[Congressional Record Volume 142, Number 140 (Wednesday, October 2, 1996)]
[Senate]
[Pages S12201-S12216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ECONOMIC ESPIONAGE ACT OF 1996
Mr. NICKLES. Mr. President, I ask the Chair to lay before the Senate
a message from the House of Representatives on (H.R. 3723) the bill to
amend title 18, United States Code, to protect proprietary economic
information, and for other purposes.
The PRESIDING OFFICER laid before the Senate the following message
from the House of Representatives:
Resolved, That the House agree to the amendment of the
Senate to the bill (H.R. 3723) entitled ``An Act to amend
title 18, United States Code, to protect proprietary economic
information, and for other purposes'', with the following
House amendment to senate amendment:
In lieu of the matter proposed to be inserted by the Senate
amendment to the text of the bill, insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Economic Espionage Act of
1996''.
TITLE I--PROTECTION OF TRADE SECRETS
SEC. 101. PROTECTION OF TRADE SECRETS.
(a) In General.--Title 18, United States Code, is amended
by inserting after chapter 89 the following:
``CHAPTER 90--PROTECTION OF TRADE SECRETS
``Sec.
``1831. Economic espionage.
``1832. Theft of trade secrets.
``1833. Exceptions to prohibitions.
``1834. Criminal forfeiture.
``1835. Orders to preserve confidentiality.
``1836. Civil proceedings to enjoin violations.
``1837. Conduct outside the United States.
``1838. Construction with other laws.
``1839. Definitions.
``Sec. 1831. Economic espionage
``(a) In General.--Whoever, intending or knowing that the
offense will benefit any foreign government, foreign
instrumentality, or foreign agent, knowingly--
``(1) steals, or without authorization appropriates, takes,
carries away, or conceals, or by fraud, artifice, or
deception obtains a trade secret;
``(2) without authorization copies, duplicates, sketches,
draws, photographs, downloads, uploads, alters, destroys,
photocopies, replicates, transmits, delivers, sends, mails,
communicates, or conveys a trade secret;
``(3) receives, buys, or possesses a trade secret, knowing
the same to have been stolen or appropriated, obtained, or
converted without authorization;
``(4) attempts to commit any offense described in any of
paragraphs (1) through (3); or
``(5) conspires with one or more other persons to commit
any offense described in any of paragraphs (1) through (4),
and one or more of such persons do any act to effect the
object of the conspiracy,
shall, except as provided in subsection (b), be fined not
more than $500,000 or imprisoned not more than 15 years, or
both.
``(b) Organizations.--Any organization that commits any
offense described in subsection (a) shall be fined not more
than $10,000,000.
``Sec. 1832. Theft of trade secrets
``(a) Whoever, with intent to convert a trade secret, that
is related to or included in a product that is produced for
or placed in interstate or foreign commerce, to the economic
benefit of anyone other than the owner thereof, and intending
or knowing that the offense will, injure any owner of that
trade secret, knowingly--
``(1) steals, or without authorization appropriates, takes,
carries away, or conceals, or by fraud, artifice, or
deception obtains such information;
``(2) without authorization copies, duplicates, sketches,
draws, photographs, downloads, uploads, alters, destroys,
photocopies, replicates, transmits, delivers, sends, mails,
communicates, or conveys such information;
``(3) receives, buys, or possesses such information,
knowing the same to have been stolen or appropriated,
obtained, or converted without authorization;
``(4) attempts to commit any offense described in
paragraphs (1) through (3); or
``(5) conspires with one or more other persons to commit
any offense described in paragraphs (1) through (3), and one
or more of such persons do any act to effect the object of
the conspiracy,
shall, except as provided in subsection (b), be fined under
this title or imprisoned not more than 10 years, or both.
``(b) Any organization that commits any offense described
in subsection (a) shall be fined not more than $5,000,000.
``Sec. 1833. Exceptions to prohibitions
``This chapter does not prohibit--
``(1) any otherwise lawful activity conducted by a
governmental entity of the United States, a State, or a
political subdivision of a State; or
``(2) the reporting of a suspected violation of law to any
governmental entity of the United States, a State, or a
political subdivision of a State, if such entity has lawful
authority with respect to that violation.
``Sec. 1834. Criminal forfeiture
``(a) The court, in imposing sentence on a person for a
violation of this chapter, shall order, in addition to any
other sentence imposed, that the person forfeit to the United
States--
``(1) any property constituting, or derived from, any
proceeds the person obtained, directly or indirectly, as the
result of such violation; and
``(2) any of the person's property used, or intended to be
used, in any manner or part, to commit or facilitate the
commission of such violation, if the court in its discretion
so determines, taking into consideration the nature, scope,
and proportionality of the use of the property in the
offense.
``(b) Property subject to forfeiture under this section,
any seizure and disposition thereof, and any administrative
or judicial proceeding in relation thereto, shall be governed
by section 413 of the Comprehensive Drug Abuse Prevention and
Control Act of 1970 (21 U.S.C. 853), except for subsections
(d) and (j) of such section, which shall not apply to
forfeitures under this section.
``Sec. 1835. Orders to preserve confidentiality
``In any prosecution or other proceeding under this
chapter, the court shall enter such orders and take such
other action as may be necessary and appropriate to preserve
the confidentiality of trade secrets, consistent with the
requirements of the Federal Rules of Criminal and Civil
Procedure, the Federal Rules of Evidence, and all other
applicable laws. An interlocutory appeal by the United States
shall lie from a decision or order of a district court
authorizing or directing the disclosure of any trade secret.
``Sec. 1836. Civil proceedings to enjoin violations
``(a) The Attorney General may, in a civil action, obtain
appropriate injunctive relief against any violation of this
section.
``(b) The district courts of the United States shall have
exclusive original jurisdiction of civil actions under this
subsection.
``Sec. 1837. Applicability to conduct outside the United
States
``This chapter also applies to conduct occurring outside
the United States if--
``(1) the offender is a natural person who is a citizen or
permanent resident alien of the United States, or an
organization organized under the laws of the United States or
a State or political subdivision thereof; or
[[Page S12202]]
``(2) an act in furtherance of the offense was committed in
the United States.
``Sec. 1838. Construction with other laws
``This chapter shall not be construed to preempt or
displace any other remedies, whether civil or criminal,
provided by United States Federal, State, commonwealth,
possession, or territory law for the misappropriation of a
trade secret, or to affect the otherwise lawful disclosure of
information by any Government employee under section 552 of
title 5 (commonly known as the Freedom of Information Act).
``Sec. 1839. Definitions
``As used in this chapter--
``(1) the term `foreign instrumentality' means any agency,
bureau, ministry, component, institution, association, or any
legal, commercial, or business organization, corporation,
firm, or entity that is substantially owned, controlled,
sponsored, commanded, managed, or dominated by a foreign
government;
``(2) the term `foreign agent' means any officer, employee,
proxy, servant, delegate, or representative of a foreign
government;
``(3) the term `trade secret' means all forms and types of
financial, business, scientific, technical, economic, or
engineering information, including patterns, plans,
compilations, program devices, formulas, designs, prototypes,
methods, techniques, processes, procedures, programs, or
codes, whether tangible or intangible, and whether or how
stored, compiled, or memorialized physically, electronically,
graphically, photographically, or in writing if--
``(A) the owner thereof has taken reasonable measures to
keep such information secret; and
``(B) the information derives independent economic value,
actual or potential, from not being generally known to, and
not being readily ascertainable through proper means by, the
public; and
``(4) the term `owner', with respect to a trade secret,
means the person or entity in whom or in which rightful legal
or equitable title to, or license in, the trade secret is
reposed.''.
(b) Clerical Amendment.--The table of chapters at the
beginning part I of title 18, United States Code, is amended
by inserting after the item relating to chapter 89 the
following:
(c) Reports.--Not later than 2 years and 4 years after the
date of the enactment of this Act, the Attorney General shall
report to Congress on the amounts received and distributed
from fines for offenses under this chapter deposited in the
Crime Victims Fund established by section 1402 of the Victims
of Crime Act of 1984 (42 U.S.C. 10601).
``90. Protection of trade secrets..............................1831....
SEC. 102. WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION AND
INTERCEPTION OF ORAL COMMUNICATIONS.
Section 2516(1)(c) of title 18, United States Code, is
amended by inserting ``chapter 90 (relating to protection of
trade secrets),'' after ``chapter 37 (relating to
espionage),''.
TITLE II--NATIONAL INFORMATION INFRASTRUCTURE PROTECTION ACT OF 1996.
SEC. 201. COMPUTER CRIME.
Section 1030 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``knowingly accesses'' and inserting
``having knowingly accessed'';
(ii) by striking ``exceeds'' and inserting ``exceeding'';
(iii) by striking ``obtains information'' and inserting
``having obtained information'';
(iv) by striking ``the intent or'';
(v) by striking ``is to be used'' and inserting ``could be
used''; and
(vi) by inserting before the semicolon at the end the
following: ``willfully communicates, delivers, transmits, or
causes to be communicated, delivered, or transmitted, or
attempts to communicate, deliver, transmit or cause to be
communicated, delivered, or transmitted the same to any
person not entitled to receive it, or willfully retains the
same and fails to deliver it to the officer or employee of
the United States entitled to receive it'';
(B) in paragraph (2)--
(i) by striking ``obtains information'' and inserting
``obtains--
``(A) information''; and
(ii) by adding at the end the following new subparagraphs:
``(B) information from any department or agency of the
United States; or
``(C) information from any protected computer if the
conduct involved an interstate or foreign communication;'';
(C) in paragraph (3)--
(i) by inserting ``nonpublic'' before ``computer of a
department or agency'';
(ii) by striking ``adversely''; and
(iii) by striking ``the use of the Government's operation
of such computer'' and inserting ``that use by or for the
Government of the United States'';
(D) in paragraph (4)--
(i) by striking ``Federal interest'' and inserting
``protected''; and
(ii) by inserting before the semicolon the following: ``and
the value of such use is not more than $5,000 in any 1-year
period'';
(E) by striking paragraph (5) and inserting the following:
``(5)(A) knowingly causes the transmission of a program,
information, code, or command, and as a result of such
conduct, intentionally causes damage without authorization,
to a protected computer;
``(B) intentionally accesses a protected computer without
authorization, and as a result of such conduct, recklessly
causes damage; or
``(C) intentionally accesses a protected computer without
authorization, and as a result of such conduct, causes
damage;''; and
(F) by inserting after paragraph (6) the following new
paragraph:
``(7) with intent to extort from any person, firm,
association, educational institution, financial institution,
government entity, or other legal entity, any money or other
thing of value, transmits in interstate or foreign commerce
any communication containing any threat to cause damage to a
protected computer;'';
(2) in subsection (c)--
(A) in paragraph (1), by striking ``such subsection'' each
place that term appears and inserting ``this section'';
(B) in paragraph (2)--
(i) in subparagraph (A)--
(I) by inserting ``, (a)(5)(C),'' after ``(a)(3)''; and
(II) by striking ``such subsection'' and inserting ``this
section'';
(ii) by redesignating subparagraph (B) as subparagraph (C);
(iii) by inserting immediately after subparagraph (A) the
following:
``(B) a fine under this title or imprisonment for not more
than 5 years, or both, in the case of an offense under
subsection (a)(2), if--
``(i) the offense was committed for purposes of commercial
advantage or private financial gain;
``(ii) the offense was committed in furtherance of any
criminal or tortious act in violation of the Constitution or
laws of the United States or of any State; or
``(iii) the value of the information obtained exceeds
$5,000;''; and
(iv) in subparagraph (C) (as redesignated)--
(I) by striking ``such subsection'' and inserting ``this
section''; and
(II) by adding ``and'' at the end;
(C) in paragraph (3)--
(i) in subparagraph (A)--
(I) by striking ``(a)(4) or (a)(5)(A)'' and inserting
``(a)(4), (a)(5)(A), (a)(5)(B), or (a)(7)''; and
(II) by striking ``such subsection'' and inserting ``this
section''; and
(ii) in subparagraph (B)--
(I) by striking ``(a)(4) or (a)(5)'' and inserting
``(a)(4), (a)(5)(A), (a)(5)(B), (a)(5)(C), or (a)(7)''; and
(II) by striking ``such subsection'' and inserting ``this
section''; and
(D) by striking paragraph (4);
(3) in subsection (d), by inserting ``subsections
(a)(2)(A), (a)(2)(B), (a)(3), (a)(4), (a)(5), and (a)(6) of''
before ``this section.'';
(4) in subsection (e)--
(A) in paragraph (2)--
(i) by striking ``Federal interest'' and inserting
``protected'';
(ii) in subparagraph (A), by striking ``the use of the
financial institution's operation or the Government's
operation of such computer'' and inserting ``that use by or
for the financial institution or the Government''; and
(iii) by striking subparagraph (B) and inserting the
following:
``(B) which is used in interstate or foreign commerce or
communication;'';
(B) in paragraph (6), by striking ``and'' at the end;
(C) in paragraph (7), by striking the period at the end and
inserting ``; and''; and
(D) by adding at the end the following new paragraphs:
``(8) the term `damage' means any impairment to the
integrity or availability of data, a program, a system, or
information, that--
``(A) causes loss aggregating at least $5,000 in value
during any 1-year period to one or more individuals;
``(B) modifies or impairs, or potentially modifies or
impairs, the medical examination, diagnosis, treatment, or
care of one or more individuals;
``(C) causes physical injury to any person; or
``(D) threatens public health or safety; and
``(9) the term `government entity' includes the Government
of the United States, any State or political subdivision of
the United States, any foreign country, and any state,
province, municipality, or other political subdivision of a
foreign country.''; and
(5) in subsection (g)--
(A) by striking ``, other than a violation of subsection
(a)(5)(B),''; and
(B) by striking ``of any subsection other than subsection
(a)(5)(A)(ii)(II)(bb) or (a)(5)(B)(ii)(II)(bb)'' and
inserting ``involving damage as defined in subsection
(e)(8)(A)''.
TITLE III--TRANSFER OF PERSONS FOUND NOT GUILTY BY REASON OF INSANITY
SEC. 301. TRANSFER OF PERSONS FOUND NOT GUILTY BY REASON OF
INSANITY.
(a) Amendment of Section 4243 of Title 18.--Section 4243 of
title 18, United States Code, is amended by adding at the end
the following new subsection:
``(i) Certain Persons Found Not Guilty by Reason of
Insanity in the District of Columbia.--
``(1) Transfer to custody of the attorney general.--
Notwithstanding section 301(h) of title 24 of the District of
Columbia Code, and notwithstanding subsection 4247(j) of this
title, all persons who have been committed to a hospital for
the mentally ill pursuant to section 301(d)(1) of title 24 of
the District of Columbia Code, and for whom the United States
has continuing financial responsibility, may be transferred
to the custody of the Attorney General, who shall hospitalize
the person for treatment in a suitable facility.
``(2) Application.--
``(A) In general.--The Attorney General may establish
custody over such persons by filing an application in the
United States District Court for the District of Columbia,
demonstrating that the person to be transferred is a person
described in this subsection.
``(B) Notice.--The Attorney General shall, by any means
reasonably designed to do so, provide written notice of the
proposed transfer of custody to such person or such person's
guardian,
[[Page S12203]]
legal representative, or other lawful agent. The person to be
transferred shall be afforded an opportunity, not to exceed
15 days, to respond to the proposed transfer of custody, and
may, at the court's discretion, be afforded a hearing on the
proposed transfer of custody. Such hearing, if granted, shall
be limited to a determination of whether the constitutional
rights of such person would be violated by the proposed
transfer of custody.
``(C) Order.--Upon application of the Attorney General, the
court shall order the person transferred to the custody of
the Attorney General, unless, pursuant to a hearing under
this paragraph, the court finds that the proposed transfer
would violate a right of such person under the United States
Constitution.
