The annual wiretap report is out. The headline number is that wiretaps have gone up, and judges still don’t deny any wiretap applications.
The number of federal and state wiretaps reported in 2015 increased 17 percent from 2014. A total of 4,148 wiretaps were reported as authorized in 2015, with 1,403 authorized by federal judges and 2,745 authorized by state judges. Compared to the applications approved during 2014, the number approved by federal judges increased 10 percent in 2015, and the number approved by state judges increased 21 percent. No wiretap applications were reported as denied in 2015.
The press has focused more attention on the still very small number of times encryption thwarts a wiretap.
The number of state wiretaps in which encryption was encountered decreased from 22 in 2014 to 7 in 2015. In all of these wiretaps, officials were unable to decipher the plain text of the messages. Six federal wiretaps were reported as being encrypted in 2015, of which four could not be decrypted. Encryption was also reported for one federal wiretap that was conducted during a previous year, but reported to the AO for the first time in 2015. Officials were not able to decipher the plain text of the communications in that intercept.
Discussing the number — which doesn’t include data at rest — on Twitter got me to look at something that is perhaps more interesting.
Back in July 2015, 7 months into the period reported on today, Deputy Attorney General Sally Yates and FBI Director Jim Comey testified in a “Going Dark” hearing. Over the course of the hearing, they admitted that they simply don’t have the numbers to show how big a problem encryption is for their investigations, and they appeared to promise to start counting that number.
Around January 26, 2016 (that’s the date shown for document creation in the PDF) — significantly, right as FBI was prepping to go after Syed Rizwan Farook’s phone, but before it had done so — Comey and Yates finally answered the Questions for the Record submitted after the hearing. After claiming, in a response to a Grassley question on smart phones, “the data on the majority of the devices seized in the United States may no longer be accessible to law enforcement even with a court order or search warrant,” Comey then explained that they do not have the kind of statistical information Cy Vance claims to keep on phones they can’t access, explaining (over five months after promising to track such things),
As with the “data-in-motion” problem, the FBI is working on improving enterprise-wide quantitative data collection to better explain the “data-at-rest” problem.”
As noted above, the FBI is currently working on improving enterprise-wide quantitative data collection to better understand and explain the “data at rest” problem. This process includes adopting new business processes to help track when devices are encountered that cannot be decrypted, and when we believe leads have been lost or investigations impeded because of our inability to obtain data.
We agree that the FBI must institute better methods to measure these challenges when they occur.
The FBI is working to identify new mechanisms to better capture and convey the challenges encountered with lawful access to both data-in-motion and data-at =-rest.
Grassley specifically asked Yates about the Wiretap report. She admitted that DOJ was still not collecting the information it promised to back in July.
The Wiretap Report only reflects the number of criminal applications that are sought, and not the many instances in which an investigator is dissuaded from pursuing a court order by the knowledge that the information obtained will be encrypted and unreadable. That is, the Wiretap Report does not include statistics on cases in which the investigator does not pursue an interception order because the provider has asserted that an intercept solution does not exist. Obtaining a wiretap order in criminal investigations is extremely resource-intensive as it requires a huge investment in agent and attorney time, and the review process is extensive. It is not prudent for agents and prosecutors to devote resources to this task if they know in advance the targeted communications cannot be intercepted. The Wiretap Report, which applies solely to approved wiretaps, records only those extremely rare instances where agents and prosecutors obtain a wiretap order and are surprised when encryption prevents the court-ordered interception. It is also important to note that the Wiretap Report does not include data for wiretaps authorized as part of national security investigations.
These two answers lay out why the numbers in the Wiretap Report are of limited value in assessing how big a problem encryption is.
But they also lay out how negligent DOJ has been in responding to the clear request from SJC back in July 2015.
There’s one last exchange in Wednesday’s Senate Judiciary Committee hearing with Attorney General Loretta Lynch that deserves closer focus. It came during John Cornyn’s round of questioning.
He structured his questions quite interestingly. He started by using the example of the Apple All Writs Act order to emphasize that FBI can’t do anything without DOJ’s approval and involvement. “I just want to make sure people understand the respective roles of different agencies within the law enforcement community — the FBI and the DOJ.”
He then turned to an unrelated subject — mental health, particularly as it relates to gun crime — ending that topic with a hope he and Lynch could work together.
Then he came back to the respective roles of the FBI and DOJ. “So let me get back to the role of the FBI and the Department of Justice.”
He did so in the context of Hillary’s email scandal. He started by reminding that Hillary had deleted 30,000 emails rather than turning them over to State for FOIA review. Cornyn then raised reports that the government had offered Bryan Pagliano immunity (Chuck Grassley argued elsewhere in the hearing that that should make it easy for Congress to demand his testimony, as the WSJ has also argued). “It’s true, isn’t it, that immunity can’t be granted by the FBI alone, it requires the Department of Justice to approve that immunity.”
Lynch filibustered, talking about different types of immunities, ultimately ceding that lawyers must be involved. She refused to answer a question directly about whether they had approved that grant of immunity. Which is when Cornyn moved onto trying to get the Attorney General to admit that she would have the final decision on whether to charge anyone in the email scandal.
