[CTRL] Coalition for Constitutional Liberties, Vol. 5 #11 (fwd)

[Yardbird]

-Caveat Lector-

Weekly Update for 6/7/01
COALITION FOR CONSTITUTIONAL LIBERTIES

Volume 5, Number 11
Brought to you by the Center for Technology Policy of the Free Congress
Foundation
Lisa S. Dean, Vice President for Technology Policy
(mailto:[EMAIL PROTECTED])
J. Bradley Jansen, Coalition Coordinator (mailto:[EMAIL PROTECTED])
Hannah H. Woody, Coalition Coordinator (mailto:[EMAIL PROTECTED])
phone: (202) 546-3000
fax: (202) 544-2819
http://www.FreeCongress.org
[N.B.  Thanks to all who helped us by signing on to the letter opposing the
global Know Your Customer proposal.  The Financial Times credits our
coalition with forcing the administration to reconsider the government's
policies.  Kudos to our members! -- JBJ]
 ***********
 THIS WEEK:

* PERSONAL PRIVACY VS. GOVERNMENT DATABASES
by Lisa S. Dean, from the  "Endangered Liberties" Television Program

* FBI DIRECTOR REPLACEMENT A SERIOUS DECISION FOR BUSH
by Paul M. Weyrich, from the "Endangered Liberties" Television Program

* U.S. MAY EASE STANCE ON MONEY LAUNDERING
By Edward Alden and Michael Peel, Financial Times

* U.S. TREASURY HOPES TO EASE BURDEN OF ANTI-LAUNDERING EFFORTS ON BANKS
DAVID S. CLOUD and JACOB M. SCHLESINGER, Staff Reporters of THE WALL STREET
JOURNAL, June 7, 2001
 <http://interactive.wsj.com/media/atlas-wsjbrand.gif>

* IDENTITY THIEVES THRIVE IN INFORMATION AGE, Rise of Online Data Brokers
Makes Criminal Impersonation Easier
By Robert O'Harrow Jr., Washington Post Staff Writer

* LETTER FROM CONGRESSMAN PAUL TO SECRETARY THOMPSON REGARDING THE "MEDICAL
PRIVACY RULE"
Forwarded by Norman Singleton, May 23, 2001
<http://www.house.gov/paul/congrec/congrec2001/cr052301B.htm>

* ARMEY DECRIED UNIVERSAL MEDICAL IDS, HOUSE LEADER: 'FEDERAL LAW IS BEING
VIOLATED'
By Jon Dougherty, WorldNetDaily.com, May 29, 2001,
http://worldnetdaily.com/news/article.asp?ARTICLE_ID=23005

* PROTECTING PRIVACY AND PREVENTING MISUSE OF SOCIAL SECURITY : Hearing
before the House Ways and Means Social Security Subcommittee, May 22, 2001
http://www.house.gov/paul/congrec/congrec2001/cr052201.htm>


PERSONAL PRIVACY VS. GOVERNMENT DATABASES
by Lisa S. Dean
>From the  "Endangered Liberties" Television Program

In discussions about personal privacy vs. government databases, privacy
advocates have argued quite correctly that our video rental records have
more privacy protection than our medical records.  Now that the Bush
Administration has given the green light for the implementation of Clinton's
medical privacy regulations, it can still be said truthfully that our video
rental records have more privacy protection than do our medical records.

Under the newly released U. S. Health and Human Services medical privacy
regulations, physicians would be required to report all patients' medical
records to HHS and other government agencies, thereby extinguishing all of
what's left of the doctor/patient confidentiality tradition in this country.
These government agencies would have unfettered access to our medical
histories, for the purpose, they claim, of ensuring that the privacy
regulations are being followed by health care professionals.  How ironic!

Physicians would also be required to turn over that same information on
their patients to any other federal agency who requested it for the purpose
of observing "public health activities".  Your personal medical information
would be turned over to these government agencies without the patient's
consent. In addition to your private, personal medical histories being
readily available to the federal government, law enforcement would also be
able to access them as well, without a warrant.

If the US government wishes, under these regulations, it would be allowed to
turn any citizen's medical files over to a foreign government if they
believe that it is for the purpose of "national health", whatever that
means.

But government agencies, foreign governments as well as law enforcement
aren't the only entities that will know what illnesses you suffer from or
what diseases you might have been treated for.  Under the new HHS rule,
direct marketing companies will be able to view that information as well in
order to tailor their marketing strategies for products to your needs.  And
we all know what happens when one marketing company gets a hold of your
personal information.  Soon you find yourself bombarded by telemarketers who
think that you might be interested in their products as well because, after
all, according to your medical records, you need them.

The worst part about all of this, even the violation of personal privacy, is
that you, the patient, have no say whatsoever in who gets your information.
People who wouldn't tell friends or family members what they are being
treated for will have government officials or some telemarketer, whom they
have never met or will never meet, knowing what illness they have and what
treatment they are undergoing for it, no matter how slight or severe the
illness or embarrassing the disease.  There are no limits anymore or
standards of decency when it comes to our government agencies' treatment of
US citizens.  It's reflective of the current culture, I suppose, but tragic
nonetheless.

