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Tech Firms Pay Police Agencies to Fight Cyber Crime

Law enforcement: Intel funds sheriff's unit that chases computer pirates. Some fear conflict of interest.


Wander through the headquarters of the Sacramento County Sheriff Department's high-tech team and see what cops call the "ideal model" for fighting cyber crime in an age of shrinking budgets.

Fluorescent lights cast a jaundiced pall over the worn office cubicles, the frayed fabric pinned in spots with tacks. On each desk sits a computer, confiscated from a crime scene and still sporting an evidence tag. Windbreakers with the team logo are a luxury.

Then there are the things visitors don't see.

Like the $10,000 body wire Intel Corp. bought for the unit to use in undercover stings. Or the corporate jet Hewlett-Packard Co. used to fly officers to Silicon Valley, and the tens of thousands of dollars the computer firm spent for the team's travel expenses--flights, hotels, meals--when a recent case took officers out of town.

Tired of being ripped off by high-tech criminals, some of America's most powerful computer companies are fighting back with a relatively simple approach: Subsidize the local police.

From inside pilferage and brazen heists to Internet piracy and industrial espionage, digital crime in the United States cost computer hardware and software companies about $3 billion last year.

Authorities, who concede they are barely making a dent in the problem, insist they don't have the staff, resources or public support to tackle the overwhelming number of complaints.

But the computer companies do. Corporate largess ranges from a $100,000 annual grant from Intel that pays for police salaries in Oregon to Motorola Corp. and several other major PC firms donating $10,000 each to an annual fund to help underwrite the Austin (Texas) Police Department's cyber team.

This controversial practice has divided the law enforcement community between those who embrace the help and those who insist it is a means of buying justice.

It also underscores a nationwide dilemma: How can local police departments protect the high-tech sector--and the jobs and tax revenue it provides--if there isn't enough money to handle such cases?

While investigating the Hewlett-Packard case, members of the Sacramento Valley Hi-Tech task force traveled nationwide, at company expense, to serve search warrants, arrest suspects and confiscate evidence.

Before federal criminal charges were filed, however, Hewlett-Packard filed a civil fraud suit against a company in San Diego believed to be tied to the $500-million scheme. Hewlett-Packard used evidence gathered, in part, in the officers' travels to resolve its suit and ultimately obtain a stipulated judgment in its favor for $900,000.

"When companies are directly paying for travel, investigations or salaries, I think that's a very dangerous line that quickly crosses into a conflict of interest," said former FBI Agent Joe Chiaramonte, president of the San Jose chapter of the High Technology Crime Investigation Assn., a trade group.

But police Sgt. Tom Robinson, who heads up the Hillsboro, Ore., computer unit, sees it differently: "Frankly, any department that's not [accepting such grants] is missing the boat."

Advocates such as Robinson insist the money represents the key to winning the war on cyber crime, and is a small investment for the multinational companies.

"If you're inferring that we're paid off, that's not right," said Sacramento County Sheriff's Sgt. Michael Tsuchida. "I'll eat your dinner, sleep in your hotel and still arrest you if you're breaking the law."

'We All Realized We Needed Each Other'

Traditionally, many corporations have shied away from revealing too much to law enforcement to avoid drawing public attention to internal troubles. But as computer piracy grows, companies today are much more willing to seek help from police agencies.

Catching such criminals has long been the bailiwick of federal prosecutors, as tech-savvy criminals rarely stay within the neat confines of city limits when committing fraud on the Internet or stealing computer components.

But federal law prevents prosecutors and the FBI from taking corporate contributions to pay for salaries or travel expenses, and limits the use of evidence collected by private investigators.

State laws, however, have created a much broader gray area for local police. As a result, some local agencies rely on corporate handouts.

When losses mounted from armed robberies at computer chip plants in Austin in the early '90s, the city's high-tech companies decided to finance a private nonprofit group to train officers to deal with the problem. Through the Austin Metro High Tech Foundation, firms including IBM and Dell Computer Corp. annually donate up to $10,000 each for investigators' training, travel and equipment.

In return, businesses--including Applied Micro Devices, National Instruments and Motorola Corp.--say they expect law enforcement to treat computer crime as seriously as drugs and gang violence.

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