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The Information Systems Security Monitor
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Dedicated to the pursuit of security awareness............
=================================================================
Volume 2 Number 2 April 1992
=================================================================
////////////////////// In this Issue \\\\\\\\\\\\\\\\\\\\\\\\\\\
Choosing the Right Password
Comptroller General Decision on EDI
Security Hall of Fame
OAIS Employees Judge Student Contest
Cyberspace: A Hacker's Response
Quick Fix Security
Dear Clyde
Computer Speak
What's New
----------------------------------------------------------------
Hacker Lists Passwords Hackers Look For
Choosing the Right Password!
Imagine a hacker entering a system with your id and password
because you did not take the time to choose a good password, this
is something that can be completely prevented if people would take
a few minutes to choose a good password. You must be creative when
choosing a password not lazy. Since a password is usually the
first line of defense against unauthorized access to a computer
system, when the first line is broken the rest only take time. The
average user usually has a password that is easy to select and easy
to remember. Any word that is easy to select or is contained in
a dictionary is a poor and insecure selection for a password. The
reason this makes a poor selection is because these words are the
first ones an intruder will try when attempting to compromise your
system. For instance, if your name is Tom Smith and your logon id
is TSMITH your password should not contain any variation of these
two words (Tom & Smith). A hacker will try TSMITH, SMITHT,
TOMSMITH, SMITHTOM, TSMITH1, HTIMST, etc. before anything else.
As far as the length of a password goes its definitely the longer
the better. To demonstrate this point I give you the following
table:
# of Possible Average Time
Characters Combinations To Discover Example
1 36 6 min q
2 1,300 4 hrs bt
3 47,000 5 days tyu
4 1,700,000 6 months insw
5 60,000,000 19 years potnb
etc...
The greater the number of possibilities a hacker must sort through,
the better the chances of a password remaining undiscovered.
The best passwords are those that contain a combination of letters
and numbers or are a combination of two or more unrelated words
i.e. TREEFLOOR, TVBOOK, RADIOSHOE, etc. Another possibility is to
select the initials of your two grandmothers combined with the
number of times you have seen your favorite movie to come up with
a password that resembles PAWH07, 07WHPA, PA07WH, etc.
If you think that you have chosen a password that is hard to guess
or would take too much time to guess keep in mind that hackers have
automated the process. There have been programs written for the
sole purpose of guessing passwords, they take a list similar to the
one in this article and try each and every one of them
These are the types of passwords that are hard to guess and will
most likely not be found in any dictionary or word list. I am
enclosing a list of common passwords that most hackers have a
variation of, under no circumstances should you ever use a word
contained in this list. All forms of profanity should also be
included in this list. 100
666
6969
aaa
abc
abel
academia
academic
academie
access
ada
adele
adeline
adelphe
admin
adrian
aerobic
aerobics
agathe
agnes
aide
aime
aimee
airplane
alain
alban
albanie
albany
albatros
albatross
albert
alex
alexander
alexandre
alf
algebra
algebre
alias
aliases
alice
alida
alix
alpha
alphabet
alphonse
ama
amadeus
amandine
ambroise
amedee
ami
amorphe
amorphous
amour
amy
an
analog
analogue
ananas
anchor
ancre
andre
andromache
andy
angele
angerine
anicet
animals
animaux
anne
annie
annonciation
anselme
answer
anthelme
antoine
antoine-marie
anvils
anything
aout
apollinaire
apolline
apotre
aquin
arc
aria
ariane
aristide
armand
armel
arnaud
arrow
arsene
arthur
ascension
asd
asm
assise
assomption
athena
athenes
atmosphere
aubin
aude
audrey
augustin
automne
autoroute
avent
avila
avion
avril
aymar
aymard
aztecs
aztecs
azur
azure
bacchus
badass