However, there is a shining light in all of this, the congressional stalwart
of privacy protection himself, Rep. Ron Paul (R-Texas).  He has introduced
House Joint Resolution 38 which would declare that the HHS regulation "shall
have no force or effect".  But it must pass both Houses within 60
legislative days.

Here's how you can help.  You can write to your member of Congress urging
him to vote for HJR 38, sponsored by Rep. Ron Paul (R-Texas) which would
nullify the current HHS regulations which obliterate our privacy or you can
go to www.defendyourprivacy.com  and sign on the online petition opposing
the regulations.  You can also email your congressman and senators from that
same site.  It's an easy way to get your voice heard on this issue.

If no government agency can find out what movies you rented last night, they
certainly shouldn't be able to know what you discuss with your doctor.

Lisa Dean is Vice President for Technology Policy at the Free Congress
Foundation.


FBI DIRECTOR REPLACEMENT A SERIOUS DECISION FOR BUSH
by Paul M. Weyrich
>From the "Endangered Liberties" Television Program

This nation has managed to hang on by a thread somehow, through the prayers
and hard work of good people. I cannot help but think of how close we have
come to either having Federal Bureau of Investigation Director Louis Freeh
stay on in his current position or be replaced by President Al Gore. What a
frightening thought!  I am still shaken by it.

Instead, a good and decent president, George W. Bush, someone who prays for
Divine guidance each and every day, someone who reads the Scriptures,
someone who discusses holy things with the elect, will be making that
appointment.  I have spoken with Attorney General Ashcroft about the search
and certainly he is of sound mind in thinking about the sort of person who
needs to hold this position.

First of all we are talking about a 10-year term.  The FBI Director can
outlast two full terms of a president.

Second, the pay isn't all that great. The person is obviously going to have
to be extremely dedicated and able to live with his means. The candidate we
are talking about should probably know the FBI but should not be taken in by
it. A lot of what has gone wrong with the FBI over the last two decades or
more has to do with the bureaucratic structure. There is going to be a
tendency to want to blame most of the FBI's ills on the late Director J.
Edgar Hoover. Hoover did a lot of things that were questionable. But he also
did a not of things that were right.  And he wasn't always trying to expand
the powers of the FBI, which was to his credit. He kept the portfolio of the
FBI narrowly focused. Consequently, the FBI acquired a reputation, and a
deserved one, of getting what it went after. Today's FBI has become a sad
joke. If some of these cases weren't so terribly important for national
security reasons, one almost wouldn't mind seeing what went wrong analyzed
by any number of the newsmagazines.

All of this is to say that the president has one of the most important
decisions of his presidency coming up in the next few months. In many ways
this is at least as important as a Supreme Court nominee.  The president
needs to consult widely on this appointment. He needs to pray about it
fervently. He needs, as unfortunate as this is, to have discreet discussions
with the Senate, where the nomination will have to go for confirmation.
This nominee needs to be someone the nation can trust. The nominee needs to
be someone who can raise morale at the FBI, which is at an all-time low.
This person needs to be above reproach.  That is one tall order for even
this president. This appointment may well determine what kind of nation we
live in beyond the presidency of George W. Bush.

Please, Mr. President. Give this your very best.


US MAY EASE STANCE ON MONEY LAUNDERING
By Edward Alden and Michael Peel, Financial Times, June 1, 2001,
<http://news.ft.com/ft/gx.cgi/ftc?agename=View&c=Article&cid

The US government has, over the past decade, been at the forefront of an
international campaign to discourage money laundering by cracking down on
countries seen as havens for financial secrecy.
But scarcely four months into office, the Bush administration is
reconsidering the virtues and vices of financial privacy. The result could
have the effect of sharply weakening US support for the international
initiative.
The Treasury Department is understood to have launched a review of domestic
anti-money laundering laws. Current rules, intended to deter laundering
through banks, require them to report any cash deposits over $10,000, and
flag any unusual pattern of transactions in reports filed to the government.

