|News from June 16-20, 2004|
Rep. Dreier Addresses Economic Growth, Productivity, and Information Technology
6/18. Rep. David Dreier (R-CA) gave a lengthy speech in the House on the economy and economics. He focused on the "productivity revolution", and in particular, on the role of information technology in boosting productivity.
He said that "productivity growth is so fundamental to both growth in GDP and a rising standard of living that most economists agree it is the single most important economic factor for improving our quality of life."
"Large, sustained bursts of productivity growth have fundamentally changed our entire economy in the past, and I believe we are witnessing a new wave of productivity growth that is changing the face of our economy once again", said Rep. Dreier.
"The tech boom of the 1990s clearly changed the way Americans do business. The Internet and the rapid proliferation of personal computers allowed workers to communicate efficiently and quickly. Data could be transferred with the click of a mouse. The world became a smaller place, and we all were able to accomplish more in less time and with fewer resources."
Rep. Dreier is the Chairman of the House Rules Committee, which performs a legislative gate keeping function in the House. His address is published in the Congressional Record, June 18, 2004, at pages H4573-7.
He reviewed recent trends in sales and employment in electronic games industry, online advertising, and e-commerce. He said that "While spending on TVs increased by 5 percent last year, spending on other forms of electronic entertainment like video gaming jumped by almost 11 percent. The result has been growing employment in high-tech entertainment industries. For example, companies that create Web content like eBay and Yahoo have created several thousand new jobs in just the last few months."
"Growing Internet use has also spurred growth in online advertising and e-commerce. Large employers in these sectors like Amazon.com and Google are also hiring at a rapid rate for the first time in several years. Employment in Internet publishing and broadcasting is on the rise, growing 7 percent in the past year", said Rep. Dreier. "But demand for Internet content and computer gaming and the jobs they help create are obviously just a narrow slice of the much bigger high-tech picture, and demand for high-tech products overall is just a narrow slice of the total impact that the industry has on our economy at large."
He then elaborated on the IT based productivity revolution. He stated that "the high-tech boom has been the key factor in the emergence of our 21st century economy and the productivity revolution that ushered it in. Experts and analysts agree that our 1990s tech boom was to a great extent made possible by the falling prices of IT hardware. As demand met supply, companies across America incorporated high-tech products and services in their business plans and the results were nothing less than revolutionary. This process resulted in job creation in fields like systems administration and IT product manufacturing."
"But looking at the impact of the high-tech boom in terms of job creation in directly related fields is like saying the significance of the invention of the wheel was that it created wheel-producing jobs. The real significance of the information technology revolution is that it went hand in hand with our productivity revolution. It fundamentally changed how business does business and made American workers tremendously more productive. And it unleashed a powerful new wave of innovation and entrepreneurship", said Rep. Dreier.
"Online advertising and computer gaming are just the very tip of the iceberg. The high-tech boom has, for example, enabled 430,000 Americans, nearly half a million Americans, to make their entire living by selling and buying on eBay", said Rep. Dreier. "By making opportunities for entrepreneurship cheaper and more accessible, the Internet and our high tech economy are helping millions of Americans realize their dream of being their own boss and doing something that they love."
He continued that "This powerful American drive to innovate and create and work independently is at the crux of our productivity revolution. American innovation led to the creation of new information technologies, but it did not just stop there. IT products do not integrate themselves into the economy. Hard working and creative Americans harnessed technology, incorporated it into nearly every aspect of our lives, and brought about a wave of productivity that is transforming our entire economy."
His analysis of the origins, nature and importance of productivity gains is similar to that of Federal Reserve Board Chairman Alan Greenspan. Greenspan has given many speeches on this subject in recent years that have been covered in the TLJ Daily E-Mail Alert.
Editor's Note: One way to locate archived Tech Law Material is to do a Google search. For example, enter "site:www.techlawjournal.com Greenspan speech productivity" to find coverage of Greenspan's speeches.
Treasury Secretary Comments on ETI Repeal Bills
6/18. John Snow, Secretary of the Treasury, commented upon House passage of HR 4520, the "American Jobs Creation Act of 2004". This bill would, among other things, repeal the extraterritorial income (ETI) tax regime.
Snow stated that "I would like to thank the House for taking action to move the FSC/ETI process forward to eliminate sanctions. We want to increase the ability of American companies to succeed in a worldwide economy and lay the foundation for increased growth and job creation for American workers. Passing the FSC/ETI legislation is an important step toward ending the burden of the tariffs currently being imposed on U.S. exports under the WTO sanctions. We will continue our efforts to work with the Conferees to ensure that legislation is signed into law that will help us comply with our WTO obligations, is as close to budget neutral as possible, and will strengthen our economy and help manufacturers and other job creators."