bailey
balance
banana
bananas
banane
bande
bandit
banks
banque
baptiste
barbara
barber
barbier
bariton
baritone
barnabe
barnard
bart
barthelemy
bartman
basic
basile
bass
basse
basson
bassoon
batch
batman
baudouin
beach
beater
beaute
beauty
beaver
beethoven
belier
beloved
benedicte
benoit
benz
beowulf
berkeley
berlin
berline
berliner
bernadette
bernard
bernardin
bertille
bertrand
beryl
beta
everly
bicameral
bienheureux
bienvenue
bishop
bitch
blaise
bob
boris
bradley
brian
brice
brigitte
broadway
bruno
bsd
bumbling
burgess
cad
cafe
calude
camarade
campanile
cancer
cantor
capricorne
cardinal
careme
carine
carmel
carmen
carole
carolina
caroline
carson
cartouche
cascades
casimir
cassis
castle
castle
cat
catherine
cayuga
cecile
celine
celtics
cendres
cerulean
challenger
change
chantal
charles
charlotte
charmant
charming
charon
chat
chateau
chem
chemin
chemistry
chess
chester
cheval
chevalier
chien
chou
christ
christian
christine
christophe
cible
cigar
cigare
citroen
claire
clarisse
class
classic
classique
claude
clemence
clement
clotilde
cluster
clusters
code
coeur
coffee
coke
colette
collins
come
computer
comrade
comrades
conception
condo
condom
connect
console
constant
constantin
conversion
cookie
cooper
corinne
cornelius
couscous
create
creation
creosote
crepin
cretin
criminal
croix
cshrc
cyrille
daemon
dame
damien
dancer
daniel
danny
dapper
data
dave
davy
deb
debbie
deborah
december
decembre
default
defoe
defunts
delphine
deluge
denis
denise
desperate
develop
device
dial
diane
didier
diet
dieter
dieu
digital
dimanche
dimitri
disc
discovery
disk
disney
dog
dominique
donald
donatien
dos
drought
duncan
dupond
dupont
durand
dwladys
eager
earth
easier
easy
eatme
eau
edges
edinbourg
edinburgh
edith
edmond
edouard
edwige
edwin
egghead
eiderdown
einstein
elephant
elisabeth
elisee
elizabeth
ella
ellen
email
emeline
emerald
emeraude
emile
emilie
emma
enclumes
endeavour
enemy
engin
engine
engineer
entreprise
enzyme
epiphanie
erenity
eric
ersatz
establish
estate
estelle
ete
eternity
etienne
euclid
euclide
eudes
eugenie
evelyn
evrard
extension
eymard
fabrice
facile
fairway
famille
felicia
felicie
felicite
fender
ferdinand
fermat
fernand
ferrari
fete
fevrier
fiacre
fidele
fidelite
fidelity
field
file
filet
fini
finite
firmin
fishers
flakes
fleche
fleur
fleurs
float
flocon
flocons
florent
florentin
flower
flowers
foolproof
football
foresight
format
forsythe
fourier
fraise
framboise
francine
francois
francoise
fred
frederic
friend
frighten
fulbert
fun
function
fungible
gabin
gabriel
gaetan
games
gardner
garfield
gaston
gateau
gatien
gatt
gauss
gautier
gemeaux
genevieve
geoffroy
george
georges
gerard
geraud
germain
germaine
gertrude
ghislain
gibson
gilbert
gildas
gilles
ginger
gisele
glacier
gnu
golf
golfer
gontran
gorgeous
gorges
gosling
gouge
goutte
graham
grahm
gras
gregoire
group
gryphon
gucci
guenole
guess
guest
guillaume
guitar
guitare
gumption
guntis
guy
gwladys
habib
hack
hacker
hal
hamlet
handily
happening
harmonie
harmony
harold
harvey
hawaii
hebrides
heinlein
helene
hello
help
henri
herbert
hermann
hermes
herve
hiawatha
hibernia
hidden
hippolyte
hiver
homework
honey
honore
honorine
horse
horus
hubert
hugues
humbert
hutchins
hyacinthe
hydrogen
ibm
ida
ignace
igor
imbroglio
imbroglio
immaculee
imperial
include
inconnue
ines
info
ingres
ingress
ingrid
inna
innocent
innocuous
internet
invite
irene
irenee
irishman
irlande
isabelle
isidore
isis
jacqueline
jacques
janvier
japan
japon
jean
jean-baptiste
jean-claude
jean-francois
jean-michel
jean-pierre
jean-yves
jeanclaude
jeanfrancois
jeanmichel
jeanne
jeanpierre
jeanyves
jerome
jessica
jester
jeudi
jixian
joel
johnny
joseph
joshua
jour
judas
judicael
judith
juggle
juillet
juin
jules
julia
julien
julienne
juliette
jumeaux
jupiter
juste
justin
justine
kathleen
kermit
kernel
kevin
key
kirkland
kiwi
knight
ladle
lambda
lamination
landry
lapin
larissa
larkin
larry
laurent
lazare
lazarus
lea
lebesgue
lee
leger
leland
leon
leonce
leroy
lewis
library
licorne
light
lion
lisa
lisp
loch
lock
lockout
louis
louise
lourdes
love
luc
lucie
lucien
lumiere
lundi
lune
lydie
macintosh
mack
madeleine
madelene
maggot
magic
magique
mai
mail
maint
malcolm
malcom
manager
