Robert couldn't know where the bombs had been hidden, nor did he know how many there were or what they would do when they went off. All he knew was that they had been set to explode on a national holiday--and five days later it would be Independence Day, the Fourth of July.
He reported the call to his superiors at Indiana Bell and to Bellcore (Bell Communication Research), which coordinates network security. Given the imminence of the Fourth of July, Bellcore had little choice but to take the threat seriously. The company organized an alert, assembling a security task force consisting of forty-two full-time employees. They would work around the clock in two twelve-hour shifts examining the 5ESS's, checking through each and every program for a few lines of code that could cause disruption.
The threat to the phone system was also reported to the United States Secret Service. The agency, part of the Treasury Department, had been assigned national responsibility for computer crime in 1984, after a long bureaucratic battle with the FBI. The limits of its responsibilities and those of the FBI have never been strictly defined; there have always been areas where the two agen- cies overlapped. The Secret Service's responsibility is to investigate access device fraud that affects interstate and foreign commerce if there is a minimum loss of $1000. Their mandate, though, is subject to agreement between the secretary of the Treasury (their boss) and the Attorney General, who runs the FBI. The effect has been to leave the two agencies to fight out their responsibilities between themselves.
The Secret Service was already in the midst of an in-depth investigation of the computer underworld. In 1988 the agency had become aware of a new proposal, one that seemed to signal an increase in hacker activity. Called the Phoenix Project, it was heralded in the hacker bulletin PHRACK as "a new beginning to the phreak/hack community where knowledge is the key to the future and is free.
The telecommunications and security industries can no longer withhold the right to learn, the right to explore, or the right to have knowledge." The Phoenix Project, it was announced, would be launched at SummerCon '88--the annual hacker conference, to be held in a hotel near the airport in Saint Louis.
The Phoenix was the legendary bird that rose from its own ashes after a fiery death. To the hackers it was just a name for their latest convention. But to the telephone companies and the Secret Service, the Phoenix Project portended greater disruption--as well as the theft of industrial or defense secrets. The implications of "the right to learn, the right to explore, or the right to have knowledge" appeared more sinister than liberating, and the article was published just as the Secret Service was becoming aware of an upsurge in hacker activity, principally telecommunications fraud. The increase appeared linked to the hacker wars, then spluttering inconclusively along.
Coincidentally, in May 1988, police in the city of Phoenix, Arizona, raided the home of a suspected local hacker known as the Dictator. The young man was the system operator of a small pirate board called the Dark Side. The local police referred his case to the district attorney for prosecution, and he in turn notified the secret service.
No one was quite sure what to do with the Dictator--but then someone had the bright idea of running his board as a sting. The Dictator agreed to cooperate: in return for immunity from prosecution, he continued to operate the Dark Side as a Secret Service tool for collecting hacker lore and gossip and for monitoring the progress of the Phoenix Project. That the scheme to investigate the Phoenix Project was based in the city of Phoenix was entirely coincidental: it was established there solely because the local office of the Secret Service was willing to run an undercover operation.
Dubbed Operation Sundevil, after the Arizona State University mascot, it was officially described as "a Secret Service investigation into financial crimes (fraud, credit card fraud, communications service losses, etc.) led by the Phoenix Secret Service with task force participation by the Arizona U.S. Attorney's office and t he Arizona Attorney General's office." The Arizona assistant attorney general assigned to the case was Gail Thackeray, an energetic and combative attorney who would become the focal point for press coverage of the operation.