Dina Ellis, who was previously a senior lawyer on the Senate banking
committee under Phil Gramm, a Texas Republican who staunchly opposes tougher
financial regulations, is heading the Treasury review.
Paul O'Neill, Treasury secretary, said earlier this month that the $10,000
threshold for reporting "imposes a significant cost on society".
Mr. O'Neill also questioned whether the roughly $700m the government spends
annually to fight money laundering is well spent. The pressure on the
administration is coming from a loose coalition that has brought together
small bankers, privacy advocates and libertarians.
The same coalition last year helped to quash legislation that would have
expanded "know your customer" rules and forced banks to identify all their
clients and beneficial owners of assets.
Pressure from similar groups caused the administration last month to weaken
its support for an Organization for Economic Co-operation and Development
(OECD) plan to crack down on tax haven secrecy.
The OECD set up the Financial Action Task Force (FATF) in 1989 to spearhead
a global fight against money laundering. A key FATF requirement is that
institutions put in place rules similar to the "know your customer"
provisions that were blocked in the US.
The FATF last year produced a blacklist of 15 countries that it said had
proved insufficiently co-operative in discouraging money-laundering.
The group is set to meet next month to review the list and decide whether to
impose sanctions against previously blacklisted countries that have failed
to reform their laws.
But US support remains critical.
"If we were to backtrack now it would completely undermine the whole
process," said William Wechsler, who headed the money laundering strategy
for the Treasury in the Clinton administration.
"It will either blow up right away or else it will wither on the vine."
That is exactly what its opponents are hoping.
In a letter sent earlier this month to Mr. O'Neill, the opposition groups
charged that the international money laundering campaign is a backdoor
effort to force the US to adopt the "know your customer" provisions that
were rejected by Congress.
Bradley Jensen [sic] of the Free Congress Foundation is a former
congressional aide who led the fight against the "know your customer" rules.
Mr. Jensen [sic] says the campaign against anti-money laundering regulations
"is part of the broader context of a surveillance society".
The campaign has also drawn support from smaller banks, particularly Texas
banks that have a friendly ear both in the Bush White House and with
powerful congressional Republicans such as Mr. Gramm.
John Heasley, executive vice-president of the Texas Bankers' Association,
says the government is "trying to deputize the commercial banking industry
to serve as an agent of law enforcement". The burden, he says, is
particularly onerous for small and mid-sized banks.
So far the Bush administration has not publicly linked its opposition to the
OECD tax havens initiative and the money laundering campaign. But it has
delayed, by almost three months, the required annual release of its national
anti-money laundering strategy and has not said it will support sanctions
against countries blacklisted by FATF.
A US about-face on money laundering would deepen consternation in Europe,
which has sharply criticized the US for backing away from the tax havens
plan.
"It's a bandwagon," said one OECD official of the growing campaign. "How far
can it go? Do we scrap all attempts to make people pay taxes? Do we scrap
all attempts to combat money laundering?"

U.S. Treasury Hopes to Ease Burden Of Anti-Laundering Efforts on Banks
DAVID S. CLOUD and JACOB M. SCHLESINGER, Staff Reporters of THE WALL STREET
JOURNAL, June 7, 2001
 <http://interactive.wsj.com/media/atlas-wsjbrand.gif>

WASHINGTON -- Treasury Secretary Paul O'Neill has ordered a broad review of
rules designed to combat money laundering, looking at overhauling parts of
the system that U.S. officials call burdensome and ineffective.

Administration officials said the review reflects skepticism about
money-laundering policies pursued by the Clinton administration, which
beefed up regulatory controls both at home and abroad. The result, these
officials said, has been a greater burden on banks, but not necessarily
better enforcement.

"We're looking at all the requirements in this area, at how to strengthen
them or to streamline them to make them more effective law-enforcement
tools," Treasury spokeswoman Michele Davis said.

U.S. officials are looking at new regulations that would let more banks get
exemptions from current requirements that they report cash deposits
exceeding $10,000. In 1994, Congress ordered the Treasury Department to cut
the number of reports by 30%, but the number grew to more than 12 million a
year during the Clinton years.

Officials also said they are considering extending the reporting
requirements to include securities dealers for the first time. Treasury and
the Securities and Exchange Commission are discussing requiring
broker-dealers to report any transaction, regardless of the dollar amount,
if they suspect money laundering.

Currently, only brokers employed by bank holding companies have to file such
reports. Regulations covering brokers have been in the works for years but
have never been finalized.

But some critics said the Bush administration is under pressure from some
banks and privacy advocates to ease reporting requirements they view as
intrusive and costly.

"There's a real question about whether their intention is to strengthen the
U.S. money-laundering regime or simply to ease bank regulations," said
William Wechsler, a former Treasury official who handled money-laundering
issues during the Clinton administration.
Policing Dirty Money: Two Views
"The requirement that financial institutions notify us of every transaction
of over $10,000 ... imposes a significant cost on the society and the
banking community ..."
Paul O'Neill
Bush Treasury secretary
May 3, 2001
"Tackling dirty money gives us more weapons to fight the underlying crimes.
As is often noted, it took an accountant to catch Al Capone."
Lawrence Summers
Then-Clinton Treasury secretary
March 2, 2000
Just Wednesday, the Treasury's money-laundering watchdogs warned banks that
businesses engaged in selling phone cards may be fronts. They warned the
banks to alert tellers that large cash deposits from phone-card businesses
should be scrutinized and reported when deposits are "well beyond their
normal cash flows."

