Subject:   More laundering IMF $; civil asset forfeiture; web privacy attacks by DoJ
   Date:    Mon, 31 Jan 2000 18:35:49 -0500
   From:   JBJ
 

[Privacy advocates,

Just a year ago, beltway cops were embarrassed and befuddled when the public "Just said 'No' " to the latest toy on their wish list, Know Your Customer.  They quickly manufactured a failed attempted to divert attention from the abuse of International Monetary Fund (i.e., US taxpayer) money going to prop up inept governments and feed corruption: the Bank of New York "scandal" produced no convictions and highlighted the fact that DC law enforcement priorities are misplaced--ignoring investigation pleas from British law enforcement officials for half a year, Washington paper shufflers were too busy lobbying US Congressmen against civil asset forfeiture and money laundering reforms (to correct their abuses).

Well, Congress is back, and the attack on privacy begins anew.  After spending the Congressional recess lobbying staffers on the need to be able to take innocent people's money because they look "suspicious" without proper recourse for the victims (civil asset forfeiture abuse) and to force bank tellers to spy on their customers (misnamed Bank Secrecy Act), Washington "crime fighters [sic]" are trying to stop the Hatch-Leahy civil asset forfeiture reform bill in the Senate (a watered-down version of a bill that passed the House four-to-one).  Look for them, too, to attempt to divert attention from IMF failure to be accountable for the (taxpayer) money it doles out to argue, again, that the problem is "inadequate regulation" and "excessive bank secrecy."

Rep. Ron Paul has legislation to stop the hemorrhage of taxpayer dollars to the IMF (HR 1147) and to end the deputization of bank tellers as law enforcement agents (HR 518):  http://www.house.gov/paul/legis/welcome.htm  and see Dr. Paul's statement on Russia laundering IMF money:  http://www.house.gov/banking/92299toc.htm

This looks as if it's going to be a fun year--JBJ]

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 http://www.ft.com/hippocampus/q33595a.htm

IMF: Body probes Ukraine allegations
                   By Stephen Fidler in Washington

     The International Monetary Fund said on Friday it was taking seriously reports that millions of dollars of IMF loans to Ukraine had been misappropriated and would carefully examine the allegations.

     Tom Dawson, spokesman, said the fund had not been aware of the details of the allegations until they appeared in the Financial Times on Friday. [...]

 http://www.ft.com/hippocampus/q333a06.htm
 

UKRAINE: Funds affair stirs debate on US ties
                   By Thomas Catan in New York and Charles Clover in Kiev

    Allegations that the government of President Leonid Kuchma of Ukraine diverted International Monetary Fund money for its electoral gain are set to raise the political temperature not only in the Ukrainian capital, Kiev, but also in the US. [...]

                   His allegations - that President Kuchma's government diverted IMF funds and reinvested them in the country's debt market - come at a sensitive moment for Ukraine, which is in the midst of negotiations to restructure its foreign debt and restart its IMF programme. [...]

                   The scheme outlined by Mr Lazarenko to his aides closely resembles one employed by the Russian central bank, which in 1996 funnelled billions of dollars in western aid into an offshore subsidiary called Fimaco and recycled the funds into speculative government bonds. [...]

                   "As a result of the scheme, the National Bank was able to artificially inflate its reserves [and] show itself to be healthier than it in fact was," said Viktor Suslov, who headed the parliamentary investigation into the affair.  "This may have even been done in complicity with the IMF."

                   The Ukrainian government said this week that the central bank's actions had been completely cleared by an IMF audit. An IMF spokeswoman said: "Any practices that were objectionable were corrected."

                   However, Mr Lazarenko is now ready to allege that the transaction under question was only part of a larger scheme to divert IMF money and invest it in the domestic debt market. The proceeds of the transaction - some $200m - were then siphoned off and may have been used in part to fund Mr Kuchma's re-election
 effort. [...]

 http://www.ft.com/hippocampus/q333b2e.htm
 

UKRAINE: Former PM alleges $613m fraud
                   By Thomas Catan in New York and Charles Clover in Kiev

Pavlo Lazarenko, a former Ukrainian prime minister, is preparing to air allegations that members of President Leonid Kuchma's government engaged in embezzlement and money laundering, including misappropriating millions of dollars of International Monetary Fund loans. [...]

