Cypherpunks, With your indulgence I would like to post this short essay here, which was stimulated by a recent report posted on this list that was passed on to me. The essay just ran as an op-ed piece in this week's issue of Communications Week. I would like to thank and acknowledge the author off the original report as well as encourage the cypherpunk community to keep me posted on related issues. (I cannot keep up with the volume on this list and, hence, am not a subscriber.) Thank you, Bill Frezza Columnist Communications Week Network Computing Magazine frezza@interramp.com --------------------------------------------------------------------------- ELECTRONIC WARFARE WAGES ON - AND YOU'RE THE TARGET Although the flap over the Clinton administration's attempt to promote escrowed-key encryption systems like Clipper has temporarily faded, the war on electronic privacy continues. As proceedings at the Fourth International Conference on Money Laundering, Forfeiture, Asset Recovery, Offshore Investments, the Pacific Rim, and International Financial Crimes reveal, there has been no let up in our government's efforts to blockade the cyber-frontier. No, you won't learn much from the Wall Street Journal or the New York Times, written by journalist-generalists who have no clue about where this technology is heading. The Feds have become so skilled at manipulating the Old Media that stories about electronic privacy invariably center on the latest drug kingpin, pedophile, or domestic terrorist. Attacking these universally abhorred enemies of the people not only makes for good headlines but keeps privacy advocates off balance as they are forced to defend abstract rights using loathsome examples. But if you tune in to the Cypherpunks mailing list (majordomo@toad.com) you can get some excellent first hand reports from the front. In the relatively short period since the passage of the Bank Secrecy Act, which, among other things, obliges banks to file Suspicious Activity Reports on its customers, banks have become virtual deputies in the treasury department's war on uncontrolled financial transactions. And this war is increasingly spilling into cyberspace. The conference underscored the fact that, paradoxically, we are heading not toward more specific and well defined transaction monitoring regulations, but less. How so? The problem with making regulations precise is that what software algorithms can define, other algorithms can evade. Instead, regulation by "raised eyebrow" is becoming the norm. Federal bank examiners have been given significant latitude to invoke draconian penalties against uncooperative banks. Because bank officers have few due-process protections under this regime, it is no surprise that most of them have become sniveling toadies. The objective is to insure that banks "voluntarily" introduce even more aggressive, unpredictable, and intrusive monitoring than the government would ever dare mandate. And to make sure nothing slips through the cracks, human surveillance will be supplemented with artificial-intelligence agents that can perform pattern analysis on the aggregate flow of electronic transactions, flagging anything remotely suspicious. George Orwell would be impressed. Lest you think that all of this is motivated solely by the drug war, a visit to the Treasury Department's Financial Crimes Enforcement Network (FinCEN) homepage (http://www.ustreas.gov/treasury/bureaus/fincen/facts.html) should open your eyes. This battle is not just about drug prohibition, a crime the Treasury Department would have to invent if it didn't already exist. The real struggle is about the future of tax compliance, and it has you in its sights. A famous Revolutionary War era pamphleteer, writing under the pseudonym "Brutus", perhaps said it best 200 years ago when he wrote - "The national government through its taxing power will introduce itself into every corner of the city and country. It will take cognizance of the professional man in his office or his study; it will watch the merchant in his store; it will follow the mechanic to his shop and his work, and will haunt him in his family and his bed; it will be the constant companion to the industrious farmer in his labour; it will penetrate into the most obscure cottage; and finally it will light upon the head of every person in the United States. To all these different classes of people and in all these circumstances on which it will attend them, the language in which it will address them will be GIVE! GIVE!" What Brutus didn't know and what the cypherpunks foresee is that one day strong encryption will make it impossible to spy on our activities in cyberspace. Heightened conflict is inevitable. Expect the rhetoric to get a lot hotter as the government spinmeisters labor to keep us focused on public enemies while frantically trying to keep its hand in every citizens pocket and its eyes on every bankbook. # # # COPYRIGHT CMP PUBLICATIONS 1995 Bill Frezza is president at Wireless Computing Associates and co-founder of the online forum DigitaLiberty. The opinions expresses are his own. Frezza can be reached at frezza@interramp.com. ------------------------------------ | Wireless Computing Associates, Inc. | 704 Stoney Hill Rd., Suite 155 | Yardley, PA 19067 | ph 215-321-0929, fax 215-321-0490 | urgent Email: frezza@radiomail.net | bulk Email: frezza@interramp.com ------------------------------------