Dossier Society : Computers: Is Privacy the Loser?

Times Staff Writer

After a severe frost shut down Florida's citrus harvest last year, Jacques Augustin and hundreds of other low-income Haitian farm workers applied for emergency unemployment compensation. They were rejected and their work permits revoked. Federal immigration officials, relying on faulty computer data, had mistakenly concluded that the fruit pickers were illegal aliens and ineligible for aid.

Just before Christmas, Joni Bernard, along with 200 other customers of a small savings bank in El Paso, received chilling season's greetings from the Internal Revenue Service, letters accusing them of being tax cheats. An electronic search of bank records by an IRS computer had mistakenly determined that Bernard failed to report taxable interest on a non-existent $30,000 savings account.

Arrested at Gunpoint

And, in Boston last summer, Suke Emma unknowingly joined the estimated 14,000 Americans who, on any given day, are vulnerable to false arrest or detention because of faulty data in the nation's law enforcement computers. It was not until after he was arrested at gunpoint and jailed overnight that police corrected the mistaken computer report that listed the Emma family car as stolen.

Computers, the electronic gumshoes of the modern age, are proving to be less than perfect detectors of wrongdoers.

Yet, their popularity grows--both in government and private business--raising concerns in Congress and among privacy experts about the accuracy, security and fair use of billions of personal records in the nation's rapidly expanding computer networks.

Senate Hearings Set

Sen. William S. Cohen (R-Me.), who will hold subcommittee hearings this fall into the administration of this growing network, told an earlier Senate hearing: "I think we're rapidly approaching a society in which the human voice is not going to be heard above the whir of the computer, and that is very troubling."

"We're living in a dossier society where ultimately everyone may be judged by his data image," sociologist Kenneth C. Laudon of New York University said in an interview. The problem is a high level of data inaccuracy and ambiguity, notably in computerized national crime records, according to Laudon's recently published audit of federal crime records.

"We've got big, powerful computers collecting information about all of us, but no one's managing the data--how it's used, its accuracy," he said.

And Jerry Berman, director of the American Civil Liberties Union project on privacy and technology, says he is concerned that "even as we're recognizing that there are enormous accuracy problems with these data bases, we're still getting new ones . . . full of personal information that will be used by other people to make decisions about us."

Testifying this month before a House hearing into legislation aimed at improving the quality of criminal justice data banks, Berman recommended that Congress make federal aid to law enforcement agencies contingent upon their meeting minimum standards of computer record accuracy. He said faulty data in police computers "jeopardize the due process and privacy rights of citizens."

Earlier this month the congressional Office of Technology Assessment reported that the widespread and growing use of computer networks and electronic data banks in all agencies of the government has led to "creation of a de facto national data base" on most Americans. Consequently, the nonpartisan research agency added, "the completeness, accuracy and relevance of information" has never been more important.

Data Bank Use Growing

But government data bank growth is only part of the proliferation of electronic systems accumulating personal information. The insurance industry collects medical dossiers on millions of individuals, the credit and banking industries collect financial histories on virtually everyone active in the nation's economy, and marketing firms gather personal details on tens of millions of citizens ranging from their buying habits to life style preferences.

One marketing firm in Nebraska, for example, can provide mailing lists identifying millions of Jews or Catholics. Another firm, what sociologist Gary Marx of Massachusetts Institute of Technology calls a "data scavenging company"--culls drivers' license records to get the names and addresses of about 500,000 American women who wear petite dress sizes.

To Marx, the "low visibility, mostly unregulated private data bases" pose the greatest threat to personal privacy. Certainly such data systems can have a profound effect on an individual's ability to secure such fundamental needs or services as housing, jobs, medical care and credit.

Versie Kimble, for example, was fired from his Louisiana factory job after his new employer consulted a computerized industrial data bank. The private computer network keeps track of worker compensation claims filed against companies by their employees. It showed that Kimble had twice been hurt--suffering a shoulder injury and a broken finger--and had collected modest injury compensation settlements after suing his bosses. Kimble later had to use fictitious Social Security numbers to get new jobs and foil effects of a computerized blacklist.

Rejected by Landlords

In Los Angeles, Lucky Kellener's rental applications were repeatedly rejected by prospective landlords because of faulty information in a data bank of "undesirable tenants." Typical of personal data stored in a computerized tenant registry are records of a renter's past evictions, claims of property damage and warnings that the individual likes loud music. Kellener, however, was falsely blacklisted because he was mistaken for his once-evicted brother.

And Southern Californians who have filed any civil lawsuits may find it more difficult to get a new doctor since creation recently of a data bank for physicians that tracks people with "litigious tendencies." The computer network was established to help doctors screen prospective patients who may pose the highest risks of filing future malpractice claims.

"Decisions made about us as citizens, employees, consumers, debtors and supplicants . . . are based on information held in national (computer) systems and interpreted by bureaucrats and clerical workers in distant locations," NYU's Laudon writes in his new book "Dossier Society."

