Time: Fri Oct 31 05:49:02 1997
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Date: Fri, 31 Oct 1997 05:45:24 -0800
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]

>----- Begin Included Message -----
>James Bidzos is the Chairman of RSA INC. the largest US
>encryption firm.  In 1994, Bidzos met with Commerce Department
>officials in a US Government attempt to purchase RSA patents on
>Digital Signatures.  Later, in 1995 and 1996, Bidzos traveled
>to China, and finally signed a "Memorandum of Understanding"
>with the Chinese Government on encryption.  Finally, in April of
>1996 RSA merged with Security Dynamics of Massachusetts.
>BIDZOS: Hi Charles- I'll try to answer your questions.
>SOFTWAR: I have spoken with Michael Rubin of NIST and to be
>frank, his reaction to your name was somewhat harsh. Tell me
>about your meetings with the US Government to purchase RSA
>digital signature patents and what was it you did or said that
>caused such a negative reaction?
>BIDZOS: I think they remember this as a bad experience because
>it failed. NIST came to terms on the DSA patent licenses, then
>published them in the federal register.  However, several
>foreign governments objected for a number of reasons, and NIST
>took most of the blame for having entered into any deal at all.
>(I think some of the foreign govts did not like the fact that
>they and their companies would pay for the use of DSA while the
>US Govt itself would have royalty free use.) Rubin was
>associated with all this, and it may have hurt his career. Being
>a bureaucrat, this would anger him.
>SOFTWAR: What past experiences and other techniques do you have
>to shake up so many people in government and among your
>BIDZOS: I think my negotiating skills are highly overrated. We
>have over 400 licensees who had no problem getting RSA licenses.
>Many people simply do not like the fact that such inportant
>technology must be paid for; I am the face they see, so much of
>their frustration is directed at me. I also suspect that many
>people in the crypto business are jealous of our success. Maybe
>I just do a good job of realizing value for RSA shareholders.
>(See next answer.)
>SOFTWAR: Security Dynamics is reported to have paid $200 million
>to merge with RSA.What makes RSA worth so much?
>BIDZOS: It is a matter of record that SDI gave the shareholders
>of RSA 8 million shares of SDI stock. (It was 4 million at the
>time of the merger; it has since split 2 for 1.) At today's
>price of 37, that is $296 million. RSA is a very valuable brand
>name, has good technology, excellent people, and RSA has a
>valuable customer base and relationships.
>SOFTWAR: I recently tried to talk with the FOIA officer at NSA
>on digital signatures and got a VERY rude (and possibly illegal)
>reaction. What is your opinion the NSA?
>BIDZOS: I suspect NSA is very good at what their primary job is
>- intelligence gathering - but not very good at marketing or
>dealing with the public. I think they were unable to deal
>successfully with the software industry because of their
>closed-world, secretive mentality.
>SOFTWAR: When did you meet with Vice President Al Gore during
>the government bid to buy RSA patents on Digital Signatures?
>BIDZOS: I did not meet with Al Gore on this; only Ginger Lew and
>4 other lawyers, but they did say they were there on his
>authority. It was in early 1994, in March, I think.
>SOFTWAR: Have you ever met with Janet Reno? John Huang? Ginger
>Lew? Ira Sockowitz? Ron Brown?
>BIDZOS: No to all of the above.
>SOFTWAR: Do you think the Clinton administration shipped Clipper
>systems to China?  Do you think this export was an accident or
>BIDZOS: I know nothing about this, and have not heard of it
>until now.
>SOFTWAR: What do you think about Dr. Perry now being an
>executive of Cylink - which also claimed to build Clipper
>BIDZOS: I don't believe that Perry is an executive of Cylink. I
>heard he had joined their board of directors, but I also heard
>that he immediately resigned. However, these are rumors I heard,
>and I have no facts concerning his involvement with Cylink, and
>have no opinion about it.