``(D) Effect.--Nothing in this paragraph shall be construed
to--
``(i) create in any person a liberty interest in being
granted a hearing or notice on any matter;
``(ii) create in favor of any person a cause of action
against the United States or any officer or employee of the
United States; or
``(iii) limit in any manner or degree the ability of the
Attorney General to move, transfer, or otherwise manage any
person committed to the custody of the Attorney General.
``(3) Construction with other sections.--Subsections (f)
and (g) and section 4247 shall apply to any person
transferred to the custody of the Attorney General pursuant
to this subsection.''.
(b) Transfer of Records.--Notwithstanding any provision of
the District of Columbia Code or any other provision of law,
the District of Columbia and St. Elizabeth's Hospital--
(1) not later than 30 days after the date of enactment of
this Act, shall provide to the Attorney General copies of all
records in the custody or control of the District or the
Hospital on such date of enactment pertaining to persons
described in section 4243(i) of title 18, United States Code
(as added by subsection (a));
(2) not later than 30 days after the creation of any
records by employees, agents, or contractors of the District
of Columbia or of St. Elizabeth's Hospital pertaining to
persons described in section 4243(i) of title 18, United
States Code, provide to the Attorney General copies of all
such records created after the date of enactment of this Act;
(3) shall not prevent or impede any employee, agent, or
contractor of the District of Columbia or of St. Elizabeth's
Hospital who has obtained knowledge of the persons described
in section 4243(i) of title 18, United States Code, in the
employee's professional capacity from providing that
knowledge to the Attorney General, nor shall civil or
criminal liability attach to such employees, agents, or
contractors who provide such knowledge; and
(4) shall not prevent or impede interviews of persons
described in section 4243(i) of title 18, United States Code,
by representatives of the Attorney General, if such persons
voluntarily consent to such interviews.
(c) Clarification of Effect on Certain Testimonial
Privileges.--The amendments made by this section shall not be
construed to affect in any manner any doctor-patient or
psychotherapist-patient testimonial privilege that may be
otherwise applicable to persons found not guilty by reason of
insanity and affected by this section.
(d) Severability.--If any provision of this section, an
amendment made by this section, or the application of such
provision or amendment to any person or circumstance is held
to be unconstitutional, the remainder of this section and the
amendments made by this section shall not be affected
thereby.
TITLE IV--ESTABLISHMENT OF BOYS AND GIRLS CLUBS.
SEC. 401. ESTABLISHING BOYS AND GIRLS CLUBS.
(a) Findings and Purpose.--
(1) Findings.--The Congress finds that--
(A) the Boys and Girls Clubs of America, chartered by an
Act of Congress on December 10, 1991, during its 90-year
history as a national organization, has proven itself as a
positive force in the communities it serves;
(B) there are 1,810 Boys and Girls Clubs facilities
throughout the United States, Puerto Rico, and the United
States Virgin Islands, serving 2,420,000 youths nationwide;
(C) 71 percent of the young people who benefit from Boys
and Girls Clubs programs live in our inner cities and urban
areas;
(D) Boys and Girls Clubs are locally run and have been
exceptionally successful in balancing public funds with
private sector donations and maximizing community
involvement;
(E) Boys and Girls Clubs are located in 289 public housing
sites across the Nation;
(F) public housing projects in which there is an active
Boys and Girls Club have experienced a 25 percent reduction
in the presence of crack cocaine, a 22 percent reduction in
overall drug activity, and a 13 percent reduction in juvenile
crime;
(G) these results have been achieved in the face of
national trends in which overall drug use by youth has
increased 105 percent since 1992 and 10.9 percent of the
Nation's young people use drugs on a monthly basis; and
(H) many public housing projects and other distressed areas
are still underserved by Boys and Girls Clubs.
(2) Purpose.--It is the purpose of this section to provide
adequate resources in the form of seed money for the Boys and
Girls Clubs of America to establish 1,000 additional local
Boys and Girls Clubs in public housing projects and other
distressed areas by 2001.
(b) Definitions.--For purposes of this section--
(1) the terms ``public housing'' and ``project'' have the
same meanings as in section 3(b) of the United States Housing
Act of 1937; and
(2) the term ``distressed area'' means an urban, suburban,
or rural area with a high percentage of high risk youth as
defined in section 509A of the Public Health Service Act (42
U.S.C. 290aa-8(f)).
(c) Establishment.--
(1) In general.--For each of the fiscal years 1997, 1998,
1999, 2000, and 2001, the Director of the Bureau of Justice
Assistance of the Department of Justice shall provide a grant
to the Boys and Girls Clubs of America for the purpose of
establishing Boys and Girls Clubs in public housing projects
and other distressed areas.
(2) Contracting authority.--Where appropriate, the
Secretary of Housing and Urban Development, in consultation
with the Attorney General, shall enter into contracts with
the Boys and Girls Clubs of America to establish clubs
pursuant to the grants under paragraph (1).
(d) Report.--Not later than May 1 of each fiscal year for
which amounts are made available to carry out this Act, the
Attorney General shall submit to the Committees on the
Judiciary of the Senate and the House of Representatives a
report that details the progress made under this Act in
establishing Boys and Girls Clubs in public housing projects
and other distressed areas, and the effectiveness of the
programs in reducing drug abuse and juvenile crime.
(e) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section--
(A) $20,000,000 for fiscal year 1997;
(B) $20,000,000 for fiscal year 1998;
(C) $20,000,000 for fiscal year 1999;
(D) $20,000,000 for fiscal year 2000; and
(E) $20,000,000 for fiscal year 2001.
(2) Violent crime reduction trust fund.--The sums
authorized to be appropriated by this subsection may be made
from the Violent Crime Reduction Trust Fund.
TITLE V--USE OF CERTAIN TECHNOLOGY TO FACILITATE CRIMINAL CONDUCT
SEC. 501. USE OF CERTAIN TECHNOLOGY TO FACILITATE CRIMINAL
CONDUCT.
(a) Information.--The Administrative Office of the United
States courts shall establish policies and procedures for the
inclusion in all presentence reports of information that
specifically identifies and describes any use of encryption
or scrambling technology that would be relevant to an
enhancement under section 3C1.1 (dealing with Obstructing or
Impeding the Administration of Justice) of the Sentencing
Guidelines or to offense conduct under the Sentencing
Guidelines.
(b) Compiling and Report.--The United States Sentencing
Commission shall--
(1) compile and analyze any information contained in
documentation described in subsection (a) relating to the use
of encryption or scrambling technology to facilitate or
conceal criminal conduct; and
(2) based on the information compiled and analyzed under
paragraph (1), annually report to the Congress on the nature
and extent of the use of encryption or scrambling technology
to facilitate or conceal criminal conduct.
TITLE VI--TECHNICAL AND MINOR AMENDMENTS
SEC. 601. GENERAL TECHNICAL AMENDMENTS.
(a) Further Corrections to Misleading Fine Amounts and
Related Typographical Errors.--
(1) Sections 152, 153, 154, and 610 of title 18, United
States Code, are each amended by striking ``fined not more
than $5,000'' and inserting ``fined under this title''.
(2) Section 970(b) of title 18, United States Code, is
amended by striking ``fined not more than $500'' and
inserting ``fined under this title''.
(3) Sections 661, 1028(b), 1361, and 2701(b) of title 18,
United States Code, are each amended by striking ``fine of
under'' each place it appears and inserting ``fine under''.
(4) Section 3146(b)(1)(A)(iv) of title 18, United States
Code, is amended by striking ``a fined under this title'' and
inserting ``a fine under this title''.
(5) The section 1118 of title 18, United States Code, that
was enacted by Public Law 103-333--
(A) is redesignated as section 1122; and
(B) is amended in subsection (c) by--
(i) inserting ``under this title'' after ``fine''; and
(ii) striking ``nor more than $20,000''.
(6) The table of sections at the beginning of chapter 51 of
title 18, United States Code, is amended by adding at the end
the following new item:
``1122. Protection against the human immunodeficiency virus.''.
(7) Sections 1761(a) and 1762(b) of title 18, United States
Code, are each amended by striking ``fined not more than
$50,000'' and inserting ``fined under this title''.
(8) Sections 1821, 1851, 1852, 1853, 1854, 1905, 1916,
1918, 1991, 2115, 2116, 2191, 2192, 2194, 2199, 2234, 2235,
and 2236 of title 18, United States Code, are each amended by
striking ``fined not more than $1,000'' each place it appears
and inserting ``fined under this title''.
(9) Section 1917 of title 18, United States Code, is
amended by striking ``fined not less than $100 nor more than
$1,000'' and inserting ``fined under this title not less than
$100''.
(10) Section 1920 of title 18, United States Code, is
amended--
(A) by striking ``of not more than $250,000'' and inserting
``under this title''; and
(B) by striking ``of not more than $100,000'' and inserting
``under this title''.
(11) Section 2076 of title 18, United States Code, is
amended by striking ``fined not more than $1,000 or
imprisoned not more than one year'' and inserting ``fined
under this title or imprisoned not more than one year, or
both''.
[[Page S12204]]
(12) Section 597 of title 18, United States Code, is
amended by striking ``fined not more than $10,000'' and
inserting ``fined under this title''.
(b) Cross Reference Corrections and Corrections of
Typographical Errors.--
(1) Section 3286 of title 18, United States Code, is
amended--
(A) by striking ``2331'' and inserting ``2332'';
(B) by striking ``2339'' and inserting ``2332a''; and
(C) by striking ``36'' and inserting ``37''.
(2) Section 2339A(b) of title 18, United States Code, is
amended--
(A) by striking ``2331'' and inserting ``2332'';
(B) by striking ``2339'' and inserting ``2332a'';
(C) by striking ``36'' and inserting ``37''; and
(D) by striking ``of an escape'' and inserting ``or an
escape''.
(3) Section 1961(1)(D) of title 18, United States Code, is
amended by striking ``that title'' and inserting ``this
title''.
(4) Section 2423(b) of title 18, United States Code, is
amended by striking ``2245'' and inserting ``2246''.
(5) Section 3553(f) of title 18, United States Code, is
amended by striking ``section 1010 or 1013 of the Controlled
Substances Import and Export Act (21 U.S.C. 961, 963)'' and
inserting ``section 1010 or 1013 of the Controlled Substances
Import and Export Act (21 U.S.C. 960, 963)''.
(6) Section 3553(f)(4) of title 18, United States Code, is
amended by striking ``21 U.S.C. 848'' and inserting ``section
408 of the Controlled Substances Act''.
(7) Section 3592(c)(1) of title 18, United States Code, is
amended by striking ``2339'' and inserting ``2332a''.
(c) Simplification and Clarification of Wording.--
(1) The third undesignated paragraph of section 5032 of
title 18, United States Code, is amended by inserting ``or as
authorized under section 3401(g) of this title'' after
``shall proceed by information''.
(2) Section 1120 of title 18, United States Code, is
amended by striking ``Federal prison'' each place it appears
and inserting ``Federal correctional institution''.
(3) Section 247(d) of title 18, United States Code, is
amended by striking ``notification'' and inserting
``certification''.
(d) Correction of Paragraph Connectors.--Section 2516(1) of
title 18, United States Code, is amended--
(1) in paragraph (l), by striking ``or'' after the
semicolon; and
(2) in paragraph (n), by striking ``and'' where it appears
after the semicolon and inserting ``or''.
(e) Correction Capitalization of Items in List.--Section
504 of title 18, United States Code, is amended--
(1) in paragraph (1), by striking ``the'' the first place
it appears and inserting ``The''; and
(2) in paragraph (3), by striking ``the'' the first place
it appears and inserting ``The''.
(f) Corrections of Punctuation and Other Erroneous Form.--
(1) Section 656 of title 18, United States Code, is amended
in the first paragraph by striking ``Act,,'' and inserting
``Act,''.
(2) Section 1114 of title 18, United States Code, is
amended by striking ``1112.'' and inserting ``1112,''.
(3) Section 504(3) of title 18, United States Code, is
amended by striking ``importation, of'' and inserting
``importation of''.
(4) Section 3059A(a)(1) of title 18, United States Code, is
amended by striking ``section 215 225,,'' and inserting
``section 215, 225,''.
(5) Section 3125(a) of title 18, United States Code, is
amended by striking the close quotation mark at the end.
(6) Section 1956(c)(7)(B)(iii) of title 18, United States
Code, is amended by striking ``1978)'' and inserting
``1978''.
(7) The item relating to section 656 in the table of
sections at the beginning of chapter 31 of title 18, United
States Code, is amended by inserting a comma after
``embezzlement''.
(8) The item relating to section 1024 in the table of
sections at the beginning of chapter 47 of title 18, United
States Code, is amended by striking ``veterans''' and
inserting ``veteran's''.
(9) Section 3182 (including the heading of such section)
and the item relating to such section in the table of
sections at the beginning of chapter 209, of title 18, United
States Code, are each amended by inserting a comma after
``District'' each place it appears.
(10) The item relating to section 3183 in the table of
sections at the beginning of chapter 209 of title 18, United
States Code, is amended by inserting a comma after
``Territory''.
(11) The items relating to section 2155 and 2156 in the
table of sections at the beginning of chapter 105 of title
18, United States Code, are each amended by striking ``or''
and inserting ``, or''.
(12) The headings for sections 2155 and 2156 of title 18,
United States Code, are each amended by striking ``or'' and
inserting ``, or''.
(13) Section 1508 of title 18, United States Code, is
amended by realigning the matter beginning ``shall be fined''
and ending ``one year, or both.'' so that it is flush to the
left margin.
(14) The item relating to section 4082 in the table of
sections at the beginning of chapter 305 of title 18, United
States Code, is amended by striking ``centers,'' and
inserting ``centers;''.
(15) Section 2101(a) of title 18, United States Code, is
amended by striking ``(1)'' and by redesignating
subparagraphs (A) through (D) as paragraphs (1) through (4),
respectively.
(16) Section 5038 of title 18, United States Code, is
amended by striking ``section 841, 952(a), 955, or 959 of
title 21'' each place it appears and inserting ``section 401
of the Controlled Substances Act or section 1001(a), 1005, or
1009 of the Controlled Substances Import and Export Act''.
(g) Corrections of Problems Arising From Uncoordinated
Amendments.--
(1) Section 5032.--The first undesignated paragraph of
section 5032 of title 18, United States Code, is amended--
(A) by inserting ``section 922(x)'' before ``or section
924(b)''; and
(B) by striking ``or (x)''.
(2) Striking material unsuccessfully attempted to be
stricken from section 1116 by public law 103-322.--Subsection
(a) of section 1116 of title 18, United States Code, is
amended by striking ``, except'' and all that follows through
the end of such subsection and inserting a period.
(3) Elimination of duplicate amendment in section 1958.--
Section 1958(a) of title 18, United States Code, is amended
by striking ``or who conspires to do so'' where it appears
following ``or who conspires to do so'' and inserting a
comma.
(h) Insertion of Missing End Quote.--Section 80001(a) of
the Violent Crime Control and Law Enforcement Act of 1994 is
amended by inserting a close quotation mark followed by a
period at the end.
(i) Redesignation of Duplicate Section Numbers and
Conforming Clerical Amendments.--
(1) Redesignation.--That section 2258 added to title 18,
United States Code, by section 160001(a) of the Violent Crime
Control and Law Enforcement Act of 1994 is redesignated as
section 2260.
(2) Conforming clerical amendment.--The item in the table
of sections at the beginning of chapter 110 of title 18,
United States Code, relating to the section redesignated by
paragraph (1) is amended by striking ``2258'' and inserting
``2260''.
(3) Conforming amendment to cross-reference.--Section
1961(1)(B) of title 18, United States Code, is amended by
striking ``2258'' and inserting ``2260''.
