And you're tuned
into Off the Hook, the program about telephones, technology, and the abuses thereof and therein.
Very good evening to you.
This is Emmanuel Goldstein, and we have all kinds of things to talk about tonight.
I'll give you a hint as to what one of them is going to be.
Drake is bad.
That's the hint, and that's all I'm going to say at this moment.
Thank you.
I actually liked it better at that speed.
Jean-Michel Jarret, one of my favorites.
But we have important things to look at tonight, including one thing that we promised we'd focus some time on,
and that is the wonderful world of ATM fraud, automatic teller machines.
And then we'll be taking your phone calls at 212-279-3400 a bit later.
Yes, ATM fraud.
A document which was passed on to us over at 2600 magazine, directly from the Secret Service.
I don't think they were the ones, actually, that passed it to us, as it says in this document.
This document is not intended for distribution outside those having a legitimate professional interest,
and is not intended for release to the news media.
So if there are any members of the press out there, anybody from the media,
turn off your radio now, I mean it.
Turn off your radio and turn back on in about 15 minutes, because this is not intended for the media.
Just for average people out there, average people that need to know,
average people that feel they have a right to this information,
and don't feel that it should be kept from them.
Okay, now we got all those media people out of here.
They are something else, aren't they?
We won't talk about them while they're not here.
Let's get right into this story.
Synopsis of an ATM Fraud Scheme
On February 4th, 1989, U.S. Secret Service agents arrested four individuals in Los Angeles
and one in Lincoln, Nebraska,
for producing counterfeited automated teller machine debit cards
and for possession of access device-making equipment.
When the defendants in Los Angeles were arrested,
they were in the process of encoding the counterfeit ATM cards with stolen bank account information.
The group was planning to travel to a number of cities throughout the United States
to make cash withdrawals from ATMs linked to a specific nationwide ATM network.
They made plans to travel in teams to different geographic areas of the country
and to use disguises to defeat ATM surveillance cameras,
which, excuse me, while using each card to its daily maximum for three to five days.
Each card, generally, depending on the bank,
has a maximum withdrawal limit of between $200 and $500.
Some of them have little tricks where you can withdraw $300 and then come back and withdraw $200.
And they're different for just about every bank.
And every bank machine, by the way, in case you don't know this,
every bank machine does have a camera somewhere inside it,
and it takes your picture or just records the whole transaction on videotape.
In fact, they could even record sound.
Who knows?
But they take a very keen interest in that kind of a thing.
You can rest assured of that.
The counterfeit cards were constructed of poster board cut to the appropriate size
and affixed with common magnetic tape.
The tape was encoded with stolen cardholder account data on track 2 for use in ATMs.
Seized concurrent with the arrests were a computer, an encoding device,
and thousands of counterfeit ATM cards.
The defendants intended to execute the scheme over a five-day period during February 1989.
Test cards had been successfully used in at least three cities,
which netted the defendants about $5,000.
This case constitutes the first known attack of this magnitude on a major nationwide ATM network.
Bank officials interviewed after the arrests confirmed
that the account numbers used in this case
would have given the defendants access to the checking accounts,
savings accounts,
and any line of credit available to the legitimate cardholders.
An audit of those accounts revealed
this scheme could have netted the defendants as much as $5.5 million
had all gone according to plan
and had the scheme gone undetected.
Well, things didn't go according to plan, obviously.
We wouldn't be reading this right now.
One industry expert from outside the bank
speculated that it is plausible someone could,
using this scheme or one similar to it,
access accounts and steal as much as $100 million
have carried to the extreme
and extended over a 30-day period with careful execution.
And if they don't go around boasting about it in bars
and things like that, I guess.
It doesn't say anywhere here how they were caught.
I'd love to know about that.
In the city where this conspiracy began,
several, known as La La Land, I think,
several national and regional ATM networks
share a single telecommunications carrier
which routes transactions between ATMs and banks.
In addition, the telecommunications company,
which is generally rumored to be GTE,
but again, that's only a rumor.
That's why we asked the press people to leave
because they take rumors the wrong way.
The telecommunications company, through a subsidiary,
maintains a number of ATMs in a proprietary network
which they make available on a contractual basis
for other networks to use as ATM outlets
for their respective cards.
Thus, the role of the subsidiary company
is similar to that of any bank
on the telecommunications network.
The mastermind of this scheme was a computer programmer
employed by a well-established software company
specializing in the design and implementation
of ATM network software.
His company was contracted by the telecommunications company
to update and expand the existing proprietary network.
