May 2004 - cypherpunks-legacy

Bring Us Your Small, Unloved Start-Ups
by R. A. Hettinga 15 May '04

15 May '04

<http://www.nytimes.com/2004/05/15/technology/15venture.html?th=&pagewanted=…> The New York Times May 15, 2004 Bring Us Your Small, Unloved Start-Ups By GARY RIVLIN ilicon Valley is littered with hundreds of former start-ups trapped inside larger technology companies that are no longer happy with the ventures they snapped up in the acquisitions frenzy of the 1990's. Now a pair of Silicon Valley-based venture capitalists have opened an unusual $250 million fund intended to buy and rehabilitate such companies, which Terry Garnett, one of the two founders, calls "the orphaned and the unloved." In some cases, the best candidate for running the newly freed company may turn out to be its original creator. "We've heard from a number of founders," Mr. Garnett said, "who told us, 'Gosh, we sold our business four years ago, and now our baby has been all screwed up and we want it back.' '' The new fund, called Garnett & Helfrich Capital, is expected to occupy a long-needed niche within the technology universe's constellation of venture partnerships and private equity groups. Other entities, like Francisco Partners and Silver Lake Partners, specialize in technology buyouts, but they usually focus on deals priced in the hundreds of millions. Garnett & Helfrich intends to concentrate on deals, generally under $50 million, too small for these multibillion-dollar firms. Traditional venture capital outfits occasionally participate in these kinds of deals, sometimes called carve-outs, but only sporadically and often in partnership with others. "There aren't a lot of venture guys doing tech carve-outs, and none are specializing in it," said Allan Thygesen, a managing director in the Carlyle Group's American-based venture capital fund. "It's sort of a forgotten area." Venture capitalists, Mr. Thygesen and others said, are by temperament far more interested in untested, fledgling companies that stir hopes of striking it rich with a new idea rather than those already freighted with baggage. Mr. Garnett was in his prior job as a general partner at Venrock Associates, the venture arm of the Rockefeller family, when he experienced what he described as his "aha" moment. Along with a partner from Doll Capital Management, he was poised to invest in a new software company that would cloak e-mail messages and instant messaging from everyone but the intended recipient. But then Mr. Garnett and his fellow venture capitalist learned that Network Associates, the computer security company, was looking to sell a unit called PGP, which stands for Pretty Good Privacy, with a similar product already on the market. PGP was a proven technology with a sizable customer base. It was also one of more than 40 companies Network Associates bought over three years starting in 1997 - and one of many acquisitions it was actively seeking to shed after hiring a new chief executive at the start of 2001. Venrock and Doll Capital purchased PGP in August 2002 for "significantly less" than the $36 million Network Associates paid for it five years earlier, said Phillip Dunkelberger, the company's original chief executive and once again in charge of PGP. "That was a real proof of concept for me," Mr. Garnett said. "We were able to recast the product and be cash-flow positive six months after buying it." In February 2003, Mr. Garnett and David Helfrich, then a general partner at ComVentures, met for breakfast at Il Fornaio, a popular restaurant in Palo Alto. The two knew each other casually but had grown closer through their daughters, who enjoyed riding horseback in Woodside, Calif. There Mr. Garnett told Mr. Helfrich about PGP. "I knew I was in trouble after I didn't sleep a wink that night," Mr. Helfrich said. Four months after that first breakfast, the two gave notice at their respective firms. That summer, Grove Street Advisors, which makes venture capital investments on behalf of large institutions and wealthy individuals, became the new fund's first investor. The fund's largest investor is the Harvard Management Company, the university's investment arm. "It's quite unique what the two of them are doing," said Catherine A. Crockett, a founder and general partner at Grove Street. The firm is expecting to do one or two deals a year, and six to eight for the life of the fund, because each will require a great deal of time. Mr. Garnett is a former senior executive at Oracle, the big maker of database software that runs large business systems for many major corporations. Mr. Helfrich was a member of the founding team at Copper Mountain Networks, a maker of equipment for high-speed Internet connections, and his risumi includes turns at the 3Com Corporation and Ascend Communications, two other computer networking equipment makers. Certainly the pool of potential orphans is large. From 1999 to 2001, an average of 3,500 mergers and acquisitions (excluding telecommunications deals) took place each year in the American technology community, according to Thomson Financial. That compares with roughly 500 a year in the early 1990's, and 1,500 or so a year in the mid-1990's. "I have absolutely no doubt these guys face a tremendous supply of deal opportunities," said Roger McNamee, a co-founder of Silver Lake Partners. Whether that will translate into attractive profits for the fund's two founders and its investors is another question. "There's typically a high degree of difficulty in these kind of deals," Mr. Thygesen of Carlyle said. Pricing is one issue, Mr. Thygesen said; typically there are no audited numbers associated with a single product or unit inside a larger company. "Another risk is that you're taking on people who haven't been out there hustling, groveling for a living," Mr. Thygesen said. "They're not necessarily entrepreneurs." Should an investment team choose well, though, "there's the potential for a very high value creation," he added. Both Mr. Garnett and Mr. Helfrich said that they intended in most cases to bring in new management to run the company and they see plenty of available executives in waiting. "Nowadays, it's hard to attract a great management team, especially a great C.E.O., to a start-up," Mr. Helfrich said. "It takes two or three years to get a product out, there are three or four rounds of financing to raise, and the success ratio of start-ups is pretty low." The companies they intend to finance, by contrast, will already have an existing business in place. "It's a lot easier to build a company from $50 million in revenues to $100 million,'' Mr. Helfrich said, "than take something from scratch and build it up to $10 million or $20 million." -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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On the Road Again, But Now the Boss Is Sitting Beside You
by R. A. Hettinga 14 May '04