      According to Joel Bartow, a former Federal Bureau of Investigation agent he has retained, Mr Lazarenko says $613m in IMF funds were diverted from the central bank in December 1997 and invested in speculative government bonds, reaping interest rates of up to 66 per cent.  [...]

      The IMF said it was unaware of any allegations that its funds had been misused in Ukraine, but remained wary since last year's finding that it had been misled by the Russian central bank in a transaction similar to that described by Mr Lazarenko.

      "Because of the Russian situation, we look into everything and we suspect and think about everything," said an IMF spokesman. "But I am not aware of any [allegations] concerning Ukraine." [...]

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Spotlight on Civil Asset Forfeiture (aka Legal Robbery)
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http://www.free-market.net/spotlight/forfeiture/

Civil asset forfeiture enables government officials to take your stuff,  even if you haven't broken any of their laws.  With civil asset forfeiture, only your _property_ needs to be guilty.  And, as it turns out, inanimate objects don't have many legal rights.  No due process, speedy trial, or impartial jury required here.

 In New York, they may confiscate your car if the person driving it  appears to have had too much to drink (whether or not that person is you). In Michigan, they may padlock your home if they think someone's been selling drugs out of there. At an airport, they may take your cash if you're carrying too much of it.

 This week we spotlight this ongoing outrage. J.D. Tuccille gives an introduction and overview, and offers a directory of online resources for more information -- news reports, background articles, Web sites, organizations, etc. See: http://www.free-market.net/spotlight/forfeiture/

 And don't miss last week's spotlight on government vs. private land  management. (A full 1/3 of the total land in America is owned, and mismanaged, by the federal government.)     http://www.free-market.net/spotlight/takings/

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    This article is from ZDNN (http://www.zdnet.com/zdnn/).
    Visit this page on the Web at:    http://www.zdnet.com/zdnn/stories/news/0,4586,2423015,00.html

    Through the guidance of a federally sponsored committee that has been quietly meeting since 1998, the U.S. Department of Justice is leading a national push to integrate, standardize and Web-enable all criminal justice information that is harvested and stored by local, state, tribal and federal governmental entities.  [...]

    But while not categorically condemning the broad push for linking systems and developing standards, privacy advocates cautioned that such efforts may not be worth the trouble and may invite security problems. Broadening authorities' access to different pots of information may not be in the public's best interest, they said.  And Web-based technologies, with their security flaws, may not be the best  method for collecting and storing criminal justice information, they added.
 

Critic: Effort 'simplistic'

        Jim Dempsey, senior staff counsel at the Center for Democracy and Technology, a Washington-based privacy watchdog organization, questioned the motive behind the Network's activity, calling the effort "simplistic."

    "The easy answer that they thought was missed here is, 'If we were to share information among various criminal justice agencies more efficiently, we would have less crime,' " Dempsey said.

    He added: "We think information collected for one purpose should not be routinely shared. ... I think [the coordinated effort] underestimates the powerful reasons, both legitimate and illegitimate, for why we have so many different criminal justice agencies and systems. And I question whether the World Wide Web model can map onto criminal justice information and, if it did, whether it would leave anybody better off." [...]
 
 

[Congressman Ron Paul sent out the following letter to his colleagues]

Tax cash?  Just Say "No!"
Cosponsor HR 3399
 

Dear Colleague,

A senior Fed official is proposing a plan to impose a "carry tax" on cash using the magnetic strip as a tracking device.  The reasons to oppose this idea are many and obvious.  The  Currency "Carry Tax" Prohibition Act of 1999, HR 3399, would send a clear message to the Federal Reserve to renounce clearly this preposterous idea.

