Clips April 1, 2003

[Lillie Coney <lillie.coney@xxxxxxx>]

Clips April 1, 2003

ARTICLES

EBay's PayPal Is Accused Over Gambling Transfers
CA attacking Internet sales of smokes to kids 
Hackers Plan Attacks To Protest Iraq War 
Data thieves strike Georgia Tech 
Disability sites put one face forward 
Ridge: Merging watch lists tops IT agenda 
Pentagon seeks tech-savvy workers 

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Los Angeles Times
EBay's PayPal Is Accused Over Gambling Transfers
By Alex Pham
Times Staff Writer
April 1, 2003

A federal prosecutor has accused EBay Inc.'s PayPal subsidiary of violating the law when it facilitated online gambling payments last year, according to EBay documents filed Monday with the Securities and Exchange Commission.

In a letter sent to the San Jose online auction firm Friday, U.S. Atty. Ray Gruender of St. Louis argued that PayPal violated a 17-month-old federal anti-terrorism law when it handled payments for online casinos.

Gruender, whose office declined to comment Monday, has not filed charges against EBay. Instead, his letter proposed a settlement in which EBay would forfeit an amount equal to PayPal's casino-related earnings from Oct. 26, 2001, when the law went into effect, to July 31, 2002, when EBay agreed to buy the electronic-payments company for $1.5 billion.

EBay spokesman Kevin Pursglove said the company's attorneys were reviewing the letter. EBay shares slipped $3.98 to $85.31 on Nasdaq on Monday.

In its SEC filing, EBay said PayPal earned less from online gambling than Gruender contended, but did not disclose the amounts.

Either way, Pursglove said, "There will not be a material impact on cash flow or earnings."

As part of its sale to EBay, PayPal ceased processing online gambling payments, a business that accounted for 6% of its 2002 revenue.

In August, PayPal settled a suit filed by New York Atty. Gen. Eliot Spitzer, who argued that facilitating online gambling was illegal in that state. The company paid a $200,000 fine and vowed to exit online gambling, a lightly regulated industry with murky legal status in the U.S.

The U.S. attorney's letter represents a new federal application of a law designed to help terrorism investigators. Passed six weeks after the Sept. 11 attacks, the USA Patriot Act gave federal authorities broader powers to track money laundering and monitor online activities, among other things.
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San Francisco Chronicle
CA attacking Internet sales of smokes to kids 

It isn't hard for kids to find weapons of mass destruction. They just have to click their way to Dirt Cheap Cigarettes, one of a number of online tobacco merchants that state officials say make it all too easy for minors to score smokes. 

That's why, after months of quiet investigation, California Attorney General Bill Lockyer will file suit today against five out-of-state Internet tobacco vendors, who are charged with not just peddling nicotine to children but also dodging state cigarette taxes. 

The lawsuit -- I'm looking at a copy right now -- says Lockyer's office has been cooperating with authorities in as many as 39 other states to crack down on online cigarette sales. Many of those states are expected to file similar actions in the weeks ahead. 

"Every day in the United States more than 2,000 children begin smoking cigarettes, and one-third of those children will die one day from tobacco- related disease," the lawsuit says, adding that an estimated 690 million packs of cigarettes are sold illegally to kids each year nationwide. 

Laura Kaplan, a deputy attorney general, declined to comment on specifics of the lawsuit prior to it being filed in San Diego Superior Court, where a number of tobacco cases have been heard. Nor could she specify how many tobacco sales are made to minors each year via the Net. 

But Kaplan said state investigators began looking into the situation after receiving numerous complaints from parents, and found during an undercover probe that kids had no trouble purchasing cigarettes online. 

"Basically, these Web sites simply ask if you're 18," she said. "If you say yes, and you have a credit card, you can make the purchase." 

Kaplan said hundreds of Web sites were investigated, many claiming affiliation with Indian tribes throughout the country (thus raising questions of sovereignty that California authorities were leery of getting into right off the bat). 

