[Handout at Key Escrow Issues Meeting, at NIST,
   Gaithersburg, Maryland, September 6, 1995.]


   Private Escrow Key Management: A Method and Its Issues

   Remarks by
   Edward M. Scheidt, CEO &
   Dr. Jon L. Roberts, President
   TECSEC, Incorporated

   [No date]


   Introduction

   During the past few years a debate has been raging around
   the conflict between the rights of an individual to privacy
   in information to foster its competitiveness and the
   Government's need to access information for national
   security and law enforcement purposes. At the heart of the
   debate is the difficulty in arriving at a position whereby
   a robust implementation of an encryption process can be
   accomplished that protects sensitive private or industrial
   data yet insures that the government can have access to
   information if that information is part of a criminal
   conspiracy or enterprise, or other action hostile to the
   United States.

   The U. S. Government initially tendered a cryptographic
   scheme known as the Clipper Escrow Key management plan.
   Using communication encryption technology, the government
   wanted to mandate an encryption process for which it
   maintained the key used for the decrypting of information
   transiting any communications path. This key would be split
   and distributed to escrow agents. The split key would have
   to be combined if the government were to use the key to
   decrypt and monitor criminal or other such activities. That
   methodology met with howls of protest from much of U.S.
   society (industry and private) due to a certain mistrust of
   the government and its handling of private information (for
   example, various IRS scandals). The debate has shifted from
   the technical solution provided by the Clipper initiative
   to alternate methods that define key escrow in terms of a
   commercial or private entity.

   A NIST-sponsored key escrow meeting was held on August 17,
   1995 to listen to the government's proposal to work towards
   a solution which industry and the international community
   would accept and which would provide needed security to
   private information. The meeting was a positive step
   towards resolving the conflicting issues surrounding
   cryptography. The government's proposal to extend the key
   length of any cryptographic algorithm used to 64 bits to
   enable export of cryptographic products more readily is a
   small step towards industry's desire for "good"
   cryptography. As a result, the government has set the stage
   to extend cryptography into the broader international field
   of electronic commerce. Privacy is still an issue and must
   be included in the resultant key escrow solution.

   Since the very onset ofthe debate TECSEC has espoused
   private key escrow as the only method that individuals,
   industry and the international community would accept for
   cryptography. A split key method has been developed that
   could satisfy many of the issues. The technology is called
   Constructive Key Management ("CKM"), the resultant product
   using CKM is called VEIL. VEIL is a software key management
   design that utilizes multiple key splits with labels as
   cryptographic triggers. It offers complete administrative
   control of the key, and it includes an inherent method to
   construct the key used for encrypting a file or database
   that results in a fixed header and audit information. By
   defining the roles of the escrow agent as a mix between
   government and private as necessarv VEIL can be applied to
   solve the private key escrow question


   The Internet: A Paradox for Information Flow and
   Information Control

   At the heart of the escrow debate lies the philosophical
   goal of competition. Economic competition on an
   international electronic information highway such as the
   Internet can only be fostered with a judicious balance
   among the free flow of information, the respect for the
   privacy of selected information, and the legitimate
   requirements of law enforcement and national security
   concerns.

   The information highway of the Internet is already handling
   large amounts of critical data where privacy is becoming a
   more visible issue. Access to presidents, universities,
   electronic commerce, government databases -- all of these
   activities are available on today's Internet. While
   government, industry and individuals want equal access to
   the Intemet, they do not necessarily want equal access to
   all the data that is flowing over the Internet ...
   especially if it is their own!

   Industry has always had a concern for keeping valuable
   information of all types (corporate, healthcare, personnel)
   safe from increasingly sophisticated curious hackers and
   those with more malevolent objectives. Data security and
   privacy are big businesses for both U. S. industries and
   our foreign competitors. The U. S. security industry, like
   industry in general, must have an environment where it can
   compete overseas. Some foreign obstacles to this
   competition are bad enough, but must we have additional
   obstacles in the name of restrictive key escrow policies?
   The compromise lies in defining a privately managed key
   escrow scheme in which the governrnent can participate and
   share in its administration and control, but only when
   absolutely necessary.

   Key escrow and encryption offer a methodology to achieving
   privacy on the Internet by capitalizing on trends in
   information processing and protection. Traditionally,
   communications security technology has been concerned with
   the protection of the mechanics of information processing
   and not with protecting the information itself. Thus the
   emphasis has been concerned with protecting the channels of
   communications. If the security paradigm is moved to file
   management and protection, a new methodology to protect
   information emerges that can shift the protection of
   information to the user of that information and away from
   the manager of the means of communicating that information.
   Since the nature of file management and the encryption
   process necessitates the retention of keys to recover prior
   encrypted files, the user of the information would be
   responsible for protecting that information: hence, private
   escrow key management.


   The Private Key Escrow Process

   There are different approaches to private key escrow that
   need to be addressed. Of importance is that the individual
   or the company must have confidence that they are in
   control of the release of their information. Proprietary
   data can determine a company' s competitiveness. It should
   not simply be available to third parties. Key escrow agent
   responsibility may be administered through the company or
   through a third party. Liability issues and confidence will
   dictate the extent to which third party agents are used.