The House passed HR 4520 on June 17 by a vote of 251-178. See, Roll Call No. 259. The Senate passed its ETI repeal bill, S 1637, the "Jumpstart Our Business Strength (JOBS) Act", on May 11 by a vote of 92-5.
6/18. The U.S. Court of Appeals (6thCir) issued its opinion in Bridgeport Music v. Diamond Times, a case involving claims of copyright infringement arising out of sampling in rap songs, and attorneys fees under 17 U.S.C. § 505. The Appeals Court affirmed the District Court's summary judgment for defendants. This case is Bridgeport Music, Inc., et al. v. Diamond Time, Ltd., et al., U.S. Court of Appeals for the 6th Circuit, App. Ct. Nos. 03-5003 and 03-5656, appeals from the U.S. District Court for the Middle District of Tennessee, at Nashville, D.C. No. 01-00702, Judge Thomas Higgins presiding.
6/18. The General Accounting Office (GAO) released a report [100 pages in PDF] titled "Homeland Security: Performance of Information System to Monitor Foreign Students and Exchange Visitors Has Improved, but Issues Remain".
6/18. Rep. Howard Coble (R-NC), Rep. John Conyers (D-MI), Rep. Henry Hyde (R-IL), and Rep. Barney Frank (D-MA) introduced HR 4615, the "Playwrights Licensing Antitrust Initiative Act of 2004", a bill to modify the application of the antitrust laws to permit collective development and implementation of a standard contract form for playwrights for the licensing of their plays. It was referred to the House Judiciary Committee.
6/18. The Federal Communications Commission (FCC) announced that on June 14 it adopted an Order amending Section 1.80(b) of its rules to increase the maximum monetary forfeiture penalties. The FCC issued a release, but not the order. This order FCC 04-139.
6/18. The Federal Communications Commission (FCC) announced that on June 14 it adopted a Notice of Apparent Liability for Forfeiture (NAL) against Directv for repositioning a satellite without FCC authorization, in violation of Section 25.117(a) of its rules. This NAL proposes to fine Directv $87,500. The FCC issued a release [PDF] and the NAL [6 pages in PDF]. This NAL is FCC 04-138.
6/18. The Federal Communications Commission (FCC) issued a document [2 pages in PDF] titled "Public Notice" regarding telecommunications relay service (TRS) and internet protocol relay service (IPRS). It states that FCC "has received complaints from vendors, consumers, and TRS providers that people are using the IP Relay to make telephone purchases using stolen or fake credit cards". The Public Notice also states that pursuant to "Title III of the Americans with Disabilities Act of 1990 (ADA)", if merchants "accept telephone orders from the general public, they cannot refuse to accept them from persons with hearing or speech disabilities using TRS."
6/18. The Federal Communications Commission (FCC) published a notice in the Federal Register that summarizes, and sets comments deadlines for, the FCC's Notice of Proposed Rulemaking (NPRM) [38 pages in PDF] regarding use by unlicensed devices of broadcast television spectrum where the spectrum is not in use by broadcasters. Initial comments are due by September 1, 2004. Reply comments are due by October 1, 2004. See, Federal Register, June 18, 2004, Vol. 69, No. 117, at pages 34103-34112. See also, story titled "FCC Adopts NPRM Regarding Unlicensed Use of Broadcast TV Spectrum" in TLJ Daily E-Mail Alert No. 898, May 14, 2004, and story titled "FCC Releases NPRM Regarding Unlicensed Use of TV Spectrum" in TLJ Daily E-Mail Alert No. 905, May 26, 2004. This NPRM is FCC 04-113 in ET Docket Nos. 04-186 and No. 02-380.
House Passes Bill to Repeal ETI
6/17. The House passed HR 4520, the "American Jobs Creation Act of 2004", by a vote of 251-178. See, Roll Call No. 259.
The primary and original purpose of this bill is to repeal the extraterritorial income (ETI) tax regime. It accomplishes this, and to compensate for this, reduces the top corporate tax rate from 35% to 32%, over several years, for domestic manufacturers, producers, farmers, and small corporations.