Cornyn: Let me give you a hypothetical. If the FBI were to make a referral to the Department of Justice to pursue a case by way of an indictment and to convene a grand jury for that purpose, the Department of Justice is not required to do so by law, are they?
Lynch: It would not be an operation of law, it would be an operation of our procedures, which is we work closely with our law enforcement partners–
Cornyn: Prosecutorial discretion–
Lynch: –it would also be consulting with the Agents on all relevant factors of the investigation, and coming to a conclusion.
Cornyn: But you would have to make to the decision, or someone else working under you in the Department of Justice?
Lynch: It’s done in conjunction with the Agents. It’s not something that we would want to cut them out of the process. That has not been an effective way of prosecuting in my experience.
Cornyn: Yeah, I’m not suggesting that you would cut them out. I’m just saying, as you said earlier, you and the FBI would do that together, correct? Just like the Apple case?
Lynch: We handle matters together of all types.
Cornyn: If the FBI were to make a referral to the Department of Justice to pursue criminal charges against Mr. Pagliano or anyone else who may have been involved in this affair, does the ultimate decision whether to proceed to court, to ask for the convening of a grand jury, and to seek an indictment, does that rest with you, or someone who works for you at the Department of Justice?
Lynch: So Senator with respect to Mr. Pagliani [sic] or anyone who has been identified as a potential witness in any case, I’m not able to comment on the specifics of that matter and so I’m not able to provide you–
Cornyn: I’m not asking you to comment on the specifics of the matter, I’m asking about what the standard operating procedure is, and it seems pretty straightforward. The FBI does a criminal investigation, but then refers the charges to the Department of Justice, including US Attorneys, perhaps in more celebrated cases goes higher up the food chain. But my simple question is doesn’t the buck stop with you, in terms of whether to proceed, to seek an indictment, to convene a grand jury, and to prosecute a case referred to you by the FBI?
Lynch: There’s many levels of review, at many stages of the case, and so I would not necessarily be involved in every decision as to every prosecutorial step to make.
Cornyn: It would be you or somebody who works for you, correct?
Lynch: Everyone in the Department of Justice works for me, including the FBI, sir.
Cornyn: I’m confident of that.
Grassley: Senator Schumer.
Schumer: Well done, Attorney General, well done.
I’m not entirely sure what to make of this: whether Cornyn was setting this up for the future, or whether he was trying to lay out Lynch’s responsibility for a decision already made. But given the reports that FBI Agents think someone should be charged (whether because of the evidence or because Hillary is Hillary), it sure felt like Cornyn was trying to pressure Lynch for her role in decisions already discussed. Indeed, I wonder whether Cornyn was responding to direct entreaties from someone at the FBI, possibly quite high up at the FBI, about Lynch’s role in this case.
Whatever he was trying to do, it may lead to some folks in the FBI getting a stern talking to from their boss, Loretta Lynch.
The Department of Justice is undercutting Chuck Grassley’s efforts to provide FBI employees whistleblower protection. That became clear in an exchange (2:42) on Wednesday.
The exchange disclosed two objections DOJ has raised to Grassley’s FBI Whistleblower Protect Act. First, as Attorney General Loretta Lynch revealed, DOJ is worried that permitting FBI Agents to report crimes or waste through their chain of command would risk exposing intelligence programs.
What I would say is that as we work through this issue, please know that, again, any concerns that the Department raises are not out of a disagreement with the point of view of the protection of whistleblowers but again, just making sure that the FBI’s intelligence are also protected at the same time.
I suspect (though am looking for guidance) that the problem may be that the bill permits whistleblowers to go to any member of Congress, rather than just ones on the Intelligence Committees. It’s also possible that DOJ worries whistleblowers will be able to go to someone senior to them, but not read into a given program.
Still, coming from an agency that doesn’t adequately report things like its National Security Letter usage to Congress, which has changed its reporting to the Intelligence Oversight Board so as to exempt more activities, and can’t even count its usage of other intelligence programs, it seems like a tremendous problem that DOJ doesn’t want FBI whistleblowers to have protection because it might expose what FBI is doing on intelligence.
That’s sort of the point!
Especially given Grassley’s other point: apparently, DOJ is opposed to the bill because it will elicit too many complaints.
One of the issues that your department has raised is that allowing FBI employees to report wrong-doing to their chain of command could lead to too many complaints. You know? What’s wrong with too many complaints? … Seems to me you’d invite every wrong doing to get reported to somebody so it could get corrected.
Apparently, DOJ knows there are so many problems FBI employees would like to complain about that things would grind to a halt if they were actually permitted to complain.
This is the FBI! Not only a bureau that has tremendous power over people, but also one with a well-documented history of abuse. It should be the first entity that has whistleblower protection, not the last!
Grassley raised two more points. First, in April 2014, DOJ promised to issue new guidelines on whistleblowing for FBI, clarifying who employees could go to. That hasn’t been done yet.
FBI has, however, created a video about whistleblowing which is, according to what Grassley said, pretty crappy. He’s asking for both those things as well.
