Tech Law Journal Daily E-Mail Alert
January 9, 2003, 9:00 AM ET, Alert No. 579.
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House Organizational News
Rep. Roy Blunt1/8. The top House Republican leadership for the 108th Congress is Speaker Denny Hastert (R-IL), Majority Leader Tom DeLay, and Whip Roy Blunt (R-MO) (at right). On January 7, the House passed as part of its rules package a provision that removes the term limit on the office of Speaker. "It best serves neither our Conference, nor the Congress, to have a lame duck Speaker of the House," said Rep. Blunt in a release.

The other members of the Republican leadership for the 108th Congress are Deborah Pryce (R-OH) (Conference Chairman), Jack Kingston (R-GA) (Conference Vice-Chair), John Doolittle (R-CA) (Conference Secretary), Chris Cox (R-CA) (Policy Chairman), Tom Reynolds (R-NY) (NRCC Chairman), Eric Cantor (R-VA) (Chief Deputy Whip), David Dreier (R-CA) (Rules Chairman), and Rob Portman (R-OH) (Leadership Chairman). See, NRCC release.

Nancy Pelosi (D-CA) will be the House Minority Leader. Rep. Steny Hoyer (D-MD) will be the House Democratic Whip. Rep. Bob Menendez (D-NJ) will be Chairman of the House Democratic Caucus.

The House Republican Conference met on Wednesday night to select committee chairmen. Rep. James Sensenbrenner (R-WI) will continue as Chairman of the House Judiciary Committee. However, Subcommittee Chairmen have not been named. Rep. Howard Coble (R-NC), the former Chairman of the Courts, Internet and Intellectual Property (CIIP) Subcommittee, is term limited. Rep. Bob Goodlatte's (R-VA) selection as Chairman of the Agriculture Committee bars him from selection as CIIP Chairman.

Rep. Billy Tauzin (R-LA) will continue as Chairman of the House Commerce Committee. The Judiciary and Commerce Committees have jurisdiction over most technology related bills.

Rep. Bill Thomas (R-CA) will continue as Chairman of the House Ways and Means Committee, which has jurisdiction over both tax and trade issues.

Rep. Bill Young (R-FL) will continue as Chairman of the House Appropriations Committee. Also, Rep. Frank Wolf (R-VA) will continue as Chairman of the Commerce, Justice, State and the Judiciary Subcommittee, which has jurisdiction over appropriations for most of the technology related federal agencies, including the Federal Communications Commission (FCC), Federal Trade Commission (FTC), U.S. Patent and Trademark Office (USPTO), National Telecommunications and Information Administration (NTIA), and Department of Justice (DOJ). See, release.

Rep. Duncan Hunter (R-CA) will be the Chairman of the House Armed Services Committee. He replaces former Rep. Bob Stump (R-AZ), who retired.

Rep. Richard Pombo (R-CA) will be the Chairman of the House Resources Committee. He replaces former Rep. James Hansen (R-UT), who retired.

Rep. Jim Nussle (R-IA) will continue as Chairman of the House Budget Committee.

Rep. Tom Davis (R-VA) (at right) will be the new Chairman of the House Government Reform Committee. He replaces Rep. Dan Burton (R-IN), who was term limited. Rep. Davis represents a tech heavy district in the Northern Virginia suburbs of Washington DC. As Chairman of the Reform Committee's Subcommittee on Technology and Procurement Policy in the 107th Congress, he focused on many technology related issues. Rep. Davis is also a former Chairman of the National Republican Congressional Committee (NRCC). Rep. Davis is also a member of the House Commerce Committee, and its Telecom and Internet Subcommittee.

Rep. Bob Goodlatte (R-VA) will be the new Chairman of the House Agriculture Committee. He replaces former Rep. Larry Combest (R-TX), who retired. Rep. Goodlatte is also a member of the House Judiciary Committee and its Courts, Internet and Intellectual Property Subcommittee. He has long been one of the House's most informed and active members on technology related issues. However, his new responsibilities on the Agriculture Committee may detract from his involvement in other issues.