mangue
marc
marcel
marcelle
marcellin
mardi
marguerite
marie
marie-madeleine
marietta
mariette
marina
marius
mark
markus
mars
marthe
martial
martin
martine
martinien
marty
marvin
master
math
mathilde
matthias
matthieu
maurice
maxime
medard
melaine
mellon
memory
mercredi
mercure
mercury
meres
merlin
metro
mets
mgr
michael
michel
michelle
mike
minimum
minsky
mit
modem
modeste
mogul
moguls
monique
mont
moose
morley
morts
mouse
mozart
mutant
nadege
nagel
naissance
nancy
napoleon
narcisse
nasa
natacha
nathalie
nationale
nativite
navette
nepenthes
neptune
ness
nestor
net
network
new
news
newton
next
nicolas
nina
ninon
nobody
noel
norbert
notre
novembre
noxious
nuclear
nutrition
nyquist
oceanography
ocelot
october
octobre
odette
odile
odilon
office
olive
olivetti
olivia
olivier
open
operator
oracle
orca
orwell
osiris
outlaw
oxford
pacific
pacifique
pad
padoue
painless
pakistan
pam
paper
papers
papiers
paques
parfait
pascal
pass
password
pat
paterne
patrice
patricia
patrick
paul
paule
paulin
peche
pecheur
pecheurs
peggy
pelagie
pencil
penguin
penis
pentecote
peoria
percolate
peres
persimmon
persona
pete
peter
peugeot
peur
philip
philippe
phoenix
phone
pierre
pizza
plane
playboy
plover
pluto
pluton
plymouth
poire
poisson
poissons
polynomial
pomme
pondering
porc
pork
porsche
poster
power
praise
precious
prelude
presence
presto
prevision
prince
princeton
printemps
prisca
priv
private
privs
professor
profile
program
prosper
protect
protozoa
prudence
pub
public
pumpkin
puppet
quentin
qwerty
rabbit
rainbow
raindrop
raissa
raleigh
rameaux
random
raoul
rap
rascal
raymond
reagan
really
rebecca
regional
reine
remi
remote
renaud
renault
rene
reponse
requin
reseau
richard
rick
ripple
risc
rje
robert
robot
robotics
rochester
rodent
rodolphe
rodrigue
roger
roi
roland
rolande
rolex
romain
romano
romaric
romeo
romuald
ronald
root
rosalie
rose
rosebud
roseline
rosemary
roses
rosine
ruben
rules
ruth
sabine
sacre
sade
sagittaire
sainte
sal
sales
salome
samedi
samson
sandrine
saturn
saturne
saturnin
saxon
scamper
scheme
school
scorpion
scott
scotty
sebastien
secret
security
seigneur
sensor
septembre
serenity
serge
service
sesame
severin
sex
sharc
shark
sharks
sharon
sheffield
sheldon
shell
shiva
shivers
shuttle
sidoine
signature
silvere
simon
simple
simpsons
singer
single
smile
smiles
smooch
smother
snatch
snoopy
soap
socrate
socrates
solange
somebody
sophie
sossina
sourire
souris
souvenir
sparrows
spit
spring
springer
squires
stanislas
strangle
stratford
student
stuttgart
subway
succes
success
summer
sun
super
superuser
support
supported
surfer
suzanne
swearer
sylvain
sylvere
sylvestre
sylvie
symmetry
sys
sysadmin
system
tangerine
tanguy
tape
target
tarragon
tatiana
taureau
taylor
tech
telephone
temptation
tennis
tentation
terminal
terre
test
thailand
thailande
thecle
theodore
theophile
therese
thibault
thibaut
thierry
thomas
tiger
tigre
toggle
tomate
tomato
topography
tortoise
tortue
toussaint
toxic
toyota
trails
transfer
transfiguration
travail
trivial
trombone
tty
tuba
tubas
tuttle
ulrich
umesh
unhappy
unicorn
unix
unknown
uranus
urbain
urchin
util
utility
uucp
valentin
vasant
venceslas
vendredi
venus
ver
veronique
verseau
vertige
vertigo
vianney
vicky
victoire
victor
victorien
vierge
village
vincent
virgin
virginia
virginie
virus
visitation
visitor
viviane
vivien
volvo
wargames
warren
water
weenie
whatever
whatnot
whiting
whitney
wholesale
wilfried
will
william
willie
winston
wisconsin
wizard
wombat
woodwind
word
work
wormwood
wyoming
xavier
xaviere
xfer
xmodem
xyz
yaco
yang
yin
yosemite
yves
yvette
zap
zimmerman
zita
zmodem
zzz
Written by "The Butler", a hacker at heart, a Systems Administrator
in real life who enjoys learning as much as possible about any
given system including how to circumvent its security measures. He
has written articles for various hacker magazines that deal with
computer security. He currently administers a PC Network for a
medium size business (250 people). He also lectures to various
groups including Local EDP Auditors Association, User Groups, and
Private Corporations on how to protect their systems from hackers
like himself but who use their knowledge for mischievous purposes.