The impetus for repealing ETI is that the World Trade Organization (WTO) ruled that the Foreign Sales Corporation (FSC) tax regime, and its replacement, the ETI tax regime, constitute illegal export subsidies, and authorized the EU to impose up to $4 Billion in retaliatory tariffs. See also, story titled "EU Imposes FSC/ETI Sanctions" in TLJ Daily E-Mail Alert No. 847, March 2, 2004.
While the bill addresses international tax concerns, it also has become a vehicle for numerous other unrelated changes to tax law. Several of these are technology related.
First, the bill contains a provision limiting the deduction for contributions of intellectual property (IP). This provision is of concern to both technology companies that donate IP, and universities and other entities that receive these donations. See, story titled "Ways and Means Committee Approves Bill to Limit Deductions for IP Contributions" in TLJ Daily E-Mail Alert No. 918, June 15, 2004.
Second, the bill extends the research and development (R&D) tax credit, which is scheduled to expire on June 30, 2004, through December 31, 2005. The R&D tax credit is found at 26 U.S.C. § 41. The sunset provision is found at Section 41(h)(1). The R&D tax credit is a perennial issue in Congress. The credit was first enacted in 1981 as a temporary measure, and has been extended every few years since then. See, story titled "Ways and Means Committee Votes to Extend Research and Development Tax Credit", in TLJ Daily E-Mail Alert No. 918, June 15, 2004.
Third, the bill provides for collection of taxes by private sector entities. To the extent that the Internal Revenue Service (IRS) would transfer data about taxpayers to these private collectors, such as names, addresses, phone numbers, and taxpayer identification numbers (which are usually Social Security Numbers for individuals), this would augment the personally identifying information held in private sector databases, and thus, implicate issues related to the misuse of data, and data privacy. See, story titled "Ways and Means Committee Debates Private Tax Collectors and Information Privacy" in TLJ Daily E-Mail Alert No. 918, June 15, 2004.
Fourth, the bill excludes incentive stock options and employee stock purchase plan stock options from wages.
Fifth, the bill includes a provision regarding the limitation on the depreciation period for software leased to tax exempt entities.
The vote broke down mostly along party lines, with 203 Republicans voting for the bill, and 154 Democrats opposing it. However, 48 Democrats voted for the bill, and 23 Republicans against it.
The Senate has already passed a bill that addresses the rulings of the WTO. On May 11, 2004, the Senate passed S 1637, the "Jumpstart Our Business Strength (JOBS) Act", by a vote of 92-5.
Rep. Bill Thomas (R-CA), the Chairman of the House Ways and Means Committee, and sponsor of the bill, stated in a release that "I look forward to quickly resolving differences between the House and Senate versions and sending a bill to the President's desk for his signature -- so American businesses can continue to do what they do best -- create jobs."
House Subcommittee Approves Spyware Bill
6/17. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection amended and approved HR 2929, the "Securely Protect Yourself Against Cyber Trespass Act" or "SPY ACT". This is Rep. Mary Bono's (R-CA) anti spyware bill.
This bill was introduced on July 25, 2003 by Rep. Bono and Rep. Edolphus Towns (D-NY). See, story titled "Rep. Bono Introduces Spyware Bill" in TLJ Daily E-Mail Alert No. 706, July 29, 2003.
The Subcommittee approved an amendment in the nature of a substitute [18 pages in PDF] offered by Rep. Clifford Stearns (R-FL), the Chairman of the Subcommittee, by unanimous voice vote. It then approved the bill, as amended, by unanimous voice vote. See, full story.
More Capitol Hill News
6/17. The Senate Judiciary Committee held an executive business meeting. It amended and approved S 2013, the "Satellite Home Viewer Extension Act of 2004". It held over consideration of S 1635, the "L-1 Visa (Intracompany Transferee) Reform Act of 2003".
6/17. The House Ways and Means Committee's Subcommittee on Health held a hearing titled "Health Care Information Technology". See, prepared testimony of witnesses: David Brailer (Department of Health and Human Services), Robert Kolodner (Department of Veterans Affairs), Charles Safran (American Medical Informatics Association), Janet Marchibroda (eHealth Initiative), Marc Overhage (Regenstreif Institute), and Andrew Wiesenthal (Kaiser Permanente).
6/17. President Bush gave a speech at a George Nethercutt for Senate reception in which he discussed judicial nominations. He said that "unfortunately, some United States senators are playing politics with my nominees, two of them right from this state. One of the reasons you ought to have George Nethercutt as United States senator is to make sure that good, honorable, decent judges are able to make it through the nominating process and the confirmation process of the United States Senate."
