Associate Director of Technology Studies Ryan Radia talks about how to prevent data privacy violations in the Internet age. Your data may be safe if it’s stored on your personal hard drive. But if it’s in the cloud, as with Gmail or Dropbox accounts, you can’t count on the Fourth Amendment to protect you against unreasonable search and seizure. Radia suggests some reforms to outdated laws to better reflect today’s technological realities.
Privacy
The Thanksgiving travel rush is officially underway. Airports are clogged with passengers. Many of them are upset at new TSA screening policies. A new poll finds 60 percent support for full-body scanning, and just under 50 percent support for pat-downs that involve touching breasts, buttocks, and genitals.
If that sounds high, remember that most Americans don’t fly. Jim Harper also points out that the poll’s wording is biased. “Before being asked about strip-search machines, poll-takers hear cognates of “terror” three times, “privacy” once.” Wording like that skews the results in the TSA’s favor.
Unsurprisingly, many TSA employees don’t care for the new pat-down policy either. Near-constant verbal abuse and poor passenger hygiene are among their biggest complaints. There is also the matter of having to “feel inside the flab rolls of obese passengers.”
Assuming that most TSA screeners are not sex perverts, it can’t be much fun spending 8-hour shifts inspecting other peoples’ genitals. However, not all TSA employees are mentally sound. A TSA employee kidnapped a woman from Hartsfield-Jackson Atlanta International Airport and assaulted her.
This was the action of a disturbed individual, and probably unrelated to the backlash against the TSA’s new policies. Even so, that means the TSA has done more harm than good; TSA has yet to catch a single terrorist during its entire existence.
One reason is that its screeners are ineffective. Adam Savage from the television show Mythbusters accidentally arrived at airport security with two 12-inch razor blades. The TSA did not find them, despite giving him a full-body scan.
Ars Technica posts a video of Savage telling his story, and points out that ”If the TSA thinks you can hijack a plane with saline solution and nail clippers, Savage’s 12″ razor blades are the equivalent of a nuclear bomb. Since the blades weren’t anywhere near Savage’s privates, they likely would have been missed by the pat-down as well.”
At least one argument against full-body scanners does not hold ground: that the radiation dose from repeated scans can cause cancer and other illnesses. The dose of so small, that the odds of dying from the radiation exposure is roughly the same as dying in a terrorist attack. Those odds are less than 1 in 10,000,000. Passengers are over 20 times more likely to be struck by lightning.
As with any government agency, the TSA is highly politicized. The two companies that make the scanners have ramped up their lobbying efforts in recent years, getting political heavyweights such as Linda Daschle (the lobbyist wife of former Sen. Tom Daschle) and Michael Chertoff to promote the scanners on Capitol Hill.
One privacy concern about full-body scans is that the images could be stored and possibly leaked on the Internet. This has already happened at a courthouse in Florida (you can see 100 of the 35,000 leaked images here). But the TSA says that won’t be a problem with their scanners. Common sense says otherwise.
Their machines are unable to store images, yes. But any enterprising screener can modify them. Or he could even snap a picture of a naked image with his cell phone. Fortunately, a recent story about a Denver TSA screener who was caught masturbating is a hoax. But the very fact that it is plausible should give TSA boosters pause.
In fact, flying at 30,000 feet exposes passengers to “3 mrem of radiation, an amount that is 150 times greater than the scanner gives you before you board the same flight.”
That’s about the strongest argument in favor of the scanners. But it is outweighed by the fact that they induce some people to drive instead of fly. Since driving is more dangerous than flying, the scanners are expected, on net, to kill people.
They are not expected to actually save any lives, as security expert Bruce Schneier makes crystal clear.
It is well past time to abolish the TSA. Let airlines and airports determine their own policies. Let them compete on safety; if people think flying is dangerous, they won’t fly. Airlines have everything to lose. The TSA has no such incentive. If anything, its repeated failures are rewarded with budget increases.
Most car thefts happen to unlocked cars. The government of Bucks County, Pennsylvania, thinks it can help. It plans to issue $25 fines to people who forget to lock their cars. First-time violators get off with a warning.
Bear in mind that enforcing this policy involves police systematically trying to break into peoples’ cars. First, that’s inherently creepy. Second, that’s a significant privacy violation. It’s also a Fourth Amendment issue. If an officer stumbles upon something illegal and decides to prosecute, he has performed a warrantless search.
It’s also a safety issue. If a thief decides to play dress-up and look like an officer, he could very easily steal valuables from parked cars in broad daylight and no one would be the wiser.
One more problem to add to the pile is corruption. A legitimate officer might be tempted to give himself a quick pay raise at a forgetful car owner’s expense. Policing for profit is all too common.
Better for the government to stay out of this one.
Richard Morrison and Jeremy Lott welcome Reason magazine Senior Editor Michael Moynihan to Episode 93 of the LibertyWeek podcast. We take on the high-profile congressional primaries, Chuck Schumer’s hypocritical stance on privacy, the fight for wine liberation in New York, passing the buck on debit card fees and we embark on a Tea Party Euro Trip.
