ROSE-SHOW-01
Christopher John Farley, Dana Stevens >
with Max Levchin, one of the co-founders of PayPal; A look at the Oscars
with Dana Stevens, David Edelstein, Melena Ryzik and Christopher John
Farley.>
Academy Awards; Oscars; Movie Industry; Celebrities; Entertainment>
CHARLIE ROSE, PBS HOST: Welcome to the program. We continue our look at the conflict between the FBI and Apple with a conversation with Max Levchin. He`s a much-admired figure in Silicon Valley and one of the co- founders of PayPal.
(BEGIN VIDEO CLIP)
MAX LEVCHIN, CO-FOUNDER, PAYPAL & CHAIRMAN, YELP BOARD OF DIRECTORS & YAHOO! BOARD MEMBER: I ultimately hope that this propels its way to the Supreme Court very quickly, and the Supreme Court actually tells Apple you are compelled to open this phone. I personally want to see this case in front of the FBI with every bit of evidence so that they have access to whatever information they need to make sure my kids are safe.
(END VIDEO CLIP)
CHARLIE ROSE: And we conclude with the Oscars. We talk with David Edelstein, Dana Stevens, Melena Ryzik and Christopher John Farley.
(BEGIN VIDEO CLIP)
CHRISTOPHER JOHN FARLEY, SENIOR EDITOR, WALL STREET JOURNAL & AUTHOR: In terms of what`s been nominated for best picture is, in a sense, it doesn`t really capture the quality. And usually, the films are really diverse. You see a lot of different poles of experience, but there`s only one film out of all the films nominated for best picture that actually has any romance in it.
(END VIDEO CLIP)
CHARLIE ROSE: Max Levchin and the Oscars when we continue.
(voice-over): Funding for Charlie Rose is provided by the following:
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From our studios in New York City, this is Charlie Rose.
CHARLIE ROSE (on camera): We begin this evening with our continuing coverage of the encryption debate. On Thursday, Apple hit back at the FBI with a 36-page legal brief. Microsoft, Google, Twitter, Facebook and Yahoo! also moved to throw their support behind Apple in court. FBI Director James Comey, testifying before Congress, called encryption, "the hardest problem I`ve seen in government."
Joining me now is Max Levchin. He was a co-founder of PayPal, chairman of Yelp and on the board of directors at Yahoo!. He is currently the co- founder and CEO of a firm, a financial technology.
Thank you for coming in here.
Rather ask a specific question, let me ask a broader question. We`ve seen this coming.
MAX LEVCHIN: Yep.
CHARLIE ROSE: Tell me more.
MAX LEVCHIN: So if you`ll dial history back, you will see even the current Director Comey has advocated many times in speeches and interviews for essentially back-dooring encryption software that is built into various software systems from Apple to other operating systems. That was a very black and white and fairly easy issue. That`s a terrible idea. There are two simple things to it. One is bad guys don`t have to abide by our laws. The good guys will weaken encryption, and bad guys will take advantage of. The good guys will have weak systems. The bad guys will use the strongest thing they can get their hands on. We`ll be worse off, they will be better off, bad idea. That`s easy.
CHARLIE ROSE: Bad guys can be criminals, nation states?
MAX LEVCHIN: Whoever. Everyone who is out to hurt us will have knowledge that we have purposely weakened our systems and enacted laws presumably to make sure everyone here uses the weakened systems. You can make the argument they will be safeguarded and legal protections around them but we`ve seen what happened with the break-ins from Target to the government break-in in the last couple of years. Weakening security is fundamentally bad idea. Security is either there or not. Even if it`s slightly weakened, it basically doesn`t exist. This particular case is not exactly the same thing. This one is a subtle, different thing. And here the government has asked Apple to not just hand over some data that they happen to have.
(CROSSTALK)
MAX LEVCHIN: Right. What they`re saying is, yes, we know you don`t have this data. We want you to build some software that opens up this phone and gives this data to us because we want to investigate a known terrorist, obviously, a very bad guy.
CHARLIE ROSE: And they say it`s one time only. We only want to do this one time. And they say we`re not trying to open a backdoor, we deliberately are not trying. So we`ve got a problem with how people interpret key words -- backdoor, one time only, precedent.
MAX LEVCHIN: Yes, unfortunately, reality is that this is a very complex issue and people very often don`t understand the subtleties and conflate the general encryption issue, which I just tried to explain, and this particular issue. This one is a precedent legal issue that Apple and FBI are now digging out.
CHARLIE ROSE: Why is that true?
