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Civil Liberties
FBI Chief Takes Blame For Misuse Of Subpoenas
by Andrew Noyes
The head of the FBI on Tuesday took personal responsibility for his agency's misuse of a secret subpoena power included in a 2001 anti-terrorism law. He said at a Senate Judiciary Committee hearing that he is taking steps to ensure that the improper collection of citizens' telephone, e-mail and financial records does not continue.
FBI Director Robert Mueller told the panel he fully supports recommendations made in a recent report by Justice Department Inspector General Glenn Fine. The report revealed widespread failures in the agency's use of "national security letters" under the USA PATRIOT Act.
Fine's analysis showed that Congress was not adequately briefed on thousands of requests for such subpoenas. Of particular interest during House and Senate hearings last week was the agency's issuance of so-called exigent letters, which are to be used in emergencies but were sent to telecommunications firms in non-emergencies.
It also was reported Tuesday that the FBI repeatedly provided inaccurate data to the Foreign Intelligence Surveillance Court to get approval of subpoenas in anti-terrorism probes. Committee Chairman Patrick Leahy, D-Vt., said he was irked that he learned about the latest bungle from the press and not from law enforcement.
Despite the controversy, the authority for the subpoenas should not be changed, Mueller said. Problems in Fine's audit were the product of "mistakes, carelessness, confusion, sloppiness, lack of training, lack of adequate guidance, and lack of adequate oversight," he said. The letters are "indispensable" and have resulted in appropriate anti-terrorism investigations, he said.
Leahy said it "troubles all of us that the FBI has not yet lived up to its promise to be world-class domestic intelligence agency the American people expect." This is "a problematic thing and it bothers me very much," he told Mueller.
Acknowledging shortcomings is appropriate, but the FBI and Justice Department "must learn from its mistakes if progress is to be made," Leahy said. "This learning curve has gone on far too long."
Ranking Republican Arlen Specter of Pennsylvania asked, "How can your highly trained agents make so many factual mistakes?" The basic job of an investigator is to "find the facts and know the facts and make an accurate representation on the facts before you get a warrant," he said.
Mueller said a comprehensive compliance program, which the FBI is now implementing, should have been in place before the Fine report. Lack of funds may be a problem, he said, noting that his agency needs more lawyers and better auditing capabilities.
The FBI chief also gave an update on an unrelated paperless case-management effort dubbed Sentinel. Lockheed Martin, which was awarded the $305 million contract for the program last March, completed the design, and the testing phase will be finished "sometime next week," Mueller said. The program then will be piloted at FBI headquarters and at several field offices before being deployed throughout the agency.
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Security
House Debates Rail Security Despite Objections To Bill
by Chris Strohm
The House on Tuesday began debate on a major bill to improve rail and mass-transit security, even though the White House threatened to veto the legislation over provisions dealing with whistleblower protections for transportation workers.
The bill would requires the Homeland Security Department to establish risk-based programs for rail and transit systems, and would authorize about $7.3 billion for security-related efforts between fiscal 2008 and fiscal 2012. Supporters argue that the legislation is needed because terrorists have shown that they will target public transportation systems, such as through train bombings in London; Madrid, Spain; Moscow; and Tokyo in recent years.
The legislation is intended to give House and Senate negotiators a vehicle to conference a final bill for implementing unfulfilled recommendations of the commission that investigated the Sept. 11, 2001, terrorist attacks. The White House, however, has objected to several provisions.
Bush administration advisers said they would recommend a veto if sections about whistleblower protections remain in the legislation. The administration said the language would permit employees to disclose classified information.
"Moreover, this bill would place unacceptable substantive and procedural limitations on the ability of the United States to assert the state-secrets privilege in litigation, raising grave constitutional concerns and hindering the ability to protect classified and sensitive information, perhaps to the detriment of rail and transportation security," the White House said in a statement.
The state-secrets privilege is a trump card the White House can use in order to fight lawsuits and classify information.