========================end of article========================
Dear Clyde Responses to
questions for
those who are
searching for
the truth.
Send your comments or questions to Clyde c/o the AIS Security
Branch in Parkersburg, Room 1011, or leave them in Clyde's mailbox
located on the Security bulletin boards throughout the Parkersburg
office.
Dear Clyde,
What is the proper way to dispose of diskettes which are no longer
able to be used? Are there security concerns here?
Peggy
Dear Peggy,
Yes there are security concerns as the data stored on the diskettes
may still be readable, if someone wants to take the effort to
retrieve it. Therefore the diskettes should be disposed of
properly. Any method of destroying the diskette can be used.
Cutting it up as you do a credit card that is no longer to be used
is one method. However the important thing is to make certain the
disk surface, that is the inner contents of the envelope or plastic
case, is destroyed.
(Note: I personally prefer giving the disk several good whacks with
my sword and lance to render it unusable.)
Clyde ....... Sir Clyde?
Rumor has it that Clyde is to be recognized for his continuing
efforts in the arena of computer security by being knighted. There
will be more on this in the next issue, stay tuned.
========================end of article========================
...........................................................
A Journey Behind (further behind) . . .
.
. . . . . ..
.
. The Dark Side of CYBERSPACE . . ..
. .
. . . . . .
.
Hackers in Their Illusive World: . A Response .
. .
...........................................................
A Response by: Dispater
Editor in Chief of Phrack Inc. Magazine
InterNet: phracksub@stormking.com
First of all, I would like to thank Kim Clancy for providing me
with the opportunity to reply to her article in the previous issue
of the ISSM. I find myself agreeing with her on more issues than
not. I read her piece on Cyberspace... Most of the article was
good, but I felt unclear about what she was saying in the section
titled "The Dark Side." So I have attempted to present a few
things from this hacker's viewpoint and make a few points where I
have disagreed with her. The ">" indicates Kim's previous
writings.
>...What is scary to me in regard to some of the avenues is
>the ability for individuals to get to so many different
>types of information...
What scares me are the kinds of people who have access to
the most personal parts of our lives compiled into data
bases (like Information America) that are for sale to anyone
who wants to pay the money or has the "power" to access it.
Why does the government need to know my unlisted phone number? Is
it really any insurance agency's right to know that I have a son
or daughter that is about to turn age 16, and will soon need to buy
auto insurance? I think I have the right not to be bothered by an
onslaught of people that think they have something I want to
purchase from them. If you really enjoy junk mail and computerized
telephone sales calls you can thank these kinds of databases.
>I am not stating that I think information should be
>shielded from individuals.
The more diverse sources of information we can all access, the
better off society will become. If we look at the past we can see
how accuracy in books was improved drastically by the creation of
the printing press. The scribes of kings and church figures were
no longer relied upon as authorities of various subject matter.
Information was made cheap and easily possessed by the common man.
Therefore if someone disagreed with some book that was printed, he
and his guild could write their version of what THEY found to be
true. This promoted truth, accuracy, a deluge of human
interaction, and free thought.
>...I once went to a presentation about hackers. The
>presenter told a story about a mother who took her child's
>computer modem out into the driveway and ran over it after
>her son had been arrested for hacking...
What was the parent doing while her child was hacking?
Another thing we need to clarify is the use of the word
"child." These are not often children. There is a certain
level of mental development that must occur first. I don't
know much about child psychology, but I'd say that most kids
under the age of 13 would have a bit of difficult time
understanding computer networking. Most people in the
computer underground are at least 16. If they are not
16 years old almost every sysop I know, kicks them off the
system. The young person should be allowed to explore in areas the
parent might not agree with as long as he/she is willing to
talk about it with the parent afterward. Why are required to
water down and censor all information so that is safe and
easily understandable to the "little children?" If there is
a 12 year old that has network access and is reading USENET's
ALT.SEX.BONDAGE, I think there is a greater problem involved than
the type of information the nets carry!!
>While hackers spend time developing their skills and
>learning how to master cyberspace they also use cyberspace
>to share information about what they have learned.
This is the great benefit of getting involved. Everyone
should own a computer because of this reason.
>Information has been found on how to steal long distance
>phone calls from the phone company, how to make a pipe bomb
>and how to perform satanic rituals before sitting down to
>hack.