The primary defendant's function as a programmer
was to implement software which drove ATMs
and point-of-sale terminals,
those are known as POS terminals,
on the proprietary network
in order to make information compatible with
and therefore acceptable to
the main electronic switch
maintained for all of the participating networks
on the communications system.
His position required him to have access
to most of the technical data
pertaining to software
for both the proprietary ATM network
as well as the main communications system
on which all of the networks were mixed.
In keeping with established industry standards,
the telephone carrier subsidiary in this case
encrypted the personal identification numbers
known as PINs
used in conjunction with ATM cards.
This was done prior to transmitting data
from the ATM across the proprietary system
to the electronic switch
where the transaction would be routed
to the appropriate bank.
The system targeted in this case
is typical of ATM networks
found throughout the United States.
When a cardholder accesses his account
through use of a debit or credit card
at an ATM machine,
the customer is asked to key in
his or her personal identification number.
The PIN is encrypted
using the Universal Data Encryption Standard
known as DES, D-E-S.
That particular method
employing an encryption key
known only to the owners
of the proprietary system
to which that ATM belongs.
The account number
and other Track 2 data
from the ATM card,
encrypted PIN,
and information
about the requested transaction
are then transmitted electronically
to a switch maintained
by a designated communications carrier.
At the electronic switch,
messages from several proprietary systems
are received and decrypted
using the same DES key
as was used to encrypt the data.
At that point,
the information is sorted
by destination bank
and encrypted with the proper DES key
provided by the destination bank.
The transaction is then transmitted
across the main communications line
to the appropriate bank.
Theoretically,
upon receipt at the bank,
the information is once again decrypted
using the key
supplied to the communications network.
However, in practice,
this step may not actually take place
as the recipient bank
may elect to accept
the encrypted version of the PIN
and process it
in its encrypted form.
Upon receipt at the bank,
the account is queried
and a determination is made
relative to authorization
or denial
of the requested transaction.
The flow of information
is reversed
upon return
of a message
from the bank
to the originating ATM.
To illustrate,
if Bank A
issues ATM cards
and maintains
their own ATMs
at various locations,
they are running
a proprietary system.
A communications carrier
must be employed
to tie the system together,
but since there are no other
participating banks
on the system,
the sorting process
at the previously described
electronic switch
need not take place.
All transactions
are directly between
the ATMs
and the bank.
No NICE
or Cirrus network
floating around.
Even on a closed system
such as this,
the industry encourages
the use of PIN encryption.
Furthermore,
DES is the preferred standard
when PIN encryption
is employed.
On the other hand,
if Bank A
elected to enjoy
reciprocity
with Banks B
and C
enjoy,
I don't believe this,
permitting transactions
at all three
banks' ATMs,
in other words,
have a little network
like we have here
in New York,
then an electronic switch
would be installed
to sort
and route transactions
between all of the ATMs
and Banks A,
B, and C.
The transactions
destined for Banks B
or C
from ATMs
owned and operated
by Bank A
would still be considered
to be on the Bank A
proprietary system
until they reached
the electronic switch
where they would be
mixed and sorted
by the destination bank.
At that point,
the proprietary ATM networks
from Banks A, B, and C
combine to share
a common communications carrier,
but the networks
remain independent
and do not share
encryption keys.
The function of the
electronic communication switch
is to sort the transactions,
determine which
encryption key to use,
and establish how
to route the information
to the destination.
The system abused
in the case
in which these arrests
were made
was similar to that
previously described
with the communications carrier
subsidiary
functioning
in the role
of Bank A.
specifically,
the subsidiary
owned a network
of ATMs
and through
a contractual arrangement
accepted debit
and credit cards
issued by various banks
and honored
by other networks.
When a transaction
was requested,
the information
was handled
on the proprietary network
until it reached
a communications switch
where it was decrypted,
then encrypted
with the proper key
for the destination bank
and fed into
the main communications line
used by all
of the proprietary systems
cooperating
in this enterprise.
As a part of their
routine business practice,
the subsidiary
recorded all transactions
on the proprietary network
before those transactions
reached the electronic switch.
The intended purpose
was to create
a transaction log
from which
all activities
could be reconstructed
should a system
or other failure
occur.
The pins remained
encrypted
in this recording process.
Either while
performing his job
or merely by knowing
where to look
based on his
intimate knowledge
of the system,
the scheme's
mastermind
discovered that
the key used
to encrypt pins
on the proprietary network
was a default key
as opposed to
a proprietary key
selected by
network officials.
