TLJ News: May 11-15, 2013.

TLJ News from May 11-15, 2013

EC to Investigate Huawei and ZTE

5/15. The European Commission's (EC) Trade Commissioner, Karel De Gucht, announced in a release that the EC has decided "to open an ex officio anti-dumping and an anti-subsidy investigation concerning imports of mobile telecommunications networks and their essential elements from China".

Karel De Gucht De Gucht (at right) added, however, that "This decision will not be activated for the time being to allow for negotiations towards an amicable solution with the Chinese authorities."

This release adds that "An ex officio trade defence action allows the European Commission to launch a trade defence investigation on its own initiative without an official complaint by the EU industry. This possibility is particularly important as it offers a 'shield' when the risk of retaliation against European companies asking for trade defence instruments is high. Such an action can be focused on either an anti-dumping or anti-subsidy investigation or both."

See, full story.

People and Appointments

5/15. The Senate confirmed William Orrick to be a Judge of the U.S. District Court for the Northern District of California by a vote of 56-41. See, Roll Call No. 125. All of the yes votes were cast by Democrats, except that Sen. Jeff Flake (R-AZ) also voted yes. All of the no votes were cast by Republicans. The Northern District of California hears many technology related cases. However, Republican opposition to Orrick is based on his prior statements and activities in non-technology related issues, and especially his work in the Obama Department of Justice (DOJ) on immigration matters. See, story titled "Divided Senate Judiciary Committee Approves Orrick for NDCal Judgeship" in TLJ Daily E-Mail Alert No. 2,530, March 5, 2013.

5/15. Steven Miller, acting Commissioner of the Internal Revenue Service (IRS), resigned.

5/15. Lona Nallengara was named Chief of Staff of the Securities and Exchange Commission (SEC). See, SEC release. She went to work at the SEC in 2011. Before that, she worked in the New York City office of the law firm of Shearman & Sterling.

5/15. Keith Higgins was named Director of the Securities and Exchange Commission's (SEC) Division of Corporate Finance. See, SEC release. He previously worked in the Boston office of the law firm of Ropes & Gray.

More News

5/15. The Federal Trade Commission (FTC) sent one of four letters to 90 app developers regarding compliance with the FTC's Childrens' Online Privacy Provection Act (COPPA) rules changes, adopted in December of 2012. See, story titled "FTC Releases Expanded COPPA Rules" in TLJ Daily E-Mail Alert No. 2,494, December 19, 2012. See also, letter to U.S. companies that may be collecting images or sounds of children, letter to U.S. companies that may be collecting persistent identifiers from children, letter to foreign companies that may be collecting images or sounds of children, and letter to foreign companies that may be collecting persistent identifiers from children.

Rep. Poe Introduces Free Flow of Information Act

5/14. Rep. Ted Poe (R-TX) introduced HR 1962 [LOC | WW], the "Free Flow of Information Act of 2013", on May 14, 2013. This bill, and related bills from earlier Congresses, are also sometimes referred to as "media shield" bills.

Rep. Poe stated in a release that "This bill would protect reporters from being compelled to reveal their confidential news sources in federal court proceedings. Specifically, the bill would maintain the free flow of information to the public by providing conditions for the federally compelled disclosure of information by certain persons connected with the news media."

He added that "Democracy cannot exist without a free press. A free press provides critical information to the public, including information about the activity of the federal government. The media's ability to deliver the news provides a crucial check on government power. Maintaining confidentiality of sources is critical to ensuring the free flow of information without government interference."

The key issue is reporters' ability to acquire information from government employees, and the ability of the consumers' of news to learn about the activities and operations of their government. Those in government who disclose corruption, waste, fraud, abuse, and internal policy disputes often request and receive from reporters promises of confidentiality. Disclosure of their identities can lead to retaliation by their superiors. Presidents and senior government officials, from both parties, have long sought to limit the free flow of such information by seeking the identities of those who are providing information to reporters. One way is to compel reporters to disclose their sources. Another is to obtain records from communications service providers. The main motive is to stem the free flow of information, which government officials often label "plugging leaks". This bill would seek to limit these abusive practices by government officials.

