relying on outdated algorithms that were easily broken. After all, who was watching?

Phil Zimmerman, Josh Wieder, 1990, 90's
Phil Zimmerman
The Clipper Chip made the public aware that the United States was watching; they wanted to see everything, monitor everyone. As one military official would later describe this totalitarian data lust: "Let’s collect the whole haystack. Collect it all, tag it, store it. . . . And whatever it is you want, you go searching for it." Lots of people were uncomfortable with this idea. A domestic market for encryption was born. But to meet demand, the encryption used would have to not suck. It didn't necessarily have to use the absolute best, military-grade algorithms available, but it did have to be tough enough to confound government decryption efforts enough to make it unattractive for snooping. The encryption would have to be Pretty Good.

Phil's program became widely popular; it quickly dominated this new domestic encryption market. However, there were already encryption companies in the US. Unlike Phil's company, these companies sold encryption only to the US government and government contractors. Because of this business model, their interests were closely aligned with the government. They really didn't like the idea of some average Joe giving encryption that was as strong or stronger then their own to anybody who asked for it. One company that really didn't like Phil was RSA.

To fast forward for just a minute, RSA was in the news very recently. RSA is still around today. Things have changed, of course. Today encryption is widely used throughout the internet, by everyone. Just by doing a Google search you use encryption. RSA has adapted to this new world; they now sell encryption products to companies in addition to the US government. They even sell encryption to people outside of the United States (a particularly eye-rolling development, as we will understand in a minute). Despite these changes RSA has never forgotten where they came from. They still do business with the US government. And when the government asks them nicely, RSA will do things for the government that endangers all of their commercial relationships. A recent expose uncovered that RSA had received a secret payment from the US intelligence community of $10 million. In return, RSA used a flawed random number generator in the encryption software that they sell to companies. Its a clever flaw - you would have to look very closely at RSA's software, and know a lot about programming and encryption, in order to catch the flaw. None of RSA's customers caught the backdoor. It hadn't occurred to anyone to look. People trusted RSA. Using the flaw, the US intelligence community, and RSA, could decrypt things that had been encrypted with the product. RSA and the US government are very close.

Let's go back in time again and pick up where we left off. We are back in 1995. RSA knows about Phil Zimmerman and his PGP program, and they don't like Phil. In its early versions, PGP used an RSA has algorithm to protect session keys and create digital signatures. RSA was horrified that their technology would help lead to the distribution of military grade encryption "for the masses" (Phil liked to use that phrase in his press releases and marketing). RSA quickly claimed that Zimmerman was breaking RSA licensing rules.

But a licensing dispute wasn't enough to make PGP go away. And it wasn't just RSA that didn't like Phil - the US government was increasingly distressed by Phil's popularity. The entire executive branch was plugging the Clipper Chip, explaining diligently how police investigators were at a disadvantage. Technology had rapidly outpaced the law - there were processes in place to deal with phone wiretaps, rules forcing phone companies to help, case law. But what if crooks were using email? What if they used PGP? Terrorists could be using PGP to hide their plots. They could be selling PGP technology to Saddam Hussein or the Ayatollah. And don't even get them started about the pornography. Phil was interfering with this full court press lobbying effort by telling people that the government's proposed rules would let them read everybody's messages and that they could protect their privacy using cheap and simple encryption tools.

RSA increasingly began to panic. Would the White House blame RSA if Phil killed the Clipper Chip? Losing a few contracts to a competitor was one thing - Phil was threatening the whole business model, and he was using RSA to do it.

He had to be stopped.

Remember at the beginning of this article, how I said that in 1993, encryption was a weapon? Like the war on drugs and the war on terrorism, this metaphor was treated literally in legislation. Washington claimed that encryption technology was protected under the United States Arms Export Control Act. Encryption had long been at the center of armed conflict - the cracking of the German Enigma Code by Alan Turing during World War II is widely believed to have been pivotal to winning the war - as if not more important than any specific gun. Throughout the Cold War, Warsaw Pact and NATO intelligence services assigned some of their brightest minds to code breaking to get a glimpse into the other empire's government. Now, in the 90's, there was the middle east to think about. Saddam Hussein could have been using encryption to hide his attempts at building weapons of mass destruction; Russians could be using encryption to sell off military assets to third world countries. In the post-Soviet world, the US was the last super-power left standing, and to find its next enemy it neaded to be able to sniff through the mails.