At a conference last October, Marvin Goodfriend, a Richmond Fed senior vice president, suggested taxing Federal Reserve notes held by the public "by imbedding a magnetic strip in each bill.  The magnetic strip could visibly record when a bill was last withdrawn from the banking system.  A carry tax could be deducted from each bill upon deposit according to how long the bill was in circulation since last withdrawn and how much carry tax was 'past due' [in order to stimulate stagnant economic growth in an environment of stable or falling prices and nominal short-term interest rates at or near zero]."

The carry tax was proposed by economists John Keynes and Silvio Gesell but abandoned decades ago due to inadequate technology.  The Fed believes the technology now exists and is studying the proposal as a remedy to "hoarding" cash under hypothetical conditions that might soon develop.   The entire text of Mr. Goodfriend's paper is available at  http://www.y2kculture.com/politech/cashtax.html.

 To cosponsor HR 3399 and stop this ridiculous idea (unfortunately this is not a joke), please contact Bradley Jansen at 5-2831 ....

 Respectfully,
 /s  Ron Paul
 
 

[Privacy has taken on a seriousness even Washington can't ignore--JBJ]

Rep. Ron Paul's statement on the House floor,
January 31, February 2, 2000:  http://www.house.gov/paul/congrec/
 

       [...]The people should be able to closely monitor the government,  but as our government grows in size and scope, it seeks to monitor our every move.  Attacks on our privacy are incessant and are always justified by citing so-called legitimate needs of the state, efficiency, and law enforcement. Plans are laid for numerous data banks to record  everyone's activities. A national ID card using our social security number is the goal of many, and even though we achieved a significant victory in delaying its final approval last year, the promoters will surely persist in their efforts. Plans are made for a medical data bank to be kept and used against our wishes. Job banks and details of all our lending activities continue to be of interest to all national policing agencies to make sure they know exactly where the drug dealers, illegal aliens, and tax dodgers are and what they're doing, it is argued. For national security purposes, the Echelon system of monitoring all overseas phone calls has been introduced, yet the details of this program are not available to any inquiring Member of Congress.

      The government knew very little about each individual American citizen in 1900, but starting with World War I, there has been a systematic growth of government surveillance of everyone's activities, with multiple records being kept.  Today, true privacy is essentially a thing of the past. The FBI and the IRS have been used by various administrations to snoop and harass political opponents and there has been little effort by Congress to end this abuse. A free society, that is a constitutional republic, cannot be maintained if privacy is not highly cherished and protected by the government, rather than abused by it.

      And we can expect it to get worse. Secretary of Defense Bill Cohen was recently quoted as saying: "Terrorism is escalating to the point that US citizens may soon have to choose between civil liberties and more intrusive forms of protection;" all in the name of taking care of us! As far as I am concerned, we could all do with a lot less government protection and security. The offer of government benevolence is the worst reason to sacrifice liberty, but we have seen a lot of that during the 20th Century.[...]
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Medical Privacy Threatened
Deadline for Halting Dangerous Regulations Quickly Approaching
http://www.house.gov/paul/tst/tst2000/tst020700.htm
 

        An unconstitutional and dangerous rulemaking procedure by the U.S. Department of Health and Human Services is underway and greatly threatens the health care privacy and freedom of Americans. The deadline for concerned citizens to submit comments to HHS is February 17.

      On November 3rd, 1999, the Department of Health and Human Services (HHS) published proposed medical privacy regulations in the Federal Register. Protecting medical privacy is a noble goal; however, the federal government is not constitutionally authorized to mandate a uniform standard of privacy protections for every citizen. Rather, individuals and those with whom they entrust their health care information should determine the question of who should have access to a person's medical records.  Real threats to privacy come primarily from governments that have historically compelled individuals to provide information, often in exchange for some government benefit.......

        ......Before implementing these rules, HHS must consider what will happen to the trust between patients and physicians when patients know that any and all information given their doctor may be placed in a government database, seen by medical researchers, or handed over to government agents without a warrant. For more information on how to submit comments to the Department of Health and Human Services, feel free to contact my congressional staff by email (rep.paul@mail.house.gov <mailto:rep.paul@mail.house.gov>). Please use the words "HHS Regs" in the subject line, and make sure to include your email address in your message.  You may also contact my office by phone at 202-225-2831.....