Treasury officials conducting the review met recently with officials from
the American Bankers Association, and asked for data on the cost of
complying with the rules. Law-enforcement officials also have been asked to
submit information on how helpful the reports are in catching criminals.
Money laundering describes transactions in which proceeds from criminal
activities are passed through a legitimate business to hide the origin of
the funds.

Bush administration officials say the number of prosecutions has been flat,
even though the Clinton administration made money-laundering a priority.
Last year, there were 969 people sentenced in which money laundering was
either the primary or secondary offense.

"We're effectively deputizing bank tellers to act as law-enforcement agents
against their own customers," said J. Bradley Jansen, who is spearheading a
lobbying campaign at the Free Congress Foundation, a conservative think tank
here.

A leading critic of the rules has been Lawrence Lindsey, currently head of
Mr. Bush's National Economic Council. Advocates of easing the rules widely
cite Mr. Lindsey's research on the burdens of money-laundering compliance,
written while he was a scholar at the conservative American Enterprise
Institute think tank.

Mr. Lindsey wrote in a recent book that money-laundering enforcement is "the
kind of blanket search that the writers of the Constitution sought to
prohibit." In an interview Wednesday, Mr. Lindsey said he wasn't involved in
the Treasury's review of the policy, though he still holds his views on the
subject.

Texas bankers who contributed heavily to Mr. Bush's presidential campaign
have been especially active in lobbying for easing the regulations. The
Texas Bankers Association argues that small banks along the border must file
a disproportionate number of reports because of the high volume of
cross-border commerce conducted in cash. Of the 12 million transaction
reports nationwide last year, more than one million came from Texas, said
John Heasley, the group's executive vice president.

The Financial Times last week reported that U.S. officials were believed to
be reviewing anti-laundering laws.

Law-enforcement officials said they rely heavily on so-called
suspicious-activity reports, which bank employees must file when they
suspect a customer is laundering money, regardless of the size of the
transaction. Last year, 156,931 reports were filed, up from 96,900 in 1998,
according to the Federal Reserve.

At a congressional hearing last month, Mr. O'Neill said the reporting rule
"imposes a significant cost on . . . society." But in his prepared remarks,
he also said the administration's 2002 budget "maintains support" for
efforts to strengthen anti-money-laundering efforts.

IDENTITY THIEVES THRIVE IN INFORMATION AGE
Rise of Online Data Brokers Makes Criminal Impersonation Easier
By Robert O'Harrow Jr. Washington Post Staff Writer Thursday, May 31, 2001;
Page A01

The identity thieves began their scam the old-fashioned way, stealing credit
card statements, new bank checks and other documents from mailboxes in a
neighborhood just south of Portland, Ore.

But their operation took a high-tech turn that confirmed what law
enforcement authorities and privacy specialists have long suspected:
Criminal groups, like legitimate businesses, are using commercial online
data brokers, which collect and sell personal information.

Using an America Online e-mail account and one of the stolen credit card
numbers, the thieves paid $25 to $280 for reports containing Social Security
numbers, employment information and driving records via e-mail, according to
documents and interviews.
They used those details to order more credit cards, create a phony driver's
license and begin plundering at least two bank accounts.
"What has taken me a lifetime to build - my trust, my integrity and my
identity - has been tainted," said Rita Johnson, whose identity and credit
card were used to order the reports.  "I don't know if I'm dealing with a
14-year-old messing around with a computer or if I'm
dealing with organized crime."

Law enforcement officials said the case is especially unsettling because
reports available from hundreds of brokers on the World Wide Web can serve
as Information Age keys in the hands of criminals.

There's no way to know how often commercial brokers are used in such
schemes.  But brokers acknowledge, in interviews and documents filed with
the Securities and Exchange Commission, that they unwittingly sell dossiers
online to people using fraudulent credit cards and posing as others.

"Although information brokers provide a legitimate service, we are concerned
that bad actors and practices by some in the industry may be fueling
identity theft," Brad Blower, assistant director of the financial practices
division at the Federal Trade Commission, said when told about the case.

Some law enforcement officials and regulators say identity theft has become
one of their most pressing problems.  The federal Office of the Comptroller
of the Currency recently estimated that there are half a million victims of
identity theft per year in the United states.

The Justice Department told Congress last week that Internet fraud,
including identity theft, is one of the nation's fastest-growing
white-collar crimes.  And John G.  Huse Jr., the Social Security
Administration's inspector general, testified that the misuse of Social
Security numbers in fraudulent activity is "a national crisis." "The power
[the Social Security number] wields - power to engage in
financial transactions, power to obtain personal information, power to
create or commandeer identities - makes it a valuable asset and one that is
subject to limitless abuse," Huse said.

Congress is struggling over how to address the misuse of personal
information, in part because lawmakers don't want to discourage the use of
the Internet or the free flow of information.

Congress in 1998 made it a federal crime to assume the identity of another,
and a year later it outlawed the practice of some brokers who use trickery -
known as pretext calling - to obtain confidential financial information.
The FTC recently charged three brokers with
violating the law. While the identity thieves in the Lake Oswego, Ore., case
somehow obtained access to confidential details about bank accounts, it's
not clear whether they bought the information from brokers using illegal
means.