Within minutes after the public announcement of Antonin Scalia’s death, Senator Mike Lee’s flack Conn Carroll started predicting Obama would have zero chance of successfully naming a successor. After Carroll, one after another actual Senator followed that sentiment, including Chuck Grassley and Mitch McConnell, both of whom would have the ability to stall any Obama nominee. From that point, the GOP was pretty much committed, they said, to preventing any Obama nominee from being confirmed.
That led to a bunch of bad comparisons — between judges like Robert Bork who was rejected and Miguel Estrada who never got a vote — and simply going a year without acting on a President’s nominee. Even the comparison with Anthony Kennedy (who was nominated in November after two other nominees, including Bork, failed) is inapt, as he was nominated earlier than any Obama pick would be (though in a sense that fetishizes the year that would pass without a nominee).
I, like bmaz, believe Obama will pick someone fairly centrist, probably someone who has been recently confirmed by big margins. I agree the most likely nominee will be Sri Srinivasan, who in 2013 was confirmed to the DC Circuit with a 97-0 vote — though I’m also mindful of the wisdom (given the GOP unanimity about obstructing this nominee) of picking someone who drive Democratic turnout — an African-American woman, for example. Though I highly doubt Obama will nominate Loretta Lynch, as some have suggested, not least because the fight over releasing data on HSBC’s continued money laundering will draw more attention as it moves toward appeal, which might focus attention on her role in administering the wrist slap in the face of egregious drug cartel and terrorist supporting money laundering.
After some reflection, some conservatives have suggested that the GOP would have been better served if they had simply not managed to pass Obama’s nominee, rather than making such a big stink about it.
I think that ignores how much both parties look forward to using this nominee to drive turnout — and regardless of who the respective nominees are, the GOP have a much bigger challenge in getting enough voters to turn out to elect a GOP president in November, so I’m sure they’re quite happy to have an issue that (they presumably hope) might flip some conservative Latino votes — though one likely outcome of an extended 8-member court is that the Fifth Circuit’s ruling staying Obama’s immigration orders will be upheld after a 4-4 tie on the court, which might have the opposite effect.
Furthermore, I think it ignores one other factor. Srinivasan has been predicted to be Obama’s most likely SCOTUS appointment for almost 3 years (few people consider how such predictions might have influenced Ruth Bader Ginsburg’s decision not to retire). The Republicans probably presume he’s the most likely candidate as well.
The presumption Srinivasan — or someone similar — would be the nominee easily justifies the GOP’s immediate promise they won’t confirm a nominee. That’s because they need to explain why someone they just overwhelmingly confirmed, someone who faced more opposition from the left than the right, suddenly became unacceptable.
More importantly, I presume the GOP wants to keep open the possibility of confirming Srinivasan or whatever centrist Obama appoints during the Lame Duck. Here’s why:
Barring any replay of Bush v. Gore, both sides will know on November 9 who would get to pick Scalia’s replacement if Obama’s pick failed. Both sides will also know the makeup of the Senate. Because of the demographic issues I mentioned earlier, the likely Democratic nominee, Hillary Clinton, is most likely to win. That’s not to say I think she’s necessarily the strongest candidate — even ignoring the potential the email scandal will taint close advisors like Huma Abedin or Jake Sullivan, I think it likely the economy will be crashing by November in a way that would favor Trump if he were the GOP nominee facing Hillary. But I think electoral demographics suggest the GOP will have a harder time winning this year, particularly after a year of Trump branding the GOP with bigotry.
Plus (ignoring my suspicion the economy will be crashing by November), we’re likely to have a more Democratic Senate after November. Harry Reid is the only retiring Democrat where the replacement race is currently perceived to be toss-up, whereas Marco Rubio, Mark Kirk, Kelly Ayotte, and Ron Johnson are all deemed to be likely toss-ups, if not Dem-favorable. It’s still most likely the GOP will have a slight majority, but a smaller one, in the Senate, one where people like Susan Collins could make more of a difference. But it is likely to be more Democratic.
If Hillary wins (the most likely outcome) and Democrats win the Senate (unlikely, but feasible), then the Republicans will have good reason to want to confirm an Obama nominee perceived to be centrist. Whereas Srinivasan looks far worse than Scalia to the Republicans, he would all of a sudden look far preferable to a Hillary choice with the time to wait out the Senate. The GOP would have time between November 9 and the Christmas break to confirm whatever Obama nominee has been languishing.
In other words, I think the GOP have provided a way to stall someone (like Srinivasan) they have recently confirmed, while leaving the possibility of confirming that person if November makes it likely the next nominee will be more liberal.
One more thing: Commentary on this process has presumed that McConnell and Grassley (and Obama) learned of Scalia’s death when we all did. I would hope that Obama, at least, got word well before that, particularly given the involvement of at least the US Marshals and according to some reports the FBI. But I also wouldn’t leave out the possibility that one of the 39 other still unidentified guests at the ranch this weekend gave the Republican leadership a heads up as soon as a hearse showed up. So it’s possible that what looked like quick knee-jerk response on the part of Republican leadership was instead more considered, along the lines I’ve just laid out.
In response to a question Senate Intelligence Committee Chair Richard Burr posed during his committee’s Global Threat hearing yesterday, Jim Comey admitted that “going dark” is “overwhelmingly … a problem that local law enforcement sees” as they try to prosecute even things as mundane as a car accident.
