1 IN THE CIRCUIT COURT OF THE STATE OF OREGON 2 FOR THE COUNTY OF WASHINGTON 3 4 STATE OF OREGON, ) ) 5 Plaintiff, ) Case No. C940322CR ) 6 vs. ) Appeal ) Transcript 7 RANDAL LEE SCHWARTZ, ) ) 8 Defendant. ) ) 9 10 11 BE IT REMEMBERED that on the 21st day 12 of July, 1995, the above-entitled matter came on for 13 hearing before the HONORABLE ALAN BONEBRAKE, a 14 Circuit Court Judge. 15 APPEARANCES: 16 THOMAS J. TINTERA 17 Deputy District Attorney Representing the State 18 MARC SUSSMAN 19 Attorney at Law Representing the Defendant 20 * * * 21 22 BOB A. ZARO Official Court Reporter 23 CSR No. 90-0119 24 25 2 1 THE COURT: Mr. Sussman, you have a matter 2 you want to address, I think, about the possibility 3 of producing additional testimony regarding the 4 matter that came up yesterday, I think? 5 MR. SUSSMAN: That's correct, Your Honor. 6 Your Honor, during the State's 7 cross-examination last Friday of Patrick Reilly, our 8 character witness -- I am sorry. It was Tuesday. 9 Time flies -- on Tuesday regarding -- on 10 cross-examination of Patrick Reilly, our character 11 witness, the State, on cross-examination, asked 12 Mr. Reilly if he had heard Mr. Schwartz's contract at 13 Motorola would not be renewed, and that was because 14 of a personality conflict. I had no prior 15 information about this. This was new information. 16 It appeared to be kind of -- it 17 appeared to be cross-examination that was proper for 18 a -- I mean, at least having heard portions of 19 that -- appeared to be proper cross-examination of a 20 character witness, but since that time, upon 21 investigation, we've learned -- and, actually, this 22 was late yesterday that the information that 23 Mr. Schwartz's contract -- the decision that his 24 contract would not be renewed and that it was because 25 of a personality conflict was not accurate. 3 1 I have spoken to the executive at 2 Motorola, who was the supervisor of the person, the 3 systems administrator, who informed me Mr. Schwartz 4 is still under a valid contract. No further 5 information was available about his appointment 6 status, and nobody was authorized to indicate 7 otherwise or indicate it would be removed because of 8 a personality conflict. 9 I think the jury was left with an 10 impression, which can be a very powerful one, by that 11 particular question, and it's an impression which we 12 believe is essential for us to correct and rebut. 13 I have the witness, and we were able 14 to contact him only yesterday. They would speak with 15 us only upon sending them a subpoena. I spoke with 16 them only this morning at approximately 7:30 our 17 time, and I was informed of the facts which I have 18 related to the Court. 19 This witness is leaving this evening 20 for vacation, which will take him away from the 21 business. There would -- and there is no way for me 22 to compel this witness' personal appearance before 23 this court today or on Tuesday, you know, be able to 24 get that done for him to be here on Tuesday. 25 THE COURT: I assume the witness is in 4 1 another state? 2 MR. SUSSMAN: The witness is in Austin, 3 Texas. 4 THE COURT: Typically, if a witness is 5 resistant, sometimes it takes a couple months. 6 MR. SUSSMAN: Precisely. We would have to 7 go through the out-of-state -- process of subpoenaing 8 a witness through the out-of-state statute for 9 out-of-state witnesses, and so the only -- the 10 witness is available to be heard by telephone 11 testimony today, and we propose to offer this 12 testimony on this point by telephone testimony as we 13 were able to do with Tonya Herlick. 14 THE COURT: Okay. 15 Mr. Tintera? 16 MR. TINTERA: Your Honor, the questioning, 17 as I recall, was two-part. The witness was asked, 18 "Had you heard that the contract for Mr. Schwartz 19 would not be renewed?" The answer was, "Yes." 20 "And had you heard it would not be 21 renewed because of personality difficulties?" or 22 words to that effect, and the answer was, "No." 23 The Evidence Code provides for that 24 type of questioning. There was no objection made to 25 any of that line of questioning at the time. The 5 1 Evidence Code does not provide for proof on a 2 collateral matter. The answers have to be accepted, 3 and I don't think it's proper for them to try to 4 offer evidence on a collateral matter. 5 And I am not agreeing to a telephone 6 conference. 7 THE COURT: Okay. 8 MR. SUSSMAN: Your Honor, could I respond, 9 briefly? 10 THE COURT: You bet. 11 MR. SUSSMAN: As far as -- my recollection 12 on the question is slightly different than 13 Mr. Tintera's, but I'll ask the Court to rely -- 14 THE COURT: Which witness was it? 15 MR. SUSSMAN: Patrick Reilly. 16 THE COURT: I didn't even write that down. 17 I am looking at my notes. Okay. 18 MR. SUSSMAN: What I would also like to 19 add, if the impeachment -- the impeachment -- if the 20 impeachment was proper, it would be -- it was because 21 it was not a collateral matter and a permissible area 22 of cross-examination. 23 The State introduced this issue before 24 the jury. It was a matter which we had based on 25 information that was only within the knowledge of the 6 1 State. We had no way of knowing. 2 The misinformation -- I am not 3 suggesting Mr. Tintera is deliberately 4 misrepresenting something before the jury. There may 5 have been a misunderstanding, but the point is that 6 there was information presented to the jury that 7 presents a serious misrepresentation, in fact, in 8 terms of what the actual circumstances are and one 9 which can be very prejudicial to Mr. Schwartz -- 10 THE COURT: Not as prejudicial as I thought 11 the question was going to be. Because -- and I am 12 sorry I interrupted you. At pretrial I thought this 13 would all be evidence of prior cracking programs and 14 that sort of thing. When I heard something about a 15 personality conflict, I thought -- maybe I had 16 forgotten -- but that was the first time I heard of 17 that, and I am wondering if that really is evidence 18 of prior bad acts -- I guess, in my mind, in a case 19 where one of the allegations involves unlawful 20 cracking of passwords or wrongful passing of 21 passwords, prior incidents similar in nature 22 certainly have a possibility of leading to prejudice, 23 but where the prior evidence is a personality 24 conflict, the possibility of prejudice, in my mind, 25 is certainly not as great when you weigh those sorts 7 1 of things. 2 I was suspecting, when the question 3 was asked, "Have you heard" -- and I was waiting for 4 Mr. Tintera to say something about another one of 5 these cracking incidents, and, in fact, it was a 6 personality conflict. 7 In my mind the possibility of 8 prejudice is not nearly as great. But go ahead. 9 MR. SUSSMAN: That was the additional point 10 I wanted to make. I don't think -- if it was 11 collateral, to begin with, it would have been 12 improper cross-examination. Because the State opened 13 that door, I think we needed to correct that 14 impression, which is based on inaccurate 15 information. 16 THE COURT: Your client is still, 17 apparently, employed or has a contractual 18 relationship with Motorola? 19 MR. SUSSMAN: That's correct. 20 THE COURT: I will permit him to say, if he 21 testifies. 22 As counsel knows, from my review of 23 the statute, which is ORS 45.400, there is no 24 authority in Oregon law for taking telephone 25 testimony in a criminal case. We occasionally do 8 1 when parties agree to it, and I encourage parties in 2 appropriate cases to do that, as you have already in 3 this case once. But if Mr. Tintera is not prepared 4 to stipulate or agree to it, it isn't going to 5 happen. 6 Now, I am always concerned about some 7 prejudice or great injustice done to a party. In my 8 mind, the possibility of prejudice is not as great as 9 if the testimony had come out that this was another 10 one of those running a cracking program without 11 authority or authorization incidents. That's not 12 what this is. This has something to do with a 13 so-called personality conflict, and, in my mind, the 14 possibility of prejudice is not nearly as great. 15 We all have that sort of dilemma, 16 occasionally, in our interaction with other people. 17 That is not something where a jury necessarily would 18 infer a person is a bad person. It is not similar in 19 nature to, I don't think, anything we have heard 20 about in this case. 21 In any case, I can resolve it easily 22 by the statute that doesn't permit telephone 23 testimony. 24 MR. SUSSMAN: I understand that. We have 25 reviewed the statute with the Court. I would point 9 1 out that although we have the statute that so limits 2 the testimony, that under these circumstances, I 3 believe, the Court would have authority to allow it 4 on its own on two other grounds. First of all, the 5 Court -- 6 THE COURT: You are not going to tell me 7 about inherent authority, are you? 8 MR. SUSSMAN: Well, not only inherent 9 authority, Your Honor, because -- but you also -- 10 Mr. Schwartz also has the constitutional right to 11 present witnesses in his own behalf, either subpoena 12 witnesses and produce evidence favorable to his 13 defense, and that constitutional right would be 14 violated by not allowing the testimony by phone of 15 this particular witness, because, otherwise, the 16 evidence is not available. 