Federation of Connecticut Taxpayer Organizations

WELCOME TO THE 22nd EDITION OF

TAX TALK

Your update on what others are thinking, doing, and planning
Send your comments or questions to me, and
I will include in next week's publication.

Please note that TAX TALK is now on our Website

Thank you to all who contributed to TAX TALK this week. Several interesting articles follow to include the

*Is the FBI Bugging Your Car?
*Citizens Against Government Waste Provides
Insight on the Federal Deficit
*A FCTO Member Would Like Information on
Local Economic Development Commissions
*Excerpt from Tactics Often Used to Form and Sell Budgets

DO YOU HAVE SOMETHING YOU WOULD LIKE TO
INCLUDE IN NEXT WEEK'S PUBLICATION?
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Phil Gosselin, imgoose7@yahoo.com
East Hartford Taxpayers Association
Subject: Big Brother on Board
February 9, 2004

Big Brother on Board Charles R. Smith
Thursday, Dec. 11, 2003 OnStar Bugging Your Car
http://www.newsmax.com/archives/articles/2003/12/10/213653.shtml

Thursday, Dec. 11, 2003 OnStar Bugging Your Car
Would it surprise you to find out that the FBI might be able to monitor private conversations in your car? A recent court case revealed that the FBI used the popular OnStar system to do just that. GM cars equipped with OnStar are supposed to be the leading edge of safety and technology. OnStar has run a recent blitz of commercials citing helpless motorists calling in with every type of emergency, from a heart attack to locking the keys inside the car. In the advertising world, OnStar reacts quickly by sending help or even unlocking the car. However, buried deep inside the OnStar system is a feature few suspected - the ability to eavesdrop on unsuspecting motorists. The FBI found out about this passive listening feature and promptly served OnStar with a court order forcing the company to give it access. The court order the FBI gave OnStar was not something out of the Patriot Act involving international terrorism or national security but a simple criminal case. According to court records, OnStar complied with the order but filed a protest lawsuit against the FBI. Yet the FBI was able to enforce the original legal order and completed its surveillance because OnStar's lawsuit took nearly two years to pass through the court system. The 9th Circuit Court of Appeals recently ruled in OnStar's favor. The ruling was not based on invasion-of-privacy grounds or some other legitimate constitutional basis. The FBI lost because the OnStar passive listening feature disables the emergency signal, the very life-saving call for help that the advertisements tout as the main reason to purchase the system. "The precedent has been set," stated former Georgia Rep. Bob Barr. "The grounds on which the 9th Circuit reached the decision were not on the privacy aspects of the case. Under the CALEA [Communications Assistance to Law Enforcement Act] laws, the FBI blocking of the emergency signal constituted a breach of the consumers' contract." The technical problem of blocking the emergency signal is clearly one that the FBI tech teams can overcome. Thus, under the current ruling, the FBI can resume using OnStar to monitor subject vehicles once it has solved the emergency issue.

Open for Abuse
Further analysis of the OnStar design reveals that the FBI may not be the only one listening in. According to my own electronics experts, foreign intelligence services or even technically savvy organized crime groups could invoke the passive OnStar feature. The system used by the FBI for law enforcement purposes is open for abuse. That abuse could span the spectrum of illegal operations from criminal activity to commercial espionage to military espionage. It is not hard to envision a foreign intelligence service using the covert OnStar feature to monitor the conversations of unknowing government employees, contractors or officials. It would seem certain that the FBI should be concerned that its one-way listening feature might be twisted into a tool for evil if it fell into the hands of hostile nations or ruthless criminals. One would hope that law enforcement would design these very expensive surveillance systems so they cannot be abused. "The abuse by others does not enter into question unless it is for counter-espionage purposes," stated former Rep. Barr. "As for the general public themselves, it is clear from the past history that law enforcement is not concerned if these systems are abused."