Burr: Can you, for the American people, set a percentage of how much of that is terrorism and how much of that fear is law enforcement and prosecutions that take place in every town in America every day?
Comey: Yeah I’d say this problem we call going dark, which as Director Clapper mentioned, is the growing use of encryption, both to lock devices when they sit there and to cover communications as they move over fiber optic cables is actually overwhelmingly affecting law enforcement. Because it affects cops and prosecutors and sheriffs and detectives trying to make murder cases, car accident cases, kidnapping cases, drug cases. It has an impact on our national security work, but overwhelmingly this is a problem that local law enforcement sees.
Much later in the hearing Burr — whose committee oversees the intelligence but not the law enforcement function of FBI, which functions are overseen by the Senate Judiciary Committee — returned to the issue of encryption. Indeed, he seemed to back Comey’s point — that local law enforcement is facing a bigger problem with encryption than intelligence agencies — by describing District Attorneys from big cities and small towns complaining to him about encryption.
I’ve had more District Attorneys come to me that I have the individuals at this table. The District Attorneys have come to me because they’re beginning to get to a situation where they can’t prosecute cases. This is town by town, city by city, county by county, and state by state. And it ranges from Cy Vance in New York to a rural town of 2,000 in North Carolina.
Of course, the needs and concerns of these District Attorneys are the Senate Judiciary Committee’s job to oversee, not Burr’s. But he managed to make it his issue by calling those local law enforcement officials “those who complete the complement of our intelligence community” in promising to take up the issue (though he did make clear he was not speaking for the committee in his determination on the issue).
One of the responsibilities of this committee is to make sure that those of you at at the table and those that comp — complete the complement of our intelligence community have the tools through how we authorize that you need. [sic]
Burr raised ISIS wannabes and earlier in the hearing Comey revealed the FBI still hadn’t been able to crack one of a number of phones owned by the perpetrators of the San Bernardino attack. And it is important for the FBI to understand whether the San Bernardino attack was directed by people in Saudi Arabia or Pakistan that Tashfeen Malik associated with before coming to this country planning to engage in Jihad.
But only an hour before Jim Comey got done explaining that the real urgency here is to investigate drug cases and car accident cases, not that terrorist attack.
The balance between security, intelligence collection, and law enforcement is going to look different if you’re weighing drug investigations against the personal privacy of millions than if you’re discussing terrorist communications, largely behind closed doors.
Yet Richard Burr is not above pretending this about terrorism when it’s really about local law enforcement.
the names, addresses, lengths of service and electronic communication transaction records [ECTR], to include existing transaction/activity logs and all e-mail header information (not to include message content and/or subject fields) for [the target]
The unsealing of the NSL confirmed what has been public since 2010: that the FBI used to (and may still) demand ECTRs from Internet companies using NSLs.
On December 1, House Judiciary Committee held a hearing on a bill reforming ECPA that has over 300 co-sponsors in the House; on September 9, Senate Judiciary Committee had its own hearing, though some witnesses and members at it generally supported expanded access to stored records, as opposed to the new restrictions embraced by HJC.
Since then, a number of people are arguing FBI should be able to access ECTRs again, as they did in 2004, with no oversight. One of two changes to the version of Senator Tom Cotton’s surveillance bill introduced on December 2 over the version introduced on November 17 was the addition of ECTRs to NSLs (the other was making FAA permanent).
And yesterday, Chuck Grassley (who of course could shape any ECPA reform that went through SJC) invited Jim Comey to ask for ECTR authority to be added to NSLs.
Grassley: Are there any other tools that would help the FBI identify and monitor terrorists online? More specifically, can you explain what Electronic Communications Transactions Record [sic], or ECTR, I think that’s referred to, as acronym, are and how Congress accidentally limited the FBI’s ability to obtain them, with a, obtain them with a drafting error. Would fixing this problem be helpful for your counterterrorism investigations?
Comey: It’d be enormously helpful. There is essentially a typo in the law that was passed a number of years ago that requires us to get records, ordinary transaction records, that we can get in most contexts with a non-court order, because it doesn’t involve content of any kind, to go to the FISA Court to get a court order to get these records. Nobody intended that. Nobody that I’ve heard thinks that that’s necessary. It would save us a tremendous amount of work hours if we could fix that, without any compromise to anyone’s civil liberties or civil rights, everybody who has stared at this has said, “that’s actually a mistake, we should fix that.”
That’s actually an unmitigated load of bullshit on Comey’s part, and he should be ashamed to make these claims.
As a reminder, the “typo” at issue is not in fact a typo, but a 2008 interpretation from DOJ’s Office of Legal Counsel, which judged that FBI could only get what the law said it could get with NSLs. After that happened — a DOJ IG Report laid out in detail last year — a number (but not all) tech companies started refusing to comply with NSLs requesting ECTRs, starting in 2009.