On January 7, the House adopted a HRes 6, which names the Republican members of the House Rules Committee. It names Rep. David Dreier (R-CA) as Chairman, and Rep. Porter Goss (R-FL), Rep. John Linder (R-GA), Rep. Deborah Pryce (R-OH), Rep. Lincoln Diaz-Balart (R-FL), Rep. Doc Hastings (R-WA), Rep. Sue Myrick (R-NC), Rep. Pete Sessions (R-TX), and Rep. Tom Reynolds (R-NY). This is unchanged from the 107th Congress. The House also adopted HRes 6, which names the Democratic member of the Rules Committee. It names Rep. Martin Frost (D-TX), Rep. Louise Slaughter (D-NY), Rep. James McGovern (D-MA), and Rep. Alcee Hastings (D-FL).

California Republicans Dominate Committee Chairmanships
1/8. Rep. David Dreier (R-CA) returns as Chairman of the Rules Committee. Rep. Bill Thomas (R-CA) returns as Chairman of the Ways and Means Committee. Rep. Chris Cox (R-CA) is the new Chairman of the new Homeland Security Committee (as well as the Republican House Policy Committee). Rep. Duncan Hunter (R-CA) is the new Chairman of the House Armed Services Committee. Rep. Richard Pombo (D-CA) is the new Chairman of the House Resources Committee.

Republicans make up a minority of the California delegation. Moreover, in recent Congresses their proportion of the delegation has been shrinking. Nevertheless, the California Republicans now hold a disproportion share of the top House committee chairmanships.

A California Republican does not chair the powerful Appropriations Committee. However, Rep. Jerry Lewis (R-CA) is a senior member, and the Chairman of the Defense Appropriations Subcommittee. Rep. Randy Cunningham (R-CA) and Rep. John Doolittle (R-CA) are also members of the committee.

In addition, Rep. John Doolittle (R-CA) now holds a position in the House Republican leadership, Conference Chairman.

Nor does a California Republican chair the powerful House Commerce Committee. However, Rep. Cox and Rep. Mary Bono (R-CA) are both members.

Rep. Leach Introduces Internet Gambling Bill
1/7. Rep. James Leach (R-IA) introduced HR 21, a bill that would attempt to bar Internet gambling operations access to the U.S. financial services system by banning the use of credit cards, wire transfers, or any other bank instrument to fund gambling transactions. Similar, legislation was passed in the 107th Congress by the House Financial Services Committee (HFSC), and then by the full House. However, it did not pass the Senate. See, HFSC release.

Rep. Leach, and other members of the House, such as Rep. Bob Goodlatte (R-VA) and former Rep. John LaFalce (D-NY), as well as several members of the Senate, and especially Sen. Jon Kyl (R-AZ), have been attempting to pass legislation that would limit Internet gambling for many years. All efforts to date have failed.

Rep. James Leach.Rep. Leach (at right) stated that "These unregulated gambling sites are a direct pipeline of dollars out of the United States into virtually unknown hands.  This factor makes the financial services industry vulnerable to criminal and terrorist activity and Americans citizens vulnerable to identity theft and other personal scams ... Internet gambling serves no legitimate purpose in our society and is a danger to family and society at large. It should be ended."

The bill has 14 original cosponsors, including Rep. Goodlatte, who in past Congresses has sponsored his own related anti-Internet gambling legislation. While the Leach bill focuses on the financial transactions involved in Internet gambling, the Goodlatte approach involves amending the Wire Act.

In a related matter, Rep. Barney Frank (D-MA) will become the ranking Democrat on the Financial Services Committee, replacing former Rep. LaFalce, who retired. LaFalce had been a leading supporter of anti-Internet gambling legislation in the 107th Congress, while Frank opposed it.

SGI Pleads Guilty to Selling HPCs to Russian Nuclear Weapons Lab
1/7. Silicon Graphics Inc. (SGI) plead guilty in U.S. District Court (NDCal) to two felony counts involving violating export control regulations in connection with the export of high performance computers (HPCs) to a Russian nuclear laboratory in 1996.

The Bureau of Industry and Standards (BIS), which was formerly known as the Bureau of Export Administration (BXA), stated in a release that "SGI agreed to pay $1 million in criminal fines to resolve the charges. In a related administrative case, SGI agreed to pay $182,000 -- the maximum penalty authorized by the Export Administration Regulations (EAR) -- to settle civil charges arising from the same exports to the Russian nuclear laboratory, as well as additional charges relating to illegal computer exports to Israel and for failure to meet reporting requirements for exports to China, Qatar, and the United Arab Emirates."

