Speeches and Testimony

 

 

March 4, 1999

 

 

Security and Freedom through Encryption (SAFE)Act

Thank you, Mr. Chairman and distinguished members of the Courts and Intellectual Property Subcommittee. It is an honor to appear before you today to express my strong support for this legislation, H.R. 850, the Security and Freedom Through Encryption Act.

Americans for Tax Reform has taken an increasing interest in the emerging economy and the implications for every taxpayer, because the digital economy does impact every taxpayer. Along those lines I have considered each issue that effects electronic commerce very seriously. In addition, I was selected to serve on the Advisory Committee on Electronic Commerce to examine the role and impact of taxation on electronic commerce. Encryption is a principle building block for the success of the digital economy both domestically and internationally. This basic fact drives both my and the taxpayer’s movement interest.

For several years, and congressional sessions, policymakers, public interest groups and privacy advocates have been engaging in a great debate on the issues concerning a basic electronic necessity -- encryption. As we have heard in the press and in the "Encryption and the Constitution" hearing held by Senator Ashcroft last year, the Founding Fathers had no trouble deciding whether robust encryption should be used: They actually used cypher wheels, which are encryption devices, during the discussions that would result in the very founding of this nation. The great debate that established our beloved Constitution – a document that embodies the freedoms we hold so dear -- was actually developed because of the advantages of technology. Encryption has long been used as a tool to protect communications and to ensure that integrity and privacy of communications remain intact. Since that momentous time we have clearly moved away from trusting the American people and have opted instead to lay the groundwork for a weakened Bill of Rights.

It is truly ironic that the Congress, which has little difficulty raising personal income taxes and has less than 90 years experience with that notion, cannot see clear to allow the free use of robust encryption, which 250 years ago patriots were using to secure our fundamental freedoms from an ever more controlling government. The impossibly complicated federal tax system is impossible to fathom, even for IRS officials as we heard last year during the hearings on IRS reform. In addition, unlike the federal budget encryption technology is fairly straightforward by comparison and based on mathematics, instead of "creative financing."

The push towards increased federal government control seems unending. William Safire recently noted in The New York Times that a half-century ago, government at all levels controlled a fourth of our economy and that today government controls about one-third. Controls on encryption are one more governmental attempt to control an aspect of everyday life, our right to protect our personal information from snoops and criminals. The historical perspective on this issue is fairly apparent. Encryption has been used in, and by, this country for hundreds of years.

Today I applaud Congressman Goodlatte, Congresswoman Lofgren, and the 205 co-sponsors for re-engaging in this fundamentally important issue. House Bill 850, The Security and Freedom through Encryption "SAFE" Act, withstood many challenges last Congress and managed to move further than any other piece of legislation on the issue. This legislation should be enacted. SAFE is not a starting point as many would like to advocate, it is the solution. SAFE is not a marker, nor is it a rhetorical piece that keeps the issue alive: It is an answer.

Encryption has become an even more crucial component of communications in this digital age of high technology. The proliferation of communications and communications devices – phones, faxes, e-mails, palm pilots and laptops – make it even more critical that the vital information flowing across these mediums is secure. So privacy, security and the integrity of communications are most important to the average American.

I now want to turn to the issue of the export of encryption technology. There are very practical reasons for allowing the export of encryption technology. Perhaps the most important piece to understand here is that the definition of export is most appropriately viewed through the lens of electronic commerce. For example, did you know that it is illegal for you to use the Web browsers found on many of your laptop computers if you are outside of the United States? In fact, you are breaking the law if you even leave the country with the software installed that only uses strong encryption. This clear limitation on U.S. citizens only impacts our combined personal and professional lives by essentially limiting our mobility of efficiency. So, the issue here is not sending products manufactured here to foreign shores, but rather the mere use of technology by U.S. citizens of their laptop computers.

Also, encrypted messages, let’s say medical information, cannot be securely encrypted here and then sent out of the country. Make no mistake, the information could still be sent, but not without a dramatic increase in the chance that a hacker could intercept or, maybe worse, alter the information in route. The impact for distance medicine is dramatic -- all you need to do is imagine your loved one dying because the information sent was altered by a hacker.