The decision of these [redacted] Internet companies to discontinue producing electronic communication transactional records in response to NSLs followed public release of a legal opinion issued by the Department’s Office of Legal Counsel (OLC) regarding the application of ECPA Section 2709 to various types of information. The FBI General Counsel sought guidance from the OLC on, among other things, whether the four types of information listed in subsection (b) of Section 2709 — the subscriber’s name, address, length of service, and local and long distance toll billing records — are exhaustive or merely illustrative of the information that the FBI may request in an NSL. In a November 2008 opinion, the OLC concluded that the records identified in Section 2709(b) constitute the exclusive list of records that may be obtained through an ECPA NSL.
Although the OLC opinion did not focus on electronic communication transaction records specifically, according to the FBI, [redacted] took a legal position based on the opinion that if the records identified in Section 2709(b) constitute the exclusive list of records that may be obtained through an ECPA NSL, then the FBI does not have the authority to compel the production of electronic communication transactional records because that term does not appear in subsection (b).
Even before that, in 2007, FBI had developed a new definition of what it could get using NSLs. Then, in 2010, the Administration proposed adding ECTRs to NSLs. Contrary to Comey’s claim, plenty of people objected to such an addition, as this 2010 Julian Sanchez column, which he could re-release today verbatim, makes clear.
They’re calling it a tweak — a “technical clarification” — but make no mistake: The Obama administration and the FBI’s demand that Congress approve a huge expansion of their authority to obtain the sensitive Internet records of American citizens without a judge’s approval is a brazen attack on civil liberties.
Congress would be wise to specify in greater detail just what are the online equivalents of “toll billing records.” But a blanket power to demand “transactional information” without a court order would plainly expose a vast range of far more detailed and sensitive information than those old toll records ever provided.
Consider that the definition of “electronic communications service providers” doesn’t just include ISPs and phone companies like Verizon or Comcast. It covers a huge range of online services, from search engines and Webmail hosts like Google, to social-networking and dating sites like Facebook and Match.com to news and activism sites like RedState and Daily Kos to online vendors like Amazon and Ebay, and possibly even cafes like Starbucks that provide WiFi access to customers. And “transactional records” potentially covers a far broader range of data than logs of e-mail addresses or websites visited, arguably extending to highly granular records of the data packets sent and received by individual users.
As the Electronic Frontier Foundation has argued, such broad authority would not only raise enormous privacy concerns but have profound implications for First Amendment speech and association interests. Consider, for instance, the implications of a request for logs revealing every visitor to a political site such as Indymedia. The constitutionally protected right to anonymous speech would be gutted for all but the most technically savvy users if chat-forum participants and blog authors could be identified at the discretion of the FBI, without the involvement of a judge.
That legislative effort didn’t go anywhere, so instead (the IG report explained) FBI started to use Section 215 orders to obtain that data. That constituted a majority of 215 orders in 2010 and 2011 (and probably has since, creating the spike in numbers since that year, as noted in the table above).
Supervisors in the Operations Section of NSD, which submits Section 215 applications to the FISA Court, told us that the majority of Section 215 applications submitted to the FISA Court [redacted] in 2010 and [redacted] in 2011 — concerned requests for electronic communication transaction records.
The NSD supervisors told us that at first they intended the [3.5 lines redacted] They told us that when a legislative change no longer appeared imminent and [3 lines redacted] and by taking steps to better streamline the application process.
But the other reason Comey’s claim that getting this from NSL’s would not pose “any compromise to anyone’s civil liberties or civil rights” is bullshit is because the migration of ECTR requests to Section 215 orders also appears to have led the FISA Court to finally force FBI to do what the 2006 reauthorization of the PATRIOT Act required it do: minimize the data it obtains under 215 orders to protect Americans’ privacy.
By all appearances, the rubber-stamp FISC believed these ECTR requests represented a very significant compromise to people’s civil liberties and civil rights and so finally forced FBI to follow the law requiring them to minimize the data.
Which is probably what this apparently redoubled effort to let FBI obtain the online lives of Americans (remember, this must be US persons, otherwise the FBI could use PRISM to obtain the data) using secret requests that get no oversight: an attempt to bypass whatever minimization procedures — and the oversight that comes with it — the FISC imposed.
And remember: with the passage of USA Freedom Act, the FBI doesn’t have to wait to get these records (though they are probably prospective, just like the old phone dragnet was), they can obtain an emergency order and then fill out the paperwork after the fact.
For some reason — either the disclosure in Merrill’s suit that FBI believed they could do this (which has been public since 2010 or earlier), or the reality that ECPA will finally get reformed — the Intelligence Community is asserting the bogus claims they tried to make in 2010 again. Yet there’s even more evidence then there was then that FBI wants to conduct intrusive spying without real oversight.
Last week, the Senate Judiciary Committee had a hearing on Electronic Communication Privacy Act reform, the main goal of which is to provide protection for content served on a third party’s server. Because reform is looking more inevitable in Congress (the House version of the bill has more sponsors than any other), government agencies used the hearing as an opportunity to present their wish list for the bill. That includes asking for an expansion of the status quo for civil agencies, with witnesses from SEC, DOJ, and FTC testifying (DOJ also made some other requests that I hope to return to).
