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Net Effect: How US sanctions made Haystack

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There seems to be no end to the Haystack Affair. Who knew that this whole "Internet freedom" business was so ugly? Perhaps, it comes with the location: there must be a reason why Washington beats any other city in the world in terms of how many/how often its residents search for that very term on Google

I'm glad that The Economist picked it up, along with many others. I'm still waiting for The Guardian to do something about their akward award to Austin Heap. (That award is deeply symbolic of what happens to good editorial judgement when newspapers are forced to run conferences and make money on things that their marketing departments don't know how to vet.)

Now that we know so much about technology behind Haystack, I think the public attention should focus to discussing the instituational/structural environment that made Haystack possible. I definitely think that the blame extends far beyond Austin Heap; he's the product of the current "digital-innovation-at-all-costs" environment inside the State Department. Unfortunately, I don't think that Haystack is a unique case; had Austin been speaking only in half his voice, Haystack would have been able to survive for probably much longer.

To broach thet discussion about the enabling environment, today I did a piece for Slate, where I  recouped some of the key developments but also tried to reflect on the role that the US government - willingly or unwillingly - played in this mess. Since we had to make a lot of cuts to my original essay - I guess Slate didn't want yet another 6,000-word Haystack piece by yours truly! - I'll post the full version of one particular segment from the pre-edited version of my piece here. I think it does add some nuance to my argument - in no way was I trying to imply that we need MORE sanctions imposed on Iran, as some of the comments posted in response to my Slate piece seem to suggest.

I was actually arguing quite the opposite: that the sanctions - along with many other existing hurdles in US foreign policy - can easily distort the original noble intentions of the Internet Freedom Crusade. (And yes, if you think there are too many brands here - Haystack Affair, Internet Freedom Crusade, etc - I've decided it's unfair that the State Department gets to use all of those fancy brands - "21st Century Statecraft", "connection technologies", "Internet Freedom" - and I have to stick with boring and precise terms that actually mean something. So as of today, I'll be branding everything that moves!). So below is a small excerpt from my original essay - the bit that deals with the meaning of sanctions.


The Haystack Affair has helped to highlight that if the American diplomats are really seriousabout defending Internet freedom, they should begin by solvingproblems in their own backyard. The broader public debate here shouldgo beyond the subject of government incompetence – of which thereseems to be little doubt – and focus on the utility of requiringsuch licenses.

Whyshould the US government require a license to export ananti-censorship technology to Iran but not, say, China? What exactlyis the fear here? That the progressive elements of the IranianRevolutionary Guards would all become active Haystack users and startbrowsing the banned web-sites of Human Rights Watch? But isn't it agood thing? Why didn't the US government explicitly addcircumvention-technologies to the list of other online services –like Web browsers and instant messaging software – that werefinally granted exemptions from seeking such licenses when thesanctions wereamended in March 2010?

Mostlikely, we'll never know. Anything related to Iranian sanctions isdeliberately clouded in such secrecy and ambiguity as to guaranteethe US government maximum maneuver space should they seek to changetheir mind on an issue. Such strategy – “flexibility throughambiguity” - may sometimes be quite useful, but as the HaystackAffair has revealed, it can also backfire quite easily. Haystack'sfounders may not have boasted of having the US State Department“fast-track” their application to Newsweek– a claim that aState Department official denied to me – if there were at least amodicum of transparency surrounding the government's deliberationover Haystack's license application.

Itcertainly doesn't help that OFAC – the entity that is ultimatelyresponsible for issuing such licenses – is exempt from some crucialFreedom of Information Act regulations and is not obliged to releaseany information about individual cases it reviews. Not surprisingly,there is no mention of Haystack anywhere on OFAC's web-site. It'ssuch ambiguity that has allowed Austin Heap to make overstated claimsthat the media didn't know how to verify or challenge; the governmenthas also not shown much desire to set the record straight, eventhough they could have easily challenged Heap's claims to the media.Why didn't they? Perhaps, because being seen to do something aboutIran can't possibly hurt them. All in all, it looks like sanctionsoversight is one critical area where Obama's call for moretransparency is not likely to get heeded any time soon.

Butthe licensing process does more than just bestow additionallegitimacy on projects like Haystack; it can also give an unfairfirst-mover advantage to the most aggressive and legally-savvy ofthem. Haystack's press-releasewith regards to their OFAC license put all the right accents in allthe right places: “Haystack is the first anti-censorship tooldeveloped specifically for Iran and built to target the methods thatIran uses to filter the Internet. The CRC is the only organizationlicensed to export such software to Iran.”

CRC,being the first entity to obtain an export license from thegovernment rightly saw it as a strategic asset. After all, ifeveryone in Washington wanted to fund Internet freedom in Iran andHaystack was the only entity with an export license, it was obviousthat they had one killer advantage over other organizations: as faras the US law was concerned, Haystack was the only such tool thatcould be distributed in Iran legally.

Itdoesn't matter that there were other more effective tools or thatHaystack was a raw piece of code that may never leave its betastatus. Austin Heap had the license – and others didn't. It wasclear which way the funding wind would be blowing – especiallyafter a tacit endorsement of Haystack by Hillary Clinton. Howeverambiguously worded that endorsement was, it seemed to work inHaystack's favor.

HadHaystack not collapsed, it is easy to predict what would havehappened in the next few months: the project would have locked in amajor chunk of the early Iran-related “Internet Freedom” funds,stealing the spotlight from other tools and establishing very tightconnections with the donor community. And had the right-thinkingpeople at the US State Department refused to fund Haystack on itsweak technological merits, they would soon have been attacked by themedia and the Senators - as they always are, for example, wheneverthey refuse to fund projects affiliated with the Falun Gong movement.(But even the State Department hadto capitulate to such pressure in May 2010, granting $1.5 millionto one such Falun Gong effort.)

Hereinlies a lesson for aspiring digital revolutionaries looking to tapinto the Internet Freedom funding bonanza: hire good lawyers beforeyou hire good programmers! One of Haystack's numerous “innovations”in this space was hiring a Berkeley-educated and Washington-basedlawyer as its managing director. Whatever their sins, the Haystackgang presciently foresaw that, given how deeply the American foreignpolicy is mired in government bureaucracy, the crusade for Internetfreedom – especially when it targets countries that have Americansanctions imposed on them – would always prize one's ability towrite memos over one's ability to write code.

Thisis, of course, perverse – but this is just another example of howAmerica's own rules harm the cause of Internet freedom and distortincentives to produce good software. It seems unwise to embark onsuch quixotic initiatives as the promotion of “Internet freedom”without first getting a thorough understanding of how existingpolicies may compromise the noble intentions.

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