A default key
in an ATM machine
encryption device
is analogous
to a common
computer password
installed by
a mainframe
computer manufacturer.
Its intended purpose
is for testing
during the installation phase
and it is expected
that the default password
will be removed
once the system
is installed
and accepted
by the buyer.
Well,
guess again.
Upon making
this accidental discovery,
the programmer
realized the value
of this information
and was able
to refer to
various software manuals
and textbook literature
to decipher the key.
The programmer
knew data
was routinely
recorded to the
transaction log
and that he could
access the data
transmissions
as they were being
posted to the
transaction log
and thereby
see all transactions
on the proprietary
network.
It was there
at the transaction
log that he copied
account numbers
and the encrypted
PIN offsets
onto his
personal computer.
Now,
while it is believed
the information
was copied
in real time
that is concurrent
with it being posted
to the transaction log,
it could have just
as easily been done
using another method.
The programmer
could have electronically
copied data
from the computer tape
containing the
transaction log
and extracted
the same information.
Either method
would have netted
the same result.
At this point,
the programmer
made a conscious
decision according
to his post-arrest
statement
to use account
numbers from
only one major bank.
He said he did so
because he believed
that once the crime
was discovered,
suspicion would
center on an
internal problem
within that bank.
After selecting
a generous number
of accounts
from the targeted
bank,
the employee
wrote a computer
program to decrypt
the PIN
for each of those
accounts.
He was able
to accomplish this
using the default
DESC key.
It was later learned
that accounts
from other banks
were also used
during the testing
phase of the scheme
and that those
accounts and PINs
were obtained
in the same manner.
He also realized
that the network
would be reviewed
for potential weaknesses
once the crime
was completed,
so he reported
the apparent oversight
in using the default
encryption key
on the system
and made recommendations
to his superiors
about how to
remedy the situation.
The remedies
were put in place,
ending his access
to additional
account data.
He also accomplished
his goal of
shoring up the network
so that there would
be no apparent
weakness in the system
from which the information
could have been obtained.
As an aside,
it was noted
by the investigating agents
that the network
in this case
had been in operation
when purchased
by the communications
company subsidiary.
At the time
of this writing,
it has not been established
whether the default
key was in use
by the company
from whom the subsidiary
brought the network
or whether
a proprietary key
had been in use.
Next,
the defendants
constructed counterfeit cards
using poster board
cut to ATM card size
to which magnetic tape
was mounted.
The programmer
then wrote a program
which he used
in conjunction
with a magnetic
encoding device
borrowed from his office
to write the account number
and other data
to each of the
counterfeit cards.
The data was properly
encoded
in the appropriate positions
on track two
of the magnetic stripe.
Among the data elements
actually copied
to the magnetic stripe
were the primary
account number
it's known as
PAN
and the pin offset.
In systems
where the pin
is assigned
to a customer
the pin
is a direct derivative
of the account number
and the
DES encryption algorithm
and is referred to
as a natural pin.
In systems
where the customer
selects his own pin
the customer selected pin
would not match
the natural pin
so an offset number
is used
to resolve the difference.
When the offset
is added
to the customer selected pin
it will equal
the natural pin
and the verification
is made.
Thus,
in this case
an offset was necessary
as the system
was one
in which the customers
had selected
their own pins.
At the time
of their arrests
the defendants
were in possession
of more than
7,400 account numbers
with pins
and pin offsets
all from the same bank.
In fact,
as previously mentioned
they were in the process
of actually encoding
the cards
when arrested.
Among the items
seized
during the search
and arrest
were the programmer's
personal computer
an encoding device
and several thousand
counterfeit cards
in various stages
of construction
from uncut
poster board stock
through finished
encoded cards.
Although a great deal
of technology
was compromised
and used
in the execution
of this scheme
in the end
this crime
was one
in which
a trusted employee
exploited his knowledge
and position
to manipulate
and misuse
the system.
the only true
technical deficiency
or error
uncovered
was that
the default
key
was left
in place
when the proprietary
network was absorbed.
Presumably
it had been in place
since the system
was first activated
although
that has not
been established
as fact.
At the time
of this writing
it is unknown
who should have
been responsible
for replacing
the default key
with an active
proprietary key.
Perhaps this oversight
could have been
prevented
had a more
thorough checklist
been used
by the communications
company
subsidiary
when they absorbed
the system
or by the previous
owner of the network.
Regardless
had the
recognized protocol
for securing
their respective data
been followed
this crime
would not have
been possible.