Effectively, the civil agencies want to create some kind of court order that will provide them access to stored content. A number of the agencies’ witnesses — especially SEC’s Andrew Ceresney — claimed that a warrant is the same as an order, which culminated in Sheldon Whitehouse arguing (after 45:30) that an order requiring court review is actually less intrusive than a warrant because the latter is conducted ex parte.
It took until CDT policy counsel (and former ACLU lawyer) Chris Calabrese to explain why that’s not true (after 2:08):
We have conflated two really different and very different things in this committee today. One is a court, some kind of court based on a subpoena and one is a probable cause warrant. These are not the same thing. A subpoena gives you access to all information that is relevant. As pursuant, relevant to a civil investigation, a civil infraction. So if you make a mistake on your taxes, that’s a potential civil infraction. Nothing that has been put forward by the SEC would do anything but be a dramatic expansion of their authority to get at ordinary people’s in-boxes. Not just the subjects of investigation, but ordinary folks who may be witnesses. Those people would have the–everything in their in-boxes that was relevant to an investigation, so a dramatic amount of information, as opposed to probable cause of evidence of a crime. That’s a really troubling privacy invasion.
I’m utterly sympathetic with Calabrese’s (and the EFF’s) argument that the bid for some kind of civil investigative order is a power grab designed to bypass probable cause.
But I wonder whether there isn’t another kind of power grab going on as well — a bid to force banks to be investigated in a certain kind of fashion.
It was really hard, to begin with, to have former and (presumably) future Debevoise & Plimpton white collar defense attorney Andrew Ceresney to talk about how seriously SEC takes it job of “the swift and vigorous pursuit of those who have broken the securities laws through the use of all lawful tools available to us,” as he said in his testimony and during the hearing. There’s just been no evidence of it.
Moreover, as Ceresney admitted, SEC hasn’t tried to obtain email records via an order since the US v. Warshak decision required a warrant in the 6th Circuit, even though SEC believes its approach — getting an order but also providing notice to the target — isn’t governed by Warshak. As SEC Chair Mary Jo White (another revolving door Debevoise & Plimpton white collar defense attorney) said earlier this year,
“We’ve not, to date, to my knowledge, proceeded to subpoena the ISPs,” White said. “But that is something that we think is a critical authority to be able to maintain, done in the right way and with sufficient solicitousness.”
For five years, the SEC hasn’t even tried to use this authority, all while insisting they needed it — even while promising they would remain “solicitous,” if there were any worries about that.
Claims that the SEC needed such authority might be more convincing if SEC was actually pursuing crooks, but there’s little evidence of that.
Which is why I’m interested in this passage, from a letter White sent to Pat Leahy in April 2013 and appended to Ceresney’s testimony, explaining why SEC can’t have DOJ obtain orders for this material.
DOJ only has authority to seek search warrants to advance its own investigations, not SEC investigations. Thus, the Commission cannot request that the DOJ apply for a search warrant on the SEC’s behalf. Second, many SEC investigations of potential civil securities law violations do not involve a parallel criminal investigation, and thus there is no practical potential avenue for obtaining a search warrant in those cases. The large category of cases handled by the SEC without criminal involvement, however, have real investor impact, and are vital to our ability to protect- and, where feasible, make whole – harmed investors.
The only times when SEC would need their fancy new order is if the subject of an investigation refuses to turn information voluntarily, and the threat that they could obtain an order anyway is, according to Ceresney, they key reason SEC wants to maintain this authority (though he didn’t argue the apparent absence of authority has been responsible for SEC’s indolence over the last 5 years). But that act, refusing to cooperate, would get companies more closely into criminal action and — especially under DOJ’s purportedly new policy of demanding that companies offer up their criminal employees — into real risk of forgoing any leniency for cooperation. But White is saying (or was, in 2013, when it was clear Eric Holder’s DOJ wasn’t going to prosecute) that SEC can’t ask DOJ to subpoena something because that would entail a potentially criminal investigation.
Well yeah, that’s the point.
Then add in the presumption here. One problem with prosecuting corporations is they hide their crimes behind attorney-client and trade secret privileges. I presume that’s partly what Sally Yates meant in her new “policy” memo, noting that investigations require a “painstaking review of corporate documents … which may be difficult to collect because of legal restrictions.” SEC’s policy would be designed for maximal privilege claims, because it would involve the subject in the process.
If the legislation were so structured, an individual would have the ability to raise with a court any privilege, relevancy, or other concerns before the communications are provided by an ISP, while civil law enforcement would still maintain a limited avenue to access existing electronic communications in appropriate circumstances from ISPs.
Other criminals don’t get this treatment. Perhaps the problems posed by financial crime — as well as the necessity for broader relevancy based evidence requests — are unique, though I’m not sure I buy that.
But that does seem to be a presumption behind this SEC power grab: retention of the special treatment financial criminals get that has thus far resulted in their impunity.
A few weeks back, I noted that Office of Legal Counsel had finally released its opinion on whether DOJ had to share everything its Inspector General requested, or could hold things (and investigations) up until the Deputy Attorney General decided such disclosure would be in the interest of DOJ.
OLC ruled against the Inspector General, finding that rules limiting dissemination of wiretap, grand jury, and financial data required DOJ’s preferred arrangement, even given Congress’ recent appropriations instructions to give Inspectors General what they need.
