House Subcommittee Criticizes Administration Opposition to SAFE Act

(May 18, 1999) The House International Economic Policy and Trade Subcommittee held a hearing on the SAFE Act on Tuesday afternoon, May 18. Administration officials who testified in opposition to the bill were met with tough questions, blunt criticism, and ridicule.

The Safety and Freedom through Encryption (SAFE) Act, HR 850 is sponsored is Rep. Bob Goodlatte (R-VA). The lead cosponsor is Rep. Zoe Lofgren (D-CA). Over half of the House is also cosponsoring the bill. The Clinton/Gore administration remains opposed.

On May 18 the House International Relations Committee's Subcommittee on International Economic Policy and Trade held a hearing on the bill. The first panel of witnesses included three administration representatives: William Reinsch of the Department of Commerce, Ronald Lee of the Department of Justice, and Barbara McNamara, of the NSA. A second panel included supporters of the bill.

The SAFE Act, H.R. 850, has three main components. First, it affirms the right of all Americans to use any type or strength of encryption they choose. Second, the bill prohibits the federal government from mandating key escrow, key recovery, or other back doors in encryption products. Finally, the SAFE Act provides export relief to American businesses.

Reinsch stated that "with respect to H.R.850, the Administration opposes this legislation as we did its predecessor in the last Congress." Reinsch and the other administration representatives stated that they want to continue export controls, and "encourage" key recovery. They said that their reasons are crime, national security, treaty obligations, and statutory obligations.

The administration's claim that criminals and drug dealers would use encryption products was met with derision from subcommittee members. Rep. William Delahunt (D-MA), who served as a prosecutor for 21 years before being elected to Congress, admonished the administration officials, "Let's get real." He said that "street level criminals" are not smart enough to use encryption products.

Rep. John Cooksey (R-LA) told the administration officials that "the sheriffs in my area are not concerned about the effects of this bill."

Rep. Dana Rohrabacher (R-CA) suggested that it would not matter if drug dealers used encryption because wiretaps of unencrypted communications have not succeded in stopping drug trafficking. "The government for the last twenty years has had all of this control," said Rep. Rohrabacher. "And the drug war is a joke. You go down in any city in the United States of America and any kid can get drugs."

When the administration officials said they opposed the bill because of international treaty obligations under the Wassenaar agreement, Rep. Goodlatte responded that Wassenaar is a "Swiss cheese" full of loopholes for foreign governments. Rep. Brad Sherman (D-CA) described Wassenaar as a "little dance" where foreign governments only "pretend to be interested in preventing their companies from marketing strong encryption worldwide. And, we fall for it, and are now in the process of giving away what may be the world's most important industry to our foreign competitors."

When the administration officials cited national security as a grounds for opposing the SAFE Act, subcommittee members questioned their national security priorities. Rep. Robert Menendez (D-NJ) criticized the administration's invocation of national security to ban "freedom and democracy" banners from the area of Camden Yards where the Baltimore Orioles played the Cuban baseball team.

	Rep. Dana Rohrabacher

Rep. Rohrabacher pointed out that it was Ronald Lee's office at the Department of Justice that had blocked the effort to get a wiretap on the suspect in the Los Alamos Chinese espionage scandal. "The overall conduct towards China is doing far more damage to our national security," said Rep. Rohrabacher.

Rep. Rohrabacher accused the administration of "trying to strengthen the government's control, not of other people hostile to the United States, but trying to assert the government's control of ordinary Americans, and American enterprise."

When the administration officials said that they wanted to "encourage" but not "mandate" key recovery, Rep. Goodlatte accused the administration of trying to "insidiously put key recovery into the entire country."

The only member of the Subcommittee to defend the administration was Rep. Benjamin Gilman (R-NY), the Chairman of the full House International Relations Committee. Rep. Gilman read an opening statement in which he urged his colleagues "not to rush to judgement."

Rep. Gilman

"I am very concerned that the enactment of the SAFE Act would make strong encryption all the more available to our adversaries and would only undermine international efforts to modernize and improve multilateral export controls under the Wassenaar Arrangement," said Rep. Gilman.

"Unlimited proliferation of this technology only makes the street corner drug dealer further immune from the consequences of his and others' actions. The drug trade costs us billions each year in crime, health care costs, lost worker productivity and destroyed families and lost young lives. Let us not contribute to this carnage under the guise of promoting trade and commerce."

Rep. Gilman left shortly after reading his statement, returned briefly to toss a few softball questions to the administration officials, and then left again.

The administration representatives stated that they support key recovery, and want to "encourage" its use. Moreover, they stated that the administration opposes the SAFE Act because it would prevent them from "encouraging" its use.

Reinsch stated that the administration wants "to promote the development of strong encryption products that would allow lawful government access to plaintext under carefully defined circumstances." He also stated that it is "our policy to encourage the marketing of a wider variety of "recoverable" products that may not be key recovery in a narrow sense but which may be helpful to law enforcement."

Similarly, Lee stated that the Justice Department believes in "encouraging the use of recoverable encryption products." He also asserted that, "Unfortunately, to the extent that this provision would actually prohibit government from encouraging development of key management infrastructures and other similar technologies, the provision could  preclude U.S. government agencies from complying with statutory requirements ..."

Rep. Goodlatte focused on key recovery during the questioning of witnesses. He asked Lee: "So you do not object to the provision in this bill which prohibits the government from mandating key recovery or key escrow?" Lee responded that "we are concerned that the provisions in HR 850 would inhibit the government from encouraging the use of key recovery, key escrow, other types of plaintext available systems."

