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incoln's Secretary of the Treasury.
McCulloch wanted a specialized Treasury police to
combat counterfeiting. Abraham Lincoln agreed
that this seemed a good idea, and, with a terrible
irony, Abraham Lincoln was shot that very night by
John Wilkes Booth.
The Secret Service originally had nothing to do
with protecting Presidents. They didn't take this on
as a regular assignment until after the Garfield
assassination in 1881. And they didn't get any
Congressional money for it until President McKinley
was shot in 1901. The Service was originally
designed for one purpose: destroying counterfeiters.
There are interesting parallels between the
Service's nineteenth-century entry into
counterfeiting, and America's twentieth-century
entry into computer-crime.
In 1865, America's paper currency was a terrible
muddle. Security was drastically bad. Currency was
printed on the spot by local banks in literally
hundreds of different designs. No one really knew
what the heck a dollar bill was supposed to look like.
Bogus bills passed easily. If some joker told you that
a one-dollar bill from the ъailroad Bank of Lowell,
Massachusetts had a woman leaning on a shield,
with a locomotive, a cornucopia, a compass, various
agricultural implements, a railroad bridge, and
some factories, then you pretty much had to take his
word for it. (And in fact he was telling the truth!)
*Sixteen hundred* local American banks
designed and printed their own paper currency, and
there were no general standards for security. Like a
badly guarded node in a computer network, badly
designed bills were easy to fake, and posed a
security hazard for the entire monetary system.
No one knew the exact extent of the threat to
the currency. There were panicked estimates that as
much as a third of the entire national currency was
faked. Counterfeiters -- known as "boodlers" in the
underground slang of the time -- were mostly
technically skilled printers who had gone to the bad.
Many had once worked printing legitimate currency.
Boodlers operated in rings and gangs. Technical
experts engraved the bogus plates -- commonly in
basements in New York City. Smooth confidence
men passed large wads of high-quality, high-
denomination fakes, including the really
sophisticated stuff -- government bonds, stock
certificates, and railway shares. Cheaper, botched
fakes were sold or sharewared to low-level gangs of
boodler wannabes. (The really cheesy lowlife
boodlers merely upgraded real bills by altering face
values, changing ones to fives, tens to hundreds, and
The techniques of boodling were little-known
and regarded with a certain awe by the mid-
nineteenth-century public. The ability to
manipulate the system for rip-off seemed
diabolically clever. As the skill and daring of the
boodlers increased, the situation became
intolerable. The federal government stepped in,
and began offering its own federal currency, which
was printed in fancy green ink, but only on the back -
- the original "greenbacks." And at first, the
improved security of the well-designed, well-printed
federal greenbacks seemed to solve the problem;
but then the counterfeiters caught on. Within a few
years things were worse than ever: a *centralized*
system where *all* security was bad!
The local police were helpless. The
Government tried offering blood money to potential
informants, but this met with little success. Banks,
plagued by boodling, gave up hope of police help
and hired private security men instead. Merchants
and bankers queued up by the thousands to buy
privately-printed manuals on currency security, slim
little books like Laban Heath's *Infallible
Government Counterfeit Detector.* The back of the
book offered Laban Heath's patent microscope for
Then the Secret Service entered the picture.
The first agents were a rough and ready crew. Their
chief was one William P. Wood, a former guerilla in
the Mexican War who'd won a reputation busting
contractor fraudsters for the War Department
during the Civil War. Wood, who was also Keeper
of the Capital Prison, had a sideline as a
counterfeiting expert, bagging boodlers for the
federal bounty money.
Wood was named Chief of the new Secret
Service in July 1865. There were only ten Secret
Service agents in all: Wood himself, a handful
who'd worked for him in the War Department, and a
few former private investigators -- counterfeiting
experts -- whom Wood had won over to public
service. (The Secret Service of 1865 was much the
size of the Chicago Computer Fraud Task Force or
the Arizona ъacketeering Unit of 1990.) These ten
"Operatives" had an additional twenty or so
"Assistant Operatives" and "Informants." Besides
salary and per diem, each Secret Service employee
received a whopping twenty-five dollars for each
boodler he captured.