In the end, five non-Indian Internet retailers were singled out for the state's lawsuit: Dirt Cheap Cigarettes in Missouri, Smokin 4 Less in Virginia, Cycocigs.com in New Mexico, eSmokes in Florida and Cigoutlet.com in Virginia. 

"Even after we warned these guys how easy it was for minors to purchase cigarettes, they continued operating as usual," Kaplan said. "It was a real problem." 

According to the federal Centers for Disease Control, nearly 28 percent of California high school students used tobacco products as of 2000. 

Meanwhile, the state Board of Equalization estimates that about $54 million in tax revenue was lost in the most recent fiscal year because out-of-state tobacco merchants failed to report sales to California officials. 

The Internet, of course, accounts for a very small fraction of overall cigarette sales, including among minors. 

Emily Kaplan, 17, a student at Lincoln High School in San Francisco (and no relation to the deputy attorney general), said most young people know which stores will sell them smokes over the counter. "Also, you can always ask someone older to buy them for you," she said. 

Buying cigarettes online, Kaplan added, seems "way too complicated." 

But the attorney general's office believes its lawsuit is important because the number of kids willing to purchase tobacco via the Net will only grow year after year. 

All but one of the five companies to be sued today by California ignored calls and e-mails seeking comment. The one that did respond, New Mexico's Cycocigs, essentially argued that if kids are determined to smoke, there's not much anyone can do to stop them. 

"Look at marijuana," said Rick Urrea, the company's president. "It's 100, 000 percent illegal and kids smoke it every day. They're going to get it if they want it." 

Nevertheless, he said he understands the concerns of California officials and, as of two weeks ago, implemented a new policy requiring the signature of an adult when shipments from Cycocigs arrive at the door. 

"We've lost customers because of the inconvenience," Urrea said. "But we don't want to sell to kids. That's not what we're here for." 

As for evading state taxes, he said Cycocigs will fight the charge. The U.S. 

Supreme Court ruled in 1992 that it's too great a burden for companies to collect and remit taxes across state lines, and Urrea said this will form the basis of his defense. 

But Kaplan at the attorney general's office countered that the federal Jenkins Act still requires out-of-state tobacco vendors to report all cigarette sales to local authorities. 

"We think we have a good case," she said. "We feel good about this." 

With good reason, you could say.
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Washington Post
Hackers Plan Attacks To Protest Iraq War 
Chinese Group Targets U.S., U.K. Sites 
By Brian Krebs
washingtonpost.com
Tuesday, April 1, 2003; Page A24 


Chinese hacker groups are planning attacks on U.S.- and U.K.-based Web sites to protest the war in Iraq, the Department of Homeland Security warned in an alert that it unintentionally posted on a government Web site yesterday.

The hackers are planning "distributed denial-of-service" attacks, which render Web sites and networks unusable by flooding them with massive amounts of traffic. They also are planning to deface selected Web sites, according to the alert, though the government said it did not know when the attacks would occur.

The Homeland Security Department said it got the information by monitoring an online meeting that the hackers held last weekend to coordinate the attacks. The department sent the alert to government and industry officials over the weekend but accidentally posted the link on the home page of the National Infrastructure Protection Center. The alert was pulled hours later. 

Homeland Security Department spokesman David Wray said the information was not supposed to be released to the public. "This was an inadvertent release and the information, while not classified, is sensitive," he said.

The messages cited in the alert were posted on several hacker Web sites thought to be affiliated with the "Honker Union of China," a cadre of Chinese hackers that launched an assault against dozens of U.S. government Web sites in May 2001 after the collision of a Chinese fighter jet and a U.S. surveillance plane on April 1, 2001. "Honker" is Chinese slang for "hacker."

The group claimed responsibility then for defacements on the Web sites of the National Institutes of Health, the U.S. Navy, the Labor Department, and other government agencies and businesses.

The Homeland Security Department's warning comes amid a flurry of antiwar hacking activity. About 10,000 Web sites have been marred with digital graffiti by protesters and supporters of U.S.-led war in Iraq, according to F-Secure Corp., a Finnish Internet security firm.
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Washington Post
Hackers Plan Attacks To Protest Iraq War 
Chinese Group Targets U.S., U.K. Sites 
By Brian Krebs
Tuesday, April 1, 2003; Page A24 

Chinese hacker groups are planning attacks on U.S.- and U.K.-based Web sites to protest the war in Iraq, the Department of Homeland Security warned in an alert that it unintentionally posted on a government Web site yesterday.

