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            L  E  G  A  L  *  I  M  P  L  I  C  A  T  I  O  N  S  *

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               STEVE JACKSON WINS CASE AGAINST US SECRET SERVICE

                          Report compiled by Genie


    A games publisher has won a lawsuit against the U.S. Secret Service and the
federal government in a  groundbreaking  case  involving  computer publications
and electronic-mail privacy. In a  decision  announced  Friday, March 12, Judge
Sparks of  the  federal  district  court  for  the  Western  District  of Texas
announced that the case of Steve  Jackson  Games  et al. versus the U.S. Secret
Service and the United States Government has been decided for the plaintiffs.
    Judge Sparks awarded more than $50,000 in damages to the plaintiffs, citing
lost  profits  for  Steve   Jackson   Games,   violations   of  the  Electronic
Communications Privacy Act, and  violations  of  the  Privacy Protection Act of
1980. The judge also  stated  that  plaintiffs  would  be  reimbursed for their
attorneys' fees.
    The judge did not find  that  Secret  Service  agents had "intercepted" the
electronic communications that were captured  when agents seized the Illuminati
BBS in an early-morning raid  in  spring  of  1990  as part of a computer-crime
investigation. The judge did find, however, that  the ECPA had been violated by
the agents' seizure of stored electronic communications on the system.
    Judge Sparks also found that the  Secret Service had violated Steve Jackson
Games's rights as a  publisher  under  the  Privacy  Protection  Act of 1980, a
federal law designed to limit the  ability  of law-enforcement agents to engage
in searches and seizures of publishers.
    It was also noted that: "prior to  March  l,  1990, and at all other times,
there has never been any basis  for  suspicion  that any of the Plaintiffs have
engaged  in  any  criminal  activity,   violated   any  law,  or  attempted  to
communicate, publish, or store any  illegally obtained information or otherwise
provide access  to  any  illegally  obtained  information  or  to  solicit  any
information which was to be used  illegally."  This  is a clear indication that
the publicity from the law  enforcement  agencies, which implied that Jackson's
bbs, Illuminati, had some involvement with hacking, had no basis in fact.

