The message here is that US courts can force a business to subvert their own security measures and lie to their customers, deliberately giving them a false sense of security.

The recent shutdown of Lavabit’s email services prompted a flurry of reporting and speculation about the extent US Government spying, mostly due to the mysterious statement by Lavabit founder Ladar Levison:

Most of us saw this as yet another possibly overhyped government spying issue and didn’t really think too much of it. Much of the media coverage is already starting to die down but there still is some question as to exactly what the government required of Levison that left him with only one option: shutting down his entire business he built from ground up. I wondered if there were enough clues out there to get some more insight into this case. I started by looking at exactly what Lavabit offered and how that all worked behind the scenes.

Lavabit Encryption

Lavabit claimed they had “developed a system so secure that it prevents everyone, including us, from reading the e-mail of the people that use it. “ This is a bold claim and one that surely was a primary selling point for their services.

The way it worked is relatively simple: Lavabit encrypted all incoming mail with the user’s public key before storing the message on their servers. Only the user, with the private key and password could decrypt messages. Normally with encrypted email, users store private keys on their own computers, but it appears that in the case of Lavabit, they stored the users’ private keys, each encrypted with a hash of that user’s password. This is by no means the most secure way of doing this, but it dramatically increases transparency and usability for the user. By doing this, for example, users do not need to worry about private keys and they still have access to their email from any computer.

So let’s break this down: a user logs in with their password. This login might occur via POP3, IMAP4, or through the web interface (which in turn connected internally via IMAP). Because Lavabit used the user’s password to encrypt the private key, they will need the original plaintext password which means they would not be able to support any secure authentication methods. In other words, all clients must send passwords using AUTH PLAIN or AUTH LOGIN with nothing more than base64 encoding. The webmail interface appears to have been available as both SSL and non-SSL and the POP3, IMAP4, and SMTP interfaces all seem to have accepted connections with or without SSL. All SSL connections terminated at the application tier.

Once a user sends a password, the Lavabit servers create SHA-512 hashes explained as follows:

… Lavabit combines the password with the account name and a cryptographic salt. This combined string is then hashed three consecutive times, with the former iteration’s output being used as the input value of the next iteration. The output of the first hash iteration is used as the secret passphrase for AES [encryption of the private key]. The third iteration is stored in our password database and is used to verify that users entered their password correctly.

The process they describe produces two hashes: one for decrypting the user’s private key and after two more hashing iterations, a hash to store in the database for user authentication. While this is a fairly secure process, given strong user passwords, it does weaken Lavabit’s claim that even their administrators couldn’t read your email. In reality all it would take is a few lines of code code to log the user’s original password which allows you to decrypt the private key which in turn allows you to receive and send mail as that user as well as access any stored messages.

It is important to note that the scope of Lavabit’s encryption was limited to storage on it’s own servers. The public keys were for internal use and not something you published for others to use. Full protection would require employing PGP or S/MIME and having untapped SSL connections between all intermediate servers. On the other hand, if an email was sent through Lavabit already using PGP or S/MIME encryption, they would never be able to intercept or read those emails.

The question here is what exactly did the government request Levison to do that was so bad that he’d rather shut down his entire business? What information could Lavabit even produce that would be of interest to a government agency? Unencrypted emails, customer IP addresses, customer payment methods, and customer passwords. Based on media statements, it appears that he would be required to provide unencrypted copies of all emails going through his system.

Let’s look at some quotes levison has given to various media outlets. First, here are some quotes from an interview with CNET:

“We’ve had a couple of dozen court orders served to us over the past 10 years, but they’ve never crossed the line.” “Philosophically, I put myself in a position that I was comfortable turning over the information that I had. I built Lavabit in a reaction to the original Patriot Act.” “Where the government would hypothetically cross the line is to violate the privacy of all of my users. This is not about protecting a single person or persons, it’s about protecting all my users. What level of access to this nation does the government have?” “Why should I collect that info if I didn’t need it? [That philosophy] also governed what kind of information I logged.” “Unfortunately, what’s become clear is that there’s no protections in our current body of law to keep the government from compelling us to provide the information necessary to decrypt those communications in secret.” “If you knew what I know about e-mail, you might not use it either.”