14 May '04

<http://online.wsj.com/article_print/0,,SB108448724279211265,00.html> The Wall Street Journal May 14, 2004 PAGE ONE On the Road Again, But Now the Boss Is Sitting Beside You Workers Chafe as Businesses Embrace GPS Trackers; A Cop Caught Napping By CHARLES FORELLE Staff Reporter of THE WALL STREET JOURNAL May 14, 2004; Page A1 After hearing complaints that police officers in Clinton Township, N.J., were doing a lot of loafing, Sgt. John Kuczynski sprang into action. Without telling the patrolmen, the internal-affairs officer installed a global-positioning-system tracking device behind the front grills of several patrol cars in the spring and summer of 2001. Then he used a laptop to keep track of each car's precise movements on detailed maps. Sgt. Kuczynski soon netted five officers loitering over meals or hanging out in parking lots. Their log books indicated they were patrolling the townships' streets or watching for speeders on its three highways. Four of the officers pleaded guilty that year to charges of filing false records and were barred from working in New Jersey law enforcement. A fifth, Barry Krejdovski, a then-28-year-old officer who was literally caught napping on the job, disputed the charges. He was convicted in November on the records violation and a more serious charge that was later set aside. Three of the officers who pleaded guilty are suing the town to get their jobs back. As employers increasingly turn to GPS technology to keep track of their fleets, more workers are balking at having the boss constantly looking over their shoulders. Independent snowplow drivers in Massachusetts staged a demonstration at the state capitol last year after they were required by the state to carry GPS-enabled cellphones. Washington state garbage collectors are protesting the installation of the devices on their trucks. And Teamsters union officials are watching closely to make sure the devices aren't used to punish employees. Developed in the 1970s for military use, GPS relies on a cluster of satellites orbiting 12,500 miles above Earth. The satellites emit coded signals, which a ground-based receiver can pick up to triangulate its own position. GPS trackers remained expensive niche products through much of the 1990s largely because they were difficult to use and it was expensive to relay location data from a moving truck back to a company's home base. Now, thanks to the spread of cheap cellular-phone service, the devices can send the information as easily as a commuter can make a call from the road. Without clear limits on when the devices can be used to track workers, employers are testing the boundaries of GPS. That's especially frustrating to independent-minded workers such as truckers, who have long treasured their freedom from close supervision. Many of those workers are accustomed to being paid for specific performance -- getting a shipment from one place to another, for instance -- and chafe at the idea of having their routes closely tracked. In King County, Wash., the municipal government is installing GPS receivers on the roughly 200 tractors and trailers that haul solid waste between landfills and transfer stations. Theresa Jennings, the county's solid-waste director, says the primary purpose of the system is to improve efficiency. Supervisors, for example, can automatically determine which trailers of trash have been waiting longest at depots. But last year, Teamsters Local 174 filed an unfair-labor-practice charge with the state's public-employee commission, arguing that the installation needs to be subject to collective bargaining. The union contended that drivers have been told they could be in trouble if the tracker reports they are straying from their routes. The union missed a filing date to provide more information, and the charge was dismissed, though the union says it will refile if a driver is disciplined. That hasn't yet happened, and the union has sought written assurance from the county that it won't. George Raffle, the union organizer who was responsible for the filing, says trucks follow set routes, so there's no need to use the GPS devices for routing. A driver might exercise his judgment to avoid a traffic jam or slick roads, but a supervisor might see that as an unauthorized detour to a side road, Mr. Raffle says. The trackers "don't take into account all the unknown factors: road conditions, weather conditions, what's the load," he says. Ms. Jennings says that the county doesn't as yet plan to use GPS tracking to punish drivers, and so no bargaining is necessary to install the trackers. The national Teamsters union is closely watching a plan by United Parcel Service Inc. to include GPS capabilities on its next generation of delivery scanners -- the electronic tablets that store delivery data. A Teamsters spokesman said the union isn't necessarily against the use of tracking technology but stressed that safeguards need to be in place to "ensure that it doesn't result in an invasion of