6/17. Sen. Susan Collins (R-ME) and Sen. Ron Wyden (R-OR) introduced S 2536, the "Homeland Security Civil Rights and Civil Liberties Protection Act of 2004". Sen. Collins stated that "Under the leadership of Secretary Ridge, the new Department of Homeland Security has won praise for its commitment to the protection of our freedoms. Secretary Ridge has provided the Officer for Civil Rights and Civil Liberties and the Privacy Officer with the tools they need to be effective." However, she said, the Homeland Security Act 2002, which created the Department of Homeland Security (DHS), does not codify these efforts. She explained that the bill "would write into law the activities of the Officer for Civil Rights and Civil Liberties" and provide "that the Officer for Civil Rights and Civil Liberties as well as the Privacy Officer should report directly to the Secretary, and requires coordination between those officers to ensure an integrated and comprehensive approach to the important issues they address."
6/17. Sen. Maria Cantwell (D-WA) introduced S 2540, the "Educational Radio Protection Act", a bill to protect educational FM radio stations providing public service broadcasting. It was referred to the Senate Commerce Committee. Sen. Cantwell is a member.
Cheney Addresses Technology
6/17. Vice President Dick Cheney gave a speech at NexTech Materials Ltd. in Columbus, Ohio in which he addressed nanotechnology, health care IT, and free trade.
He stated that "There's a lot of promise in fields like nanotechnology and hydrogen energy. We need to maintain American leadership in those areas by funding aggressive research development. Our administration has doubled federal funding for nanotechnology research and development. The President also recently signed the Nanotechnology Research and Development Act, which authorizes four years of additional research and development funding."
On December 12, 2003, President Bush signed S 189, the "21st Century Nanotechnology Research and Development Act". This bill authorized the appropriation of $3.7 Billion over four years for nanotechnology R&D programs at the National Science Foundation (NSF), Department of Energy (DOE), Department of Commerce's (DOC) National Institute of Standards and Technology (NIST), National Aeronautics and Space Administration (NASA), and Environmental Protection Agency (EPA). See, story titled "Bush Signs Nanotech R&D Funding Bill" in TLJ Daily E-Mail Alert No. 792, December 4, 2003.
VP Cheney also stated that "we proposed upgrades to our health care information technology, including electronic medical records for more Americans so we can avoid dangerous medical mistakes, reduce costs, and improve care."
On April 27, 2004, President Bush gave a speech in Baltimore, Maryland in which he advocated the use of electronic records in the health care industry. He also issued an executive order regarding "the development and nationwide implementation of an interoperable health information technology infrastructure". See also, story titled "President Bush Advocates Conversion to Electronic Medical Records" in TLJ Daily E-Mail Alert No. 886, April 28, 2004.
Finally, VP Cheney addressed trade. "Here at NexTech, you know the importance of our efforts to break down trade barriers and open up markets around the world." He added that "And remember also, that workers employed by the more than 900 companies from outside the United States have operations right here in Ohio; add to that all the Ohio suppliers, distributors, and service companies that do business with those companies -- the surest way to endanger all of those jobs would be a policy of tariff and barriers and economic isolationism. We will not give in to that temptation. For the sake of growth and jobs, and for the good of our economic future, the United States of America will remain a confident, successful trading nation."
OMB Issues Memorandum Re Executive Branch Entity Critical Infrastructure Plans
6/17. Joshua Bolten, Director of the Office of Management and Budget (OMB), wrote a memorandum [14 pages in PDF] to the heads of all executive departments and agencies regarding "Development of Homeland Security Presidential Directive (HSPD) - 7 Critical Infrastructure Protection Plans to Protect Federal Critical Infrastructures and Key Resources".
This memorandum specifies "the required format for agencies to use when submitting internal critical infrastructure protection (CIP) plans." It provides that "these plans must address identification, prioritization, protection, and contingency planning, including the recovery and reconstitution of essential capabilities. In particular, planning must include protection priorities, the agency’s ability to ensure continuity of business operations during a physical or cyber attack, and, where current capabilities are lacking, plans of action and milestones to achieve the necessary level of performance."
On December 17, 2003, President Bush signed a directive titled "Homeland Security Presidential Directive/Hspd-7". It pertains to "Critical Infrastructure Identification, Prioritization, and Protection". It replaces former President Clinton's directive on this subject, titled "Presidential Decision Directive/NSC-63", and dated May 22, 1998. The Clinton directive is also know as "PDD 63". See, story titled "Bush Signs Critical Infrastructure Protection Directive" in TLJ Daily E-Mail Alert No. 802, December 12, 2004.
