CyberWire Dispatch // Copyright (c) 1994 //
 
Jacking in from the "We Doubt It" Port:
 
Washington, DC -- The critical thinking behind the Administration's
decision to back the FBI's controversial Digital Telephony Wiretap Act was
based on a severely flawed cost/benefit analysis, according to documents
obtained by Dispatch.
 
The FBI continues to insist that its "easy access" wiretap bill will cost
industry little, compared to the "economic benefit from the continued use
of electronic surveillance," which Bureau briefing documents say equate to
"billions of dollars per year," collected through "fines, recoveries,
restitution, forfeitures and prevented economic loss."  FBI Director Louis
Freeh, appearing on the TV show "Meet The Press" stated that the wiretap
bill would cost the industry just $300 million to implement.
 
Someone donate money to Freeh so he can buy a clue.
 
In recent congressional testimony, Roy Neel, president of the United States
Telephone Association, said that the FBI's bill would cost the telephone
industry alone "billions" to implement.  Freeh, who also testified during
the hearing, didn't refute Neel's assumptions.
 
As early as 1992, when the FBI first floated its bill, the basic
underlying cost/benefit analysis was pointedly questioned by the Bush
Administration, according to previously confidential documents obtained by
the Electronic Privacy Information Center through the Freedom of
Information Act and made available to Dispatch.  Those documents now raise
serious questions as to the accuracy of the FBI's numbers.
 
In that classified analysis, a copy of which was previously obtained by
Dispatch, the FBI claims wiretapping has prevented some $1.8 billion in
"potential economic loss" between the years of 1985 and 1991.  But several
agencies and departments within the Bush White House, although favoring the
bill's premise, were quick to hammer the FBI's math skills when asked to
comment on the cost/benefit analysis.
 
A May 22, 992 memo from the office of the Vice President office, Jim Jukes
writes that there are "several specific areas which we think need to be
further explored."  Jukes points out a basic flaw in the FBI's analysis in
that the "estimates of benefits seems to assume that without [the bill] law
enforcement agencies would have no ability to intercept communications...
should the figures [of estimated economic benefit] therefore be reduced?"
 
Jukes also points out that implementing the bill could stall "emerging
technologies" such as the fledgling personal communications services
industry.  Owing to the fact the Clinton Administration is banking on the
communications industry to pony up more than $10 billion and pour it into
government coffers when it bids for PCS spectrum licenses later this year,
Jukes appears to be a prophet when he wonders why the FBI chose not to
estimate what the economic benefit would be if these PCS technologies
didn't get off the ground sooner than later due to restrictive measures in
the wiretap bill.
 
Finally, Jukes says:  "In several places in the analysis, figures are cited
without reference to their sources or how they  were derived.  For
example... a figure of $1.8 billion is cited for potential economic loss...
could more information be provided here?"
 
A May 26, 1992 memo from the Treasury Department blasts the FBI's analysis,
pointing out several areas of flawed or questionable math.  "It is
difficult at best to do a critical analysis" of Justice's cost benefit
package "without a full explanation of how [Justice] arrived at its
cost/benefit analysis figures."  A final stinging comment says that it's
hard to tell how Justice would possibly determine "all the costs and
benefits involved."
 
The White House itself weighed in with a memo dated May 22, 1992, claiming
the FBI didn't provide enough information to "comprehensively" assess the
"cost side" on "a number of assessments required" by the President.   The
White House goes on to point out that the analysis also fails to explain
the impact on consumers, effect on U.S. employment, inflation,
international competitiveness, economic growth and Federal government
outlays and revenues.
 
Although the FBI would like us all to believe (and has apparently convinced
the Clinton policy wonks) that wiretapping is the Christ that will save us
from organized crime, terrorists and child pornographers, the Bush White
House didn't bite so easily.  "The benefits analysis should reflect clearly
that only some cases involved electronic surveillance;  that some
surveillance could continue in the absence of this legislation... and that
some convictions could probably still be obtained absent surveillance."
 
Maybe those Bush guys were smarter than we thought.
 
Enter FBI Director Freeh again.  During his interview, Freeh cited the $5
billion estimated damage from the bombing of the World Trade Center as a
great example of why America needs to put this bill in his back pocket.
What Freeh apparently forgot to mention was that if the FBI had dropped 50
cents to make a phone call and act on a tip from their inside snitch, they
could have averted the mess.
 
Oh... and he forgot to mention the fact that wiretapping played no part in
catching the mad bombers.  Remember, the driver of the rental van went back
to get his refund, leaving a sprawling paper trail behind him.  I guess all
those facts just slipped Mr. Freeh's mind.
 
Maybe he was just covering up for what the Bush White House already knew
and stated in that May 22 memo:  "The analysis does not consider the
existence of or the potential for other forms of surveillance that might
compensate for the reduction in telephone wiretapping capabilities..."
 
Meeks out...