An individual's "data image," therefore, becomes increasingly important, just as favorable credit ratings have grown in significance over the last decade. According to Laudon, one's data image is an electronically assembled collection of "officially selected moments in your past . . . your official life, the one you must live with and explain to whatever authority chooses to demand an explanation."

Loses Benefits

It was Massachusetts welfare authorities who demanded an explanation from Raulinea Howard when a computer investigation found that she appeared to be concealing $11,000 in a bank account. It made her ineligible for benefits. While authorities awaited her explanation, they cut off her financial aid.

The computer had found money that Howard did not know anything about. In fact, she had to ask her social worker for the account number so she could find her own mysterious nest egg. After a futile search of Boston-area bank branches, she finally found the account in northern Massachusetts--but, not surprisingly, it belonged to someone else with a similar Social Security number.

Howard was one of scores of welfare recipients--some of them elderly with assets frozen in trust accounts set up to cover their burial expenses--who were improperly terminated in response to a computer matching investigation that compared welfare eligibility lists with state bank records.

"It was an absolute fiasco," Allan Rodgers, executive director of the Massachusetts Law Reform Institute, said. He successfully sued welfare administrators to reinstate many of the benefits. He said the computer erred in 70% of the cases that led to aid terminations.

Besides concern over the accuracy problems of some computer investigations, Rodgers questions procedures that shift the burden of proving computer error to the victim of the mistake.

Urges Cost Analysis

"Government has got to do some sort of cost-benefit analysis of this match madness," he said. "Someone needs to balance the benefits of this approach to government efficiency against the cost of emotional carnage committed against innocent people."

Sociologist Marx of MIT said computer matching programs--now mandatory in some form in all states as part of the federal government crackdown on welfare fraud and waste--"turns the investigative process on its head" by making whole classes of people "suspects when they've done nothing but be part of a group," such as welfare recipients.

"It's not illegal to apply for unemployment or Medicaid," Marx said. "But the computer presumes everyone's committing a fraud until proven innocent."

Federal employees and welfare recipients are groups most targeted for computer matches, but record surveillance projects also are affecting increasing numbers among the general population.

All 18-year-old males, for example, are potential objects of computer investigations. The Selective Service Administration computers compare drivers' license records in each of the states to find young men who have failed to register for the draft. The federal agency also has conducted computer matches with "birthday club" lists of an ice cream parlor chain.

Father Registers Complaint

"It bothers me that you take your boy out for an ice cream cone and it's not just father and son, the Selective Service is there with you," a Palo Alto father complained to the San Francisco Examiner after the agency sent a letter to the man's home based on erroneous information in the ice cream parlor's computerized data.

Also, parents believed delinquent on child support payments are sought by the Department of Health and Human Services computers, examining the data banks of such government agencies as the IRS or Social Security Administration.

And persons whose names show up on commercial mailing lists have been targets of IRS searches for individuals who have not filed a tax return. The computerized lists--compiled by private firms--are developed from telephone directories, census data and motor vehicle registrations, for example.

The IRS also is building a new data bank, a master debt file that will include the names of everyone who owes the government money--from student loan defaulters to farmers who received subsidy overpayments. When the computer finds someone in that category, the individual's tax refund will be withheld.

In its recent report to Congress, the Office of Technology Assessment said that the expanded use of computerized data networks has made it virtually impossible for most citizens to know where files about them exist and "nearly impossible for individuals to learn about, let alone seek redress for, misuse of their records."

Most Seen as Unaware

Privacy experts also are concerned that most citizens are unaware when their files are part of a targeted computer search until, or unless, they are singled out for additional investigation.

The expansion of computerized investigations of data banks began in the late 1970s as an answer to concerns about welfare abuse. In the 1980s the expansion has become an explosion. Computers are the newest weapon in wars on illegal immigration and the national deficit, as tools for keeping track of criminals in the nation's war on crime, and as investigative instruments in the war on waste, fraud and abuse in all corners of government.

"In the 1970s we threw money at social problems--now we throw computers," Robert Ellis Smith, publisher of the Washington-based Privacy Journal, said. "People seem to think that if they're spending money for computers, they're getting at the problem."

Smith questions whether the yield in taxpayer benefits will be high enough over time to justify the expense of such investigations.

"We may be heading for data saturation," he said. "We're developing so much information in order to protect ourselves from inefficiency and fraud that the very mass of the information we're taking in may create a whole new kind of inefficiency."

But one of the leading advocates of computer data investigations--Richard Kusserow, inspector general of the Department of Health and Human Services--defends them as a boon to the taxpayer and an aid to government efficiency.

Sees $25-Million Savings

"They work. They save money," he said, citing one matching program that led to recovery of $7.5 million in Social Security checks that had been mailed to dead people. He said the government ultimately will save $25 million from that single investigation.

Kusserow also called computer inquiries less intrusive than a human investigator, who would have to pore over entire files, even personal files, that ultimately turn out to have no investigative value.