(j) Redesignation of Duplicate Chapter Number and
Conforming Clerical Amendment.--
(1) Redesignation.--The chapter 113B added to title 18,
United States Code, by Public Law 103-236 is redesignated
chapter 113C.
(2) Conforming clerical amendment.--The table of chapters
at the beginning of part I of title 18, United States Code is
amended in the item relating to the chapter redesignated by
paragraph (1)--
(A) by striking ``113B'' and inserting ``113C''; and
(B) by striking ``2340.'' and inserting ``2340''.
(k) Redesignation of Duplicate Paragraph Numbers and
Correction of Placement of Paragraphs in Section 3563.--
(1) Redesignation.--Section 3563(a) of title 18, United
States Code, is amended by redesignating the second paragraph
(4) as paragraph (5).
(2) Conforming connector change.--Section 3563(a) of title
18, United States Code, is amended--
(A) by striking ``and'' at the end of paragraph (3); and
(B) by striking the period at the end of paragraph (4) and
inserting ``; and''.
(3) Placement correction.--Section 3563(a) of title 18,
United States Code, is amended so that paragraph (4) and the
paragraph redesignated as paragraph (5) by this subsection
are transferred to appear in numerical order immediately
following paragraph (3) of such section 3563(a).
(l) Redesignation of Duplicate Paragraph Numbers in Section
1029 and Conforming Amendments Related Thereto.--Section 1029
of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) by redesignating those paragraphs (5) and (6) which
were added by Public Law 103-414 as paragraphs (7) and (8),
respectively;
(B) by redesignating paragraph (7) as paragraph (9);
(C) by striking ``or'' at the end of paragraph (6) and at
the end of paragraph (7) as so redesignated by this
subsection; and
(D) by inserting ``or'' at the end of paragraph (8) as so
redesignated by this subsection;
(2) in subsection (e), by redesignating the second
paragraph (7) as paragraph (8); and
(3) in subsection (c)--
(A) in paragraph (1), by striking ``or (7)'' and inserting
``(7), (8), or (9)''; and
(B) in paragraph (2), by striking ``or (6)'' and inserting
``(6), (7), or (8)''.
(m) Insertion of Missing Subsection Heading.--Section
1791(c) of title 18, United States Code, is amended by
inserting after ``(c)'' the following subsection heading:
``Consecutive Punishment Required in Certain Cases.--''.
(n) Correction of Misspelling.--Section 2327(c) of title
18, United States Code, is amended by striking ``delegee''
each place it appears and inserting ``designee''.
(o) Correction of Spelling and Agency Reference.--Section
5038(f) of title 18, United States Code, is amended--
(1) by striking ``juvenille'' and inserting ``juvenile'',
and
(2) by striking ``the Federal Bureau of Investigation,
Identification Division,'' and inserting ``the Federal Bureau
of Investigation''.
(p) Correcting Misplaced Word.--Section 1028(a) of title
18, United States Code, is amended by striking ``or'' at the
end of paragraph (4) and inserting ``or'' at the end of
paragraph (5).
(q) Stylistic Correction.--Section 37(c) of title 18,
United States Code, is amended by inserting after ``(c)'' the
following subsection heading: ``Bar to Prosecution.--''.
(r) Mandatory Victim Restitution Act Amendments.--
(1) Order of restitution.--Section 3663 (a)(1)(A) of title
18, United States Code, is amended by adding at the end the
following: ``The court may also order, if agreed to by the
parties in a plea agreement, restitution to persons other
than the victim of the offense.''.
(2) Forfeiture.--Section 3663(c)(4) of title 18, United
States Code, is amended by inserting ``or chapter 96'' after
``under chapter 46''.
[[Page S12205]]
(3) Animal enterprise terrorism.--Section 43(c) of title
18, United States Code, is amended by inserting after
``3663'' the following: ``or 3663A''.
(4) Special assessment.--Section 3013(a)(2) of title 18,
United States Code, is amended by striking ``not less than''
each place that term appears.
(s) Clarifications to Antiterrorism and Effective Death
Penalty Act of 1996.--
(1) Jurisdiction.--Section 2332b(b)(1)(A) of title 18,
United States Code, is amended by--
(A) striking ``any of the offenders uses''; and
(B) inserting ``is used'' after ``foreign commerce''.
(2) Providing material support.--Section 2339A(a) of title
18, United States Code, is amended by inserting ``or an
escape'' after ``concealment''.
(3) Technical amendments.--Sections 2339A(a) and
2332b(g)(5)(B) of title 18, United States Code, are each
amended by inserting at the appropriate place in each
section's enumeration of title 18 sections the following:
``930(c),'', ``1992,'', and ``2332c,''.
SEC. 602. REPEAL OF OBSOLETE PROVISIONS IN TITLE 18
(a) Section 709 Amendment.--Section 709 of title 18, United
States Code, is amended by striking ``Whoever uses as a firm
or business name the words `Reconstruction Finance
Corporation' or any combination or variation of these words--
''.
(b) Section 1014 Amendment.--Section 1014 of title 18,
United States Code, is amended--
(1) by striking ``Reconstruction Finance Corporation,'';
(2) by striking ``Farmers' Home Corporation,''; and
(3) by striking ``of the National Agricultural Credit
Corporation,''.
(c) Section 798 Amendment.--Section 798(d)(5) of title 18,
United States Code, is amended by striking ``the Trust
Territory of the Pacific Islands,''.
(d) Section 281 Repeal.--Section 281 of title 18, United
States Code, is repealed and the table of sections at the
beginning of chapter 15 of such title is amended by striking
the item relating to such section.
(e) Section 510 Amendment.--Section 510(b) of title 18,
United States Code, is amended by striking ``that in fact''
and all that follows through ``signature''.
SEC. 603. TECHNICAL AMENDMENTS RELATING TO CHAPTERS 40 AND 44
OF TITLE 18.
(a) Elimination of Double Commas in Section 844.--Section
844 of title 18, United States Code, is amended in subsection
(i) by striking ``,,'' each place it appears and inserting a
comma.
(b) Replacement of Comma With Semicolon in Section 922.--
Section 922(g)(8)(C)(ii) of title 18, United States Code, is
amended by striking the comma at the end and inserting a
semicolon.
(c) Clarification of Amendment to Section 922.--
(1) Amendment.--Section 320927 of the Violent Crime Control
and Law Enforcement Act of 1994 (P.L. 103-322) is amended by
inserting ``the first place it appears'' before the period.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect as if the amendment had been included in
section 320927 of the Act referred to in paragraph (1) on the
date of the enactment of such Act.
(d) Stylistic Correction to Section 922.--Section 922(t)(2)
of title 18, United States Code, is amended by striking
``section 922(g)'' and inserting ``subsection (g)''.
(e) Elimination of Unnecessary Words.--Section 922(w)(4) of
title 18, United States Code, is amended by striking ``title
18, United States Code,'' and inserting ``this title''.
(f) Clarification of Placement of Provision.--
(1) Amendment.--Section 110201(a) of the Violent Crime
Control and Law Enforcement Act of 1994 (P.L. 103-322) is
amended by striking ``adding at the end'' and inserting
``inserting after subsection (w)''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect as if the amendment had been included in
section 110201 of the Act referred to in paragraph (1) on the
date of the enactment of such Act.
(g) Correction of Typographical Errors in List of Certain
Weapons.--Appendix A to section 922 of title 18, United
States Code, is amended--
(1) in the category designated
``Centerfire Rifles--Lever & Slide'',
by striking
``Uberti 1866 Sporting Rilfe''
and inserting the following:
``Uberti 1866 Sporting Rifle'';
(2) in the category designated
``Centerfire Rifles--Bolt Action'',
by striking
``Sako Fiberclass Sporter''
and inserting the following:
``Sako FiberClass Sporter'';
(3) in the category designated
``Shotguns--Slide Actions'',
by striking
``Remington 879 SPS Special Purpose Magnum''
and inserting the following:
``Remington 870 SPS Special Purpose Magnum''; and
(4) in the category designated
``Shotguns--Over/Unders'',
by striking
``E.A.A/Sabatti Falcon-Mon Over/Under''
and inserting the following:
``E.A.A./Sabatti Falcon-Mon Over/Under''.
(h) Insertion of Missing Commas.--Section 103 of the Brady
Handgun Violence Prevention Act (18 U.S.C. 922 note; Public
Law 103-159) is amended in each of subsections (e)(1), (g),
and (i)(2) by inserting a comma after ``United States Code''.
(i) Correction of Unexecutable Amendments Relating to the
Violent Crime Reduction Trust Fund.--
(1) Correction.--Section 210603(b) of the Violent Crime
Control and Law Enforcement Act of 1994 is amended by
striking ``Fund,'' and inserting ``Fund established by
section 1115 of title 31, United States Code,''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect as if the amendment had been included in
section 210603(b) of the Act referred to in paragraph (1) on
the date of the enactment of such Act.
(j) Correction of Unexecutable Amendment to Section 923.--
(1) Correction.--Section 201(1) of the Act, entitled ``An
Act to provide for a waiting period before the purchase of a
handgun, and for the establishment of a national instant
criminal background check system to be contacted by firearms
dealers before the transfer of any firearm.'' (Public Law
103-159), is amended by striking ``thereon,'' and inserting
``thereon''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect as if the amendment had been included in
the Act referred to in paragraph (1) on the date of the
enactment of such Act.
(k) Correction of Punctuation and Indentation in Section
923.--Section 923(g)(1)(B)(ii) of title 18, United States
Code, is amended--
(1) by striking the period and inserting ``; or''; and
(2) by moving such clause 4 ems to the left.
(l) Redesignation of Subsection and Correction of
Indentation in Section 923.--Section 923 of title 18, United
States Code, is amended--
(1) by redesignating the last subsection as subsection (l);
and
(2) by moving such subsection 2 ems to the left.
(m) Correction of Typographical Error in Amendatory
Provision.--
(1) Correction.--Section 110507 of the Violent Crime
Control and Law Enforcement Act of 1994 (Public Law 103-322)
is amended--
(A) by striking ``924(a)'' and inserting ``924''; and
(B) in paragraph (2), by striking ``subsections'' and
inserting ``subsection''.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect as if the amendments had been included in
section 110507 of the Act referred to in paragraph (1) on the
date of the enactment of such Act.
(n) Elimination of Duplicate Amendment.--Subsection (h) of
section 330002 of the Violent Crime Control and Law
Enforcement Act of 1994 is repealed and shall be considered
never to have been enacted.
(o) Redesignation of Paragraph in Section 924.--Section
924(a) of title 18, United States Code, is amended by
redesignating the 2nd paragraph (5) as paragraph (6).
(p) Elimination of Comma Erroneously Included in Amendment
to Section 924.--
(1) Amendment.--Section 110102(c)(2) of the Violent Crime
Control and Law Enforcement Act of 1994 (Public Law 103-322)
is amended by striking ``shotgun,'' and inserting
``shotgun''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect as if the amendment had been included in
section 110102(c)(2) of the Act referred to in paragraph (1)
on the date of the enactment of such Act.
(q) Insertion of Close Parenthesis in Section 924.--Section
924(j)(3) of title 18, United States Code, is amended by
inserting a close parenthesis before the comma.
(r) Redesignation of Subsections in Section 924.--Section
924 of title 18, United States Code, is amended by
redesignating the 2nd subsection (i), and subsections (j),
(k), (l), (m), and (n) as subsections (j), (k), (l), (m),
(n), and (o), respectively.
(s) Correction of Erroneous Cross Reference in Amendatory
Provision.--Section 110504(a) of the Violent Crime Control
and Law Enforcement Act of 1994 (Public Law 103-322) is
amended by striking ``110203(a)'' and inserting ``110503''.
(t) Correction of Cross Reference in Section 930.--Section
930(e)(2) of title 18, United States Code, is amended by
striking ``(c)'' and inserting ``(d)''.
(u) Correction of Cross References in Section 930.--The
last subsection of section 930 of title 18, United States
Code, is amended--
(1) by striking ``(g)'' and inserting ``(h)''; and
(2) by striking ``(d)'' each place such term appears and
inserting ``(e)''.
SEC. 604. ADDITIONAL AMENDMENTS ARISING FROM ERRORS IN PUBLIC
LAW 103-322.
(a) Stylistic Corrections Relating to Tables of Sections.--
(1) The table of sections at the beginning of chapter 110A
of title 18, United States Code, is amended to read as
follows:
``Sec.
``2261. Interstate domestic violence.
``2262. Interstate violation of protection order.
``2263. Pretrial release of defendant.
``2264. Restitution.
``2265. Full faith and credit given to protection orders.
``2266. Definitions.''.
(2) Chapter 26 of title 18, United States Code, is amended
by inserting after the heading for such chapter the following
table of sections:
``Sec.
``521. Criminal street gangs.''.
(3) Chapter 123 of title 18, United States Code, is amended
by inserting after the heading for such chapter the following
table of sections:
``Sec.
[[Page S12206]]
``2721. Prohibition on release and use of certain personal information
from State motor vehicle records.
``2722. Additional unlawful acts.
``2723. Penalties.
``2724. Civil action.
``2725. Definitions.''.
(4) The item relating to section 3509 in the table of
sections at the beginning of chapter 223 of title 18, United
States Code, is amended by striking ``Victims''' and
inserting ``victims'''.
(b) Unit Reference Corrections, Removal of Duplicate
Amendments, and Other Similar Corrections.--
(1) Section 40503(b)(3) of Public Law 103-322 is amended by
striking ``paragraph (b)(1)'' and inserting ``paragraph
(1)''.
(2) Section 60003(a)(2) of Public Law 103-322 is amended by
striking ``at the end of the section'' and inserting ``at the
end of the subsection''.
(3) Section 3582(c)(1)(A)(i) of title 18, United States
Code, is amended by adding ``or'' at the end.
(4) Section 102 of the Controlled Substances Act (21 U.S.C.
802) is amended by redesignating the second paragraph (43) as
paragraph (44).
(5) Subsections (a) and (b) of section 120005 of Public Law
103-322 are each amended by inserting ``at the end'' after
``adding''.
(6) Section 160001(f) of Public Law 103-322 is amended by
striking ``1961(l)'' and inserting ``1961(1)''.
(7) Section 170201(c) of Public Law 103-322 is amended by
striking paragraphs (1), (2), and (3).
(8) Subparagraph (D) of section 511(b)(2) of title 18,
United States Code, is amended by adjusting its margin to be
the same as the margin of subparagraph (C) and adjusting the
margins of its clauses so they are indented 2-ems further
than the margin of the subparagraph.
(9) Section 230207 of Public Law 103-322 is amended by
striking ``two'' and inserting ``2'' the first place it
appears.
(10) The first of the two undesignated paragraphs of
section 240002(c) of Public Law 103-322 is designated as
paragraph (1) and the second as paragraph (2).
(11) Section 280005(a) of Public Law 103-322 is amended by
striking ``Section 991 (a)'' and inserting ``Section
991(a)''.
(12) Section 320101 of Public Law 103-322 is amended--
(A) in subsection (b), by striking paragraph (1);
(B) in subsection (c), by striking paragraphs (1)(A) and
(2)(A);
(C) in subsection (d), by striking paragraph (3); and
(D) in subsection (e), by striking paragraphs (1) and (2).
(13) Section 320102 of Public Law 103-322 is amended by
striking paragraph (2).
(14) Section 320103 of Public Law 103-322 is amended--
(A) in subsection (a), by striking paragraph (1);
(B) in subsection (b), by striking paragraph (1); and
(C) in subsection (c), by striking paragraphs (1) and (3).
(15) Section 320103(e) of Public Law 103-322 is amended--
(A) in the subsection catchline, by striking ``Fair
Housing'' and inserting ``1968 Civil Rights''; and
(B) by striking ``of the Fair Housing Act'' and inserting
``of the Civil Rights Act of 1968''.