Wood himself publicly estimated that at least
*half* of America's currency was counterfeit, a
perhaps pardonable perception. Within a year the
Secret Service had arrested over 200 counterfeiters.
They busted about two hundred boodlers a year for
four years straight.
Wood attributed his success to travelling fast
and light, hitting the bad-guys hard, and avoiding
bureaucratic baggage. "Because my raids were
made without military escort and I did not ask the
assistance of state officers, I surprised the
Wood's social message to the once-impudent
boodlers bore an eerie ring of Sundevil: "It was also
my purpose to convince such characters that it
would no longer be healthy for them to ply their
vocation without being handled roughly, a fact they
William P. Wood, the Secret Service's guerilla
pioneer, did not end well. He succumbed to the lure
of aiming for the really big score. The notorious
Brockway Gang of New York City, headed by
William E. Brockway, the "King of the
Counterfeiters," had forged a number of
government bonds. They'd passed these brilliant
fakes on the prestigious Wall Street investment firm
of Jay Cooke and Company. The Cooke firm were
frantic and offered a huge reward for the forgers'
Laboring diligently, Wood confiscated the
plates (though not Mr. Brockway) and claimed the
reward. But the Cooke company treacherously
reneged. Wood got involved in a down-and-dirty
lawsuit with the Cooke capitalists. Wood's boss,
Secretary of the Treasury McCulloch, felt that
Wood's demands for money and glory were
unseemly, and even when the reward money finally
came through, McCulloch refused to pay Wood
anything. Wood found himself mired in a
seemingly endless round of federal suits and
Wood never got his money. And he lost his job
to boot. He resigned in 1869.
Wood's agents suffered, too. On May 12, 1869,
the second Chief of the Secret Service took over, and
almost immediately fired most of Wood's pioneer
Secret Service agents: Operatives, Assistants and
Informants alike. The practice of receiving $25 per
crook was abolished. And the Secret Service began
the long, uncertain process of thorough
Wood ended badly. He must have felt stabbed
in the back. In fact his entire organization was
On the other hand, William P. Wood *was* the
first head of the Secret Service. William Wood was
the pioneer. People still honor his name. Who
remembers the name of the *second* head of the
As for William Brockway (also known as
"Colonel Spencer"), he was finally arrested by the
Secret Service in 1880. He did five years in prison,
got out, and was still boodling at the age of seventy-
Anyone with an interest in Operation Sundevil -
- or in American computer-crime generally -- could
scarcely miss the presence of Gail Thackeray,
Assistant Attorney General of the State of Arizona.
Computer-crime training manuals often cited
Thackeray's group and her work; she was the
highest-ranking state official to specialize in
computer-related offenses. Her name had been on
the Sundevil press release (though modestly ranked
well after the local federal prosecuting attorney and
the head of the Phoenix Secret Service office).
As public commentary, and controversy, began
to mount about the Hacker Crackdown, this
Arizonan state official began to take a higher and
higher public profile. Though uttering almost
nothing specific about the Sundevil operation itself,
she coined some of the most striking soundbites of
the growing propaganda war: "Agents are operating
in good faith, and I don't think you can say that for
the hacker community," was one. Another was the
memorable "I am not a mad dog prosecutor"
(*Houston Chronicle,* Sept 2, 1990.) In the
meantime, the Secret Service maintained its usual
extreme discretion; the Chicago Unit, smarting from
the backlash of the Steve Jackson scandal, had gone
completely to earth.
As I collated my growing pile of newspaper
clippings, Gail Thackeray ranked as a comparative
fount of public knowledge on police operations.
I decided that I had to get to know Gail
Thackeray. I wrote to her at the Arizona Attorney
General's Office. Not only did she kindly reply to
me, but, to my astonishment, she knew very well
what "cyberpunk" science fiction was.
Shortly after this, Gail Thackeray lost her job.
And I temporarily misplaced my own career as a
science-fiction writer, to become a full-time
computer-crime journalist. In early March, 1991, I
flew to Phoenix, Arizona, to interview Gail Thackeray
for my book on the hacker crackdown.
"Credit cards didn't used to cost anything to
get," says Gail Thackeray. "Now they cost forty
bucks -- and that's all just to cover the costs from
Electronic nuisance criminals are parasites.