>SOFTWAR: Did you ever meet with Mr. Foster, Mr. Nussbaum or Mr.
>BIDZOS: Never.
>SOFTWAR: Have you ever met Bill Clinton or taken one of those
>"infamous" White House calls?
>BIDZOS: I met Clinton for the first, and so far only, time a
>week or two ago, where I was invited to join a dinner where
>encryption was one of the main topics. I have never been
>telephoned by Clinton, or anyone in the administration, or the
>DNC, about contributions.
>SOFTWAR: What do you know about Mr. Sanford Robertson and his
>firm Robertson and Stephens?
>BIDZOS: I know they are successful investment bankers who were
>acquired by Bank of America.
>SOFTWAR: I understand you first met Mr. Stuckey in late 1992 -
>Can you tell me when and where?
>BIDZOS: I acutally first met him in 1987 or 1988, at various
>computer security trade shows.
>SOFTWAR: Has the government ever pressed you about your work at
>RSA and your greek heritage? For example, did they express
>concern about your ownership of so much of RSA and sensitive
>BIDZOS: No, Greek heritage has not been an issue. (The current
>CIA director is of Greek heritage.) RSA does not do "sensitive
>contracts." We have never done any sensitive or classified work
>for the govt. None of our revenue comes from the govt, except
>for a negligible amount of software sales to some agencies who
>buy from us just like any other customer.
>SOFTWAR: I understand you were in the US Army - When, and what
>did you do?
>BIDZOS: In the early 1970's for 2 1/2 years. I served mainly in
>the Far East. I did not, and never have, had a security
>SOFTWAR: You signed a deal with LOIS and the China Academy of
>Sciences in Feb. of 1996. Exactly what encryption is involved
>(e.g... source code, object code, executable, theory)? Was a
>license required from the Commerce Dept.?
>BIDZOS: The deal was a Memorandum of Understanding, with LOIS
>and MOFTEC.  (Ministry of Foreign Trade and Economic
>Cooperation.) It does not involve any source code, and only
>applies to products which may be legally exported to China.
>(Such as "authentication only" products.) To date, nothing has
>been delivered, although we have done some joint research
>between our scientists and some LOIS mathematicians.
>SOFTWAR: What do you think of going to a nation such as China to
>discuss advanced technology which could be used against
>BIDZOS: I think it is a good idea for the US Govt and for people
>in the US to exchange visits and idea with China, and to learn
>what's going on, and to express our views to them. We have not
>provided anything to China that can be used against dissidents.
>SOFTWAR: What do you think of the Senate Campaign finance
>hearings (Thompson) NOT covering encryption exports to China and
>the Clinton administration?
>BIDZOS: I have not followed these hearings closely, and I am not
>aware of any crypto exports coming up in them. Maybe I did not
>understand your question?
>SOFTWAR: Thank you for your answers. FYI - Here is a couple of
>snips from the GAO report on HUA MEI - Export Controls: Sale of
>Telecommunications Equipment to China (Letter Report, 11/13/96,
>GAO/NSIAD-97-5). I would be interested in any comments or if you
>want the entire report I can send it to you.
>BIDZOS: No comment really, I don't follow this stuff much. I've
>been very busy dealing with various bills in Congress regarding
>domestic encryption controls.
>SOFTWAR: Could I follow up with one more question? When did you
>meet with Al Gore and if you did, were any of the meetings on
>official business?
>BIDZOS: No problem, glad to help. I have never met personally
>with Al Gore (nor have I ever spoken with him on the phone),
>only govt reps (Ginger Lew) who claimed to be meeting me on his
>SOFTWAR: Once Again - Thank you very much!
>BIDZOS: Good luck! 
>1 if by land, 2 if by sea.  Paul Revere - encryption 1775
>Charles R. Smith
>Pcyphered SIGNATURE:

Paul Andrew Mitchell, Sui Juris      : Counselor at Law, federal witness 01
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