FedEx: “That’s Exactly What Our Customers Want."
For some reason, I’ve been quite disturbed by this headline story in yesterday’s WSJ. It could be just the way the story was presented. In any case, I thought I’d post my notes here for you to make your own judgment. And, perhaps you’d like to consider whether this is “exactly what you want” if you happen to be a FedEx customer. Then, what do you do?
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FedEx has opened the international portion of its databases, including credit-card details, to government officials. It has created a police force (after intense lobbying by FedEx) recognized by the state of Tennessee that works alongside the Federal Bureau of Investigation. Moreover, the company is encouraging its 250,000 employees to be spotters of would-be terrorists.
When the government wanted help fighting drugs and smuggling, FedEx felt many of its requests were intrusive and threatened to slow the pace of their deliveries. When the worry was terrorism, its CEO, Fred Smith, says, the company saw its entire system as vulnerable because trucks and planes have been the "instrument of choice" of extremists such as Timothy McVeigh as well as Islamist terrorists.
Other companies that hold different views are as follows.
GM – For business reasons. OnStar, General Motors Corp.'s in-car emergency communications system, says it won't provide information to authorities, such as the location of a vehicle, unless presented with a warrant. "OnStar philosophy is to err on the side of customer privacy," says Terry Sullivan, an OnStar spokesman. He says the company fears the public won't buy the system if people believe it's being used for surveillance.
UPS – For principle reasons. Other shippers say they have refrained from granting a level of access similar to that of FedEx without court orders. At rival United Parcel Service Inc., spokesman David Bolger says the company won't disclose information about its customers' shipments unless required to do so by law or regulation.
US POSTAL SERVICE – For legal reasons. The U.S. Postal Service says it doesn't provide customer payment information without a warrant. In addition, postal officials say, law-enforcement agencies are prohibited from collecting information from envelopes and packages sent through the mail without a court order.
And here’s what the concerns expressed by a couple experts.
Lee Strickland, a retired Central Intelligence Agency analyst and a specialist in privacy issues, says the new cooperation between business and the government takes place in a legal "gray zone" that has never been tested in court. He says these relationships could undermine existing privacy laws that restrict what the government can do with information it collects directly from individuals. In general, the government can only use information for the express reason it's collected.
"Since you don't know what information is being shared and how it is being stored, or how it is coded or accessed, and since you don't know what the government is looking for, there is always a possibility that it could be factored into other decisions," says Mr. Strickland. He is now the director of the Center for Information Policy at the University of Maryland.
However, Fred Smith dismisses privacy concerns stemming from his company's cooperation with federal agencies. He says people already hand over tremendous amounts of information to the government, including personal-income data and details contained on a driver's license.
"As far as asking people to identify who they are, I don't think that's a real imposition. And to make that information available to the people protecting the public, I don't understand why that's as controversial as that has become," says Mr. Smith, who started FedEx 34 years ago after two tours of duty in Vietnam as a Marine officer. He says FedEx is willing to cooperate with federal authorities "up to and including the line on which we would be doing a disservice to our shareholders."
FedEx Pressed Ahead
In 2002, the Department of Justice, under then-Attorney General John Ashcroft, devised a program to create an army of domestic informants. Operation Terrorism Information and Prevention System, or TIPS, envisioned workers such as couriers, meter readers, utility companies, truck drivers, letter carriers and train engineers organized into a force that would "report suspicious, publicly observable activity that could be related to terrorism," the government said at the time.
When UPS first heard about the program, its officials told the Department of Justice their employees would not participate, says spokesman Mr. Bolger. "We said we don't have time and our employees don't know what to look for. We are not law enforcement," he says. After the collapse of TIPS, FedEx pressed ahead with its own program, one that embodied many of the same objectives, much to the delight of the government.
Mr. Bryden, the former security chief, says FedEx worked with Homeland Security officials last summer to develop a computer system that simplifies the reporting of suspicious behavior. FedEx spokeswoman Ms. Krause says the two sides met again in March and says the program should soon go through testing. The Department of Homeland Security declined to comment on the program.
"We secure our supply chain and help the country," says Mr. Bryden. "And we believe that's exactly what our customers want."
And, if you’re still interested in reading more, here’s a story about one of these FedEx employees working as a terrorist detector.
In December 2001, according to court records in Illinois, a FedEx driver became suspicious after making a series of deliveries of boxes to an apartment complex in suburban Chicago. The cartons were always the same size and shape and came from the same address in Los Angeles. Worried there was something sinister afoot, the driver informed his bosses and FedEx called the police.
Suspecting narcotics or explosives, the police showed up at the FedEx depot with bomb- and drug-sniffing dogs. The dogs didn't signal there was anything illicit in the boxes. FedEx then invoked the authority granted to it by every customer, which the police don't automatically have, permitting it to inspect any package without a warrant.
With a police officer looking on, FedEx popped the carton. Instead of anything dangerous, the boxes contained several hundred pre-recorded compact discs. Local police launched an investigation that eventually uncovered a CD-bootlegging operation.
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Come to think of it, my mom used to send me pictures she took around her home in Hawaii in the same size package month after month, year after year. I wonder if FedEx employee rent-a-cop program had started then... That may help explain why some of my mom's pictures came out so poorly.
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