AP 09/21 0844 Encryption Software Copyright, 1993. The Associated Press. All rights reserved. SAN JOSE, Calif. (AP) -- A federal grand jury is investigating exports of a controversial computer program in a case that could affect how software is distributed worldwide. U.S. Customs officials asked for an investigation into ViaCrypt of Phoenix and Austin Code Works of Austin, Texas, and the companies' plans for foreign distribution of software, including PGP, a program that turns data into an indecipherable code using encryption technology. William Keane, an assistant U.S. attorney, confirmed that an investigation is continuing, but declined to comment on the case. The PGP program has been distributed worldwide over computer networks by some computer enthusiasts who oppose the U.S. government's trade regulations on encryption. The National Security Agency, which monitors international communications, has supported strict encryption technology export regulations, arguing that it would be difficult to keep tabs on hostile governments and foreign terrorists. But opponents say the restrictions hurt sales and violate the First Amendment that protects the right to publish information about encryption. "I wrote PGP to make democracy healthier. I didn't do it to make money," said Philip Zimmermann, a computer consultant who developed PGP. "We believe everything we are doing is above board and well within the law," said ViaCrypt president Leonard Mikus. He said the company had no intentions of violating export regulations. WP (Washington Post) 09/18 Encryption Program Stirs Security Debate By John Mintz and John Schwartz Washington Post Staff Writers Computer industry officials and civil-liberties activists are launching new attacks on the Clinton administration's plan to make the so-called clipper computer chip the national standard for encrypting, or scrambling, data and voice communications. Under the clipper plan announced this year by the Clinton White House, police agencies that receive court authorization for a wiretap to intercept encrypted communications would then need the technological cooperation of two independent "escrow" agents to crack the code. Earlier this week administration officials told congressional staff members that the two escrow agents will be officials of two government agencies: the Commerce Department's National Institute of Standards and Technology (NIST), and a non-law enforcement section of the Treasury Department that has not been selected. Yesterday industry and civil-liberties groups criticized that selection because they said NIST and Treasury are not independent, but arms of the same federal government that could some day be called upon to listen in on their communications. Douglas Miller, government affairs representative of the Software Publishers Association, made up of U.S. software firms, said his group has "grave doubts" that foreign corporations will encrypt their communications with the clipper chip because "the U.S. government holds the key." A main reason the administration is promoting clipper is that the U.S. National Security Agency, the super-secret code-breaking agency, wants to discourage use of highly capable, non-clipper encryption programs that are becoming increasingly popular but that the NSA can't pierce. Industry officials for years have regarded NIST as a stalking horse for the NSA. Jerry Berman, director of the Washington office of the Electronic Frontier Foundation, which promotes public-interest causes in technology-policy areas, said NIST is "so close to the NSA that it can't give the public comfort that this is a true escrow system." John Podesta, assistant to the president and a key White House staff member on this issue, said such objections are "a phony issue." "We clearly are looking for procedures and escrow agents that would maintain privacy and confidentiality and security of the keys," Podesta said. "Cryptography lends itself to a certain degree of paranoia." Kate Martin, director of the Center for National Security Studies of the American Civil Liberties Union, mocked use of the term "escrow" in this case. An escrow agent is someone who is independent of two parties potentially in conflict, like a settlement attorney at a real estate closing, she said. "As long as the escrow agents are government agencies, it's misleading to call them that," she said. "The government doesn't have a fiduciary obligation to the people whose (communications) keys it holds," but only to the government. "The whole idea continues to be structurally flawed," said Bruce Heiman, attorney for the Business Software Alliance, a group of top U.S. software firms, such as Microsoft, Novell, Lotus and Apple. Companies and individuals who transmit secure information "will have serious doubts about the integrity of the system." Since the government currently prevents the export of many powerful U.S.-made encryption techniques, the administration's attempts to promote its clipper chip "will discourage use of encryption, period, or hand over the market for encryption to foreigners." When one listens to an encrypted conversation, it sounds like a crackle or buzz. Under the plan, every law-enforcement agency will have a special personal computer or "black box" to descramble that crackle, but the device will work only when they have been given a special key from the escrow agents. When police get a judge's permission to intercept an encrypted conversation or stream of computerized data, they would use the box to determine the special encryption identifier or label assigned to that particular encryption device. A detective would notify NIST and Treasury that he or she has permission to listen in on the party. NIST and Treasury would have a list of the secret encryption key numbers - extremely long lists of 0s and 1s - for every encryption device sold in the United States. NIST and Treasury would find the appropriate one on the list, and then they would send the needed key number to the police over telephone lines. The police would then insert that decoder number into the black box to tap the phone line in question. The ACLU's Martin said the government, given lists of secret encryption numbers, "has an enormously greater ability to eavesdrop than it's ever had." Government officials deny that. Duncan Frissell The $1 Trillion/year Health Security Act of 1993, the most expensive government program in the hisotry of mankind. --- WinQwk 2.0b#0