HSPD-7 required the CIP plans addressed in Bolten's June 17 memorandum. HSPD-7 required that "By July 2004, the heads of all Federal departments and agencies shall develop and submit to the Director of the OMB for approval plans for protecting the physical and cyber critical infrastructure and key resources that they own or operate. These plans shall address identification, prioritization, protection, and contingency planning, including the recovery and reconstitution of essential capabilities."
People and Appointments
6/17. The Senate confirmed Jane Boyle to be a Judge of the U.S. District Court for the Northern District of Texas by a vote of 99-0. See, Roll Call No. 128.
6/17. The Senate confirmed Roger Benitez to be a Judge of the U.S. District Court for the Southern District of California, by a vote of 98-1. See, Roll Call No. 127.
6/17. The Senate confirmed James Robart to be a Judge of the U.S. District Court for the Western District of Washington, by a vote of 99-0. See, Roll Call No. 126.
6/17. The Senate confirmed Alan Greenspan to be Chairman of the Board of Governors of the Federal Reserve System for a term of four years.
6/17. Jack Goldsmith, the Assistant Attorney General in charge of the Office of Legal Counsel, resigned, effective July 30, 2004. See, DOJ release.
6/17. Kenneth Dunn was named Qwest Communications' VP of Corporation Development & Strategy. He went to work for Qwest in 2002 as VP and Deputy General Counsel. See, Qwest release.
6/17. The Federal Communications Commission (FCC) released its Notice of Inquiry (NOI) [30 pages in PDF] regarding its annual report to the Congress on the status of competition in the market for the delivery of video programming. The FCC adopted, but did not release, this NOI at its June 10 meeting. This NOI sets deadlines for comments. Initial comments are due by July 23, 2004. Reply comments are due by August 25, 2004. See, story titled "FCC Adopts NOI For Annual Report to Congress on Video Programming" in TLJ Daily E-Mail Alert No. 916, June 11, 2004. This NOI is FCC 04-136 in MB Docket No. 04-227.
6/17. The VeriSign filed its First Amended Complaint [74 pages in PDF] with the U.S. District Court (CDCal) against the Internet Corporation for Assigned Names and Numbers (ICANN).
6/17. Pascal Lamy, the EU Trade Commissioner, issued a release regarding the House passage of HR 4520, the "American Jobs Creation Act of 2004", a bill that repeals the ETI tax regime. He stated that "I have repeatedly stated that our objective remains the withdrawal of the US illegal subsidy, and compliance with the WTO’s findings. Today, thanks to the efforts of Chairman Thomas and his colleagues in the House, we are a step closer to this objective. I very much hope that both the House and Senate can now agree on a final text so that an FSC/ETI repeal bill is rapidly adopted and signed into law by President Bush. It goes without saying that the moment WTO compliant legislation becomes law, the EU will immediately repeal the countermeasures. That will be good news for all involved in transatlantic trade. Let's hope the time will shortly come to put this long standing dispute behind us once and for all." On May 11, 2004, the Senate passed its ETI repeal bill, S 1637, the "Jumpstart Our Business Strength (JOBS) Act". On June 17, 2004 the House passed its bill. See, story titled "House Passes Bill to Repeal ETI" in TLJ Daily E-Mail Alert No. 921, June 18, 2004. See also, story titled "EU Imposes FSC/ETI Sanctions" in TLJ Daily E-Mail Alert No. 847, March 2, 2004.
NTIA's Gallagher Writes Powell Re Interim Unbundling Rules
6/16. Michael Gallagher, the acting Administrator of the National Telecommunications and Information Administration (NTIA) wrote a letter to Federal Communications Commission (FCC) Chairman Michael Powell regarding the FCC's triennial review order, and USTA v. FCC.
He wrote that "The Supreme Court has decided not to grant a stay in United States Telecommunications Association v. Federal Communications Commission. The Administration believes you should act promptly using all methods at your disposal to protect consumers and ensure appropriate competitive access to local networks, including the rapid adoption of interim rules that will accomplish those goals."
Gallagher (at right) continued that "To ensure appropriate competitive access, the Administration believes the interim rules should cover a full year, unless superseded by permanent rules, and include the maximum legally sustainable transition period without wholesale rate increases for those network elements subject to the vacatur of the DC Circuit Court. We support your stated goal of adopting permanent rules by the end of the year, provided that the permanent rules complete the period of rate certainty initiated in the interim rules."