(16) Section 320109(1) of Public Law 103-322 is amended by
inserting an open quotation mark before ``(a) In General''.
(17) Section 320602(1) of Public Law 103-322 is amended by
striking ``whoever'' and inserting ``Whoever''.
(18) Section 668(a) of title 18, United States Code, is
amended--
(A) by designating the first undesignated paragraph that
begins with a quotation mark as paragraph (1);
(B) by designating the second undesignated paragraph that
begins with a quotation mark as paragraph (2); and
(C) by striking the close quotation mark and the period at
the end of the subsection.
(19) Section 320911(a) of Public Law 103-322 is amended in
each of paragraphs (1) and (2), by striking ``thirteenth''
and inserting ``14th''.
(20) Section 2311 of title 18, United States Code, is
amended by striking ``livestock'' where it appears in
quotation marks and inserting ``Livestock''.
(21) Section 540A(c) of title 28, United States Code, is
amended--
(A) by designating the first undesignated paragraph as
paragraph (1);
(B) by designating the second undesignated paragraph as
paragraph (2); and
(C) by designating the third undesignated paragraph as
paragraph (3).
(22) Section 330002(d) of Public Law 103-322 is amended by
striking ``the comma'' and inserting ``each comma''.
(23) Section 330004(18) of Public Law 103-322 is amended by
striking ``the Philippine'' and inserting ``Philippine''.
(24) Section 330010(17) of Public Law 103-322 is amended by
striking ``(2)(iii)'' and inserting ``(2)(A)(iii)''.
(25) Section 330011(d) of Public Law 103-322 is amended--
(A) by striking ``each place'' and inserting ``the first
place''; and
(B) by striking ``1169'' and inserting ``1168''.
(26) The item in the table of sections at the beginning of
chapter 53 of title 18, United States Code, that relates to
section 1169 is transferred to appear after the item relating
to section 1168.
(27) Section 901 of the Civil Rights Act of 1968 is amended
by striking ``under this title'' each place it appears and
inserting ``under title 18, United States Code,''.
(28) Section 223(a)(12)(A) of the Juvenile Justice and
Delinquency Prevention Act of 1974 (42 U.S.C. 5633(a)(12)(A))
is amended by striking ``law).'' and inserting ``law)''.
(29) Section 250008(a)(2) of Public Law 103-322 is amended
by striking ``this Act'' and inserting ``provisions of law
amended by this title''.
(30) Section 36(a) of title 18, United States Code, is
amended--
(A) in paragraph (1), by striking ``403(c)'' and inserting
``408(c)''; and
(B) in paragraph (2), by striking ``Export Control'' and
inserting ``Export''.
(31) Section 1512(a)(2)(A) of title 18, United States Code,
is amended by adding ``and'' at the end.
(32) Section 13(b)(2)(A) of title 18, United States Code,
is amended by striking ``of not more than $1,000'' and
inserting ``under this title''.
(33) Section 160001(g)(1) of Public Law 103-322 is amended
by striking ``(a) Whoever'' and inserting ``Whoever''.
(34) Section 290001(a) of Public Law 103-322 is amended by
striking ``subtitle'' and inserting ``section''.
(35) Section 3592(c)(12) of title 18, United States Code,
is amended by striking ``Controlled Substances Act'' and
inserting ``Comprehensive Drug Abuse Prevention and Control
Act of 1970''.
(36) Section 1030 of title 18, United States Code, is
amended--
(A) by inserting ``or'' at the end of subsection
(a)(5)(B)(ii)(II)(bb);
(B) by striking ``and'' after the semicolon in subsection
(c)(1)(B);
(C) in subsection (g), by striking ``the section'' and
inserting ``this section''; and
(D) in subsection (h), by striking ``section 1030(a)(5) of
title 18, United States Code'' and inserting ``subsection
(a)(5)''.
(37) Section 320103(c) of Public Law 103-322 is amended by
striking the semicolon at the end of paragraph (2) and
inserting a close quotation mark followed by a semicolon.
(38) Section 320104(b) of Public Law 103-322 is amended by
striking the comma that follows ``2319 (relating to copyright
infringement)'' the first place it appears.
(39) Section 1515(a)(1)(D) of title 18, United States Code,
is amended by striking ``; or'' and inserting a semicolon.
(40) Section 5037(b) of title 18, United States Code, is
amended in each of paragraphs (1)(B) and (2)(B), by striking
``3561(b)'' and inserting ``3561(c)''.
(41) Section 330004(3) of Public Law 103-322 is amended by
striking ``thirteenth'' and inserting ``14th''.
(42) Section 2511(1)(e)(i) of title 18, United States Code,
is amended--
(A) by striking ``sections 2511(2)(A)(ii), 2511(b)-(c),
2511(e)'' and inserting ``sections 2511(2)(a)(ii),
2511(2)(b)-(c), 2511(2)(e)''; and
(B) by striking ``subchapter'' and inserting ``chapter''.
(43) Section 1516(b) of title 18, United States Code, is
amended by inserting ``and'' at the end of paragraph (1).
(44) The item relating to section 1920 in the table of
sections at the beginning of chapter 93 of title 18, United
States Code, is amended by striking ``employee's'' and
inserting ``employees'''.
(45) Section 330022 of Public Law 103-322 is amended by
inserting a period after ``communications'' and before the
close quotation mark.
(46) Section 2721(c) of title 18, United States Code, is
amended by striking ``covered by this title'' and inserting
``covered by this chapter''.
(c) Elimination of Extra Words.--
(1) Section 3561(b) of title 18, United States Code, is
amended by striking ``or any relative defendant, child, or
former child of the defendant,''.
(2) Section 351(e) of title 18, United States Code, is
amended by striking ``involved in the use of a'' and
inserting ``involved the use of a''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of enactment of Public Law 103-
322.
SEC. 605. ADDITIONAL TYPOGRAPHICAL AND SIMILAR ERRORS FROM
VARIOUS SOURCES.
(a) Misused Connector.--Section 1958(a) of title 18, United
States Code, is amended by striking ``this title and
imprisoned'' and inserting ``this title or imprisoned''.
(b) Spelling Error.--Effective on the date of its
enactment, section 961(h)(1) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 is amended by
striking ``Saving and Loan'' and inserting ``Savings and
Loan''.
(c) Wrong Section Designation.--The table of chapters for
part I of title 18, United States Code, is amended in the
item relating to chapter 71 by striking ``1461'' and
inserting ``1460''.
(d) Internal Cross Reference.--Section 2262(a)(1)(A)(ii) of
title 18, United States Code, is amended by striking
``subparagraph (A)'' and inserting ``this subparagraph''.
(e) Missing Comma.--Section 1361 of title 18, United States
Code, is amended by inserting a comma after ``attempts to
commit any of the foregoing offenses''.
(f) Cross Reference Error From Public Law 103-414.--The
first sentence of section 2703(d) of title 18, United States
Code, by striking ``3126(2)(A)'' and inserting
``3127(2)(A)''.
(g) Internal Reference Error in Public Law 103-359.--
Section 3077(8)(A) of title 18, United States Code, is
amended by striking ``title 18, United States Code'' and
inserting ``this title''.
(h) Spelling and Internal Reference Error in Section
3509.--Section 3509 of title 18, United States Code, is
amended--
(1) in subsection (e), by striking ``government's'' and
inserting ``Government's''; and
(2) in subsection (h)(3), by striking ``subpart'' and
inserting ``paragraph''.
(i) Error in Subdivision From Public Law 103-329.--Section
3056(a)(3) of title 18, United
[[Page S12207]]
States Code, is amended by redesignating subparagraphs (1)
and (2) as subparagraphs (A) and (B), respectively and moving
the margins of such subparagraphs 2 ems to the right.
(j) Table of Contents Correction.--The table of contents at
the beginning of the Antiterrorism and Effective Death
Penalty Act of 1996 is amended by inserting ``TITLE I--HABEAS
CORPUS REFORM'' before the item relating to section 101.
(k) Correcting Error in Amendatory Instructions.--Section
107(b) of the Antiterrorism and Effective Death Penalty Act
of 1996 is amended by striking ``IV'' and inserting ``VI''.
(l) Correcting Error in Description of Provision Amended.--
With respect to subparagraph (F) only of paragraph (1) of
section 205(a) of the Antiterrorism and Effective Death
Penalty Act of 1996, the reference at the beginning of such
paragraph to ``subsection (a)(1)'' shall be deemed a
reference to ``subsection (a)''.
(m) Addition of Missing Reference.--Section 725(2) of the
Antiterrorism and Effective Death Penalty Act of 1996 is
amended by inserting ``(2)'' after ``subsection (b)''.
(n) Conforming Amendment to Table of Sections.--The table
of sections at the beginning of chapter 203 of title 18,
United States Code, is amended by inserting after the item
relating to section 3059A the following new item:
``3059B. General reward authority.''.
(o) Insertion of Missing Punctuation.--Section 6005(b)(3)
of title 18, United States Code, is amended by adding a
period at the end.
(p) Correction of Erroneous Section Number.--
(1) Section 2401 of title 18, United States Code, is
redesignated as section 2441.
(2) The item relating to section 2401 in the table of
sections at the beginning of chapter 118 of title 18, United
States Code, is amended by striking ``2401'' and inserting
``2441''.
(3) The table of chapters for part I of title 18, United
States Code, is amended in the item relating to chapter 118,
by striking ``2401'' and inserting ``2441''.
(q) Duplicate section number.--That section 2332d of title
18, United States Code, that relates to requests for military
assistance to enforce prohibition in certain emergencies is
redesignated as section 2332e and moved to follow the section
2332d that relates to financial transactions, and the item
relating to the section redesignated by this subsection is
amended by striking ``2332d` and inserting ``2332e'' and
moved to follow the item relating to the section 2332d that
relates to financial transactions.
(r) Correction of Word Usage.--Section 247(d) of title 18,
United States Code, is amended by striking ``notification''
and inserting ``certification''.
SEC. 606. ADJUSTING AND MAKING UNIFORM THE DOLLAR AMOUNTS
USED IN TITLE 18 TO DISTINGUISH BETWEEN GRADES
OF OFFENSES.
(a) Sections 215, 288, 641, 643, 644, 645, 646, 647, 648,
649, 650, 651, 652, 653, 654, 655, 656, 657, 658, 659, 661,
662, 665, 872, 1003, 1025, 1163, 1361, 1707, 1711, and 2113
of title 18, United States Code, are amended by striking
``$100'' each place it appears and inserting ``$1,000''.
(b) Section 510 of title 18, United States Code, is amended
by striking ``$500'' and inserting ``$1,000''.
SEC. 607. APPLICATION OF VARIOUS OFFENSES TO POSSESSIONS AND
TERRITORIES.
(a) Sections 241 and 242 of title 18, United States Code,
are each amended by striking ``any State, Territory, or
District'' and inserting ``any State, Territory,
Commonwealth, Possession, or District''.
(b) Sections 793(h)(1) and 794(d)(1) of title 18, United
States Code, are each amended by adding at the end the
following: ``For the purposes of this subsection, the term
`State' includes a State of the United States, the District
of Columbia, and any commonwealth, territory, or possession
of the United States.''.
(c) Section 925(a)(5) of title 18, United States Code, is
amended by striking ``For the purpose of paragraphs (3) and
(4)'' and inserting ``For the purpose of paragraph (3)''.
(d) Sections 1014 and 2113(g) of title 18, United States
Code, are each amended by adding at the end the following:
``The term `State-chartered credit union' includes a credit
union chartered under the laws of a State of the United
States, the District of Columbia, or any commonwealth,
territory, or possession of the United States.''.
(e) Section 1073 of title 18, United States Code, is
amended by adding at the end of the first paragraph the
following: ``For the purposes of clause (3) of this
paragraph, the term `State' includes a State of the United
States, the District of Columbia, and any commonwealth,
territory, or possession of the United States.''.
(f) Section 1715 of title 18, United States Code, is
amended by striking ``State, Territory, or District'' each
place those words appear and inserting ``State, Territory,
Commonwealth, Possession, or District''.
(g) Section 1716 of title 18, United States Code, is
amended--
(1) in subsection (g)(2) by striking ``State, Territory, or
the District of Columbia'' and inserting ``State'';
(2) in subsection (g)(3) by striking ``the municipal
government of the District of Columbia or of the government
of any State or territory, or any county, city, or other
political subdivision of a State'' and inserting ``any State,
or any political subdivision of a State''; and
(3) by adding at the end the following:
``(j) For purposes of this section, the term `State'
includes a State of the United States, the District of
Columbia, and any commonwealth, territory, or possession of
the United States.''.
(h) Section 1761 of title 18, United States Code, is
amended by adding at the end the following new subsection:
``(d) For the purposes of this section, the term `State'
means a State of the United States and any commonwealth,
territory, or possession of the United States.''.
(i) Section 3156(a) of title 18, United States Code, is
amended--
(1) by striking ``and'' at the end of paragraph (3);
(2) by striking the period and inserting ``; and'' at the
end of paragraph (4); and
(3) by adding at the end the following new paragraph:
``(5) the term `State' includes a State of the United
States, the District of Columbia, and any commonwealth,
territory, or possession of the United States.''.
(j) Section 102 of the Controlled Substances Act (21 U.S.C.
802) is amended--
(1) by amending paragraph (26) to read as follows:
``(26) The term `State' means a State of the United States,
the District of Columbia, and any commonwealth, territory, or
possession of the United States.''; and
(2) by redesignating paragraph (43), as added by section
90105(d) of the Violent Crime Control and Law Enforcement Act
of 1994, as paragraph (44).
(k) Section 1121 of title 18, United States Code, is
amended by adding at the end the following new subsection:
``(c) For the purposes of this section, the term `State'
means a State of the United States, the District of Columbia,
and any commonwealth, territory, or possession of the United
States.''.
(l) Section 228(d)(2) of title 18, United States Code, is
amended by inserting ``commonwealth,'' before ``possession or
territory of the United States''.
(m) Section 1546(c) of title 18, United States Code, is
amended by adding at the end the following: ``For purposes of
this section, the term `State' means a State of the United
States, the District of Columbia, and any commonwealth,
territory, or possession of the United States.''.
(n) Section 1541 of title 18, United States Code, is
amended--
(1) in the first undesignated paragraph, by striking ``or
possession''; and
(2) by adding at the end the following new paragraph:
``For purposes of this section, the term `State' means a
State of the United States, the District of Columbia, and any
commonwealth, territory, or possession of the United
States.''.
(o) Section 37(c) of title 18, United States Code, is
amended in the final sentence by inserting before the period
the following: ``, and the term `State' means a State of the
United States, the District of Columbia, and any
commonwealth, territory, or possession of the United
States''.
(p) Section 2281(c) of title 18, United States Code, is
amended in the final sentence by inserting before the period
the following: ``, and the term `State' means a State of the
United States, the District of Columbia, and any
commonwealth, territory, or possession of the United
States''.
(q) Section 521(a) of title 18, United States Code, is
amended by adding at the end the following: `` `State' means
a State of the United States, the District of Columbia, and
any commonwealth, territory, or possession of the United
States.''.
Mr. SPECTER. Mr. President, I am pleased that the Senate is acting
today to pass the Economic Espionage Act of 1996, legislation Senator
Kohl and I introduced earlier this year to combat economic espionage.
This bill addresses an issue of critical importance to our Nation's
economic well-being. It is a testament to the importance of the issue
that we are able to act in a bipartisan fashion on the eve of national
elections.
As chairman of both the Select Committee on Intelligence and the
Judiciary Committee's Subcommittee on Terrorism, Technology and
Government Information, with jurisdiction over legal matters involving
technology, I have been concerned with the threat posed to American
economic competitiveness in a global economy by the theft of
intellectual property and trade secrets.