Human nature
greed
opportunity
and a willingness
by the defendants
to commit larceny
combined with human error
and not properly
installing and reviewing
system safeguards
account for the
forming of this scheme.
It is fortunate
that the information
came to light
before the scheme
was executed.
The central figure
in this case
is a high school
graduate
and was gainfully
employed
with a substantial
salary.
He stated
that he was
motivated in part
by his desire
to purchase
an expensive home
and did not want
to wait as many
years as it would
take to save
before he could
acquire the property
he had in mind.
His wife
is a co-defendant
and she too
had been gainfully
employed
with a good salary.
Another of the
defendants
is a graduate
of the Air Force
Academy
and has a
master's degree
from a prominent
university.
You just never
guess that such
prominent people
would commit
a crime.
Amazing.
None of the
defendants
has a criminal
record.
Well,
I imagine they do
now,
but they didn't
before.
All have been
charged with
several counts
of violations
of Title
18,
United States
Code,
Section 1029,
Access Device
Fraud.
As written,
that law
provides for
substantial
penalties.
And no early
withdrawals,
I can tell you
that much.
Each count
of producing
or using
counterfeit
cards carries
a maximum
sentence of
15 years
imprisonment
and a fine
of $50,000.
Let's see here.
They produced
7,400
cards there
and each
one of those
cards carries
a maximum
of 15 years
in jail.
Well,
they could be
in for quite
a while,
actually,
if the judge
is in a bad
mood that day.
the same
penalties apply
to the
possession
of device
making
equipment.
Possession
of device
making
equipment.
That's a
phrase that
has come up
a few
times in
the hacker
circles.
Rather
nebulous
phrase,
to say the
least.
The possession
of 15
or more
counterfeit
cards carries
a maximum
penalty of
10 years
imprisonment
and a
$10,000
fine.
Ultimately,
upon conviction
of the
defendants,
the recently
implemented
federal
sentencing
guidelines
were to
determine the
sentences.
I don't have
what the
exact sentences
actually turned
out to be.
That's the
story as
seen by the
Secret Service.
This is a
document that
was distributed
within the
banking
community,
a whole
group of
bankers who
do nothing
but talk
about banks
and how
to protect
them and
things like
that.
Now, as I
see some
of our
press people
are beginning
to rejoin
us, you,
the average
person listening
out there,
knows a
bit more
about this,
a bit more
about how
ATM fraud
could work,
how you
could be
victimized by
it, how
semi-wide
open the
systems can
be if
morons are
running
things and
don't
change
default
passwords,
and how
the whole
thing works
in the
first place.
I think
that's
essential to
pass that
kind of
knowledge on.
We'll be
taking phone
calls in
just a little
bit at
212-279-3400.
The program
is off the
hook.
This is
Emmanuel
Goldstein.
We spend
our time
talking about
technology,
its abuses,
and its
oddities.
It is.
What
did
go
at
one
time
to
WHO
will
run
up to
an
detail.
King
and
to
pick
up
and
test
and
look
new
and
how
and in case you missed the clue at the top of the hour
I'll say it again
Drake is bad
real bad
we'll unlock that door in just a couple of minutes
again the phone number is 279-3400
and here's an interesting story from the Newark Star Ledger of December 15th
H.J. Kohler, owner of an Elizabeth, New Jersey armored car service
who pleaded guilty to illegally wiretapping his employees
was placed on probation for five years
fined $25,000
and ordered to perform 250 hours of community service
Kohler, 61, his brother
and New York electronics consultant Robert Schios
all pleaded guilty last September
Schios is awaiting sentencing
Assistant U.S. Attorney John Lacey said the government found
a pattern of illegal wiretaps over two decades
by Kohler and people entrusted to him
Rodriguez pointed out
that corporate America must be told
that illegally wiretapping employees is a crime
for which they will be punished
and now to
to the lighter part of the program
well, I shouldn't say lighter
I mean, everything is really serious
if you look at it in the right light
but this is where we're going to
unlock a door
we did say that Drake is bad
and we might just as well
shorten that
make it a contraction
and just say
Drake's bad
you know
Drake's bad
doesn't mean a thing
to a single person listening
but in a few moments
it could be a legend
let's start by making a liar
out of a long distance phone company
I love doing that
let's
grab a dial tone here
oh, thank you
there's one
let's call up a long distance company
AT&T
this is Stacy
my goal is to give you excellent service
how can I help you?
yes, hello
I was just curious about one thing
I was thinking of getting AT&T
as a phone company
I've just arrived in the country
and I'm not very familiar
with the way things work here
you can probably tell by the way
I'm mangling the language
what could I answer for you?