The White House also objected to several other provisions in the bill, such as creating a rail and transit security grant program, and splitting responsibility for managing and distributing grants between the Homeland Security and Transportation departments.
"Creating a separate grant program that divides responsibility between two executive departments sets up an unnecessarily complicated administrative process and creates confusion among stakeholders as to which department is responsible for transportation security," the administration stated. A Homeland Security official called the grant structure in the bill "a wretched mistake."
Republicans on the House Homeland Security Committee offered several amendments on border security, the protection of sensitive information and whistleblower protections. The Democratic-controlled House Rules Committee, however, blocked debate on any of those amendments.
New Yorker Peter King, the ranking Republican on the House Homeland Security Committee, said he wished a "spirit of bipartisanship" would have prevailed on the Rules Committee.
Republicans were clearly upset. "I guess allowing amendments on protecting national security information and preventing terrorists from entering our country had no place in their homeland security agenda," a GOP leadership aide said.
Despite the objections, the House is expected to pass the bill later Tuesday.
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Lobbying
Net Neutrality Strikes Right Chord For Some Musicians
by Michael Martinez
A coalition of musicians on Tuesday announced a campaign that they hope will rock the nationwide debate over the future of high-speed Internet networks.
The "Rock The Net" campaign is being backed by musicians who want Congress to mandate network neutrality, or the principle that broadband network operators should treat all traffic equally. The coalition includes several high-profile artists from varying musical genres, including R.E.M. and OK Go, the band that recently took home the "most creative" trophy in the inaugural awards by the YouTube video-sharing site.
Rock The Net is being organized by the Future of Music Coalition, Noise Pop and Zeitgeist Artist Management, and funded by the Proteus Fund's Media Democracy Fund. A series of concerts throughout the country will be held by participating artists to raise awareness on the issue.
In a teleconference, Future of Music Coalition Executive Director Jenny Toomey said the open nature of the Internet has given a middle class of artists access to wider audiences than ever before. She said artists would be denied innovative opportunities to connect with audiences if they were forced to pay premium rates for high-speed traffic to flow to their sites.
Rep. Edward Markey, D-Mass., said Rock The Net will help him get network neutrality legislation on the books. Markey is the chairman of the House Energy and Commerce Telecommunications and the Internet Subcommittee.
"It's going to be big," he said. "It's going to be powerful. And it's going to rock."
Markey said the key question in the network neutrality debate should not be how it affects established Internet firms such as Amazon.com or Google but rather how it affects the ability of smaller startups to tap into the Internet and expand. "The great thing about the Internet is that no one has to ask permission to get their voice heard," he said.
Media Access Project President Andrew Schwartzman said that for musicians, network neutrality is just as much about uploading content as it is downloading. He said artists should be able to upload without facing higher prices for certain content so they can take advantage of social media and distribute their works.
"It really involves people's right to speak as much as it involves their ability to receive information," he said.
Toomey said many artists already know what it is like to be blocked from certain audiences because of a recent wave of payola scandals that has kept them off radio airwaves. She said all of the problems the music industry has faced in the digital era are coming to a head in the network neutrality debate.
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Budget
Securities Chief Defends Budget, Opposes New Law
by David Hess and Winter Casey
Artfully ducking most questions about how much more money he needs for his agency's expanding missions, Securities and Exchange Commission Chairman Christopher Cox on Tuesday told appropriators he will make do with the $905.3 million requested by President Bush.
Then he told reporters he could easily spend additional funds for various purposes, including wider enforcement priorities.
Cox also made it clear that he prefers no new legislation to dilute the agency's auditing powers under Section 404 of the 2002 accounting law known as the Sarbanes-Oxley Act.
Rather, he wants to apply new SEC rules scaled to the size, performance and risk of smaller corporations that are complaining about the financial burden of proving to tough-minded auditors and skeptical investors that their internal financial controls and reports are accurate. Under that approach, he indicated, many smaller companies whose internal financial controls were solid could be excused from the repeated demands of onerous audits on a case-by-case basis.