Brokers of all sizes generally offer legitimate customers information to
review job candidates, track down debtors, or find relatives or
friends.  Customers include banks, insurance companies, lawyers, journalists
and law enforcement agencies.

Most brokers sell data collected from public records, or from details
consumers provide on such forms as warranty cards and credit
applications.  When brokers sell reports online, they often have no way to
verify the identity of buyers who claim to be checking on a
prospective nanny, tenant or employee. "We're as cautious as we're able to
be on a free and open medium such as
the Internet," said Mal Ransom, an executive vice president at US
Search.com, whose company disclosed in a recent SEC filing that some of its
customers had used fraudulent credit-card numbers.  He estimated that the
company sold about 500,000 reports to consumers last year - 80 percent of
them over the Internet.  "Online, we have little protection for ourselves,"
he said.

That's little solace for Johnson and other victims of the unknown thieves in
Oregon.  "It's very invasive, because I'm so out of control
of it," said Sue Nelson, a caterer whose information was bought from at
least two brokers by someone posing as Johnson.

The thieves moved money from Nelson's daughter's bank account into her own
checking account and then starting writing bogus checks.  They also created
a driver's license using her name and ID number.

The case began when Johnson, a bank-fraud investigator, noticed that her
credit card statement had not arrived at the usual time in March and when it
did, it contained charges from companies she had never heard of.  One was
from YourOwnPrivateEye.com, a Los Angeles broker, for three $25 reports
about another woman's name and past and current addresses, Johnson said.

The site's owner, Sam Rokni, declined to discuss the case but said that
every couple of days someone buys a report using a stolen credit card. US
Search.com then charged Johnson $84.95 for a report that contained another
man's phone number and the names of his neighbors and the owner of his
property.

Information Search Inc.  in Baltimore, a broker charged by the FTC with
using pretext calling to obtain individuals' financial data, sold Social
Security numbers, criminal records and driving records to the thieves. The
person posing as Rita Johnson claimed in one instance to be a mother
checking out the background of a nanny.  For another order, the person posed
as a property manager checking out a prospective tenant.

"We do more good than we do harm," said David Kacala, owner of Information
Search, acknowledging that he sometimes unwittingly sells to people using
others' credit card numbers.

Darryl Wrisley, a Lake Oswego police officer, said he is seeking a subpoena
for records from America Online in an effort to identify the people
involved.  He said the combination of the Internet, information brokers and
fraud artists is a dangerous one. "For the crooks, it's great because they
can use anybody's card number. They don't have to be verified.  They don't
have been be seen, so they don't have to be identified physically.  They
don't have to sign anything," Wrisley said.

Financial damage in the case has been limited, in part because Johnson, the
fraud investigator, acted so quickly on her suspicions.
But she and other victims are afraid that their troubles are just beginning.
"It's not an open-and-shut case," she said.  "It's just
ongoing, and it could be ongoing for months or years."


FORMER FDIC EMPLOYEE SENTENCED IN IDENTITY FRAUD SCHEME
FDIC Press Release, June 1, 2001, :
<http://www.fdic.gov/news/news/press/2001/pr4101.html>

Federal Deposit Insurance Corporation (FDIC) Inspector General Gaston L.
Gianni, Jr., announced today that former FDIC employee Theresa A. Hill of
Seat Pleasant, MD, was sentenced on May 29, 2001, to five years of
probation, including six months of home confinement, in connection with an
identity fraud scheme. Ms. Hill was also ordered to pay $87,531 in
restitution. The scheme's victims included employees of the FDIC and the
Department of Health and Human Services' (HHS) Office of Inspector General
(OIG).
This case was investigated by the Inspectors General of the FDIC and HHS and
is being prosecuted by the U.S. Attorney's Office, District of Maryland.
According to the Statement of Facts presented during her March 1, 2001,
guilty plea, from August 1999 through June 2000, Ms. Hill conspired with
five others - Timothy D. Fleming and Shannon A. Williams of Capital Heights,
MD; Ruby L. Downing and Arthur Mathews of Washington, DC, and Yolaunda R.
Thomas of Temple Hills, MD - to obtain goods and services on credit by using
the names and personal information of unwitting victims.
Ms. Hill admitted that the conspirators obtained fraudulent identification
cards in the victims' names, and used the names to open credit accounts,
obtain goods and services in retail stores and order merchandise over the
Internet. Purchases included gift certificates, jewelry and electronic
equipment. In furtherance of the conspiracy, Ms. Hill checked the victims'
credit status by applying for credit accounts using the victims' names,
Social Security numbers and other identifying information.
The indictment alleges that the conspirators obtained personal information,
including names, birth dates, Social Security numbers and home addresses,
about victims who were employed by the FDIC and the HHS OIG. Ms. Hill was
employed in the FDIC's finance division, where she allegedly had access to
personnel records of FDIC employees.
Ms. Downing pled guilty on November 2, 2000, and has not yet been sentenced.
Ms. Williams pled guilty on August 16, 2000, and was sentenced to 36 months
of probation, including six months of home detention. Mr. Fleming pled
guilty on September 18, 2000, to conspiracy and access device fraud and was
sentenced on May 18, 2001, to 37 months of incarceration and ordered to pay
restitution of $87,544. Mr. Mathews pled guilty to access device fraud and
was sentenced to four months of incarceration, to be followed by three years
of supervised release. He was also ordered to pay $21,645 in restitution.