   One method to private key escrow is where the company
   maintains the keys in a split form and the government has
   access through the judicial process. The key escrow agent
   is the company. (In some current banking implementations
   the keys are split between two senior bank officials to
   ensure that no one person has total access. The keys are
   reassembled when needed.) The government's access to the
   keys and the protected information is through regulation
   and legislation that are enforced through the judicial
   process. No one would need to turn over their keys to
   encrypted files without a showing of probable cause as is
   now done to obtain subpoenas. Failure to comply with a
   subpoena could result in fines or other penalties. How long
   key splits are maintained may be limited to a period of how
   long the file is retained. It should be pointed out that
   this form of key escrow does not offer the government any
   technical means to access encrypted information without the
   company's participation.

   A second method of private key escrow could include an
   additional key split for the government's use. The scenario
   becomes key splits for the company and a key split for the
   government. To reconstruct the key used for encrypting the
   information mathematically could remain rigorous but now
   the government would retain one of the splits. The
   government key split could be fixed, whereas, the company's
   key splits could be dynamic. Of course other variations are
   possible on the mix of key splits. An additional key split
   could be reserved for a foreign government's use and only
   known to them. In the latter scenario key splits would be
   administered by the U. S. government, a local government
   authority, and the company. Administering the process can
   be streamlined though a hierarchical key management scheme.
   The government would still have to exercise its authority
   through the judicial process.

   The costs of key escrow could be assumed by the company if
   the company is responsible for the key splits. The more the
   government wants to administer the key escrow process, the
   more the company would want to shift the costs of the
   process to the government


   What if the Private Key Escrow Process Is Not Used?

   If the governrnent elects to accept another method to key
   escrow other than a private form, there will be no domestic
   U.S. solution to cryptography. The individual or industry
   must believe they have control over their information and
   have trust in the encryption process. If that trust does
   not exist, industry will be reluctant to get involved.

   A consequence of such policy will be that the import of
   cryptographic products will increase for non-escrow
   techniques since the government currently does not regulate
   imports. It might be possible for the government to
   administer import control under the current Department of
   State regulations for cryptography.

   Other actions that could happen include:

   --   Jobs in the cryptographic field are lost to off shore
        industries.

   --   U.S. Ieadership in cryptography will be lost.

   --   U.S. industries would be vulnerable to outside
        intelligence activities through foreign product trap
        doors.

   --   U.S. international businesses will be forced to use
        non-U. S. technology.


   Private Escrow Key Management: A Method

   Constructive Key Management (CKM) offers a technology that
   capitalizes on combining key splits, a label process based
   on cryptographic triggers which associates the key splits
   to the inforrnation processes, and a three step process for
   creating and distributing the key splits. A Label Maker
   begins the process for creating the labels and their
   respective key splits, a Key Disk Maker identifies the
   labels, key splits, access authority to the individual
   including read/write authority and stores that resultant
   data on a token (a floppy disk), and a Workstation Setup is
   offered that can limit what algorithms are present at a
   workstation (algorithrns and labels can be used to separate
   data within a three dimensional organizational array). In
   the case of VEIL, the user is given a floppy disk to
   encrypt and decrypt files that an administrator authorizes
   based on organizational structure and procedures. The key
   management process can be viewed as a house key management
   process -- the physical key is made with notches that only
   work with your home's lock, can be keyed to open only one
   lock or many, shared with only those who you would want
   access to your home, and can be readily replaced at the
   locksmith. This variation on the older technology of crypto
   ignition key management where key splits were the
   predominant feature, facilitates the key handling process
   and makes the user part of that process. VEIL is an
   implementation of the CKM technology that includes
   application program interface capabilities, multiple
   algorithm management, and token management. Version 2.0
   uses a floppy disk for a token. The algorithm(s) are bound
   to the key escrow prograrn. An export version with single
   DES (Data Encryption Standard) has been approved for
   Canada, England, and Australia (governments).


   Private Escrow Key Management: Conclusion

   Constructive Key Management is one encryption methodology
   of probably several that can meet the intent of key escrow.
   Defining the role of specific key splits can expand or
   minimize government's involvement. The technology is
   flexible. A demonstrable product, VEIL, is available.

   With the advent of increased usage on the Internet with
   cryptographic products, the government will need to wrestle
   with the more difficult situation of controlling free
   access to encryption products. In short, how does the
   government extend its current munitions control over
   encryption products to the Internet? Already, encryption
   products well beyond those currently sanctioned through
   export regulation are available, from the U.S., over the
   Internet. The desired balance is the realization of
   encryption as a possible weapon and encryption as a vehicle
   for fostering economic competitiveness

   The debate concludes with the question, Who is going to
   decide how the privacy of information is protected? The
   resultant answer has far reaching impact on the economic
   competitiveness of U.S. commerce.

   [End]