              --------------------------------------------------

The story started when in October of  1988, Henry Kluepfel, Director of Network
Security Technology (an  affiliate  Bell  Telephone  Company),  was  advised "a
sensitive, proprietary computer document of Bell  South relating to Bell's '911
program' " had appeared on a bbs  in  Illinois.  This was the infamous issue of
Phrack that contained an E911 document downloaded from a hacked Bell computer.
    Kluepfel, who  had previously worked with  the Secret Service and was known
as an expert and reliable informant  on  hacking,  met Assistant U. S. Attorney
William Cook in  Chicago  and  thereafter  communicated  with  Cook  and Secret
Service Agent  Tim  Foley.  Agent  Foley  was  in  charge  of  this  particular
investigation.
    Around February 6, l990, Kluepfel  learned  that  the Phrack issue with the
911 document was available on  the  bbs  "Phoenix"  which  was operated by Loyd
Blankenship in Austin, Texas.  Then  Kluepfel  found  out that  Blankenship not
only operated the Phoenix bulletin board,  but  he  was  a user of the Illinois
bulletin board wherein the 911 document was first disclosed, was an employee of
Steve Jackson Games, Inc., and a  user  of  the Steve Jackson Games, Inc.'s bbs
"Illuminati.". Even worse, he determined  that  Blankenship was a "co-sysop" of
the Illuminati bulletin board, which means  that  he  had the ability to review
anything on the  Illuminati  bulletin  board  and,  importantly,  maybe able to
delete anything on  the  system.  So,  the  Secret   Services  put  two and two
together, and came up with five.
    The judgement criticises Kluepfel's  lack  of  evidence: "Kluepfel was, and
is, knowledgeable in the operation of  computers, computer bulletin boards, the
publishing of materials and document by  computers  ... and could have "logged"
into the Illuminati  bulletin  board  at  any  time  and  reviewed  all  of the
information on the bulletin board  ....  but  did  not do so." Similarly, Agent
Foley, the best known anti-hacker agent in the US, did not check Illuminati for
the E911 document. The only information Agent Foley had regarding Steve Jackson
Games, Inc. and Steve Jackson was that  he  thought this was a company that put
out games, but he also reviewed a  printout of Illuminati on February 25, 1990,
which read, "Greetings, Mortal! You have  entered the secret computer system of
the Illuminati, the on-line  home  of  the  world's  oldest  and largest secret
conspiracy.  5124474449300/1200/2400BAUD  fronted   by   Steve  Jackson  Games,
Incorporated. Fnord."  Judge  Sparks  said  that  "The  evidence  in  this case
strongly suggests Agent Foley, without  any further investigation, misconstrued
this information to  believe  the  Illuminati  bulletin  board  was  similar in
purpose to Blankenship's Phoenix bulletin  board, which provided information to
and was used by 'hackers'." He also  notes  that  "Agent Foley was not aware of
the Privacy Protection Act.... , and  he conducted no investigation about Steve
Jackson Games,  Incorporated,  although  a  reasonable  investigation  of  only
several hours would have revealed  Steve  Jackson  Games,  Inc. was, in fact, a
legitimate publisher of information to  the  public"  The judge also criticised
Foley's search warrant:  "The  affidavit  and  warrant  preparation  was simply
sloppy and not carefully done."
    During the search of  Steve  Jackson  Games  and  the  seizure of the three
computers, over 300  computer  disks,  and  other  materials,  Agent Golden was
advised by a Steve Jackson Games, Inc.  Employee that Steve Jackson Games, Inc.
was in the publishing business.  Unfortunately,  Agent  Golden, like Foley, was
unaware of the Privacy Protection  Act  and apparently attached no significance
to this information. They were acting illegaly.
    In court, Foley admitted  there  was  no  valid  reason why all information
seized could not have  been  duplicated  and  returned  to  Steve Jackson Games
within a period of hours and no more than eight days from the seizure. In fact,
it was months (late June 1990) before  the majority of the seized materials was
returned. Agent  Foley  (an  attorney)  simply  was  unaware  of  the  law  and
erroneously believed he had  substantial  criminal  information which obviously
was not present, as to  date,  no  arrests  or  criminal charges have ever been
filed against anyone, including Blankenship. Judge Sparks adds that Foley "must
have known his seizure of  computers,  printers,  disks and other materials and
his refusal to provide copies represented  a  risk of substantial harm to Steve
Jackson Games, Inc. - under circumstances where he had no reason to believe the
corporation or its owner was  involved  in  criminal activity." Agent Foley, it
appears, in his zeal to obtain  evidence for the criminal investigation, simply
concluded  Steve  Jackson   Games,   Incorporated   was   somehow  involved  in
Blankenship's alleged activities  because  of  the  wording  of  the Illuminati
bulletin board menu.
    Initially the Secret Service denied that it had read private email messages
and made deletions to messages. However,  it  came  out  in court that they had
done this, and that, said Sparks "cannot be justified".
    Sparks also dismisses the arguments that  he might be undermining the fight
against computer  crime,  saying:  "This  Court  cannot  amend  or  rewrite the
statutes involved. The Secret Service must go to the Congress for relief. Until
that time, this Court  recommends  better  education,  investigation and strict
compliance with the statutes as written."


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    Mike Godwin, legal services counsel for the Electronic Frontier Foundation,
which has underwritten and supported the case  since it was filed in 1991, said
he is pleased  with  the  decision.  "This  case  is  a  major  step forward in
protecting the rights of those who use  computers  to send private mail to each
other or who use computers to create and disseminate publications."
    "Judge Sparks has made it  eminently  clear  that  the Secret Service acted
irresponsibly,"  Godwin  said.  "This  case  should  send  a  message  to  law-
enforcement groups everywhere that they  can't  ignore  the rights of those who
communicate by computer."
    According to the EFF, the  US  law  enforcement agencies overreact in their
fight against computer  crime.  John  Quaterman,  of  EFF-Austin,  gives  as an
example an article in the Austin  American-Statesman  in which a security agent
is quoted as saying "Giving their kids  a  computer  and a modem is like giving
them a loaded gun." John  disagrees:  "There  are  people  who use computers to
commit crimes, just  as  there  are  hit-and-run  drivers.   That  doesn't make
everyone modem owner a criminal, anymore  than  every  car owner is a criminal.
Most people use computers and modems for  work  and amusement, just as they use
automobiles."


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