27 July 2000. Message deleted by request.
26 July 2000
From: "Alan Simpson" <news@comlinks.com>
To: <mpeloquin@verio.net>
Cc: <intelforum@his.com>, <red@isr.net>,
<jya@pipeline.com>, <wrodgen@usatoday.com>,
<news@wbrief.com>
Subject: Verio Site - JYA.com - Press Request
Date: Mon, 24 Jul 2000 17:56:13 -0400
Mona:
There is a controversy breaking that Verio has illegally blocked public access to JYA.com, (216.167.102.12) for publishing documents the CIA deemed "Embarrassing".
JYA.com has been down for three days, after the Japanese requested the FBI to ask John Young to remove postings, which he refused, without a Court Order. I understand no Court Order has been issued. Frequent requests for information, and restoration of service from digitalNation, a Verio company, have not led to restoration of service, or why Verio could not trace a fault after 3 days.
A number of widely spread sources have used tracert to locate the blockage, which is digitalNation switch fe0000ed1.wdc.dn.net. (209.207.190.38). The Verio DNS servers 206.43.192.76 - 206.197.81.10 - 206.197.81.11 are fully operational, as are other domains hosted on the server with JYA.com.
Could you confirm either that: Verio received a valid Court Order, Verio technicians are incompetent and can't find the blockage, this was a technical problem which has since been fixed, or yes, this is a breaking news story involving illegal activities by gagging a US web site on the orders of the Japanese?
Alan Simpson
Managing Editor
Washington Brief
cc: Justin Jasche, CEO Verio
Chris DeMarche CTO, Verio
Douglas Schneider President, Web Services, Verio
Intelligence Forum (http://www.intelforum.org) is sponsored by Intelligence and National Security, a Frank Cass journal (http://www.frankcass.com/jnls/ins.htm)
Date: Mon, 24 Jul 2000 18:29:58 -0400
From: Anthony Kimery <editor@dso.com>
Organization: SOURCES
To: intelforum@his.com
Subject: Re: Verio Site - JYA.com - Press Request
SOURCES reported in its July 6, 2000 daily report (Issue #222) national security concerns that have been raised regarding Nippon Telegraph & Telephone’s (NTT) move to acquire Verio.
Is their sound logic upon which to pose the question of whether Verio might be receiving favorable treatment with regard to Nippon's acquisition bid in return for Verio's cooperation in the Cryptome matter?
Foreign Acquisitions of U.S. Firms Inadequately Monitored National Security, Technology Transfers at Stake, Report Says
On the heels of a new audit (http://www.gao.gov/new.items/ns00144.pdf) by the General Accounting Office (GAO), Congress' investigative arm, which found acquisitions of U.S. businesses by foreign companies are not properly being examined for their impact on national security, intelligence, defense, and congressional leaders are expressing alarm over foreign acquisitions of U.S. technology businesses, and telecommunications firms in particular.
Thirty U.S. senators this week stated that they have serious concerns about the impact on national security due to foreign government-owned companies taking over U.S. telecommunications businesses. Their fears were prompted by recent reports that the German-based Deutsche Telekom company is mulling acquisition of the U.S. long-distance carrier, Sprint Corp. Deutsche Telekom -- a former state telephone monopoly the majority of which is owned by the government -- has emerged as a leading candidate to acquire Sprint after a wrench was thrown in the U.S. company's planned merger with WorldCom Inc. Analysts have been speculating that Deutsche Telekom is ripe for making a move for Sprint, in which it already holds a 10 percent stake. In a letter to the head of the Federal Communications Commission (FCC), Democrat Sen. Fritz Hollings and 29 other lawmakers representing both U.S. political parties said acquisitions by government-owned foreign firms raise serious national security concerns and "would be putting domestic competitors at the mercy of a foreign government. No country should allow this."
Meanwhile, this week the government weighed in on the debate through its acknowledgment that it has national security-related concerns regarding Nippon Telegraph & Telephone’s (NTT) move to acquire U.S. Internet Service Provider, Verio, Inc. The government’s concern is seen as a signal that U.S. national security authorities and policy-makers are becoming increasingly unnerved about the impact of globalization on American security interests. The FBI in particular is concerned about foreign ownership of Verio because it believes it could inhibit its ability to securely carry out court-authorized surveillance over the company's telecommunications network.
The FBI has raised identical concerns over past multinational telecom deals, including the merger of the wireless assets of Bell Atlantic and Britain's Vodafone Airtouch. NTT itself conceded in a statement that it believes the transaction does indeed raise national security concerns for the U.S. In 1988, Congress enacted the Exon-Florio Amendment to the Defense Production Act, authorizing the President to suspend or prohibit foreign acquisitions, mergers, or takeovers of U.S. companies if there is credible evidence that a foreign controlling interest might threaten national security and if other legislation cannot adequately protect national security. Congress passed the legislation to prevent foreign acquisitions that would adversely affect national security with respect to the domestic defense industry, U.S. technological leadership in national security areas, and the sale of military equipment and technology to countries that support terrorism or proliferate missile technology or chemical and biological weapons. The President delegated the authority to review foreign acquisitions of U.S. companies to the Committee on Foreign Investment in the United States. NTT announced last Friday that the committee is conducting a 45-day review of the planned merger with Verio.
Since the Exon-Florio legislation was enacted in 1988, nearly 1,300 foreign acquisitions have been reported voluntarily to the committee, according to the GAO, but they represent only about 17 percent of the nearly 7,400 foreign acquisitions of U.S. companies that have been reported to the Commerce Department's Bureau of Economic Analysis over the same period. At least 600 of these acquisitions were in the high-technology industry that were not reported between October 1988 and May 1994, and it isn't known "to what extent these foreign acquisitions may have had an effect on national security."