well, I'm just curious
is every telephone
in the United States
reachable directly
by using AT&T?
yes
ok, that's all I wanted to know
from anywhere
ok, great
thank you very much for your help
that's all I wanted to know
they've just made a terrible mistake
now
let's go back to Drake's bad here
and see what we can find out about it
and who better to go to
than
a trusting operator
alright
pick up the phone
and
whoops
I don't know how that happened
let's pick up the phone again
I might hit one too many digits there
oh, that doesn't sound like
an AT&T operator
uh, yes, hi
is this AT&T?
oh, no, I'm sorry
I thought I was dealing with AT&T
ok, so to reach AT&T
free location
please hang up
and dial 10
2880
there's no 10 on my phone though
I mean
1028
ah, ok
thank you very much
boy, I'm so stupid sometimes
ok, let's
let's do it the right way
let's see if we can deal with AT&T now
new york telephone
this month
may I help you?
uh, yes
can I have AT&T please?
certainly
thank you
moment for an operator
who can assist you
thank you
hey, they changed the voice
AT&T, how can we help you?
hi, I'm trying to find out an area code
um, I believe it's in California
and the name is Drake's Bad
the area code there?
you, uh, Drake's Bad, California?
yeah
have you ever heard of that?
uh, I'll check it for you
thank you
D-R-A-K-E-S?
yeah, uh, and a contraction
apostrophe S
ok, I have a lot of Drakes
you have a lot of Drakes?
you have Drake's Bad
number 1
Drake's Bad
number 2
Drake's Bad
number 3
all the way up to 9
all the way up to 9
I wonder which one I need
uh, you have them all the way up
to number 17
uh-oh
got them up to
uh, 25
they're all the same area code
916
oh, they're all 916
ok
alright, what is that?
a special kind of
uh
well, I thought it was
it was just a place
but apparently this
uh, how many of them
did you say?
I guess there's a lot of them
you have a listing up
to number 36
up to number 36
Drake's Bad
number 1
number 2
all the way up to 36
boy, I guess they ran out of
names for cities, eh?
yeah, right
ok, thanks for
916 for all of them
916
ok, thank you
can you connect me to
916 information please?
no problem, sir
thank you
if you're the AT&T
have a good night
you too
ah, here we go
this is, I mean
what city please?
uh, yes
hello
uh, is this the
916 area code?
yes, sir
hi, I'm trying to
find the number
for Drake's Bad
California?
yes
ok, and what number
did you need there?
uh, well
let's see
um, I believe
it's just listed as
Drake's Bad
you know, I don't
I don't think it's
anything more than that
ok, sir
then you need to
call the operator
first and ask for
Drake's Bad
Drake's Bad
number 2
or else you could
if there's no answer
there, you could
try this
thank you for calling
the number is
5-2-9-1-5-1-2
once again
5-2-9
I hope this isn't
one of those ones
that hangs up
after they give you
the number
oh, it is one of
the ones that hangs up
ok, that's
that's really horrible
because if you have
another question
for the operator
you have to pay
another 60 cents
to find out
but, I guess life
wasn't meant to be fair
alright, well
we know now
that we have to
pick up the telephone
and ask the operator
for Drake's Bad
number 2
let's, uh
let's give it a shot
we seem to have
lost that operator
we're getting
another one now
uh, yes
is this New York
telephone?
yes sir
I'm trying to reach
uh, Drake's Bad
number 2
in California
thank you
hold for this
assistance
please
one moment
for an operator
who can assist you
thank you
I think she just
got slowed down
or something
agent, you
how can we help you?
uh, yes
hello
I'd like to place
a call please
to Drake's Bad
number 2
California
uh, that's it
Drake's Bad
number 2
one second
okay
come on
I need your help
he's calling
Drake's Bad
number 2
California
how do you get
that?