The hackers are planning "distributed denial-of-service" attacks, which render Web sites and networks unusable by flooding them with massive amounts of traffic. They also are planning to deface selected Web sites, according to the alert, though the government said it did not know when the attacks would occur.

The Homeland Security Department said it got the information by monitoring an online meeting that the hackers held last weekend to coordinate the attacks. The department sent the alert to government and industry officials over the weekend but accidentally posted the link on the home page of the National Infrastructure Protection Center. The alert was pulled hours later. 

Homeland Security Department spokesman David Wray said the information was not supposed to be released to the public. "This was an inadvertent release and the information, while not classified, is sensitive," he said.

The messages cited in the alert were posted on several hacker Web sites thought to be affiliated with the "Honker Union of China," a cadre of Chinese hackers that launched an assault against dozens of U.S. government Web sites in May 2001 after the collision of a Chinese fighter jet and a U.S. surveillance plane on April 1, 2001. "Honker" is Chinese slang for "hacker."

The group claimed responsibility then for defacements on the Web sites of the National Institutes of Health, the U.S. Navy, the Labor Department, and other government agencies and businesses.

The Homeland Security Department's warning comes amid a flurry of antiwar hacking activity. About 10,000 Web sites have been marred with digital graffiti by protesters and supporters of U.S.-led war in Iraq, according to F-Secure Corp., a Finnish Internet security firm.
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CNET New.com
Data thieves strike Georgia Tech 
By Robert Lemos 
March 31, 2003, 2:15 PM PT

Online intruders broke into a server containing the credit card numbers of some 57,000 patrons of a Georgia Institute of Technology arts and theater program, a university official said Monday. 
The online intrusions, which are thought to have occurred over the last two months, were only discovered in the past week or so, said David Terraso, a Georgia Tech spokesman. Both the Georgia Bureau of Investigations--an independent resource for the state's law enforcement personnel--and the FBI have started investigating the matter, he said.

"We sent out an e-mail to the people affected," Terraso said. He referred further questions to a Georgia Tech Information Security Center representative who wasn't immediately available for comment. 

 

The break-in came shortly after Georgia Tech became the first university in the state to do away with reliance on Social Security numbers. As of March 1, the university stopped using Social Security numbers as the primary way to track student data, according to the school's Web site.

The incident is the third known Internet break-in at a U.S. university within the last several months. 

Nearly 55,000 Social Security numbers were stolen by a student who took advantage of a security flaw in a key administrative database at the University of Texas at Austin. Investigators accused University of Texas student Christopher Andrew Phillips of the theft in mid-March. 

In January, the University of Kansas acknowledged that online attackers had snagged the records of 1,400 international students. 

Ironically, the latest victim is no slouch in terms of security. Georgia Tech is recognized by the National Security Agency as a "center of academic excellence" in information security assurance education.
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Government Computer News
Disability sites put one face forward 
By Vandana Sinha 

A single online query can mine for answers from five federally funded groups that provide information about disability topics. 

The IT Technical Assistance and Training Center, funded by the Education Department?s National Institute on Disability and Rehabilitation Research, has reorganized its Web site and added a search function that automatically returns links from its site and four others. 

Besides searching the center?s site, at www.ittatc.org, the tool taps: 


The National Center on Accessible IT in Education at the University of Washington: www.washington.edu/accessit 


The Center for Assistive Technology and Environmental Access at the Georgia Institute of Technology: www.assistivetech.net 


The White House?s interagency portal: www.disabilityinfo.gov 


The federal Section 508 site: www.section508.gov 

?Site visitors have a much more complete answer? than if they had to forage through the five sites on their own, said Mimi Kessler, project director for the IT Technical Assistance and Training Center, which is based at Georgia Tech in Atlanta. 