The House bill had 18 cosponsors as May 21. While Rep. Poe is a Republican, most of the cosponsors are Democrats. Rep. Trey Radel (R-FL), a cosponsor, is a former television and radio reporter, anchor and host.

The House bill was referred to the House Judiciary Committee (HJC). Rep. John Conyers (D-MI), another cosponsor, is the ranking Democrat.

Rep. Bob Goodlatte (R-VA), the Chairman of the HJC, is not a cosponsor. However, he has cosponsored similar legislation in the past.

Similar bills have been introduced in the House and Senate in many Congresses. However, both the Bush and Obama administrations opposed them, and they were not enacted into law.

However, then Senator Obama did join as a cosponsor S 1267 [LOC | WW], the "Free Flow of Information Act of 2007", in April of 2008, during the primary elections. His enthusiasm for a free flow of information lapses with his election. Then, after public disclosure of the DOJ's abuse of subpoenas directed at the Associated Press, his staff asserted that he has supported media shield legislation. See, transcript.

The prospects for passage of a media shield diminished in recent years when two of the leading proponents left the Congress. Former Rep. Rick Boucher (D-VA) lost his seat in the 2010 elections. Former Rep. Mike Pence (R-IN), a former journalist, did not run for re-election in 2012.

The issue acquired a renewed urgency with the Associated Press's disclosure that the Obama Department of Justice engaged in a long running and wide ranging warrantless seizure of phone of AP reporters and editors. See, story titled "Associated Press Alleges Unjustified FBI Seizure of Reporters' Phone Records" and "Commentary: IRS, AP and Benghazi Scandals Provide Arguments for Supporters of ECPA Reform and Shield Act" in TLJ Daily E-Mail Alert No. 2,516, May 14, 2013.

Much of the just introduced is identical to language in a bill passed by the House, but not the Senate, in the 111th Congress, HR 985 [LOC | WW], the "Free Flow of Information Act". However, the just introduced bill also includes some significant additions and deletions. See also, story titled "House Judiciary Committee Approves Media Shield and Communications Services Provider Protection Bill" in TLJ Daily E-Mail Alert No. 1,919, March 30, 2009.

The related House bill in the 110th Congress was HR 2102 [LOC | WW]. See also, story titled "House Approves Boucher-Pence Media Shield Bill" in TLJ Daily E-Mail Alert No. 1,656, October 17, 2007.

House Passes Internet Governance Bill

5/14. The House passed HR 1580 [LOC | WW], an untitled bill that states that "It is the policy of the United States to preserve and advance the successful multistakeholder model that governs the Internet" by a vote of 413-0. See, Roll Call No. 145.

Rep. Greg Walden (R-OR), Chairman of the House Commerce Committee's (HCC) Subcommittee on Communications and Technology, stated that "This bipartisan bill is designed to combat recent efforts by some in the international community to regulate the Internet, which could jeopardize not only its vibrancy, but also the benefits that it brings to the entire world." See, Congressional Record, May 14, 2013, at Page H2582.

He continued that "Nations from across the globe met at the December 2012 World Conference on International Telecommunications in Dubai. They considered changes to the international telecommunications regulations. The treaty negotiations were billed as a routine review of rules governing ordinary international telephone service. A number of countries, such as Russia, China, and Iran, sought to use the negotiations, however, to pursue regulation of the Internet through the International Telecommunication Union, a United Nations agency. None other than Russian President Vladimir Putin has been clear in his objective of ``establishing international control over the Internet using the monitoring and supervisory capabilities of the International Telecommunication Union.´´"

Rep. Walden added that the US "and 54 other countries left Dubai without signing the treaty. Unfortunately, 89 nations did sign. The revised ITRs will be implemented by those nations, and that begins in January of 2015. Now, a number of upcoming conferences will present additional opportunities for countries to pursue international regulation of the Internet, including the World Telecommunication/ICT Policy Forum in Geneva, which starts today, and the ITU Plenipotentiary Conference in Busan, South Korea, in 2014."