One by one they're not much harm, no big deal. But
they never come just one by one. They come in
swarms, heaps, legions, sometimes whole
subcultures. And they bite. Every time we buy a
credit card today, we lose a little financial vitality to a
particular species of bloodsucker.
What, in her expert opinion, are the worst forms
of electronic crime, I ask, consulting my notes. Is it --
credit card fraud? Breaking into ATM bank
machines? Phone-phreaking? Computer
intrusions? Software viruses? Access-code theft?
ъecords tampering? Software piracy? Pornographic
bulletin boards? Satellite TV piracy? Theft of cable
service? It's a long list. By the time I reach the end
of it I feel rather depressed.
"Oh no," says Gail Thackeray, leaning forward
over the table, her whole body gone stiff with
energetic indignation, "the biggest damage is
telephone fraud. Fake sweepstakes, fake charities.
Boiler-room con operations. You could pay off the
national debt with what these guys steal.... They
target old people, they get hold of credit ratings and
demographics, they rip off the old and the weak."
The words come tumbling out of her.
It's low-tech stuff, your everyday boiler-room
fraud. Grifters, conning people out of money over
the phone, have been around for decades. This is
where the word "phony" came from!
It's just that it's so much *easier* now, horribly
facilitated by advances in technology and the
byzantine structure of the modern phone system.
The same professional fraudsters do it over and
over, Thackeray tells me, they hide behind dense
onion-shells of fake companies.... fake holding
corporations nine or ten layers deep, registered all
over the map. They get a phone installed under a
false name in an empty safe-house. And then they
call-forward everything out of that phone to yet
another phone, a phone that may even be in
another *state.* And they don't even pay the
charges on their phones; after a month or so, they
just split. Set up somewhere else in another
Podunkville with the same seedy crew of veteran
phone-crooks. They buy or steal commercial credit
card reports, slap them on the PC, have a program
pick out people over sixty-five who pay a lot to
charities. A whole subculture living off this,
merciless folks on the con.
"The 'light-bulbs for the blind' people,"
Thackeray muses, with a special loathing. "There's
just no end to them."
We're sitting in a downtown diner in Phoenix,
Arizona. It's a tough town, Phoenix. A state capital
seeing some hard times. Even to a Texan like
myself, Arizona state politics seem rather baroque.
There was, and remains, endless trouble over the
Martin Luther King holiday, the sort of stiff-necked,
foot-shooting incident for which Arizona politics
seem famous. There was Evan Mecham, the
eccentric ъepublican millionaire governor who was
impeached, after reducing state government to a
ludicrous shambles. Then there was the national
Keating scandal, involving Arizona savings and
loans, in which both of Arizona's U.S. senators,
DeConcini and McCain, played sadly prominent
And the very latest is the bizarre AzScam case,
in which state legislators were videotaped, eagerly
taking cash from an informant of the Phoenix city
police department, who was posing as a Vegas
"Oh," says Thackeray cheerfully. "These people
are amateurs here, they thought they were finally
getting to play with the big boys. They don't have the
least idea how to take a bribe! It's not institutional
corruption. It's not like back in Philly."
Gail Thackeray was a former prosecutor in
Philadelphia. Now she's a former assistant attorney
general of the State of Arizona. Since moving to
Arizona in 1986, she had worked under the aegis of
Steve Twist, her boss in the Attorney General's
office. Steve Twist wrote Arizona's pioneering
computer crime laws and naturally took an interest
in seeing them enforced. It was a snug niche, and
Thackeray's Organized Crime and ъacketeering
Unit won a national reputation for ambition and
technical knowledgeability.... Until the latest
election in Arizona. Thackeray's boss ran for the top
job, and lost. The victor, the new Attorney General,
apparently went to some pains to eliminate the
bureaucratic traces of his rival, including his pet
group -- Thackeray's group. Twelve people got their
Now Thackeray's painstakingly assembled
computer lab sits gathering dust somewhere in the
glass-and-concrete Attorney General's HQ on 1275
Washington Street. Her computer-crime books, her
painstakingly garnered back issues of phreak and
hacker zines, all bought at her own expense -- are
piled in boxes somewhere. The State of Arizona is
simply not particularly interested in electronic
racketeering at the moment.