privacy or is used to "get" an employee." UPS officials say the company is as much as two years away from actually using GPS on the scanners. They say that the company would use the technology to improve customer service -- for example, to quickly reroute packages in transit -- and not driver discipline. UPS already has GPS devices on its tractor-trailer trucks, which haul packages between warehouses. Last December, snowplow operators in Massachusetts marched outside the state capitol to protest a new requirement that they carry cellphones with GPS receivers. As independent contractors paid by the hour, they feared the highway department would use the tracking data to unfairly squeeze their payments. Satellite tracking equipment, they complained, could wrongly label a plower stuck in a traffic jam as napping by the side of the road. The Massachusetts highway department said that it is confident the devices can accurately track plowers. After hundreds of plowers packed a rowdy legislative hearing at Boston's State House, the highway department partially backed down. The compromise: Drivers began carrying the GPS phones but are being paid according to the old-fashioned paper timesheets they submit. The contract runs until the end of the year. In Mecklenburg County, N.C., a sprawling district encompassing the Charlotte metropolitan area, officials say a new GPS-enabled dispatch and routing system has shaved 10% off the time it takes ambulances to respond to emergency calls. The system automatically tells 911 dispatchers which ambulance is closest to the call and provides the best route to an address. The system, based on software from California vendor ESRI Inc., also captures historical data about travel speeds, allowing dispatchers to route ambulances around potential rush-hour trouble spots. Sabby Nayar, a marketing manager for MapInfo Corp., a Troy, N.Y., maker of mapping software, says the benefit of GPS trackers on police cruisers is obvious. "If the officer is injured, you know where he is, and you know where his car is," Mr. Nayar says. In Clinton Township, the devices were installed specifically to check up on the officers. Some of the officers were missing for hours at a time, sometimes on daytime shifts, but Mr. Krejdovski was unaccounted for less than two hours in the middle of the night. According to Mr. Krejdovski's activity logs, he checked a residence, a cemetery and a cluster of car dealerships in the early morning hours. But the GPS showed his cruiser, unmoving, for much of that time in a McDonald's parking lot, overlooking a car wash and a Japanese restaurant nestled at the intersection of two highways. The three officers who are suing the town to get their jobs back claim that idling was a department-wide practice in the two-dozen-member force. The activity reports used to build the town's case against them were simply "busy sheets," intended to demonstrate that the officer was on duty, not precise records of his movements, one officer testified at Mr. Krejdovski's trial. They also claim they were deliberately singled out for the tracking because superiors wanted a pretext to get rid of them. The township's attorney declines to comment on the case. Sgt. Kuczynski, the internal-affairs officer, said in an interview that his tracking program "may appear to be extreme" but that the department had a "systemic" absence problem. Mr. Krejdovski, now 31, declined to comment on the case. He testified at his trial that his GPS-tracked nap occurred because he was exhausted from a stomach virus, compounded by the flu medication he was taking. He admitted that he waited until shortly before the end of his shift at 7 a.m. to fill out most of his reports and that they were sloppy and incorrect. "I was just trying to guesstimate at what time I had gone through those areas," he said on the witness stand. Testimony established that his reports deviated from his actual location, as determined by the GPS, for about 76 minutes. Mr. Krejdovski's lawyer, Walter Lesnevich, argued that his client was a young cop who made a mistake and was unfairly swept up in a dragnet aimed at catching more-serious offenders. When he was tracked another night, Mr. Krejdovski's log matched up with the GPS tracker. The jury convicted Mr. Krejdovski on both charges he faced. New Jersey Superior Court Judge Victor Ashrafi was not so convinced. He set aside the jury's verdict on the official misconduct charge -- which would have carried jail time -- and sentenced Mr. Krejdovski to probation and community service. His conviction means he will never be able to work in law enforcement again. The nap, the judge ruled, "did not result in any actual damage or loss to the public, other than the loss of Officer Krejdovski's services during a period of fewer than 90 minutes." -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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Wyoming agent develops touted porn tracking software
by R. A. Hettinga 14 May '04