Also, from the Coalition for Constitutional Liberties:  If you would like to review detailed analysis and comments by others opposing the rule, see the following:

    Association of American Physicians and Surgeons    http://www.aapsonline.org./aaps/confiden/hhsp.htm
    Institute for Health Freedom    http://www.forhealthfreedom.org/Publications/Privacy/NeedToKnow.html
    Representative Ron Paul's Privacy Forum    http://www.house.gov/paul/privacy/medpriv120999.htm

Sincerely, Dawn Richardson
PROVE (Parents Requesting Open Vaccine Education)
P.O. Box 1071    Cedar Park, TX  78630-1071    (512) 918-8760
prove@vaccineinfo.net (email)    http://vaccineinfo.net (web site)
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From the ACLU:
The Department of Health and Human Services doesn't want to hear what you think about its proposed medical privacy regulations. In fact, the agency has thrown out 2,500 of your comments!  But now you can do something about it!

TO: ACLU Action Network
FR: Jared Feuer, Internet Organizer
DT: February 3, 2000

When the Clinton Administration proposed its regulations to protect medical records privacy, the ACLU offered you, our online activists, an action tool that allowed you to fax your comments about the proposal to the Administration. Thousands of you took advantage of our offer and faxed comments into the Department of Health and Human Services.

Citing bureaucratic rules, HHS has rejected these faxes.

It appears that for the Department of Health and Human Services, the word "comments" means a bureaucratic and complicated procedure that is meant to discourage public participation.  According to the rules they have set, faxes and even snail mail letters -- unless they are sent in quadruplicate -- will not be considered as formal "comments."

Incredibly, only after 2,400 of you faxed in your comments through the ACLU site did HHS notify us that it would not accept these faxes as "official comments."

By insisting that individuals wade through a complex web-based system and by only informing the ACLU that they would not accept other electronic comments after thousands had been sent, we believe the Administration has turned its back on the general public and opened itself largely to insurance companies and other "inside-the-Beltway" lobbyists.

In response, we are today launching a new feature where we've tried to make it easier for you to submit formal comments to the agency. We have created a special feature on our website with the HHS form directly embedded into the page, allowing users to make direct comments without the difficulty of utilizing the HHS homepage.  This ACLU feature also provides comment forms and additional information on three aspects of the regulations that need to be strengthened, in addition to providing tools for submitting comments on other aspects of the regulations.

There are only two more weeks until the comment period ends on February 17, and these regulations still need to be strengthened in the areas of consent, law enforcement and the creation of a government database.  You can help push the Clinton Administration to listen to the privacy concerns of the American public by participating in the ACLU mini-campaign on the proposed medical privacy regulations at:  http://www.aclu.org/action/medregs

This time your comments WILL NOT be ignored!
-----------------------------------------
 

BARR THANKS NET TASK FORCE FOR REJECTING WIRETAPS

U.S. Representative Bob Barr (GA-7) hailed reports today that the Internet Engineering Task Force (IETF) is poised to reject building wiretapping into the Internet.  According to Wired News, the IETF has "decided not to support wiretapping."  The text of Barr's letter to the IETF last year is available from his website at http://www.house.gov/barr/wiretapletter.html.

----------------------------------------
Coalition for Constitutional Liberties
Weekly Update for 2/3/00   Volume 3, Number 5
Brought to you by the Center for Technology Policy of the Free Congress Foundation
Lisa S. Dean, Vice President for Technology Policy
(mailto:lsdean@freecongress.org)
Julie McIntire, Coalition Coordinator (mailto:jmcintire@freecongress.org)
phone: (202) 546-3000   fax: (202) 544-2819
http://www.FreeCongress.org
 

Clinton's Convoluted Encryption Policy - Endangered Liberties Commentary,
By FCF Vice President for Technology Policy Lisa Dean
January 27, 2000

        Since its inception privacy advocates and cryptographers have been battling the Clinton Administration on the government's long held policy on the development and export of encryption, a method of scrambling electronic data in order to protect the information from unwarranted access.  With the recent announcement by the Administration that export controls are being "lifted", privacy advocates and cryptographers ought to be basking in their apparent victory over the Administration . . . or should they?