LETTER FROM CONGRESSMAN PAUL TO SECRETARY THOMPSON REGARDING THE "MEDICAL
PRIVACY RULE"
Forwarded by Norman Singleton, May 23, 2001
[To get on Representative Ron Paul's Privacy mailing list, contact
[EMAIL PROTECTED] directly]
<http://www.house.gov/paul/congrec/congrec2001/cr052301B.htm>

May 23, 2001
Thank you for your interest in revising the Department of Health and Human
Services' (HHS) medical privacy regulations. I respectfully urge HHS to
revise those sections of the bill that reduce medical privacy by allowing
the government increased access to
medical records.

According to a Gallop survey commissioned by the Institute for Health
Freedom, 92% of Americans oppose allowing government agencies to have access
to medical records without patient consent. The American people are more
opposed to government agencies having unfettered access to medical records
than they are to any private party, with the exception of financial
institutions, having access to their medical history. Yet HHS's rule
increases the power of government agencies to seize medical records
without consent!

HHS should ensure that the regulation complies with the letter and spirit of
the fourth amendment by requiring that law enforcement officials obtain a
valid search warrant before seizing private medical records. The requirement
that law enforcement officials obtain a warrant from a judge before
searching private documents is one of the fundamental protections against
abuse of the government's power to seize an individual's private documents.
While the fourth amendment has been interpreted to allow warrantless
searches in emergency situations, it is hard to conceive of a situation
where law enforcement officials would be unable to obtain a warrant before
electronic medical records would be destroyed.

HHS should also eliminate those sections which require physicians to provide
the federal government with personal medical records for purposes of
monitoring compliance with the rule. HHS should only collect information if
the physicians or the federal government has obtained written permission
from the patient allowing HHS to obtain their records. HHS should also
repeal those sections of the regulations that provide private parties with a
right to access private medical records for reasons unrelated to treatment.
Particularly offensive are those sections which allow medical researchers to
access private records without individual consent. While researchers claim
to be able to protect the autonomy of their unwilling subjects, the fact is
that allowing third parties to use medical records for
research purposes runs the risk of inadvertent identification of personal
medical information. I am aware of at least one incident where a man had his
identity revealed when his medical records were used without his consent.
As a result, many people in his community discovered details of his medical
history that he wished to keep private!  I am also aware that some will make
the argument that there is a "social good" in medical research that
outweighs the individual's right to privacy. As a physician, I certainly
recognize the value and importance of medical research. However, as a
legislator, I also recognize that because people have a property interest in
their medical information, forcing individuals to divulge medical
information without their consent runs afoul of the fifth amendment's taking
clause, which was designed to prevent sacrifices of individual liberty and
property for the "common good."

In a free society, such as the one envisioned by the drafters of the
Constitution, the federal government should never force a citizen to divulge
personal information to advance "important social goals." Rather, it should
be up to the individuals, not the government, to determine what social goals
are important enough to warrant allowing others access to their personal
property, including their personal information. To the extent these
regulations sacrifice individual rights in the name of a
bureaucratically-determined "common good," they are incompatible with a
constitutional government that respects individual liberty. Finally,
Secretary Thompson, if HHS is going to collect private medical records, the
medical privacy rule should then explicitly forbid the federal government
from permanently storing any medical information on a federally maintained
or funded database. Previous experience with federal collection of
information demonstrates the need for an explicit ban on creating a
database. For example, despite repeated assurances they would not do so, the
Bureau of Alcohol Tobacco and Firearms is using their authority to conduct
background checks under the Brady Law to compile a database of every gun
owner in America!

In conclusion, I once again respectfully request that the Department of
Health and Human Services amend the medical privacy rule to require a search
warrant before government officials may seize medical records. I also
request that HHS remove all sections of the rule that give private parties
(particularly researchers) a federal right to access medical records without
consent for purposes unrelated to treatment. Furthermore, if HHS is going to
continue to allow the Federal Government to collect medical information
for any reason, HHS must explicitly provide that none of the information
collected under the authority given HHS, or any other federal agency, will
be stored in a federally maintained or funded database. Thank you for your
consideration of my views, which, according to the Gallup poll, are shared
by the vast majority of Americans.
-Congressman Ron Paul

Armey decries universal medical IDs, House leader: 'Federal law is being
violated'
By Jon Dougherty, WorldNetDaily.com, May 29, 2001
http://worldnetdaily.com/news/article.asp?ARTICLE_ID=23005

House Majority Leader and Texas Republican Dick Armey has written Health and
Human Services Secretary Tommy Thompson, criticizing Clinton-era guidelines
that he said strongly suggested the agency is preparing to issue universal
medical identification numbers.