He concluded that "In response to your leadership, the telecommunications industry has participated in an historic effort to use commercial negotiations to end eight years of regulatory and legal stalemate. The Administration continues to support these negotiations as the best way to achieve greater market-based competition within the telecommunications industry. We encourage the FCC to aggressively continue to facilitate these negotiations. Any interim rules should ensure that consumers immediately benefit from the current and future commercially-negotiated agreements and that those agreements are protected from unnecessary legal challenges."
This letter pertains to the March 2, 2004 opinion [62 pages in PDF] of the U.S. Court of Appeals (DCCir) in USTA v. FCC (also known as USTA II), which overturned key provisions of the FCC's triennial review order [576 pages in PDF] regarding the unbundling requirements of incumbent local exchange carriers (ILECs) under 47 U.S.C. § 251.
Legislators Introduce Bills Pertaining to NCIC Database, Data Mining and FISA Surveillance
6/16. Sen. Ted Kennedy (D-MA), Sen. Patrick Leahy (D-VT), Sen. Richard Durbin (D-IL), Sen. Russ Feingold (D-WI), and Sen. Jon Corzine (D-NJ) introduced S 2528, the "Civil Liberties Restoration Act of 2004". Rep. Howard Berman (D-CA) and Rep. William Delahunt (D-MA) introduced HR 4591, the companion bill in the House.
This is a huge bill. Much of its pertains to immigration law and procedure. However, it also contains numerous technology related provisions pertaining to (1) the FBI's National Crime Information Center (NCIC) database, (2) government data mining, (3) disclosure of surveillance and searches performed pursuant to the Foreign Intelligence Surveillance Act (FISA), including electronic surveillance and use of pen registers and trap and trace devices (PR&TTDs), in criminal proceedings. PR&TTDs is a term that now encompasses internet routing and addressing information.
Much of the bill is not technology related. Titles I and II pertain to immigration law and procedure. They would impose limitations upon the use of closed immigration hearings, specify due process notice requirements for aliens arrested or detained under the Immigration and Nationality Act, revise the provisions regarding bond, and replace the Executive Office of Immigration Review with a new Immigration Review Commission within the Department of Justice.
Title III would terminate the Department of Homeland Security's National Security Entry-Exit Registration System (NSEERS), and limit penalties for violation of certain sections of the Immigration and Nationality Act.
NCIC Database and the Privacy Act. Title III would also provide that "Data entered into the National Crime Information Center database must meet the accuracy requirements of section 552a of title 5, United States Code (commonly referred to as the ``Privacy Act´´)." (Parentheses in original.)
Sen. Kennedy offered this explanation. "Our bill also protects the integrity of the National Crime Information Center database. For decades, in maintaining the database, the Department of Justice was required to obey the Privacy Act, which requires each agency to maintain its records ``with such accuracy, relevance, timeliness, and completeness as is reasonably necessary to assure fairness to the individuals in the determination.´´"
Sen. Kennedy continued that "In March 2003, Attorney General Ashcroft issued a regulation stating that these requirements no longer applied to the NCIC database, and justified the exemption because ``in the collection of information for law enforcement purposes it is impossible to determine in advance what information is accurate, relevant, timely and complete.´´"
The FBI published a notice in the Federal Register (March 24, 2003, Vol. 68, No. 56, at Pages 14140 - 14141) in which it concluded that "The Department of Justice (DOJ), Federal Bureau of Investigation (FBI), is exempting the FBI's National Crime Information Center (NCIC) ... to avoid interference with law enforcement functions and responsibilities of the FBI". See also, story titled "EPIC Seeks OMB Reversal of FBI Exemption of NCIC Database from Privacy Act Requirements" in TLJ Daily E-Mail Alert No. 841, February 23, 2004.
Sen. Kennedy said that "Our legislation requires the Attorney General to comply with the Privacy Act in maintaining the database. Circumventing this statutory obligation poses significant risks not only for individuals whose files may be part of this data system, but also for communities that rely on law enforcement to employ effective, reliable methods for protecting public safety."
Government Data Mining. The bill would require the head of every federal department and agency to prepare annual reports to the Congress on that department's or agency's data mining activities.
The bill also enumerates the required contents of these reports. The requirements include a discussion of the technology, and the impact upon privacy and civil liberties.
The bill defines data mining as "a query or search or other analysis of 1 or more electronic databases, where (A) at least 1 of the databases was obtained from or remains under the control of a non-Federal entity, or the information was acquired initially by another department or agency of the Federal Government for purposes other than intelligence or law enforcement; (B) the search does not use a specific individual's personal identifiers to acquire information concerning that individual; and (C) a department or agency of the Federal Government is conducting the query or search or other analysis to find a pattern indicating terrorist or other criminal activity."