To get rid of Zimmerman, RSA and the government would have to portray him not as a privacy advocate for US citizens, but as a shadowy double-agent, looking to take valuable American military secrets and sell them to the highest, Foreign bidder.

RSA had been watching Phil closely, and they believed they had evidence that the Department of Justice could use to indict him. The PGP website allowed visitors to download their PGP software from anywhere. There were warnings and promises on the page making downloaders understand they would be breaking the law by downloading PGP from outside of the United States, but that was it. An Iraqi spy only had to click a box to get the 128-bit goods? This was too dangerous to continue. Zimmerman was a terrorist. 

RSA took their findings to the Department of Justice (DOJ), who promptly began an investigation, looking to indict Phil under the Arms Export Control Act (AECA).

To outsiders, it looked like a fairly open-and-shut case. Privacy advocates, security experts and constitutional lawyers might have viewed the investigation as the opening aria to a miscarriage of justice, but it appeared unstoppable.

People outside of the US had in fact downloaded PGP. At the time, the AECA mandated that encryption had to be limited to the use of flimsy 40 bit keys in order to allow international transfer. PGP's weakest keys were 128 bits. At times, Zimmerman appeared to thumb his nose at prosecutors. He wrote a book about PGP, and his publisher distributed the book internationally. The book contained the entire source code to PGP. By tearing off the covers, typing the text on the pages int on a computer and compiling the resulting file, anyone with the book could have a working copy of PGP. The book sold for $60: a lot to ask for a book, but a bargain for cutting-edge encryption software.

The press loved Phil. Zimmerman and PGP was featured prominently in publications ranging from technical journals, to consumer electronic porn like Wired, to the Washington Post. The investigation of Zimmerman continued for years. Washington clearly hated the idea of taking on Phil with his profile this high. No one was buying the Phil-as-spy narrative. The public saw Phil as an idealistic computer nerd; a story they had become used to during the Dot Com boom. People like Phil were enabling the public to do amazing things and enriching the economy to heights unheard of for generations. The nation had a budget surplus for the first time that anyone could remember. It became increasingly clear: imprisoning Phil would risk transforming him from idealistic nerd to a human rights martyr. Clearly, Washington didn't want to play de Klerk to Phil's Mandela. And that was the best-case scenario. What if they lost their case? The investigation had dragged on for three years. It was now 1996: an election year. Phil had bipartisan support. Liberals wanted to use encryption to protect dissidents in third world countries. Conservatives wanted the government to stop trying to bankrupt profitable tech companies with decades'-old regulation. After a three year investigation, DOJ walked away from Zimmerman without filing any charges.

That didn't stop Washington from going after others working with encryption that were not media darlings. In 1995 Daniel J. Berstein was criminally charged for publishing an academic paper related to his encryption program Snuffle while studying at Berkeley. The next year charges were brought against Peter Junger, a professor at Case Western Reserve University, for his university course on computer law, which included class materials on encryption regulation. Five years before the Patriot Act, mere discussion of the law had become a crime.

Junger was initially found guilty in Northern District of Ohio (Junger v. Daley, 8 F. Supp. 2d 708). The case's Judge Gwin ruled that software is not expression because software is "inherently functional" and a "device". Fortunately, Junger successfully sought relief from Appellate Court in the Sixth Circuit, who agreed with Junger that his class was speech protected by the First Amendment, and not a weapon (Junger v. Daley, 209 F.3d 481). This case is vitally important to the recent developments we will discuss shortly, because the regulations that were used against Junger was not part of the Arms Export Control Act that was the basis for the complaint against Zimmerman. With Junger, the complaint was filed by the Department of Commerce. Junger's accusers said that he had to apply for permission from the Department of Commerce in order to discuss the law with his students over the Internet. An "International Traffic in Arms Regulations" (ITAR) license was required, as part of the Department of Commerce's "Export Administration Regulations" (EAR). As Peter Junger and his attorneys explained the rules in a 1997 press release: "Under the EAR [...] one is permitted to export such software in books and other ``hard copy'', but is still required to obtain a license before publishing the same software on the Internet or the World Wide Web or in other electronic form." Write a book about the law, and it is protected speech. Take that book and post it on a website, and the book becomes a weapon.