The BIS also stated that "SGI admitted that, on two occasions in 1996, the company exported four Challenge L computer systems, upgrades, and peripheral equipment to the All-Russian Institute for Technical Physics (Chelyabinsk-70) in violation of U.S. export control regulations. Chelyabinsk-70, located in Snezhinsk, Russia, is a nuclear laboratory operated by Russia's Ministry of Atomic Energy and is engaged in research, development, testing, and maintenance of nuclear devices."

In addition, SGI's exporting privileges to Russia will be denied for three years.

SGI stated in a release that the "The 1996 exports came at a time when the U.S. government, in the spirit of post-Cold War cooperation, was encouraging the technology industry to assist Russia's government laboratories in developing commercially beneficial scientific research. SGI's customer represented that the computers were to be used for civilian research, including environmental analysis and remediation in one of the most polluted areas of the world. However, because the export was made to a government-operated facility involved in both civil and non-civil activities in Russia, SGI has agreed in this settlement that it should have applied for an export license."

The Nuclear Threat Initiative (NTI), a group co-chaired by Ted Turner and former Senator Sam Nunn (D-GA), reports that the All-Russian Institute for Technical Physics (Chelyabinsk-70) was established to design and build nuclear warheads. It further states that "It possesses facilities that simulate different aspects of nuclear explosions, including pulsed reactors, lasers, shock wave generators and computers." See, NTI summary of Chelyabinsk-70.

The All-Russian Institute for Technical Physics also has its own web site, but it is mostly in Russian.

Condor Systems Charged With Making False Statements About Software in Export Application
1/8. The U.S. Attorney's Office (USAO) for the Northern District of California charged Condor Systems, Inc., by a felony information [7 page PDF scan] alleging two counts of making false statements to U.S. government officials, in violation of 18 U.S.C. § 1001. The information was filed in the U.S. District Court (NDCal). This is D.C. No. CR 03 20002. See, USAO release.

At all times relevant to the information, Condor was a privately held defense contractor specializing in signals intelligence and electronic warfare systems, located in San Jose, California. In 2002, most of its assets were acquired by EDO Reconnaissance and Surveillance Systems Inc., a wholly owned subsidiary of EDO Corporation. See, EDO release. The charges arise from Condor's efforts between 1996 and 1999 to market a tactical electronic surveillance system to the government of Sweden.

The Arms Export Control Act (AECA), and the International Trafficking in Arms Regulation (ITAR), promulgated thereunder, prohibited export of certain Condor products, without U.S. government approval. However, Condor is not charged with export violations, but rather, with making false statements with respect to attempts export to Sweden.

Condor submitted an application for approval to export a product. The information states that this application represented the product as its "COTS [Commercial Off The Shelf] version" of a related product developed for the U.S. Navy. (Brackets in original.). The information alleges that this was a false statement, since it was not a COTS version, and the government had not approved a COTS version.

Count two of the information alleges that the application also stated that the product was "being developed in parallel and separately", when in fact, it was the identical source code to that developed for the U.S. Navy.

USTR Launches FTA Negotiations with Central American Countries
1/8. The Office of the U.S. Trade Representative (USTR) announced the "launch of  negotiations" between the U.S., El Salvador, Guatemala, Honduras, Costa Rica and Nicaragua for a U.S. Central America free trade agreement (CAFTA). See, USTR release and the USTR's CAFTA page.

The USTR stated that "Working level negotiations on this U.S. Central American Free Trade Agreement, or CAFTA, will begin in San José, Costa Rica, on January 27. The participants will seek to complete the negotiations by December 2003."

Among the many issues involved are trade related intellectual property rights, and removing existing barriers to trade in services, including telecommunications.

This is just the latest step towards reaching a CAFTA. President Bush announced his intention to explore an FTA with central American nations on January 16, 2002. The President formally notified Congress of his intention on October 1, 2002, following passage of the trade promotion authority bill. See, letter [7 pages in PDF] to House Speaker Denny Hastert (R-IL), and substantially identical letter [7 pages in PDF] to former Senate President Pro Tempore Robert Byrd (D-WV). The USTR then noticed a public hearing. See, notice in the Federal Register, October 16, 2002, Vol. 67, No. 200, at Pages 63954 63955. The USTR held a public hearing on November 19, 2002, and received further written comments.