He said that "I also want to address the elephant in the room, if you will: the FCC's network neutrality regulations. ... Let me be clear: while I oppose the FCC's rules regulating the Internet, this legislation does not address those regulations."

Rep. Henry Waxman (D-CA), the ranking Democrat on the HCC, said that "Democrats and Republicans in Congress and the Administration have been united in our support for a global open Internet governed from the bottom up. We worked together last Congress on a bipartisan, bicameral basis to express our support for that successful approach to Internet governance. On some domestic issues, I have strong differences with the majority over Internet policy. One example is my support for a domestic Internet policy that prevents Internet service providers from acting as ``gatekeepers´´ that control what American citizens can do online. But those differences appropriately stop at the water's edge."

He added that the bill has been revised to assure "that the legislation is in no way intended to direct domestic Internet policy. With these changes and the assurances of my colleagues, I am pleased that we stand together on a bipartisan basis in support of our diplomats and the multistakeholder model for global Internet governance."

The Senate has not yet passed this bill. It has been referred to the Senate Commerce Committee (SCC).

See also, stories titled "House Commerce Committee Passes Internet Governance Resolution" in TLJ Daily E-Mail Alert No. 2,551, April 17, 2013, "House Subcommittee Approves Bill Regarding Promoting a Global Internet Free from Government Control" in TLJ Daily E-Mail Alert No. 2,550, April 11, 2013, and "House Commerce Subcommittee Begins Mark Up of Internet Freedom Resolution" in TLJ Daily E-Mail Alert No. 2,549, April 10, 2013.

Commentary: IRS, AP and Benghazi Scandals Provide Arguments for Supporters of ECPA Reform and Shield Act

5/14. The disclosures in the last week regarding Internal Revenue Service's (IRS) targeting of tea party groups, the Department of Justice's (DOJ) massive seizure of Associated Press phone records, and government officials' false descriptions of the September 11, 2012 attack in Benghazi may provide additional arguments for proponents of reform of surveillance laws, and impetus for enactment of a bills, such as those that would update the Electronic Communications Privacy Act (ECPA).

See also, related stories in this issue titled "Associated Press Alleges Unjustified FBI Seizure of Reporters' Phone Records" and "Inspector General Reports on IRS Targeting of Tea Party Groups".

These disclosures provide proponents of reform evidence and debating points to support their positions that the principles embodied in the 1st and 4th Amendments should be applied to online, digital and cloud based activities, just as they have been applied for centuries to the physical world, notwithstanding of the objections of the DOJ and other federal agencies.

Public disclosure of government misconduct in the Nixon administration's Watergate scandal had a significant causal effect upon the passage of laws designed to promote government transparency and integrity, and reduce abuse of surveillance powers. It is possible that recent disclosures regarding the IRS, AP and Benghazi could have an effect on some current legislative proposals, and particularly, on the various proposals to reform the ECPA.

Trust in Government. The last time that a Congressional committee conducted an in depth review of the federal governments' use of its surveillance powers was in 2005, when the House Judiciary Committee's (HJC) Subcommittee on Crime, under the leadership of Rep. Howard Coble (R-NC) and Rep. Bobby Scott (D-VA), held about a dozen hearings over several months in the run up to the extension of numerous sunsetted provisions of the 2001 surveillance act, Title II of the USA PATRIOT Act.

DOJ officials were asked repeatedly in those hearings why they should possess such broad surveillance powers that are not subject to judicial supervision. DOJ officials repeatedly argued that they are serious professionals who would not abuse their powers.

