"The Internet Police"

How Crime Went Online and the Cops Followed

E-mail spammers flooding inboxes, and hackers taking over computers from afar. The internet created brand new crimes for criminals to commit forcing law enforcement to up their game. And in some cases, police use the same tools as hackers to zero-in on a suspect. Stories of the war between these digital cops and robbers are in the new book The Internet Police: How Crime Went Online and the Cops Followed, by Nate Anderson. Anderson is a deputy editor in Chicago for Ars Technica, a technology news site. He joins us on Chicago Tonight at 7:00 pm. Read an excerpt from his book below.


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Ryan Lackey’s bedroom had already driven men to madness. As the head of HavenCo, an ultrasecure Internet data center housed in a rusting North Sea naval fort seven miles off the English coast, Lackey spent months at a time during 2000 and 2001 sleeping inside one of the fort’s two concrete legs. But when you want to escape the eyes of Government—and change the world while you’re at it—you expect to put up with some discomfort. Lackey got plenty, later comparing life on the site to “squatting in an abandoned warehouse.”

Even when new, this had not been a comfortable place. The hulking structure known as HM Fort Roughs Tower had been one in a series of forts built at a wharf in Gravesend during World War II, then hauled to its current location in the waters of the English Channel east of Harwich, where it was sunk to provide an antiaircraft platform. The fort’s installation came close to catastrophe; film of the event shows the monstrous structure nearly capsizing with a full crew on board before the massive legs settle on the sea floor.

For the rest of the war, 100 enlisted men bunked at the fort for shifts of six weeks on, ten days off, spending much of their time inside the lightless, circular legs. Each leg contained seven levels, each level a concrete room 24 feet in diameter and lit with a single light bulb. A 120-foot steel deck, rising 60 feet above the frigid seawater, lay across the two squat legs and provided space for latrines, radar, and gun emplacements.

“While the officers’ sleeping quarters were in the upper part of the cylinders, where there was adequate light and oil heating,” noted a Der Spiegel article on these forts, “it was intolerable for the crews, who spent their nights below the surface of the water.” The claustrophobia, isolation, and fear—crews routinely shot at Luftwaffe bombers and V-1 flying bombs from guns mounted on the deck—commonly led to psychological distress; crews called the condition “fort madness.”

In 2005, artist Stephen Turner spent six weeks alone in a nearby North Sea fort called Shivering Sands in order to conduct an “artistic exploration of isolation.” Turner found in the rusting workshop there “a ball of beautifully preserved and colourful cottons,” created as part of the compulsory recreation program ordered by the fort’s wartime commander, Major J. Sharman. Sharman had ordered his men to build “fully rigged galleons, kids’ toys, and so on” as a way of keeping the mind’s demons too busy for free play.

Fifty years in the briny air had not improved the comfort of the forts. “Rusty precipitation falls on the tent every night with a slow but regular patter,” wrote Turner of his experience at Shivering Sands. “All my equipment would be covered in a film of new deposits if I did not regularly dust it down. Every day I ritually sweep around the tent, an act akin to maintaining a clearing in a wood.”

Roughs Tower was farther up the coast from Shivering Sands. On approach, the two pillars and the rusting platform of Lackey’s redoubt looked more like Neptune’s abandoned banquet table than the spot from which the next great Internet revolution would be launched. The tower had not deteriorated as badly as the abandoned Shivering Sands, but conditions could still be brutal. Shower facilities were minimal, since the muddy North Sea water created problems for the desalinator (not that a visitor would want to take many showers; as Lackey put it later, “our shower wasn’t properly grounded and thus led to shocks”). Lackey also admitted that North Sea winters were “worse than I expected.” Weather grew so rough that even helicopter access to the fort was impossible for a week at a time, while getting up to the deck from the more common rigid inflatable boat required a winch-powered ride over the roiling ocean while sitting on a wooden plank.

Not everyone involved with HavenCo wanted to live this way. Original CEO Sean Hastings and his wife both left the company soon after HavenCo began operations. (“They didn’t like living on a tiny platform in the middle of the sea,” was how Lackey put it in a conference presentation.) Even the cook found a better opportunity; according to Lackey, “She went off to the north of England to become a stripper.”

But the miserable conditions gave HavenCo something unique: a true libertarian paradise. The company had grand plans to run fiber-optic cables from Roughs Tower to English and Dutch Internet exchange points, to stuff one leg of the fort with computer servers and diesel generators, and to host just about any sort of Internet activity that might be frowned on in less liberty-loving jurisdictions. Hence HavenCo’s motto: “The free world just milliseconds away.”