14 May '04

<http://www.usatoday.com/tech/news/2004-05-14-cp-program_x.htm> USA Today Wyoming agent develops touted porn tracking software By Sarah Cooke, Associated Press CHEYENNE, Wyo. - A Wyoming law enforcement agent was credited Friday with developing software that weeds out child pornography in file-sharing networks, resulting in at least 1,000 investigations and 65 arrests nationwide. The software, written last year by Division of Criminal Investigation special agent Flint Waters, cracks down on the growing use of "peer-to-peer" or P2P networks. The networks allow users to connect computers directly with one another to exchange files. Officials say they provide greater anonymity than traditional Internet servers that are easier to track. They can also be much quicker and easier to access. "This problem was so widespread that it was clearly easier for a child to obtain these images than it would be for them to buy a magazine depicting adult pornography," Attorney General Pat Crank said Friday. After testing the software last fall, Waters and other DCI officials offered it free of charge to local, state, national and even international law enforcement agencies. The results surprised even the most veteran officers. Images of children as young as 7 years old were being trafficked worldwide through file-sharing networks easily accessible to children, such as Kazaa. Some images took as little as 14 seconds to load. "We hit everyone from 13-year-olds to 55-year-olds with active molests on children," Waters said. Charges against the 65 people arrested so far have included possession and distribution of child pornography and sexual abuse of children. The 1,000 investigations have involved more than 350 searches of computers and other property, officials said. Specific cases include Jimmy Richard Morrison, a California man who faces federal pornography distribution charges in Wyoming alleging he was a P2P client named "Pedokiller." Morrison, of Modesto, Calif., told authorities he used the P2P networks because police were known to be examining Internet chat rooms for child pornography activity, Waters said. "This guy had pictures of two of his victims on an ID card around his neck," Waters said. To date, more than 3,100 computers have been identified exchanging child pornography. Of these, nearly 2,000 were discovered by Wyoming DCI special agents. "Law enforcement has a new tool to combat the targeting of our children for sexual exploitation," Gov. Dave Freudenthal said. "As a governor, and even more so as a parent, I am extraordinarily grateful for the work Special Agent Waters and the Wyoming DCI have done. Their dedication means that purveyors and users of child pornography might have fewer places to hide." -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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In a Road That's All Eyes, the Driver Finds an Ally
by R. A. Hettinga 14 May '04