        On January 14 the Clinton Administration announced publicly its new regulations allegedly reversing its long held policy regarding the exportation of encryption products and products containing encryption.  The new rule would "allow the export and reexport of any encryption commodity or software to individuals, commercial firms, and other non-government end-users in all destinations.  It also allows exports and reexports of retail encryption commodities and software to all end-users in all destinations."  This of course does not include Cuba, Iran, Iraq, Libya, North Korea, Sudan or Syria.  In fact, the rule specifically states that a person cannot "knowingly export or reexport source code or products developed with this source code" to those countries.

        While on its face this rule may sound reasonable, it, in fact, is filled with unconstitutional aspects and inconsistencies that only the legalistically minded can obey and enforce.  For example, one cannot post or export source code in places where citizens from Libya or North Korea might have access however, that same source code, if composed and copied to paper, could legally be sent to those same citizens in those countries.  Also, if an individual created an encryption program for profit, he would be forbidden to provide assistance to those end-users who might have questions regarding the set-up and usage of the program because the new regulations specifically prohibit encryption software publishers from providing "technical assistance."

        Basically, this new regulation only helps businesses within the high tech industry who have long wanted the export restrictions relieved in order to participate in the global marketplace.  Through this ruling, that ability will now be made easier for businesses, which is an improvement over the previous situation under the Clinton Administration.  However, businesses are not the only factor to be considered.  While companies have fought for the ability to develop and sell their encryption products overseas, so have individual cryptographers.

        In fact, the most notable example is in the case of a former graduate student of mathematics, Daniel J. Bernstein, who developed his own encryption algorithm and wanted to post it to a newsgroup for comment and discussion.  When the federal government informed him that encryption was classified as a "munition" and that he would have to obtain a license to be an arms dealer before he could post the algorithm, Bernstein sued in federal district court on the basis that source code was protected First Amendment speech and the government had no Constitutional authority to stifle that speech.

        According to Bernstein's attorney, in light of the Administration's latest regulation, the case has now been sent for further review, from an en banc panel in the US Court of Appeals for the Ninth Circuit back to the three-judge panel which originally ruled on the case earlier in 1999.

        How will the latest regulations by the Commerce Department affect Bernstein and other individuals who wish to post or publish their source code?  That's where the regulations begin to sound less reasonable.  If Professor Bernstein happened to post his algorithm to a newsgroup or website where a Cuban or a Syrian was able to view it, Professor Bernstein could go to jail for having committed a felony, being accused of "knowingly" posting that information in a place where citizens from countries where the US currently has sanctions would have access.

        Aside from the numerous unconstitutional aspects of the regulations, this is perhaps the most ridiculous.  Given the "boundaryless" nature of the Internet, one cannot prove definitively and based on evidence that someone "knowingly" posted to an area where enemies of the US would have the ability to access the information.  The other side of the coin would be that one also cannot prove his innocence or guilt for that same reason.  A court case based on that argument would turn into a "kangaroo court", a phenomenon unknown in a democratic society.

        The bottomline is that while this latest set of regulations is a slight improvement over the Administration's previous rule insofar as allowing US businesses more freedom to export their products and perhaps help the US regain its once-held position as a leader in the software developing and manufacturing industry, the fact is that it also illustrates another of Clinton's many broken promises to the American people.  The Administration promised to lift export controls and restrictions, when in fact, it created an entirely new set of legal issues for the courts and individuals to contend with.  Cryptographers who wish to post their source code will find themselves in the same position as Alice was while attempting to defend herself before the Queen of Hearts.

        Until this Administration or perhaps the next one lifts the export controls and restrictions completely from encryption products, there will continue to be a Daniel Bernstein who will wage legal battles involving the ability to speak freely and express those thoughts and ideas with colleagues and friends as the US Constitution has guaranteed for all citizens.