MAX LEVCHIN: Because the software can be built. Apple doesn`t have it. They can sit down and build it. It will be complex, it will be a burden, but they can do it. The thing that Tim Cook is saying, if the FBI can compel me to build software that basically opens up phones of my customers, they won`t stop with this one.
CHARLIE ROSE: Stopping there would be naive. Apple says we can build software to open a phone up. FBI says, OK, open this phone up with the software you build but then destroy the software. We`re not asking you to do anything else with it. We just wanted access to this one phone. I`m keeping over here for a moment the idea someone else may come and say, ah- ha, I know you destroyed that but do it for us because we have a case of a mass murderer, and if we can get inside his phone, it will tell us stuff about what he did.
MAX LEVCHIN: Right, and the perhaps more scary wrinkle is they open up the phone, say we have a case and real probable cause and a very scary thing going on, what we needed to do is turn on cameras on every laptop out there or on every phone or --
(CROSSTALK)
CHARLIE ROSE: They`re not saying that.
MAX LEVCHIN: No, they`re not saying that, but what Apple is saying is, if there is precedent where a government organization comes in and tells them build software to do effectively spying on our own citizens, who`s to say it won`t happen again and again and gets broader and broader. The answer is, it`s fine, you can compel us to do this, but it has to be out in the open and there has to be a law that says this is how it goes down, here is what is OK --
(CROSSTALK)
CHARLIE ROSE: This is the perfect case to decide, A, a Supreme Court decision or, B, a congressional law?
MAX LEVCHIN: Right. And there`s one more thing that`s worth considering and understanding here. Beyond just legal precedent, what Apple is not saying, because it would be, I think, a P.R. disaster, but it`s a very real concern is should we build the tool and the tool exists for a brief moment in time, it`s a company for several hundred thousand employees. There will be people involved in this. This tool is pretty terrifying. It will exist for a time, but it will exist. Who`s to say that as the world knows this tool is being built, you don`t have every imaginable bad actor saying we`ll do whatever it takes to get our hands on that tool because, as soon as we do, we, not our government, some other government, some other agency, some other mafia, grabbing this tool while it`s in existence, pocketing it, and using it for their own purposes and devices. And I think Apple wants a legal hearing that says this tool must exist under the following framework of law and that`s how usage of this tool can or can`t happen.
(CROSSTALK)
CHARLIE ROSE: Apple doesn`t want the responsibility without somebody having said these are the rules, this is how we`ll do it and these are the guidelines, and everybody understands that?
MAX LEVCHIN: I believe that`s the purpose. I`m, obviously, not authorized to speak on behalf of anyone --
CHARLIE ROSE: No.
MAX LEVCHIN: -- other than myself.
CHARLIE ROSE: I asked you to come and be because I asked you to come. You know Silicon Valley very well and you understand computer science very well. You spent your life there. That puts you in a very different place than me. I only have my curiosity to guide me here.
So then do -- back to this one phone. Do we wait until it works its way through the courts? That may take a year. Do we wait before -- for this national debate to take place and we may or may not have congressional legislation? What happens in the meantime to the phone that has information because we know what the people were and what they were doing, that might lead us to other plots against America?
MAX LEVCHIN: So this is where my emotional parent-husband-family-person- self and my civil liberties person-public-self conflict. I ultimately hope this propels its way to the Supreme Court very quickly and the Supreme Court actually tells Apple you are compelled to open this phone up. I personally want to see this case in front of the FBI with every bit of evidence so that they have access to whatever information they need to make sure my kids are safe.
CHARLIE ROSE: Right.
MAX LEVCHIN: I think that is fundamentally very, very important to me. However --
CHARLIE ROSE: And to most parents.
MAX LEVCHIN: I hope so. On the other hand, I think it is absolutely critical that it is in fact the Supreme Court that says, for this one phone, you are compelled to open. And, incidentally, we have a four against four court so doesn`t set precedent. So this ruling happens at a particularly curious time. The precedent will not be set. The court can compel Apple to open this one phone, then it still goes in front of Congress and we still have the public debate and, fundamentally, decide what it`s going to be, what checks and balances will be. Do we have every bad guy`s phone opened up by Supreme Court? A little burdensome on the Supreme Court but that would ensure our civil liberties.
CHARLIE ROSE: When you look at Apple doing this, they have also announced or it has been reported that they are developing devices, iPhones, future iPhones that will even be harder to crack. That`s going to make it more difficult.
MAX LEVCHIN: Yes.
CHARLIE ROSE: They say almost impossible for them to penetrate.
MAX LEVCHIN: Yeah.
