ENCRYPTION

When we talk today about privacy, it is difficult not to talk about encryption. In both the business world and in our private lives, the concept of privacy is that information we possess be passed on only to those we intend. Whether the information is a love note or an authorization for a financial transaction, it is important that we control the access to our communications. This is not (as the Government would like to imply) because private information is inherently suspect or evidence of improper behavior. It is perfectly legal and appropriate for a man and wife to make love. It is also appropriate that they be permitted to do this in private. Why should it be any different when an individual or a company chooses to participate in a business arrangement that is otherwise legal and ethical? Why should that be less private, just because a curious competitor or regulatory agency is curious?

How then is privacy to be achieved? In the case of the husband and wife, they retire to the private recesses of their private home, and obstruct the view of the rest of the world. That communication takes place, but it is not displayed for others. The technology we refer to as encryption makes it possible to so encapsulate our written and verbal communications so that it too is obscured from interception or observation by the rest of the world. The science of cryptography was honed by the need for military commanders to communicate without fear that the enemy would intercept the message and take advantage of the information. With the development of the computer and the increasingly universal access to personal computers, the benefits of encryption are all the more apparent.

Today, billions of email messages are routinely sent between individuals sitting at computer terminals in both business and home environments. These email messages are transmitted over the backbones, hubs, and other elements of what has become known simply as "The Internet." An email message, sent over the Internet is much like a post card sent through the regular mail service. Many people could easily read it en route. The greatest protection from this interception is the fact that most of our messages are of such little value to anyone other than the intended receiver, that interception is not worth the effort. In our everyday communications, there are messages that we might feel comfortable sending by post card. "Wish you were here," and "Having a great time" are messages that we would permit others to read if they chose. We would not likely feel as comfortable sending a detailed love note except in a sealed envelope. We might even write "confidential" or "For Your Eyes Only" on the outside of the envelope. We would not send someone our credit card number, our bank account number or sensitive business information except in a sealed envelope. That information might go by Fed Ex, with a requirement that the intended recipient sign for it. These are simple considerations that we already utilize to ensure some level of privacy where it matters to us.

With the growing use of email communications in our personal and business lives, it is no longer acceptable to utilize a "post card" level of privacy. If we want our business to remain our business, some further procedures need be implemented. Enter encryption technology.

Some years ago (we won't bore you with the entire history) a computer science researcher at MIT named Phil Zimmerman authored a piece of software that has had an incredible impact on the world. This piece of software was named "Pretty Good Privacy" (PGP for short). Originally created as a DOS based product, that was not very user friendly, this product has grown up and matured. PGP is now in various stages of its 5th Version. It is universally available for free as a Shareware product. It can be downloaded free from the Internet from several different sites. A company called Network Associates has purchased the commercial rights to PGP and sells a more feature packed version at your local computer or office products store.

Most encryption experts work for the government. Phil Zimmerman and a dedicated cadre of very intelligent software freaks continue to improve the product that started it all. Until very recently, it was a crime to export beyond the U.S. and Canada, full strength versions of PGP. That prohibition is now over, making it possible to use virtually unbreakable strength protection on communications between users in the U.S. and other countries. Phil Zimmerman spent hundreds of thousands of dollars defending himself from absurd federal prosecutions because of his copyrighted discovery. He has prevailed.

What that means for Prudential clients is that the servers that reside in the Bahamas can receive and send communications between clients, attorneys, Protectors, banks, brokerage houses, consultants and others, with an assurance of complete privacy.

PGP 5.0 and later versions that will no doubt be released, interfaces seamlessly with other software, word processors, email managers, Internet browsers, and software suites. It is well-documented and easy to use. It utilizes the Private Key/Public Key method of encryption (which we will let you read about in the PGP documentation) which has become the world standard. The available level of protection is such that the government, using the world's most advanced computers, would have to want to know the contents of a single email very badly to dedicate the many many hours of computer time necessary to have any chance at all of unscrambling the message. That would be for any given email message. It is virtually impossible for any set of computers now in existence or expected in our lifetimes to be able to intercept, crack, translate, review and cross reference any volume of encrypted email.

Why is encryption important? The U.S. Department of Justice has a system they call "Carnivore." This system is intended to be proactively intrusive of email being transmitted from all over the world. This system, operating through very powerful computers is programmed to look for key words, phrases or numbers, and to intercept great volumes of otherwise innocent and legal email. The theory is that unencrypted email is entitled to no expectation of privacy and that they need to keep an eye on all of us like Big Brother. Orwell would be proud.

Recently, PGP has released a new product called "PGPfone." This clever new application of encryption technology turns your voice into digital signals, encrypts those digital signals, transmits them over the Internet to an intended receiver seated at another computer, where the signal is descrambled and that person hears your voice. While in transit, no one (and we mean no one) can intercept and understand the communication. Again, this product installs onto your computer's desktop and interfaces with your other programs.

Prudential will accept your communications by phone (with pin #), by fax (with Pin #) by post card (if you are so foolish), by sealed letter (if you really believe that governmental officials in other countries never open the mail) or any other method of communication that you approve. Of course, we are likely to require that you indemnify the trustee in the event that there is a miscommunication due to lack of security. We offer the opportunity for our clients and others to communicate with us through PGP encryption technology. Just as the case of the "Wish you were here" post card, not every communication may require this procedure. We believe it is important to make it available for anyone who sees the benefits of private communications.