It is not illegal to know how to do any of the previously
mentioned things. As you mention later the information can
also be found in such places like libraries. We need to
keep a few things in perspective here. MOST of the
information readily available on phone phreaking is so out
dated, one couldn't hope to implement the use of such
knowledge without most surely getting caught in an ESS(Electronic
Switching System environment. Most of the United State's
telephones are on such a system.
Secondly, most of the information available on explosives is
very crude. Most of it isn't worth the time it took to
download. Actually there is more information available in
the library on that subject than in all the data bases in
the world. I personally think this kind of thing is simply
stupid. I will not print that kind of thing in Phrack.
That kind of information is typed in from books, by people
who don't have anything else to do.
In regards to "satanic rituals", it is difficult to make any
comments about this because in all my years of calling BBS's
and talking to other hackers, I have never seen such an
animal. I have seen *THREE* articles on the Wiccan religion
which is similar to white witchcraft, but it's not even
close to anything satanic. However, other than this
minuscule tidbit in cyberspace, the only things I've seen
were things that were written as pranks and for joke
purposes. It amazes me that if one person has written
something or done something it is representative of the
whole community. This is definitely not a responsible
conclusion. If some people would just open their eyes to
reality, they would not see a computer underground filled
with "satanic, child molesting anarchists".
>I hesitate to write the above because I don't want people
>to avoid the technology. Everything I have found is in
>most libraries, but the accessibility of it through
>computers makes it much easier to obtain.
You hesitate with good reason and you are correct about all
that information being already in your local library. The
problem boils down to "digital censorship." Some people are
saying it's OK for a library to have the aforementioned
information, but it's NOT OK for it to be on my computer's
hard drive.
In regards to that argument I say it is much easier to get
the information from a library than the computer. Let's
take a look at they facts. First of all, most libraries are
FREE. On the other hand the average computer system
(386/33) costs around $1500. Your typical 8th grader
doesn't usually have that kind of cash.
The problem is that reality and virtual reality is the same
for some of us. We will promptly ignore silly rules like
"it's ok for some people to know certain things, but it's
not ok for me to know the same bit of information."
In the information age we are all becoming much more aware
of each other's presence. We are finding out that we are
all very different. We each have some ideas that can
easily shock others. These ideas can and are being
challenged by the other people we interact with. Therefore,
we should NEVER take the step back into the "electronic dark
age."
The really funny thing about all this is, everyone in the
United States IS a part of cyberspace, even though most of
them don't want to recognize this fact. If your name is on
a computer somewhere, you are in cyberspace! So you'd
better become aware of your existence. Use it to learn and
question why its there!
========================end of article========================
OAIS Employees Volunteer to Judge Student Contest
Every October, the Computer Learning Foundation, a non-profit
educational foundation serving the United States and Canada, hosts
Computer Learning Month. During that month, among other numerous
activities, the foundation hosts numerous contests designed to
encourage students, educators, and community members to explore new
areas of using technology and to share their knowledge with others.
These contests for students provide parents and teachers with an
activity children can do today to begin thinking and learning about
what it means to be a responsible user of technology. One of this
year's contests was a student writing contest focusing on Adult
Attitudes on the Value of Technology and Ethical Issues. Students
were to interview one parent and one other adult, write a summary
of their opinions on the value of technology in our lives and the
ethical issues involved with using technology, then the students
evaluated what they thought of the comments and opinions expressed
by the adults they interviewed.
The Bureau of the Public Debt participated in this program with
several OAIS employees, Gretchen Bergmann, Kim Clancy, Bill Dobson,
Zephery Ellerson, Joe Kordella, Gary Smith, and Ed Alesius,
volunteering their time to judge the students entries.
While the use of a computer was not required to create the
critique many submissions showed an adept usage of various word
processing, desktop publishing and graphics software.
This interchange between the professional environment and schools
proved to be very enlightening. It is refreshing to see a group
dedicate its effort to a much needed task, keeping schools up with
technology and its responsible use.
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QUICK FIX SECURITY
The following is a listing of some easy to do security controls
that help a lot....
1. Set modem to answer after 4-5 rings.
2. Select a dial-up number from a different prefix or out of order
from the rest of your office.
3. Use call back features.
4. Use proprietary software for your communications e.g.,
PC Anywhere IV.
5. Use special modems for encryption and access control e.g.,
Leemah Datacom.
6. Disconnect after a certain period of inactivity.
7. Do not allow certain userids' to have dial-up access.
8. Use caller id and call tracking.
9. Display a blank screen when a connection is made so the user
has no clue what they have connected to.