Sen. Charles Grassley (R-IA), the incoming Chairman of the Senate Finance Committee, which has jurisdiction over trade issues, announced his support for President Bush's CAFTA initiative. He said that "A free trade agreement with these nations represents a unique opportunity not only for U.S. farmers, businesses and workers, but also for promoting development, security and prosperity in this region."

John Murphy, U.S. Chamber VP for the Western Hemisphere, stated that "The Chamber is pushing for a comprehensive agreement that will eliminate trade barriers, protect investors and intellectual property, and raise the bar for the Free Trade Area of the Americas". See, Chamber release.

Chris Cox to Chair New House Homeland Security Committee
1/8. The House will continue the new Select Committee on Homeland Security. Its Chairman will be Rep. Chris Cox (R-CA).

On November 25, 2002, President Bush signed HR 3005 (Public Law No: 107-296), the bill creating the new Department of Homeland Security.

Chris CoxCox (at right) issued a release which states that "With the enactment of the historic legislation creating the Department of Homeland Security, the immediate focus of the Select Committee will be to work with the President to implement the new law. The Select Committee's oversight will be devoted to getting the new Department up and running as quickly and efficiently as possible. The Committee has exclusive legislative jurisdiction over all matters relating to the Homeland Security Act and will be a crucial influence in shaping America's security future."

Rep. Cox was first elected to the Congress in 1988, and has since focused on technology, foreign affairs, and trade issues. He has generally been a low taxes, deregulation, free enterprise, and free trade type of Republican. He has been Chairman of the Republican's House Policy Committee since 1995. He is a senior member of the House Commerce Committee, and its Telecom Subcommittee. He is also a member of the House Financial Services Committee. Rep. Cox will retain his positions with the House Policy Committee and the House Commerce Committee.

Since the 105th Congress, he has been the leader in the House of efforts to pass legislation to place a moratorium on new or discriminatory state taxes on electronic commerce. On January 7, he introduced legislation to make the ban permanent. Sen. Ron Wyden (D-OR) introduced the companion bill in the Senate. Rep. Cox opposed what he saw as efforts to expand Federal Communications Commission (FCC) regulation from telecommunications to the Internet during former Chairman William Kennard's tenure.

In 1998 he was selected to chair a select committee to investigate China's acquisition of U.S. nuclear and military technology. It was officially titled the Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China. However, it was known as the "Cox Committee", and its final report in 1999 was known as the "Cox Report".

He was also active in securing passage of the Securities Litigation Uniform Standards Act in the 105th Congress. See also, Cox bio.

Before his election to the House, Cox worked in the White House Counsel's office in the Reagan administration. He was previously an attorney with the law firm of Latham & Watkins.

The Democrats have yet to name the ranking Democrat on the new committee.

FCC to Hold Meeting on January 15
1/8. The Federal Communications Commission (FCC) released a notice titled "Commission Meeting Agenda" that pertains to the FCC's Wednesday January 15 meeting.

The notice states as follows: "Presentations will be made in four panels: Panel One consisting of the Managing Director. Panel Two consisting of the Chiefs of the Enforcement Bureau and the Consumer and Governmental Affairs Bureau. Panel Three consisting of the Chiefs of the Office of Engineering and Technology, the Wireless Telecommunications Bureau, and the International Bureau. Panel Four consisting of the Chiefs of the Wireline Competition Bureau and the Media Bureau."

As usual, the meeting will take place at 9:30 AM Room TW-C305 (Commission Meeting Room) of the FCC headquarters, at 445 12th Street, SW.

Thursday, January 9
POSTPONED TO JANUARY 27. Deadline to submit comments to the Federal Communications Commission's (FCC) regarding the Report [73 pages in PDF] of the FCC Spectrum Policy Task Force (SPTF). The report recommends that "spectrum policy must evolve towards more flexible and market oriented regulatory models." See, notice [PDF]. See, notice of extension [PDF].
Friday, January 10
12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Committee will host a luncheon. The topic will be "What's Up for the Coming Year in the Auctions & Industry Analysis, Public Safety & Private Wireless, Commercial Wireless & Policy Divisions". The speakers will be Division Chiefs at the FCC's Wireless Telecommunications Bureau Division. The price to attend is $15. RSVP to Wendy Parish at Location: Sidley Austin, 1501 K St., NW, Confr. Rm. 6E.
Monday, January 13
The Supreme Court will return from the recess that it began on December 16.

