Eric Holder Claims Terrorists Are Involved In 'IP Theft'

by Mike Masnick
May. 20, 2013

You may have heard about a fair bit about Attorney General Eric Holder testifying before the House Judiciary Committee on Wednesday morning. He was -- quite reasonably -- raked over the coals by members of both parties for the incredible decision to obtain phone records from AP reporters, under very questionable circumstances.

There was one other odd tidbit that might be worth discussing around here as well. Suddenly, in the middle of all the questions about the Associated Press, Rep. Mel Watt -- who, during the SOPA markup famously declared that he didn't understand the technology, or why tech people were concerned, but also that he didn't care and wanted to pass SOPA without bothering to understand -- started asking questions about copyright and "enforcement." Yes, Mel Watt is the ranking member on the IP subcommittee (scary enough in its own right), but it seemed completely off topic.

Most of the coverage on Watt's questioning has focused on the fact that he did most of his questioning with his two-year-old grandson on his lap, who interrupts the questioning at one point. But the questions were ridiculous, as were the answers, and deserve some scrutiny. First, despite it being soundly rejected when SOPA went down in flames, Watt asks Holder if Congress should make online streaming of infringing material a felony, rather than the misdemeanor that it currently is. There are all sorts of problems with this idea, as we've discussed in the past, but Holder embraced the idea wholeheartedly, saying that the Justice Department would love to have "another tool," ignoring just how widely the DOJ has abused existing tools to shut down legitimate companies and websites.

And then Watt directly asks about a connection to terrorism:
Watt: Are there increasing indications of links between this problem and terrorism? Have you found any of those links and would you describe them for the committee?

Holder: Yes, that's a very good question. It's something that's very worrisome. As we saw organized crime get into a variety of other businesses in order to support their efforts, we're now seeing terrorist groups getting into the theft of intellectual property. Again, to generate money to support what they're trying to do for their terrorist means. So we have to broaden our enforcement efforts, broaden the investigative efforts that we take, to examine what are the precise reasons why people are engaging in this kind of intellectual property thievery. And to consider whether or not there's a terrorist connection to it. This is a relatively new phenomenon, but one we have to be aware of.
Watt then asks about things that Congress can do to help, and Holder says he's "particularly concerned" about this problem, and he asks for "enhanced penalties" for "intellectual property theft."

That all sounds very interesting. And it might be, if there were any truth to it at all. Unfortunately, there's not. We've yet to see a single piece of evidence supporting the idea that terrorists are involved in infringement. The claim has been around for years, and we've asked for evidence for years, and none has ever been provided. Because it doesn't exist. Researcher Joe Karaganis looked into the issue a few years ago and found that there were some very vague reports of organized crime being involved in counterfeit CDs/DVDs in the 80s and 90s. But that was small and short-lived -- in large part because online infringement basically made that business obsolete:
Arguing that piracy is integral to such networks [organized crime and terrorism] means ignoring the dramatic changes in the technology and organizational structure of the pirate market over the past decade. By necessity, evidentiary standards become very loose. Decades-old stories are recycled as proof of contemporary terrorist connections, anecdotes stand in as evidence of wider systemic linkages, and the threshold for what counts as organized crime is set very low. The RAND study, which reprises and builds on earlier IFPI and Interpol reporting, is constructed almost entirely around such practices. Prominent stories about IRA involvement in movie piracy and Hezbollah involvement in DVD and software piracy date, respectively, to the 1980s and 1990s. Street vendor networks in Mexico City--a subject we treat at length in the Mexico chapter--are mischaracterized as criminal gangs connected with the drug trade. Piracy in Russia is attributed to criminal mafias rather than to the chronically porous boundary between licit and illicit enterprise. The Pakistani criminal gang D-Company, far from "forging a clear pirate monopoly" in Bollywood, in RAND's words, plays a small and diminishing part in Indian DVD piracy--its smuggling networks dwarfed by local production.

The US record isn't more convincing in this regard. Jeffrey McIllwain examined the Department of Justice’s IP-related prosecutions between 2000 and 2004 and found that only 49 out of the 105 cases alleged that the defendant operated within larger, organized networks. Nearly all of these were "warez" distribution groups for pirated software--hacker communities that are explicitly and often fiercely non-commercial in orientation. McIllwain found "no overt references to professional organized crime groups" in any of the DOJ's criminal charges (McIllwain 2005:27). If organized crime is a serious problem in these contexts, it should not be difficult to produce a stronger evidentiary record.
In other words, Rep. Mel Watt, a well known supporter of Hollywood's position on copyright, tossed a bogus softball FUD talking point to Eric Holder in the middle of an important hearing about a very different subject, and Holder proceeded to make claims to Congress that have been made for decades without a single bit of evidence to support it.

Holder has plenty of other serious issues to deal with these days, but it makes me incredibly uncomfortable to see our Attorney General appear to be spreading known scare stories that have been proven bogus from decades ago as if they're new, despite a single bit of evidence concerning any modern connection to terrorism.

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