In an increasingly complex and competitive economic world,
intellectual property forms a critical component of our economy. As
traditional industries shift to low-wage producers in developing
countries, our economic edge depends to an ever-increasing degree on
the ability of our businesses and inventors to stay one step ahead of
those in other countries. And American business and inventors have been
extremely successful and creative in developing intellectual property
and trade secrets. America leads the nation's of the world in
developing new products and new technologies. Millions of jobs depend
on the continuation of the productive minds of Americans, both native
born and immigrants who find the freedom here to try new ideas and add
to our economic strength.
Inventing new and better technologies, production methods, and the
like, can be expensive. American companies and the U.S. Government
spend billions on research and development. The benefits reaped from
these expenditures can easily come to nothing, however, if a competitor
can simply steal
[[Page S12208]]
the trade secret without expending the development costs. While prices
may be reduced, ultimately the incentives for new invention disappear,
along with jobs, capital investment, and everything else that keeps our
economy strong.
For years now, there has been mounting evidence that many foreign
nations and their corporations have been seeking to gain competitive
advantage by stealing the trade secrets, the intangible intellectual
property of inventors in this country. The Intelligence Committee has
been aware that since the end of the cold war, foreign nations have
increasingly put their espionage resources to work trying to steal
American economic secrets. Estimates of the loss to U.S. business from
the theft of intangible intellectual property exceed $100 billion. The
loss in U.S. jobs is incalculable.
For the benefit of my colleagues who wish more detail about the
nature and scope of the problem of economic espionage, I ask unanimous
consent that a copy of the article ``The Lure of the Steal'' from the
March 4, 1996, U.S. News & World Report, and an article by Peter
Schweizer, ``The Growth of Economic Espionage--America if Target Number
One'' from the January-February 1996 edition of Foreign Affairs be
printed at the end of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. SPECTER. Mr. President, a major problem for law enforcement in
responding to the increase in such thefts has been a glaring gap in
Federal law. For many years, the United States has had a variety of
theft statutes in the United States Code. These laws are derived
primarily from the common law of theft. For example, it violates
Federal law to move stolen property across State lines. In order to
violate such laws, however, the courts have held that the property
stolen cannot be intangible property, such as trade secrets or
intellectual property. In addition, theft usually requires that the
thief take the property with the intention of depriving the lawful
owner of its use. But such a test if useless when a person copies
software and leaves the original software with the lawful owner, taking
only the secrets on the software but leaving the physical property. The
lawful owner still has full use of the property, but its value is
significantly reduced.
In order to update Federal law to address the technological and
economic realities of the end of the 20th century, I began working
earlier this year with Senator Kohl and officials from the Department
of Justice and the Federal Bureau of Investigation on developing
legislation. We developed two separate bills, that were introduced as
S. 1556 and S. 1557. The former bill broadly prohibited the theft of
proprietary economic information by any person. The latter bill was
more narrowly drawn to proscribe such thefts by foreign nations and
those working on behalf of foreign nations.
At the end of February, I chaired a joint hearing of the Intelligence
Committee and the Judiciary Subcommittee on Terrorism, Technology, and
Government Information on the issue of economic espionage. Continuing
to work closely with members of the Judiciary and Intelligence
Committees, the administration, and various industry groups, Senator
Kohl and I were able to produce the bill the Senate is today
considering.
The Senate adopted S. 1556 with an amendment I offered, based on S.
1557, to bring together into a single vehicle the prohibition on the
theft of trade secrets and proprietary information by both private
individuals and corporations and by foreign governments and those
acting on their behalf, and passed them using H.R. 3723, the House
companion bill, as the vehicle. The language of my amendment dealing
with foreign-government-sponsored economic espionage was, with minor
changes, unanimously reported to the Senate by the Intelligence
Committee earlier this year as part of the Intelligence Authorization
Act. We have now reconciled the Senate- and House-passed bills in this
agreement, which also incorporates several unrelated provisions.
Senator Kohl and I are inserting into the Record a managers' statement
which reflects the understanding of the bill's sponsors on the intent
behind and meaning of the economic espionage bill.
Adoption of this bill will not be a panacea, but it is a start.
Congress has started moving to protect U.S. economic interests. For
example, earlier this year we enacted strong anticounterfeiting
legislation, S. 1136, to protect American business from counterfeit
goods. This bill addresses cognate problems. Both are only a start.
Corporations must exercise vigilance over their trade secrets and
proprietary information. Contract law may provide civil remedies. In
addition, some States have adopted legislation to allow the owners of
trade secrets to use civil process to protect their ownership rights.
We have been made aware that available civil remedies may not be
adequate to the task and that a Federal civil cause of action is
needed. This is an issue we need to study carefully, and will do so
next year.
For helping to make sure that this legislation was passed this year,
I want to thank Senator Kohl for his leadership, and acknowledge the
work of his excellent staff, Jon Leibowitz and Victoria Bassetti. I
also want to thank the chairman of the Judiciary Committee, Senator
Hatch, and his staff, especially Paul Larkin and Pat Murphy, for their
valuable contributions to this legislation. I would also be remiss if I
did not also thank Chairman McCollum of the House Crime Subcommittee,
and Representative Schumer, ranking member of that Subcommittee, and
their staff, Glenn Schmitt and Bill McGeveran, for their hard work.
Finally, we worked closely with the Justice Department and the Federal
Bureau of Investigation in developing this legislation, and I want to
thank Alan Hoffman of the Justice Department and Pat Kelly of the FBI
for their hard work on this bill.
Exhibit 1
[From U.S. News & World Report, Mar. 4, 1996]
The Lure of the Steal
(By Douglas Pasternak with Gordon Witkin)
Not long ago, Subrahmanyam M. Kota went into hamsters--or,
to be more precise, their ovary cells. That was a big switch
for Kota. In the 1980s, he allegedly sold military secrets on
infrared detectors to the KGB. With the cold war over,
however, hamster ovaries were the coming thing. A Boston
biotech company had genetically engineered the cells to
produce a protein that boosted the manufacture of red blood
cells, making them a valuable commodity. Kota and a former
company scientist are charged with stealing a batch of the
hamster cells and offering them to an FBI undercover agent in
exchange for $300,000. Law enforcement officials suspect the
pair of selling another batch to a biomedical research outfit
in India. It was dramatic evidence of how the world of
espionage has changed--from selling secrets to the KGB one
year to moving hamster ovaries to a research firm in India
another. Kota has been charged with three counts of
espionage. He pleaded not guilty and is out on bail awaiting
trial.
Today the field of economic espionage is wide open. Instead
of missile launch codes, the new targets of choice are
technological and scientific data concerning flat-panel
televisions, electric cars and new computers. ``During the
cold war, we thought of the threat as KGB agents crawling
into the facility,'' says Gregory Gwash, the deputy director
for industrial security matters at the Defense Investigative
Service. ``The game is no longer espionage in the classic
sense.''
growing threat
Economic espionage is as old as greed itself. But with huge
sums to be made stealing designs for computer chips and
patents for hormones, the threat is growing. Rapid changes in
technology are tempting many countries to try to acquire
intellectual properties in underhanded ways, thus bypassing
the enormous costs of research and development. New
global communications--cellular phones, faxes, voice
transmissions and data on the Internet--make this type of
spying easier than ever.
And it's not just hostile governments snooping. ``Countries
don't have friends. They have interests!'' declares a poster
from the Department of Energy's counterintelligence program.
``Guess which countries are interested in what you do?'' A
senior U.S. intelligence official answers the question. ``The
ones who do it most,'' he says, ``are our greatest friends.''
Indeed, countries such as France, Israel and China have
made economic espionage a top priority of their foreign
intelligence services. A congressional report released last
week confirmed that close U.S. allies are after critical U.S.
technology, saying they posed ``a significant threat to
national security.''
intensified efforts
Friend or enemy, Washington is taking the trend seriously.
The nation's intelligence agencies are increasing their
overseas collection of information on foreign bribery
[[Page S12209]]
schemes that put U.S. corporations at a disadvantage. The
agencies are also providing classified information to U.S.
policy makers engaged in trade negotiations with foreign
governments. Domestically, the FBI has also taken more-
aggressive steps recently. This month, the Justice Department
sent new draft legislation that would bolster the FBI's
ability to investigate economic espionage to the Office of
Management and Budget. The new bill--named the Economic
Espionage and Protection of Proprietary Economic Information
Act of 1996--is badly needed, says the FBI, because there are
no statutes that deal with the theft of intellectual
property, making it difficult to prosecute such cases.
In the past year, FBI agents have recorded more than a 100
percent increase in economic spying and now have more than
800 cases under investigation--espionage attempts from the
supersophisticated to the downright crude. ``We're seeing all
of the above,'' says Robert ``Bear'' Bryant, who oversees all
FBI counterintelligence investigations nationwide, ``from the
cyberattack to the shoplifter.''
Economic-espionage investigations require the FBI to gather
intelligence through electronic surveillance and physical
searches, a source of concern to many civil libertarians. But
the FBI is empowered under existing law to gather
intelligence for such purposes, and the new legislation would
define more precisely how and when FBI agents could
investigate the theft of corporate secrets. The key, legal
specialists and FBI supervisors say, is defining precisely
what constitutes conducting intelligence investigations,
looking for spies and theft prevention, and what is a
primarily criminal investigation whose objective is to put a
spy behind bars. Both objectives can be accomplished, but the
law requires intelligence and law enforcement interests be
defined very carefully.
The quest for corporate advantage has put many of the old
players from the cold war back on the chessboard. Just this
month. Russian President Boris Yeltsin ordered his senior
intelligence officials to increase their efforts to obtain
high-technology secrets from the West.
Besides gathering intelligence and conducting criminal
investigations, federal law enforcement officials have been
trying to help corporations protect themselves. A law enacted
in 1994 authorizes Attorney General Janet Reno to make
payments of up to $500,000 for information leading to the
arrest and conviction of anyone involved in economic
espionage. The National Counterintelligence Center, headed by
an FBI agent but based at CIA headquarters in suburban
Virginia, was established in August 1994, in part to help
coordinate a governmentwide response to economic espionage
incidents. The center began providing regional security
briefings for industry last May. The FBI recently opened its
own Economic Counterintelligence Unit, and its Development of
Espionage, Counterintelligence and Counterterrorism Awareness
(DECA) program inaugurated an instant fax alert service to
U.S. corporations regarding specific economic-intelligence-
collection activities. It is supplemented by the State
Department's Overseas Security Advisory Council, which, like
DECA, has begun posting economic threat information on an on-
line bulletin board for its members.
Some security experts say the FBI should employ more active
measures to counter the threat. Mike Sekora tracked the
global technology trade for the Defense Department in the
1980s, identifying foreign interest in U.S. technology to
pre-empt thefts. Now a technology consultant, he believes the
FBI should do the same.
Profit motives aside, economic espionage is booming because
there are few penalties for those who get caught. Rarely do
economic spies serve time in jail. Nor do countries that
encourage such activities have much to lose; since most are
U.S. allies, Washington prefers to scold them in private
rather than risk political backlash in public.
Companies and industries targeted by foreign spies often
contribute to the problem. Few report known acts of
espionage, fearing it will affect stock prices and
customer confidence. In a survey published in July by the
National Counterintelligence Center, 42 percent of the
responding corporations said they never reported suspected
incidents of economic espionage to the government. At the
same time, 74 of 173 companies that responded to the
survey reported a total of 446 incidents of suspected
economic espionage.
culturebound
The methods used to acquire economic-related data are often
culturebound. ``The Chinese and Japanese flood you with
people collecting all sorts of things in different areas,''
says a former FBI official. ``For the most part, it is
absolutely legal,'' he said. ``The Japanese don't invest a
lot of money in trade craft. They just send lots of people
out talking and pick up trade secrets in the process,'' says
the retired official. The Russians and French, on the other
hand, use both legal and illegal means to target specific
intelligence, experts say.
Targeting economic data can take many forms. In two
separate incidents in the early 1990s, French nationals
working at Renaissance Software Inc. in Palo Alto, Calif.,
were arrested at San Francisco International Airport for
attempting to steal the company's proprietary computer source
codes. Marc Goldberg, a French computer engineer, had worked
at the company under a program sponsored by the French
Ministry of Foreign Affairs that allows French citizens to
opt out of military service if they are willing to work at
high-tech U.S. firms. He was fined $1,000 and ordered to
perform 1,000 hours of community service. The other
individual, Jean Safar, was released soon after his arrest by
the FBI. ``They said they did not have the power to do
anything,'' recalls Renaissance's former president, Patrick
Barkhordarian. The company, in fact, had received start-up
funds from two French brothers, Daniel and Andrew Harari. In
return for their investment, they received positions on the
company's five-member board of directors. When an internal
dispute erupted in 1992, the Harari brothers were able to
place a third French citizen on the board. ``They converted
the company to a French company,'' said Barkhordarian. Safar
was told by the company, claims Barkhordarian, to take the
source codes to France. There was nothing illegal about it.
Renaissance was acquired by a publicly held U.S. company last
fall.
Even when the collection methods are legal, the results can
hurt. In the summer of 1994, a film crew from Japanese public
television visited dozens of U.S. biotech corporations,
including California biotech giant Amgen, while filming a
documentary on the industry. William Boni, Amgen's security
director, was warned by a DECA agent that the FBI suspected
the film was a cover for intelligence collection. Still, Boni
allowed the visit, partly because the director of the film
said this would help Amgen break into the Japanese biotech
market. Once at Amgen, film crew members photographed every
document they possibly could, including company production
numbers. ``This was a very clear-cut case of benchmarking
America's best practices for their industry,'' says Boni.
``They ran their vacuum cleaner over the U.S. biotech
industry.''
Some efforts are not so subtle. In one case, an Amgen
employee attempted to steal vials of Epogen, a genetically
engineered hormone that controls the production of red blood
cells and is one of two patented items in the company's
product line. Security chief Boni was tipped to the threat
by an anonymous letter, which said that the employee was
planning to open up a black market in Epogen in his home
country in Asia. The employee confessed. He was fired, but
no charges were filed. Had the theft attempt succeeded,
the rogue employee and an accomplice could have made a
fortune. In 1995, Epogen sales amounted to nearly $1
billion.
Neither of the two prongs of the U.S. attempt to combat
such threats is simple. Like his predecessors, Directories of
Central Intelligence John Deutch has provided clear marching
orders to the CIA and other agencies that gather intelligence
overseas. The agencies are to inform U.S. policy makers if
foreign competitors are winning business abroad through
bribery or other illegal means. In 1994, Boeing Aerospace,
McDonnel Douglas and Raytheon Corp, won two multibillion-
dollar contracts from Saudi Arabia and Brazil after President
Clinton complained to those governments about bribes that
rival French companies had paid to win the contracts, the
information on the bribes came from U.S. intelligence
agencies, President Clinton strongly endorses such action.
``You uncovered bribes that would have cheated American
companies out of billions of dollars,'' he told a gathering
of CIA employees last July. Over the past three years, the
CIA has reportedly saved U.S. corporations $30 billion as a
result of those efforts.
Threat information
Deutch has made it clear that, unlike the foreign
intelligence services of at least 50 other nations, America's
spy services are forbidden to engage in economic espionage
for the benefit of corporate America. That's clear enough,
but in today's global, multinational economy, it is often
difficult to distinguish American from foreign corporations.
The FBI, in fact, makes no such distinctions and provides all
corporations operating in the United States with threat
information regarding economic expionage.
The other mission of the CIA and its sister agencies that
operate abroad is to provide economic intelligence to U.S.
policy makers. Last spring, the intelligence community helped
U.S. trade officials learn of Japanese negotiating positions
during automobile trade talks. This was perfectly legal under
U.S. law, but the press disclosure prompted a firestorm of
criticism from Capitol Hill, prompting some intelligence
officials to grumble that such activities were more trouble
then they were worth. Last year, several CIA officers were
expelled from France for engaging in an intelligence
operation to obtain information on France's position on
global telecommunications talks. The CIA's inspector general
investigated the matter, and a report is expected shortly.