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COMPUTER SPEAK
COMPUTER TERMS AND THEIR MEANINGS
access n. The ability of a subject to view, change, or
communicate with an object in a computer system. Typically, access
involves a flow of information between the subject and the object
(for example, a user reads a file, a program creates a directory).
cyberspace n. The world that is created by the connection of
computers. Travels thru this environment can be vast and undefined
just as space travel can be. This is the environment Cyberpunks
call home.
database n. A collection of data items processible by one or more
programs.
phreaking v. The art and science of cracking the phone network
(so as, for example, to make free long-distance calls). By
extension, security-cracking in any other context (especially, but
not exclusively, on communications networks).
virtual reality n. 1. Computer simulations that use 3-D graphics
and devices such as the Dataglove to allow the user to interact
with the simulation. 2. A form of network interaction incorporating
aspects of role-playing games, interactive theater, improvisational
comedy, and "true confessions' magazines. In a virtual reality
session, interaction between the participants is written like a
shared novel.
Phrack Inc. Magazine n. An electronically published and
distributed magazine that focuses on technical issues.
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Comptroller General Decision on EDI
The Comptroller General of the United States has issued a decision
that electronic data interchange (EDI) technologies, with
enhancements such as message authentication and digital signatures,
can create valid legal contractual obligations between the U.S.
Government and the party with whom the agency contracts.
Digest
Contracts formed using Electronic Data Interchange technologies may
constitute valid obligations of the government for purposes of 31 U.S.C.
1501, so long as the technology used provides the same degree of
assurance and certainty as traditional "paper and ink" methods of
contract formation.
Decision
By letter dated September 13, 1991, the Director, Computer Systems
Laboratory, National Institute of Standards and Technology (NIST), asked
whether federal agencies can use Electronic Data Interchange (EDI)
technologies, such as message authentication codes and digital
signatures, to create valid contractual obligations that can be recorded
consistent with 31 U.S.C. 1501. For the reasons stated below, we
conclude that agencies can create valid obligations using properly
secured EDI systems.
Background
EDI is the electronic exchange of business information between
parties, usually via a computer, using an agreed upon format. EDI
is being used to transmit shipping notices, invoices, bid requests, bid
quotes and other messages. Electronic contracting is the use of
EDI technologies to create contractual obligations. EDI allows the
parties to examine the contract, usually on video monitors, but
sometimes on paper facsimiles, store it electronically (for example on
magnetic tapes, on discs or in special memory chips), and recall
it from storage to review it on video monitors, reproduce it on paper or
even mail it via electronic means. Using EDI technologies, it is
possible for an agency to contract in a fraction of the time that
traditional practices take.
As NIST pointed out in its request, the "paperless" nature of the
technology has raised the question of whether electronic contracts
constitute obligations which may be recorded against the government.
NIST is in the process of developing standards for electronic signatures
to be used in various applications,*1 including the formation of
contracts, but has been advised that section 1501 imposes a barrier to
the use of electronic technologies by federal agencies in this regard.
Discussion
Section 1501 establishes the criteria for recording obligations
against the government. The statute provides, in pertinent part, as
follows:
"(a) An amount shall be recorded as an obligation of the United
States Government only when supported by documentary evidence of-
(1) a binding agreement between an agency and another person
(including an agency) that is--
(A) in writing, in a way and form, and for a purpose
authorized by law. . . ."
31 U.S.C. 1501(a) (1) (A).
Under this provision, two requirements must be satisfied: first, the
agreement must bind both the agency and the party with whom the agency
contracts; second, the agreement must be in writing.
Binding Agreement
The primary purpose of section 1501 (a) (1) is "to require that there
be an offer and an acceptance imposing liability on both parties." 39
Comp. Gen. 829, 831 (1960) (emphasis in original). Hence the government
may record an obligation under section 1501 only upon evidence that both
parties to the contract willfully express the intent to be bound. As
explained below, EDI technology provides both the agency and the
contractor the means to electronically "sign" a contract.
A signature traditionally has provided such evidence. See generally
65 Comp. Gen. 806, 810 (1986). Because of its uniqueness, the
handwritten signature is probably the most universally accepted evidence
of an agreement to be bound by the terms of a contract. See 65 Comp.
Gen. at 810. Courts, however, have demonstrated a willingness to accept
other notations, not necessarily written by hand. See, e.g., Ohl & Co.
v. Smith Iron Works, 288 U.S. 170, 176 (1932) (initials); Zacharie v.
Franklin, 37 U.S. (12 Pet.) 151, 161-62 (1838) (a mark);Benedict v.