In a May 15 letter to Thompson, Armey asked if the Clinton administration
guidelines, implemented a year ago this month, were still
in effect, and if so noted that "federal law is being violated.  ..." If HHS
was still implementing the rules, Armey said, "I would
respectfully urge you to take swift, corrective action" to remove them for
the time being.

"After media reports revealed in 1998 that HHS officials"- then led by
Secretary Donna Shalala - "had been working on a universal
medical identification number, former Vice President Al Gore moved to assure
the public that the program had ended," said a statement issued by Armey's
office.  "Congress followed up by passing a law, still in effect,
prohibiting just such a number."

"Imagine the implications for personal privacy if everyone had a
government-issued medical ID number and the government had an unfettered
search-and-seizure power over private medical records," Armey said, in his
Thompson letter.  "The unfettered search-and-seizure power is currently
posed to become law, thanks to the Clinton privacy regulations that are
being finalized right now."

In his letter to HHS, Armey included a photocopy of a May 2000 data standard
implementation guideline document, which described a database field called,
"HIPAA Individual Identifier" -- the field he says would create a unique
medical identification number.

But, Armey noted, Public Law 106-554 "specifically prohibits HHS from
providing any such 'unique health identifier.'"

"Mr.  Secretary, until Congress speaks again on this subject, I would
respectfully ask that you bring the medical ID project to a complete halt,"
Armey state in his letter.

In a statement released by Armey's office, staffers referenced a recent
Zogby poll, released May 14, which "reveals that nearly two-thirds of likely
voters nationwide have concerns about the government maintaining
computerized medical records on all Americans."

Neither Armey's office nor HHS could be reached for comment because of the
Memorial Day holiday.

WND reported June 29, 1998, that then-Secretary Shalala was set to release
guidelines that would have required medical ID numbers. "With little fanfare
and no media coverage, Health and Human Services Secretary Donna Shalala
announced earlier this month a plan to assign a national identification
number to every health-care provider in the country," Editor-in-Chief Joseph
Farah wrote in his daily column.

"The national standard employer identifier will help eliminate paperwork,
simplify activities such as enrollment in health plans and
payment of health insurance premiums, and save money for consumers," Shalala
said in a June 16, 1998 announcement, as quoted by Farah.

"What the Shalala plan would do is establish the government's ability to
track not only every health-care provider but every health-care transaction
between doctor and patient," Farah said.

WND reported Feb.  18, 1999 that medical professionals had begun sounding
the alarm over new federal regulations which they say
constitute a huge and egregious violation of a patient's privacy. "Federal
and state government agencies have developed a new home
health-care tracking system that is about to be introduced for all patients
receiving any type of home health assistance," WND reported.

"According to one group monitoring the progress of the new Health and Human
Services Department rules, the tracking system will require that all private
Home Health Agencies be licensed and comply with the new federal guidelines
as a requisite to receiving any form of public funding (such as Medicare and
Medicaid)."

And, on Nov.  25, 1999, WND reported that new medical privacy rules unveiled
by HHS Nov.  3 "will do little to fulfill the Clinton
administration's promise of protecting medical privacy ... but will instead
move government closer to digitally warehousing medical
information on all Americans, while providing third parties easier access to
private medical records."

