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Archivists in France Fight a Privacy Initiative

June 16, 2013 by Leave a Comment

One of the European Union’s measures would grant Internet users a “right to be forgotten,” letting them delete damaging references to themselves in search engines, or drunken party photos from social networks. But a group of French archivists, the people whose job it is to keep society’s records, is asking: What about our collective right to keep a record even of some things that others might prefer to forget?

The archivists and their counteroffensive might seem out of step, as concern grows about American surveillance of Internet traffic around the world. But the archivists say the right to be forgotten, as it has become known, could complicate the collection and digitization of mundane public documents — birth reports, death notices, real estate transactions and the like — that form a first draft of history.

“Today, e-mail, Facebook, Twitter — this is the correspondence of the 21st century,” said Jean-Philippe Legois, president of the Association of French Archivists, which has around 1,700 members. “If we want to understand the society of today in the future, we have to keep certain traces.”

The group represents a wide swath of professionals who specialize in preserving and cataloging documents from institutions as diverse as town halls or museums. Still, supporters of the French campaign acknowledged the growing concern about digital privacy, after the disclosure of the extensive United States intelligence project known as Prism to mine data from Internet companies for security purposes.

To try to persuade European Union lawmakers to drop or soften the proposed rules on digital privacy, the French archivists introduced a petition, circulated to their counterparts in other countries. The group says the petition has received almost 50,000 signatures, which it will present to the European Parliament.

The group also commissioned advertising posters underlining the threat it sees. One shows a metaphorical image of demonstrators marching through Paris, their faces hidden by digitally appended clown masks. It asks: “Without a name, does individual commitment still have the same meaning?”

The archivists know that their influence is limited as the Parliament is lobbied by myriad Internet companies, governments and other organizations, which have submitted about 4,000 amendments to the proposed law for the European Union’s 27 member states. This month, several proposals were softened, including the plan to require companies to obtain “explicit” consent from users to collect and process their data, though the United States surveillance revelations could renew the push for tougher rules.

The right to be forgotten is one of the most contentious items.

The European Commission has drawn support from consumer organizations and privacy advocates, but the archivists have received backing from other European professionals who rely on record-keeping, including genealogists and history professors.

Advocates of the right to be forgotten say it is unrealistic to expect Internet companies like Google and Facebook, which collect huge amounts of data on their users in order to direct relevant advertising to them, to put safeguards in place without stricter regulations.

European Union lawmakers want to establish two separate, but related, digital privacy rules. One would guarantee Internet users the right to delete pictures, writings and other data on social networks and other online forums. In theory, this is already permitted, but regulators say removal can be cumbersome and deleted material often lingers in search engines and elsewhere.

Under the proposal, search engines would have to remove the material immediately. Internet companies balk at that. They say that they generally favor giving people control over material they have posted themselves, but oppose letting Internet users demand that search engines and other sites remove information about them that has been posted by others, perhaps including official documents.

The principle of a right to be forgotten is being tested under existing laws in Spain, where the government has ordered Google to remove unflattering references to dozens of individuals who filed complaints with the Spanish Data Protection Agency. Google has refused, insisting that only publishers or courts, not individuals or search engines, should have the power to remove information, assuming that it was legally published.

Article source: http://www.nytimes.com/2013/06/17/technology/archivists-in-france-push-against-privacy-movement.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Secret Court Ruling Put Tech Companies in Data Bind

June 13, 2013 by Leave a Comment

The judges disagreed. That left Yahoo two choices: Hand over the data or break the law.

So Yahoo became part of the National Security Agency’s secret Internet surveillance program, Prism, according to leaked N.S.A. documents, as did seven other Internet companies.

Like almost all the actions of the secret court, which operates under the Foreign Intelligence Surveillance Act, the details of its disagreement with Yahoo were never made public beyond a heavily redacted court order, one of the few public documents ever to emerge from the court. The name of the company had not been revealed until now. Yahoo’s involvement was confirmed by two people with knowledge of the proceedings. Yahoo declined to comment.

