THE ELECTRONIC IDENTITY
                                by
                          Robert Parson


                      Electronic Terrorism I


     Last month I pointed out we should continually check for 
viruses.  This despite the fact I firmly believe we are more 
likely to have damage done to our data or system when the toddler 
knocks over the mini-tower case.  This month and next month we'll 
look at a worst case scenario.  Although I think this scenario 
probably won't be played out, it is something that needs to be 
examined.

                              _____

     Normally when we talk about Electronic Terrorism, we speak 
about viruses, trojan horses, worms and other types of vandalism.  
Quite often we think of it in terms of only a few machines being 
damaged at a time.  But as recent events have proven, the 
possibility of real carnage exists.

     In March someone planted a bomb in the World Trade Center in 
New York killing a number of people.  It also forced hundreds of 
businesses to seek temporary offices.  Companies were not able to 
communicate with their field offices as effectively for several 
days, and in some cases even weeks.  Their phone links had been 
severed, which also meant their electronic mail systems had been 
disrupted.

     The bombing of the World Trade Center appears to be, for lack 
of a better phrase, a generic terrorist attack.  It's a building 
with a lot of people in it that can be scared easily, and scare 
the nation as well.  

     The Federal Reserve Bank formulates monetary policy, 
supervises bank holding companies and provides financial services 
to local banks.  "When there was a a shortage of currency in 
Florida because of Hurricane Andrew, the Fed stepped in to meet 
demand," Sue McCullum of the F.S.B. in Saint Louis, Missouri told 
me.  She said the Federal Reserve has contingency plans that 
eliminate or at least minimize any problems.

     McCullum says there are 12 Federal Reserve branches 
throughout the United States.  She said she couldn't speak for the 
Fed as a whole.  However, if services from Federal Reserve Bank in 
Saint Louis were to be disrupted somehow many of the "more 
critical operations" could be transferred to Little Rock, 
Arkansas.  If worse came to worse, computer operations could be 
moved to the Federal Reserve's main computer center in Culpepper, 
Virginia.

     To give you an idea of the amount of monetary traffic the 
Federal Reserve handles, McCullum said over 850 thousand personal 
checks were cleared through the Federal Reserve Bank in Saint 
Louis alone.  That's individual checks, not dollars.  That doesn't 
include checks that don't go through the Fed or wire transfers. 

     Despite the large number of transactions, if there were a 
terroristic action or natural disaster that would bring a halt to 
operations, the main effect we would see would be a longer "float" 
period.  A "float" is the time between writing a check and the 
time the money actually comes out of your account.

     McCullum says anything that caused a serious disruption in 
service from the Federal Reserve System would likely be some sort 
of unthinkable national disaster (leaving unsaid that we probably 
wouldn't need to worry about money at that point anyway.  But 
there, now *I* have said it.).

     Let's say for sake of example that the People's Front to 
Liberate Refrigerator Magnets tosses a bomb into one of the branch 
offices of the Federal Reserve (This is pure speculation on my 
part.  McCullum and I did not discuss this.).  The Fed may have 
contingency plans to ensure continuation of service, but the 
psychological aspect of an assault the nation's major financial 
institution could be quite dramatic.  If one branch of the Fed can 
be compromised, so can the other 11.  Imagine a concerted effort 
on the part of terrorists to attack the financial underpinnings of 
our nation.

     How many people will pick up their phones and call their 
stock broker to liquidate their holdings to cash, gold or silver?  

     Now that we've examined some of the possible effects of a 
physical attack on our financial system, we'll set the stage for 
what could happen if the People's Front to Liberate Refrigerator 
Magnets unleashed an electronic attack.

     During the blizzard we had in March, heavy snow caved in a 
roof at a computer processing center in Clifton, New Jersey.  This 
coupled with the bomb at the World Trade Center caused Automatic 
Teller Machines nationwide to not work properly.  There was an 
awful lot of frustration caused by an act of terrorism and an 
accident.


Next:  The PFLRM launches it's most devastating attack


                                  (c) 1993 Robert Parson