03/11/98 WED 17:41 FAX THE WHITE HOUSE WASHINGTON March 11, 1998 BY FACSIMILE Mr. Charles R. Smith Dear Mr. Smith: I am writing with regard to the article you propose to publish in Insight Magazine on the administration's encryption policy, and particularly with respect to your references to White House Deputy Chief of Staff John Podesta. The draft article you provided us is filled with gross inaccuracies and misleading characterizations. Contrary to your report, John Podesta holds no ownership or interest in Podesta Associates and undertook no efforts to provide special access to Podesta. Associates and/or CSPP. In January 1993, when he joined the White House as Staff Secretary, Mr. Podesta resigned from Podesta Associates and divested himself of all ownership interests. When he left the White House and rejoined Podesta Associates on a part-time basis in July 1995, he did not reacquire any ownership interest. While at Podesta Associates, Mr. Podesta did not lobby the White House or the Executive Office of the President on behalf of any firm client. In January 1997, Mr. Podesta resigned his part-time position at Podesta Associates and returned to the White House as Deputy Chief of Staff. Mr. Podesta was requested by Senior Administration Officials to undertake certain responsibilities with respect to encryption policy. He did not however undertake these responsibilities until he received specific approval from the White House Counsel's Office with respect to his involvement in these matters. He has in all events recused himself from all contacts with Podesta Associates on these issues. At all times Mr. Podesta has proceeded in strict accordance with all statutory and regulatory requirements on ethics and conflicts of interest. Your accusations to the contrary are devoid of any basis in fact or law. We respectfully suggest that you not proceed to publication. Sincerely, Michael B. Waitzkin Special Counsel to the President cc: Paul Rodriguez, Insight Magazine ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Charles R. Smith March 11, 1998 Mr. John Podesta The White House 202/456-1907 CC: Michael B. Waitzkin (WHITE HOUSE) Podesta & Assoc. Attn: Sarah Latham REF. INTERVIEW FOR ARTICLE IN INSIGHT MAGAZINE (Washington Times Group) TOPIC: ENCRYPTION and COMPUTERS Dear Mr. Sirs: Thank you for taking the time to respond. I, however, note that Mr. Podesta has chosen NOT to respond to any of my questions. It is within my right to publish these question without his comment in total. I also note that your responses indicate that Mr. John Podesta was employed at Podesta & Assoc. starting in July 1995. This claim has also been confirmed directly to me by fax sent from Podesta & Assoc. in response to your request to them. However, Federal Election Commission records indicate that MR. John Podesta donated campaign monies using Podesta & Assoc. as his employer PRIOR to JULY 1995. This contradiction with facts presented by the Federal Election Commission raises the question of exactly WHEN did Mr. Podesta take employment with Podesta & Assoc.? Finally, I also note that in your disclaimer you state that Mr. Podesta did not get approval from White House Counsel on this matter until 1997. I assume that waiver was in response to 5 CFR 2635.502 where a notification and waiver from conflict of interest on matters involving relative, employer or partners. Since Mr. Podesta's first term of service started in the White House in 1993 I note the extreme time difference between his terms of service and issuance of waiver by Counsel. Please, if you can, provide an exact copy of that waiver. Best of Wishes, Charles R. Smith SOFTWAR SOFTWAR Charles R. Smith ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ March 2, 1998 Mr. John Podesta The White House 202/456-1907 Attn: Sarah Latham REF. INTERVIEW FOR ARTICLE IN INSIGHT MAGAZINE (Washington Times Group) TOPIC: ENCRYPTION and COMPUTERS Dear Mr. Podesta: Thank you for taking the time to answer my questions. My editor is Doug Burton 202/636-8836. You may contact him for confirmation of publication and/or me on the following questions: 1. What is your current position and previous term(s) of service at the White House? 2. Are you currently working on encryption policy? 3. Can the current "Key Recovery" design as proposed by the Clinton administration be used against political opponents or dissidents by oppressive governments such as China or Iraq? 4. Do you deny that Vince Foster and Webb Hubbell were involved in encryption policy and the CLIPPER project? If so please explain their documented meeting at NSA Ft. Meade in May, of 1993? 5. I have obtained documents that describe meetings between George Tenet and Webster Hubbell in reference to project CLIPPER which took place inside the White House in 1993. Please explain Mr. Hubbell's role in CLIPPER and Mr. Hubbell's role in encryption policy. 6. What meetings have you had with the Computer Systems Policy Project (CSPP)? 7. What was the role of the Computer Systems Policy Project in Mrs. Clinton's Health Care Reform initiative? 8. What is your relationship with Ken Kay, Director of the CSPP? 9. Has the CSPP met in the White House, Old Executive Office or the Commerce Dept? If so, when and on what subjects? 10. I have documented evidence of three exports of encryption technology to China; HUA MEI, Motorola and RSA/SDI. Please describe the role of the Clinton administration in helping these exports take place. 11. Explain why meetings between the CSPP and the US Government should not come under the FACA (Federal Advisory Committee Act) laws? 12. Please explain Al Gore's role in CLIPPER and inside the Inter-Agency Working Group for encryption. 13. Please explain Ron Brown's role in CLIPPER and inside the Inter-Agency Working Group. Did Ron Brown discuss encryption with representatives of China? 14. Was the CLIPPER design or Skipjack algorithm disclosed to any foreign government or representative? 15. What kind of encryption policy did you discuss with CIA Director Deutch, George Tenet and NSA Director McConnell in late December of 1993? 16. What role did the Federal government play in the merger of Silicon Graphics and CRAY? 17. Please describe the Clinton administration's role in the "accidental" export of Silicon Graphics super-computers to a Russian nuclear weapons lab and the exports of some 46 supers to China. 18. What role did the Federal government play in dealings with Andrew Logan in 1993? Did Mr. Logan get paid to not sue the US Government over the CLIPPER design? 19. What role did the Federal government and specifically AL GORE play in the 1994 negotiations to purchase the DSA patents from Mr. Bidzos, CEO of RSA Inc.? 20. Please explain how you can serve on policy and still remain part owner of Podesta & Associates without conflict? 21. Were there or are there any plans to mandate government encryption and nationalize the industry? 22. Why would the Commerce Dept. reference the US government DSA (Digital Signature) algorithm when I requested all information on back doors or special software to monitor US domestic financial transactions? Does DSA contain some back door or other exploitable feature? 23. Explain the role of the FORTEZZA smart card as the proposed national health care card during the 1993 Health Care reform. 24. Does the White House hold closed meetings with other groups covered under the FACA rules? For example I have documents that reference closed meetings with Dr. Willis Ware of the Computer System Security and Privacy Advisory Board. 25. Explain the role of AT&T and CLIPPER? Please note I have documents which detail the 1991 and 1992 meetings between Scrowcroft and AT&T to purchase the initial batch of AT&T 3600 phones. I also have details of the substitution contract to AT&T issued in 1993 to remove the DES chips and put CLIPPER in place. 26. Explain the role of Mrs. Hillary Clinton in encryption policy and project CLIPPER. 27. Explain the relationship between the administration, Mr. Stephens of Arkansas, his company Systematics and the lawsuit over PROMIS software. Again, thank you for taking the time to answer my questions. I would like the opportunity to follow up if possible. Best of Wishes, Charles R. Smith SOFTWAR ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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