17 Now, of course, under these 18 circumstances we can offer this testimony through my 19 investigator, who also, initially, got the statement 20 and the information from the witness, and we could 21 offer this as a statement of an unavailable witness 22 through the hearsay exception. 23 If the Court will not allow us -- 24 THE COURT: I am only ruling on the one 25 method right now. 10 1 MR. SUSSMAN: Let's stay with the telephone 2 testimony right now. But that the -- I believe -- 3 you know, there is a legitimate constitutional basis 4 for the Court to exercise its inherent authority to 5 order the telephone testimony in this case. As the 6 Court knows, there are times where statutory 7 restrictions are outweighed by the constitutional 8 protections -- fraud, trial rights of an accused -- 9 and I think this is such a case. 10 This is not an isolated point. There 11 have been certain other circumstances in this case 12 where evidence was brought up that suggested 13 improprieties by Mr. Schwartz, for instance, the 14 incident involving the computer -- the DEC computer 15 that was described as a security incident and the 16 witness -- the testimony later on indicated that 17 wasn't the case at all. 18 So I think there have been instances 19 of misimpressions that because of information that 20 was inaccurate or not founded -- and I think it is 21 essential to our defense showing what -- how 22 Mr. Schwartz conducted himself, whether or not in 23 evaluating the evidence -- whether the accusations, 24 the information presented to the Court, for the 25 State, are founded for us to be able to produce 11 1 this. 2 If the Court will not allow the 3 testimony of this witness, I certainly would -- will 4 ask the Court to allow me to make an offer of proof 5 right after the noon hour, just put the witness' 6 statements on the record. 7 THE COURT: Live or through another 8 witness? 9 MR. SUSSMAN: First, you know -- 10 THE COURT: Like, to have somebody relate 11 what the witness says? That is sufficient for an 12 offer of proof. We don't have to have them on the 13 telephone. 14 Okay. I have heard the argument, and 15 I'm ruling only on what's before me, and that is a 16 suggestion that the witness at Motorola be permitted 17 to testify by telephone. As I said, there is no 18 authority under Oregon law to permit that in a 19 criminal case absent an agreement. I think it is a 20 serious question, even with agreement of the parties, 21 that there is authority to do it. The prior Oregon 22 law before the statute was because there was no 23 provision under Oregon law for taking telephone 24 testimony in any case, that the court didn't even 25 have the authority to do it, but, of course, if no 12 1 one objects and cites it as error, it is 2 permissible. I suspect when every party stipulates 3 to it, it is hard put to cite it as error later on. 4 We did that previously. 5 Mr. Tintera says he is not prepared 6 and will not stipulate to it in this particular 7 instance. I already indicated the possibility of 8 personal conflict and the fact his contract had not 9 or would not be renewed is not great. I already 10 indicated I will permit the defendant, if he 11 testifies, by telling what the current state of his 12 contract is, and I am just convinced that's 13 appropriate under all the circumstances of this case, 14 and that's my ruling. 15 Anything else? 16 MR. SUSSMAN: Yes, Your Honor. Then, 17 first, just given the Court's indication, the offer 18 of proof can be made by representation to the Court 19 now. 20 The witness' name is Tom Navickas, and 21 that is spelled N-a-v-i-c-k-a-s, Navickas. He is an 22 executive at the Motorola University in Austin, 23 Texas. Mr. Navickas, if called, would testify that 24 he is the supervisor of an individual named 25 Tom Gocker, G-o-c-k-e-r, who hired Mr. Schwartz to 13 1 teach classes, that Mr. Schwartz is still under 2 contract with Motorola. No decision has been made 3 regarding his employment status, and no one was 4 authorized to represent that Mr. Schwartz's contract 5 had been terminated or would be terminated for any 6 personality conflicts. 7 That is the testimony that the -- 8 would have been elicited from the witness. I put 9 that on the record by way of the offer of proof at 10 this time. 11 Now, the next motion that I would 12 make, I would ask if you would allow me to present 13 this witness through an investigator, who spoke with 14 Mr. Navickas yesterday afternoon and brought this 15 information to my attention. The discussion took 16 place with Mr. Navickas, with the Motorola corporate 17 counsel on the line, and that was the information 18 that was related, again, to me this morning, and 19 under the exception to the hearsay rule for 20 unavailable witnesses, the Court could allow my 21 investigator to testify as to this conversation and 22 allow me to put on the evidence through the 23 investigator. 24 MR. TINTERA: Who is the investigator? 25 MR. SUSSMAN: Phil A-g-r-u-e, Phil Agrue. 14 1 THE COURT: I don't want to hear all the 2 argument and make the decision yet. I will be 3 thinking about it, because we would have an 4 opportunity to do that. I would like to get started, 5 because the jury has been sitting in there for an 6 hour. I'll think about it a bit and give Mr. Tintera 7 a chance to argue. Maybe we will reconvene early 8 after the noon break and get a chance to argue this. 9 (To the clerk) Bring in the jury. 10 (Whereupon, the jury entered the 11 courtroom, and the following 12 transpired:) 13 THE COURT: Good morning, folks. We are 14 ready to proceed now. 15 Mr. Sussman, you may call your next 16 witness. 17 MR. SUSSMAN: Thank you, Your Honor. We 18 would now call Mr. Schwartz. 19 20 21 22 23 24 25 Schwartz D 15 1 RANDAL SCHWARTZ was called as a witness on 2 his own behalf and, having been duly sworn, was 3 examined and testified as follows: 4 DIRECT EXAMINATION 5 BY SUSSMAN: 6 Q Mr. Schwartz, where do you live? 7 A Just north of Beaverton, Oregon. 8 Q How long have you lived there? 9 A About -- I think about six years, six and a 10 half years. 11 Q Now, the jury has had a good idea what 12 you -- you worked at Intel at one time. Would you 13 tell the jury what you are doing now, what your 14 occupation is now. 15 A I am an independent computer consultant. 16 What I am doing now is providing training on a 17 computer language called Perl language that I have 18 written, and I am consulting companies. 19 Q What companies have you been consulting to? 20 A In terms of training, I have been all over 21 the country, a company in Alaska down to a company 22 in -- University of Buffalo, Silicon Graphics in 23 California. I also have been doing computer 24 consulting work for Motorola Corporation and a small 25 company called Air Net out in Florida. Schwartz D 16 1 Q What was the nature of the consulting work 2 you did for Motorola? 3 A At Motorola I was a -- I guess the best 4 word for it would be toolsmith, someone who creates 5 software tools -- software is computer programs -- 6 create tools to support a group, a part of Motorola 7 that was building a satellite system that would allow 8 you to have cell phones anywhere in the world. My 9 particular role was to provide tools to help the 10 group that was doing simulations of this system once 11 it was up and running, and I would create pieces of 12 software to help them get their job done. 13 Q Now, what's the status of your contract at 14 Motorola? Are you still under contract with them? 15 A Yes, I am currently under contract with 16 Motorola University in Austin, Texas, to provide my 17 Perl training class on a regular basis. I have 18 classes from next month to the end of the year, about 19 one a month, and I am currently in negotiations for 20 me to go to China and Japan through that contract. 21 Q What about Air Net? You are still doing 22 work for them? 23 A The Air Net project was a small project. 24 They are keeping me in mind for future work. I think 25 I worked there three or four times, more recently two Schwartz D 17 1 or three months ago. 2 Q Let's kind of go back, back a long way. 3 A Okay. 4 Q Tell the jury a little bit about yourself. 5 A Okay. 6 Q Where did you grow up? 7 A Started out in Gladstone, Oregon. I was 8 born in the Willamette Falls Hospital in Oregon City, 9 just up the hill, and I spent 13 years in Gladstone. 10 I then moved -- I moved to Colton. That is a little 11 town past Mollala. I think they have got one traffic 12 light, and there is a school and store, and that is 13 about the entire size of the city, and I graduated 14 from high school there. 15 Q So what -- tell me about your family. We 16 know you have one brother. What family did you grow 17 up with? 18 A Yeah, I had two younger brothers. I was 19 the oldest of three. In fact, the brother, Russ, the 20 one that came here yesterday, is exactly one year 21 younger than me. We shared birthdays. That was kind 22 of fun. 23 It was my mom and dad and the three 24 kids. The other brother, like, two and a half years 25 younger, has gone on to be a music teacher. He -- we Schwartz D 18 1 lived together both in Gladstone and in Colton. The 2 reason we moved from Gladstone to Colton is my dad, 3 who had been working for himself creating -- not 4 creating -- fixing heating and air conditioning, 5 appliance repair, that sort of thing, finally got -- 6 changed his mind about what he wanted to do. He 7 actually wanted to have a job, and he found a job in 8 Colton, and so we had to move to out where the job 9 was. 10 Q What kind of work was he doing? 