14 May '04

<http://nytimes.com/2004/05/13/technology/circuits/13next.html?pagewanted=pr…> The New York Times May 13, 2004 WHAT'S NEXT In a Road That's All Eyes, the Driver Finds an Ally By IAN AUSTEN BOUT 12 years ago, Martin Dicks was trapped in dense fog during a harrowing four-hour commute to his job as a firefighter in central London. "Virtually all I could see on the road was a cat's-eye reflector every now and then," Mr. Dicks said, recalling his trip down one of Britain's major highways. "I figured that if I could make the cat's-eyes more visible, I could probably save more lives than I could in the fire service." A back injury forced Mr. Dicks out of the fire department shortly afterward, giving him the time to pursue that goal. His training as an electrical engineer provided the necessary skills. Now, after perfecting illuminated markers that are embedded in the road surface to guide motorists through bad weather or warn of dangerous conditions, Mr. Dicks's company, Astucia Traffic Management Systems, is going a step further. Its latest creation is an embedded stud equipped with a camera that catches speeders, monitors traffic for criminals or stolen cars and even checks for bald tires on the fly. "Nobody knows it's a camera or a speed trap," Mr. Dicks said of his latest creation. Mr. Dicks's original idea was quite simple in concept. He wanted to create an illuminated road marker containing its own power source, a solar cell. At night or in bad weather, light from approaching vehicles would generate enough power to light up the marker, which consisted of light-emitting diodes. An illuminated marker would be more visible than a plain reflector, and the idea was that a car passing over the markers would cause them to stay illuminated long enough so that they would provide a warning trail of lights for any vehicles close behind. The trouble, at first, was the technology available in the early 1990's. Photovoltaic cells were not as efficient as they are today. And at the time, Mr. Dicks recalled, "the concept of a white L.E.D. was nowhere." Working mostly with family members at first, Mr. Dicks produced a prototype marker within two years. He dodged the white L.E.D. problem by combining the glow from red, green and blue arrays. The group not only overcame the limitations of solar cells, but also managed to engineer markers that turned red to warn when the gap between two cars was dangerously small. Mr. Dicks said the technology both impressed and alarmed British government highway officials. "They were frightened about everyone using the product on roads from one end of the country to the other," he said. "They thought it would make their budgets disappear." The first markers cost roughly twice the price of conventional embedded road studs. As a result, their use was restricted at first to especially fog-prone or dangerous sections of roads as well as crosswalks, including some in the United States. Mr. Dicks was not the only person with a desire to illuminate to road markers. After a friend struck and killed a pedestrian in 1991 at a crosswalk in Santa Rosa, Calif., Michael Harrison developed a system that uses flashing L.E.D.'s in the road surface to make crosswalks more visible. The company he founded in 1994, LightGuard Systems, now has about 700 installations in the United States. A study of 100 illuminated crosswalks by Katz, Okitsu & Associates, a traffic engineering firm based in Southern California, estimates that adding the blinking L.E.D.'s to crosswalks can reduce pedestrian accidents by 80 percent. The original Astucia markers were glued onto the road surface. That left them vulnerable to snowplow blades and to constant pounding from car and truck tires. Mr. Dicks wanted to put the markers into holes drilled into the road surface. The key, he said, was finding self-healing resins for the top lenses that would be flush with the surface and subjected to much wear and tear. "It's like running your fingernail on a rubber sheet," he said of the plastics' behavior. "The mark it leaves goes away." Advances in solar-panel technology also allowed Astucia to develop markers that could store electricity all day and then constantly illuminate particularly dangerous sections of roads at night. Other features followed. Optical systems inside the casing are able to monitor the atmosphere for fog. Electrical resistance detectors can check for standing water. The addition of a thermometer allows the marker to predict ice. But getting high-resolution digital cameras into the flush-mounted housings was a more difficult task. It ultimately required the development of a special series of lenses that in effect allowed the camera to look upward and forward from its subsurface location. The cameras (the system can use either normal or infrared sensors) provide remarkably detailed images, according to Mr. Dicks. "You can clearly see everything underneath a vehicle, although I'm not sure why you'd want to do that," he said. The police, however, are likely to be interested in seeing the license plates of vehicles traveling above the speed limit or through red lights. To that end, Astucia has developed a system that is operating on a highway in Scotland. It employs three embedded cameras to give front, rear and side views of passing vehicles. Other embedded sensors project two infrared beams over the road that are used to time traffic and determine its speed. The images and the speed data travel under the road by cable to a computer. It in turn relays the data by satellite to Astucia's offices. The system is currently being used to monitor traffic slowdowns. When it detects them, it turns on illuminated markers farther up the road as a warning. Mr. Dicks said that its speed measurements were accurate within 0.5 percent, well within the tolerances demanded for traffic enforcement. Similarly, he said, the systems can be combined with optical character recognition software to automatically track stolen vehicles or cars believed to be used by suspected criminals or terrorists. The United States branch of Astucia began demonstrating the camera system - which costs about $50,000 for a package of three cameras, sensors and supporting electronics - to police and highway officials less than a month ago. John Kerridge, the subsidiary's president, reported considerable interest in the system for both traffic and broader law enforcement. But he added that public resistance could be one obstacle to its adoption. "We all break the law regarding speeding," Mr. Kerridge said. "The system may leave a bad taste in motorists' mouths at the beginning. But when their insurance starts going down and stolen vehicles start getting recovered, the benefits will overcome that." -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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Re: Can Skype be wiretapped by the authorities? (fwd from em@em.no-ip.com)
by Eugen Leitl 14 May '04