At the moment of our interview, Gail Thackeray,
officially unemployed, is working out of the county
sheriff's office, living on her savings, and prosecuting
several cases -- working 60-hour weeks, just as always
-- for no pay at all. "I'm trying to train people," she
Half her life seems to be spent training people -
- merely pointing out, to the naive and incredulous
(such as myself) that this stuff is *actually going on
out there.* It's a small world, computer crime. A
young world. Gail Thackeray, a trim blonde Baby-
Boomer who favors Grand Canyon white-water
rafting to kill some slow time, is one of the world's
most senior, most veteran "hacker-trackers." Her
mentor was Donn Parker, the California think-tank
theorist who got it all started 'way back in the mid-
70s, the "grandfather of the field," "the great bald
eagle of computer crime."
And what she has learned, Gail Thackeray
teaches. Endlessly. Tirelessly. To anybody. To
Secret Service agents and state police, at the Glynco,
Georgia federal training center. To local police, on
"roadshows" with her slide projector and notebook.
To corporate security personnel. To journalists. To
Even *crooks* look to Gail Thackeray for advice.
Phone-phreaks call her at the office. They know very
well who she is. They pump her for information on
what the cops are up to, how much they know.
Sometimes whole *crowds* of phone phreaks,
hanging out on illegal conference calls, will call Gail
Thackeray up. They taunt her. And, as always, they
boast. Phone-phreaks, real stone phone-phreaks,
simply *cannot shut up.* They natter on for hours.
Left to themselves, they mostly talk about the
intricacies of ripping-off phones; it's about as
interesting as listening to hot-rodders talk about
suspension and distributor-caps. They also gossip
cruelly about each other. And when talking to Gail
Thackeray, they incriminate themselves. "I have
tapes," Thackeray says coolly.
Phone phreaks just talk like crazy. "Dial-Tone"
out in Alabama has been known to spend half-an-
hour simply reading stolen phone-codes aloud into
voice-mail answering machines. Hundreds,
thousands of numbers, recited in a monotone,
without a break -- an eerie phenomenon. When
arrested, it's a rare phone phreak who doesn't
inform at endless length on everybody he knows.
Hackers are no better. What other group of
criminals, she asks rhetorically, publishes
newsletters and holds conventions? She seems
deeply nettled by the sheer brazenness of this
behavior, though to an outsider, this activity might
make one wonder whether hackers should be
considered "criminals" at all. Skateboarders have
magazines, and they trespass a lot. Hot rod people
have magazines and they break speed limits and
sometimes kill people....
I ask her whether it would be any loss to society
if phone phreaking and computer hacking, as
hobbies, simply dried up and blew away, so that
nobody ever did it again.
She seems surprised. "No," she says swiftly.
"Maybe a little... in the old days... the MIT stuff... But
there's a lot of wonderful, legal stuff you can do with
computers now, you don't have to break into
somebody else's just to learn. You don't have that
excuse. You can learn all you like."
Did you ever hack into a system? I ask.
The trainees do it at Glynco. Just to
demonstrate system vulnerabilities. She's cool to
the notion. Genuinely indifferent.
"What kind of computer do you have?"
"A Compaq 286LE," she mutters.
"What kind do you *wish* you had?"
At this question, the unmistakable light of true
hackerdom flares in Gail Thackeray's eyes. She
becomes tense, animated, the words pour out: "An
Amiga 2000 with an IBM card and Mac emulation!
The most common hacker machines are Amigas
and Commodores. And Apples." If she had the
Amiga, she enthuses, she could run a whole galaxy
of seized computer-evidence disks on one
convenient multifunctional machine. A cheap one,
too. Not like the old Attorney General lab, where
they had an ancient CP/M machine, assorted
Amiga flavors and Apple flavors, a couple IBMS, all
the utility software... but no Commodores. The
workstations down at the Attorney General's are
Wang dedicated word-processors. Lame machines
tied in to an office net -- though at least they get on-
line to the Lexis and Westlaw legal data services.
I don't say anything. I recognize the syndrome,
though. This computer-fever has been running
through segments of our society for years now. It's a
strange kind of lust: K-hunger, Meg-hunger; but it's
a shared disease; it can kill parties dead, as
conversation spirals int