11 A For -- I think the name of the company was 12 Hardware and Industrial Tool Supplies Company. He 13 just called it his company. They made carbide tips. 14 He was a general handyman. He would 15 use his head to solve whatever problem he had out 16 there. Most of my problem-solving ability came from 17 watching him work. Here is the problem, and here is 18 72 parts, and see what we can put together to make it 19 work. He was a really creative guy. I really admire 20 him for it. 21 Q Was your mom working? 22 A She was the classic homemaker. She took 23 care of the kids, and she liked doing that. That was 24 perfect for her. We were well taken care of as kids. 25 She showed a lot of concern for us. Schwartz D 19 1 Q You went to school throughout your 2 elementary and middle school years in Gladstone? 3 A Yes, until ninth grade I was in Gladstone. 4 Q And how was school for you? Was it a good 5 experience? Were you having problems? Did you do 6 real well? How would you describe it? 7 A Somewhere around the middle of second 8 grade, they decided I didn't need to go to third or 9 fourth grade. I got moved up from second to fifth 10 grade. That created a lot of social problems. I 11 wasn't with people my own age anymore. I started 12 focusing on things I knew best, which was reading 13 books and talking to teachers and learning everything 14 I could learn. That was the thing I was best at. It 15 was difficult, though, because I was always -- I 16 mean, you can't really talk about it terms of peer 17 pressure. I didn't look at the people I was with as 18 peers. I got disconnected from everybody there. 19 Q So, then, what were your middle school 20 years and high school like? 21 A Well, as I started growing up, you know, 22 you go through these social changes. You go through 23 junior high, which is difficult enough for anybody. 24 Here I was, the computer guy in the corner. I 25 decided when I was nine that computer was everything Schwartz D 20 1 I wanted to do. I started learning everything I 2 could about them. 3 It's an experience I don't want to 4 relive. I made it through there, but it was 5 difficult. I didn't have a lot of friends. The few 6 friends that I had I only saw occasionally at 7 school. I spent most of my time learning and reading 8 and just trying to figure out everything I needed to 9 know in order to get my career done. 10 Q When did you start getting interested in 11 computers? 12 A About nine. 13 Q So with the difference in ages and school, 14 computer became kind of a -- that became your 15 alternate refuge? 16 A Yeah, I escaped in that. It was the only 17 comfortable thing I knew how to do was work with 18 computers, work with machines. You know, it's what 19 made me good at what I am doing now. It certainly 20 didn't give me the rich set of experiences growing up 21 most people seem to have, at least from the outside 22 they seem to have. 23 Q Now, did you -- how were you doing in 24 school with these different habitats, grade -- 25 because you were ahead of yourself, did that create Schwartz D 21 1 problems for you there? 2 A Yeah. Anything I really wanted to do, 3 anything that I had an attraction to, I did well in, 4 because whatever I focused my mind at, I did well 5 at. That's what I started discovering. But if I 6 didn't want to do good at it, I didn't. I flunked 7 junior high English. I didn't get really good grades 8 in high school. I wouldn't do homework outside of 9 the class. I got through there, and it caused 10 problems. It was difficult because of that. 11 Q But in other areas -- were there people 12 that helped you along and made that experience easier 13 for you? 14 A Oh, yeah. All the way through -- anytime 15 somebody saw that I was skilled, somehow -- I 16 remember, especially in junior high, my math 17 teacher. He decided I was already far enough ahead 18 in math he would take his prep period to teach me. 19 He was teaching the whole day, but we worked out a 20 schedule so I would be in his class one-on-one with 21 him during his prep period. He was teaching me 22 advanced high school math when I was in junior high. 23 He took an attraction toward me and made that work 24 and said, "This is somebody who needs extra 25 assistance. This is somebody that is obviously going Schwartz D 22 1 somewhere, and let's give him attention at this 2 point." My first grade teacher paid special 3 attention to me, saying, "This guy seems to have 4 something going on; so maybe we'll do some stuff." 5 I remember getting that sort of 6 favored treatment, and it really helped. It was 7 two-way. I was also able to be someone who was 8 moving forward in their classes. That doesn't happen 9 all the time. I don't know. I am not a teacher, and 10 so I can't really tell. 11 Q In high school, as you continued on, was -- 12 were you able to do anything additional with your 13 interest in computers? 14 A Yeah. By the time I was in high school, I 15 had already been spending a lot of time working with 16 a computer terminal, that is, like a keyboard and 17 screen attached to a computer system provided by 18 the -- I think it was provided by the Portland public 19 school system -- no. It was provided by the 20 educational service district, one level up from the 21 school system. They had this big computer all the 22 school systems were sharing. We had a terminal that 23 would attach to the computer, and I could tape in 24 computer programs and get them to run. I actually 25 created a system in that system that allowed me to Schwartz D 23 1 communicate with other students at other schools 2 around the area to send, you know, computer cases 3 back and forth, both immediately and sort of 4 electronic mail. I created a sort of electronic mail 5 system, in fact, when I was in high school at age 15, 6 16. 7 Q Did you get involved in other activities at 8 school? 9 A As I said, the learning was sort of my 10 focus, but towards my junior and senior year, I was 11 pulled in as technical assistant to a play, a school 12 play. I think I was the lighting coordinator or the 13 spotlight operator, something to do with that. It is 14 kind of fuzzy. It is a long time ago. 15 What I noticed there, drama people 16 were different from ordinary people, and I was 17 different from ordinary people in the other 18 direction, and I liked what I was seeing there. I 19 liked the enthusiasm they were showing for being able 20 to express themselves. With their encouragement I 21 actually tried out for the next play and got a fairly 22 significant part with actual lines and having to 23 stand up in front of all these people, and for 24 somebody who had spent most of their life in the 25 corner with computers, it was quite a draw in the Schwartz D 24 1 other direction. 2 Q Were you able to do more in school with 3 computers? 4 A Yeah. In high school I assisted the 5 computer teacher with his work. I actually helped 6 him prepare lesson plans and maybe even occasionally 7 got up in front of the computer class and taught. 8 That was my first real teaching experience back 9 then. I found that fun. It was exciting. 10 Q Was there anything else happening in your 11 life, your family, at that time that was helping 12 shape what was happening to you? 13 A Well, my dad -- I think -- my dad was -- 14 not career-oriented -- yeah, career-oriented. He 15 was. Let's face it, he was. He was gone 7:00 in the 16 morning until 8:00 or 9:00 at night most of the time, 17 and I think, eventually -- I still don't know all the 18 reasons behind it -- my mom got tired of it. She 19 wanted someone around. I can't blame her. When you 20 are in a relationship, it is nice to have them 21 around. They started breaking up and having 22 disagreements and arguments as I got sort of toward 23 the end of my high school years. 24 Q So what happened then? 25 A Right after I graduated from high school -- Schwartz D 25 1 this would be about '78 -- they split up within six 2 months later -- I don't know when the divorce was 3 filed or when it was final, but it was right in that 4 period of time somewhere. 5 Q You said you graduated from high school in 6 '78? 7 A Yes. 8 Q What did you do when you finished high 9 school? 10 A Well, the last year of high school, before 11 I actually graduated, I started working for a small 12 software company, group of -- like a handful of 13 consultants, maybe five or four consultants who were 14 providing software services to the Washington County 15 Educational Service District. Again, that is a 16 support organization that assists the schools, kind 17 of one level up from the school district themselves, 18 and at age 15, when I was working for them, I was 19 writing programs, grading and testing packages, text 20 editors, things that are used to change the way text 21 appears on the screen and so on. I was already doing 22 contract software before I got out of high school. 