Thursday, January 12, 2012

Senators Say Patriot Act Is Being Misinterpreted

At the same time, Congress and the White House were rushing to enact legislation to prevent a lapse in several of the federal government’s investigative powers under the Patriot Act that were set to expire at midnight. The Senate passed the bill 72 to 23 late in the afternoon, and within hours the House approved it 250 to 153. In an unusual move, a White House spokesman said that President Obama, who was in Europe, would “direct the use” of an autopen machine to sign the bill into law without delay.

During the debate, Senator Ron Wyden, an Oregon Democrat and a member of the Intelligence Committee, said that the executive branch had come up with a secret legal theory about what it could collect under a provision of the Patriot Act that did not seem to dovetail with a plain reading of the text. “I want to deliver a warning this afternoon: When the American people find out how their government has secretly interpreted the Patriot Act, they will be stunned and they will be angry,” Mr. Wyden said. He invoked the public’s reaction to the illegal domestic spying that came to light in the mid-1970s, the Iran-contra affair, and the Bush administration’s program of surveillance without warrants.

Another member of the Intelligence Committee, Senator Mark Udall, Democrat of Colorado, backed Mr. Wyden’s account, saying, “Americans would be alarmed if they knew how this law is being carried out.”

The Obama administration declined to explain what the senators were talking about. Dean Boyd, a Justice Department spokesman, said that Congressional oversight committees and a special panel of national security judges — known as the FISA Court — were aware of how the executive branch was interpreting and using surveillance laws.

“These authorities are also subject to extensive oversight from the FISA Court, from Congress, from the executive branch,” Mr. Boyd said.

Mr. Wyden has long denounced the idea of “secret law” — classified memorandums and rulings about the meaning of surveillance law developed by executive branch officials and the FISA Court. He and Mr. Udall had proposed requiring the Justice Department to make public its official interpretation of what the Patriot Act means. The chairwoman of the Intelligence Committee, Dianne Feinstein, Democrat of California, agreed to hold a hearing on their concerns next month.

The two had also sponsored a proposal to tighten the circumstances in which one of the expiring provisions, known as Section 215, could be used. It allows the F.B.I. to obtain “any tangible things” — like business records about customers.

Mr. Udall criticized Section 215, saying it lets the government get private information about people without a link to a terrorism or espionage inquiry.

In a 2009 debate over the Patriot Act, another member of the Intelligence Committee, Russell Feingold, Democrat of Wisconsin, also hinted that Section 215 was being used in a secret way that, he said, “Congress and the American people deserve to know” about. He was defeated for re-election in 2010.

The business records section of the Patriot Act had been set to expire, along with provisions allowing the F.B.I. to obtain “roving” wiretap orders to follow suspects who change phone numbers, and to obtain national security wiretaps against noncitizen terrorism suspects who are not connected to any foreign power.

Congressional leaders had agreed to extend the provisions before they expired. But Senator Rand Paul, a libertarian-leaning Republican from Kentucky, initially blocked an expedited vote on the bill because he wanted Senate leaders to allow a vote on several amendments. The Senate majority leader, Harry Reid, Democrat of Nevada, allowed votes on two Paul amendments, which would have offered greater privacy protections for records involving gun sales and banking.


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Tuesday, January 10, 2012

Google Unveils App for Paying With Phone

On Thursday, the technology giant introduced Google Wallet, a mobile application that will allow consumers to wave their cellphones at a retailer’s terminal to make a payment instead of using a credit card. The app, for the Android operating system, will also enable users to redeem special coupons and earn loyalty points.

Starting this summer, the wallet will be available on the Nexus S 4G phone on Sprint and able to hold certain MasterCards issued by Citibank. It will also hold a virtual Google Prepaid MasterCard.

The mobile wallet will work at any of the 124,000 merchants that accept MasterCard’s PayPass terminals, which take contactless payments, and more than 300,000 merchants outside the United States. The wallet is powered by a technology called near-field communications, which is incorporated into a chip in mobile phones and sends a message to the merchants’ terminals.

“Eventually, you will be able to put everything in your wallet,” Stephanie Tilenius, vice president for commerce at Google, said at a news conference.

That grand vision will take a while to come to fruition. Various players have been working on mobile wallets for years, but they have not gained traction because the companies have not been able to agree on how they would be paid or who would control the wallets. Cellular carriers, banks, credit card issuers, payment networks and technology companies all have a stake in this battle.

With its wallet, Google plans to make money by offering consumers promotions as they shop. For instance, it plans to introduce “Google Offers” — advertising deals from local and online businesses that can be found online or sent through the phone. Like Groupon, Google will collect a fee from participating retailers every time a person redeems a coupon. Citibank will collect the same fees as it would in a traditional credit card transaction.

Google Wallet will need some time to become fully functional nationwide. While Google has worked with more than 15 retailers, like American Eagle Outfitters, Bloomingdale’s, the Container Store and Jamba Juice, they all need to upgrade their payment terminals. When they do, consumers will also be able to store and redeem deals with the wallet. Merchants in New York and San Francisco are expected to be ready this summer.

Once the retailers’ technology is in place, consumers will be able to wave their phone at the checkout counter and, in one swoop, discounts will be applied, loyalty points will be awarded and payments made. Someday, Google said, when consumers enter the store, their phones may serve up a list of items they recently bought, and offer them related discounts.

The wallet app itself will require a PIN, as will each transaction. The payment credentials will be encrypted and stored on a chip inside the phone.

Google emphasized that the wallet would be open to all businesses and invited other banks, credit card issuers, payment networks, mobile carriers and merchants to work with it.

“I expect that other payment networks and other banks will join this effort, though in some cases it will be a hedge strategy they employ along with their own mobile payment initiatives,” said Charles S. Golvin, an analyst with Forrester Research. “Since these payments utilize the same underlying business model as cards today, there is not significant disruption risk for these players.”

Google is also working with First Data, which processes payments and will ensure the security of the transaction.

If the phone was stolen, the credit cards inside could be remotely disabled. Consumers would have the same “zero liability” for unauthorized transactions made with their phones as they would with plastic cards.

Separately, PayPal filed a suit on Thursday against Google and two of its former executives who are now at Google, including Ms. Tilenius. The suit claims that they misappropriated trade secrets from PayPal’s mobile-payment business. A Google spokesman declined to comment because he said they have not yet received a copy of the complaint.

Eventually, Google said, its wallet may be able to hold much more, including car keys and airline boarding passes. But access to such items will still require a fully charged phone.

If the phone battery dies, even Ms. Tilenius of Google conceded, “I think you need to use your plastic at that point.”


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