Given the ratio of risk to potential reward, many
intelligence officials argue that America's espionage
agencies should not be used to acquire economic information
secretly when so much can be obtained from open sources.
``What you try to gain covertly,'' says Charles Emmling, a
former CIA case officer who recruited Soviet agents from
1968 to 1991 and now teaches businesses how to protect
their corporate trade secrets at Aegis Research Corp.,
``becomes less and less important.'' Robert Steele, a 20-
year veteran of the CIA's clandestine service, says the
agency relies on cloak-and-dagger techniques out of habit.
``Don't send a spy,''
[[Page S12210]]
Steele says, ``where a schoolboy can go.'' That was
precisely the mistake the CIA made last year in France,
critics say.
The second prong of the U.S. effort, playing defense, is
also more complicated than ever. Kenneth Geide, the head of
the FBI's new economic counterintelligence unit, says that
there are a host of ways to go after a target and that often
``foreign governments are hiding their collection
[activities] within legitimate activities.''
But some former law enforcement and intelligence officials
fear that legal collection of information may be investigated
simply to determine if illegal methods are being used. They
argue that the onus of protecting proprietary information
should remain on the shoulders of industry, not government.
``It is our responsibility to protect this [information], and
it is our liability if we don't,'' contends a former
intelligence official now in the private sector. There is
still debate on the proper balanced role of law enforcement
in countering this new threat within government as well. ``We
don't want the FBI in our bedrooms or our boardrooms,'' quips
a senior administration official.
The FBI defends its approach and has vowed not to overstep
its bounds. How to meet such a varied threat? ``We don't
intend to, want to and can't investigate all foreigners,''
Geide says. The threat to America's national security from
spies seeking economic secrets has increased significantly,
but Geide says: ``We don't want to be alarmist about it. It
deserves a measured approach.''
____
The Growth of Economic Espionage
(By Peter Schweizer)
Shortly after CIA officer Aldrich ``Rick'' Ames began
selling secrets to the Soviet KGB in 1985, a scientist named
Ronald Hoffman also began peddling classified information.
Ames, the last known mole of the Cold War, received $4.6
million for names of CIA informants before he was apprehended
in early 1994. But Hoffman, a project manager for a company
called Science Applications, Inc., made $750,000 selling
complex software programs developed under secret contract for
the Strategic Defense Initiative (SDI). Hoffman, who was
caught in 1992, sold his wares to Japanese multinationals--
Nissan Motor Company, Mitsubishi Electric, Mitsubishi Heavy
Industries, and Ishikawajima-Harima Heavy Industries--that
wanted the information for civilian aerospace programs.
Ames received the more dramatic and sensational coverage,
as he should have, given that his betrayal led to the loss of
life. But the Hoffman case represents the future of
intelligence. While one spied for America's chief military
rival, the other sold information to a major economic
competitor. Perhaps it should induce an epiphany of sorts
that these two cases occurred in near congruence.
As economic competition supplants military confrontation in
global affairs, spying for high-tech secrets with commercial
applications will continue to grow, and military spying will
recede into the background. How the United States elects to
deal with this troubling issue will not only determine the
direction of the American intelligence community, but also
set the tone for commercial relations in the global
marketplace.
the new currency of power
Most economic agents systematically collect economic
intelligence using legal means. Major corporations collect
business intelligence to read industry trends and scout the
competition. Many nations track global and regional economic
trends and even technological breakthroughs to aid
policymakers. But a growing number of states have become
very active in gathering intelligence on specific
industries or even companies and sharing it with domestic
producers. Indeed, economic espionage, the outright theft
of private information, has become a popular tool as
states try to supplement their companies' competitive
advantage. This is sheer folly, threatening to restore
mercantilism through the back door.
The United States has devoted increasing attention to
intelligence on economic issues, sometimes with diplomatic
consequences. French Interior Minister Charles Pasqua
summoned U.S. Ambassador Pamela Harriman to his office on
January 26 of this year to protest U.S. spying on French
commercial and technological developments. According to Le
Monde, CIA agents flush with 500-franc notes tried to bribe a
member of the French parliament to reveal France's
negotiating position on the nascent World Trade Organization.
A senior official in the Ministry of Communications was
offered cash for intelligence on telecommunications and
audiovisual policy. A technician for France Telecom, the
national telephone network, was also approached. All three
immediately notified the French Directorate of Territorial
Surveillance, which ordered them to play along with the
Americans and lay a trap.
More recently, an October 15 story in The New York Times
disclosed that American intelligence agents assisted U.S.
trade negotiators by eavesdropping on Japanese officials in
the cantankerous dispute over car imports. U.S. Trade
Representative Mickey Kantor and his aides were the reported
beneficiaries of daily briefings by the CIA, including
information gathered by the CIA's Tokyo station and the
National Security Agency's vast electronic network. How
useful this information was remains open to debate. After
all, the agreement the United States and Japan ultimately
reached was hardly an unambiguous victory for Washington.
These reports, which appear to be accurate, indicate that
the United States is following the model for economic
intelligence several recent CIA directors have proposed. In
1991, believing that the CIA could make a ``unique
contribution'' by uncovering foreign economic espionage in
the United States and gathering information about the
attempts of other governments to violate international trade
agreements and ``other basic rules of fair play,'' Robert
Gates called for a deeper look at applying the tools of
intelligence to economic matters. By 1993, James Woolsey had
declared no more Mr. Nice Guy and promised that the CIA would
sniff out unfair trade practices and industrial espionage
directed against American firms.
Even with all this heightened activity and interest, the
United States is far less involved in economic espionage than
most of its major allies and trading partners. Spying on
trade negotiators and attempting to obtain commercial
information to assist government policymakers is economic
espionage at its most benign level and should be expected.
The United States has yet to surmount the critical firewall
of passing purloined information to domestic companies
competing in the global marketplace. It is in this area that
the most damage is done to the international trading system
and where most major industrialized countries have operated.
Over the past 15 years, the FBI has chronicled numerous
cases involving France, Germany, Japan, Israel, and South
Korea. An FBI analysis of 173 nations found that 57 were
covertly trying to obtain advanced technologies from U.S.
corporations. Altogether, 100 countries spent some public
funds to acquire U.S. technology. Former French Intelligence
Director Pierre Marion put it succinctly when he told me,
``In economics, we are competitors, not allies. America has
the most technical information of relevance. It is easily
accessible. So naturally your country will receive the most
attention from the intelligence services.''
Recent data indicate that American industry has felt the
effects of such unwanted attention. A 1993 survey
commissioned by the American Society for Industrial Security
found a dramatic upswing in the theft of proprietary
information from corporate America. The number of cases
increased 260 percent since 1985; those with foreign
involvement shot up fourfold. A 1993 study by R. J. Heffeman
and Associates noted that an average of about three incidents
every month involve the theft of proprietary information from
American companies by foreign entities. These estimates are
probably conservative. Companies prefer not to admit they
have been victims. An admission can depress the price of
their stock, ruin joint ventures, or scuttle U.S. government
contracts.
The sort of espionage that threatens U.S. corporations
varies with the national characteristics and culture of the
perpetrators. France possesses a well-developed intelligence
service, one of the most aggressive collectors of economic
intelligence in the world. Using techniques often reminiscent
of the KGB or spy novels, the French in recent years have
planted moles in U.S. companies such as IBM, Texas
Instruments, and Corning. Japan lacks a large formal
intelligence service such as the CIA or Direction Generale de
la Securite Exterieure (DGSE) but remains an active acquirer
of business information. A public-private partnership has
evolved between the Ministry for International Trade and
Industry and the Japan External Trade Organization,
supplementing and nurturing the already well-developed
commercial intelligence networks created by Japanese
corporations. These commercial networks rival the
intelligence services of medium-sized nations. Matsushita's
intelligence operations in the United States, for example,
occupy two full floors of a Manhattan skyscraper, according
to Herb Meyer, special assistant to CIA Director William
Casey during the Reagan administration.
the gains from theft
That so many states practice economic espionage is a
testament to how profitable it is believed to be. Marion
boasts that during his tenure, France won a $2 billion
airplane deal with India thanks to the work of the DGSE. The
late French spy chief Count De Marenches typified the French
view when he wrote in his memoirs that economic espionage is
``very profitable. . . . In any intelligence service worthy
of the name you would easily come across cases where the
whole year's budget has been paid for in full by a single
operation.''
Economic espionage threatens to unhinge certain post-Cold
War goals such as arms control. On-site inspections, a
necessity for some agreements, create institutional
opportunities to engage in espionage. The Chemical
Manufacturers Association, for example, fears that a chemical
weapons treaty with a rigid on-site verification regime could
subject 50,000 industrial sites in the United States to
systematic international inspection and monitoring. Officials
from any number of countries would have access to sensitive
information about the American chemical industry, including
plant layouts, production levels, perhaps even formulas.
Intelligence collection is a proper function of the state--
protecting the national interest and informing statecraft.
But collecting proprietary information and sharing it with
domestic producers in an entirely different
[[Page S12211]]
matter. That kind of economic espionage ought to be called
what it is: at best a subsidy to well-connected domestic
companies, at worst theft on a par with piracy. Economic
espionage can grossly disrupt trade and corrode a nation's
science and technology base. It is a parasitic act, relying
on others to make costly investments of time and money. And
to destroy the rewards of investment is to destroy the
incentive to innovate.
the quaint united states
This is a decidedly minority point of view in the world
marketplace. The rest of the world does not share the
American capitalist ethos of vigorous but open competition.
In both Europe and Asia, the American law that bars U.S.
corporations from bribing foreign officials is viewed as
quaint. Antitrust laws are likewise dismissed as an American
idiosyncrasy. The semi-corporatist cultures of continental
Europe and Asia view the state-business relationship very
differently than does the United States. There is a popular
old joke in American business circles: ``What are the nine
scariest words in the English language?'' ``I'm from the
government and here to help you.'' This quip would hardly
garner a smile in Tokyo, Paris, or Berlin.
Early indications are that Russia is more likely to embrace
the semi-corporatist view than the American laissez-faire
model. The transition from communism to capitalism means only
that Russian intelligence will have a greater business
orientation. Russian intelligence officials speak of
nonbudgetary resources for defense and security policy.
And as James Sherr of Oxford University pointed out in the
winter 1994-95 National Interest, Russian intelligence
officials are blurring the distinction between, if not
merging, state policy and private pursuits. The newly
created Federal Agency for Government Communications and
Information indicates this trend. Encompassing the former
KGB's communication's assets, it is both a ``strictly
classified organization'' and a business, with the right
to contract with foreign investors, invest in foreign
commercial entities, and set up companies abroad.
As economic strength in part replaces military might as the
currency of national power, one can only expect this trend to
continue. Trade talks have supplanted arms control as the
most acrimonious, demanding, and headline--grabbing form of
diplomacy, a certain sign of changing priorities.
Consequently, most intelligence organizations around the
globe are all too willing to serve as a competitive tool to
protect budgets in lean times.
The current interregnum between the Cold War and the new
era of economic conflict provides an opportunity finally to
address this issue. Fissures or disagreements within the
Western alliance no longer have the dangerous consequences
they might have had at the height of the Cold War. The United
States needs to treat economic espionage no only as an
intelligence issue, but as the competitiveness and economic
issue it has become. Until it does, the American response
will be spotty, and the results minimal.
In 1991 the FBI began a quiet shift from the traditional
focus of its counterintelligence policy. The country criteria
list, which identified nations whose intelligence services
needed watching, has been replaced by the national security
threat list, which identifies key American technologies and
industries that should be protected. This is an important
first step. But even a successful counterintelligence
operation will accomplish little unless there are
consequences for those who are caught. In the past, ensnared
thieves usually receive a slap on the wrist. When prosecuted
in a court of law, it has usually been under statutes that
make it illegal to transfer stolen goods across state lines.
This is a difficult legal standard, particularly since some
judges believe that information is not a good.
Changes in U.S. law and greater diplomatic fortitude offer
the best hope for grappling with this problem. When Hitachi
admitted in court that its employees tried to purchase stolen
``Adirondack'' computer design workbooks from IBM, the judge
in 1983 fined the company a whopping $10,000. The U.S.
government did not blink an eye. Several months after the
trial, Hitachi reportedly won a major contract to equip the
Social Security Administration with computers. (Ironically,
the losing bid was submitted by IBM.) When it was disclosed
that between the early 1970s and late 1980s the French DGSE
had planted agents in Texas Instruments, IBM, and Corning and
shared the purloined information with Compagnie des Machines
Bull, the U.S. government merely sent a letter of diplomatic
protest. Likewise, when Israeli intelligence officers stole
valuable technological data from Illinois defense contractor
Recon Optical, no penalties were imposed. Selling SDI
computer software programs did get Ronald Hoffman a six-year
prison term, but the Japanese companies that purchased the
data faced no sanctions. This state of affairs should be
unsatisfactory.
The United States should consider changing its privacy
laws. The data protection laws of countries such as Austria,
France, Switzerland, Belgium, Germany, New Zealand, Denmark,
Norway, and Luxembourg define ``persons'' to include
corporations for protection of privacy purposes. Their laws
provide a much higher level of protection for corporate
information, treating business secrets as equivalent to the
private data of individual citizens. Under much more firmly
defined privacy statutes, thieves could be prosecuted.
When diplomats are involved, the United States should be as
aggressive and vigorous as it was when dealing with Soviet
spying, or at least as firm as France was last January.
Instead, diplomatic personnel have simply been asked to leave
quietly, a gesture with little punitive effect. Foreign
corporations involved in the theft of American technology or
corporate information should face real monetary costs for
their crimes. Until there is a price to be paid, companies
will not think twice about purchasing and using stolen
information, and foreign governments will not blink at
stealing American proprietary business information.
How the United States chooses to deal with this problem
will set the tone internationally. Some, such as former CIA
Director Stansfield Turner, have proposed an American
economic espionage program, in effect imitating foreign
competitors. But this path is fraught with peril. There is no
groundswell of support for such a course in either corporate
America or the intelligence community. Ask intelligence
professionals what they think about the idea and they are
likely to tell you, ``I will risk my life for America, but
not General Motors.'' An economic espionage program could
also have a corrupting influence on the U.S. intelligence
community, as officials might be enticed by bribes from
companies seeking particularly useful information. Likewise,
American companies are nervous about getting entangled with
the intelligence world and the strings that are likely to be
attached to any such program. Rather than wanting to imitate
its competitors, corporate America seeks a level playing
field and protection from industrial thieves.
The goal of the United States should be a world in which
governments do not try to outspend one another on stealing
each other's corporate secrets. But that goal cannot be
reached until the United States decides to grow up and face
down the threat. Ignoring economic espionage will not make it
go away.
Mr. KOHL. Mr. President, today, we pass the Economic Espionage Act,
which is based upon legislation drafted by Senator Specter and me and,
on the House side, by Representatives McCollum and Schumer. In a
Congress marked by so much partisanship, this legislation marks a
significant bipartisan accomplishment. With this new law, we penalize
the theft of vital economic information.
Since the end of the cold war, our old enemies and our traditional
allies have been shifting the focus of their spy apparatus. Alarmingly,
the new target of foreign espionage is our industrial base. But for too
many years, we were complacent and did not heed these warnings. And we
left ourselves vulnerable to the ruthless plundering of our country's
vital information. We did not address this new form of espionage--a
version of spying as dangerous to our national well-being as any form
of classic espionage. Today, that complacency ends.
Mr. President, this legislation is crucial. Most Americans probably
do not realize that anyone with the wherewithal to do it can walk out
of a company with a computer disk full of its most important
manufacturing information and sell that information to the highest
bidder with virtual impunity--and no criminal penalties.
This problem is even worse when foreign governments have specifically
focussed on American companies in order to steal information from them.