Cox told the House Financial Services Appropriations Subcommittee he is focusing his staff now on "areas of the market [that] pose the greatest risk," with emphasis on "those investment advisers and mutual funds that are most likely to be high-risk."
Republicans, including subcommittee ranking member Ralph Regula of Ohio and Mark Kirk of Illinois, quizzed Cox about the need for legislation to relieve smaller corporations of the onus imposed by the Section 404 audits.
They also fretted that the tougher regulatory climate created by Sarbanes-Oxley could be driving some public companies to go private or encouraging investment pool managers to go abroad -- outside the SEC's reach -- in search of meeker regulation and higher profits.
Cox said he saw no clear evidence of that and reminded the panel that in a globalized economy there would always be some investors seeking greener pastures abroad. He also noted that the availability of investment capital "remains deep" in the United States, even as some investors move their money around the globe.
And he said several other countries have emulated the United States' toughened regulatory regime, so it would not necessarily be advantageous for investors looking for acceptable risk to go abroad.
In response to questions by subcommittee Chairman Jose Serrano, D-N.Y., Cox acknowledged that his agency could use additional funding but cautioned against a sudden influx of appropriations. If Congress does decide to augment the president's request, he said, it should do so over time under a considered plan for using the extra funds in an efficient manner.
On another front, Cox said in his written testimony that the SEC will create an office to help return funds to injured investors. A new information technology system will help distribute the billions of dollars that result for the panel's enforcement work.
"The efforts of this new office will be aided by a new information system, called Phoenix," Cox said. "The system will more accurately track, collect and distribute the billions of dollars in penalties and disgorgements that flow from our enforcement work.
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Antitrust
DirecTV Strikes Out With Senators Over Baseball Deal
by David Hatch
An exclusive deal between Major League Baseball and DirecTV allowing the satellite service to carry out-of-market games faced strong criticism Tuesday from senators in both parties.
Massachusetts Democrat John Kerry, who oversaw a Senate Commerce Committee hearing on sports programming, urged the parties not to implement the arrangement in the next few days. Instead, he wants them to explore wider carriage of America's pastime. At the conclusion of the hearing, they agreed to schedule talks.
"Let's hold the status quo for a period of time," the senator said. "It's possible to get the best of both worlds here."
Arlen Specter, R-Pa., warned that if modifications are not made, Congress would intervene. "This is something that I would hope that Major League Baseball would find a way to work out on its own," said the top Republican on the Senate Judiciary Committee, who asserted that competitors were effectively shut out.
"There's going to be a tremendous reaction. When the fans react, Congress reacts," he said, cautioning that Major League Baseball would be "well-advised to react before we do."
At issue is a proprietary agreement permitting DirecTV to carry MLB's "Extra Innings" package from 2007 through 2013. The package would enable a Red Sox fan living in Washington, for example, to regularly watch the Boston team. Beginning in 2009, DirecTV would be the only outlet carrying the league's new Baseball Channel.
"I am concerned about exclusive carriage deals in the sports industry," said Kerry, who stood in for panel Chairman Daniel Inouye, D-Hawaii. "I am concerned when fans lose access to their favorite team, or as we will discover today, they are forced to change their TV service just to see games. That is wrong."
Robert DuPuy, president and chief operating officer of the league, emphasized that fans have many choices, including switching to DirecTV, subscribing to video-streamed coverage on www.mlb.com, watching various cable and broadcast networks, or listening on the radio. But some senators and witnesses insisted that many games would be off-limits through those options and that computers do not replicate television.
DuPuy said exclusive content arrangements are common in sports, including the National Football League. "To watch NFL out-of-market games, you must subscribe to DirecTV," he noted, adding that cable providers such as Comcast have such deals.
He insisted that EchoStar Communications and inDemand, a cable-owned programmer, can continue to carry "Extra Innings." But Robert Jacobson, president and CEO of inDemand, said the package was offered at "unreasonable" terms.