The pure economic effect on this country is also important. We are, and have been, creating an artificial market for foreign competition by eliminating U.S. companies from the global marketplace. The current policy does not allow U.S. companies to compete internationally and with their absence several other companies have gotten their beginning and can now be competitive. Again, the specter of national security is raised. We are actively encouraging through misguided government policies the wholesale loss of U.S. intellectual capitol and property. Those very companies that have driven the economic expansion of the last decade are being punished for being the best in the world. A unilateral preclusion of opportunity not only hamstrings economic opportunity but is also simply unworkable. How do we benefit if other countries are producing the encryption that, according to the FBI, international terrorists may use? What are the chances that these foreign corporations will in any way cooperate with the United States?

Another historical pattern worth mentioning is the increasingly controlling nature of the rhetoric that those opposed to allowing citizens to protect their privacy have been using. Four years ago the FBI simply argued that strong encryption should not exported. This position held for a couple years until they were pressed as to how these international concerns relate to their fundamental mission. At that point, rather than acknowledging the facts that robust encryption products, both hardware and software, are being manufactured around the world, the FBI decided that the better approach would be to suggest and support a domestic restriction on the use of encryption.

One of the most disturbing overtones of the encryption debate has been how flagrant the government has been in wanting to increasingly regulate the software and hardware market as those markets relate to encryption. The basic premise of the federal policy has been to regulate what the end user is allowed to operate. Remarkably the only people who get regulated in this environment are the law-abiding consumers who purchase their technology legally and legitimately. The criminal who uses encryption to cloak other crimes is in no way impacted. Why? Because robust encryption is easily available around the world. We are back to a governmental regime that at a fundamental level does not trust the people, that truly believes that only Big Brother can guide society, and that only an omnipotent federal government can make the correct choices.

Make no mistake that this regulation is broad and perhaps hidden at first blush. The indirect problem is that, in addition to the explicit regulation of the technology industry, not allowing the free export of robust encryption puts the government firmly in charge of an individual’s decision on how to protect their most private matters. Think of the current use of the typical personal computer, enhanced with access to the Internet. Would any of us have believed, even two years ago, the explosion we saw this holiday season in electronic commerce, the rapid growth in on-line banking, the dramatic switch to electronic trading of stock, the rapid transfer of medical documents to facilitate healthcare any where in the country, or even the greatly increased numbers of taxpayers filing electronically? This is the information that must be protected in the best way possible, not only when being transferred domestically, but internationally as well. Why then should the federal government be in the business of exposing citizens to criminals, ranging from terrorists to hackers on a lark?

Seemingly, every time the opposition on this issue begins to lose on the facts they shift to increasingly restrictive and controlling policy positions. This unwillingness to rationally discuss and work through this issue causes a great deal of consternation and problems in trying to work toward an adequate solution. We may as well make note of the obvious -- no one on this panel, in this room, or involved in this debate wants to see emboldened criminals, secure terrorists, or even cocky hackers succeed, but we cannot allow the federal government to diminish the fundamental freedoms of U.S. citizens so that the job is made easier. This concept is so basic, so necessary, that even a recent Simpson’s episode could make an easily understandable point of the importance of the First, Fourth and Fifth Amendments. Those amendments mean something, they stand for our way of life, they are icons of our liberty, and because of that we do not strip them out of our lives or tear them away from the Bill of Rights so that criminals are more easily revealed.

Encryption technology is absolutely necessary for the future of electronic commerce. At the same time we must all accept the fact that the Internet is an international medium. Whether individually we like it or not, international commerce became astoundingly easier in the last several years. Policies that do not accept this basic fact are outmoded and wrongheaded from the moment of introduction. To arbitrarily limit private transactions by restricting the export of encryption only limits the success of every U.S. citizen. My feelings are so strong on this issue, in fact, that I have placed the discussion of encryption and its impact on electronic commerce as a central issue to be taken up by the Advisory Committee on Electronic Commerce. One of the express areas of direction given to the Commission is to look at the impact of Internet access on the state and local revenue base. The answer is clear that without the fair use of encryption the impact will be zero. Who would transmit sensitive financial, health, personal or taxation information if they did not have some belief that the information would not be intercepted by those intent on doing harm. These issues are fundamentally tied.

