Yahoo Threatened With A Secret $250,000 Per Day Fine If It Didn't Comply With NSA PRISM Demands

from the how-do-you-explain-that-one? dept

Fri, Sep 12th 2014 7:03am — Mike Masnick

Back in 2013, a week after the whole PRISM program was first revealed thanks to Ed Snowden's leaks, it was then revealed that Yahoo had fought a secret legal battle against the program, based on a predecessor to the FISA Amendments Act of 2008 called the Protect America Act of 2007. Yahoo took this fight to the FISA court and then lost. The company was ordered to begin handing over information, even though the company believed the requests were unconstitutional. Late yesterday, Yahoo noted that the FISA Court was finally declassifying many of the documents from that legal fight. James Clapper's office quickly provided its spin on the 1,500 pages worth of documents in the fight. We're digging through all the documents and will likely have more to say once we've had a chance to read through them more carefully.

However, we wanted to comment briefly on the story that's already been making the rounds -- which was called out by Yahoo in its announcement about this. And it's that the government threatened Yahoo with a $250,000 per day fine for refusing to comply with the demands to turn over the information. That specific threat can be seen in the government's motion for an order of civil contempt, after Yahoo sought to appeal the original decision against Yahoo. Yahoo asked for a stay of the original ruling while it appealed, but the government insisted that the court should not allow a stay and should order Yahoo to hand over the data or pay the $250,000 per day fine -- which even the government refers to as a "coercive fine."

$250,000 per day is a lot. Yes, that number can add up pretty quickly, but the truly stunning thing about all of this is that you have to remember all of this was done in total secrecy (it's only come out now, about seven years after it happened). As a company making billions, perhaps it would be able to hide millions of dollars in fines, but somewhere along the line it would have had to have raised alarm bells from someone -- whether an accountant for the company or even someone on the board, wondering why giant chunks of money were going to the government based on absolutely no explanation. And making it even more bizarre is that almost no one in the company itself would have even been allowed to know what was going on. While it never actually got to that point, imagine the financial mess such a secret fine from a secret court would cause.

FISA Court judge Reggie Walton denied Yahoo's request for the stay, meaning Yahoo would likely have been found in contempt if it didn't start handing over data. Thus, even though the company was still trying to appeal the decision (unsuccessfully), it was forced to start handing over the data anyway.

There are so many things wrong (and seemingly unconstitutional) in this entire setup -- and I'm sure we'll have more to say on it after we've gone through the documents. But what kind of constitutional democracy are we living in when this kind of thing is considered to be perfectly acceptable by those in power?

Government Motion 20080509 (PDF)Government Motion 20080509 (Text)

Order 20080509 (PDF)Order 20080509 (Text)

Yahoo Compliance Report 20080514 (PDF)Yahoo Compliance Report 20080514 (Text)

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: 4th amendment, doj, fisa amendments act, fisa court, fisc, nsa, prism, protect america act, surveillance
Companies: yahoo

41 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

That One Guy (profile), 12 Sep 2014 @ 7:03am

Minor typo
FISA Court judge Reggie Walton denied Yahoo's request for the stay

Pretty sure that should read:

FISA Court judge Reggie Walton denied Yahoo's appeal

Because the only even remotely sensible reason to deny the stay request, meaning they were stuck paying the insane fine while waiting for the appeal(which, I'm sure could stretch on for a long time), would be to coerce them into dropping the appeal and just handing over the information.

Denying the request for a stay on a fine that huge, is effectively no different than denying them the appeal flat out, or telling them they can appeal all they want, the verdict won't change.
[ link to this | view in chronology ]
Digger, 12 Sep 2014 @ 7:06am

I find the entire U.S. Government in Contempt of the Constitution...
The evidence is everywhere, trial by the people as the courts cannot be trusted, line em all up and execute the traitors.
[ link to this | view in chronology ]
Michael, 12 Sep 2014 @ 7:10am

Wouldn't forcing them to pay a fine of that size in secrecy have been an SEC violation?
[ link to this | view in chronology ]
- David, 12 Sep 2014 @ 7:21am
  