DirecTV President and CEO Chase Carey said negotiations were fair and open. "All of our cable and satellite competitors engaged with Major League Baseball on this package," he said, adding that DirecTV had no advantage.
"This transaction forces consumers through no fault of their own to make a change," lamented Carl Vogel, president and vice chairman of EchoStar, who testified that exclusive distribution never fosters competition. He complained that the deal would restrict 300,000 viewers nationwide from "Extra Innings." EchoStar started carrying the package three years ago, but now 55,000 customers will lose access.
Kerry said many people cannot switch to DirecTV because it is unavailable or too expensive, or they are locked into competing contracts.
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Campaigns
Carville, Matalin Talk Politics To Electronics Group
by Heather Greenfield
Democratic political strategist James Carville predicted during a Tuesday speech at a Consumer Electronics Association that the candidate who eventually will be the Republican nominee for president in 2008 is not in the race yet.
Carville, who once advised former President Bill Clinton, did not pick a Democratic nominee but said he expects former Vice President Al Gore to join the race. "I think Gore is going to get in, and it's going to have a big effect," Carville said.
He also expects former House Speaker Newt Gingrich to get into the GOP race and Sen. John McCain, R-Ariz., to end his bid after the Iowa caucuses. "His heart isn't in it this time," Carville said of McCain. "He lacks energy and is not meeting his fundraising goals."
Carville warned the audience of people in the consumer electronics business not to delude themselves that they are in business, not politics, as politics impacts all aspects of business.
He spoke alongside his wife, Republican strategist Mary Matalin. Matalin did not disagree with Carville's prediction that the eventual Republican nominee is not in the race yet but did disagree with his prediction that it would be former Florida Gov. Jeb Bush.
Carville and Matalin agreed that the race is the most unique in their lifetimes.
Carville said it is the first time since 1940 that Republicans have not had a clear frontrunner and the first time since 1920 without a former vice president or victorious military general waiting in the wings. Matalin outlined various ways the race is unique, starting with the duration of it because of candidates declaring so early and the public paying more attention.
"There is more interest in the race this far out than six months before a normal race, whatever normal is," Matalin said.
But she worries about different consequences than voter fatigue. She asked, "What happens to governance in the meantime," with so many senators focused on a run for president?
Matalin said having large states like California and Florida move their primaries up likely will have a good side effect by forcing candidates to focus on broader issues of interest to more people -- not just those in Iowa and New Hampshire.
Other unique factors that she cited included the diversity of the candidates, the way the race will coincide with Republican bids to retake control of the House and Senate, the war in Iraq, and the economic challenges from the growth of China and India.
What does not concern her is the expected record sum of spending by the candidates. She said the price tag still will be less than what the nation spends on Easter candy.
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Privacy
Study: Voters Don't Want Campaigns Posting Their Data
by Andrew Noyes
Campaign finance laws are widely supported in American politics, but a new study undermines the assumption that forced disclosure contributes to better-informed voters. The report's authors discussed their findings' impact on free speech and privacy at a Cato Institute forum Tuesday.
The study, published by the libertarian nonprofit Institute for Justice on the fifth anniversary of an oft-criticized 2002 campaign finance law, reveals what several thousand citizens think of the so-called McCain-Feingold law's mandatory disclosure requirement as it pertains to ballot initiatives.
More than 50 percent of those polled opposed having to reveal their names, addresses and contribution amount to the government, and at least 70 percent rejected having to disclose their employers' identities. The 24 states that permit citizens to vote on ballot initiatives usually post "disclosed" lists of contributions online, the institute said.
The report also showed that 60 percent of respondents would "think twice" before contributing to an issue campaign if their personal information would be revealed and posted on a government Web site. People seem to support disclosure until it is their personal information, said Dick Carpenter, the institute's research director.
Typical reasons respondents gave in the telephone poll for not wanting to disclose their information ranged from "I do not think it's anybody's business what I donate" to "it's an opening for harassment" and "I might get fired," according to the study.