The entire project was about pushing free speech to its radical limits. Apart from child pornography and spam, most activities were fair game. No rules governed “copyright, patents, libel, restrictions on political speech, non-disclosure agreements, cryptography, restrictions on maintaining customer records...music-sharing services, or other issues,” according to HavenCo’s website at the time.

This sort of talk wasn’t likely to please countries like the United States, where online gambling was forbidden. For their part, European states tended to frown on speech with Nazi overtones. China wouldn’t like “free Tibet” sites, while Saudi Arabia wouldn’t tolerate even adult pornography. And the extraordinarily powerful global music and movie lobbies weren’t about to sit idly by while a North Sea naval fort turned into Pirate Central. But what were any of them going to do—summon HavenCo to court?

“If somebody comes to us with a subpoena—one, they’re going to have a pretty long boat ride and two, we’re going to probably laugh at them,” Lackey told a gathering of hackers at the 2001 DEF CON convention in Las Vegas. “We’re either going to laugh at them or shoot at them—probably laugh at them.” The crowd loved it. Lackey went on to lay out his vision of an alternative to existing nation-states—which in his estimation were already overregulated and were heading in the direction of less, not more, personal liberty.

“There’s really no middle ground,” he continued. “You’re either going to have uniform laws across all the countries...[or] it’s going to be a few of the big countries like the US and the UK that don’t really respect personal liberty as much as they might ideally do....The alternative that we have is to create ways that you can use technical means or use structuring or anything else to sort of take some of the bite out of some of these regulations. Really, nothing we’re doing is enabling a truly new thing that you couldn’t do if you were willing to break the law. It’s just that we’re making it legal.”
Could sticking some servers inside the leg of a sea fort really make such behavior “legal”? Perhaps Lackey had picked up a bit of “fort madness” already—but he had a reason for thinking HavenCo might work.

Roughs Tower wasn’t just a rusting North Sea fort. It also claimed to be the world’s tiniest country, called “Sealand.” The gun platform’s strange journey to quasi-statehood began when libertarian-leaning UK citizen Roy Bates decided that he would take one of the rusting gun platforms long abandoned by the British armed forces and turn it into a pirate radio operation, blasting pop and rock music back into the United Kingdom in an era when licensed broadcasters did not do so.

Bates was a true character, who had gone off to fight in the Spanish Civil War at age fifteen and later saw action in places like Italy, Iraq, and Syria. His family said that Bates was taken prisoner—among many other adventures—during the war and put on a plane that then crash-landed on Rhodes. Bates tried to escape but was “captured stealing a fishing boat by the Fascista and later rescued from execution by firing squad by a passing German officer.”

Of course he was—it was just the sort of life Bates led. (He once told an interviewer, “I might die young or I might die old, but I will never die of boredom.”) In the two decades after the war, Bates tried his hand at many businesses: meat importer, swimming fins manufacturer, commercial fisherman, butcher shop operator, real estate–agency owner. In 1965, hooked on the pirate radio trend, Bates decided to seize Knock John, a Roughs Tower clone that stood closer in to shore, to house his radio transmitter. Knock John was already occupied by other pirate radio operators, so Bates and a small crew physically ejected the men and set up their own Radio Essex station there. But Knock John was within the United Kingdom’s three-mile territorial waters, and Bates was soon hauled into a UK court on charges of illegal broadcasting.

Undeterred, Bates and his then fourteen-year-old son Michael packed up their gear and moved a few miles farther out. On Christmas Day 1966, they took a boat to Roughs Tower. It too was already occupied by radio pirates running a station called Radio Caroline, but Bates dealt with the problem just as he had on Knock John. He seized the platform by force and left his own men in charge, but bad weather meant they could not be resupplied with food; they eventually had to be rescued by a government lifeboat sent from the mainland.

Roughs Tower was soon reoccupied by Radio Caroline, but Bates remained determined to secure the fort. In April 1967, he partnered with Radio Caroline and agreed to share the platform. When a Radio Caroline crew member suffered severe rope burns and was taken ashore, however, Bates found himself in sole possession of the place. He refused to let Radio Caroline staffers reboard.

“Radio Caroline didn’t go down without a fight,” writes New York Law School professor James Grimmelmann, who in 2012 completed the definitive archival history of Sealand. “It sent a boarding party by boat on April 27; [Radio Essex employee] David Barron and Michael Bates repulsed them with an air rifle and flaming bottles of paraffin. Defiant, Roy Bates painted his name on the side of the platform in large white letters. Caroline tried again, more dramatically, on June 27. Bates and company again fought off the attackers with petrol bombs. When they withdrew, one man was left dangling from a ladder for two hours until a lifeboat from nearby Walton-on-Naze rescued him.”

