ment officials? It is always a delicate balance. How do we strike the right kind of balance? We have tried to strike that balance with current technology. I am not aware that the FBI has made an intrusive, widespread violation into the realm of privacy that is not justifiable. There are certain procedures they have to follow. They have to go to the court. That is not an easy thing to do. They have to report that to an administrative council and so forth.

I don't want to seem to be ignoring the need for privacy. My own belief is we are going to find ourselves in a society in the future in which you will have an increase in the level of terrorism, not only abroad but here in the United States. That will call into question the tension that normally exists between the need for privacy and the need for protection, and it will shift from time to time depending upon the horrific nature of the latest attack upon our citi

zens.

The FBI needs to try to maintain at least a status quo position, where they are today, fearing where technology is going tomorrow. Frankly, I am not sure that just because something is possible it is necessarily desirable in terms of preserving our values. Technology can achieve untold things, but maybe they are inconsistent with cherished values that we have had.

That is a decision that we do not make at the governmental level. That is something that we have to try to continue to educate ourselves on. Just because we can achieve it, does it mean we should desire it?

One of the fears of the Agency would be that we now have an informal arrangement. Mr. Berman, you talked about an informal arrangement, that we have ongoing talks. But these, I assume, are voluntary by the companies who are involved. I am not sure how committees work in your business, but I suspect they work like the ones here. Sometimes people show up and sometimes they do not. It is periodic at best. There may be a few members who are very conscientious. There may be a few members who say they are not interested in helping our law enforcement agencies.

As the race for superiority in technology continues to escalate, there will be some firms that say, we do not want to be a part of this, we got a better deal than AT&T or whatever the firm might be, and we can get there faster and not comply with what these responsible firms are trying to do to accommodate law enforcement's needs. These firms will also say, we want to get there first, we want to get there fast, and we want to make the biggest amount of money; and if we can market this domestically and internationally, that is what we are going to do, and to hell with the FBI and law enforcement.

There may be a need for legislation in some form. I am not sure it is this specifically, but I would not dismiss it out of hand by saying we can operate informally. We may need to have an adjustment. The legislation must neither hamper technological breakthroughs nor intrude in a way that is undesirable in the view of most of the American public.

Mr. BERMAN. We have suggested the possibility of a more formal process with more diversity than simply the telephone industry, the computer industry, Internet, and that process could go on, and, in fact, it would be encouraging the FBI to catch up with the tech

nology. I am not saying that they are behind or are Luddites, but to really create a process that makes that an ongoing dialog that is less than informal.

That is different and I think far more acceptable than saying stop the world, you know, we have got to get off here because we could lose control.

Senator COHEN. Technology, like time, cannot be stuffed in a bottle. We must recognize that. The real issue is: Can a system be devised where the law enforcement agencies are running in tandem with technology to make sure that technology is not racing ahead so fast that law enforcement is put at such a severe disadvantage that it cannot fulfill its mission of protecting the American people? Further, can we devise such system in a way that does not unduly intrude into the value we place on privacy? Obviously, whenever we allow the FBI or any other agency to intrude, we knowingly give up some of our privacy. We are very conscious of this, and do not do this lightheartedly.

Mr. BERMAN. We are for that process, but we have to be on guard on privacy grounds. This legislation, as it was drafted, would do some very interesting things to communications. It would permit the FBI to move a communication to a remote location and pick it up and require networks design that. Now, that may be the future, but also it would have made Watergate really hard to uncover if you could have moved the communication from the Howard Johnson's Hotel to some remote site and no one was ever able to trace that interception.

Senator COHEN. I do not think that is how Watergate was broken. That is another matter altogether.

Senator LEAHY. Nor do I think that will determine which way this committee goes.

Mr. NEEL. Senator, I would respond to one thing. In terms of the willingness of the private companies participating in this forum, the entire local telephone industry is represented at those meetings, and my information is that participation in that work has been enthusiastic and that attendance is universal. I do not think our industry would have any problems with sterner mandates for participation in that process.

Senator COHEN. Mr. Chairman, thank you very much. I hope to be able to continue to participate.