CHARLIE ROSE: You would know more about that than I would. What happens in the future to the need of law enforcement to have access to critical data? The civil liberties case is often having to do with individual`s right for privacy. It clearly was raised after Edward Snowden, in terms of people who might not have known their phone was being -- metadata was being collected and all that stuff, and may have known about the transactions of people, but may not necessarily have had a reason to know. But law enforcement has a legitimate purpose in America, in any society, and that moans they ought to be able to -- now, there are constitutional restrictions on that. It has to do with due process and a whole series of constitutional -- the 14th Amendment and everything else. But law enforcement has the responsibility to do as much as it could and we`re putting a ceiling here. And is there any way and shouldn`t there be a way for society to develop laws that will say, yes, we know law enforcement has this need, but they have to check off here and here and here before they can do it, rather than saying under no circumstances can they do it because we can develop in today`s technology ways that they can never do it?
MAX LEVCHIN: So I think Apple`s -- not sure it`s been announced but certainly debated a plan to build something that`s effectively unbreakable is actually the right thing to do. I think it is most certainly the case that people that are trying to safeguard themselves on Apple or Microsoft or Vipir or any device have access, both bad and good guys, to software that is, in fact, unbreakable. So someone who is absolutely keen on protecting their data knows how to do so and will do so. There are many vulnerabilities that happen within systems and have little to do with the math and encryption. They`re just implementation problems and bugs and so- called zero exploits and that`s what the FBI, NSA and CIA have used successfully over the years. And that practice will remain. And that is not something that any one of us needs to worry about. That`s the spy craft of the agencies. The notion of compelling a company to do something that fundamentally puts them into a very conflicted situation, as Apple finds themselves in now, is completely side stepped by not allowing this weakness to happen. What this weakness will cause --
(CROSSTALK)
CHARLIE ROSE: Apple does not want this decision?
MAX LEVCHIN: Correct. They do not want to be the company deciding what level of privacy they can guarantee their users. But I think what`s really important again is the point that, if you weaken the system, the bad guys are generally not going to be affected. The good guys will be affected. Apple says the same strength applies to everyone, the same level of protection applies to everyone, and we`re telling you what it is, is generally a better outcome. There will be difficulties but NSA, was the PRISM being outlawed many years ago, everyone was beating the drum of, oh, no, now the bad guys -- we`ll never read the bad guys` mail. It appears that we have not been that much weaker even though the PRISM system was -- I`m sorry, the Clipper Chip is the debate I`m referring to. Clipper Chip was a notion of a backdoor chip that would go into computers and the NSA would access to have everything and, eventually, it got blown up because civil liberties folks protested it and it was eliminated.
CHARLIE ROSE: Where are civil liberties when the FBI or law enforcement goes to a bank and says, we have a search warrant to look at the financial records of this person, we have gone through the proper procedure to get it and here`s the search warrant, show it to us. In the past, they have done it.
MAX LEVCHIN: Yep.
CHARLIE ROSE: They`ve given the information because there was a search warrant.
MAX LEVCHIN: Mm-hmm.
CHARLIE ROSE: Also, we face this problem that they may not have control of it.
MAX LEVCHIN: I think that`s actually unlikely to change. I think that`s both lawful and good, certainly, during the years I many times dealt with agents who came in and said, we need to see records of certain tractions because there is a real risk here when we were looking at financial crime. And as a financial institution, you are audited, you`re required to keep certain types of records, there is the anti-money laundering law, all of that works fine today. I think we`re in a good place there and don`t need to change anything. I think what`s special about this case is the request or demand to write software because that creates a precedent that -- software can do anything. Software can turn on your microphone and listen to your phone calls. If Apple can be told, hey, you need to do that --
(CROSSTALK)
CHARLIE ROSE: Is there a problem with them, being asked to do something?
MAX LEVCHIN: To build something.
CHARLIE ROSE: Rather than stop something, they`re asking them to create something.
MAX LEVCHIN: Or to hand over data they have. If Apple is in possession of a bunch of data, there is precedent where court order is given to a law enforcement agency and the data is something that must be handed over and has been done in the past, and Apple has worked with law enforcement agencies plenty of times. This is a fundamentally new way of doing this.
CHARLIE ROSE: James Comey said yesterday, as part of the conversation we`re having, "The code the judge has directed Apple to write works only on this one phone so the idea of it getting out into the wild and working on my phone or your phone, at least the experts tell me, is not a real thing." That`s James Comey, director of the FBI.
MAX LEVCHIN: With all due respect to the director of the FBI, I think between him and the judge there is probably many layers of indirection or explanation of how good it actually works. It`s certainly possible to write code that works on one phone. Is it a lot closer to write code that works on any phone? Yes. It`s fundamentally a check in the code that says, hey, is this the right phone. It works here.