Digital Pearl Harbor
There is historical precedent to back up Barr's claim. The Clinton administration wanted to erect a multibillion-dollar monitoring system called Clipper. However, the project had a major flaw that could have led to a digital Pearl Harbor. Attorney General Janet Reno wanted to monitor all American domestic computer communications such as e-mail, using the Clipper "exploitable" feature to secretly intercept and decode any messages. Prime targets for monitoring would be foreign governments, banks, corporations and individuals the Clinton administration felt were a threat. The Clipper keys were to be held by Ron Brown's Commerce Department under a project run by Assistant Attorney General Webster Hubbell. In fact, it was the "exploitable" feature of Clipper that worried U.S. government officials. FBI Director William Sessions wrote two major papers to then-Clinton National Security Advisor George Tenet early in February of 1993. The FBI documents reveal that the Clipper system had flaws that could compromise all the computers so equipped. The FBI director wrote: "This design means that the list of chip keys associated with the chip ID number provides access to all Clipper secured devices, and thus the list must be carefully generated and protected. Loss of the list would preclude legitimate access to the encrypted information and compromise of the list could allow unauthorized access." The Clipper flaw also worried other U.S. government officials. In fact, NASA decided to decline to use any Clipper device. In 1993, NASA Associate Administrator for Management Systems and Facilities Benita A. Cooper wrote: "There is no way to prevent the NSA from routinely monitoring all encrypted traffic. Moreover, compromise of the NSA keys, such as in the Walker case, could compromise the entire system." For those of you who do not remember, former Navy officer Jonathan Walker is currently serving a life sentence for espionage because he gave the Soviet Union the secret code keys to U.S. military communications. In short, NASA pointed out that a single security breach by one agent would have given total access to every computer in the United States to a foreign power. The desire to monitor all communications at any cost is well documented. Despite the warnings in 1993 that the draconian Clipper system had an Achilles' heel, Ms. Reno and VP Al Gore continued to pursue mandatory Clipper designs for America right up to the end of the Clinton administration.

For Whom the Booth Tolls
The Big Brother-like desire to monitor you does not stop with computers, phones and OnStar. The state of Virginia recently revealed that it has used electronic tollbooth systems for law enforcement surveillance. The Virginia Smart Tag system is designed to electronically pay tolls, allowing customers to speed through specially equipped booths. The Smart Tag is a small electronic box about the size of a deck of cards that is attached to a customer's windshield. Angry lawyers and privacy advocates argued that the Smart Tag system could be used against customers by law enforcement. The Virginia Department of Transportation promised in several public statements that the system would be used only for toll collection purposes. That promise turned out to be a lie. Recent court actions forced the state to reveal that the Smart Tag system had been used by law enforcement for surveillance. The systematic use of a toll collection process for surveillance brings into question the move to nationalize the toll process with a single electronic tag to pay any toll.

No Check - No Balance
Clearly, any surveillance system can be used and abused at the expense of the general public unless there are checks that balance law enforcement's need to know with the public's right to privacy. At the moment, those checks and balances don't appear to be in place. "The government's efforts to thus enhance its ability to listen in to our conversations have moved into high gear in the aftermath of 9/11," stated former Rep. Bob Barr. "The Patriot Act granted law enforcement certain powers, including administrative warrants that inhibit our ability to check to see that these powers are used correctly," concluded Barr.
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Roland Fisher, rolandfisher@comcast.net
East Hartford Taxpayers Association
Subject: Taxpayers Seeing Red, CBO Estimates Record Deficits
February 1, 2004

A special thank you to Roland Fisher for forwarding to us the following article from the website: Citizens Against Government Waste. Travel to this website for more interesting information. http://www.cagw.org/site/PageServer