Rep. Goodlatte also sought elaboration on what the administration meant by "encouraging the use of recoverable encryption products." He asked Lee, "What do you mean by the word encourage?"

"The government has a number of statutory obligations to make information available to the citizens," said Lee. "Some type of plaintext recovery system is necessary to meet that obligation." Lee did not define these statutory obligations, and Rep. Goodlatte eventually stated: "there is no statutory obligation." During a long exchange with Rep. Goodlatte, Ronald Lee spoke only vaguely and evasively about what the administration means by "encouraging" key recovery.

Rep. Bob Goodlatte

Rep. Goodlatte stated to Ronald Lee that "nothing in the legislation prohibits the government from having its own key recovery system for its own records and purposes. But we do prohibit the government from mandating that anybody who does business with the government, which is virtually every business, and every citizen in the United States, from using a system that requires a key recovery system be attached to it."

Rep. Goodlatte then criticized the administration's desire to "encourage" key recovery. "So you would insidiously put key recovery into the entire country by saying that if you want to do business with the United States government you have got to have key recovery. That is what you mean by encourage. When you say you really don't want to mandate key recovery, but you want to encourage it by saying if you want to do business with the government online, which everybody will be doing in the near future, you are going to require that they have a system that, if they do business with the government, has a key recovery feature. Is that what you are saying?"

When Rep. Goodlatte's time for asking questions expired, Rep. Sherman (D-CA) picked up where he left off. He focused specifically on using Social Security checks to "encourage" key recovery.

"Will this administration ever say that," he asked Ronald Lee, "for banks to have any deposits of the U.S. government, they must divulge the key recovery provisions as a condition for having U.S. government deposits.?" Lee did not answer. Rep. Sherman asked again. This time Lee stated "the administration's policy is not to seek mandatory regulation of key recovery." Sherman continued: "I am not talking mandatory. I am saying, as you may know, the U.S. government sends out a awful lot of Social Security checks. Those are being sent out by wire to banks across this country. Will the administration ever tell banks that they must divulge key information in order to be eligible to receive such wires of social security deposits?"

Lee then ducked the question by saying,  "I think that the wise thing to do is defer that question to Secretary Reinsch." Reinsch, in turn, asserted that "nobody has even thought about that." Under repeated questioning from Rep. Sherman, Reinsch would make no statement regarding the administration's policy on this point.

The administration's representatives repeatedly cited compliance with the Wassenaar agreement as a reason for opposing the SAFE Act. However, Representatives rejected this argument. "The problem with the Wassenaar agreement is that it is Swiss Cheese. It is something that is loaded with loopholes," said Rep. Goodlatte."It can be applied differentially in different countries, and is indeed being done so."

Rep. Sherman was more blunt. "There is, I think, no prospect of getting Congress to give the administration or any administration, domestically, what you are seeking internationally." He continued:

"You can't go after what you like domestically. So you want to punish the U.S. software industry, by putting it at a disadvantage vis a vis foreign competitors. And not surprisingly our foreign competitors and their governments have welcomed this effort, and have engaged in a little dance at Wassenaar, where they pretend to be interested in preventing their companies from marketing strong encryption worldwide. And, we fall for it, and are now in the process of giving away what may be the world's most important industry to our foreign competitors. And then you come to us and you show us how youthful our technology competitors dance at Wassenaar, and give us that as a reason why we should bludgeon our own industry, and make it more difficult for them to compete worldwide."

Several Representatives stated that the Department of Justice should not appeal the Ninth Circuit decision in the Bernstein case. On May 6 the appeals court held that U.S. encryption export regulations violate First Amendment free speech rights. See, 9th Circuit Opinion.

Ronald Lee, of the Justice Department, had this to say. "The recent decision of the United States Court of Appeals for the Ninth Circuit in Daniel Bernstein v. United States Department of Justice and United States Department of Commerce has not changed our view that legislation eliminating export controls is contrary to our national interests. The Department of Commerce and the Department of Justice are currently reviewing the Ninth Circuit's decision in Daniel Bernstein v. United States Department of Justice and United States Department of Commerce, and we are considering possible avenues for further review, including seeking a rehearing of the appeal en banc in the Ninth Circuit. In the interim, the regulations controlling the export of encryption products remain in full effect."

The subcommittee also heard from a panel of supporters of the SAFE Act.

• Alan Davidson, Staff Counsel, Center for Democracy and Technology.
• Jeffrey Smith, attorney, Americans for Computer Privacy.
• Ira Rubinstein, Senior Corporate Attorney for Microsoft, on behalf of the Business Software Alliance.
• David Weiss, Software & Information Industry Association.
• Dinah PoKempner, Human Rights Watch.
• Ed Black.

Rep. Ileana Ros-Lehtinen (R-FL), the Chairman of the Subcommittee, presided over most of the hearing. The other members of the subcommittee who participated in the hearing included Benjamin Gilman (R-NY), Douglas Bereuter (R-NE), Richard Burr (R-NC), Dana Rohrabacher (R-CA), Tom Campbell (R-CA), Menendez (D-NJ), Brad Sherman (D-CA), and William Delahunt (D-MA). Bob Goodlatte (R-VA) is not a member of the subcommittee, but was permitted to sit on the panel for this hearing.