Note:     The following was released by the White House today in
          conjunction with the announcement of the Clipper Chip
          encryption technology.

                           FACT SHEET

                  PUBLIC ENCRYPTION MANAGEMENT

The President has approved a directive on "Public Encryption
Management."  The directive provides for the following:

Advanced telecommunications and commercially available encryption
are part of a wave of new computer and communications technology. 
Encryption products scramble information to protect the privacy of
communications and data by preventing unauthorized access. 
Advanced telecommunications systems use digital technology to
rapidly and precisely handle a high volume of communications. 
These advanced telecommunications systems are integral to the
infrastructure needed to ensure economic competitiveness in the
information age.

Despite its benefits, new communications technology can also
frustrate lawful government electronic surveillance.  Sophisticated
encryption can have this effect in the United States.  When
exported abroad, it can be used to thwart foreign intelligence
activities critical to our national interests.  In the past, it has
been possible to preserve a government capability to conduct
electronic surveillance in furtherance of legitimate law
enforcement and national security interests, while at the same time
protecting the privacy and civil liberties of all citizens.  As
encryption technology improves, doing so will require new,
innovative approaches.

In the area of communications encryption, the U. S. Government has
developed a microcircuit that not only provides privacy through
encryption that is substantially more robust than the current
government standard, but also permits escrowing of the keys needed
to unlock the encryption.  The system for the escrowing of keys
will allow the government to gain access to encrypted information
only with appropriate legal authorization.

To assist law enforcement and other government agencies to collect
and decrypt, under legal authority, electronically transmitted
information, I hereby direct the following action to be taken:

INSTALLATION OF GOVERNMENT-DEVELOPED MICROCIRCUITS

The Attorney General of the United States, or her representative,
shall request manufacturers of communications hardware which
incorporates encryption to install the U.S. government-developed
key-escrow microcircuits in their products.  The fact of law
enforcement access to the escrowed keys will not be concealed from
the American public.  All appropriate steps shall be taken to
ensure that any existing or future versions of the key-escrow
microcircuit are made widely available to U.S. communications
hardware manufacturers, consistent with the need to ensure the
security of the key-escrow system.  In making this decision, I do
not intend to prevent the private sector from developing, or the
government from approving, other microcircuits or algorithms that
are equally effective in assuring both privacy and a secure key-
escrow system.

KEY-ESCROW

The Attorney General shall make all arrangements with appropriate
entities to hold the keys for the key-escrow microcircuits
installed in communications equipment.  In each case, the key
holder must agree to strict security procedures to prevent
unauthorized release of the keys.  The keys shall be released only
to government agencies that have established their authority to
acquire the content of those communications that have been
encrypted by devices containing the microcircuits.  The Attorney
General shall review for legal sufficiency the procedures by which
an agency establishes its authority to acquire the content of such
communications.

PROCUREMENT AND USE OF ENCRYPTION DEVICES

The Secretary of Commerce, in consultation with other appropriate
U.S. agencies, shall initiate a process to write standards to
facilitate the procurement and use of encryption devices fitted
with key-escrow microcircuits in federal communications systems
that process sensitive but unclassified information.  I expect this
process to proceed on a schedule that will permit promulgation of
a final standard within six months of this directive. 