Sen. Kennedy stated that "Through comprehensive data-mining, many records that people believe are private can be collected by computer, fed into a database and used by the government without their knowledge. Law enforcement must have the necessary means to protect our safety, but the use of data-mining technology should not be allowed to threaten privacy and civil liberties." He added that the reporting requirement would enable the Congress to "exercise its oversight authority over federal agencies using this technology."
Disclosure of Surveillance and Searches in Criminal Proceedings. The bill would amend the Foreign Intelligence Surveillance Act's (FISA) provisions regarding discovery in criminal proceedings of applications, orders and other materials relating to electronic surveillance and searches under the FISA.
The FISA, which is codified in Title 50, applies to surveillance of agents of foreign governments and international terrorists, but not to ordinary criminal proceedings, which are governed by Title 18. The FISA and the Criminal Code also have vastly different standards for issuance of court orders authorizing surveillance. It is much easier to obtain a FISA order than, for example, a Title III wiretap order.
However, the distinction FISA and Criminal Code surveillance was affected by a section of the 2001 PATRIOT Act.
The PATRIOT Act did not change the standard for either Title III wiretaps (a showing of probable cause) or pen register or trap and trace orders (an assertion of mere relevance to a criminal investigation). It did, however, lower the standard for issuance of a FISA order. The statute had previously required that the "primary purpose" of the surveillance be foreign intelligence gathering. This was a very low standard to begin with. Then, the PATRIOT Act changed this to "a significant purpose".
That is, the PATRIOT Act made it easier for the government to get a FISA order. This is also significant for non-FISA prosecutions, because FISA investigations regarding foreign intelligence also can uncover evidence of domestic crimes, which result in domestic criminal prosecutions.
Opponents of the change in the FISA standard have argued that it opens the door for unscrupulous prosecutors to obtain a FISA order on the pretext that it is for foreign intelligence or terrorism purposes, but with the concealed purpose of using the evidence collected for prosecutorial purposes, thereby evading the Fourth Amendment protections against unreasonable searches and seizures that the Title III process is intended to protect.
There are legislative proposals to revert from the "a significant purpose" standard back to the "primary purpose" standard. However, the Kennedy and Berman bills would not make this change. Rather, these bills would make it easier for defendants in criminal cases to learn about the use of the FISA process against them.
Currently, the FISA, at 50 U.S.C. § 1806(f), which addresses disclosure of "electronic surveillance", provides that "the court may disclose to the aggrieved person, under appropriate security procedures and protective orders, portions of the application, order, or other materials relating to the surveillance only where such disclosure is necessary to make an accurate determination of the legality of the surveillance."
The bill would change this to "the court shall disclose, if otherwise discoverable, to the aggrieved person, the counsel of the aggrieved person, or both, under the procedures and standards provided in the Classified Information Procedures Act (18 U.S.C. App.), portions of the application, order, or other materials relating to the surveillance unless the court finds that such disclosure would not assist in determining any legal or factual issue pertinent to the case."
Likewise, 50 U.S.C. § 1845(f), which addresses "pen registers and trap and trace devices", provides similarly restrictive language regarding disclosure of PR&TTDs. The Kennedy and Berman bills would provide that "Unless the court finds that such disclosure would not assist in determining any legal or factual issue pertinent to the case, the court shall disclose, if otherwise discoverable, to the aggrieved person, the counsel of the aggrieved person, or both, under the procedures and standards provided in the Classified Information Procedures Act (18 U.S.C. App.), portions of the application, order, or other materials relating to the use of the pen register or trap and trace device, as the case may be, or evidence or information obtained or derived from the use of a pen register or trap and trace device, as the case may be."
PR&TTDs are telephone industry terms that refer to capturing outgoing and incoming telephone numbers. The PATRIOT Act provided that PR&TTD authority extends to internet addressing and routing information, such as the "To:" and "From:" lines of e-mail, and uniform resource locators (URLs) accessed by web browsers.
Sen. Kennedy said this. "The bill also protects privacy by ensuring that constitutional limitations apply to secret surveillance. The Patriot Act amended the Foreign Intelligence Service Act to permit surveillance or searches when a ``significant purpose´´, not just the ``primary purpose´´, of the surveillance or search is foreign intelligence. Under current procedures, when such evidence is brought before a court, it is nearly impossible for a criminal defendant to contest its introduction, because the government's application for the search is kept secret. When such evidence is used in criminal cases, the court should disclose the application and related materials to the defendant, subject to the Classified Information Procedures Act, which offers a balanced and effective way to protect both national security information and the rights of defendants."