Citizens' own responses undercut the alleged benefits of government-forced disclosure, the institute said. About three-quarters of those polled could not name any specific contributors to issue campaigns in their states, and 60 percent did not know where to find disclosed data, the study stated.
"How is it that in this country we require people before they speak out ... to register with the government and disclose all of their political activities?" institute attorney Steve Simpson asked. A large part of the answer is that people "vastly overestimate the benefit of disclosure laws" and underestimate the costs to individual citizens, he said.
Courts that have addressed the issue of how disclosure pertains to ballot initiatives have ruled that government-mandated disclosure provides "important information on which voters can rely when deciding which way to vote," Simpson said.
Steven Weissman, associate director for the Campaign Finance Institute, criticized the report's conclusion that the costs are too great and the benefits too small, so a voluntary disclosure system should be considered. "The survey and analysis fail to take sufficient account of the real world of campaigns and voter decisions," he said.
The study did, however, demonstrate "very adequately, the ambivalence that many voters have if you ask them about disclosure," Weissman said. But the research in this arena should continue because it brings up a potent issue in modern-day politics, he said.
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Defense
Pentagon Looks Forward To New Web Applications
by Heather Greenfield
RESTON, Va. -- While the Defense Department tends to lead federal agencies in adopting technological advances, the military predicts that the switch to the next generation of the Internet will be driven by the need to use the next big "killer app."
Maj. Gen. Dennis Moran, who directs command, control, communications and computer systems for the Joint Chiefs of Staff, told those gathered for the annual IPv6 summit here that a big advance in the field of logistics is likely to be the innovation that forces a faster switch to Internet protocol version 6 from the previous protocol known as IPv4.
The old system is running out of addresses as more devices -- anything from ovens to aircraft -- become controllable remotely over the Internet. In addition to the millions more Internet addresses, the new system has features to provide better security and ways to tell who is logging on from where.
Moran said the added security features and ability to enhance communication throughout a military operation make IPv6 "critical to achieving DOD's net-centric vision." "Our ability to control high-tech weapons in a secure environment in a secure way is absolutely critical," Moran said.
Managing costs slows the transition, he said, but so does making sure Defense does not get too far ahead of evolving standards and technology.
Other challenges are synchronizing the transition to the next-generation Internet while keeping other equipment functioning on the old system, and making sure all systems talk to each other.
While Moran said the backbone of the next Internet is in place, "it will take a few years to get firewalls and intrusion-detection devices capable of functioning in both [IPv6 and IPv4] environments."
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Digitocracy Digest
The Pros And Cons Of Electronic Tax-Filing
by Aliya Sternstein
As the nation faces its annual April 17 date with Uncle Sam, electronic tax returns are proving to be a true ally for many individuals. Yet proposed changes to the e-filing process have become a point of contention among tax professionals, the Internal Revenue Service and privacy advocates.
The e-file program began in 1986, with the modem transmission of 25,000 individual returns. Today, people can pay to have tax professionals prepare and e-file their returns, or they can submit returns by themselves over the Internet with purchasable software.
The five-year-old Free File program, a partnership between the IRS and tax software companies, is available at no cost to taxpayers with an adjusted gross income of up to $52,000. That means about 70 percent of U.S. individuals are eligible to e-file for free this tax season.
Ryan Ellis, a tax professional who also is the federal affairs manager at Americans for Tax Reform, said Free File is a "good option for a lot of taxpayers," but his concern is that the program may creep toward a scenario where the IRS electronically prepares the forms and sends taxpayers either a refund or a bill. That return-free concept would bypass tax professionals, tax software and self-prepared forms.
This year, complaints with the Free File process are down to one per every 2,193 returns, compared with one per 654 returns last year. "Any time you see complaints drop like that, precipitously, [you know] you've taken the product to the next level," said Tim Hugo, executive director of the Free File Alliance, the coalition of software companies that runs the site with the IRS.