23 Q So what did that lead to? 24 A Well, I didn't get good grades in school; 25 so I wasn't really looking forward to any Schwartz D 26 1 scholarships. As much attention as people had paid 2 to me -- paid toward me to make me skillful, I 3 just -- you know, I just didn't seem to get the 4 grades in school that you would need for 5 scholarships. My parents weren't rich. My dad was 6 blue collar, working long hours to get what he 7 wanted. College wasn't in the plans. I couldn't see 8 any way of doing that without going into a tremendous 9 amount of debt and not knowing where it would come 10 from. 11 But I already had gotten this 12 contract, at least, bit work with this consulting 13 firm. The day I graduated, I moved from Colton to 14 out here to Beaverton to live with my uncle, who had 15 a house out here, and he had a room he could put me 16 up in, and I continued working for that consulting 17 company. My idea was to keep getting jobs. If I got 18 that job, I could get another one. Never mind I was 19 16 at the time. I didn't seem to pay attention to 20 that. 21 Q What happened -- what jobs or what did you 22 wind up doing next? 23 A My uncle happened to go to church with a 24 second level manager at Tektronix, and this was in 25 about April or May. I graduated in January, a half Schwartz D 27 1 year early out of my senior year. This was getting 2 about April or May. My uncle talked to his friend 3 and said, "You got anything, like, a summer temp 4 program we can put this guy in?" and, sure enough, 5 there were a couple slots available. It happened to 6 be in a technical writing position. That's someone 7 who understands the machinery and writes the books 8 that you get with the machinery once you buy it. 9 Usually the things are incomprehensible. Mine 10 weren't, at least I try not to make them that way. 11 Things that are hard to read, that's the kind of 12 things I would create. 13 The slot became open. I interviewed 14 for the job. I was a bit hesitant, because I hated 15 junior high English. I didn't like English or 16 writing. I am a software engineer. I put software 17 programs together. I figured if I get my foot into 18 the door, they would see the skills I had, and I 19 would eventually find my way into the slot I wanted. 20 Q At this point did you have any thoughts 21 about maybe going on to college or something or plans 22 to do that? 23 A Well, as I said, you know, I didn't get the 24 grades; so I didn't think the scholarships would be 25 there. Schwartz D 28 1 MR. TINTERA: Your Honor, I have to 2 interrupt. I don't mind a bit of background, but I 3 don't think we need the detail we are going into. We 4 are still -- as I see it -- 17 years away from -- or 5 so -- 15 years away from what the jury is here for. 6 I object. I don't mind some background about 7 Mr. Schwartz, but I think the amount of detail is too 8 great. 9 THE COURT: Overruled. Proceed. 10 Q (By Mr. Sussman) Anyway, was there 11 anything else that came up that might have affected 12 you -- your plans, any plans you might have had to 13 consider going to school? 14 A Oh, yeah. I -- because of my mom and dad 15 splitting, my mom was now left without a lot of 16 career experience. It was the classic case of 17 someone who was married straight out of high school 18 and only been a homemaker all her life. I took my 19 mom and my youngest brother into my apartment to take 20 care of her. I figured that was my responsibility 21 now. 22 Q You had a job at this point? 23 A I had a job and an apartment, and I could 24 share the resources that I did have available. 25 Q So you actually wound up getting a Schwartz D 29 1 full-time job at Tektronix? 2 A Oh, yeah. About a month into the 3 contract -- excuse me, not a contract -- but about a 4 month into that position of being a technical writer, 5 I was sitting in the cafeteria alone, sort of working 6 on the work I was doing, and an older gentleman, 7 Lyle Settle, also noticed I was working there alone 8 and started asking questions about what I would -- 9 what I would do under certain circumstances. He had 10 a proposal for a manual he was trying to create. He 11 said, "How would you handle this? What would you 12 do?" I looked at it and gave him common-sense 13 answers. At least they were common sense to me. 14 "Wow, those are interesting ideas. How long will 15 you be here? Do you mind if I get you transferred 16 over to my project?" I said, "No, I am here to 17 work. I don't care what I am working on. If you 18 want me to work on your stuff, I will work on your 19 stuff." 20 He adopted me. That is the best way 21 to say that. He became my mentor. He taught me over 22 the next four years how corporations work, how to get 23 the job done, how to deal with situations as they 24 arose and, best of all, how to think for the 25 customer, how to imagine someday somebody is going to Schwartz D 30 1 have to get this book in their hands and figure out 2 how it works, and, really, pretty much everything I 3 know, at least in my formative years, on how to deal 4 with companies and corporations came from Lyle. 5 Q How long did you wind up staying at 6 Tektronix? 7 A Five years. 8 Q What kinds of things did you do while you 9 were at Tektronix? 10 A Well, for the first four years I worked 11 with Lyle as a technical writer and eventually a 12 manager of technical writers. 13 While I was in that group, I also 14 created the typesetting systems that our group used. 15 I had -- in a typesetting system, you type the letter 16 "A," and, eventually, it has to end up as black dots 17 on a white paper in the shape of the letter "A." I 18 made it so that stuff would work all correctly. 19 After the first four years, I 20 transferred into the software engineering group that 21 I had previously been writing books for. So my peers 22 that were sort of across the hall, I would put it -- 23 I would design it, and now I was part of the group. 24 Q When that happened, what -- what did you 25 wind up doing? Schwartz D 31 1 A I was -- I managed a couple of people that 2 were creating new versions of software for one of the 3 products that Tektronix was releasing. 4 Q How did things go for you at Tektronix? 5 Did you wind up leaving on your own? Was it -- was 6 it a mutual decision? 7 A Oh, yeah. Everybody liked me there. They 8 kept saying, "You are doing good work." My reviews 9 were always really cool. 10 Eventually, though, I got an offer 11 from a start-up company to be assistant manager for a 12 couple of small fax computer systems. That is 13 computer equipment from Digital Computer Company. It 14 was downtown, and I was working with a manager that I 15 formally worked with at Tektronix that had gone on to 16 another project, and he called me up from there. 17 Because of my admiration for my former 18 manager, Joe Turner -- Joe says, "Come on over, and 19 take a look at this project." Even though I had been 20 at Tektronix for five years -- I thought I could 21 retire from here -- I thought, "Well, I could look at 22 this. I will never know unless I take this 23 opportunity." Of course, there is a big kick-up in 24 money. That kind of motivates the decision. Yeah, I 25 took on this new role. Schwartz D 32 1 Q And what -- how long were you there? What 2 kind of things did you -- 3 A I was there for about ten months, and I was 4 assistant manager, as I said, for a couple of 5 computer systems. I was in charge of keeping the 6 systems and networks up and running, the networks 7 being the wires that keep the computers together. 8 I was there for ten months, and the 9 manager that brought me from Tektronix went to 10 another company, Servio Logic, then left to go to 11 another company and called me from there and said, 12 "You got to come over here." I still liked him. It 13 was kind of silly. He dragged me over to Servio, and 14 he took me to the next company. I respected his 15 decision. I checked it out. The new company was 16 Sequent Computer Systems, and within a couple months 17 I became employee No. 64 at Sequent. 18 Q And how long did you stay there? 19 A I stayed there, I think it was, two and a 20 half years. 21 Q What kind of work were you doing at 22 Sequent? 23 A At Sequent I went back to being a technical 24 writer. I was up writing the manuals for an 25 operating system called UNIX. What Sequent was doing Schwartz D 33 1 was putting UNIX on their particular machine, their 2 hardware, and selling the package to their 3 customers. As they did that, they made modifications 4 to UNIX. The documentation, reference cards, 5 everything with it had to reflect the changes that 6 Sequent had made to UNIX in order to put it on their 7 machine. I spent time rewriting the manuals as my 8 initial job. 9 Q What led to your departure, and what did 10 you do next? 11 A Well, on towards the end of my stay at 12 Sequent, there was a dispute over the number of hours 13 I needed to work to be an employee there. They kept 14 asking for 80 hours for 40 hours' pay, and I realized 15 it was a start-up company. I had a lot of outside 16 activities at that point, and I thought 60 would be 17 about right. They were asking for a lot of work. We 18 reached a mutual decision that maybe I should go 19 somewhere else. 20 Q Where did you go? 21 A I used that as an opportunity to say, 22 "Well, my dad was self-employed. Maybe I will do 23 that for a while. Maybe I will be a contractor or 24 consultant. If I don't like that, maybe I could go 25 back to another company." Schwartz D 34 1 Q That was -- 2 A That was back in '86. I haven't worked for 3 a company as an employee since then. I have been in 4 business for myself since '86 or '87. The dates 5 escape me. 6 Q What is the name of the company? 7 A Stonehenge Consulting Services. Stonehenge 8 is this big rock pile in England. 9 MR. TINTERA: Objection, he answered the 10 question. 11 THE COURT: Sustained. 12 THE DEFENDANT: Sorry. 