  Re:
  Most likely yes. Talk about being between a rock and a hard place. A secret court with little oversight and no Congressional or public scrutiny which is able to put a company in a position where there's no way to fight it without breaking a law. Secret courts have to go. Period.
  [ link to this | view in chronology ]
  - That One Guy (profile), 12 Sep 2014 @ 7:36am
    
    Re: Re:
    'little oversight' implies they answer to someone, and some other agency/group is capable of forcing answers out of them, and so far, I haven't seen either when it comes to them, so 'no oversight' would probably be more accurate there.
    [ link to this | view in chronology ]
- That One Guy (profile), 12 Sep 2014 @ 7:34am
  
  Re:
  As the FISA 'court' would likely say: 'That's a feature, not a bug'.
  [ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 7:15am

When the hammer falls...
I hope I am completely out of the way, but as things stand, I really would not put anyone taking the government to task on any of this if I were called to jury duty.
[ link to this | view in chronology ]
- Anonymous Coward, 12 Sep 2014 @ 7:28am
  
  Re: When the hammer falls...
  I would go further - I would force jury nullification on any case involving any of the following organisations:
  
  FBI
  CIA
  NSA
  DOJ
  
  I would ask for my fellow jurors to ignore any requests for a Guitly plea. Yes, there would be grave injustices committed under the auspices of this plan; however, none of those are so great that these terrorists should get their way. Ever.
  [ link to this | view in chronology ]
  - Anonymous Coward, 12 Sep 2014 @ 8:40am
    
    Re: Re: When the hammer falls...
    FBI
    CIA
    NSA
    DOJ
    
    I'd like to add in another three letter terrorist group
    
    CPS
    [ link to this | view in chronology ]
  - Anonymous Coward, 12 Sep 2014 @ 8:50am
    
    Re: Re: When the hammer falls...
    And you would never make it onto a jury.
    [ link to this | view in chronology ]
    - art guerrilla (profile), 12 Sep 2014 @ 11:02am
      
      Re: Re: Re: When the hammer falls...
      uh huh...
      you BREATHE a word of 'jury nullification' or ANYTHING remotely like that, and you will be struck from the pool in approximately 99% of the courtrooms in the country...
      
      EVEN THOUGH, not only is so-called 'jury nullification' COMPLETELY 'legal' (whatever that means anymore), but ABSOLUTELY the right and duty of citizens to invoke to stop or ameliorate over-zealous persecutors...
      
      IN SPITE of it not only being 'legal', BUT -i would aver- OUR HIGHEST DUTY to perform when 'the law is an ass', judges and DA's will NOT allow that kind of -you know- populist crap to go on in "THEIR" courtrooms...
      you may *think* or theorize that they are OUR courtrooms, but you would be wrong: they are the courts of the 1%, and all the officers of the court are functionaries of the 1%...
      
      you, dear citizen, ain't shit...
      [ link to this | view in chronology ]
Guardian, 12 Sep 2014 @ 7:32am

stopped using email in 2002 for anything but site signups
oh and with 96 email addresses each with different password of course good luck tracking crap
[ link to this | view in chronology ]
- art guerrilla (profile), 12 Sep 2014 @ 11:05am
  
  Re: stopped using email in 2002 for anything but site signups
  do you know what a keystroke logger is ? ? ?
  
  'all your base are belong to us...'
  [ link to this | view in chronology ]
Erik Grant, 12 Sep 2014 @ 7:34am

Missing a 0 on the number in the article.
[ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 7:41am

Inversion
There is another aspect to this not being mentioned.

How much of the "Tax Inversion Movement" is really not tax inversion but an escape from US regulations imposed by the US government(courts and bureaucracy)in secret tribunals and proceedings.

Did Burger King move to Canada to escape US secret courts, secret regulations, or secret taxes? The truth may be all three.
[ link to this | view in chronology ]
- Roger Strong (profile), 12 Sep 2014 @ 11:31am
  
  Re: Inversion
  Just the opposite; they've embraced the secrecy and intelligence gathering. Burger King is taking over Tim Horton's, which protects Canada's most important secrets using "Roll Up The Rim" technology.
  