This brings us to today. Over the last 17 years (1997-2014), encryption has changed from weapon of mass destruction to a fundamental internet protocol. Netscape's SSL RFC was updated to version 3, then deprecated by TLS. Hash functions are now a basic component of operating systems distributed to every individual with a computer. Encrypted storage is a cross-industry recommended best practice when dealing with customer information as simple as a name, phone number and address.

Today, the controversy is when a company does not use encryption. Even more surprisingly, government regulations for a variety of industries, such as HIPAA and Sarbanes/Oxley, now compels companies to use encryption as part of their operations. Every reputable E-Commerce transaction uses encryption. Without encryption, its doubtful there would even be such a thing as "E-Commerce".

These regulations apply to large multi-national corporations doing business in the United States. For example, it is taken for granted that a large bank will have foreign customers. And yet, the government requires that large bank to protect all of their customers using encryption.

Such customers must have a basic understanding of encryption technology in order to rely on encrypted services; alternatively, they must purchase products from people with such an understanding to assist them with these tasks. So for example, lets consider a Canadian citizen who works in upstate New York. She commutes while living right across the border in Canada. In order to get paid, this Canadian citizen has an American bank account. When she is at home, she checks her bank account balance using the bank's website.

Our Canadian friend is not very technical, but like most folks today she is familiar with life online. She has a social media page, uses search engines and email. When she checks her bank account online, she barely notices the little green lock icon appear in the top left hand corner of her browser, which she downloaded from the website of an American company based in Silicon Valley.

If we consider this for a moment, what has happened here is that two American companies has exported encryption technology to our Candian friend. Her bank and her browser. If she used a search engine to remember the URL of her bank, and if like most search engines that search engine uses a TLS connection by default, a third company enters the conspiracy. Each of these companies exported to a foreigner encryption software that is exponentially more powerful than the PGP of 1993 - todays keys are usually between 1024 and 4096 bits. When Zimmerman was investigated the limit was 40 bits, and PGP's default was 128 bits - 512 bits was the really strong stuff. Today, 1024 bits is considered weak.

The regulations have changed to accommodate the new reality. The Department of Commerce (DoC) now maintains a black list - a list of individuals, corporations, governments and entities that no technology company can provide encryption tools to without facing consequences. DoC refers to its ominous blacklist as the "BIS List" - BIS being the department within DoC that handles the list, the Bureau of Industry and Security.

Within the BIS List are a number of more specific lists. There is the Entity List, the Denied Persons List and the Unverified List. And thats just the DoC. Different Federal Bureaucracies like the Department of State and the Department of Treasury have their own separate black lists with which American firms may not provide encryption tools. Helpfully, Washington posts this "Consolidated Screening List" on a website where you can download the whole business in a CSV. I have my own copies of these documents for anyone who would like to review them.

It is unclear what lands someone on one these lists. DoC states the following on their website:

"[...]the Entity List in February 1997 as part of its efforts to inform the public of entities who have engaged in activities that could result in an increased risk of the diversion of exported, reexported and transferred (in-country) items to weapons of mass destruction (WMD) programs. Since its initial publication, grounds for inclusion on the Entity List have expanded to activities sanctioned by the State Department and activities contrary to U.S. national security and/or foreign policy interests."

So originally this was explained as a WMD anti-proliferation measure. The BIS List kept companies from selling aluminum tubes and suspiciously-colored cakes; sounds quite prim and proper, frankly. And yet, in the very next sentence DoC dismisses the WMD mandate - expanding its mandate to hassle anyone involved in "activities contrary to U.S. national security and/or foreign policy interests." Does this mean Pizza Hut needs to apply for a license to deliver to Michael Moore's house?