But the decision has had lasting repercussions for the dozens of companies that store troves of their users’ personal information and receive these national security requests — it puts them on notice that they need not even try to test their legality. And despite the murky details, the case offers a glimpse of the push and pull among tech companies and the intelligence and law enforcement agencies that try to tap into the reams of personal data stored on their servers.

It also highlights a paradox of Silicon Valley: while tech companies eagerly vacuum up user data to track their users and sell ever more targeted ads, many also have a libertarian streak ingrained in their corporate cultures that resists sharing that data with the government.

“Even though they have an awful reputation on consumer privacy issues, when it comes to government privacy, they generally tend to put their users first,” said Christopher Soghoian, a senior policy analyst studying technological surveillance at the American Civil Liberties Union. “There’s this libertarian, pro-civil liberties vein that runs through the tech companies.”

Lawyers who handle national security requests for tech companies say they rarely fight in court, but frequently push back privately by negotiating with the government, even if they ultimately have to comply. In addition to Yahoo, which fought disclosures under FISA, other companies, including Google, Twitter, smaller communications providers and a group of librarians, have fought in court elements of National Security Letters, which the F.B.I. uses to secretly collect information about Americans. Last year, the government issued more than 1,850 FISA requests and 15,000 National Security Letters.

“The tech companies try to pick their battles,” said Stephen I. Vladeck, a law professor at American University who has challenged government counterterrorism surveillance. “Behind the scenes, different tech companies show different degrees of cooperativeness or pugnaciousness.”

But Mr. Vladeck added that even if a company resisted, “that may not be enough, because any pushback is secret and at the end of the day, even the most well-intentioned companies are not going to be standing in the shoes of their customers.”

FISA requests can be as broad as seeking court approval to ask a company to turn over information about the online activities of people in a certain country. Between 2008 and 2012, only two of 8,591 applications were rejected, according to data gathered by the Electronic Privacy Information Center, a nonprofit research center in Washington. Without obtaining court approval, intelligence agents can then add more specific requests — like names of individuals and additional Internet services to track — every day for a year.

National Security Letters are limited to the name, address, length of service and toll billing records of a service’s subscribers.

Because national security requests ban recipients from even acknowledging their existence, it is difficult to know exactly how, and how often, the companies cooperate or resist. Small companies are more likely to take the government to court, lawyers said, because they have fewer government relationships and customers, and fewer disincentives to rock the boat. One of the few known challenges to a National Security Letter, for instance, came from a small Internet provider in New York, the Calyx Internet Access Corporation.

The Yahoo ruling, from 2008, shows the company argued that the order violated its users’ Fourth Amendment rights against unreasonable searches and seizures. The court called that worry “overblown.”

“Notwithstanding the parade of horribles trotted out by the petitioner, it has presented no evidence of any actual harm, any egregious risk of error, or any broad potential for abuse,” the court said, adding that the government’s “efforts to protect national security should not be frustrated by the courts.”

One of the most notable challenges to a National Security Letter came from an unidentified electronic communications service provider in San Francisco. In 2011, the company was presented with a letter from the F.B.I., asking for account information of a subscriber for an investigation into “international terrorism or clandestine intelligence activities.”

The company went to court. In March, a Federal District Court judge, Susan Illston, ruled the information request unconstitutional, along with the gag order. The case is under appeal, which is why the company cannot be named.

Google filed a challenge this year against 19 National Security Letters in the same federal court, and in May, Judge Illston ruled against the company. Google was not identified in the case, but its involvement was confirmed by a person briefed on the case.

In 2011, Twitter successfully challenged a silence order on a National Security Letter related to WikiLeaks members.

Other companies are asking for permission to talk about national security requests. Google negotiated with Justice officials to publish the number of letters they received, and were allowed to say they each received between zero and 999 last year, as did Microsoft. The companies, along with Facebook and Twitter, said Tuesday that the government should give them more freedom to disclose national security requests.

The companies comply with a vast majority of nonsecret requests, including subpoenas and search warrants, by providing at least some of the data.

For many of the requests to tech companies, the government relies on a 2008 amendment to FISA. Even though the FISA court requires so-called minimization procedures to limit incidental eavesdropping on people not in the original order, including Americans, the scale of electronic communication is so vast that such information — say, on an e-mail string — is often picked up, lawyers say.