  Canadians were shocked at the thought of the NSA recording an entire country's phone calls. THIS provokes pearl-clutching horror.
  [ link to this | view in chronology ]
Stig Rudeholm (profile), 12 Sep 2014 @ 7:42am

Constitutional democracy?
"""But what kind of constitutional democracy are we living in when this kind of thing is considered to be perfectly acceptable by those in power?"""

The simple and obvious answer is: You're not.
[ link to this | view in chronology ]
- Anonymous Coward, 12 Sep 2014 @ 9:41am
  
  Re: Constitutional democracy?
  Do you now have to have a login to vote comments insightful or funny? Because I wanted to vote this one insightful, but the buttons for "insightful funny report" were missing by it and all of the other comments on this article...
  [ link to this | view in chronology ]
  - Lurker Keith, 12 Sep 2014 @ 4:13pm
    
    Re: Re: Constitutional democracy?
    I never log in, & I can still see the buttons. It's possible they didn't load properly (happens to me on rare occasions), so try refreshing the page if it happens again.
    [ link to this | view in chronology ]
  - Rekrul, 12 Sep 2014 @ 11:54pm
    
    Re: Re: Constitutional democracy?
    Do you now have to have a login to vote comments insightful or funny? Because I wanted to vote this one insightful, but the buttons for "insightful funny report" were missing by it and all of the other comments on this article...
    
    No, but they won't show up if Javascript is blocked.
    [ link to this | view in chronology ]
- R.H. (profile), 12 Sep 2014 @ 7:12pm
  
  Re: Constitutional democracy?
  Yeah, we live in a federal presidential constitutional republic. It's not a democracy since the people don't directly vote on laws at the national level. Which is nitpicking I know but, terminology is important.
  [ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 7:45am

So, what would probably have happened if Yahoo chose to pay the fine so that someone would ask questions and dig up where all this money is going to?
[ link to this | view in chronology ]
- That One Guy (profile), 12 Sep 2014 @ 8:00am
  
  Re:
  Then they'd have been really screwed, because then they'd not only be on the hook for paying the fine, but they'd either be facing down an investigation and likely charges for refusal to talk, or and investigation and charges if they did talk.
  
  If they refuse to talk, charges for interfering with an ongoing investigation.
  
  If they talk, charges for 'contempt of court', or something similar, and if the FISA 'court' was willing to hand out a $250K per day fine for non-compliance, you can bet whatever they came up with for 'contempt of court' would make that amount seem like loose change.
  [ link to this | view in chronology ]
AC, 12 Sep 2014 @ 7:57am

"But what kind of constitutional democracy are we living in when this kind of thing is considered to be perfectly acceptable by those in power?"

Your not living in a democracy, you never have lived in a democracy. Time to start listening to all the tin foil hat guys. Seems they have had it right for years.
[ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 7:59am

Oh how it fits.
In a time of universal deceit - telling the truth is a revolutionary act.

George Orwell
[ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 8:12am

Whatever's wet dream.
[ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 8:15am

Yahoo should have leaked the metadata of the court orders
We all know now that metadata isn't protected based on the many cases where the government has twisted logic and reason to be completely opposite of reality. Since that seems to be the legal ground they are standing on, use it against them and just release the metadata. (hint, it can all be classified as metadata if you include keywords that exclude little things like is, of, etc)
[ link to this | view in chronology ]
- Roger Strong (profile), 12 Sep 2014 @ 11:08am
  
  Re: Yahoo should have leaked the metadata of the court orders
  Or just store all the documents as is on iCloud.
  [ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 8:20am

Thanks America.