IRS Electronic Tax Administration Director Bert DuMars said of Free File, "Our biggest issue right now is awareness." Only 4 percent of the people eligible for Free File last year used it.
Meanwhile, the e-file program as a whole is quite popular. On March 22, the IRS reported that 73 percent of all returns have been e-filed, compared with 70 percent for the same period last year. Ellis, who is not a tax software vendor, prefers e-file to paper as long as the program continues to rely on third-party software vendors. He will electronically file "almost exclusively" for the 200-some clients he expects this year.
But the third-party system has some legislators and consumer advocates crying taxation without representation. "Why should a consumer have to shell out to pay for electronic filing when they can send it in for free with a 39-cent or [whatever-priced] stamp," said Chi Chi Wu, a staff attorney at the National Consumer Law Center.
In addition, all taxpayer data goes through the third-party software company before reaching IRS computers. "Our concern is the ability of tax preparers to use that data to cross-market financial products," Wu said. "It's the most sensitive financial information a person could have."
Two e-file conduits -- Intuit, which makes Turbo Tax, and H&R Block -- and the IRS stress that participating commercial systems undergo intense security. As far as selling consumer data, DuMars said the rule is that vendors cannot disclose or use taxpayer information without the taxpayers consciously approving first.
Several other e-file models have been discussed. One situation would let the tax professional or taxpayer file directly to the IRS over the Internet using commercial software, DuMars said. But the IRS would bear additional costs associated with customer support and increased security, and privacy requirements. The Web site undoubtedly would become a target for hackers.
Sen. Daniel Akaka, D-Hawaii, will reintroduce legislation before April 16 that would require the IRS to offer direct e-filing through its Web site to all individual taxpayers for free. "Taxpayers are dependent on commercial preparers to electronically file their taxes," he said. "If a taxpayer takes the time necessary to prepare their returns by themselves, they must be provided with the option of electronically filing directly with the IRS."
A different proposal would let taxpayers self-file with software developed by the IRS.
Ellis sees severe problems with the idea of IRS-developed software: "It's dangerously-close to the return-free model; it sets up government competition with the private sector; and it creates an inherent bias in favor of the IRS."
"Digitocracy Digest," an e-government column by Senior Writer Aliya Sternstein, is published every other Tuesday.
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Today's Feature:
People Column
It's no surprise that Larry Clinton has become the new president of the Internet Security Alliance.
Every Tuesday, read the People Column by Heather Greenfield.
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E-briefs
Education: Verizon Foundation, the telecommunications company's philanthropic arm, on Tuesday announced a $31 million commitment to provide free, online educational materials for teachers and students nationwide. Through Thinkfinity.org, educators will have access to 50,000 standards-based resources from major educational organizations, including the American Association for the Advancement of Science, John F. Kennedy Center for the Performing Arts, National Council of Teachers of Mathematics, National Geographic Society and the National Museum of American History. Over the next three years, the funds will be distributed to expand the number of interactive offerings and other professional development content. "The broadband networks we are building can provide a student anywhere, anytime access to the world's richest educational content," said Tom Tauke, Verizon's executive vice president for public affairs, policy and communications. "It's appropriate that our foundation supports a literacy and education program that is built on the technology that Verizon is deploying."
Security: State Sen. Valde Garcia will be the new chairman of the Michigan Homeland Security Roundtable, the state's Homeland Security Consortium announced Tuesday. The Wolverine State wants "to be known as the center for homeland security innovation and products," Michigan Economic Development Corporation Chairman Keith Brophy said in a statement. The corporation plans to be a part of the roundtable, which acts as an independent guide to the consortium, according to spokeswoman Julie Metea. The roundtable seeks to bring together people from security, technology, economic development, government, military, law enforcement and academic fields. "The technology transfer out of automotive and into homeland security is a rapid trend right now" in Michigan, Metea said. Garcia, a Republican, is currently vice chair of the newly created Michigan Homeland Security and Emerging Technologies Committee.
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