Tomorrow, December 1st marks the day when banks and other credit processing companies would have had to be in full compliance with Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). The Act, which was sneaked into the unrelated and must-pass Port Safety Act, passed in the late night hours just before congressional recess, would cause a variety of problems for the credit processing companies and has been vehemently opposed for over three years by a multitude of banks, players’ organizations, and regulators. Luckily, the Treasury Department and the Federal Reserve Board on November 25th with little more than a week to spare decided to delay the implementation of the law for a period of six months.
According to the Treasury statement issued on November 25th, “While the final regulation affords regulated entities maximum flexibility in establishing and implementing policies and procedures that are reasonably designed to prevent or prohibit unlawful Internet gambling transactions restricted by the Act, the Agencies acknowledge some of the challenges regulated entities are experiencing with the Act’s definition of “unlawful Internet gambling.”
Apart from the fact that any attempt to ban gambling online is a serious infringement on individual rights, Treasury recognizes that UIGEA is vague, will do little to stop Internet gambling, and will be financially burdensome at a time when credit processing companies are teetering on the edge of bankruptcy. Not to mention the cost to the US government. By the Treasury department’s own estimate the cost of simply gathering and processing the information required by UIGEA to be somewhere around $20 million.
Proponents of the right to gamble online have six months to come to an agreement about the best way to permanently overturn UIGEA. Currently, the most promising route seems to be Barney Frank’s two bills related to Internet gambling. HR 2266 the Reasonable Prudence in Regulation Act would stall implementation of UIGEA until December 1st, 2010. HR 2267 Internet Gambling Regulation, Consumer Protection, and Enforcement Act also introduced by Barney Frank in May 2009, would create a regulatory regime, giving the Secretary of the Treasury the authority to license online gambling activities and “establish and enforce standards of integrity and fairness.” Additionally, in June 2009 Rep. Jim McDermott (D-Wash.) introduced HR 2268, the Internet Gambling Regulation and Tax Enforcement Act, as a companion bill to Barney’s gambling regulatory regime, which would amend the US tax code, allowing the government to extract taxes from gambling related activities.
Barney Frank’s proposals have picked up a lot of steam, but it is unlikely, considering that congress has bigger financial fish to fry, that any major new regulatory regime will be decided upon in the next half year. Additionally, there are big potential problems with the proposed legislation that such a “rush to regulate,” might gloss over, potentially creating bigger problems than the past ambiguity of Internet gambling’s legal status that has been the long-running state of the US’s oversight on online wagering. Some of the potential problems with the Frank proposals include: 1. States will have the option to opt-out of regulatory regime for online gaming, 2. Sports gambling would continue to be illegal, 3. Taxation from federal, and state authorities could be disproportionately high, 4. The regulations are viewed by international operators and international trade authorities as protectionist, and 5. The proposed regime is likely to be inefficient and overly burdensome.
Overturn UIGEA Permanently
Internet gambling in the United States is going to continue, with or without a regime, and regardless of any attempt to ban the activity. While the best way to regulate Internet gaming, if it should be regulated at all, will continue to hotly debated by members of congress, the first step should be to recognize that UIGEA is a bad law and simply a strain on financial institutions and it should be overturned permanently.
Today, after a long and protracted battle between the U.S. and Swiss government, Swiss bank UBS AG agreed to turn over the names of at least 4,450 U.S. holders of accounts in Switzerland who may have violated U.S. tax laws. While the Obama administration may paint this as a victory, this number is less than 10 percent of the 52,000 names it had originally asked for. It is even lower than the estimate of 5,000 to 10,000 names that news reports speculated UBS would turn over once the agreement was announced.
Yet in a sense, this settlement is at least a partial victory — for privacy rights, international relations, and the rule of law. The U.S was forced to back away from its outrageous demands that would have set a precedent endangering U.S. competitiveness as well as civil liberties throughout the world.
The case began earlier this year after UBS – with the Swiss government’s full cooperation – turned over the names of 250 customers suspected of violating U.S. tax laws. But the U.S. government then turned around and asked for a whopping 52,000 additional names. The Swiss government naturally objected to such a fishing expedition as a violation of the nation’s privacy laws.
Switzerland rightly argued that such a large volume of names could not be justified by probable cause or “reasonable suspicion,” a requirement of the tax treaty Switzerland had negotiated with the U.S. In addition, such a fishing expedition would have gone against the spirit of the Fourth Amendment of the U.S. Constitution, which protects Americans from “unreasonable searches.” A forensic analysis commissioned by UBS from Alix Partners found that many international students, diplomats, and Americans who work in Switzerland – and banked in Switzerland by necessity – could have been swept up in this dragnet.