Thanks a pantload.
[ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 8:26am

i'm not interested in the least about the fine in itself, what i am absolutely disgusted at is the lengths the USA government, in the form of the NSA (and probably other security forces as well) went to/will go to to get what they want, ie, able to spy on Americans in just about all ways, turning the USA into a terrorist-classed nation! what the hell has really possessed these agency heads? i know, like everyone else world-wide that 9/11 was the most despicable act ever. however, it doesn't give your own government the right to turn the country into something that is as bad, if not worse, than what they keep telling us they are protecting us from! no one wants terrorism or acts of terrorism to happen, but turning a country into a Police State, an Authoritarian State, a Surveillance State or some concoction of all and more, is definitely NOT the way to go!!
[ link to this | view in chronology ]
SJ, 12 Sep 2014 @ 9:19am

I wonder, why would any sane person still use US company based services?
[ link to this | view in chronology ]
- Michael, 12 Sep 2014 @ 9:52am
  
  Re:
  Lack of viable alternatives.
  [ link to this | view in chronology ]
OldMugwump (profile), 12 Sep 2014 @ 10:41am

What if they didn't pay it?
I wonder what would have happened if Yahoo refused to comply, and simply didn't pay the fine.

Eventually the government would have to do something in open court in order to enforce the fine.

Wouldn't they?
[ link to this | view in chronology ]
- Anonymous Coward, 12 Sep 2014 @ 11:42am
  
  Re: What if they didn't pay it?
  It’s a secret fine from a secret court. Why would it be enforced in open court?
  [ link to this | view in chronology ]
  - OldMugwump (profile), 14 Sep 2014 @ 7:29am
    
    Re: It’s a secret fine from a secret court. Why would it be enforced in open court?
    How else, then?
    
    If you're going to send police in enforce the order, those police normally need to be given a reason for what they're asked to do.
    [ link to this | view in chronology ]
- Roger Strong (profile), 12 Sep 2014 @ 12:33pm
  
  Re: What if they didn't pay it?
  Later, at the Embassy of Ecuador in London:
  
  "Mr. Assange. You're getting a room-mate."
  [ link to this | view in chronology ]
Harold, 12 Sep 2014 @ 1:55pm

Let's Imagin
What if Yahoo had refused to comply and did not pay the fine, the govenment could have conceivably put a public company out of business. Then the world would have known when the SEC did an investigation of the company's collapse. EVERYONE would have known about this travisty.
[ link to this | view in chronology ]
- GEMont (profile), 13 Sep 2014 @ 5:53pm
  
  Re: Let's Imagin
  Unless of course, siting National Security, the government placed a 10 year gag order on all the suddenly unemployed owners of Yahoo, who then would face 20 years in prison and a half million dollar fine, if they spoke out about how the company failed - which the government's army of liars would deny vehemently and repeatedly on all news medias anyway.
  
  And of course, the gag order would be "updated" every nine years to extend it to the legal limits of such orders, according to whatever legal limits they could create in the meantime - for national security reasons of course.
  
  Fascists love to use the letter of the law against others, while avoiding the law altogether themselves, by placing themselves legally above the law.
  
  And when all else fails, lie convincingly and often. :)
  
  ---
  [ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2014 @ 6:01pm

FISC court terrorism
threatening with a fine, if you don't do x. Sounds like ObamaCare fraud. Sounds like blackmail, sounds like treason

Wake me up when the FISC court member/officials/people names, indicted for treason, and nsa, cia, fbi, dhs deactivated.

Cause, that's WHERE the terrorism is coming from in the United States.
[ link to this | view in chronology ]
Rekrul, 12 Sep 2014 @ 11:57pm

There are so many things wrong (and seemingly unconstitutional) in this entire setup...

You seem to be under the delusion that anyone in the government actually gives a shit about the Constitution. They don't.
[ link to this | view in chronology ]
GEMont (profile), 13 Sep 2014 @ 5:42pm

That's a trick question right....
"But what kind of constitutional democracy are we living in when this kind of thing is considered to be perfectly acceptable by those in power?"

Oh! Oh!
I know.
I know the answer to that one!!

The kind of Constitutional Democracy where - through the use of a false flag operation posing as an attack by foreign terrorists, allowing the secret initiation of War Condition Laws - the Constitution has been secretly scrapped and the process of Democracy has been secretly replaced with an oligarchic cabal composed of national and multinational billionaire fascists!

But hush.
Don't tell anyone, cuz, its a secret!

---
[ link to this | view in chronology ]