This raises yet another crucial issue – we must take measures to protect this country’s critical infrastructures, including individual U.S. citizens. For years now we have heard only the most dire predictions of technological advances. You could be led to believe that the FBI’s job has become impossible because of technology. Never do we hear how much easier technology has made law enforcement’s mission throughout the years. Ironically, only a couple years ago the FBI was boasting, via Capitol Hill demonstrations, how more efficient it has become to catch traffickers in child pornography by going on-line and basically just asking for the material. This demonstration is all the more striking then when at the same time they claim that robust encryption use by criminals will hinder their efforts. They are also fond of touting the story of catching John Gotti because his men were not smart enough to essentially encrypt their discussions. In each case, the FBI got all the information they needed, whether because of dumb criminals or good detective work.

This is exactly why the FBI gained a reputation as the best crime-fighting force in the world -- real detective work. The reputation would never have been earned if they were expending their energies looking to restrict civil liberties and attempting to make their jobs easier rather than just doing their jobs in the first place. I applaud the reputation of the FBI that it has earned as a crime fighting force out to protect citizens from criminals and others who intend harm to our way of life. However, at the same time I am discouraged by efforts that in any way expand governmental control of our lives, raise taxes, and potentially lead to abuses of power. Being a crime-fighter is an inherently difficult task, but the answer is not to stop the flow of progress and advancements by those who are law-abiding.

Even worse than the arguments for a ban or limits on exports and a ban on domestic use, particularly from the taxpayer’s perspective, have been the proposed solutions to allowing or the use of encryption. Often the argument is used that the FBI does support the use of robust encryption. Like a bad joke, the punch-line kills the set-up. The FBI would agree to allow the export or domestic use of encryption if only industry would agree to program a backdoor for the government to use to spy on individuals.

Another option has long been a failed scheme of handing a key to the FBI to unlock your files at its discretion. First, even by the most optimistic projections the costs of this key escrow are prohibitive and would cost the taxpayers billions and billions of dollars to fund this extreme expansion of police powers. Second, no one can say whether a scheme such as the government escrow of keys can even work on a scale anywhere near what is necessary. Third, the whole concept of key escrow is based on the flawed premise that customers would even consider purchasing products that allow for government intrusion. Not only is it technologically unworkable, but unmarketable : customers do not want to open wide their private affairs to the government for ananlysis. Finally, we must always consider whether we want any organization, governmental or not, to hold the literal key to our most private affairs in one place -- an ideal target for criminals.

One of the essential elements of the taxpayers’ movement has been a belief in and personal responsibility and accountability. The government’s current approach is antithetical to trust in people and to personal responsibility. We can no longer stand on the sidelines while government agencies, through their words or deeds, tear down the virtues of our society. We should all do what is necessary to promote those values that are central to who we are as the United States of America and, more importantly, as a people united in a quest for justice and liberty. We must restore our faith in individuals and the government must begin to reflect that the values of the American people should hold sway, not the values of a handful of Washington bureaucrats.

As many on the Committee know Americans for Tax Reform asks congressional members and challengers to take the Taxpayer’s Protection Pledge each year. Another of ATR’s major project is to calculate a Cost of Government Day as a follow-up to Tax Freedom Day. Cost of government takes into account all the costs of government such as regulation, not just taxation. Perhaps another calculation is relevant as well. A calculation of the costs that errant policies place on individuals, whether personal or corporate. Even if such a calculation never existed we should take great efforts to avoid regulation without factual basis, or policies based on fear of the few rather than belief in the many.

I strongly encourage those who do not feel comfortable with the arguments regarding encryption or the technology that drives encryption to become familiar with the arguments and seek an understanding of the technology. I personally work with many of the organizations represented here, and I think I speak for all of us in saying that we are confident that when the facts are presented that the answer is clear -- we should be encouraging the use of robust encryption to protect each citizen in their everyday affairs, from simple personal transactions to the protection of the country.