Members of the Subcommittee could only site long distant examples of abuses, such as the wiretapping and bugging of the Rev. Martin Luther King during the Kennedy and Johnson administrations, numerous abuses during the Nixon administration (sometimes referred to collectively as "watergate"), and the FBI providing hundreds of FBI files on Republicans to political operatives in the Clinton White House in 1993 and 1994 (sometimes referred to as "filegate").

DOJ officials argued at the 2005 hearings that things are different now. Trust us.

The Congress trusted the IRS to apply the tax laws impartially. It did not. The former head of the IRS, Douglas Shulman, falsely testified to the House Ways and Means Committee's (HWMC) Subcommittee on Oversight in March of 2012 that "There is absolutely no political targeting."

The latest disclosures now provide proponents of ECPA reform, and advocates of passage of a Shield Act, arguments that government officials are still in need of restraint. In light of recent disclosures, the "trust us" argument may now be less persuasive to many members of Congress.

One of the key components of ECPA reform bills is the proposal that the government must obtain a court warrant to access cloud stored email.

The recent disclosures about the IRS pertain to the IRS's requesting information from directly from targeted groups, not warrantless demands to email service providers to turn over email. Documents released by targeted groups show that the IRS demanded, among other things, copies of all email and other communications. See, story titled "IRS Admits That It Discriminated Against Tea Party Groups" in TLJ Daily E-Mail Alert No. 2,558, May 10, 2013.

ECPA reform bills have made very little progress in significant part because of federal government opposition. Moreover, it is not just criminal investigators and prosecutors at the FBI and DOJ. It is also regulatory agencies with only civil enforcement authority that want to be able to continue to seize cloud stored email without a warrant for civil investigations. During recent debates the agency most cited by critics of ECPA reform was the Securities and Exchange Commission (SEC).

But, the key point is, other federal agencies, including the IRS, may seek access to cloud stored email without a warrant. To date, neither the IRS nor the TIGTA has stated that the IRS seized cloud stored email of tea party groups. But then, one IRS motivation in these cases may have been to impose costs and burdens on disfavored groups, and to deter prospective contributors by demanding donor lists. These goals are accomplished through direct requests to targeted groups, but not through secret orders directed to cloud service providers. However, other inappropriate goals of the IRS or other federal agencies may be best served by seizure of email from service providers.

The Center for Democracy and Technology (CDT) wrote in a short piece that "every American, regardless of political ideology, should be troubled", particularly because the IRS "doesn't believe it's required to get a warrant before reading Americans' emails. This stance by the IRS is based on its interpretation of the Electronic Communications Privacy Act (ECPA), an outdated federal law that sets the standards for when the government can access our digital communications."

The CDT added that "In the case of Tea Party organizations, the IRS asked for the documents directly from those groups. What if it didn't even have to ask? What if the IRS could just go to the groups' cloud provider with a subpoena and get the same information without the organization ever knowing until much later? Unfortunately, that's the current state of the law."

The CDT has been arguing for years for ECPA reform. Perhaps now more members of Congress will take note.

Abuse of Subpoena Powers. The latest disclosures regarding the AP are not new or novel. The DOJ and other federal agencies have a history of abusing their subpoena powers and other statutory authorities. Moreover, the DOJ has a history of invoking non-existent powers to snoop on reporters.

DOJ and other government officials argue the necessity of the obtaining information in important investigations. However, another goal has been to undermine legitimate news reporting, and to deter disclosures of government dishonesty, corruption, waste, fraud and abuse.

For example, the DOJ's Office of the Inspector General (OIG) has released series of reports that document FBI abuse of National Security Letter (NSL) authority.

NSL authority exists under federal statute -- 18 U.S.C. § 2709. Like subpoenas, NSLs do not require a warrant or other prior court authorization. They enable the DOJ's FBI to obtain records, including subscriber, billing and call records of phone companies and ISPs. NSLs also apply to libraries to the extent that they are providing an electronic communication service.