Its been unclear what these rule means to firms dealing in encryption, because these rules have remained firmly outside of the public eye, until this month (October, 2014). This month the Department of Commerce's Bureau of Industry and Security sent out a Press Release. In the release, DoC bragged of how they shook down Intel for $750K. Intel has been a pillar of US IT infrastructure and development for decades; the Federal Government does billions of dollars in business with both Intel and Intel's partners. The specific allegations were stranger than the target of the shake-down. DoC claimed that between 2008 and 2011 Intel had provided encryption tools to "governments and various end users" in China, Hong Kong, Russia, Israel, South Africa, and South Korea. Its a bizaare list of countries with which to form a basis of export allegations. China, though consistently unpopular politically, is on the short list of top US trade partners. Russia, while spending less than China in US markets, perhaps, is still an official US ally and trade partner. Israel and South Korea are two the closest allies of the US in their respective regions. Hong Kong, while the odd man out in a few ways, is certainly not an enemy of the US and US firms spend huge amounts in Hong Kong markets. There is no official embargo for any of these countries. The United States government sold nuclear weapons to China during the Clinton administration, around the same time that they were crucifying mathematics professors and students for violating weapons export laws. The US has been trying for ages their own nuclear weapons in South Korea. The National Security Agency has given Israel raw, uncensored data from its massive domestic spying program. Washington huffs and puffs at Russia over its cruel adventures in Ukraine, and snipes behind the back of the Chinese for human rights abuses. Never in my lifetime has armed conflict between these nations and the US ever been even a remote possibility.

It remains unclear why the government pursued Intel for behavior that is practiced so widely by so many US firms, but the similarities between the DoC's approach this month has obvious parallels to its behavior in the 90's during its initial campaign to limit the distribution of encryption technology. Following the Snowden leaks, the reality of pervasive domestic spying has changed from tin-foil-hat conspiracy theory to an unassailable fact. Like with the Clipper chip, demand for privacy is increasing. There are calls to push back against domestic surveillance, using legislation and through more direct action using more advanced and easy to use encryption. The latter scenario - a world where domestic surveillance is rendered useless through the widespread use of encryption - is much more terrifying to Washington than Phil Zimmerman ever was. FBI Director and confirmed bachelor James Comey has gone on a bit of a press junket, claiming that companies as servile in their relationship with Washington as Apple and Google have "gone too far" by setting basic encryption measures as default for even their least savvy of users. Federal law enforcement is once again pushing a Clipper Chip to monitor digital communication before they are encrypted in transit. This time, the regulation is being pushed under a framework called CALEA - a requirement that internet service providers install so-called "lawful intercept" capabilities that allow cops to snoop on their customers. Encryption must be bypassed in order to meet CALEA's lawful intercept requirement, argues Comey and his White House allies.

The situation remains in flux; it remains unclear how far the US government is willing to go in its desire to "collect it all". The domestic spying infrastructure they have constructed up to this point is indeed massive - much larger than any measures the Stasi or KGP had ever dreamed of - yet was constructed in absolute secret. Though network industry insiders were aware of what was happening as early as Total Information Awareness (TIA) and AT&T's secret room 641A, those outside of the industry dismissed claims of domestic spying as paranoid conspiracy theories. What did AT&T core network engineers like Mark Klein know about communications, anyway? The public has seen Law & Order - the system works when the Good Guys (Police) whack the Bad Guy Who Obviously Did It (Detainee) with a phone book and he confesses. If anything, the system is broken because too many Bad Guys Who Obviously Did It "get off" because of "activist judges" and their "technicalities". The system isn't broken because of a top-secret surveillance industry of some 2 million people monitors every electronic communication on the planet, using their snooping as justification to torture people for being born in the wrong country or to assassinate an American child for having the wrong father or as a reason to bomb a wedding (or eight weddings) or maybe just to shoot a couple of pregnant women and then cut the bullets out of their bodies with a knife while their family watched so that we could tell reporters that the Taliban did it.

Secrecy and disinformation allowed the construction of a global infrastructure to support pervasive surveillance, torture and assassination. Much will depend on Washington's desire and ability to continue building that system in the light of day.

UPDATE: Comey isn't the only top executive branch official calling for the expansion of lawful intercept interpretation. White House cybersecurity czar Michael Daniel, an official whose asinine and self-contradictory job title calls for a sacking, told the Christian Science Monitor that he also wants to peek a little further into your laptop, tablet and cell phone: "We don't want to have something that puts it utterly beyond the reach of law enforcement in the appropriate circumstances." By 'appropriate circumstances', presumably Daniel means when information exists on a computer.