Soon after the clashes with Radio Caroline, Bates announced that Roughs Tower was its own country, the Principality of Sealand, and that he was its prince. (Bates gave his wife Joan the title “princess” as a birthday present in 1967.) Sealand’s history over the next decades only got more bizarre. Bates took potshots at passing ships, the UK cabinet drew up plans to seize the tower, Bates was abducted and sent by boat to the Netherlands, he used a helicopter assault to retake the fort, and the German government sent a diplomat to check on one of Bates’s “prisoners.” The stories quickly deteriorate into legend and rumor, but between the romantic episodes that punctuate Sealand’s history, the Bates family had a constant ambition: having Sealand recognized as a real country.

It hasn’t happened. No state formally recognizes Sealand, nor does the United Nations. Sealand can make a few credible claims to being a de facto state, however, including the visit from the German diplomat and decades of benign neglect from a UK government often embarrassed about Sealand goings-on but unwilling to force the issue.

Running one’s own country can be an expensive proposition. Bates has stated publicly that he has invested over one million pounds in the place for refurbishment, security guards, boats, food, and diesel (others claim this is gross exaggeration). What is clear is that Sealand hasn’t produced much money in recompense. Plans for grand projects like a floating hotel have come to nothing, though Sealand did launch a short-lived online casino in 2007. (The local newspaper called it “the latest in a string of bizarre stories to emerge from the former war-time fort.”) Sealand has had better luck selling its own stamps, passports, and even titles of nobility.

In 2000, HavenCo looked like a credible, long-term opportunity to put Sealand’s remote location to good use—and to do so in a way that appealed to the Bates family’s libertarian leanings—while making a bit of money. HavenCo would use the reach of the Internet to “arbitrage” between various legal schemes. Customers who wanted total Internet freedom could use HavenCo servers to run their online gaming sites or pro-Tibet blogs with impunity, but they could reside and play in places where people actually wanted to live. Thanks to the Internet’s amazing ability to publish globally, it had become a simple matter to stick servers in one country with a favorable set of laws, but use them to reach the wealthy residents of countries whose governments were less excited about whatever was on offer.

For HavenCo to succeed, its founders needed somewhere with fewer restrictions, but they didn’t want mere anarchy. The ideal location would have just enough order to avoid arbitrary lawmaking and to enforce private contracts. It also needed protection from unhappy governments who might simply show up in force and shut down the scheme. What HavenCo wanted, in other words, was a minimalist sovereign state.

Such states can be hard to find. Lackey and partner Sean Hastings met at a 1998 financial cryptography conference on Anguilla, an island nation just east of Puerto Rico, and decided to start such an operation. Hastings lived at the time in Anguilla, which had access to decent Internet connections and was quite close to the US mainland, but he didn’t believe it was right for HavenCo due to perceived corruption and also to laws against gambling and pornography (likely to be some of a data haven’s best clients).

States with minimal regulation also tend not to have easy Internet connections to wealthy Western countries, or they lack a robust and predictable judicial system, or both. Sealand looked like a solution. As a nominal state, it could make HavenCo’s activities legal, and it had about as few laws as it was possible to have. Other nations would do nothing to assault the Sealand platform given its proximity to the United Kingdom, which had extended its territorial waters out to twelve miles—five miles past Sealand—in the 1980s. As Lackey put it in his 2001 DEF CON talk, he wasn’t worried about foreign forces, since “the British will deal with it. We don’t need to do anything.” (This was neither the first nor the last time that Sealand had thumbed its nose at UK law while relying on the country as a supply base, defense force, emergency rescue hub, place to live, and home to Bates businesses.)
The only challenge for HavenCo was preventing the Bates family from arbitrarily changing Sealand’s laws. HavenCo believed that the money it promised to pay the family would ensure that agreements were honored. Lackey made much of this legal security when talking up HavenCo in 2000 and 2001. It’s “very dangerous to be in a country that can change its laws on a whim,” he said in reference to that über-arbitrary nation-state, Australia. “And because Sealand gets all of its revenue pretty much from HavenCo, it’s unlikely to do anything.”

Lackey believed he had found paradise in Sealand: third-world regulation, first-world Internet connectivity, and a veneer of fixed law for the whole operation. The agreements were all there, written on pieces of paper. Unchangeable. HavenCo was going to make millions by selling access to total freedom—something that looked a lot like total chaos.

This was the Internet, after all; chaos was built into its bones. HavenCo’s founders weren’t alone in believing that governments could not—and should not—stop their offer of anonymity and an anything-goes jurisdiction to anyone who could cough up at least $1,500 a month.

Excerpted from The Internet Police: How Crime Went Online, and the Cops Followed by Nate Anderson. Copyright © 2013 by Nate Anderson. With permission of the publisher, W.W. Norton & Company, Inc.

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