13 Q (By Mr. Sussman) What kinds of -- what 14 kind of consulting service work is it you started up 15 doing after you set up your own business? 16 A Well, my first big contract, my first big 17 one at Stonehenge was, I think, about a 18 nine-month-long contract for Tandem Computer Systems 19 down in the Bay Area, San Francisco Bay Area, down at 20 the south end. We call that "Silicon Valley," the 21 part where all the computer companies are. My 22 contract was to create a security administration 23 guide -- big technical terms -- a book to tell you 24 how to keep your systems secure. Since my interest 25 and background was computer security, that fit really Schwartz D 35 1 well. I was working with my mentor, Lyle Settle, my 2 mentor at Tektronix. 3 Q How was the end of the contract? Was that 4 the end of the work? 5 A Yeah, I wrote the book, and they were happy 6 with it, and they said, "Fine," and they called me 7 back a few months later to rewrite one of the other 8 books they had on security, and I went and did that, 9 and they were happy with that, as far as I could 10 tell, too. 11 Q And so you continued doing some consulting, 12 various contracts for different durations for a 13 number of years after that? 14 A Yes. Like one ongoing contract I have had 15 from roughly that same period of time was 16 Astro Western gas stations, the Astro stations you 17 drive by everyday. The software that tracks the gas 18 that is being hauled from the distributor to those 19 gas stations is being tracked by my software. Every 20 time a truck goes, it makes an entry into this data 21 base I created. 22 Q When did you wind up doing work at Intel? 23 A A friend of mine, Connie Brown, had worked 24 with me at Tektronix and had gone on to be either an 25 employee or a contractor at Intel. When she heard my Schwartz D 36 1 second project was winding down at Tandem, she said, 2 "You ought to go try this project here I have heard 3 about, the new Gemini project," some sort of project 4 inside Intel to create, yet, another advanced 5 microprocessor chip. It is not the ones that are in 6 IBM PCs, but a different kind of architecture. 7 Q Did you get the contract? 8 A Yes. My contract was to do technical 9 writing, once again. In this case it was the 10 documentation, the book on the chip itself, the 11 microprocessor, about a 450-page book that described 12 exactly how the microprocessor worked. 13 Q Tell the jury who you worked for, then, 14 under that first contract. 15 A If I remember the name right, it is 16 Patty Langstrat. I think that is her name. 17 Q What did you -- let me ask this: So 18 overall, how long did you wind up working at Intel? 19 Was it one -- did you work continuously, or was it 20 off and on? How did that work for you? 21 A The first contract was with Patty at this 22 Gemini project. Gemini became the BIIN Corporation 23 in the building over here on Jones Farm, big 24 roll-out. The governor was there with the big 25 operation. Gemini went BIIN. My contract went from Schwartz D 37 1 Intel to BIIN, B-I-I-N, BIIN. It was really all the 2 same company, different name. 3 Then my contract with BIIN -- the 4 company was run into financial troubles. "Okay. No 5 more contractors." We all got cut in one big swoop. 6 The building was being shared by 7 another Intel group. I walked across the aisle and 8 said, "It looks like I am getting lost here, because 9 they cut all the contractors. Have you got anything 10 I can do over here?" My first person I contacted was 11 Dave Riss. "We are looking for a systems 12 administrator. Have you had experience working as a 13 systems administrator?" and that is how it worked. 14 Q Do you recall when that came about that you 15 became a systems administrator? 16 A I am going to say it was either '88 or 17 '89. I really can't tell. 18 Q Maybe this will help you remember a bit. 19 Let me show you what I have marked into evidence as 20 Defendant's Exhibit No. 156. 21 A Okay. 22 Q Do you recognize what this -- 23 A Yes. This would be an invoice to Dave Riss 24 on that first contract with IWARP as systems 25 administrator. Dave Riss was my boss, initially. Schwartz D 38 1 Q When was the date? 2 A June 6, 1989. 3 Q This is the beginning of work you did for 4 IWARP? 5 A I don't know if this was the very first 6 contract. "Orientation" sounds like it is probably 7 the first contract. 8 Q I notice, looking at this contract, that 9 you were -- talked about doing toolsmithing? 10 A Uh-huh. 11 Q You mentioned earlier in your testimony 12 about one of the first things you were doing at -- 13 with the schools you were creating tools. You talked 14 about computer tools. What does that mean? What is 15 tools and toolsmithing? 16 A Well, if you are a carpenter and you are 17 going to go build something, you go down to the 18 store, and you buy a hammer, and you buy a saw, and 19 you buy a screwdriver. Those are your tools to get 20 the job done. 21 If you are a user of a computer, you 22 might go out and buy a word processor, something that 23 can allow you to type words in and arrange them on 24 the page, or you might buy a spreadsheet, which 25 allows you to do accounting sort of stuff, adding up Schwartz D 39 1 of things and stuff like that. If you are a 2 programmer of computers like me, you can go out and 3 buy tools, and I frequently do. Often what I do is 4 simply create the tools. I design computer programs 5 that assist me in further doing my work. I create 6 the tools. I call that "toolsmithing." 7 Q So would you give us an example of a 8 program that is a tool that you might create to do 9 your job. 10 A Yeah. Let's say I had to tell the computer 11 the same five things in sequence everyday. I had to 12 do this and this and this and this and this over and 13 over again. Well, I could put that into a file. 14 That's a place where a computer can store 15 information, and then all I have to do is the one 16 command that says, "Do that file." That would be an 17 example of a tool. If I knew I had to do that 18 everyday, I could even go further and just tell the 19 computer, "Just go do that once a day. Don't even 20 tell me about it. Just go do it." 21 So the act of building up kind of, 22 like, my work bench -- you can't really see 23 anything. It is stuff inside the computer. It is my 24 work bench. I have tools over here to do these 25 things and tools to do these things. That is what Schwartz D 40 1 toolsmithing basically is. 2 Q We heard testimony about a .rhost file. 3 A Uh-huh. 4 Q During one of the projects you were on, 5 this was something that was left in a DEC computer, 6 one of the projects later on, and there was some 7 reference to that being a tool. Is that -- is 8 an .rhost file a tool that you are describing? 9 A Yes, you could certainly call an .rhost 10 file a tool. It is more of a configuration file than 11 a tool. It is more telling the computer how you want 12 to do your job, that this is something you will be 13 working on, and this is the way you will work on it. 14 We call those configuration files setting up -- 15 setting up the computer so you can use it later. 16 Q You were hired, then, as an independent 17 contractor? 18 A Yes. At Intel? 19 Q Yes. 20 A Yes. 21 Q When you were hired as an independent 22 contractor, is it your understanding -- or did you 23 have any understanding as far as there were any 24 differences in the way you would be performing or 25 doing your job than regular Intel employees? Schwartz D 41 1 A Yes. Because of my experience with Tandem, 2 I was already familiar with the differences between 3 contractors and employees. 4 A contractor is someone who is brought 5 in that already has a certain skill set that they can 6 offer to the client, and the basic meanings of 7 interaction is you are told -- I was told, "Here is 8 the problem. Go solve it with what you know." They 9 don't want to know how I did it to get there. They 10 just want the problem solved. 11 An employee -- 12 Q What -- why do you say they didn't want to 13 know how you solved the problem? 14 A They hired me to take care of the problem. 15 They didn't necessarily have the expertise to even 16 know the steps they would have to go through in order 17 to solve the problem. That's why they brought me 18 in. 19 Q Go ahead. You were starting to say about 20 employees? 21 A I was contrasting that with an employee. 22 An employee is a different matter. As an employee 23 you are brought in, and one of the resources -- 24 MR. TINTERA: Judge, could I ask a question 25 in aid of objection? Schwartz D 42 1 THE COURT: Yes. 2 MR. TINTERA: Were you an employee of 3 Intel Corporation? 4 THE COURT: No. 5 MR. TINTERA: He doesn't have knowledge as 6 an actual employee. If this is something he read, it 7 is hearsay. 8 MR. SUSSMAN: He works daily with 9 employees. 10 THE COURT: Overruled. Go ahead. 11 THE WITNESS: As an employee -- doesn't 12 matter whether it's Intel or not -- you are brought 13 in as someone that's part of the company. You are 14 working there from day-to-day. The company invests 15 certain resources and interests in you. They have 16 this sort of obligation, in a sense, to keep you on. 17 You are not going to be just cut at the end of next 18 Friday arbitrarily. You are part of the company. 19 So in that case, you are given a lot 20 more restrictions and detailed information, because 21 what they want to create is a person that works well 22 with the entire organization. 