Lebowitz, 346 F. 2d 120 (2nd Cir. 1965) (typed name); Tabas v. Emergency
Fleet Corporation, 9 F.2d 648, 649 (E.D. Penn. 1926) (typed, printed or
stamped signatures); Berryman v. Childs, 98 Neb. 450, 153 N.W. 486, 488
(1915) (a real estate brokerage used personalized listing contracts which
had the names of its brokers printed on the bottom of the contract in the
space where a handwritten signature usually appears).
As early as 1951, we recognized that a signature does not have to be
handwritten and that "any symbol adopted as one's signature when affixed
with his knowledge and consent is a binding and legal signature. B-
104590, Sept. 12, 1951. Under this theory, we approved the use of
various signature machines ranging from rubber stamps to electronic
encryption devices. See 33 Comp. Gen. 297 (1954); B-216035, Sept. 20,
1984. For example, we held that a certifying officer may adopt and use
an electronic symbol generated by an electronic encryption device to sign
vouchers certifying payments. B-216035, supra. The electronic symbol
proposed for use by certifying officers, we concluded, embodied all of
the attributes of a valid, acceptable signature: it was unique to the
certifying officer, capable of verification, and under his sole control
such that one might presume from its use that the certifying officer,
just as if he had written his name in his own hand, intended to be bound.
EDI technology offers other evidence of an intent to be bound with the
same attributes as a handwritten signature. We conclude that EDI systems
using message authentication codes which follow NIST's Computer Data
Authentication Standard (Federal Information Processing Standard (FIPS)
113*2 or digital signatures following NIST's Digital Signature Standard,
as currently proposed, can produce a form of evidence that is acceptable
under section 1501.
Both the message authentication code and the digital signature are
designed to ensure the authenticity of the data transmitted. They
consist of a series of characters that are cryptographically linked to
the message being transmitted and correspond to no other message. There
are various ways in which a message authentication code or digital
signature might be generated. For example, either could be generated
when the sender inserts something known as a "smart card"*3 into a system
and inputs the data he wants to transmit. Encoded on a circuit chip
located on the smart card is the sender's private key. The sender's
private key is a sequence of numbers or characters which identifies the
sender, and is constant regardless of the transmission. The message
authentication code and the digital signature are functions of the
sender's private key and the data just loaded into the system. The two
differ primarily in the cryptographic methodology used in their
generation and verification.
After loading his data into the system, the sender notifies the system
that he wants to "sign" his transmission. Systems using message
authentication codes send a copy of the data to the chip on the smart
card; the chip then generates the message authentication code by applying
a mathematical procedure known a cryptographic algorithm. Systems using
digital signatures will send a condensed version of the data to the smart
card, which generates the digital signature by applying another
algorithm, as identified in NIST's proposed standard. The card returns
the just-generated message authentication code or digital signature to
the system, which will transmit it and the data to the recipient.
Under either approach, when an offeror or a contracting officer
notifies the system that he wants to "sign" a contract being transmitted,
he is initiating the procedure for generating a message authentication
code or digital signature with the intention of binding his company or
agency, respectively, to the terms of the contract.*4 The code or the
digital signature evidences that intention, as would a handwritten or
other form of signature. Both, generated using the sender's private key,
are unique to the sender; and, the sender controls access to and use of
his "smart card," where his key is stored.
They are also verifiable. When the recipient receives the contract,
either on his computer monitor or in paper facsimile, it will carry,
depending on which approach is used, a notation which constitutes the
message authentication code or the digital signature of the sender,
necessary information to validate the code or the signature and, usually,
the sender's name. The recipient can confirm the authenticity of the
contract by entering the data that he just received and asking his system
to verify the code or the digital signature. The system will then use
the information provided by the sender and either verify or reject it.*5
Both approaches use a key to verify the message just received; however,
the digital signature requires application of a different key from that
used to verify a message authentication code. The change of any data
included in the message as transmitted will result in an unpredictable
change to the message authentication code or the digital signature.
Therefore, when they are verified, the recipient is virtually certain to
detect any alteration.
Writing
To constitute a valid obligation under section 1501(a)(1)(A), a
contract must be supported by documentary evidence "in writing." As NIST
pointed out, some have questioned whether EDI, because of the paperless
nature of the technology, fulfills this requirement. We conclude that it
does.
Prior to the enactment of section 1501, originally section 1311 of the
Supplemental Appropriations Act of 1955, *6 there was no "clean cut
definition of obligations." H.R. Rep. No. 2266, 83rd Cong., 2d Sess. 50
(1954). Some agencies had recorded questionable obligations, including
obligations based on oral contracts, in order to avoid withdrawal and
reversion of appropriated funds. See 51 Comp. Gen. 631, 633 (1972).