14 May '04

----- Forwarded message from Enzo Michelangeli <em(a)em.no-ip.com> -----

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SASSER Worm Dude
by Tyler Durden 14 May '04

14 May '04

"HANOVER, Germany -- German police have arrested an 18-year-old man suspected of creating the Sasser computer worm, believed to be one of the Internet's most costly outbreaks of sabotage." Note the language...an "18 year old MAN" and "sabotage"... So a HS kid, living with his parents, is able to write a worm that takes out millions and millions of computers throughout the world running the latest MS OS. Uh....shouldn't we arrest Bill Gates first? -TD _________________________________________________________________ FREE pop-up blocking with the new MSN Toolbar get it now! http://toolbar.msn.com/go/onm00200415ave/direct/01/

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NKS: Two Years Later
by Stephen Wolfram 14 May '04

14 May '04

Today marks the second anniversary of the release of A NEW KIND OF SCIENCE. And I'm very happy to be able to report that NKS is continuing to develop extremely well. A wonderful community is forming around the ideas of NKS. The pace of research and applications is steadily building--with an average of about one new paper now appearing every day (http://www.wolframscience.com/reference/bibliography.html) NKS classes and courses are being taught. And several times each week we hear about an ambitious new initiative based on NKS--in technology, or art, or business or somewhere else. We're trying to do our part to help. Earlier this year we released the online version of the complete book (http://www.wolframscience.com/nksonline) We launched the NKS Forum (http://forum.wolframscience.com) We just sponsored the second annual conference: NKS 2004 (http://www.wolframscience.com/conference/2004) And we're working hard to make http://www.wolframscience.com the best possible reference source and meeting place for the NKS community. At the end of June, I'm looking forward to our second NKS Summer School (http://www.wolframscience.com/summerschool/2004)--where I hope we'll educate another outstanding group of NKS pioneers. (We're still accepting applications this week at http://www.wolframscience.com/summerschool/application.cgi) And later this year we'll be starting an R&D fellowship program at our new facility near Boston. It's been exciting to see everything that's been happening with NKS over the past year. But it's now clearer than ever that this is just the beginning. Much of what's being done so far on NKS has focused on specific models, and specific conceptual conclusions. But ultimately the real power of NKS comes from its core: the basic science of "pure NKS"--and its methodology of systematically exploring and understanding what's out there in the computational universe. New methodologies generally spread slowly. But pure NKS is definitely gaining momentum. And this year we'll be announcing a major initiative that I think will be an important step in moving it forward. Years from now, pure NKS will no doubt be a mature field like physics or mathematics--with its own complete infrastructure for research, education and applications. But for now it is still wide open, and full of terrific opportunities for professionals, students and amateurs alike. I hope you've been able to spend time on NKS. It's always great to hear what people are doing with NKS, and I hope you'll let us know if you have something to share. -- Stephen Wolfram

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Terrorism law applied to youth group
by Major Variola (ret) 14 May '04

14 May '04

Indictment against violent Bronx gang includes terrorism charges By Associated Press Friday, May 14, 2004 NEW YORK - Nineteen members of a street gang accused of menacing their neighborhood have been indicted on murder and other charges as acts of terror, believed to be the first use of the state's anti-terrorism law against a gang. http://news.bostonherald.com/national/view.bg?articleid=27881

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Regulators Fine Riggs $25 Million
by R. A. Hettinga 14 May '04