The effort will also save time for the managers of the five sites because they won?t have to provide duplicative information on their sites. ?We?re not all individually reinventing the wheel,? she said. 

The search technology, which is still being fine-tuned for the center?s site, is from iPhrase Technologies Inc. of Cambridge, Mass. 

The iPhrase One Step tool answers each query by matching relevant keywords to a database that automatically copies and consolidates the content from the five sites. It then displays the links using an accessible format created by Agassa Net Technologies Inc., an accessibility services company in Lowell, Mass. 

?We didn?t have to explain Section 508 to them,? Kessler said of bringing on Agassa to implement the iPhrase technology. 

To save on the $450,000 project, the center got Ideal Group Inc. of Hilliard, Ohio, to donate hosting services, said Kessler. She added that the center wants to add more sites, ?but we have to see whether that will fit into our budget.?
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Government Computer News
04/01/03 
Ridge: Merging watch lists tops IT agenda 
By Wilson P. Dizard III 

Consolidating the government?s various watch lists of suspected terrorists is the Homeland Security Department?s top IT goal, Tom Ridge said today. 

?We have several departments and units that developed their own watch lists,? the Homeland Security secretary said. ?Our first IT priority is to consolidate those watch lists so people at the borders and airports and respective agencies can access that broader list of namesthe aggregate of these names.? 

The effort is well under way, Ridge said. ?We are moving rapidly to a point where we can tell you it?s done. We are not quite there yet, but we will be there shortly,? he said. 

Ridge spoke at a press briefing where he and British Home secretary David Blunkett unveiled efforts for the two organizations to coordinate counterterrorism programs. 

The government?s terrorist watch lists sometimes are referred to as watchout lists to avoid confusion with the term the Navy uses for duty rosters. 

One of the chief hurdles in the consolidation effort is setting governmentwide criteria for placing individuals? names on a single list, Ridge said. 

The agencies that have lists nowincluding the Border Patrol, CIA, FBI and Immigration and Naturalization Serviceuse different criteria from one another. 

At the briefing, Blunkett and Ridge also described their antiterrorism partnership efforts, which will include joint training, R&D and cybersecurity programs. 

"The United Kingdom has been a critically important ally in bringing our attackers to justice," Ridge said. 

As Home secretary, Blunkett?s post is comparable to the combined authority of Ridge and Attorney General John Ashcroft. 

Blunkett said a joint group would oversee collaborative efforts between U.S. and British agencies that handle in counterterrorism activities. 

The two governments will pool information about ways to defend against weapons of mass destruction and ?cyber and electronic attacks that would disrupt our commerce,? Blunkett said. ?We are shoulder to shoulder against the joint threat.? 
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Government Executive
March 31, 2003 
Pentagon seeks tech-savvy workers 
By William New, National Journal's Technology Daily 

Creating a larger pool of science- and engineering-savvy workers to choose from and developing nanotechnologies are the Defense Department's top science and technology priorities, a panel of senior department officials told a Senate subcommittee on Monday.

"Nanotechnology is going to revolutionize everything we do" in the military, Gen. Lester Lyles, commander of Air Force Materiel Command, told the Armed Services Emerging Threats and Capabilities Subcommittee.

The other witnesses were: Vice Adm. Joseph Dyer, commander of Naval Air Systems Command; Gen. Paul Kern, commander of Army Materiel Command; and Michael Wynne, principal deputy Defense undersecretary for acquisition, technology and logistics. At a House hearing on Thursday, other Defense officials gave testimony similar to that of all of the officials. 

In Monday's Senate hearing, officials said the United States is in danger of losing its edge in military technology if it does not change course. Countries such as China and India have an abundant supply of talent and are making technology a priority, Kern said. 

"We'll be challenged to keep up with them academically and from a security standpoint if we fall behind," said Kern, who said nanotechnology offers "bright potential," as does quantum theory. 

Lyles ranked the training and education of American citizens as the top priority, followed by the continued development of cutting-edge technologies, including nanotechnology and biotechnology. "We shouldn't let that melt away," he said, adding that the different services are harmonizing their nanotech projects. 