CHARLIE ROSE: There are a lot of smart hackers in the world. Could the smartest hacker in the world break into this phone without damaging the data inside?
MAX LEVCHIN: You know, the knee-jerk reaction is no, but it might not be so, because IOS is built by humans. There are bugs in it. It is plausible that there is a bug that even Apple doesn`t know about that a very smart hacker already knows about or could drive to do this bypassing Apple`s involvement. The straightforward way, not necessarily easy way, but straightforward, you build a new version of IOS, you eliminate the check around the pin trials and software elimination to have the key, you need Apple`s help to do this. But could a NSA, for example, which has all kinds of resources and all kinds of abilities, eliminate the tamper-proof chip? Presumably, they at least know how to do that. It might be very dangerous. They might destroy the chip in the process but that doesn`t require anybody`s help. They can get in and get the key.
CHARLIE ROSE: It says something to me that almost everybody among the major companies and major players in Silicon Valley are supportive of Apple to one degree or the other.
MAX LEVCHIN: I think what all Tim Cook`s peers --
(CROSSTALK)
CHARLIE ROSE: We`re talking about Google, the CEO of Microsoft, we`re talking about --
(CROSSTALK)
MAX LEVCHIN: These are companies that deal in customer data. What I think they`re fundamentally saying is this is a hugely important matter, it`s uncharted legal territory. We fully support Tim Cook`s leadership in asking Congress to create the law that draws a clear line in the sand. We do this with a court order, and these are the checks and balances, and this is how the data is discoverable, and this is what is protected and this is what is not, completely out in the public so it`s clear to the American people, when they`re buying their device and subscribing to a service, what will and will not end up in the hands of the government under certain circumstances. So I think everyone is on the right side of the debate in terms of what is important to them as private citizens but they understand the long-term implications are very profound and we owe it to ourselves.
CHARLIE ROSE: And there is no question that the iPhone 6 -- now, I assume 7 is right around the corner.
(LAUGHTER)
MAX LEVCHIN: Probably.
CHARLIE ROSE: Probably. Yes, for sure. That when Tim Cook makes the point that if, in fact, there is a precedent set here, a lot of people trusted Apple knowing and believing they were buying an encrypted phone, and, in fact, it goes to the heart of Apple`s credibility if they are not getting a phone free of encryption or encrypted, do they have a point? And especially in China, which has become their big market.
MAX LEVCHIN: Right. There certainly a piece of this that is very relevant internationally and in China, particularly where presumably an entirely different type of due process, an entirely different level of legal framework applies. And Apple has to be an international company. It has to cater to everyone in the world. And they have to have some sort of clear set of standards. I suspect that plays into it. My guess is that, in this case, Tim Cook is fundamentally concerned with the U.S. side of the argument --
CHARLIE ROSE: Right.
MAX LEVCHIN: -- but it cannot escape their attention that this is something that will have repercussions worldwide.
CHARLIE ROSE: And you said you believe there is a way not to have a master key but do this one time, and you supported law enforcement. But you`ve changed your mind. Was there one particular thing that caused you to change your mind? Was it Tim Cook`s argument in that interview with David Muirer (ph) that the precedent was involved here and it would do damage to the idea of privacy?
MAX LEVCHIN: There was a thing that I believe he said in the interview that set off my mind on the path of going black and white, bad guys` phones need to be cracked open, don`t care about anything else, to my view today. He mentioned Congress. And this notion of checks and balances, notion of accountability in law enforcement is something our Congress is fundamentally in charge of. And not having them involved is what ultimately made me think, you know, this is fairly fundamental. This is something where a brand-new level, a brand-new type of access is being discussed and we have no precedent, we have no law around it. So I think that`s what got me thinking about this more.
CHARLIE ROSE: Tim, also on this show, made the point that we need a dialogue, a conversation. We need decision-making, you know. And this is one of those issues that maybe, maybe all the amount of law enforcement and the FBI working with Apple would not have gotten to a solution. You really needed Congress to come to grips with it, representing the people, and you needed the Supreme Court, representing another branch of government to do it, that the hoped-for idea -- because they have been talking about encryption. The conversation between Apple and the government had been going on for several years, at least, and especially when Apple announced how successful their encrypted machines were, devices.
MAX LEVCHIN: Yep.
CHARLIE ROSE: Finally, in terms of technology and where we are going and what`s taking place in the marketplace, from your sense as a computer scientist, what`s next? I mean, we`ve seen the dominance of mobile devices. We`ve seen the prevalence of the cloud.