23 Q (By Mr. Sussman) Now, as a contractor, 24 were you required to attend all the meetings that 25 employees were required to attend? Schwartz D 43 1 A No. I wasn't allowed to go to certain 2 meetings because they were employee-only meetings. 3 Q When you were given specific things to do, 4 as a systems administrator, did Dave Riss or other 5 people ask you to go to them for permission or 6 authorization before you did each of your -- each job 7 that you did or dealt with each problem that you 8 had? 9 A No. Actually, in fact, basically, the 10 interactions I had with Dave -- "What is going on? 11 Anything I need to be aware of?" I would tell him 12 the most important problems I was working on, and he 13 would say, "Fine. Take care of it." My actual 14 day-to-day activities, except for the parts I would 15 tell Dave from time to time, he didn't know, and I 16 suspect he didn't care as long as results were being 17 accomplished. 18 Q When you were hired, was there -- at Intel, 19 did Intel -- was there a specific period you were 20 contracted to work for? 21 A Yeah, one thing about a contract, there is 22 an end date. There is always an end date out there. 23 There is always something that says, "This is how 24 long it will be." From my understanding, the typical 25 one was no more than six months. You were always Schwartz D 44 1 working on the short-term project. The concept of 2 the contractor is to bring them in for a certain 3 period of time to solve the problem that is there 4 now. 5 Q Well, now, after you started this contract 6 with -- at IWARP with Dave Riss, how long did you 7 stay at IWARP? 8 A Well, after the first six months, as it got 9 close to the end, he said, "Sounds like we will keep 10 needing you. Do you mind sticking around?" I said, 11 "Sure." We kept renewing the contract. It was two 12 years after I finished. 13 Q Was there a new contract written up? 14 A Generally, they would have a bureaucratic 15 form, and they would say, "He can keep working and 16 bill under the same file." There were extensions, 17 just more money and more end dates thrown into it to 18 make it longer. 19 Q During the time you were in that initial 20 two years at IWARP, were you, as a contractor, given 21 any specific security manuals from Intel, corporate 22 security policy? 23 A I don't recall any. 24 Q Were you given any memoranda showing any -- 25 describing any restrictions, company policy Schwartz D 45 1 restricting your activities on the -- you know, as a 2 systems administrator? 3 A There were conversations that happened all 4 the time. I didn't do my job in a vacuum. But as 5 far as specific, "Here is a document that needs to go 6 on," I don't recall anything formal like that. 7 Q Were you working there full-time? 8 A At IWARP, I believe, early on I was working 9 there somewhere between 30 to 60 hours a week. I 10 guess you would call that full-time. 11 Q As time went on, did you continue to be 12 there essentially full-time? 13 A There were other contracts outside of 14 Intel. Part of that is the IRS policy that you can't 15 keep working for one person entirely for the year; so 16 I would always find other things to do, projects to 17 work on, so that neither they nor I would be at risk 18 of having this relationship be claimed to be an 19 employee. 20 Q What other kind of contracts were you 21 doing? 22 A I was still doing the Astro project all 23 along. Actually, every time the tax laws changed, I 24 had to go down and change it, and you would be 25 surprised how much the tax laws change relating to Schwartz D 46 1 hauling gas. 2 Q I want to talk to you about a few things 3 you were doing as a systems administrator. 4 THE WITNESS: Could I get some water? 5 THE COURT: Sure. Since we have been out 6 here over an hour, we should take a break, and then 7 we will go into the noon hour. Let's take a 8 mid-morning recess, and we will continue on until 9 12:30. 10 Okay. Let's start again at about 11 quarter after. 12 You may step down. 13 (Brief recess) 14 THE COURT: Proceed, Mr. Sussman. 15 MR. SUSSMAN: Thank you, Your Honor. 16 Q (By Mr. Sussman) Mr. Schwartz, how are you 17 feeling today about testifying? 18 A I'm nervous. 19 Q Why is that? 20 A Well, this is the first time I have 21 testified like this before, and I'm sure that's a 22 natural reason to be nervous. 23 Q Well, slow down; okay, when you talk to the 24 jury so we can catch everything. 25 A Sorry. Schwartz D 47 1 Q Let's go back to kind of an overview here. 2 A Okay. 3 Q You were telling the jury you had a 4 contract that had you working at the IWARP section 5 for about two years. Okay. Just kind of to help us 6 with an overview, after -- tell us -- kind of run 7 through where you worked after the IWARP section 8 until the time your employment ended at Intel. 9 A Okay. I worked at IWARP until IWARP merged 10 with SSD late '91, early '92, right around December, 11 January. I continued to work under the same combined 12 IWARP and SSD until April or May of '92. 13 Now, before that contract ended, I had 14 obtained a contract through Bob Wilcox. I think I 15 picked that up in February of '92, and I was still 16 under that contract until November of '93; so those 17 were sort of overlapping and parallel. 18 Now, towards the end of '92 I came 19 back to SSD to work on the test automaton, the "TA" 20 that you heard referred to earlier, and that was 21 for -- officially, it was for Dave Riss, but my 22 contract boss was Herb Mayer. I think that was 23 toward the end of '92. Now, somewhere in there -- I 24 think it was late '92, maybe September, October, 25 something like that -- I was also contracted by Schwartz D 48 1 Clayton Kirkland out of Fulton, California, to 2 provide DNS technical support and architecture for 3 the entire company, and I was still under that 4 contract at the end of 1993. 5 Q As an independent contractor? 6 A Uh-huh. 7 Q Did you sign certain contracts? I want to 8 show you what's been marked for identification as 9 Defendant's Exhibit 106. 10 A Okay. 11 Q Take a look at that. See if that looks 12 familiar. Does it look familiar? 13 A Okay. Let me see what this entails here. 14 It looks similar to something that I signed pretty 15 much every time I have a contract with Intel. It's a 16 corporation purchase agreement for services. This is 17 sort of a -- every time I signed it, it was something 18 different, but this seems to be close to sort of the 19 general flow of what was in these contracts. 20 Q When you say it was sometimes different, 21 was there sometimes more documentation than that or 22 more likely less? 23 A This looks like about the thickest packet I 24 would have signed. Often it was smaller. 25 Q And this packet has the definitions, Schwartz D 49 1 including your definitions of independent contractors 2 and employees and the kinds of duties that -- and 3 control over your services in it? 4 A Yeah, this particular packet does have that 5 on it. 6 Q Were you familiar with that? 7 A I was familiar with that, not necessarily 8 from that page, but I was familiar with that. 9 Q And the -- now, the other document in front 10 of you, what has been received as Exhibit 103, what 11 is that? 12 A Well, this is the -- they call it the 13 famous 20-questions list, or at least this is some 14 derivation of that. The IRS, in testing whether a 15 person -- 16 MR. TINTERA: Objection, nonresponsive. 17 THE COURT: Sustained. 18 MR. SUSSMAN: Okay. 19 Q (By Mr. Sussman) You are familiar with the 20 document? 21 A I am familiar with the document. 22 Q That -- and that is the 20-questions list 23 that you filled out to show you're an independent 24 contractor, for the IRS. 25 Now, take a look -- is that your Schwartz D 50 1 signature at the end of the document? 2 A Let's see. It says "sponsoring manager's 3 signature." I don't see my signature on the 4 20-questions part. 5 Q But is that the kind of 20 questions -- 6 were you required to fill that out with the contracts 7 that you -- 8 A There may have been exceptions, but, 9 generally, every contract I signed we had to fill one 10 of these out. 11 Q All right. And in the text, what is it -- 12 what does the text include as far as the company's 13 ability to control your work hours, your -- the 14 method of your work and so forth? 15 A Well, down here it reads, "Company 16 determines order of work. Contractor relies on 17 company for total order and sequence of work." The 18 box here is checked "No." 19 Q That was the checklist for the IRS. On the 20 document that you previously identified that had the 21 definitions, was this also the Intel standards that 22 were set out in the contract? 23 A Let me see this for a second. 24 Q Uh-huh. 25 A Yes, this seems consistent with what I am Schwartz D 51 1 aware of about the contractors. 2 Q What were the limitations on the control 3 over you as independent contractor as defined by the 4 Intel contract statement policy? 5 A Well, here it says -- 6 MR. TINTERA: I object to his reading it. 7 It has already been offered into evidence. 8 THE COURT: It has not been received, I 9 don't believe. 10 MR. TINTERA: I think that is 103. 11 THE COURT: Has that been received? 12 THE WITNESS: No. It is 106. 13 MR. TINTERA: I see it as offered and 14 received. 15 THE CLERK: 103 has been received. 16 THE WITNESS: This is 106. 17 THE CLERK: It has been received. 