Senators Chuck Grassley and Ron Johnson and Congressmen Bob Goodlatte and John Conyers expressed concern about the opinion when it was released. Grassley now has a hearing — titled “‘All’ Means All: The Justice Department’s Failure to Comply with Its Legal Obligation to Ensure Inspector General Access to All Records Needed for Independent Oversight” — tomorrow to address the issue.
In anticipation of that hearing, the Inspectors General have brought out the big guns.
First, retired Senator and space hero wrote a letter, reminding that the intent when he and others in Congress passed the Inspector General act in 1978, they intended IGs to get access to everything.
The success of the IG Act is rooted in the principles on which the Act is grounded–independence, direct reporting to Congress, dedicated staff and resources, unrestricted access to agency records, subpoena power, special protections for agency employees who cooperate with the IG, and the ability to refer criminal matters to the Department of Justice without clearing such referrals through the agency. We considered these safeguards to be vital when we developed the Act and they remain essential today.
In addition, yesterday the Council of the Inspectors General on Integrity and Efficiency sent a letter to Ron Johnson, Tom Carper, Jason Chaffetz, and Elijah Cummings asking for immediate legislation to fix the problem created by the OLC memo. In addition to expressing concern about the impact of the memo for DOJ’s Inspector General (that IG, Michael Horowitz, is Chair of CIGIE, so that’s sort of him reiterating his concerns), the other agency IG’s worried that the memo might affect their ability to conduct their own work, as well.
The OLC opinion’s restrictive reading of the IG Act represents a potentially serious challenge to the authority of every Inspector General and our collective ability to conduct our work thoroughly, independently, and in a timely manner. Our concern is that, as a result of the OLC opinion, agencies other than DOJ may likewise withhold crucial records from their Inspectors General, adversely impacting their work. Even absent this opinion, agencies such as the Peace Corps and the U.S. Chemical Safety and Hazard Investigation Board (CSB) have restricted or denied their OIGs access to agency records on claims of common law privileges or assertions that other laws prohibit access.
Uncertainty about the legal authority of Inspectors General to access all information in an agency’s possession could also negatively affect interactions between the staffs of the Offices of Inspector General and the agencies they oversee. Prior to this opinion, agency personnel could be confident, given the clear language of Section 6(a) of the IG Act, that they were required to and should share information openly with Inspector General staff, and typically they did so without reservation or delay. This led to increased candor during interviews, greater efficiency of investigations and other reviews, and earlier and more effective detection and resolution of waste, fraud, and abuse within Federal agencies. We are concerned that witnesses and other agency personnel, faced with uncertainty regarding the applicability of the OLC opinion to other records and situations, may now be less forthcoming and fearful of being accused of improperly divulging information. Such a shift in mindset also could deter whistleblowers from directly providing information about waste, fraud, abuse, or mismanagement to Inspectors General because of concern that the agency may later claim that the disclosure was improper and use that decision to retaliate against the whistleblower.
Neither FBI Director Jim Comey nor Deputy Attorney General Sally Yates are appearing at tomorrow’s hearing. FBI Associate Deputy Director Kevin Perkins and Associate Deputy Attorney General Carlos Uriarte have pulled the unpleasant duty of appearing on a panel with Horowitz. But I imagine Grassley intends tomorrow’s hearing to be rather aggressive.
Since USA F-ReDux passed JustSecurity has published two posts about how the lapse of Section 215 might create problems for the dragnet. Megan Graham argued that technically USA F-ReDux would have amended Section 215 as it existed in 2001, meaning the government couldn’t obtain any records but those that were specifically authorized before the PATRIOT Act passed. And former SSCI staffer Michael Davidson argued that a technical fix would address any uncertainty on this point.
DOJ, however, doesn’t much give a shit about what USA F-ReDux actually amends. In its memorandum of law accompanying a request to restart the dragnet submitted the night USA F-ReDux passed, DOJ asserted that of course Section 215 as it existed on May 31 remains in place.
Its brief lapse notwithstanding, the USA FREEDOM Act also expressly extends the sunset of Section 215 of the USA PATRIOT Act, as amended, until December 15, 2019, id.§ 705(a), and provides that, until the effective date of the amendments made by Sections 101through103, it does not alter or eliminate the Government’s authority to obtain an order under Section 1861 as in effect prior to the effective date of Sections 101through103 of the USA FREEDOM Act. Id.§ 109(b). Because the USA FREEDOM Act extends the sunset for Section 215 and delays the ban on bulk production under Section 1861until180 days from its enactment, the Government respectfully submits that it may seek and this Court may issue an order for the bulk production of tangible things under Section 1861 as amended by Section 215 of the USA PATRIOT Act as it did in docket number BR 15-24 and prior related dockets.
It cites comments Pat Leahy and Chuck Grassley made on May 22 (without, curiously, quoting either Rand Paul or legislative record from after Mitch McConnell caused the dragnet to lapse) showing that the intent of the bill was to extend the current dragnet.
While I think most members of Congress would prefer DOJ’s argument to hold sway, I would expect a more robust argument from DOJ on this point.