(Washington, D.C.) Citizens Against Government Waste (CAGW) once again today blasted Congress for its fiscal irresponsibility. In its annual economic outlook, the Congressional Budget Office (CBO) projected the fiscal 2004 deficit at $477 billion and $362 billion for 2005. Long-term figures project a $2.4 trillion deficit over the next ten years, an increase of $1 trillion from the CBO�s August report.   �Despite the ongoing war on terrorism and events in Iraq, members of Congress have been more concerned about filling the coffers of special interests during election year politics than the fiscal well-being of the country,� CAGW President Tom Schatz said. �The money members of Congress spend today to get reelected will be devastating to our children and grandchildren for decades to come.� The CBO report in August estimated a $480 billion deficit in fiscal 2004 and a $341 deficit in fiscal 2005. While the improving economy brought in more federal revenue, it was offset in new spending by items such as the recently passed Medicare bill. The CBO today warned that if federal spending is not curbed, the deficit is likely to increase. �With big-ticket items like the energy and transportation reauthorization bills coming down the pipeline, taxpayers can expect the deficit to skyrocket even further,� Schatz continued. �Yet knowing what was ahead, members of Congress showed no concern for the deficit when they included thousands of pork-barrel projects in the recently passed fiscal 2004 Omnibus spending bill, including: $50 million for an indoor tropical rainforest; $2 million for the Appalachian Fruit Laboratory; $1 million for the Alaska SeaLife Center; and $300,000 for the National Wild Turkey Federation.� President Bush will submit his fiscal 2005 budget to Congress on Monday. It is expected that he will propose a less than one percent increase in non-defense discretionary spending in an effort to cut the deficit in half over the next five years. Over the first three years of the Bush Administration, such spending increased 27 percent, leading to a record deficit of $375 billion in fiscal 2003. The fiscal 2004 projections surpass that figure by $202 billion, or 54 percent. �This year, members of Congress need to at least stick to the tight parameters of the non-defense budget set by the President,� Schatz concluded. �Taxpayers are more concerned about the deficit and the state of spending than official Washington believes. CAGW will continue to work with other fiscal conservative organizations to hold the administration and Congress accountable for the record red ink.� Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.
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Maury Johnson, Mauryj1923@aol.com
Taxpayers Group: QUEST Stratford (Quality Education for Stratford Taxpayers)
Subject: How are Economic Development Commissions/Committees activities conducted by some of our CT towns?
Date: January 21, 2004
Hi Susan, Good job on the Twentieth edition of Tax TAlk.
Have a question which some of your readers may be able to help with. How are Economic Development Commissions/Committees activities conducted by some of our CT towns? Do they create an Economic Development Authority? Do they fund some group/persons to carry out aggressive activity in economic development? What has worked well as a process? Would appreciate comments.
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Peter Arcidiacono, PJArcidiacono@aol.com
Common Sense, East Hampton
Subject: Tactics Often Used to Form and Sell Budgets
A special thank you to Peter for providing us with a wonderful "resource that can be used to become aware of (and be armed to counter) tactics sometimes used by officials as they form and try to sell their proposed budgets." This document can be found on FCTO's website, ctact.org, under Budgets-Local. I will be offering excerpts within each Tax Talk Publication understanding the significance of this document as we head into the local budget season...

Tactics Often Used to Form and Sell Budgets
The following is a resource that can be used to become aware of (and be armed to counter) tactics sometimes used by officials as they form and try to sell their proposed budgets.

1. Salaries: Salaries account for most of the budget. In selling the budget, officials often say the salaries are fixed by contract. What they don�t say is salaries are fixed only if no turnover in staff is assumed. But turnover does occur. When it does, any staff member who leaves is usually replaced by a more junior hire that is paid less money. For example, replacing a teacher at the top of the salary scale with one at the bottom of the scale can save up to $35,000 a year. Typical staff turnover is 10%. For a system with 150 teachers, that means a turnover of 15 teachers. If only $10,000 were saved per departing teacher, the salary account would be over budgeted by $150,000. This might be acceptable IF the resulting surplus funds were returned at the end of the year. But the surplus is invariably spent on other items. Officials should be asked if the salary account includes any savings resulting from expected staff turnover. And, equally important, how does the budgeted saving compare with past turnover savings experience.

2. The salary line item in the education budget is often presented as one massive number. When pressed for details, one finds that it includes expenditures for substitutes, stipends, and overtime all items that are not necessarily fixed.   Go to ctact.org under Local-Budgets to learn more....