In an article from NBC News, we have this:

Levison stressed that he has complied with “upwards of two dozen court orders” for information in the past that were targeted at “specific users” and that “I never had a problem with that.” But without disclosing details, he suggested that the order he received more recently was markedly different, requiring him to cooperate in broadly based surveillance that would scoop up information about all the users of his service. He likened the demands to a requirement to install a tap on his telephone. Those demands apparently began about the time that Snowden surfaced as one of his customers, apparently triggering a secret legal battle between Levison and federal prosecutors.

And finally in an interview with RT he said:

I think the amount of information that they’re collecting on people that they have no right to collect information on is the most alarming thing,” he told RT. “I mean, the Fourth Amendment is supposed to guarantee that our government will only conduct surveillance on people in which it has a probable suspicion or evidence that they are committing some crime, and that that evidence has been reviewed by a judge and signed off by a judge before that surveillance begins. And if there’s anything alarming, it’s that now that’s all being done after the fact. Everything’s being recorded, and then a judge can after the fact say it’s okay to go look at the information.

Given the above information, let’s analyze some of the facts we know:

The government asked Lavabit to do something which levison considered to be a crime against the American people.

Levison was comfortable and had complied with warrants requesting information on specific users.

Levison told Forbes that “This is about protecting all of our users, not just one in particular.”

Levison is not even able to reveal some details with his own attorney or employees.

Shutting down operations was an option to circumspect compliance, although there was a veiled threat he could be arrested for doing so.

He did not delete customer data, he still has that in his possession so this was a request for ongoing surveillance.

This was a court order, which levison is fighting through the US Court of Appeals for the Fourth Circuit.

Levison compared the request to installing a tap on his telephone.

Apparently what made Levison uncomfortable with the request was that the fact that it collected information about all users, without regards to a warrant. Presumably law enforcement wanted to collect all data that they would later retroactively view as necessary once they had a warrant. The two issues here are that the Government wanted to collect information on innocent users (including Levison himself) and Levison would be out of the loop completely, taking away his control over what information he provided to law enforcement. These were the lines the Government crossed.

What’s interesting here is that Lavabit terminated the SSL connections right on the application servers themselves. These are the servers that also performed the encryption of email messages. Because of that, a regular network tap would be ineffective. The only way to perform the broad surveillance Levinson objected to would be (in order of likelihood) :

Force Lavabit to provide their private SSL keys and route all their traffic through a government machine that performed a man-in-the-middle style data collection; Change their software to subvert Lavabit’s own security measures and log emails after SSL decryption but before encrypting with the users’ public keys; or Require Lavabit to install malicious code to infect their own customers with government-supplied malware.

Sure, this could have been a simple request to put a black box on Lavabit’s network and Levinson is just overreacting, but the evidence doesn’t seem to indicate that. Regardless of which of the requests the Government made, they would all make Levison’s entire business a lie; all efforts to encrypt messages would be pointless. Surely there were some heated words spoken when the Department of Justice heard about Levison’s decision, but this is not an act of civil disobedience on Levison’s part, his personal integrity was on the line. Compliance would make his very reason for running Lavabit a deception; a government-sponsored fraud.

While Lavabit initially had quite a bit of media coverage over this issue, the hype seems to be a casualty of our frenzied newscycle. But after looking closely at the facts here, I now see that this is a monumentally important issue, one that the media needs to once again address. The message here is that US courts can force a business to subvert their own security measures and lie to their customers, deliberately giving them a false sense of security. They can say what they want about security on their web sites, it means nothing. If they did it to Lavabit, how many hundreds or thousands of other US companies already participate in this deception?

If the courts can force a business to lie, we can never again trust the security claims of any US company. The reason so many businesses specifically rely on US services is the sense of stability and trust. How sad that an overreaching and panicked pursuit of a whistleblower has thrown that all away.

This issue is so much more than a simple civil liberties dispute, it is the integrity of a nation at stake. We walked with the devil in a time of need — that is a legacy we must live with — but at what point do we sever that relationship and return to the integrity required to lead the world through respect and not by fear?

UPDATE: Since publishing this post, this Wired article has since revealed that in fact Lavabit was required to supply their private SSL keys as suspected above.

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