MAX LEVCHIN: It`s only going to get a lot more interesting. That`s my statement. I think we`ll have lots of these debates. This is certainly not the last.
(CROSSTALK)
CHARLIE ROSE: In terms of role of society now in our world or --
MAX LEVCHIN: The role of law in the newly-changed software infrastructure. Cloud is something people are talking about, but it very simplistically means your data mostly lives not on a computer or phone you physically have. There is a copy. In fact, a more complete and more up-to-date copy exists --
CHARLIE ROSE: One a server.
MAX LEVCHIN: -- on a server in someone else`s hands. So what used to be a relationship between you and your data and law enforcement has become a three-way relationship. It`s you, your data, law enforcement, and a third party that has a complete copy of the data. That is unprecedented. We`re going to find out exactly what it means. What law --
(CROSSTALK)
CHARLIE ROSE: Here`s what`s interesting. Those servers are owned by Amazon, Microsoft, Apple, other major companies. That`s where the cloud is.
MAX LEVCHIN: Yep. Exactly.
CHARLIE ROSE: My impression is Tim Cook would have had no problem if they had accessed the cloud to get this information that this phone had delivered there.
MAX LEVCHIN: Right. Because there would be a clear legal precedent with which everyone in this country is familiar and comfortable with. There is a copy. It exists. It doesn`t need to be broken. It is an item Apple has in their possession. They have been compelled by a court order to hand it over, they have done it in the past, and they could do it again. That wouldn`t be difficult. The difficulty in this case is the government compelling Apple to build software that today could be used for good in this one case, but tomorrow, can be used, and if compelled once, will be compelled again, to be used for all kinds of surveillance, surveillance that does not need to be announced or debated. If the process is established, it`s just doable. So what they`re asking for is established precedent. Tell us what it means. Can we really be forced to write software that effectively can be used to spy on our citizens, both by our government, by other governments, by third parties, et cetera? So I think that`s fundamentally --
(CROSSTALK)
CHARLIE ROSE: Yeah, and it ought to be said that this country has survived and prevailed and been the kind of nation it has been because of its respect for constitutional principles.
MAX LEVCHIN: Precisely. And there is a great factoid. Jackson and Adams, in the days of the founding fathers, communicated with each other after the U.S. was fully established in encrypted form because they were worried about the Post Master General reading their mail and using the information to blackmail them. So that`s a precedent for being concerned about the government`s role in communications.
CHARLIE ROSE: Thank you for coming.
MAX LEVCHIN: Pleasure.
CHARLIE ROSE: Max Levchin.
Back in a moment. Stay with us.
(COMMERCIAL BREAK)
CHARLIE ROSE: The 88th Academy Awards will air this Sunday night on ABC. Chris Rock will return as host for the second time. "The Revenant," directed by Alejandro Inarritu leads with 12 nominations. For the second year in a row, the Academy of Motion Picture Arts and Scientists has been embroiled in controversy after all 20 acting awards went to white actors.
Joining me now is David Edelstein, chief film critic for the "New York" magazine, a commentator for "CBS Sunday Morning"; Dana Stevens, a movie critic for "Slate"; Melena Ryzik, culture reporter for "The New York Times"; and Christopher John Farley, a senior editor at the "Wall Street Journal" and author of "Game World."
I`m pleased to have all of you here at the table.
So let me just start, we`ll talk about the controversy in just a minute. But how does this size up, Christopher, in terms of looking at an Oscar year, the quality of the films, the quality of the acting, sharp contest?
CHRISTOPHER JOHN FARLEY: In terms of what`s been nominated for best picture, in a sense -- it doesn`t capture -- usually, the films are diverse. You see a lot of different polls of experience, but there is only one film out of all the films nominated for best picture that actually has any romance. A lot of films are big-tent films like "Star Wars: The Force Awakens" is not up for best picture. So I find it interesting Hollywood has chosen to focus on these films and leave out a lot of other films that might have added to the mix. I understand we`ll get to the diverse context --
(CROSSTALK)
CHRISTOPHER JOHN FARLEY: -- context later. Of course, films like, "(INAUDIBLE)" should have been in there or "Creed." So I look at the list and say, OK, there are some films I enjoyed but there`s so much more they could have explored and been a little bit more daring and had they nominated those films.
CHARLIE ROSE: I`ll ask others. I`ll read the list, "The Big Short," "Bridge of Spies," "Brooklyn," "Mad Max: Fury Road," "The Martian," "The Revenant," "Room," "Spotlight."
What do you think for best picture?