Last year, the FISA court said the minimization rules were unconstitutional, and on Wednesday, ruled that it had no objection to sharing that opinion publicly. It is now up to a federal court.

Nicole Perlroth and Somini Sengupta contributed reporting from San Francisco.

Article source: http://www.nytimes.com/2013/06/14/technology/secret-court-ruling-put-tech-companies-in-data-bind.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Square Feet: A Closer, and Skeptical, Look at Nontraded REITs

July 20, 2011 by Leave a Comment

Cole took this unusual step after the Townsend Group of Cleveland, an adviser to the state pension board, reviewed the investment at the request of public officials and said it was unsuitable for a pension fund. Townsend’s long list of reasons included the excessive fees paid by investors and the company’s lack of liquidity and “appropriate policies for investment valuation,” public documents show.

The events in West Warwick brought unwanted attention to a relatively small and little-known sector of the real estate industry that has been around for more than a decade but has grown rapidly in recent years. Nontraded REITs are securities that are not listed on any exchange and are sold through financial advisers, which receive generous fees. Recently, this sector has been receiving heightened scrutiny from both the Securities and Exchange Commission and the Financial Industry Regulatory Authority, or Finra.

In May, Finra filed a complaint against David Lerner Associates, a broker-dealer in Syosset, N.Y., accusing the company of aggressively marketing $300 million worth of shares of the nontraded Apple hotel REIT to unsophisticated and elderly customers without telling them that the income from the stock was insufficient to support the dividends. Lerner has called the charges “baseless.”

Since 2004, the nontraded real estate investment trust sector has more than doubled and now has more than 63 sponsors, according to Blue Vault Partners, a research firm in Cumming, Ga. Last year, these sponsors raised $8.5 billion, a 30 percent increase over 2009. As much as $10 billion may be raised this year, approaching the $11.8 billion in investment at the peak of the market in 2007, Blue Vault said.

Like their publicly traded counterparts, nontraded REITs invest in real estate and are supposed to distribute at least 90 percent of their taxable income to shareholders annually in the form of dividends. REITs generally pay no corporate income tax.

But critics of nontraded REITs say there are a number of troubling features about the trusts, including high upfront fees that lower the value of the investment by as much as 17 cents on the dollar. Sales commissions and fees are typically 9 to 10 percent, and there are also charges for leasing, management and acquisition of commercial buildings. Critics also cite a lack of transparency about how the companies value their real estate holdings, inherent conflicts of interest because the sponsor generally invests little in the REIT but owns the entity that collects the fees.

Investors are told that nontraded securities, which have limited liquidity, allow ordinary people to participate in real estate investment while earning a higher dividend than what the traded ones offer, free from the volatility of the stock market. According to this pitch, investors are spared the anxiety of worrying that their shares, usually sold at $10, will go up and down.

Stacy H. Chitty, a former nontraded REIT executive who is now a Blue Vault partner, said much of the fluctuation in the stock market was driven by emotion. “It’s this little occurrence here, this little occurrence there,” he said. “Share price is not an accurate picture. In nontraded instruments you don’t have that daily up-and-down swing. It’s a long-term proposition.”

But nontraded trusts are now required to update their net asset values every 18 months after their initial offering, and their own disclosures to the S.E.C. show their values dropping well below the price at which the shares were originally issued. For example, one REIT, American Realty Capital Trust, recently reported that its shares, which had been sold at $10, were now worth $6.62. The sponsor, American Realty Capital of New York, raised $2.3 billion in the last 18 months, according to its chief executive, Nicholas S. Schorsch. Other sponsors, including Cole, have reported similar declines in share price, public records show.

“One common sales tactic we object to is the suggestion that they are eliminating volatility simply because they don’t tell you what the value is,” said Michael McTiernan, a lawyer for the S.E.C.’s corporate finance division. “It’s not that it’s not volatile. It’s just that you don’t know.”

Article source: http://feeds.nytimes.com/click.phdo?i=8ada12391d505fa56421908d5db32572

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