[Ecommerce] File trading hearing, J.Carter (R-Texas): "...go out and actually bust a couple of these college kids"

[Manon Anne Ress]

QUOTE:
Representative John Carter, (R-Texas), suggested that college students
would stop downloading if some were prosecuted and received sentences of 
33 months or longer, like the defendants in the DOJ's Operation 
Buccaneer. "I think it'd be a good idea to go out and actually bust a 
couple of these college kids," Carter said. "If you want to see college 
kids duck and run, you let them read the papers and somebody's got a 
33-month sentence in the federal penitentiary for downloading 
copyrighted materials."
END OF QUOTE

in: IDG News Service
Does File Trading Fund Terrorism?
Industry execs claim peer-to-peer networks pose more than just legal
problems.

Grant Gross, IDG News Service
Thursday, March 13, 2003

WASHINGTON -- A congressional hearing on the links between terrorism,
organized crime, and the illegal trading of copyrighted material 
produced more complaints about college students using peer-to-peer 
networks and other governments sanctioning copyright violations than it 
did evidence of nefarious connections.

Witnesses and representatives at the U.S. House Judiciary Committee's
Subcommittee on Courts, the Internet, and Intellectual Property hearing
Thursday did express fears that profits from widespread copying of 
movies, music, and software outside the United States were being 
funneled into terrorist organizations, but the hearing produced no 
concrete examples of that happening.

John G. Malcolm, deputy assistant attorney general in the criminal 
division of the U.S. Department of Justice, did say there seems to be 
some connection between illegal copying and organized crime, in that 
many of the groups profiting from illegal copies are highly organized 
and can have international distribution networks. Organized crime often 
supports terrorism, he suggested.

"These groups will not hesitate to threaten or injure those who tend to
interfere with their operations," Malcolm said.

Searching for Specifics
But when subcommittee chairman Lamar Smith (R-Texas) asked Malcolm for
examples of cases where file trading was connected to terrorism, Malcolm
said he couldn't give concrete examples. "It would surprise me greatly 
if the number were not large," Malcolm added. "This is an easy 
enterprise to get into; the barriers of entry are very small, and the 
profits are huge."

Smith and several others at the hearing noted that selling illegally 
copied materials can be more lucrative than selling illegal drugs, and 
several at the hearing compared the copyrighted materials trade to the 
drug trade. Illegally copied materials can have markups of 900 percent, 
Smith noted.

Malcolm told the representatives of this week's indictment of Hew 
Raymond Griffiths, of Bateau Bay, Australia, for his role as an alleged 
kingpin in DrinkOrDie, a software piracy group founded in Russia in 
1993. The Department of Justice is working to get Griffiths extradited 
to the United States, Malcolm said, and the indictment is part of the 
DOJ's "Operation Buccaneer," in which 20 U.S. defendants have been 
convicted of felony copyright offenses since December 2001.

"For too long, people engaged in piracy believed that if they were 
outside the borders of the United States, they could violate our 
intellectual property laws with impunity," Malcolm added. "They were 
wrong. This indictment and the extradition sends a clear and unequivocal 
message to everybody involved in illegal piracy that regardless of where 
you are, the Justice Department will find you, investigate you, arrest 
you, prosecute you, and incarcerate you."

More Than Money
Malcolm also called the creators of "warez" file-trading networks 
organized criminals, although he admitted warez fans aren't motivated by 
money. Many warez groups, who distribute pirated commercial software 
over the Internet, operate in a very organized fashion, Malcolm said, 
with a hierarchy based on how much individual members contribute to the 
group. Much of the pirated material on the Internet comes from warez 
groups, Malcolm suggested.

"They are nonetheless responsible for a massive number of pirated 
movies,music, games, and software in circulation each year, and 
represent a significant and growing threat to intellectual property 
rights around the globe," he said.

Representative Robert Wexler, (D-Florida), praised the hearing for
highlighting the "disastrous connection" between copyright piracy and
organized crime. "I can't help but sit here and wonder...if parents 
fully understand the ramifications of what it is to steal a movie or 
pirate a song," he said. "If more American parents understood the 
connection between the pirating of intellectual property and organized 
crime, I think then there'd be a much more effective public relations 
response in our own country to better appreciate the disastrous 
ramifications."

Wexler suggested public service commercials should highlight that 
alleged connection between piracy and organized crime, much like 
anti-drug commercials highlight the connection between the sale of 
illegal drugs and funding terrorism.

Familiar Complaints
Part of the hearing rehashed complaints about file trading by college
students over P-to-P networks, covered in previous hearings and 
statements from the Motion Picture Association of America. No one at the 
hearing connected P-to-P trading with the financing of terrorism or 
organized crime.

Jack Valenti, president and chief executive officer of the MPAA, 
described a couple of examples of copying operations that had been 
raided outside the United States, and he said 26 copying factories in 
Russia can copy 300 million DVDs and CDs a year. He claimed his industry 
is losing billions of dollars a year to piracy, although a couple of 
representatives also pointed out the motion picture industry had record 
box-office receipts in 2002.

Valenti predicted investors would stop investing in the movie industry 
if piracy is allowed to continue. He repeated earlier requests for 
Congress to pass new anticopying laws.

Valenti also complained about P-to-P trading. "It's low risk. Nobody 
does anything about it," he said.

Criminal Charges
Representative John Carter, (R-Texas), suggested that college students
would stop downloading if some were prosecuted and received sentences of 
33 months or longer, like the defendants in the DOJ's Operation 
Buccaneer. "I think it'd be a good idea to go out and actually bust a 
couple of these college kids," Carter said. "If you want to see college 
kids duck and run, you let them read the papers and somebody's got a 
33-month sentence in the federal penitentiary for downloading 
copyrighted materials."

The committee also spent a significant amount of the hearing listening 
to the testimony of Joan Borsten Vidov, president of Films by Jove, a 
small Los Angeles film distributor. In 1992, Vidov's company purchased 
the rights to restore and distribute a number of old Russian animated 
films, but Vidov accused the Russian Ministry of Culture of trying to 
redistribute the films without her company's permission.

"What fits the definition of organized crime more than a foreign 
government deciding to steal the property of a small U.S. business?" 
Vidov asked.
"That is the worst kind of organized crime by the most powerful possible
organization."

The Russian embassy in Washington didn't have an immediate comment on
Vidov's or Valenti's testimony.