yes
one second
one second
one second
sir
oh, no hurry
no hurry
no hurry at all
Drake's Bad
oh, no hurry
no hurry at all
no hurry at all
oh, no hurry at all
oh, no hurry at all
yes, that's 916
916-12-028
916-12-028
hello operator
hello operator
are you there
don't know if the operator is still there
still here
ah, good
I heard a different number there
one second
okay
okay
okay
system bill inward may help you yes operator drakes bad california what's your number drakes
bad operator uh sir what number uh i was trying to reach drakes bad number two certainly thank you
how can i dial that direct pardon can i dial that direct no it's a toll station we have to key it in
for you you mean there's still places in the united states you can't call direct
oh boy direct all right uh-huh and that's it ringing now well i hope it's it ringing
oh well i guess they're not home uh well so much for that drakes bad number two yes it is what is
known as a toll station toll station what is a toll station well folks let's journey back
to the 1930s or 1940s or whatever toll station is a telephone in a very very remote area
so thinly populated that not even a small exchange
can be maintained at least profitably maintained one two maybe three or four phones in the middle
of nowhere literally the middle of nowhere they're from uh they're connected to a very far away
exchange most of them are in uh places like nevada utah arizona and there are some in idaho and
california as well and i'm told that uh you'll find them in places where the population of a town is
about six or so this uh this particular explanation of a uh toll station comes from an electronic magazine
called telecom digest non-dialable points they're referred to as non-dialable exchanges toll stations
other strange things this person says i did a search of a bell core database about four years ago
for points in north america with a non-dialable flag set and came up with 4589 of them i then
excluded mexico and had 1657 left after excluding the caribbean and canada there were only 825 left
and uh they're located in alaska arizona california idaho kentucky louisiana montana nevada oregon texas utah
and washington most of them are toll stations a few are actual exchanges and for the doubting ones among
you call 206-555-1212 and ask for the ross lake national recreation area in new hallam washington
you will be told to dial your o operator and uh ask for new hallam 7735 this is an automatic exchange
which cannot support incoming toll calls local calls are dialed on a four digit basis the incoming
restriction may be due to a long-standing requirement that calls be dialable on a seven digit basis locally
and uh more interesting though is the system in shoop idaho call 208-555-1212 and ask for the
shoop salmon river store you'll be told to call shoop 24f3 that's right shoop 24f i gotta i gotta hear
that one i gotta hear a letter in uh okay let's see if we can do this
okay we are calling information in idaho
and these phones keep disconnecting you know somebody out there
a phone system they want to donate to wbai please do so at once
uh-oh my secret code
have to enter the secret code i'll do that off air
okay this is connie uh hi okay yes okay uh yes i'm looking for the um this is idaho right
yeah okay i'm looking for the uh shoop salmon river store that's s-h-o-u-p
okay it's in north fork is the town is that it i believe so okay the number is three nine four
two one well i guess it's outdated information then huh it must be okay well these things do
change occasionally this is only uh only a few months old though boy that's sad to think that uh
toll stations are slowly vanishing shoop 24f3 you can no longer dial that well you can dial
212-279-3400 but leave off the 212 if you're in town and uh any comments or questions about
telephone related or atm related uh things and uh while you're racing to your phones i want to read
a very brief piece that uh has just been put out about hackers and uh violation of privacy and that
kind of thing so uh listen up and give us a call operations sun devil remember that that was the uh
most massive raid of of hackers that uh since the spanish inquisition as far as i can tell
arthur uh cussler's novel darkness at noon tells of the downfall of a bolshevik he is purged by the
party charged with conspiring to assassinate stalin and i'm reading from uh a piece called the sanction
of the victim by michael e marotta and this is being distributed electronically all throughout the
computer underground um returning to the downfall of the bolshevik of course he did no such thing
uh plotting to assassinate stalin uh he soon comes to understand the needs of his captors as a bolshevik
he knows the theory of the centralized democracy and he comes to understand that merely questioning
authority is no different than a physical assault on the leader the operant theory in this true-to-life
example was later enunciated by ann rand in her novel atlas shrugged she called it the sanction of the
victim in atlas shrugged the heroes are engineers and investors who learn to reject mysticism altruism
and collectivism they learn to be proud of their own achievements they identify and reconcile the
contradictions that tore them apart and allowed them to be regulated ruled taxed and vilified one of
the highlights of this novel is the trial of hank reardon a steel industrialist who violated an
equalization of equalization of opportunity law he tells the court that it can sentence him to
anything and he is powerless to prevent that but he will not help them by participating he does not
recognize their right to try him and he will not help them pretend that the trial is just
he is acquitted if this seems too unreal consider the case of craig knight or in chicago and compare it
to the trials of the legion of doom in atlanta if you've been listening to this program over the
last few weeks you'll know that craig knight or was a hacker publisher a publisher of a hacker
newsletter an electronic newsletter out of missouri and he was charged with with distributing a harmful
document in the form of the emergency 911 document and the folks in atlanta georgia from the legion of
doom were pretty much charged with the same thing although they were charged with actually logging