18 THE COURT: Don't read it out loud. 19 Q (By Mr. Sussman) Without reading it, what 20 was, generally, the policy limitation, policy 21 restrictions on control over you as an independent 22 contractor? 23 A The way I understood it, very simply, they 24 could say what to do, but not how to do it. They 25 could control the goals, but not the methods. Schwartz D 52 1 Q Take a look at this one. Let me show you 2 what has been marked here for identification as 3 Defendant's Exhibit No. 157. What I am going to do 4 is go through a few of these invoices. 5 This -- why don't you just identify 6 what the document is. 7 A This is an invoice from me to Dave Riss for 8 the IWARP contract dated June 30, 1989. 9 Q What I want to do is go through a couple of 10 these, some of your invoices describing your work, so 11 we could talk about the way you did your work and who 12 you talked to about what you did. 13 A Okay. 14 Q On this one here, Exhibit 157, it mentioned 15 here, I think, on the second page that you put cables 16 in the ceiling. There we go. 17 A Okay. Yes, yes, it does. 18 Q Now, what would that be for? 19 A Well, my responsibilities in IWARP included 20 everything involved with being a systems 21 administrator. That is a really broad set of tasks. 22 It includes keeping the systems running. It includes 23 installing new systems, installing new software, and 24 handling emergencies. 25 Q Now, when you put cables in the ceiling, Schwartz D 53 1 did you -- did that alter the computer system? 2 A I would have to say so. 3 Q Did you have to get anybody's permission 4 before you did that? 5 A It was part of my contract. No, I didn't. 6 Q What about on this contract over here? 7 This is an invoice for work that Dave Riss stated -- 8 well, we have got this marked Defendant's Exhibit 158 9 for purposes of identification, and take a look at 10 this one. 11 A Okay. 12 Q Okay. And when is that one from? 13 A This is a contract to Dave Riss from me 14 dated October 19, 1989. So, again, it would be the 15 IWARP contract when I was being systems 16 administrator. 17 Q Now, on this particular one, it refers 18 here, on October 10, to doing networking. What does 19 that mean? 20 A That was probably my shorthand for talking 21 about setting up some configuration of the network. 22 In other words, the wires that connected the 23 computers together, they had to be told how to 24 connect to each other. The computers had to be told 25 how to connect to each other. I am sure that had Schwartz D 54 1 something to do with that, and if I wrote 2 "networking," that is what I meant. 3 Q Anybody specifically authorize you to do 4 that? 5 A It was authorized under my contract. I was 6 systems administrator. That was part of my job. 7 Q Over here there is a line that mentioned 8 "leased line debugging." What is "debugging"? 9 A Getting the bugs out. "Bugs" in computer 10 terms is something that is in the way, something that 11 is broke. A bug in a piece of software means it 12 doesn't do what you told it to do. It is kind of 13 like you have a sound in your car, and you drive and 14 turn to the right, and it always makes the same 15 sound. That is a bug in computer parlance. 16 "Debugging the leased line" means I 17 was looking at the telephone connection that Intel 18 and SSD shared out to the Internet and making sure 19 there was nothing wrong with it. Maybe somebody had 20 reported a problem with it, and I was trying to 21 figure out how to get that problem out of there. 22 Q Again, did you have to ask anybody's 23 authorization to do that? 24 A No, that was part of my job. 25 Q This is an invoice that has been marked for Schwartz D 55 1 identification as Defendant's Exhibit 159. 2 A Okay. 3 Q Here is a curious entry on February 28. 4 When is this one dated? 5 A The contract, again -- this invoice is 6 dated March 16, 1990. 7 Q Now, over here -- well, let me go to the 8 next one, too. Let me look at the one that has been 9 marked for identification as Defendant's Exhibit 10 No. 160. When is that invoice, and where is that 11 from? 12 A Again, it is invoiced to me -- it is 13 invoiced to Connie Woodworth. Connie took over as my 14 boss after Dave left to go to another group. So I 15 worked for Dave for a while, and then I worked for 16 Connie for a while, but I was doing the same job. 17 Q Now, I am looking at this invoice, these 18 two invoices here. 19 A Yes. 20 Q And I notice, like, there are numerous 21 references -- 22 MR. TINTERA: Counsel, could you refer to 23 them by number, or would you like me to stand up 24 there with you? 25 THE COURT: I am sure he will refer to them Schwartz D 56 1 by number. 2 MR. SUSSMAN: I am sorry. 3 Q (By Mr. Sussman) Defendant's Exhibit 4 No. 159? 5 A Yes. 6 Q Look at Defendant's Exhibit 159. There are 7 numerous references to "fires." There are also a 8 number of references to "fires" in your invoice of 9 November 16, which is Defendant's Exhibit 160. What 10 are you talking about? What do you mean by "fires" 11 here? 12 A In my role as systems administrator, I have 13 30 computer systems in this group, somewhere around 14 30 computers, that had to all be up and running, had 15 to all be talking to each other, had to all be 16 talking to the Internet, had to all have mail going 17 in and out for everybody to do their job there. 18 When any piece of it broke, it stopped 19 the work of the person that needed that piece to 20 work. So they would come to my desk and say, "This 21 is broke." Now, their work has stopped. They can 22 not continue to work; so it required urgent 23 attention. It required me looking at the problem, 24 diagnosing it immediately, drawing on my resources, 25 talking to whoever I needed to talk to to get the Schwartz D 57 1 information and to get it to work and do it. It was 2 an urgent situation, and I wrote those down as 3 "fires." 4 Q When you were dealing with a fire, did you 5 have to go to anybody to ask authorization, ask for 6 authorization for modifications you made to a 7 computer or network or system to fix the problem? 8 A As long as it was in the scope of being 9 BIIN systems administrator, I made all the changes 10 necessary to keep people working at their work 11 stations. 12 Q What was the focus of those jobs of putting 13 out those fires? 14 A Get it done now. 15 Q Now, I would like you to take a look at 16 what has been marked for identification as 17 Defendant's Exhibit No. 161. 18 A Okay. 19 Q That's an invoice. When was that dated? 20 A Well, this is an invoice dated 21 March 2nd, 1992, from me to John Gray. 22 Q Okay. On this particular invoice -- it is 23 Exhibit No. 161? 24 A Uh-huh. 25 Q There is reference to "security break-in Schwartz D 58 1 analysis." What was that all about? 2 A Security break-in analysis? Boy. 3 Q Uh-huh. 4 A Part of my work involved being sure that 5 the computer systems were secure, to pay attention to 6 information assets, because the entire company 7 resides -- the product of the company is what's 8 sitting on those disks. That's what the people are 9 producing. They are sitting at their work stations. 10 So protecting that information was my job, to look at 11 the situation, see what needed to be fixed, what 12 needed to be changed, what needed to be installed, 13 what needed to be altered in such a way that the 14 information was protected. 15 I don't know the specific action 16 related to these three words, though. 17 Q But when you talk about "security break-in 18 analysis," that typically would imply to you what? 19 A I can see I wrote this from some sort of 20 action that resulted from me analyzing something that 21 had happened in terms of a security incident, but I 22 don't know, from looking at that, what the details 23 were. 24 Q The entry on 2-18 also talks about 25 installing "TH" and tools. Schwartz D 59 1 A Where is that? Okay. 2 Q What is installing a "TH"? 3 A We weren't as creative as other groups in 4 coming up with names on computer systems. They used 5 letters of the alphabet. When we ran out of the 6 letters of the alphabet, we doubled up. All the 7 computers that were "T" something were similar 8 chassis of machines. We had TA, TB, TC. This was 9 TH. We must have gotten up to eight or nine of 10 those. 11 Q "Tools" -- what does that refer to? 12 A Once again, "tools," creating small 13 programs to assist either me or somebody else. 14 Q Did that alter the system? 15 A Absolutely. 16 Q When you made tools or when you installed a 17 new one -- 18 A Yes. 19 Q -- did anybody authorize you -- 20 specifically tell you that you were authorized to do 21 that when you performed those jobs? 22 A No, it wasn't authorized specifically. It 23 was authorized within the context of me being a 24 systems administrator. 25 Q Looking, now, at what I have marked for Schwartz D 60 1 identification as Defendant's Exhibit No. 163. 2 A Okay. 3 Q That is an invoice from when? 4 A It says April 15, 1992, and it's addressed 5 to Bob Wilcox, and the contract looks like the 6 contract -- the contract would be the one where I was 7 doing network administration and systems 8 administrator for Bob Wilcox out of Hawthorn Farms. 9 MR. SUSSMAN: Counsel, that is 163. 10 MR. TINTERA: Thank you. 11 Q (By Mr. Sussman) A couple places here you 12 say, "Play with Sun Net manager on a couple different 13 days." What are you talking about, the Sun Net 14 manager? 15 A It seems we systems administrators have 16 words that mean something different than other 17 people. "Play with" means getting your hands on, 18 find out what the parameters are, find out how it 19 wants to be installed. 