Likewise their dismissal of the Second Circuit decision in ACLU v. Clapper (which they say they’re still considering appealing). While it notes the Second Circuit did not immediately issue an injunction, DOJ’s base argument is weaker: it likes FISC’s ruling better and so it thinks FISC’s District Court judges should consider but ultimately ignore what the Second Circuit said.
The Government believes that this Court’s analysis of Section 215 reflects the better interpretation of the statute, see, e.g., In Re Application of the FBI for an Order Requiring the Production of Tangible Things, docket no. BR 13-109, Amended Mem. Op., 2013 WL 5741573 (FISA Ct. Aug. 29, 2013) (Eagan, J.) and In Re Application of the FBI for an Order Requiring the Production of Tangible Things, docket no. BR 13-158, Mem. (FISA Ct. Oct. 11, 2013) (McLaughlin, J.), disagrees with the Second Circuit panel’s opinion, and submits that the request for renewal of the bulk production authority is authorized under the statute as noted above.
The Government submits that this Court’s analysis continues to reflect the better reading of Section 1861.
This is where, incidentally, the flaccid report language attached to USA F-ReDux is so problematic. In a filing affirming the importance of legislative language, had the HJC report said something more than “Congress’ decision to leave in place the ‘‘relevance’’ standard for Section 501 orders should not be construed as Congress’ intent to ratify the FISA Court’s interpretation of that term,” DOJ might have to take notice of the language. But as it is, without affirmatively rejecting FISC’s opinion, the government will pretend it doesn’t matter.
I’m no more surprised with DOJ’s argument about the Second Circuit decision than I am its insistence that lapsing a bill doesn’t have legal ramifications.
But I would expect both arguments to make some effort to appear a bit less insolent. I guess DOJ is beyond that now.
As part of her Questions for the Record, Attorney General nominee Loretta Lynch was asked about her role in the HSBC handslap in 2012. (See Q 38, h/t Katherine Hawkins)
38. As United States Attorney for the Eastern District of New York, you helped secure nearly $2 billion from HSBC over its failure to establish proper procedures to prevent money laundering by drug cartels and terrorists. You were quoted in a DOJ press release saying, “HSBC’s blatant failure to implement proper anti-money laundering controls facilitated the laundering of at least $881 million in drug proceeds through the U.S. financial system.”
You stated that the bank’s “willful flouting of U.S. sanctions laws and regulations resulted in the processing of hundreds of millions of dollars in [Office of Foreign Assets Control]-prohibited transactions.” Still, no criminal penalties have been assessed for any executive who may have been involved.
a. Did you make any decision or recommendation on charging any individual with a crime?
i. If so, please describe any and all decisions or recommendations you made.
ii. Please explain why such decisions or recommendations were made.
b. If you did not make any decision or recommendation on charging any individual with a crime, who made the decision not to prosecute?
RESPONSE: On December 11, 2012, the Department filed an information charging HSBC Bank USA with violations of the Bank Secrecy Act and HSBC Holdings with violating U.S. economic sanctions (the two entities are collectively referred to as “HSBC”). Pursuant to a deferred prosecution agreement (“DPA”), HSBC admitted its wrongdoing, agreed to forfeit $1.256 billion, and agreed to implement significant remedial measures, including, among other things, to follow the highest global anti-money laundering standards in all jurisdictions in which it operates. As the United States District Judge who approved the deferred prosecution found, “the DPA imposes upon HSBC significant, and in some respect extraordinary, measures” and the “decision to approve the DPA is easy, for it accomplishes a great deal.” Although grand jury secrecy rules prevent me from discussing the facts involving any individual or entity against whom we decided not to bring criminal charges, as I do in all cases in which I am involved, I and the dedicated career prosecutors handling the investigation carefully considered whether there was sufficient admissible evidence to prosecute an individual and whether such a prosecution otherwise would have been consistent with the principles of federal prosecution contained in the United States Attorney’s Manual.
I want to reiterate, particularly in the context of recent media reports regarding the release of HSBC files pertaining to its tax clients, that the Deferred Prosecution Agreement reached with HSBC addresses only the charges filed in the criminal violations of the Bank Secrecy Act for failures to maintain an adequate anti-money laundering program and for sanctions violations. The DPA explicitly does not provide any protection against prosecution for conduct beyond what was described in the Statement of Facts. Furthermore, I should note the DPA explicitly mentions that the agreement does not bind the Department’s Tax Division, nor the Fraud Section of the Criminal Division. information, which are limited to violations of the Bank Secrecy Act for failures to maintain an adequate anti-money laundering program and for sanctions violations. The DPA explicitly does not provide any protection against prosecution for conduct beyond what was described in the Statement of Facts. Furthermore, I should note the DPA explicitly mentions that the agreement does not bind the Department’s Tax Division, nor the Fraud Section of the Criminal Division. [my emphasis]
Lynch seems to want to have her cake and eat it too.
Sure, she and her prosecutors were unable to find the evidence in Carl Levin’s gift-wrapped case. But trust her, she seems to be saying, she might one day see fit to charge some warm bodies with fraud if she’s confirmed.
And note she makes no mention of material support for terrorism????
Because if you’re a bank, such things are legal, apparently.