into a computer and obtaining that document so those are the um the two uh cases here that we're referring
to craig knight or stood his ground prepared a first amendment defense and asked for help from the
pioneers on the electronic frontier the government dropped its charges in atlanta the hackers cooperated
with the government informed on each other and even testified against craig knight or if and they
were sentenced to prison knight or incurred legal expenses over a hundred thousand dollars this is
also uh actually it's quite less than the fines that have to be paid by the legion of doom hackers in
atlanta who uh according to who you talk to it's either two hundred and thirty three thousand dollars
divided by three or two hundred and thirty three thousand dollars for each of the three i have yet to
hear exactly what that is and of course the main difference is that neidorf is free and they
will be going to jail the decision to go to trial rested on the premise that right makes might
neidorf prepared a first amendment argument in point of fact victory hinged on the demolition of the
government's evidence a suitable defense could have been created from any perspective the first
amendment is a broad shield that protects religion speech and assembly in addition to writing the 10th
amendment guarantees all those necessary and proper rights enjoyed by the people that are not
specifically enumerated in the bill of rights neidorf could have claimed that he was performing a
challenge commanded of him by the gods of olympus what counted most is that he felt that his accusers
were morally wrong the legion of doom went down the drain in atlanta because they granted the moral
high ground to the government they were wrong in their own eyes and they deserved punishment by their
own standards their viewpoint and their standards were the same as the government's the question then
becomes is hacking right unless you want to go to jail you better find a lot of reasons to believe
that it is one hacking is against the law congress and the states have enacted duly constituted rules
against unauthorized access to computers answer the laws are wrong slavery was once legal so what
the opinions of a few hundred politicians do not change the reality of right and wrong historically
freedom from the american revolution to solidarity is against the established laws it's true freedom is
against most laws good point the laws change when the old kings and dictators are swept away by democratic
forces hackers are radical information democrats they may not know it but they are
two hackers violate privacy well the answer to that is there is no privacy privacy is what is in your head
your heart and your home your genitals are your private parts anything on a computer especially a
computer connected to other computers via telephone lines can be accessed by government employees corporate
clerks even used car salesmen a major book publisher sells a cd-rom disk of 80 million customers nothing on a computer is private
number three hackers violate property rights the answer that's another question what is property during the middle ages land
was real property but books and tools were not today we still have real estate laws that require title searches as if
land were granted by the king of country from the duke of earl to the baron of gray matter
yet industrialism brought a new understanding a machine could be bought or sold independent of
the land it rested on you did not perform a title search to buy a forklift today the cybernetic era
rests on the fact that data processing is different than computing machinery the machine is one thing the information in it is another
number four hackers cause damage
answer this is the propaganda of a tottering regime
disgruntled employees erase computer files because workers who feel mistreated will always strike back at the people they see as their oppressors
also criminals who want to get their hands on money have learned to use computers as they previously learned to use guns and fountain pens
this is not hacking hacking is what happens when someone who is interested in computers works to learn more about them
there have been no documented cases of a hacker destroying data
number five hackers threaten the money supply answer
this is the reason that the united states secret service has been busting computerists
but hackers are not interested in monetary gain
the real threat to the economy i'm sorry to the economic well-being of america's government
monetary and fiscal policy indeed excuse me
oh boy indeed it is no accident that one of the biggest supporters of the
government crackdown on hackers was
arizona senator dennis
deconsini the man who was bought by savings and lawn swindler charles keating
the government has targeted hackers in order to cover up the fact that the entire
financial fabric of the nation is coming unraveled and that uh that is a piece
about operation sun devil written by michael e morata
some uh food for thought there well let's uh turn to our phones and the time we have left
212-279-3400 good evening
hmm
you know it's sad when the people that call first just sort of fall asleep on the phone i don't think
i was that boring good evening hello how you doing um i'm really intrigued by this whole hacker thing
and you know i'm completely computer ignorant but i was wondering if you could you know like name
a few like fun things you can do to um i don't know take it into like uh like the billing accounts
for you know some of the conglomerates like the telephone or whatever you know just by simple
computer hacking devices and screw things up well now the uh the goal of a hacker
is never to screw things up that's a very important distinction we've got to make right here
the joy of hacking and every hacker knows this every hacker has felt it and the people that have
not felt it are usually the ones that uh are are after after the the strongest prosecution of of
anybody who's using another system the thrill is
exploration knowing that there's you onto something that there's something that nobody else
has found yet just the thrill of the chase the thrill of finding something different and learning on the
