U.S. SENATOR PATRICK LEAHY VERMONT STATEMENT OF SENATOR PATRICK J. LEAHY CHAIRMAN, TECHNOLOGY AND THE LAW SUBCOMMITTEE HEARING ON THE ADMINISTRATION'S CLIPPER CHIP KEY ESCROW ENCRYPTION PROGRAM May 3, 1994 The Administration is implementing a controversial program to enable the government to decode any telephone, fax or computer communication that is encrypted with a special computer chip called Clipper Chip. In doing so, the Administration has responded to the alarm bells sounded by our law enforcement and intelligence agencies, who are struggling to keep pace with emerging telecommunications technologies that make it easier to encrypt messages and evade lawful wiretaps. The Administration has stressed the security of Clipper Chip for encrypting voice, fax, and computer information communicated over a telephone system. The price for this security is that two federal agencies will hold a duplicate set of keys to decode any communication encrypted with the Clipper Chip, before any wiretap order has been issued. Before American citizens and potential customers of American computer and telecommunications products will see this as the solution to privacy and security concerns, they must be assured that ironclad procedures are in place to guarantee that, absent a court order, no one will be able to decode their private communications, except the recipient they choose. Otherwise, even law-abiding users will not want to use encryption devices with Clipper Chip. Today we are-going to see demonstrations of a portable device that can be attached to a desktop or portable phone to scramble voice conversations and how to make your laptop computer do double duty as a secure voice communication device. Government agencies charged with protecting national security and public safety fear that the availability of such user-friendly encryption devices will jeopardize an important crime-fighting tool: court-authorized wiretaps. We will hear from government witnesses, experts and critics of Clipper Chip. A recent Time/CNN poll indicated that 80 percent of the American people oppose this program. This hearing gives the public a chance to learn more about it. I especially want to thank Admiral McConnell for his willingness to be here, although I fully realize that he will have to limit his public remarks out of concern for national security. It is for this reason we will have a second phase of this hearing and my Senate colleagues and I will adjourn for a classified session. The challenge presented by new information technologies -- particularly by the proliferation of digital means of transmission and of effective, user-friendly encryption -- raise particular economic and social questions. But the general tensions and fundamental questions posed by these challenges are the same ones that confronted the founders of our country. Our Constitution requires that we strike a balance between an individual's right to be left alone and conduct his or her own affairs without government interference, and our interest in a secure, safe society. The Clinton Administration's Clipper Chip may be seen as a solution by the law enforcement and intelligence agencies, but it raises a host of questions for its potential users about whether it may tip that fundamental balance. I have serious questions about whether any sophisticated criminal or terrorist organization is going to use the one code endorsed by the U.S. Government and for which U.S. Government agents hold the decoding keys. There are a multitude of alternative encryption methods commercially available. If Clipper Chip does become the standard encryption method used by Americans, criminals may be forced to use Clipper to communicate with legitimate outsiders. But this is a big "IF." Finally, I am concerned about Clipper Chip's impact on the competitiveness of our robust high-tech industries. We must make sure that Clipper Chip will not impede American companies trying to market high-tech products overseas. The Administration's steps to reform some export restrictions on encryption and telecommunications technology is welcome. But the only encryption technology that will be permitted to be relatively freely exported is key escrow encryption products. The Administration must address the serious questions we have about whether American companies will be able to find any foreign buyers for an encryption technology to which the U.S. Government holds the decoding keys. Whatever confidence I might have that the U.S. Government will limit its use of the decoding keys to specific and justifiable law enforcement objectives, l doubt my confidence will be universally shared. The reaction-overseas to Clipper Chip has serious implications for the "planetary information network" Vice President Gore has cheered. We will not be able to secure communications across national borders with Clipper Chip if neither foreign governments nor overseas computer networks will use it. The information superhighway holds the promise of an information explosion that will enhance our marketplace of ideas and bring untold benefits to all our citizens. But this promise will be an empty one unless people are assured that when they go on-line or talk on the phone, they are not forfeiting important fundamental rights, like their right to privacy. New technologies present enormous opportunities for Americans, but we must strive to safeguard our privacy if these technologies are to prosper in this information age. Otherwise, in the service of law enforcement and intelligence needs, we will dampen any enthusiasm Americans may have for taking advantage of the new technologies.