It’s far from clear that if the shoe were on the other foot, and a foreign country were to demand the names of 52,000 customers of an American bank, the U.S. would have complied. The United States Model Income Tax Convention of 2006, used as a template by the U.S. to negotiate tax treaties, states that no country should be required to honor “a request in which a Contracting State simply asked for information regarding all bank accounts maintained by residents of that Contracting State in the other Contracting State, or even all accounts maintained by its residents with respect to a particular bank.”
The Swiss government maintains that the surrendering of these names, in contrast to the Obama administration’s previous demand, does not violate Swiss privacy laws because there was “reasonable suspicion” of tax breaches covered under the U.S.-Swiss treaty. Regardless, American civil liberties advocates on either side of the political fence should be alarmed by the U.S. government’s sweeping disregard of privacy interests in its original demands to the Swiss government, and should encourage their home country to never treat privacy and another country’s sovereignty so cavalierly again.
Lawyers for the U.S. government and the Swiss bank UBS AG have announced that they have reached a deal on releasing to the US the names of UBS account holders. No new details of the agreement have been released, other than what was previously speculated on a week ago.
I will be watching for and examining details that are released. Whatever deal is reached, the Obama administration’s conduct in the case, disregarding both privacy interests and the sovereignty of other nations, has been deplorable. It has set a precedent that could endanger U.S. competitiveness as well as civil liberties throughout the world.
As Fred Smith and I had explained in a Washington Times op-ed, after UBS, with the Swiss government’s full cooperation, turned over the names of 250 customers suspected of violating U.S. tax laws, the U.S. government turned around and asked for a whopping 52,000 names. The Swiss government objected to such a fishing expedition as violating the nation’s privacy laws.
Switzerland rightly argued that such a large volume of names could not be justified by probable cause or “reasonable suspicion,” a condition of the tax treaty Switzerland had negotiated with the U.S. In addition, such a fishing expedition goes against the spirit of the Fourth Amendment of the U.S Constitution, which protects Americans from “unreasonable searches.” A forensic analysis commissioned by UBS from Alix Partners (scroll down the right side of this page to open the PDF) found that many international students, diplomats, and Americans who work in Switzerland – and banked in Switzerland by necessity — could have been swept up in this dragnet.
It’s far from clear if the shoe were on the other foot, and a foreign country were to demand the names of 52,000 customers of an American bank, the U.S. would have complied. The United States Model Income Tax Convention of 2006, used as a template by the U.S. to negotiate tax treaties, states that no country should be required to honor “a request in which a Contracting State simply asked for information regarding all bank accounts maintained by residents of that Contracting State in the other Contracting State, or even all accounts maintained by its residents with respect to a particular bank.”
Previous reports had indicated that UBS would surrender 5,000 names, a large amount but still less than a tenth of what the U.S. had originally called for. It will be important to scrutinize if there is indeed “reasonable suspicion” for however large the volume of names that are released. American civil liberties advocates on whatever side of the political fence should be alarmed by the U.S. government’s sweeping disregard of privacy interests in its demands to the Swiss, and should encourage their home country to never treat privacy and another country’s sovereignty so cavalierly again.
[youtube:http://www.youtube.com/watch?v=Qz0N-zegHU8 285 234]
Today, Wall Street Journal reports that a Miami court has set meeting Friday between the IRS and UBS to look at where they are in settlement negotiations over the case of the IRS demanding that the Swiss bank turn over the names of more then 50,000 U.S. citizens alleged to be tax evaders.
As I have said in past posts on this issue (in which I have been admittedly hard on UBS-but with a purpose), and as UBS seems to now be reiterating, turning over those names would be in contradiction of Switzerland’s banking privacy laws and its legal view of tax evasion. Banks in Switzerland are not required to ignore their country’s banking secrecy laws simply because another nation requests them to do so. This is a sticking point for the IRS, who is using the DoJ to try and get after UBS. Another factor in the fight to get UBS to crack is the growing pressure from other nations and international NGOs like the Organization for Economic Cooperation and Development (OECD) with its agenda, and Financial Action Task Force (FATF) with its “retaliatory measures,” mentioned in earlier posts. These groups are using the straw men of money laundering and terrorism to force Swiss capitulation. It has reached a point of absurdity. Aside from the U.S. government’s attempts at intimidation, the German government even suggested placing Switzerland on the international blacklist. I guess “Everybody Hates Switzerland” now, until they can get their hands on that money.
Of course, the average citzen is not concerned about the rights of those who can afford to have swiss bank accounts. Although they should be. This not only raises concerns about financial privacy, it also raises concerns about sovereignty, civil rights, and a host of other things. A person’s financial records should be considered as sacred as their medical records. However, we may soon be entering an era where both are collected and archived by the government. Only a person who believes Stalin was an OK guy would think that was a good idea.
RSS Updates 
RSS E-Mail Updates 
Twitter 
Facebook 
CEI.org 
WorkPlaceChoice.org 
GlobalWarming.org 
CEI On Demand Video 
Liberty Week Podcast 