Senator LEAHY. I appreciate your participation, and I appreciate the help not only because of our own personal friendship but because of your diligence on this committee and your experience in this area.

Nobody is suggesting we do away with our wiretap legislation; certainly I am not. But even if we can wiretap messages transmitted over telephone lines or the air waves if it is cellular, if that message is encrypted, law enforcement might still not have anything. I realize we are talking about an issue that is going to be before this subcommittee in another forum, but if person A is saying to person B something that is encrypted with an unbreakable code, even if you can pick it up, even if you can access it with a wiretap, you still have nothing except meaningless noises.

Mr. NEEL. That is correct, and clearly that represents a challenge to law enforcement and to the Government to determine the degrees to which encryption should be

Senator LEAHY. The reason I raise the point is that even if we make sure that whatever is being sent can be tapped, you still have a second problem if the person sending the message encrypts it. You still have nothing.

Mr. NEEL. That is correct.

Senator LEAHY. Now, I might say on the question of this cooperative endeavor and I want to send this message out very clearlyI would encourage industry and law enforcement to continue this cooperative effort. But I am not prepared to support a government veto on telecommunication technology advances, for a couple of reasons. One, the Federal Government has historically stayed way behind the curve on telecommunications and, for that matter, computer technology. In a lot of areas, both military and civilian, where the Federal Government should be doing much better, an outrageous amount of time and effort and money has probably been wasted because we have stayed so far behind the curve.

Also, I am not going to hinder one of the areas where the United States has been such a great leader while government officials_try to make up their mind how far we want them to be leaders. So I would urge everybody to work on the cooperation, but I would suggest that legislation allowing government vetoes on technological advances by the best innovative minds in America is not going to

occur.

Incidentally, the FBI Director estimated the cost to be about $500 million over the next 3 years to make existing equipment and systems wiretap-friendly. You say about $1.8 billion.

Mr. NEEL. I said we think it will cost $1.8 billion to solve only one part of the call forwarding issue alone, not to mention any other costs incurred through this. So we think it would be many multiples of the figure that the FBI cited.

Senator LEAHY. In the Quantico Committee, are the huge differences in cost estimates an issue that is being discussed?

Mr. NEEL. Yes, I believe it is. Surely cost is a main point of interest out there.

Senator LEAHY. Because if these costs get up high enough, you have probably got a moot point facing us to begin with.

Mr. NEEL. Well, as I mentioned earlier, no one wants to put a price tag on the fight against crime, and our industry is

Senator LEAHY. We do it all the time. [Laughter.]

Mr. NEEL. Well, our industry would not want to do that in terms of deciding whether it is worth the Government's spending that kind of money. But we do think that it is important that you have realistic numbers to know what the taxpayer exposure will be if you were to implement a proposal such as this.

Senator LEAHY. Let me close with this on needs of law enforcement. I would say this to the industry to add to your incentive to work very closely on this. This is not just a question of finding out where the guy who held up the branch bank might be stashing the $50,000, but it could very, very well be a question of finding the person who is going to blow up an airplane as it is landing at Kennedy Airport, or the person who is going to blow up a convention

center with 2,000, 3,000 or 100,000 people in it to make some political point dealing with concerns in a country that most Americans may not even have heard about.

These are the kinds of crimes possible in an era when transportation is so easy and where the weapons of devastation that can be used by terrorists are way beyond anything anybody thought of when the first wiretapping was being done. So the stakes are very, very high for our own security. I have said over and over again that a well-concentrated terrorist act poses danger to our constitutional liberties that we have relied on in our democracy for 200 years. A dozen well-equipped, motivated, and financed terrorists can pose more threat to our democratic liberties in this country than all the armies arrayed against us in world wars throughout this century.

Representative EDWARDS. I would like to point out that the FBI has done a remarkably successful job in combatting terrorism in this country. We have kept a careful count of it in my subcommittee. Fifteen years ago, there were several hundred incidents per year, and now it is down to a handful each year. I am going to be very interested in our exploring what the other friendly countries are doing about this because they really have a lot of terrorism that puts ours to shame. Monthly, in Europe there are terrorist incidents. So they must have the same concerns that we have. But I say I have great confidence in what our sister subcommittee in the Senate is going to do. I am really honored that we can work together because this is a very difficult problem, Mr. Chairman. Senator LEAHY. It is, indeed.