On March 9, 2007, the DOJ's OIG released a report [30 MB in PDF] titled "A Review of the Federal Bureau of Investigation's Use of National Security Letters". See also, story titled "DOJ IG Releases Reports on Use of NSLs and Section 215 Authority" in TLJ Daily E-Mail Alert No. 1,551, March 13, 2007. That report covered the use of NSLs in 2003 through 2005, and found abuses.

On March 13, 2008, the OIG released a report [187 pages in PDF] titled "A Review of the FBI’s Use of National Security Letters: Assessment of Corrective Actions and Examination of NSL Usage in 2006". See also, story titled "DOJ Inspector General Releases Second Report on FBI Misuse of National Security Letters" in TLJ Daily E-Mail Alert No. 1,730, March 12, 2008. It disclosed further abuses.

Then, on January 20, 2010, the OIG released a report [306 pages in PDF] titled "A Review of the Federal Bureau of Investigation's Use of Exigent Letters and Other Informal Requests for Telephone Records".

The OIG found improper conduct by the FBI in the use of "exigent letters" to obtain phone records from communications companies to, among other things, "target" reporters at the Washington Post and New York Times, which first reported the National Security Administration's (NSA) warrantless wiretap program. (See, pages 250-252.)

The NYT was the first to report this NSA program. It published a story by James Risen and Eric Lichtblau on December 16, 2005, titled "Bush Lets U.S. Spy on Callers Without Courts". It stated that "President Bush secretly authorized the National Security Agency to eavesdrop on Americans and others inside the United States to search for evidence of terrorist activity without the court-approved warrants ordinarily required for domestic spying, according to government officials." See also, story titled "President Bush Discloses Interception of Communications Without Court Approval" in TLJ Daily E-Mail Alert No. 1,275, December 19, 2005, and story titled "Bush, Gonzales & Hayden Discuss Presidential Intercepts and PATRIOT Act" in TLJ Daily E-Mail Alert No. 1,276, December 20, 2005.

The concept underlying the use of these "exigent letters" was that the FBI could access records by issuing a letter to communications companies in the event of an emergency, that specified the emergency, and the records sought. These involved no court approval. However, unlike subpoenas and NSLs, for which statutory authority exists, there was no statutory basis for these "exigent letters". The FBI fabricated legal authority out of thin air.

Thus, in the case of issuance of "exigent letters", the failure to follow the law arose, not out of misconstruing a complicated statute, but in applying a non-existent authority as if it existed.

The OIG found, of course, that the mere use of "exigent letters" violated the law. But moreover, the OIG found that the FBI then proceeded to violate its own purported basis for these letters. For example, it issued "exigent letters" when there was no emergency.

In addition to the improper targeting of the Washington Post and New York Times in surveillance activities, the DOJ has a history of abuse of subpoena powers to impede and degrade the quality of news reporting.

The DOJ uses subpoenas to compel reporters to disclose their confidential sources.

The American Society of News Editors (ASNE) published a piece in 2009 that states that "Since 2001, five journalists have been sentenced or jailed for refusing to reveal their confidential sources in federal court. Two reporters were sentenced to 18 months in prison and one reporter faced up to $5,000 a day in fines. A 2006 study estimated that in that year alone, 67 federal subpoenas sought confidential material from reporters, with 41 of those subpoenas seeking the name of a confidential source."

Former Rep. Mike Pence (R-IN) and former Rep. Rick Boucher (D-VA) worked unsuccessfully over many Congresses to enact legislation known as "media shield", "free flow of information", or "shield act" that would protect news reporters from abusive subpoenas from federal government agencies. These bills would have limited the ability of federal entities to compel journalists to provide testimony or documents, or disclose sources, related to their work. These bills would also would limit government access to records of carriers, ISPs and other service providers.