Dyer said the military still is able to attract top young talent but must focus on finding ways to keep them into their "peak performance" years by offering "exciting work to do." He called the workforce issue a "must-solve challenge." 

"Simple demographics show that over the next 10 years, we will lose most of our current workforce," Dyer said. 

Wynne added, "The decline in scientists and engineers becomes more acute when considering the production by academia of scientists and engineers who are American citizens." 

The officials did not deny a projection raised by Sen. Jack Reed, D-R.I., that science and technology would comprise 2.4 percent of the total military budget by fiscal 2009, down from a proposed 2.7 percent in fiscal 2004. That projection runs contrary to a stated departmental goal of a science and technology budget of 3 percent of the total military budget.

Wynne said that costs are hard to project but indicated that other urgent priorities, such as health benefits, get in the way of science and tech investments. He also stressed the need for the military to have flexibility in how it spends money.

Lyles said the most significant change in the $2.2 billion Air Force budget for science and technology work in fiscal 2004 is $350 million in projects from the office of the secretary of Defense. That would include a high-performance computer modernization program, he said.
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USA Today
'Invisible' coat technology could aid pilots, doctors
http://www.usatoday.com/tech/news/techinnovations/2003-03-31-invisible-coat_x.htm

TOKYO (AP)  Kazutoshi Obana's gray, hooded coat doesn't just keep him dry in a downpour. It can also make him seem invisible. On a clear day at Tokyo University, Obana stands outside and dons the coat. Viewed through a special projector lens, the people behind him appear as images in a fuzzy, greenish tint on his coat  as if he were see-through. "This is a kind of augmented reality," said Susumu Tachi, a Tokyo University professor of computer science and physics, during the recent demonstration of his invention.

Tachi, who is also the founding head of the Virtual Reality Society of Japan (www.star.t.u-tokyo.ac.jp/projects/MEDIA/xv/oc.html), designed the coat using microscopic reflectors which act like a movie screen. They can even reflect images when the material is wrinkled. 

In fact, Tachi's "invisibility" coat is a camera trick. 

A video camera behind the coat is linked to a projector, which bounces the image off the front of the coat's reflective surface. Because there is no time lag between what's happening behind the wearer and the image cast on the front of the coat, the viewer has the illusion he is seeing straight through the coat. 

Philip Moynihan, a scientist at NASA's Jet Propulsion Laboratory in Pasadena, Calif., said the idea has broad applications in medical surgery, construction and aviation, although it remains in an "embryonic stage." 

"I think it's got tremendous potential, once it's refined," Moynihan said. One of the hurdles will be to make the technology small, affordable and viewable with the naked eye, he added. 

Tachi acknowledges that the technology still requires too many parts: It can't be seen without peering through the projector lens. Also, an affordable product is years away. 

Moynihan said the U.S. military has studied similar technology as futuristic camouflage for years. In the mid-1990s, he and another scientist conceived of "adaptive camouflage" images for stealth or armored vehicles that could help them blend in with any type of surroundings. 

"We wanted something that could adapt to changing light conditions because present camouflage can be spotted at certain angles and can be seen in infrared lighting," Moynihan said. They never made a prototype and abandoned the project when their funding ran out. 

Still, Moynihan thinks adaptive camouflage technology could one day allow soldiers to take a picture of their surroundings and digitally transfer the image using a handheld computer to the surface of their clothing. 

Others, such as Richard Schowengerdt, a military researcher in Lakewood, Calf., are looking into the technology as a possible way of hiding sprawling top-secret facilities. Schowengerdt's "Project Chameleo" is examining modified versions that might emit or absorb energy to minimize radar or sonar detection. 

But nonmilitary applications are Tachi's primary goal. 

In the future, surgeons may not need to make large incisions if they wear gloves that project what's on the inside of a patient using a CAT scan or MRI data, Tachi said. 

Another idea is to coat the inside of an airplane cockpit with micro reflectors. Hard landings would be a thing of the past if pilots could gauge how far they are above the ground just by looking at an image of the outside terrain projected on the floor, he said. 
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