28 July 1998

    Date: Tue, 28 Jul 1998 11:27:56 -0700 (PDT)
    Subject: Cyber Spies Spin Russian Web
    To: jy@jya.com
    From: nobody@shinobi.alias.net (Anonymous)

    The St. Petersburg Times #384, Friday, 24 July 1998

    ANOTHER PIECE IN THE PUZZLE
    Cyber Spies Spin Russian Web

    By Bradley Cook

    While international lending institutions play cat and mouse
    with the Russian economy, the power and budget of FAPSI,
    Russia's counterpart to the U.S. National Security Agency
    (NSA) continues an exponential climb.

    FAPSI, or the Federal Agency for Government Communications
    and Information, has tens of thousands of people in its
    service. And despite plans to reduce personnel 40 percent

    by the year 2001, FAPSI is slated to triple its current
    budget to 11 billion rubles ($1.8 billion) per year through
    2001.

    FAPSI has a unique position in the Russian government
    because it is responsible for the electronic surveillance
    of Russia's perceived enemies both at home and abroad.
    Created by a decree from President Boris Yeltsin in 1993,
    FAPSI has steadily increased not only its budget, but its
    range of powers within the Russian government. FAPSI
    evolved from the Administration of Information Resources
    which itself was formed from various divisions of the
    former KGB's electronic surveillance, decoding and
    encryption departments. The legal limitations of FAPSI
    operations are much wider than its chief rival's -- the NSA
    -- because under U.S. law, the NSA is not authorized to
    carry out surveillance of its own citizens.

    The power held by FAPSI first began to worry state-weary
    Russians when Yeltsin issued Presidential Decree 334 in
    1995, which declared illegal any encryption software or
    hardware device not approved by FAPSI. It stands to reason
    that FAPSI would not approve any encryption technology that
    it did not have the ability to crack. That would run
    counter to the agency's purpose, which is to gather as much
    information possible about financial dealings and political
    ambitions in the name of national security. Among other
    ramifications, Decree 334 means that no Russian bank can
    guarantee its customers confidentiality of their account
    information -- a large barrier to legal and efficient
    commercial activity.

    In a government where rival agencies fight each other for
    turf, FAPSI not only has domestic electronic surveillance
    superiority, it also runs Russia's largest signals
    intelligence (SIGINT) operation abroad. FAPSI's Lourdes
    SIGINT facility near Havana, Cuba, is only 140 kilometers
    from Florida - making it ideal for gathering intelligence
    on the United States. From this facility at Lourdes, Russia
    for years has keept an estimated 2,000 Russian technicians
    to monitor U.S. military communications, commercial
    satellites, merchant shipping and Florida-based NASA space
    programs. According to reports published earlier this year
    in the Miami Herald, the Kremlin learned of U.S. battle
    plans for the Gulf War through its Cuban-based spy network.
    The U.S. Central Command, which is responsible for U.S.
    forces in the Middle East, is easily within reach of the
    Russian facility because it is based in Tampa, Florida.

    Not content with expanding their already considerable
    overseas operations, FAPSI and other Russian communications
    agencies have prepared a draft project that would force all
    Internet providers in Russia to install a snooping device
    connected to a high-speed data link to the FSB's Internet
    control room. A translated copy of the draft copy, posted
    by Maxim Otstavnov, editor of the crypto newsletter
    "CompuNomika" can be viewed at

    http://www.ice.ru/libertarium/sorm/sormdocengl.html.

    The snooping device connected to a dedicated superhighway
    from Internet providers to the FSB would make it possible
    for the KGB successor agency to have unfettered real-time
    monitoring of every e-mail message and web page sent or
    received in Russia.

    The natural reaction for many Internet users would be to
    respond to this Orwellian surveillance technique by
    encrypting their e-mail with widely available software. But
    FAPSI issues all licenses for encryption technology in
    Russia and has the codes to break such encryption. In
    theory, under Russian law, FAPSI would be restrained by the
    same legal requirements as those covering phone taps or
    letter-opening, for which it must make a formal application
    to the courts.

    But FAPSI and FAPSI officials have been circumventing
    Russian law since FAPSI was created. Numerous high-ranking
    FAPSI functionaries have been forced to leave the agency
    due to financial scandals. This list of disgraced former
    FAPSI officials include its financial director, chief of
    the military-medical service and the former deputy general
    director.

    And when the boys at FAPSI aren't stealing secrets or
    money, they are trying their hand at marketing. Despite the
    fact that government agencies are not supposed to market
    products, FAPSI announced in May that it was entering the
    wireless communication business with an untappable phone at
    the cool price of $12,000. They claim this phone -- which
    handles voice and data transmissions -- "would be equipped
    with encryption that would take a hundred years to break."

    A hundred years for anyone but the boys at FAPSI, that is.

    Copyright 1998 The St. Petersburg Times.