The GAO's investigation of the review process was prompted by "concerns that the current process may not identify all foreign acquisitions of U.S. companies that could affect our national security," adding that "in an era of increasing global markets that are open to foreign investment and rapid technological innovation, understanding the impact that foreign acquisitions of U.S. companies have on national security is increasingly important."
However, the GAO found that "the identification process the Committee on Foreign Investment currently uses does not enable it to effectively identify all foreign acquisitions with possible effects on national security." The GAO determined that the committee depends on a system of voluntary reporting by the parties to foreign acquisitions, and encourages each member agency to inform the committee of any acquisitions that comes to the agency's attention. Although the GAO "did not attempt to identify foreign acquisitions of U.S. companies with potential national security implications that were not reported voluntarily," it "did find that member agencies become aware of such acquisitions in the course of their daily operations, and that "in some instances member agencies reported foreign acquisitions to the Committee, but in other instances agencies did not." GAO said "Defense and Treasury Department officials informed us of three acquisitions that were known to officials in these agencies but the agencies did not inform the Committee." The Senators said in their joint letter that they are not opposed to investment by foreign companies, but that they are concerned that an outright acquisition by a government owned entity could not only thwart the competitive market in the U.S., but that such deals could compromise national security by give foreign governments access to U.S. telecommunications infrastructures. The FCC is barred from approving acquisitions by telecommunications companies that are more than 25 percent foreign government owned. However, the FCC can waive this limit if it determines that the deal is in the public interest. Moreover, a recent telecommunications agreement suggested that the limit could be overridden if the foreign government was a member of the World Trade Organization (WTO).
However, Sen. Hollings introduced legislation last week that would essentially remove the FCC's ability to issue a waiver. Hollings' bill would prohibit any foreign company in which more than 25 percent is owned by the government in which the firm is based from acquiring a U.S. telecommunications business. In their letter, Hollings and the bipartisan coalition he put together of other senators pointed out that other WTO member countries have such a policy in place. What Hollings and his colleagues are concerned about strikes at the very core of what the GAO highlighted in its new report. The GAO found that the foreign acquisition oversight panel "does not keep records of acquisitions referred by member agencies, does not document all contacts made with the parties to acquisitions to encourage voluntary reporting, and does not track whether these contacts led the parties to report the acquisition to the Committee."
Furthermore, the GAO found that member federal agencies "could not tell us which acquisitions were identified by member agencies but not reviewed by the Committee," and that "the Committee has no process to inform all member agencies that potentially relevant unreported acquisitions have been identified. As a result, not all member agencies have the opportunity to review acquisitions identified by other member agencies for potential national security risks using relevant information available only to individual agencies."
Consequently, in December 1995, a Hong Kong firm with ties to the People's Republic of China purchased a U.S. bearing manufacturer which has contracts with the Department of Defense and NASA to supply bearings used in military aircraft, submarines, satellites, and vehicles without the acquisition first being reviewed by the Committee on Foreign Investment in the United States (CFIUS) to determine whether the takeover threatened nation security. The acquisition was widely noticed by U.S. officials, but a review was never conducted until years later -- after Hong Kong had reverted back to Chinese control. The GAO noted that a "major U.S. business trade publication had featured the acquisition in August 1996 and reported on the Hong Kong investor's connection with the People's Republic of China," and that the "article noted the planned transfer of sensitive technology."
However, the GAO found, records show that a Treasury Department representative of the review committee "had transmitted a copy of the publication to a Defense Department Committee representative, yet neither Treasury nor Defense officials informed the Committee of the acquisition." The GAO reports that the "Defense Department officials could not recollect why they took no action to refer the acquisition for review when they saw the publication." Moreover, the GAO found, the company had not properly registered as a manufacturer of controlled items with the State Department as required by the International Traffic in Arms Regulations.
Alan Simpson wrote:
[Simpson message above omitted.]
Intelligence Forum (http://www.intelforum.org) is sponsored by Intelligence and National Security, a Frank Cass journal (http://www.frankcass.com/jnls/ins.htm)
From: "Alan Simpson"
<news@comlinks.com>
To: <intelforum@his.com>
Subject: Youngate
Date: Mon, 24 Jul 2000 21:23:56 -0400
Verio will be calling me at noon tomorrow with an explanation. (Oops, a new technician made a wrong keystroke 5-4, faulty server 7-2, some Libyan hacker 5-1)
To answer the spin-doctoring question I have been getting all afternoon "Do you condone JYA publishing documents, which seriously damage the intelligence security of the USA".....
I personally would not have put up an itinerary and presentation to visiting bureaucrats, as it is about as news worthy, and interesting as watching paint dry. (I believe we should focus on policy.) What it now makes me wonder, is what was in that briefing that is so important, that someone will deny service, and risk prison.
If it is found that the site was deliberately interfered with, to deny access, and they did it on the instructions of a foreign government, then Verio is in deep doodah. It raises serious questions about the NTT takeover of Verio. John may have been in error by posting such material, instead of extracting the relevant information, but that was his judgement call, and due legal process is available to correct any transgressions.
For those who need reminding, it was Matt Drudge, with his web site, that caused The President of the USA to be eventually impeached, by breaking the Monica story.
Alan Simpson
news@wbrief.com
Intelligence Forum (http://www.intelforum.org) is sponsored by Intelligence and National Security, a Frank Cass journal (http://www.frankcass.com/jnls/ins.htm)