Protecting Privacy and Preventing Misuse of Social Security Numbers
Hearing before the House Ways and Means Social Security Subcommittee, May
22, 2001 http://www.house.gov/paul/congrec/congrec2001/cr052201.htm>
Representative Ron Paul:  I wish to thank the subcommittee on Social
Security of the Ways and Means Committee for holding this hearing on the
misuse of the Social Security number. The transformation of the Social
Security number into a de facto uniform identifier is a subject of
increasing concern to the American people. This is, in large part, because
the use of the Social Security number as a standard identifier facilitates
the crime of identity theft. Today, all an unscrupulous person needs to do
is obtain someone's Social Security number in order to access that person's
bank accounts, credit cards, and other financial assets. Many Americans have
lost their life savings and have had their credit destroyed as a result of
identity theft.
The responsibility for the misuse of the Social Security number and the
corresponding vulnerability of the American people to identity crimes lies
squarely with the Congress. Since the creation of the Social Security
number, Congress has authorized over 40 uses of the Social Security number.
Thanks to Congress, today no American can get a job, open a bank account,
get a professional license, or even get a drivers' license without
presenting their Social Security number. So widespread has the use of the
Social Security number become that a member of my staff had to produce a
Social Security number in order to get a fishing license!
Because it was Congress which transformed the Social Security number into a
national identifier, Congress has a moral responsibility to address this
problem. In order to protect the American people from government-mandated
uniform identifiers which facilitate identity crimes, I have introduced the
Identity Theft Prevention Act (HR 220). The major provision of the Identity
Theft Prevention Act halts the practice of using the Social Security number
as an identifier by requiring the Social Security Administration to issue
all Americans new Social Security numbers within five years after the
enactment of the bill. These new numbers will be the sole legal property of
the recipient and the Social Security Administration shall be forbidden to
divulge the numbers for any purposes not related to the Social Security
program. Social Security numbers issued before implementation of this bill
shall no longer be considered valid federal identifiers. Of course, the
Social Security Administration shall be able to use an individual's original
Social Security number to ensure efficient transition of the Social Security
system.
This act also forbids the federal government from creating national ID cards
or establishing any identifiers for the purpose of investigating,
monitoring, overseeing, or regulating private transactions between American
citizens, as well as repealing those sections of the Health Insurance
Portability and Accountability Act of 1996 that require the Department of
Health and Human Services to establish a uniform standard health identifier.
By putting an end to government-mandated uniform IDs, the Identity Theft
Prevention Act will prevent millions of Americans from having their liberty,
property and privacy violated by private-and-public sector criminals.
In addition to forbidding the federal government from creating national
identifiers, this legislation forbids the federal government from
blackmailing states into adopting uniform standard identifiers by
withholding federal funds. One of the most onerous practices of Congress is
the use of federal funds illegitimately taken from the American people to
bribe states into obeying federal dictates.
Many of our colleagues will claim that the federal government needs these
powers to protect against fraud or some other criminal activities. However,
monitoring the transactions of every American in order to catch those few
who are involved in some sort of illegal activity turns one of the great
bulwarks of our liberty, the presumption of innocence, on its head. The
federal government has no right to treat all Americans as criminals by
spying on their relationship with their doctors, employers, or bankers. In
fact, criminal law enforcement is reserved to the state and local
governments by the Constitution's Tenth Amendment.
Other members of Congress will claim that the federal government needs the
power to monitor Americans in order to allow the government to operate more
efficiently. I would remind my colleagues that in a constitutional republic
the people are never asked to sacrifice their liberties to make the job of
government officials a little bit easier. We are here to protect the freedom
of the American people, not to make privacy invasion more efficient.
Mr. Chairman, while I do not question the sincerity of those members who
suggest that Congress can ensure citizens' rights are protected through
legislation restricting access to personal information, the only effective
privacy protection is to forbid the federal government from mandating
national identifiers. Legislative "privacy protections" are inadequate to
protect the liberty of Americans for several reasons. First, it is simply
common sense that repealing those federal laws that promote identity theft
is a more effective in protecting the public than expanding the power of the
federal police force. Federal punishment of identity thieves provides old
comfort to those who have suffered financial losses and the destruction of
their good reputation as a result of identity theft.
Federal laws are not only ineffective in stopping private criminals, they
have not even stopped unscrupulous government officials from accessing
personal information. Did laws purporting to restrict the use of personal
information stop the well-publicized violation of privacy by IRS officials
or the FBI abuses by the Clinton and Nixon administrations? !
The primary reason why any action short of the repeal of laws authorizing
privacy violation is insufficient is because the federal government lacks
constitutional authority to force citizens to adopt a universal identifier
for health care, employment, or any other reason. Any federal action that
oversteps constitutional limitations violates liberty because it ratifies
the principle that the federal government, not the Constitution, is the
ultimate judge of its own jurisdiction over the people. The only effective
protection of the rights of citizens is for Congress to follow Thomas
Jefferson's advice and "bind (the federal government) down with the chains
of the Constitution."
Mr. Chairman, those members who are unpersuaded by the moral and
constitutional reasons for embracing the Identity Theft Prevention Act
should consider the overwhelming opposition of the American people toward
national identifiers. The overwhelming public opposition to the various
"Know-Your-Customer" schemes, the attempt to turn drivers' licenses into
National ID cards, HHS's misnamed "medical privacy" proposal, as well as the
numerous complaints over the ever-growing uses of the Social Security number
show that American people want Congress to stop invading their privacy.
Congress risks provoking a voter backlash if we fail to halt the growth of
the surveillance state.
In conclusion, Mr. Chairman, I once again thank you and the other members of
the subcommittee for holding a hearing on this important issue. I hope this
hearing would lead to serious Congressional action to end to the federal
government's unconstitutional use of national identifiers which facilitate
identity theft by passing Hr 220, the Identify Theft Prevention Act.
-Representative Ron Paul

J. Bradley Jansen,
Deputy Director, Center for Technology Policy, Free Congress Foundation
"Liberty not only means that the individual has both the opportunity and the
burden of choice; it also means that he must bear the consequences of his
actions and will receive praise or blame for them." -F. A. Hayek

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