The bill also adds a new § 502 to the FISA, regarding business records (and renumbers the old § 502 as 503).
Section 215 of the PATRIOT Act rewrote § 501 of the FISA, which is codified in Title 50 as § 1861. It pertains to "Access to Certain Business Records for Foreign Intelligence and International Terrorism Investigations". § 215 (of the PATRIOT Act) replaced §§ 501-503 (of the FISA) with new language designated as §§ 501 and 502.
Currently, § 501 (as amended by § 215) requires that an application to a judge or magistrate "shall specify that the records concerned are sought for an authorized investigation conducted in accordance with subsection (a)(2) to obtain foreign intelligence information not concerning a United States person or to protect against international terrorism or clandestine intelligence activities."
While the statute does not expressly include library records, it is not disputed that library records could be obtained. However, John Ashcroft stated in September 2003 that it has not been used to obtain library records.
The Kennedy and Berman bills would provide that "Any disclosure of applications, information, or items submitted or acquired pursuant to an order issued under section 501, if such information is otherwise discoverable, shall be conducted under the procedures and standards provided in the Classified Information Procedures Act ..."
Rep. Berman stated in a release that "It insures that when the Attorney General asks a business or a library for personal records, he must be targeting an agent of a foreign power."
More Capitol Hill News
6/16. The House Judiciary Committee met to mark up five bills. However, the Committee did not mark up the three technology related bills: HR 4518, the "Satellite Home Viewer Extension and Reauthorization Act 2004", HR 338, the "Federal Agency Protection of Privacy Act of 2004", HR 3632, the "Anti-Counterfeiting Amendments of 2003". The next mark up session is likely to be scheduled for next week.
6/16. The House Science Committee held a meeting to mark up several bills. The Committee approved an amendment in the nature of a substitute to HR 4516, the "Department of Energy High-End Computing Revitalization Act of 2004", by a voice vote. The Committee approved HR 4218, the "High Performance Computing Revitalization Act of 2004", by a voice vote. The Committee amended and approved HR 3598, the "Manufacturing Technology Competitiveness Act of 2004", by a roll call vote of 19-13.
6/16. The House Ways and Means Committee held a hearing titled "Implementation of the U.S.-Australia Free Trade Agreement". See, prepared testimony of witnesses: Josette Shiner, (Deputy U.S. Trade Representative), Allen Johnson, (USTR's Chief Agricultural Negotiator), David Sundin, (U.S. Chamber of Commerce), Russell Shade, (National Association of Manufacturers), David Wagner, (Distilled Spirits Council of the United States), and George Franklin, (Grocery Manufacturers of America).
6/16. Sen. Ted Kennedy (D-MA), Sen. Patrick Leahy (D-VT), Sen. Richard Durbin (D-IL), Sen. Russ Feingold (D-WI), and Sen. Jon Corzine (D-NJ) introduced S 2528, the "Civil Liberties Restoration Act of 2004". This is a huge bill. Much of its pertains to immigration law and procedure. However, it also contains numerous technology related provisions. These pertain to (1) government data mining, (2) the National Crime Information Center database, and (3) disclosure of surveillance and searches performed pursuant to the Foreign Intelligence Surveillance Act (FISA), including electronic surveillance and use of pen registers and trap and trace devices (PR&TTDs), in criminal proceedings. PR&TTDs is a term that now encompasses internet routing and addressing information.
6/16. The U.S. Patent and Trademark Office (USPTO) published in its web site its latest revision of its Manual of Patent Examining Procedure (MPEP).
People and Appointments
6/16. President Bush nominated Micaela Alvarez to be a Judge of the U.S. District Court for the Southern District of Texas. See, White House release.
6/16. The Senate confirmed Paul Diamond to be a Judge of the U.S. District Court for the Eastern District of Pennsylvania, by a vote of 97-0. See, Roll Call No. 123.
6/16. The Senate confirmed Lawrence Stengel to be a Judge of the U.S. District Court for the Eastern District of Pennsylvania, by a vote of 97-0. See, Roll Call No. 122.
6/16. The Senate confirmed William Duffey to be a Judge of the U.S. District Court for the Northern District of Georgia, by a vote of 97-0. See, Roll Call No. 121.
Go to News from June 11-15, 2004.