Section 1501 was enacted not to restrict agencies to paper and ink in the
formation of contracts, but because, as one court noted, "Congress was
concerned that the executive might avoid spending restrictions by
asserting oral contracts." United States v. American Renaissance Lines,
494 F.2d 1059, 1062 (D.C. Cir. 1974), cert, denied, 419 U.S. 1020 (1974).
The purpose of section 1501 was to require that agencies submit evidence
that affords a high degree of certainty and lessens the possibility of
abuse. See H.R. Rep. No. 2266 at 50.
While "paper and ink" offers a substantial degree of integrity, it is
not the only such evidence. Some courts, applying commercial law (and
the Uniform Commercial Code in particular), have recognized audio tape
recordings, for example, as sufficient to create contracts. See e.g.,
Ellis Canning Company v. Bernstein, 348 F. Supp. 1212 (D. Colo. 1972).
The court, citing a Colorado statute, stated that the tape recording of
the terms of a contract is acceptable because it is a "reduction to
tangible form." *7 Id. at 1228. In a subsequent case, a federal Court
of Appeals held that an audio tape recording of an agreement between the
Gainesville City Commission and a real estate developer was sufficient to
bind the Commission. Londono v. City of Gainesville, 768 F.2d 1223 (11th
Cir. 1985). The court held that the tape recording constituted a "signed
writing." Id. at 1228.
In our opinion, EDI technology, which allows the contract terms to be
examined in human readable form, as on a monitor, stored on electronic
media, recalled from storage and reviewed in human readable form, has an
integrity that is greater than an audio tape recording and equal to that
of a paper and ink contract. Just as with paper and ink, EDI technology
provides a recitation of the precise terms of the contract and avoids the
risk of error inherent in oral testimony which is based on human
memory.*8 Indeed, courts, under an implied-in-fact contract theory, have
enforced contracts on far less documentation than would be available for
electronic contracts. See Clark v. United States, 95 U.S. 539 (1877).
See also Narva Harris Construction Corp. v. United States, 574 F.2d 508
(Ct. Cl. 1978).
For the purpose of interpreting federal statutes, "writing" is defined
to include "printing and typewriting and reproductions of visual symbols
by photographing, multigraphing, mimeographing, manifolding, or
otherwise." 1 U.S.C. 1 (emphasis added). Although the terms of
contracts formed using EDI are stored in a different manner than those of
paper and ink contracts, they ultimately take the form of visual symbols.
We believe that it is sensible to interpret federal law in a manner to
accommodate technological advancements unless the law by its own terms
expressly precludes such an interpretation, or sound policy reasons exist
to do otherwise. It is evident that EDI technology had not been
conceived nor, probably, was even anticipated at the times section 1501
and the statutory definition of "writing" were enacted. Nevertheless, we
conclude that, given the legislative history of section 1501 and the
expansive definition of writing, section 1501 and 1 U.S.C. 1 encompass
EDI technology.
Accordingly, agencies may create valid obligations using EDI systems
which meet NIST standards for security and privacy.
Comptroller General
of the United States
Sept. 13, 1990
General Counsel
U.S. General Accounting Office
441 G. Street, N.W.
Washington, D.C. 20548
Dear Sir:
As you know, National Institute of Standards and Technology (NIST) has
cooperated with the Department of Treasury and the General Accounting
Office to develop an electronic certification system wherein a
cryptographic Message Authentication Code (MAC) is used in place of a
written signature to bind a certifying officer to a payment order.
Several other agencies have expressed their interest in using this or a
similar system as a substitute for a written signature. In fulfillment
of our responsibilities under the Computer Security Act of 1987, NIST is
now in the process of developing a public key based Digital Signature
Standard (DSS) which is specifically designed for electronic signature
applications and will provide at least the same degree of security as the
MAC approach. We have attached the DSS Federal Register Announcement and
draft DSS which is now issued for public comment.
We have often been told that legal impairments exist which prevent
agencies from implementing electronic signatures to bind the federal
government. The specific statute cited is 31 U.S.C. 1501. Before
formally recommending these standards for contracting and financial
management applications, I would like to request a General Accounting
Office decision as to whether NIST standards such as Federal Information
Processing Standard (FIPS) 113 and a finalized DSS may be used throughout
the federal government to record obligations under 31 U.S.C. 1501. If
you need any further information in order to make your decision please
feel free to contact Miles Smid, (301) 975-2938, of my staff.
Sincerely,
James H. Burrows
Director, Computer Systems Laboratory
Enclosures