American companies are not prepared or equipped to fight off this kind
of systematic targeting.
The executive vice president of Corning, James Riesbeck, has said
that:
It is important to understand that State-sponsored
industrial espionage is occurring in the international
business community. It is very difficult for an individual
corporation to counteract this activity. The resources of any
corporation are no match for industrial espionage that is
sanctioned and supported by foreign governments.
A report of the National Counterintelligence Center [NCIC] in 1995
indicated that biotechnology, aerospace, telecommunications, computer
software, transportation, advanced materials, energy research, defense,
and semiconductor companies are all top targets for foreign economic
espionage. These sectors are aggressively targeted according to the
report. That report identified 20 different methods used to conduct
industrial espionage. The traditional methods include recruiting an
agent and then inserting the agent into the target company, or breaking
into an office to take equipment and information. According to the
report, computer intrusions, telecommunications targeting and
intercept, and private-sector encryption weaknesses account for the
largest portion of economic and
[[Page S12212]]
industrial information lost by U.S. corporations.
But even as American companies are attempting to respond to foreign
espionage, they also have to address theft by insiders. A survey by the
American Society for Industrial Security [ASIS] of 325 companies in
1995 found that almost half of them had experienced trade secret theft
of some sort during the previous 2 years. They also reported a 323-
percent increase in the number of incidents of intellectual property
loss. A 1988 National Institute of Justice study of trade secret theft
in high-technology industries found that 48 percent of 150 research and
development companies surveyed had been the victims of trade secrets
theft. Almost half of the time the target was research and development
data while 38 percent of the time the target was new technology. Forty
percent of the victims found out about the theft from their
competitors.
Norman Augustine, the president of Lockheed Martin Corp., told us at
our February hearings that a recent survey of aerospace companies
revealed that 100 percent of them believe that a competitor, either
domestic or international, has used intelligence techniques against
them.
And, Mr. President, make no mistake about it, economic espionage
costs our country dearly. In 1992, when a representative of IBM
testified at a House hearing on this issue, he told us that economic
espionage had cost his company billions of dollars. The NCIC report
concluded that industry victims have reported the loss of hundreds of
millions of dollars, lost jobs, and lost market share. The ASIS survey
concluded that the potential losses could total $63 billion a year.
Because of the gap in our laws, Senator Specter and I introduced two
companion measures that became the Economic Espionage Act earlier this
year. This legislation will be used to go after the foreign
intelligence services that take aim at American companies and at the
people who walk out of businesses with millions of dollars worth of
information.
I will only briefly explain what we have done here because the
managers' statement and the House and Senate committee reports fully
and completely describe this act. This legislation makes it illegal to
steal trade secrets from companies. It enhances the penalties when the
theft is at the behest of a foreign government. With the help of
Senator Hatch and Representatives McCollum and Schumer, we have
carefully drafted these measures to ensure that they can only be used
in flagrant and egregious cases of information theft. Moreover, trade
secrets are carefully defined so that the general knowledge and
experience that a person gains from working at a job is not covered.
Mr. President, we do not want this law used to stifle the free flow
of information or of people from job to job. But we built in a number
of safeguards to prevent exactly these problems. They are elaborated on
in the managers' statement and our committee reports.
Mr. President, I ask unanimous consent that a copy of the managers'
statement be printed in the Record. It reflects our understanding on
this measure.
There being no objection, the managers' statement was ordered to be
printed in the Record, as follows:
Managers' Statement for H.R. 3723, The Economic Espionage Bill
This legislation is based upon two bills, S. 1556, ``The
Industrial Espionage Act of 1996,'' and S. 1557, ``The
Economic Security Act of 1996,'' which were introduced by
Senators Specter and Kohl. This Managers' Statement is
intended to clarify portions of the legislation and to
supplement the Committee reports already issued on these two
measures. It also explains how the House and Senate version
of the legislation were reconciled.
DIFFERENCE BETWEEN SECTIONS 1831 AND 1832
This legislation includes a provision penalizing the theft
trade secrets (Sec. 1832) and a second provision penalizing
that theft when it is done to benefit a foreign government,
instrumentality, or agent (Sec. 1831). The principle purpose
of this second (foreign government) provision is not to
punish conventional commercial theft and misappropriation of
trade secrets (which is covered by the first provision).
Thus, to make out an offense under the economic espionage
section, the prosecution must show in each instance that the
perpetrator intended to or knew that his or her actions would
aid a foreign government, instrumentality, or agent.
Enforcement agencies should administer this section with its
principle purpose in mind and therefore should not apply
section 1831 to foreign corporations when there is no
evidence of foreign government sponsored or coordinated
intelligence activity.
This particular concern is borne out in our understanding
of the definition of ``foreign instrumentality'' which
indicates that a foreign organization must be ``substantially
owned, controlled, sponsored, commanded, managed, or
dominated by a foreign government or subdivision thereof.''
Although the term ``substantially'' is not specifically
defined, it is a relative term that connotes less than total
or complete ownership, control, sponsorship, command,
management, or domination. Substantial in this context, means
material or significant, not technical or tenuous. We do not
mean for the test of substantial control to be mechanistic or
mathematical. The simple fact that the majority of the stock
of a company is owned by a foreign government will not
suffice under this definition, nor for that matter will the
fact that a foreign government only owns 10 percent of a
company exempt it from scrutiny. Rather the pertinent inquiry
is whether the activities of the company are, from a
practical and substantive standpoint, foreign government
directed.
To make out a case under these two provisions (sections
1831 and 1832), the prosecution would have to show that the
accused knew or had reason to know that a trade secret had
been stolen or appropriated without authorization. This
threshold separates conduct that is criminal from that which
is innocent. Thus, for example, these sections would not give
rise to a prosecution for legitimate economic collection
or reporting by personnel of foreign governments or
international financial institutions, such as the World
Bank, because such legitimate collection or reporting
would not include the collection or reporting of trade
secrets that had been stolen, misappropriated or converted
without authorization.
WITHOUT AUTHORIZATION
Several federal statutes already include the requirement
that information be taken ``without authorization.'' The most
notable is 18 U.S.C. Sec. 1030, which is amended in this
measure by the National Information Infrastructure Protection
Act introduced by Senators Leahy, Kyl and Grassley. That
provision essentially deals with authorization in relation to
computer systems. However, in this legislation the nature of
authorization may be slightly different since this measure
involves information ``whether or how stored.'' But the
principle remains the same: authorization is the permission,
approval, consent, or sanction of the owner.
PARALLEL DEVELOPMENT NOT COVERED
It is important to note that a person who develops a trade
secret is not given an absolute monopoly on the information
or data that comprises a trade secret. For example, if a
company discovers that a particular manufacturing process
must be conducted at a certain ambient temperature and that a
more than 10 percent deviation from that temperature will
compromise the process, that company does not have the
exclusive right to manufacture the product at the key
temperature (assuming that this is not otherwise patented or
protected by law). Other companies can and must have the
ability to determine the elements of a trade secret through
their own inventiveness, creativity and hard work. As the
Supreme Court noted in Kewanee Oil Co. v. Bicron Corp., 416
U.S. 470 (1974): ``If something is to be discovered at all
very likely it will be discovered by more than one person. .
. . Even were an inventor to keep his discovery completely to
himself, something that neither the patent nor trade secret
laws forbid, there is a high probability that it will be soon
independently developed. If the invention, though still a
trade secret, is put into public use, the competition is
alerted to the existence of the inventor's solution to the
problem and may be encouraged to make an extra effort to
independently find the solution this known to be possible.''
Id. at 490-91.
This legislation does not in any way prohibit companies,
manufacturers, or inventors from using their skills,
knowledge and experience to solve a problem or invent a
product that they know someone else is also working on. Thus,
parallel development of a trade secret cannot and should not
constitute a violation of this statute. This includes the
situation in which an individual inventor, unsolicited, sends
his or her material to a manufacturer even as the company
itself is in the midst of its own parallel development. In
the first place, this wholesale disclosure of material likely
breaches the requirement that a trade secret owner take
reasonable measures to protect the information's
confidentiality. But more importantly, many companies
regularly receive such ideas and inventions and do not use
them. Some of these unsolicited ideas and inventions may
overlap with work being done within the company already.
Both the individual inventor and the company are
conducting parallel work, pursuing the same line of
inquiry. Neither can be subject to penalty under this law.
REVERSE ENGINEERING
Some people have asked how this legislation might affect
reverse engineering. Reverse engineering is a broad term that
encompasses a variety of actions. The important thing is to
focus on whether the accused has committed one of the
prohibited acts of
[[Page S12213]]
this statute rather than whether he or she has ``reverse
engineered.'' If someone has lawfully gained access to a
trade secret and can replicate it without violating
copyright, patent or this law, then that form of ``reverse
engineering'' should be fine. For example, if a person can
drink Coca-Cola and, because he happens to have highly
refined taste buds, can figure out what the formula is, then
this legislation cannot be used against him. Likewise, if a
person can look at a product and, by using their own general
skills and expertise, dissect the necessary attributes of the
product, then that person should be free from any threat of
prosecution.
DEFINITION OF TRADE SECRETS
Unlike patented material, something does not have to be
novel or inventive, in the patent law sense, in order to be a
trade secret. Of course, often it will be because an owner
will have a patented invention that he or she has chosen to
maintain the material as a trade secret rather than reveal it
through the patent process. Even if the material is not novel
in the patent law sense, some form of novelty is probably
inevitable since ``that which does not possess novelty is
usually known; secrecy, in the context of trade secrets
implies at least minimal novelty.'' Kewanee Oil Co., 416 U.S.
at 476. While we do not strictly impose a novelty or
inventiveness requirement in order for material to be
considered a trade secret, looking at the novelty or
uniqueness of a piece of information or knowledge should
inform courts in determining whether something is a matter of
general knowledge, skill or experience.
Although we do not require novelty or inventiveness, the
definition of a trade secret includes the provision that an
owner have taken reasonable measures under the circumstances
to keep the information confidential. We do not with this
definition impose any requirements on companies or owners.
Each owner must assess the value of the material it seeks to
protect, the extent of a threat of theft, and the ease of
theft in determining how extensive their protective measures
should be. We anticipate that what constitutes reasonable
measures in one particular field of knowledge or industry
may vary significantly from what is reasonable in another
field or industry. However, some common sense measures are
likely to be common across the board. For example, it is
only natural that an owner would restrict access to a
trade secret to the people who actually need to use the
information. It is only natural also that an owner clearly
indicate in some form or another that the information is
proprietary. However, owners need not take heroic or
extreme measures in order for their efforts to be
reasonable.
GENERAL KNOWLEDGE NOT COVERED BY DEFINITION OF TRADE SECRETS
In the course of reconciling the Senate and House versions
of this legislation, we eliminated the portion of the
definition of trade secret that indicated that general
knowledge, skills and experience were not included in the
meaning of that term. Its elimination from the statutory
language does not mean that general knowledge can be a trade
secret. Rather, we believed that the definition of trade
secrets in itself cannot include general knowledge. Thus, it
was unnecessary and redundant to both define what does and
what does not constitute a trade secret.
Our reason initially for putting the exception in was to
state are clearly as possible that this legislation does not
apply to innocent innovators or to individuals who seek to
capitalize on their lawfully developed knowledge skill or
abilities. Employees, for example, who change employers or
start their own companies should be able to apply their
talents without fear of prosecution because two safeguards
against overreaching are built into the law.
First, protection is provided by the definition of ``trade
secret'' itself. The definition requires that an owner take
objectively reasonable, proactive measures, under the
circumstances, to protect the information. If, consequently,
an owner fails to safeguard his or her trade secret, then no
one could be rightfully accused of misappropriating it. Most
owners do take reasonable measures to protect their trade
secrets, thereby placing employees and others on clear notice
of the discreet, proprietary nature of the information.
In addition, a prosecution under this statute must establish a
particular piece of information that a person has stolen or
misappropriated. It is not enough to say that a person has accumulated
experience and knowledge during the course of his or her employ. Nor
can a person be prosecuted on the basis of an assertion that he or she
was merely exposed to a trade secret while employed. A prosecution that
attempts to tie skill and experience to a particular trade secret
should not succeed unless it can show that the particular material was
stolen or misappropriated. Thus, the government cannot prosecute an
individual for taking advantage of the general knowledge and skills or
experience that he or she obtains or comes by during his tenure with a
company. Allowing such prosecutions to go forward and allowing the risk
of such charges to be brought would unduly endanger
legitimate and desirable economic behavior.
As the Pennsylvania Supreme Court noted in Spring Steels v.
Molloy, 400 Pa. 354, 363 (1960):
``It is not a phenomenal thing in American business life to
see an employee, after a long period of service, leave his
employment and start a business of his own or in association
with others. And it is inevitable in such a situation, where
the former employee has dealt with customers on a personal
basis that some of those customers will want to continue to
deal with him in [that] new association. This is . . .
natural, logical and part of human fellowship . . .''
This legislation does not criminalize or in any way hamper
these natural incidents of employment. The free and
unfettered flow of individuals from one job to another, the
ability of a person to start a new business based upon his or
her experience and expertise, should not be injured or
chilled in any way by this legislation. Individuals must have
the opportunity to take advantage of their talents and seeks
and accepts other employments that enables them to profit
from their abilities and experience. And companies must have
the opportunity to employ these people. This measure attempts
to safeguard an individual's career mobility and at the same
time to preserve the trade secrets that underpin the economic
viability of the very company that would offer a person a new
job.
The second safeguard is provided by the bill's use of the
term ``knowingly.'' For a person to be prosecuted, the person
must know or have a firm belief that the information he or
she is taking is in fact proprietary. Under theft statutes
dealing with tangible property, normally, the thief knows
that the object he has stolen is indeed a piece of property
that he has no lawful right to convert for his personal use.
The same principle applies to this measure--for someone to be
convicted under this statute he must be aware or
substantially certain that he is misappropriating a trade
secret (although a defense should succeed if it is proven
that he actually believed that the information was not
proprietary after taking reasonable steps to warrant such
belief). A person who takes a trade secret because of
ignorance, mistake or accident cannot be prosecuted under the
Act.
This requirement should not prove a great barrier to
legitimate and warranted prosecutions. Most companies go to
considerable pains to protect their trade secrets. Documents
are marked proprietary; security measures put in place; and
employees often sign confidentiality agreements.
MAINTAINING CONFIDENTIALITY
We have been deeply concerned about the efforts taken by
courts to protect the confidentiality of a trade secret. It
is important that in the early stages of a prosecution the
issue whether material is a trade secret not be litigated.
Rather, courts should, when entering these orders, always
assume that the material at issue is in fact a trade secret.
VICTIM COMPENSATION
We are also concerned that victims of economic espionage
receive compensation for their losses. This legislation
incorporates through reference existing law to provide
procedures to be used in the detention, seizure, forfeiture,
and ultimate disposition of property forfeited under the
section. Under these procedures, the Attorney General is
authorized to grant petitions for mitigation or remission of
forfeiture and for the restoration of forfeited property to
the victims of an offense. The Attorney General may also take
any other necessary or proper action to protect the rights of
innocent people in the interest of justice. In practice,
under the forfeiture laws, victims are afforded priority in
the disposition of forfeited property since it is the policy
of the Department of Justice to provide restitution to the
victims of criminal acts whenever permitted to do so by the
law. Procedures for victims to obtain restitution may be
found at Section 9 of Title 28, Code of Federal Regulations.
In addition to requesting redress from the Attorney
General, any person--including a victim--asserting an
interest in property ordered forfeited may petition for a
judicial hearings to adjudicate the validity of the alleged
interest and to revise the order of forfeiture. Additionally,
forfeitures are subject to a requirement of proportionality
under the Eighth Amendment; that is, the value of the
property forfeited must not be excessively disproportionate
to the crimes in question.
