The governments power to seize a companys sensitive customer data without being subject to traditional standards of judicial review was one of the most controversial issues that federal lawmakers grappled with last year, and they will continue to struggle with it not only in 2006 but for years to come.
Powers of surveillance, search and seizure were greatly expanded by the USA Patriot Act, which Congress passed hastily in the wake of the Sept. 11, 2001 terrorist attacks. Unsure of the ultimate implications of some of the expanded powers—many of which were on the FBIs wish list prior to 2001—lawmakers included an expiration date of Dec. 31, 2005 with 16 provisions of the Act.
For enterprises that hold sensitive data, the surveillance provisions of the Patriot Act ushered in a new era of potentially heavy and costly compliance duties. The FBI no longer had to show a link between the records demanded and a suspected terrorist, raising fears in industry of endless fishing expeditions. Joining with privacy advocates on both ends of the political spectrum, businesses sought to modify the law to dissuade the FBI from conducting unlimited, indefinite or unwarranted searches of ordinary Americans.
The concerns of corporate America are not only about the privacy rights of citizens, but also about the growing cost of compliance and the potential for liability in countries where privacy laws are more stringent. Additionally, there is the fear that with so much data being released, trade secrets and other proprietary information could be too easily obtained and disseminated. The FBI reportedly issues—unilaterally and without any judicial review—tens of thousands of National Security Letters annually, compared to a few hundred prior to Sept. 11, 2001.
Also problematic to civil liberties advocates, the expanded search provisions of the Act essentially prohibited recipients of an FBI demand from talking about it to anyone. The gag order provoked general silence on the topic from industry for about three years, but in the fall a group of manufacturers, banks, real estate firms, bookstores and other businesses banded together to call for checks and balances as Congress debated renewal of the controversial provisions.
Congress work on renewing the Patriot Act brought together an ever-rising number of diverse organizations. The American Civil Liberties Union and the National Association of Manufacturers found themselves on the same side of the issue as former conservative representative from Georgia, Bob Barr; the White Collar Crime Project of the National Association of Criminal Defense Lawyers and the Gun Owners of America.
"All firearms records could be obtained if someone could argue with a straight face that they could be relevant to terrorism. Thats simply a registration list," Larry Pratt, executive director of Gun Owners of America in Springfield, Va., said, adding that the gag order creates an additional burden on gun shop owners. "Its a felony to tell me that my gun records have been obtained on a fishing expedition by the government."
As the debate progressed, the Senate unanimously passed a bill with the protections sought by industry, but the House of Representatives passed a bill without them. When members of the two chambers met in conference to work out the differences in November, they acceded to the Bush Administrations pressure to omit the checks, and they made things even tougher on businesses by adding criminal penalties for anyone failing to comply with an NSL. However, a bipartisan group of senators blocked the conference bill, bringing the legislation to a stand-off as the holidays fast approached.
Even the most hawkish proponents of the Patriot Acts expanded data search powers agreed at the end of last year that Congress should take another look at the provisions before another four years goes by. As data privacy rights rise higher on the agenda of legislatures around the world, they will shape the evolving debate on the governments rights in demanding sensitive records from businesses