iPhoneGate reporter is cleared; DA ignores Apple 'gestapo' tactics

Illegal search and seizure? Harsh interrogation of suspects? Misappropriation of public resources?

A Silicon Valley district attorney announced yesterday that the DA's office would not to indict the reporter who bought an important piece of evidence for a great story on a key subject for his publication because he was not acting out of financial greed or criminal intent.

It was a good decision from Steven Wagstaffe, San Mateo County district attorney, whose staff had to weed through the evidence gathered during a police investigation fueled by a Steve Jobs temper tantrum who had behaved like a criminal, who was an idiot and who may have acted properly during the loss and recovery of a piece of Apple property with roughly the national-security status of the plans for a stealth ICBM.

In March, 2010 an Apple employee stopped in a Bay Area bar for a drink after work and a chance to show off the unreleased, unannounced, ultrasecret prototype of an Apple iPhone 4 to his or her friends.

They were all so excited about it, they left it in the bar when they took off, which must have violated an Apple security guideline or two.

Because the bar was in the Bay Area, which is almost entirely populated by Apple fanbois and webheads, two other guys in the bar recognized the lost phone as a potentially valuable prototype, not just something else to be tossed into the Lost and Found.

The two – Brian Hogan, 22, of Redwood City and Sage Wallower, 28, of Emeryville are being charged with misappropriation of lost property for selling the prototype to Gizmodo instead of returning it to Apple as they should have done.

Gizmodo reporter Jason Chen, who recognized the prototype as a major story, bought it, wrote about it, ran pictures of himself holding it and was lucky enough to be out of the apartment when an elite police task force broke down his door and arrested the place, seizing "a long list of items" as evidence.

Evidence of what wasn't clear at the time and isn't now.

Illegal search and seizure?

The pseudo-SWAT team that pulled the raid was the Rapid Enforcement Allied Computer Team (REACT) that works directly for the Santa Clara County district attorney's office and includes agents from the FBI, Secret service as well as local and state police.

It is supposed to work on crime in the high-tech business, primarily those involving fraud, piracy and identity theft – crimes that rarely require riot troops to break down many doors.

"It's the iPolice," according to Steve Meister, a former Los Angeles County deputy district attorney quoted in a Los Angeles Times story investigating the unit and concerns that it operates without much law-enforcement oversight. "This whole thing appears, rightly or wrongly, to be law enforcement doing the bidding of a private company."

Chen and Gizmodo did know that the phone belonged to Apple and had been lost.

Steve Jobs called Nick Denton, CEO of Gizmodo owner Gawker Media to ask that the phone be sent back.

Gizmodo wrote about how it got the prototype wonderingly, noting both Apple's "(Almost) impenetrable security" and "how ferocious and ruthless Apple is about product leaks."

That last bit is a reference to Apple's Worldwide Loyalty Team, a kind of Apple corporate secret police, whose job it is to spy on Apple employees and partners and hunt down those who might be leaking information Apple would prefer not be leaked.

They swoop down on suspected leakers, shut down their access, copy out and go through every file and every reference in their phones and computers looking for evidence, go through desks and forbid employees to talk about the humiliation or invasion of privacy on pain of being fired.

They're known internally as the Apple Gestapo.

They have no power outside Apple, however, so Apple's chief lawyer wrote a letter asking that the phone be returned.

Despite Apple pressure, Gizmodo had plenty of time

Eventually it was. Gizmodo editor (at the time) Brian Lam wrote April 19, 2010 about how and why Gizmodo returned the phone, though they beat the legal deadline by 35 months:

"Our legal team told us that in California the law states, "If it is lost, the owner has three years to reclaim or title passes to the owner of the premises where the property was found. The person who found it had the duty to report it." Which, actually, the guys who found it tried to do, but were pretty much ignored by Apple," Lam wrote.

In considering whether to charge Chen, the DA's office "had a conflict between the penal code and the 1st Amendment and California shield laws," according to Morley Pitt, San Mateo County's assistant district attorney. "We felt that the potential Gizmodo defendant [Chen] had a potential 1st Amendment argument -- one that we weren't prepared to address on this particular set of circumstances."

However, "[Chen's] claim was that he was undertaking a journalistic investigation," Pitt said

Picking up a lost prototype is not a crime

A reporter – or anyone else – who buys a piece of stolen property without knowing it was stolen has not committed a crime, although they may have to return the property when they find out.

A reporter – or anyone else – who buys a piece of property that was lost or abandoned and whose ownership is therefore unclear, has also not committed a crime.

In 1971, RAND Corp. employee Daniel Ellsberg was eventually charged with espionage after he photocopied the confidential Dept. of Defense documents that came to be known as the Pentagon Papers and eventually turned them over to New York Times reporter Neil Sheehan.

Sheehan and the NYT were named in an attempt by the Nixon Administration to suppress the documents, but wasn't charged individually with having done anything wrong.

Most district attorneys lean the same way Santa Clara County's did, and for the same reasons – based on the huge influence of the Supreme Court decision letting Sheehan and the NYT off the hook in the Pentagon Papers case.

Jason Chen's situation may have been more complex because there was an object involved that Apple wanted to have back, and Chen paid far more ($5,000) for the prototype than he would have for a phone that wasn't an Apple super-secret prototype.

There is not and never was any justification for a police assault team to invade Chen's apartment and ransack the place looking for a piece of evidence in a case that was not even a crime, and which was far more likely to be in Gizmodo's corporate office than Chen's home anyway, given that it had already been photographed and was the subject of ongoing coverage.

The riot police, jobs' call to Gizmodo's boss of bosses, letters swelling with suppressed rage and indignation from Apple's lawyers were all part of a campaign of intimidation to get one small news outfit to give up a piece of evidence it had acquired in a fair and legal way and which was of critical interest to its readership.

There was no justification for Apple to blow up what was essentially a minor case involving a lost gadget and what one blogger was going to write about it into the kind of felony that requires assault teams, a year of investigation and casework by the district attorney's office and who knows how much lost time and money spent on attorney's fees for both Gizmodo and Jason Chen.

It was a waste of everyone's time and money, a violation of the rights of (at the least) Jason Chen and Gizmodo and an abuse of public resources to reinforce the paranoia and controlling monomania of one computer-industry billionaire.

Good guys escaped; bad guys weren't stopped

It's a good thing that Chen isn't being charged. It's a good thing the case has mostly gone away.

It's not a good thing that it's going away without anyone suing Apple or pressing charges for its abuse of everyone else in this case and all the others in which it tortures employees or associates to make sure its secrets stay secret.

Apple is not a sovereign nation. It is not a religion. It does not have the right to demand or expect the loyalty and dedication rarely given freely even to family or country.

It definitely doesn't have the right to use police and prosecutors to violate the rights of people whose behavior the directors of its internal gestapo don't like.

There were major crimes in the iPhoneGate case; the D.A.'s announcement today confirms that.

It misses the major point that those committing the real crimes in iPhoneGate were not Jason Chen or Gizmodo. They were Steve Jobs and Apple.

And so far, no one has done anything to stop them from doing exactly the same thing, to someone else, again.

Read more of Kevin Fogarty's CoreIT blog and follow the latest IT news at ITworld. Follow Kevin on Twitter at @KevinFogarty. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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