Finally, we have required that the Attorney General report
back to us on victim restitution two and four years after the
enactment of this legislation. We have heard from some
companies that they only rarely obtain restitution awards
despite their eligibility. We wish to carefully monitor
restitution to ensure that the current system is working well
and make any changes that may be necessary.
FINES PROVISION
In the original Senate version of this measure, we included
a provision allowing courts to impose fines of up to twice
the value of the trade secret that was stolen. This specific
provision was eliminated because it was unnecessary in light
of 18 U.S.C. Sec. 3571(d). We have not used the specific
exemption available under 18 U.S.C. Sec. 3571(e). We,
therefore, fully expect that courts will take full advantage
of the provision in 18 U.S.C. Sec. 3571(d) allowing for fines
of up to twice the gain or loss resulting from the theft of
trade secrets and that courts will opt for the larger of the
fines available under 18 U.S.C. Sec. 3571(d) or the fines
provisions of this statute.
[[Page S12214]]
DEPARTMENT OF JUSTICE OVERSIGHT
The Senate version of this measure included a requirement
that all prosecutions brought under the statute receive the
prior approval of the Attorney General, the Deputy Attorney
General or the head of the Department of Justice's Criminal
Division. That provision was eliminated in the measure that
the House returned to us. We have not reinserted it based on
the assurances of the Department of Justice. The Department
of Justice will insert a requirement in the U.S. Attorney's
Manual that prosecutions continue to be approved and strictly
supervised by the Executive Office of the United States
Attorney. The Attorney General has written a letter to us to
that effect which we will insert into the record. We expect
to review all cases brought under this Act in several years
to ensure that the requirement is being enforced and to
determine if it needs to remain in place.
Mr. HATCH. Mr. President, I rise in support of H.R. 3723, the
Economic Espionage Act of 1996. This bill makes the theft or unlawful
appropriation and conversion of ``proprietary economic information'' a
Federal felony. It is an important bill to all of Federal law
enforcement, and I encourage my colleagues to support it.
In today's technology revolution, the Congress has recognized the
need to develop meaningful legislation that has real teeth to stop a
burgeoning criminal enterprise. Such enterprise targets the cutting
edge research and development of our Nation's industries, often on
behalf of a competitor or foreign state. Until now, there has been no
meaningful deterrent to such activity. Victims were often forced to
resort to State civil remedies as their only redress. I am confident
that all of my colleagues will agree that H.R. 3723, a bill which we
have crafted and has undergone minor House modification, is a strong
and meaningful deterrent to criminals considering engaging in economic
espionage.
There is one provision in the bill originally passed by the Senate
but deleted from the House which requires clarification. The original
bill passed by the Senate contained a provision that required Attorney
General approval prior to the initiation of a prosecution under this
legislation. The bill returned to the Senate by the House deleted this
requirement. It was my intent to attach an amendment to this bill,
reinserting the prior authorization requirement. After numerous
discussions with administration and industry officials, a compromise
has been reached which will allow this bill to be passed by the full
Senate as approved by the House.
We have a letter from the Attorney General which memorializes an
agreement we have made concerning this prior authorization requirement.
This agreement provides that the Department of Justice shall
implement regulations that require that an indictment can be pursued
under this legislation only upon the express prior approval of the
Attorney General, Deputy Attorney General, or Assistant Attorney
General-Criminal Division. This agreement shall remain in effect for a
period of 5 years from enactment. During that timeframe, the Attorney
General will be required to report to the Senate or House Judiciary
Committees, any prosecutions carried out under this bill which did not
receive such prior authorization. It shall also subject the U.S.
Attorney or Justice Department official authorizing such prosecution,
to appropriate disciplinary sanctions.
I am confident that the Department of Justice will act in good faith
and carry out its terms.
I would like to mention three other provisions included in this bill.
The first, included as a floor amendment by myself and Senator Kohl,
authorizes $100 million in grants to the Boys and Girls Clubs of
America to establish clubs in public housing and other distressed areas
across the country. The Boys and Girls Clubs have an outstanding track
record of reducing crime and drug use in the communities they serve,
and this legislation will help them extend their reach into the
communities that need them most.
Second, I am pleased that this bill included another amendment I
offered during Senate consideration, transferring to the Attorney
General custody of certain Federal inmates hospitalized at St.
Elizabeth's hospital. This provision will ensure that these persons,
hospitalized because of not guilty by reason on insanity verdicts in
Federal courts, receive appropriate care in safe, secure facilities.
Finally, I would like to note that this legislation includes an
amended version of technical corrections legislation to fix errors that
have, over time, crept into the Federal criminal code. The continued
integrity of the criminal laws depends on making these corrections from
time to time, and I am pleased that we have addressed this matter here.
For these reasons, I strongly urge all of my colleagues to fully
support H.R. 3723.
I ask unanimous consent that the letter I referenced earlier from the
Attorney General be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Department of Justice,
Office of the Attorney General,
Washington, DC, October 1, 1996.
Hon. Orrin G. Hatch,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
Dear Chairman Hatch: Thank you for your support of the
Economic Espionage Act of 1996 (``Act''). The need for this
law cannot be understated as it will close significant gaps
in federal law, thereby protecting proprietary economic
information and the health and competitiveness of the
American economy.
The Department shares your concerns that the legislation be
implemented in accordance with the intent of Congress and
therefore will require, for a period of five years after
implementation of the Act, that the United States may not
file a charge under Chapter 90, or use a violation of Chapter
90 as a predicate offense under any other law, without the
personal approval of the Attorney General, the Deputy
attorney General, or the Assistant Attorney General for the
Criminal Division (or the acting official in each of these
positions if a position is filled by the Acting official).
This requirement will be implemented by published regulation.
Violations of such regulations will be appropriately
sanctionable. Any such violations will be reported by the
Attorney General to the Senate and House Judiciary
Committees.
Once again, thank you for your leadership in this critical
area.
Sincerely,
Janet Reno.
Mr. LEAHY. Mr. President, I am delighted that the Senate is today
taking the important step of passing the Economic Espionage Act and the
National Information Infrastructure Protection Act of 1996 [NII
Protection Act].
The NII Protection Act, which I have sponsored with Senators Kyl and
Grassley, was sent to the House as S. 982, after passing the Senate
unanimously on September 18, 1996. The NII Protection Act has come back
to the Senate for final passage as part of a package of bills including
H.R. 3723, the Economic Espionage bill. These bills are complimentary.
The economic espionage bill will impose criminal penalties on those who
steal valuable trade secrets from the U.S. Government and those doing
business in our country, without regard to the means used to effect the
crime.
Spying on American companies in order to obtain their trade secrets
and confidential proprietary information is--to put it bluntly--
stealing. Although the estimates of how much this stealing costs our
Nation's business and our economy are rough, the range is in the
billions of dollars per year.
Unfortunately, the problem appears to be growing. The increasing
dependence of American industry on computers to store information and
to facilitate communications with customers, suppliers and farflung
subsidiaries, presents special vulnerabilities for the theft of
sensitive proprietary information.
I have long been concerned about this vulnerability. That is why I
worked with the Department of Justice, and my colleagues, Senators Kyl
and Grassley, on introduction of the National Information
Infrastructure Protection Act. This bill will increase protection for
computers, both government and private, and the information on those
computers, from the growing threat of computer crime. Our dependency on
computers and the growth of the Internet are both integrally linked to
people's confidence in the privacy, security, and reliability of
computer networks. I have worked over the past decade to make sure the
laws we have in place foster both privacy and security, and provide a
sound foundation for new communications technologies to flourish.
Both the NII Protection Act and the Economic Espionage Act reflect
significant efforts to better protect our
[[Page S12215]]
industrial lifeblood--the imaginative ideas and the special know-how
that give American companies the edge in global competition.
The NII Protection Act will help safeguard the privacy, security and
reliability of our national computer systems and networks and the
information stored in, and carried on, those networks. Those systems
and networks are vulnerable to the threat of attack by hackers, high-
technology criminals and spies.
Every technological advance provides new opportunities for legitimate
uses and the potential for criminal exploitation. Existing criminal
statutes provide a good framework for prosecuting most types of
computer-related criminal conduct. But as technology changes and high-
technology criminals devise new ways to use technology to commit
offenses we have yet to anticipate, we must be ready to readjust and
update our Criminal Code.
The facts speak for themselves--computer crime is on the rise. The
week before Senate passage of the NII Protection Act, on September 12,
a computer hacker attack, which shut down a New York Internet access
provider with thousands of business and individual customers, made
front page news, and revealed the vulnerability of every network
service provider to such an attack. The morning after Senate passage of
this legislation, on September 19, computer hackers forced the CIA to
take down an agency Web site because obscenities and unauthorized text
and photograph changes had been made to the site and unauthorized links
had been established between the CIA Web site and other sites. The
Computer Emergency and Response Team [CERT] at Carnegie-Mellon
University reports that over 12,000 Internet computers were attacked in
2,412 incidents in 1995 alone. A 1996 survey conducted jointly by the
Computer Security Institute and the FBI showed that 42 percent of the
respondents sustained an unauthorized use or intrusion into their
computer systems in the past 12 months.
While the NII Protection Act may not address every form of computer
crime or mischief, it closes a number of significant gaps in the
computer fraud and abuse statute. This legislation would strengthen law
enforcement's hands in fighting crimes targeted at computers, networks,
and computerized information by, among other things, designating new
computer crimes, and by extending protection to computer systems used
in foreign or interstate commerce or communications.
For example, while our current statute, in section 1030(a)(2),
prohibits misuse of a computer to obtain information from a financial
institution, it falls short of protecting the privacy and
confidentiality of information on computers used in interstate or
foreign commerce and communications. This gap in the law has become
only more glaring as more Americans have connected their home and
business computers to the global Internet.
This is not just a law enforcement issue, but an economic one.
Breaches of computer security result in direct financial losses to
American companies from the theft of trade secrets and proprietary
information. A December 1995 report by the Computer Systems Policy
Project, comprised of the CEO's from 13 major computer companies,
estimates that financial losses in 1995 from breaches of computer
security systems ranged from $2 billion to $4 billion. The report
predicts that these numbers could rise in the year 2000 to $40 to $80
billion worldwide. The estimated amount of these losses is staggering.
The NII Protection Act would extend the protection already given to
the computerized information of financial institutions and consumer
reporting agencies, to computerized information held on computers used
in interstate or foreign commerce on communications, if the conduct
involved interstate or foreign communications. The provision is
designed to protect against the interstate or foreign theft of
information by computer.
Computer hackers have accessed sensitive Government data regarding
Operation Desert Storm, penetrated NASA computers, and broken into
Federal courthouse computer systems containing confidential records.
These outside hackers are subject to criminal prosecution under section
1030(a)(3) of the computer fraud and abuse statute. Yet, this statute
contains no prohibition against malicious insiders: Those government
employees who abuse their computer access privileges by snooping
through confidential tax returns, or selling confidential criminal
history information from the National Crime Information Center [NCIC].
The NCIC is currently the Nation's most extensive computerized criminal
justice information system, containing criminal history information,
files on wanted persons, and information on stolen vehicles and missing
persons.
I am very concerned about continuing reports of unauthorized access
to highly personal and sensitive Government information about
individual Americans, such as NCIC data. For example, a ``Dear Abby''
column that appeared on June 20, 1996 in newspapers across the country
carried a letter by a woman who claimed her in-laws ``ran her name
through the FBI computer'' and, apparently, used access to the NCIC for
personal purposes.
This published complaint comes on the heels of a General Accounting
Office [GAO] report presented on July 28, 1993, before the House
Government Operations Committee, Subcommittee on Information, Justice,
Agriculture, and Transportation, on the abuse of NCIC information.
Following an investigation, GAO determined that NCIC information had
been misused by ``insiders''--individuals with authorized access--some
of whom had sold NCIC information to outsiders and determined whether
friends and relatives had criminal records. The GAO found that some of
the misuse jeopardized the safety of citizens and potentially
jeopardized law enforcement personnel. Yet, no federal or state laws
are specifically directed at NCIC misuse and most abusers of NCIC were
not criminally prosecuted. GAO concluded that Congress should enact
legislation with strong criminal sanctions for the misuse of NCIC data.
This bill would criminalize these activities by amending the privacy
protection provision in section 1030(a)(2) and extending its coverage
to Federal Government computers. If the information obtained is of
minimal value, the penalty is only a misdemeanor. If, on the other
hand, the offense is committed for purposes of commercial advantage or
private financial gain, for the purpose of committing any criminal or
tortious act in violation of the Constitution or laws of the United
States or of any State, or if the value of the information obtained
exceeds $5,000, the penalty is a felony.
The current statute, in section 1030(a)(5), protects computers and
computer systems from damage caused by either outside hackers or
malicious insiders ``through means of a computer used in interstate
commerce or communications.'' It does not, however, expressly prohibit
the transmission of harmful computer viruses or programs from abroad,
even though, a criminal armed with a modem and a computer can wreak
havoc on computers located in the United States from virtually anywhere
in the world. This is a significant challenge in fighting cybercrime:
there are no borders or passport checkpoints in cyberspace.
Communications flow seamlessly through cyberspace across datelines and
the reach of local law enforcement.
Indeed, we have seen a number of examples of computer crimes directed
from abroad, including the 1994 intrusion into the Rome Laboratory at
Griffess Air Force Base in New York from the United Kingdom and the
1996 intrusion into Harvard University's computers from Buenos Aires,
Argentina.
Additionally, the statute falls short of protecting our Government
and financial institution computers from intrusive codes, such as
computer ``viruses'' or ``worms.'' Generally, hacker intrusions that
inject ``worms'' or ``viruses'' into a Government or financial
institution computer system, which is not used in interstate
communications, are not Federal offenses. The legislation would change
that limitation and extend Federal protection from intentionally
damaging viruses to Government and financial institution computers,
even if they are not used in interstate communications.
The NII Protection Act would close these loopholes. Under the
legislation, outside hackers--including those using foreign
communications--and malicious insiders face criminal liability
[[Page S12216]]
for intentionally damaging a computer. Outside hackers who break into a
computer could also be punished for any reckless or other damage they
cause by their trespass.
The current statute protects against computer abuses that cause
computer ``damage,'' a term that is defined to require either
significant financial losses or potential impact on medical treatment.
Yet, the NII and other computer systems are used for access to critical
services such as emergency response systems, air traffic control, and
the electrical power systems. These infrastructures are heavily
dependent on computers. A computer attack that damages those computers
could have significant repercussions for our public safety and our
national security. The definition of ``damage'' in the Computer Fraud
and Abuse statute should be sufficiently broad to encompass these types
of harm against which people should be protected. The NII Protection
Act addresses this concern and broadens the definition of ``damage'' to
include causing physical injury to any person and threatening the
public health or safety.
Finally, this legislation address a new and emerging problem of
computer-age blackmail. This is a high-technology variation on old
fashioned extortion. One case has been brought to my attention in which
a person threatened to crash a computer system unless he was given free
access to the system and an account. One can imagine situations in
which hackers penetrate a system, encrypt a database and then demand
money for the decoding key. This new provision would ensure law
enforcement's ability to prosecute modern-day blackmailers, who
threaten to harm or shut down computer networks unless their extortion
demands are met.
Confronting cybercrime with up-to-date criminal laws, coupled with
tough law enforcement, are critical for safeguarding the privacy,
confidentiality, and reliability of our critical computer systems and
networks. I commend the Attorney General and the prosecutors within the
Department of Justice who have worked diligently on this legislation
and for their continuing efforts to address this critical area of our
criminal law.
In sum, the NII Protection Act will provide much needed protection
for our Nation's critical information infrastructure by penalizing
those who abuse computers to damage computer networks, steal classified
and valuable computer information, and commit other crimes on-line.
Mr. NICKLES. Mr. President, I ask unanimous consent that the Senate
concur in the amendment of the House.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________