The inspector general discounted criticism that failure to notify individuals in advance that their files may be part of a general computer search borders on government intrusion into a citizen's private affairs. He said the computer only seeks out narrowly targeted files with potential problems.

"The computer is very discreet," he said.

"Ain't no beef in that argument," countered Alan Westin, professor of public law and government at Columbia University, who called such general searches a serious due process concern. "I don't give a damn if it's J. Edgar Hoover or an IBM computer, I want to know when, who and why someone's looking at my file."

Rep. Glenn English (D-Okla.), contending that no agency of government adequately polices federal computer investigations, has introduced legislation to create an advisory data protection board modeled after similar agencies in many Western nations.

'Concerns Ignored'

"Americans are very concerned about threats to their privacy resulting from increasing computerization and the growth of government," English said when he introduced his bill. "Yet we know from past experience that privacy concerns tend to be completely discounted or ignored altogether unless there is a dedicated and responsible spokesman capable of representing the privacy interests of citizens."

The congressman was especially critical of the Office of Management and Budget, which is responsible under the Privacy Act of 1974 for assuring compliance with federal privacy regulations. He said it "is hardly doing its job at all."

And congressional researchers, in the recent report of the Office of Technology Assessment, pointed to OMB's potentially conflicting roles since the management office assigned to keep the reins on unnecessary or improper computer investigations is the same agency that oversees and encourages the inspectors general who are the heaviest users of such probes.

"OMB is not effectively monitoring such basic areas as the quality of Privacy Act records," the study found.

The 152-page report said that only 13% of government agencies conduct audits of their own electronic records system to periodically verify the completeness and accuracy of those files. "The limited evidence available suggests that quality varies widely," the report said. It also said that OMB's oversight of government record security is inadequate.

Question Data on Aliens

One of those agencies whose data quality has come under fire recently is the immigration service for its Systematic Alien Verifications for Entitlements program. It was expected to be a computerized data bank of all legal aliens, a comprehensive list of names against which agencies such as local welfare offices could check applicants for aid payments to be certain that applicants are qualified aliens.

But the data was incomplete. The results in Florida and Illinois were legal cases in which courts found that hundreds of qualified immigrants were improperly denied government benefits. And, in Colorado, where the computer system uncovered only 17 illegal aliens in a yearlong pilot project, the program costs actually exceeded savings from fraud prevention, according to state officials.

Critics like the National Council of La Raza say the program should not be used until the data quality is greatly improved. An immigration service official conceded in court last year that the alien verification system had 6.2 million records that had not yet been entered into the computer and that the backlog was growing as 1.4 million additional records are generated each year.

"If an immigrant is here legally but he's not in that computer system, it can be a major problem--he may be denied benefits that he desperately needs and for which he's qualified," Dan Purtell, an immigration policy analyst for La Raza, said.

Pending federal immigration legislation could require mandatory state participation in the computer verification system despite such concerns, however.

Crime Data Under Fire

Controversy over data quality in the nation's crime computers is more widespread, fed by scores of false arrests in areas ranging from urban centers to rural towns.

In Iowa, for example, Mary Sanchez-Jones was arrested during a Sunday drive and her 10-year-old sports car impounded, because an erroneous vehicle identification number on a stolen car report had been entered into the national computer by police in South Carolina. Even after she was released, with apologies, the mistaken report remained in the computer file for nearly a month.

And in Michigan, Terry D. Rogan was arrested repeatedly on suspicion of two murders and armed robberies after a man using Rogan's stolen wallet and identification went on a crime spree in Southern California. Rogan was falsely arrested five times in three years before filing suit against Los Angeles police to correct mistaken warrant information they had entered in the national crime data system.

Bad data is more than a problem for persons subject to false arrest. Increasingly, government licensing agencies and private businesses are screening job seekers by checking their arrest records--for example, firms such as banks whose employees routinely handle large amounts of cash or utility companies whose employees routinely go into private homes.

But according to Laudon's research, some of it done on behalf of Congress, slightly more than 50% of records in the FBI's computerized criminal history files are inaccurate or incomplete. And the accuracy of state crime data systems ranged from 12% to 49%.

A separate series of audits conducted by the FBI revealed last year that an estimated 12,000 or more invalid or inaccurate crime reports are transmitted daily to the agency's National Crime Information Center. The data center receives nearly 400,000 daily requests for information.

Student Denied Internship

One of those past requests was the arrest history for a student at City University of New York, an applicant for a student internship with the city transit authority. The computer found that he had been arrested--but not convicted--of auto theft when he was 16. The internship was denied based on the arrest alone.

Laudon regards the centralized federal network of crime information as "an aggregation of power in the federal government without precedent in peacetime America."

And its growing use as an employment screening tool--despite acknowledged accuracy flaws--presents "an automated blacklisting capability thousands of times more powerful yet considerably more silent than the blacklists of the McCarthy era," Laudon said.

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