11:00 AM - 1:00 PM. The Heritage Foundation will host a panel discussion titled "Harnessing Information Technology to Improve Homeland Security". The speakers include James Gilmore (Chairman, Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction), Lee Holcomb (Office of Homeland Security), Tom Richey (Director of Homeland Security, Microsoft), Tom Gann (VP & GM, Siebel Systems), and Peter Brookes (Heritage). See, notice. Location: Heritage, 214 Massachusetts Ave NE.

Tuesday, January 14
9:30 AM. The Senate Commerce Committee will hold a hearing titled the "State of the Competition in the Telecom Industry". Media contact: Andy Davis (Hollings) at 202 224-6654. Location: Room 253, Russell Building.

The U.S. Court of Appeals (DCCir) will hear oral argument in Peninsula Communications v. FCC, No. 01-1273. Petitioner is a radio broadcaster operating on the Kenai Peninsula in south central Alaska. Judges Henderson, Randolph and Garland will preside. Location: 333 Constitution Ave., NW.

Deadline to submit comments to the USPTO to assist it in writing a report to the Congress regarding technological protection systems for digitized copyrighted works and to prevent infringement. This report is required by the Technology, Education and Copyright Harmonization Act of 2002 (TEACH). See, notice in the Federal Register, December 9, 2002, Vol. 67, No. 236, at Pages 72920 - 72921. For more information, contact Michael Shapiro at 703 305-9300 or

Wednesday, January 15
9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

Deadline to submit comments to the NIST regarding it plans to disseminate new data regarding condensed phase infrared spectra through the Internet. See, notice in the Federal Register, December 16, 2002, Vol. 67, No. 241, at Page 77053.

People and Appointments
1/8. The Securities and Exchange Commission (SEC) designated Charles Niemeier to be the Acting Chairman of the Public Company Accounting Oversight Board, which was established by the Sarbanes Oxley Act of 2002. This Board oversees the audits of the financial statements of public companies through registration, standard setting, inspection and disciplinary programs. The SEC had previously selected William Webster for the position. Prior to this designation, Niemeier was the Chief Accountant in the SEC's Division of Enforcement and co-chairman of the SEC's Financial Fraud Task Force. See, SEC release.

1/7. Jonathan Solomon was name Special Assistant to FBI Director Mueller. See, FBI release.

1/8. Brian Dietz was named Senior Director, Communications, for the National Cable & Telecommunications Association (NCTA), effective January 20, 2003. See, NCTA release.

More News
1/8. On Wednesday night, January 8, the House passed by voice vote HJRes 1, making further continuing appropriations through January 31 for fiscal year 2003. On January 7, Rep. Deborah Pryce (R-OH), a member of the House Republican leadership, stated that the "Congress will complete its work on the remaining spending bills quickly in January." See, release.

1/8. The House Commerce Committee held a hearing on the national "Do Not Call" telemarketing list. Timothy Muris, Chairman of the Federal Trade Commission, testified. See, Muris statement.

1/8. The U.S. Court of Appeals (FedCir) issued its opinion [MS Word] in In Re Peterson, an appeal from the U.S. Patent and Trademark Office Board of Patent Appeals and Interferences, which is directed to a nickel-base single-crystal superalloy used in the manufacture of industrial gas turbine engines exposed to high temperatures. The USPTO rejected Lance Peterson's and Ioannis Vasatis's claims 1-7 of U.S. Patent Application 08/365,392. The Board of Patent Appeals and Interferences affirmed the rejection on the grounds of obviousness, pursuant to 35 U.S.C. § 103. The Court of Appeals affirmed.

1/8. The Progress and Freedom Foundation (PFF) released a report [10 pages in PDF] titled "Contracts and Electronic Commerce: The Uniform Computer Information Transactions Act (UCITA)". The report, which was written by the PFF's Kent Lassman, urges widespread adoption of the UCITA. Currently, only the states of Virginia and Maryland have adopted it.


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