way you don't have to screw things up to learn things and it's uh that's a very basic rule and
and i think it says something of uh of the hackers today that not a whole lot has been messed up
and what has been messed up is because of uh of people like uh the ones we referred to earlier
that want to steal money hackers don't want to steal money hackers want to penetrate systems see
how far they can go see what they can find and what the uh the unfortunate case of the three
lod members in atlanta what from what all accounts i've heard what they were doing was simply exploring
a telephone company computer they found an interesting document and they read it and they distributed it and
now they'll be going to jail for two years up to two years for that for exploring for
being a little bit mischievous but again no damage was caused very important that uh
aspiring hackers know that that's uh that's assumed that's assumed of you
when you go out exploring things that you won't mess things up good evening good evening how you doing okay
really enjoy your show can you tell me if uh if you have any information with regard to
uh whether 9x is um in thinking about instituting the core identification number i know there are
a couple of suits that were pending at one point well that's got to get by the psc the new york state
public service commission um i don't see that happening real soon i do think though some form of caller id
is inevitable and uh you know it's it rubs a lot of people the wrong way it rubs me the wrong way in
in quite a few instances but it's also something that uh you can use to your advantage uh don't be uh
fooled though new york state does have just like every state in the union has some form of identifying
calls particularly if you if you uh call an 800 number uh many many times your number is displayed
as you make the phone call it doesn't matter if the state that you're in has caller id or not
and that's uh that's something that uh that i think a lot of people should become aware of
well i meant for residential causes is there some reason why uh new jersey bell was able to institute
so much faster they just happen to be first i i imagine because uh uh you know bell core is actually
in new jersey they have a bit of of pull with the uh legislators and they're able to do things a
little quicker maybe um again i feel i feel some form of caller id is inevitable how much of an invasion
of privacy that's up to you that's up to the rate payers and how much of a of a noise they make
you've gotta you've gotta press for uh suppression of caller id people say oh that defeats the whole
purpose of it well uh you know privacy is something that we take for granted on the telephone i mean
i don't know who you are i don't think i have the right to know what your phone number is i you know
it's it's it's not something that you're used to when you're making phone calls of giving out all this
information it's uh it's like what ed me says those who have nothing to hide have nothing to be afraid of
and you know what i think of that statement it's garbage no i mean in talking to a person usually
you do get their name or whatever um but i understand what you're saying and um you're
most helpful thanks a lot thanks for calling okay and most of those caller id uh devices
have a particular function where you dial a certain a certain combination of digits and you can
institute a trace on a particular call whether you have caller id or not and i think that should be
enough you know if somebody is harassing you okay you hit a certain button their number gets forwarded
to the authorities and if you want to you file charges now i think that's a lot better than uh
every time you make a phone call having all that information about you passed on or not passed on
you never know do you good evening oops good evening
well good evening to you too good evening hi how you doing hi how are you go ahead i'm enjoying your
show um you understand that uh it and t is regulated by the government and therefore it comes on the
auspices of the uh national reconnaissance office okay you're gonna have to you're gonna have to wrap
this up uh you're referring to itt or at and i'll be i'll conclude uh as far as the privacy act we are
always being supplied on because uh communication through the air or through uh long lines is monitored
by the government and uh we take advantage of this service which is wonderful however that is why mr garty
or mr noriego or anyone has problems because someone's always listening good very much good
point thank you for calling and that's a a very good if somewhat uh pessimistic note to end on
and that's going to uh just about bring our show to a close for this evening the uh
computer show is next personal computer show that is and uh we'll be back again for another episode of
off the hook we'll probably be talking about the rate increase of new york telephone next uh uh next
show which will be in two weeks and while it may not be on your mind now i'm sure it's going to be on
your mind then because it's very likely to be passed within the next two weeks so uh we will be back at
you then until then emmanuel goldstein good night and happy holidays
the telephone keeps ringing so i ripped it off the wall i cut myself while shaving now i can't make a
call
99.5 fm wbai new york on may 17 1984 wbai fm was granted a license by the federal communications commission
to serve the public interest as a public trustee until june 1st 1991 our license will expire on june
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renewal process is available at the offices of wbai fm 505 8th avenue 19th floor new york new york or may be obtained
from the fcc washington dc 20554 99.5 fm wbai new york
this is joe king and welcome to another edition of the personal computer show tonight steve terry the
research director of electronic directions or wheeler hawkins whatever they're being called
this week we'll find out in a few minutes is joining hanky and myself and we're going to be talking
not about word processing not about the law we're going to be talking graphics because it's a graphics
time of the year so stay tuned for another edition of the personal computer show