The Hacker Crackdown

Kyrie was raided and arrested in Chicago in May 1989. She confessed at great length and pled guilty.

In August 1990, Cook and his Task Force colleague Colleen Coughlin sent Kyrie to jail for 27 months, for computer and telecommunications fraud. This was a markedly severe sentence by the usual wrist-slapping standards of "hacker" busts. Seven of Kyrie's foremost teenage disciples were also indicted and convicted. The Kyrie "high-tech street gang," as Cook described it, had been crushed. Cook and his colleagues had been the first ever to put someone in prison for voice-mail abuse. Their pioneering efforts had won them attention and kudos.

In his article on Kyrie, Cook drove the message home to the readers of *Security Management* magazine, a trade journal for corporate security professionals. The case, Cook said, and Kyrie's stiff sentence, "reflect a new reality for hackers and computer crime victims in the '90s.... Individuals and corporations who report computer and telecommunications crimes can now expect that their cooperation with federal law enforcement will result in meaningful punishment. Companies and the public at large must report computer-enhanced crimes if they want prosecutors and the course to protect their rights to the tangible and intangible property developed and stored on computers."

Cook had made it his business to construct this "new reality for hackers." He'd also made it his business to police corporate property rights to the intangible.

Had the Electronic Frontier Foundation been a "hacker defense fund" as that term was generally understood, they presumably would have stood up for Kyrie. Her 1990 sentence did indeed send a "message" that federal heat was coming down on "hackers." But Kyrie found no defenders at EFF, or anywhere else, for that matter. EFF was not a bail-out fund for electronic crooks.

The Neidorf case paralleled the Shadowhawk case in certain ways. The victim once again was allowed to set the value of the "stolen" property. Once again Kluepfel was both investigator and technical advisor. Once again no money had changed hands, but the "intent to defraud" was central.

The prosecution's case showed signs of weakness early on. The Task Force had originally hoped to prove Neidorf the center of a nationwide Legion of Doom criminal conspiracy. The *Phrack* editors threw physical get-togethers every summer, which attracted hackers from across the country; generally two dozen or so of the magazine's favorite contributors and readers. (Such conventions were common in the hacker community; 2600 Magazine, for instance, held public meetings of hackers in New York, every month.) LoD heavy-dudes were always a strong presence at these *Phrack*-sponsored "Summercons."

In July 1988, an Arizona hacker named "Dictator" attended Summercon in Neidorf's home town of St. Louis. Dictator was one of Gail Thackeray's underground informants; Dictator's underground board in Phoenix was a sting operation for the Secret Service. Dictator brought an undercover crew of Secret Service agents to Summercon. The agents bored spyholes through the wall of Dictator's hotel room in St Louis, and videotaped the frolicking hackers through a one-way mirror. As it happened, however, nothing illegal had occurred on videotape, other than the guzzling of beer by a couple of minors. Summercons were social events, not sinister cabals. The tapes showed fifteen hours of raucous laughter, pizza-gobbling, in-jokes and back-slapping.

Neidorf's lawyer, Sheldon Ze

The E911 Document was also proving a weak reed. It had originally been valued at $79,449. Unlike Shadowhawk's arcane Artificial Intelligence booty, the E911 Document was not software -- it was written in English. Computer-knowledgeable people found this value -- for a twelve-page bureaucratic document -- frankly incredible. In his "Crime and Puzzlement" manifesto for EFF, Barlow commented: "We will probably never know how this figure was reached or by whom, though I like to imagine an appraisal team consisting of Franz Kafka, Joseph Heller, and Thomas Pynchon."

As it happened, Barlow was unduly pessimistic. The EFF did, in fact, eventually discover exactly how this figure was reached, and by whom -- but only in 1991, long after the Neidorf trial was over.

Kim Megahee, a Southern Bell security manager, had arrived at the document's value by simply adding up the "costs associated with the production" of the E911 Document. Those "costs" were as follows:

1. A technical writer had been hired to research and write the E911 Document. 200 hours of work, at $35 an hour, cost : $7,000. A Project Manager had overseen the technical writer. 200 hours, at $31 an hour, made: $6,200.

2. A week of typing had cost $721 dollars. A week of formatting had cost $721. A week of graphics formatting had cost $742.

3. Two days of editing cost $367.

` 4. A box of order labels cost five dollars.

5. Preparing a purchase order for the Document, including typing and the obtaining of an authorizing signature from within the BellSouth bureaucracy, cost $129.

6. Printing cost $313. Mailing the Document to fifty people took fifty hours by a clerk, and cost $858.

7. Placing the Document in an index took two clerks an hour each, totalling $43.

Bureaucratic overhead alone, therefore, was alleged to have cost a whopping $17,099. According to Mr. Megahee, the typing of a twelve-page document had taken a full week. Writing it had taken five weeks, including an overseer who apparently did nothing else but watch the author for five weeks. Editing twelve pages had taken two days. Printing and mailing an electronic document (which was already available on the Southern Bell Data Network to any telco employee who needed it), had cost over a thousand dollars.

But this was just the begi

Plus ten percent of the cost of the software and the hardware, for maintenance. (Actually, the ten percent maintenance costs, though mentioned, had been left off the final $79,449 total, apparently through a merciful oversight).

Mr. Megahee's letter had been mailed directly to William Cook himself, at the office of the Chicago federal attorneys. The United States Government accepted these telco figures without question.

As incredulity mounted, the value of the E911 Document was officially revised downward. This time, Robert Kibler of BellSouth Security estimated the value of the twelve pages as a mere $24,639.05 -- based, purportedly, on "R&D costs." But this specific estimate, right down to the nickel, did not move the skeptics at all; in fact it provoked open scorn and a torrent of sarcasm.

The financial issues concerning theft of proprietary information have always been peculiar. It could be argued that BellSouth had not "lost" its E911 Document at all in the first place, and therefore had not suffered any monetary damage from this "theft." And Sheldon Ze