Gentlemen, thank you very, very much.

Mr. BERMAN. Thank you. The coalition of 50 organizations really, the cross-communication, is very anxious to work with the committee and the administration to find a way out of this and to find a solution that balances these values.

Senator LEAHY. Let me tell you, nobody is more anxious to have you work closely together and find a solution than I am, because I must say that if we have to design a legislative solution today that will predict what technology will be 5 or 6 years from now, it is not going to work. It would be inadequate for industry and I am afraid it would be inadequate for law enforcement. It would end up being a lose/lose situation, and we do not want that.

Mr. NEEL. Thank you very much.

Mr. BERMAN. Thank you very much.

Senator LEAHY. Our last witness is William C. O'Malley of the National District Attorneys Association. We thought that this would be a good name to have this close to St. Patrick's Day.

Also, as I mentioned to Senator Specter earlier, I am a former vice president of the National District Attorneys Association, back in the distant past. I must say, Mr. Chairman, I gave up the honor and glory of becoming president of that association, which I would have had in another year or year-and-a-half, for the anonymity of the U.S. Senate. And for the last 20 years, I am not sure I made the right choice because the most enjoyable job in government I have ever had was as a prosecutor.

Representative EDWARDS. From our point of view, you made the right choice because we could not have gotten along without you.

Senator LEAHY. I do not know about that, but I thank you very much.

Mr. O'Malley?

Mr. O'MALLEY. I will say that we will miss your leadership, too, Mr. Chairman.

Representative EDWARDS. Thank you.

STATEMENT OF WILLIAM C. O'MALLEY, DISTRICT ATTORNEY FOR PLYMOUTH COUNTY, MA, AND PRESIDENT, NATIONAL DISTRICT ATTORNEYS ASSOCIATION

Mr. O'MALLEY. My name is Bill O'Malley. I live in Brockton, MA. I am the district attorney of Plymouth County, 26 towns and 1 city just south of Boston. I have been a prosecutor for 22 years. I am the president of the National District Attorneys Association, an organization with 7,000 members who represent prosecutors of this country.

I will begin by pointing out that State and local prosecutors perform more than half of all the wiretaps. Approximately 60 percent of the some 850 wiretaps that are authorized in the course of the average year are conducted by district attorneys or State attorneys.

In the time I have been a prosecutor, I have personally applied for as district attorney or conducted as an assistant district attorney 25 wiretaps. They have been focused in the area of organized crime, illegal gaming, and loan sharking primarily, and for the past 10 years exclusively in the area of drug investigations.

The only tool that permits us to get above the retail level in the chain of distribution of illegal drugs and to get the people who bring drugs into this country, who finance at the wholesale level the purveying of illegal drugs, is the tool of wiretapping.

In July 1992, our board of directors unanimously passed a resolution supporting legislation that is designed to ensure that law enforcement agencies retain the capability of performing court-authorized electronic surveillance in light of changes in the technology. I think that it is critically important to understand what Congress did in 1968 when it addressed the issue of balancing privacy on the one hand and an effective tool for law enforcement on the other. And the safeguards that were put in place are such that the average person is shocked to learn that there are only some 800 to 900 wiretaps in the course of a year and that that includes every Federal agency, every State attorney general's office, and every local prosecutor, between 800 and 900 a year.

The amount of paperwork that is required to satisfy the formal requirements of title 18, title III, and the State laws runs between 25 and 200 pages. There are three kinds of probable cause that must be shown before a wiretap order can be issued. The States are permitted in our Federal system to grant greater protection of rights of our citizens. They are not allowed to grant greater authority to law enforcement. Congress preempted the field. We are now, because technology is changing, revisiting issues that have been very carefully balanced some 25 years ago. It is this simple. With 1,500-some companies providing services and equipment in the telecommunication area, voluntary agreement will never preserve our capabilities of carrying out the authority give to us 25 years ago.