FBI Develops Eavesdropping Tools

By Ted Bridis
Associated Press Writer
Thursday, November 22, 2001; 2:34 AM

WASHINGTON -- The FBI is going to new lengths to be sure it can eavesdrop on
high-tech communications, secretly building "Magic Lantern" software to
monitor computer use.

Separately, the agency is urging phone companies to change their networks
for more reliable wiretaps in the digital age.

At a conference Nov. 6 in Tucson, Ariz. - and in a 32-page follow-up letter
sent about two weeks ago - the FBI told leading telecommunications officials
that increasing use of Internet-style data technology to transmit voice
calls is frustrating FBI wiretap efforts.

The FBI told companies that it will need access to voice calls sent over
data networks within a few hours in some emergency situations, and that any
interference caused by a wiretap should be imperceptible to avoid tipping
off a person that his calls might be monitored.

The Magic Lantern technology, part of a broad FBI project called "Cyber
Knight," would allow investigators to secretly install over the Internet
powerful eavesdropping software that records every keystroke on a person's
computer, according to people familiar with the effort.

The software is somewhat similar to so-called trojan software already used
illegally by some hackers and corporate spies. The FBI envisions one day
using Magic Lantern to record the secret unlocking key a person might use to
scramble messages or computer files with encryption software.

The bureau has been largely frustrated in efforts to break open such
messages by trying different unlocking combinations randomly, and officials
are increasingly concerned about their ability to read encrypted messages in
criminal or terrorist investigations.

The FBI said in a statement Wednesday that it can not discuss details of its
technical surveillance efforts, though it noted that "encryption can pose
potentially insurmountable challenges to law enforcement when used in
conjunction with communication or plans for executing serious terrorist and
criminal acts."

The FBI added that its research is "always mindful of constitutional,
privacy and commercial equities," and that its use of new technology can be
challenged in court and in Congress.

Magic Lantern would largely resolve an important problem with the FBI's
existing monitoring technology, the "Key Logger System," which in the past
has required investigators to sneak into a target's home or business with a
so-called sneak-and-peak warrant and secretly attach the device to a

In contrast, Magic Lantern could be installed over the Internet by tricking
a person into double-clicking an e-mail attachment or by exploiting some of
the same weaknesses in popular commercial software that allow hackers to
break into computers. It's unclear whether Magic Lantern would transmit
keystrokes it records back to the FBI over the Internet or store the
information to be seized later in a raid. The existence of Magic Lantern was
first disclosed by MSNBC.

"If they are using this kind of program, it would be a highly effective way
to bypass any encryption problems," said James E. Gordon, who heads the
information technology practice for Pinkerton Consulting and Investigations
Inc. "Once they have the keys to the kingdom, they have complete access to
anything that individual is doing."

At least one antivirus software company, McAfee Corp., contacted the FBI on
Wednesday to ensure its software wouldn't inadvertently detect the bureau's
snooping software and alert a criminal suspect.

Experts said the FBI software could be used with a court order against
criminals, terrorists or foreign spies. People familiar with the project,
who spoke only on condition of anonymity, said the package is being
developed at the FBI's electronic tools laboratory, the same outfit that
built the bureau's "Carnivore" Internet surveillance technology.

Some experts said Magic Lantern raises important legal questions, such as
whether the FBI would need a wiretap order from a U.S. judge to use the
technology. The government has previously argued that the FBI can capture a
person's computer keystrokes under the authority of a traditional search
warrant, which involves less oversight by the courts.

"It's an open question whether the covert installation of something on a
computer without a physical entry requires a search warrant," said David
Sobel, a lawyer with the Washington-based Electronic Privacy Information
Center, a civil liberties group.