14 May '04

<http://www.nytimes.com/2004/05/14/business/14bank.html?th=&pagewanted=print…> The New York Times May 14, 2004 Regulators Fine Riggs $25 Million By TIMOTHY L. O'BRIEN ederal regulators fined the Riggs National Corporation, the parent company of Riggs Bank, $25 million yesterday for failing to report suspicious activity, the largest penalty ever assessed against a domestic bank in connection with money laundering. The fine stems from Riggs's failure over at least the last two years to actively monitor suspect financial transfers through Saudi Arabian and Equatorial Guinean accounts held by the bank. The accounts are still being scrutinized as possible conduits for terrorist funds or for the proceeds of graft. Riggs, based in Washington, "did not collect or maintain sufficient information about its foreign private banking customers," regulators noted in a consent order signed by the bank. "As a result, the bank failed to identify approximately one-third of the accounts related to the country of Saudi Arabia and an unacceptably high number of accounts related to the country of Equatorial Guinea." "The bank omitted disclosure of several bank accounts in response to requests" from regulators, the consent order also noted. A spokesman for the Saudi Arabian Embassy has denied any involvement by Saudi officials in terrorist financing activities through Riggs. The Equatorial Guinean Embassy has not returned calls seeking comment. It is possible that additional fines may be levied against individual executives or directors at Riggs, as well as two former directors, according to two people briefed on the matter. The moves are the latest troubles for a storied institution that manages bank accounts for most of Washington's foreign embassies as well as American embassies and consulates overseas. Riggs agreed to pay the penalty without admitting or denying any wrongdoing, according to the consent order. A spokesman said last night that the regulatory environment since the Sept. 11, 2001, attacks has required all banks to act much more diligently in monitoring accounts. Regulators cited the bank for failure to comply with the Bank Secrecy Act, a law governing anti-money-laundering requirements. "The bank's management was ineffective in overseeing the bank's day-to-day compliance with the B.S.A. laws and its regulations, as evidenced by the numerous and substantial deficiencies in the program," the consent order said. A severe penalty had been expected against Riggs after it first disclosed in a securities filing in March that regulators were considering fining the bank for lax practices in combating money laundering. Federal regulators and investigators, as well as two Congressional committees, are investigating the bank's accounts. "Riggs Bank deserves every penny of this huge fine," said Senator Charles E. Grassley of Iowa, chairman of the Senate Finance Committee, which is examining the Riggs accounts. "When banks look the other way, they put our national security at risk. Whether it's through incompetence, negligence or greed, they are allowing terrorists to funnel their blood money through the system." "This fine is a shot across the bow for the board of directors, who should have taken more care to find out what was wrong with Riggs and get it fixed," Mr. Grassley added. "I'm not satisfied they've been held to account." The Financial Crimes Enforcement Network, an investigative arm of the Treasury Department, and the Office of the Comptroller of the Currency, a regulatory arm of the same agency, each imposed $25 million penalties against Riggs, but the bank will be allowed to pay them concurrently. The consent order stated that Riggs failed to report suspect transactions involving the withdrawal of tens of millions of dollars in cash and international drafts from accounts controlled