The Bush and Obama administrations, and particularly the DOJ, opposed these bills. None become law. Rep. Boucher was defeated in the 2010 election. Rep. Pence did not run for re-election in 2012. He is now Governor of Indiana.

In the 111th Congress, see HR 985 [LOC | WW], the "Free Flow of Information Act", S 448 [LOC | WW], the "Free Flow of Information Act of 2009", and story titled "House Judiciary Committee Approves Media Shield and Communications Services Provider Protection Bill" in TLJ Daily E-Mail Alert No. 1,919, March 30, 2009.

In the 110th Congress, see HR 2102 [LOC | WW], and story titled "House Approves Boucher-Pence Media Shield Bill" in TLJ Daily E-Mail Alert No. 1,656, October 17, 2007.

Jay Carney, Press Secretary to President Obama, and no relation to the author of this article, stated at a news conference on May 15 that "the President has long supported media shield legislation in the Senate, during the 2008 campaign, and as President. In fact, under his leadership, the administration successfully negotiated a balanced bill in the Senate in 2009 that passed the Judiciary Committee by a significant vote, bipartisan vote, and was widely supported by the news media and journalism organizations represented in this room." See, transcript.

Pretexting. It should also be noted that inappropriate accessing of phone records for the purpose of impeding news coverage is not limited to government agencies. Recall the Hewlitt Packard pretexting scandal in 2006, and the more recent News Corporation scandal.

Rep. Joe Barton (R-TX) stated at a Congressional hearing that "Pretexting is pretending to be someone you're not, to get something you shouldn't have, to use in a way that is probably wrong."

In the HP pretexting scandal, pretexters and private investigators attempted to obtain phone records of, and/or physically surveil, HP Directors (including George Keyworth, Thomas Perkins, Lawrence Babbio, and Carly Fiorina) and numerous news reporters (including Dawn Kawamoto, Tom Krazit, and Stephen Shankland of CNET, Roger Crockett, Ben Elgin, and Peter Burrows of Business Week, John Markoff of the New York Times, and Pui-Wing Tam and George Anders of the Wall Street Journal.

In response to the HP pretexting scandal, the 109th Congress enacted HR 4709, the "Telephone Records and Privacy Protection Act of 2006" imposing a criminal ban on pretexting to obtain phone records. It is codified at 18 U.S.C. § 1039.

Notably, it exempts pretexting by government agencies.

Inspector General Reports on IRS Targeting of Tea Party Groups

5/14. The Department of the Treasury's (DOT) Treasury Inspector General for Tax Administration (TIGTA) released a report [54 pages in PDF] titled "Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review".

A senior Internal Revenue Service (IRS) official gave a speech on May 10, 2013 at an American Bar Association (ABA) meeting in which she disclosed a few of the improprieties covered in this report. See, story titled "IRS Admits That It Discriminated Against Tea Party Groups" in TLJ Daily E-Mail Alert No. 2,558, May 10, 2013.

This report states that the TIGTA examined "the IRS's treatment of organizations applying for tax-exempt status". In so doing, it examined three questions -- whether the IRS "1) targeted specific groups applying for tax-exempt status, 2) delayed processing of targeted groups' applications for tax-exempt status, and 3) requested unnecessary information from targeted groups."

The TIGTA did not examine whether the IRS passed on information collected from the targeted groups to other government agencies, to Democratic political committees, or to others.

The report finds that the IRS "developed and used inappropriate criteria to identify applications from organizations with the words Tea Party in their names". It also states that the IRS also targeted groups whose applications used the word "patriots" or that held policy positions on "government spending, government debt or taxes".

The report does not reach the conclusion that any IRS personnel or others violated federal criminal laws. The report includes non-criminal findings, such as "inappropriate" conduct, and the "appearance" of partiality.

Specifically, this report finds that "Using the names or policy positions of organizations is not an appropriate basis for identifying applications for review by the team of specialists", and "the criteria developed by the Determinations Unit gives the appearance that the IRS is not impartial in conducting its mission".