by the Saudi Arabian Embassy and by Saudi Arabian officials. Accounts controlled by Prince Bandar bin Sultan, Saudi Arabia's ambassador to the United States, have been scrutinized in the investigation, according to federal investigators involved in the inquiry. The consent order also stated that Riggs had similar monitoring lapses involving the Equatorial Guinean accounts, including "millions of dollars deposited into a private investment company owned" by an official of that country. The order also cited "hundreds of thousands of dollars transferred from an account of the country of Equatorial Guinea to the personal account of a government official of the country" and more than $1 million transferred from an Equatorial Guinean account to a private investment company owned by Simon P. Kareri, a former senior Riggs manager. Mr. Kareri is the subject of a federal grand jury hearing examining possible criminal fraud. Mr. Kareri's lawyer has previously declined to comment on the hearing. He could not be reached for comment yesterday evening. Another major banking regulator, the Federal Reserve, is expected to designate Riggs and one of its Miami banking subsidiaries as being in "troubled condition," a move that will severely curtail the bank's autonomy, according to three people briefed on the matter. Among other things, the designation means that the bank must secure regulatory approval before naming new executives or directors. The Comptroller of the Currency already formally designated Riggs as a troubled institution last month. Riggs said last month that it planned to exit most of its embassy and international banking operations. Riggs also indicated in a securities filing last month that Joe L. Allbritton, its former chief executive and its biggest shareholder, would not stand for re-election to the board. Mr. Allbritton, who took control of the bank in 1981, is a vice chairman. Neither Mr. Allbritton nor Riggs has been charged with wrongdoing by federal law enforcement officials who are scrutinizing the bank's accounts. -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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New puzzle for war code breakers
by R. A. Hettinga 13 May '04

13 May '04

<http://news.bbc.co.uk/2/low/uk_news/england/staffordshire/3703191.stm> The BBC Tuesday, 11 May, 2004, 09:50 GMT 10:50 UK New puzzle for war code breakers Experts from Bletchley Park are trying to crack a 250-year-old code rumoured to point the way to the Holy Grail. Specialists from the Buckinghamshire code-breaking centre hope to decipher words etched on a garden ornament at Shugborough in Staffordshire. The Shepherd's Monument in the grounds of the stately home displays an inscription that has never been solved. Second World War veterans using the celebrated Enigma machine are joining Bletchley's current team of experts. 'Unusual challenge' The code breakers are at Shugborough, the ancestral home of the Earls of Lichfield, on Tuesday. Christine Large, Bletchley Park's director, said: "This is such an unusual challenge that my colleagues and collaborators, who include veteran code breakers and modern day decoding experts from Bletchley Park's 'offspring' GCHQ, cannot resist." Shugborough's general manager, Richard Kemp, said: "The Anson family, who built the estate, commissioned the monument but it had unproven connections with the Knights Templars. "The inscription is rumoured to indicate the location of the Holy Grail, which must rank as one of the world's great mysteries." It is estimated that work carried out at The National Codes Centre at Bletchley Park in Milton Keynes helped to shorten the Second World War by two years. The site is now a popular tourist attraction. -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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