20 Q Stop a second. "Find out what the 21 parameters are" -- what does that mean? What are you 22 talking about? 23 A A program doesn't just sit on a floppy 24 somewhere. The program has to be installed. It has 25 to be set up so people can use it. There are, Schwartz D 61 1 generally, a lot of configuration things, things you 2 have to tell the program about the environment in 3 which it is running in order for it to be effective. 4 Q The environment? 5 A Like the computer system you are on, the 6 way the network is set up, the -- we call it 7 "environment," everything around the program. 8 Q So it's getting a feel for the system and 9 how the computers in the system work? 10 A "Playing" generally refers to something 11 like that. 12 Q Now, I would like to show you what has 13 already been received as Exhibit 102. What is that, 14 just to refresh the jury's memory? 15 A This is an independent contractor 16 requisition, one of the many I signed while working 17 at Intel. 18 Q This was one you signed when you started 19 working for Bob Wilcox? 20 A Actually, no. I am looking to see if I 21 signed it anywhere. Yes, I signed it -- I didn't 22 sign the first page. That was the original request 23 to bring me in. It was an authorization from Bob 24 through his boss to actually be able to pay me. 25 Q Have you worked for Bob Wilcox -- that Schwartz D 62 1 contract had you doing what kind of work? 2 A For Bob Wilcox I had multiple 3 responsibilities. I was the toolsmith of the group. 4 That was my main asset overall was being a 5 toolsmith. Bob had hired me for that. 6 I was also administering the systems 7 in Bob's group, in other words, being a systems 8 administrator for the machines that Bob needed to use 9 in order for him to accomplish his task, and I was 10 also setting up software to monitor networks, in 11 other words, pay attention to the way the information 12 was flowing along the wires out at Hawthorn Farms. 13 Q Now, I would like to show you what we have 14 had marked for identification as Defendant's 15 Exhibit 164, another invoice. 16 A Yeah. 17 Q What is the date on that? 18 A Date is May 18, 1992. 19 Q Now, that talks about downloading GNU Emacs 20 and Perl. Is that all through the system? 21 A Yes. 22 Q Did anybody tell you you could do that? 23 A In the guise of the contract, in the scope 24 of the contract, that was one of the things I was 25 authorized to do. Schwartz D 63 1 Q Part of the everyday responsibilities? 2 A Right. 3 MR. SUSSMAN: That's the document, pages 4 65, 66, Counsel. 5 MR. TINTERA: Thanks. I am following 6 along. 7 Q (By Mr. Sussman) All right. Now, on -- 8 now, what I have marked for identification as 9 Defendant's Exhibit No. 165 -- 10 A Yes. 11 Q -- would you identify what this one is. 12 A Invoice, again, to Bob Wilcox dated 13 May 29, 1992. 14 Q And on this one, this refers to "Spectrum 15 installation"? 16 A Yes. 17 Q What was "Spectrum installation"? 18 A As I said, my responsibilities included 19 three things. The third thing was install network 20 software, software that would manage the network. 21 Spectrum is a program that analyzes the network. 22 Q Does that alter a system? 23 A Completely. 24 Q Did you have to get permission to do that 25 before you did it? Schwartz D 64 1 A No. It was part of my job. 2 Q Now, I am showing you what has been marked 3 for identification as Defendant's Exhibit No. 166. 4 A Okay. 5 Q That is an invoice dated what? 6 A June 30, 1992, to Bob Wilcox. 7 Q This refers to -- I see, "Assist Dan with 8 Cisco router setup." How did that fit into your 9 work? What was that about? 10 A As one of the people in the network group 11 for Hawthorn Farms, I occasionally had to assist the 12 users, the people that work there, in how to set up 13 their boxes, their computers, their systems, to play 14 together with everything else that was going on at 15 Hawthorn Farms. 16 Dan, I believe, was somebody that 17 worked there in another group at Hawthorn Farms, and 18 I was assisting him with their router, their machine 19 that allowed them to connect to their work stations, 20 to the network Intel had, the Intel Net. 21 Q Now, looking at what we have marked for 22 identification as Defendant's Exhibit No. 169 -- 23 A Okay. 24 Q -- we have an invoice dated 25 October 4, 1992? Schwartz D 65 1 A Yes. 2 Q This refers to "Spectrum debugging" and 3 "more Spectrum debugging." Again, what is 4 "debugging"? 5 A Removing the bugs, removing the things that 6 aren't working the way the system was configured. 7 Q Was that altering the system? 8 A Yes. 9 Q Did you have to ask permission before you 10 did that? 11 A No. 12 Q This one -- on this invoice, which we have 13 marked for identification as Defendant's Exhibit 14 No. 170, we see an, "Install X and local tools on 15 Memphis." What are you talking about? 16 MR. TINTERA: Now, Counsel, you lost me. 17 You identified the date, not who it was to. 18 MR. SUSSMAN: Page 77. 19 Q (By Mr. Sussman) Why don't you identify 20 that. 21 A It was to Bob Wilcox, again, 22 November 2nd, 1992. 23 Q We talked about "install X"? 24 A X is -- we are talking about the Xserver. 25 We talked about this yesterday. The tool -- it is Schwartz D 66 1 the package that allows programs to draw on the 2 screen and to access the keyboard and the mouse. I 3 was bringing a version of that from the Internet down 4 to the work stations at Hawthorn Farms and making it 5 work in the local environment. 6 Memphis is one of the names that 7 Bob Wilcox picked for his systems in his area. 8 Q Again, did that alter the computer system? 9 A Certainly. 10 Q Did you have to ask permission? Did you 11 get specific authorization from a supervisor before 12 you could do that? 13 A No. 14 Q Now, I am showing you what we have marked 15 for identification as Defendant's Exhibit No. 171. 16 A Okay. 17 Q Why don't you identify which particular 18 invoice this is. 19 A Well, another invoice to Bob Wilcox, 20 December 4, 1992. 21 Q And on this one, this refers to, I believe, 22 "Set up Duchamp as secondary NIS server." That is 23 referring to one of the computers? 24 A One of the work stations. Bob Wilcox 25 picked the name for it. Schwartz D 67 1 Q "Install and configure Duchamp." When you 2 set up Duchamp and you are setting up a secondary 3 source, does that change anything? 4 A Certainly. 5 Q Again, was that a change or alteration to 6 the system or network, something that you got 7 Bob Wilcox's specific permission for first? 8 A Not specifically. It was part of what I 9 was doing as part of my job as systems administrator 10 in that group. 11 Q You previously mentioned installing Cisco 12 routers earlier. That deals with communication 13 inbound and outbound from the Internet? 14 A Cisco routers are in use all over Intel. 15 They are also used as the firewalls between Intel and 16 the Internet. 17 Q When you work on or install Cisco routers, 18 does that alter the computer system or the network? 19 A Yes. 20 Q Did you specifically have to get permission 21 or authorization to do those? 22 A No. 23 Q Now, I would like to show you what has been 24 marked for identification as Defendant's Exhibit 25 No. 174. This refers -- again, please identify which Schwartz D 68 1 invoice this is and to whom that was directed. 2 A Again, an invoice to Bob Wilcox regarding 3 my contract with Hawthorn Farms, and the date here is 4 March 4, 1993. 5 Q Okay. This one talks about getting manray 6 installed and reconfigured. Are these actions which 7 required an alteration to the system? 8 A Yes, most definitely. 9 Q Were these things you had to go to 10 Bob Wilcox first in order to get authorization or 11 permission for? 12 A No. 13 Q Now, we have an invoice dated -- I am 14 sorry. We have what has been marked for 15 identification as Defendant's Exhibit 176? 16 A Yes. 17 Q And here we are talking about "compile and 18 install latest GNU" -- I am sorry. Thank you. 19 Please identify what this document is. 20 A Got the pattern down. I figured I better 21 do that first. It's to Bob Wilcox, dated, 22 September 24, 1993. It is an invoice from me 23 relative to my contract at Hawthorn Farms. 24 Q Now, on this particular invoice, it talks 25 about restructuring directories or compiling and Schwartz D 69 1 installing GNU software, more tools. Were these 2 things that changed the system or changed the 3 computers? 4 A Yes. 5 Q Again, what permission or authorization did 6 you have to get before you did that? 7 A Nothing specifically. It was under my 8 normal work that I would do as systems administrator 9 for Bob. 10 Q And that is systems administrator kind of 11 work? 12 A Yes, all that, yes. 13 Q Now, I would like to show you what has been 14 marked for identification as Defendant's Exhibit 15 No. 105. 16 A Okay. 17 Q Would you identify what this document is. 18 A It's an invoice sent to Bob Wilcox, 19 December 9, 1993. 20 Q Was this the actual invoice that was sent 21 to Mr. Wilcox? 22 A These invoices were sent via my computer 23 system via fax modem to Bob's fax machine. 24 Q What is this document? 25 A A printout from my computer through that. Schwartz D 70 1 Q What is the date? 2 A 25 September to 25 November 1993. 3 Q That was the last work you did for 4 Bob Wilcox? 5 A Yes. 6 Q October 4? 7 A October 4, 1993, "configure Snoopy." 8 Q What does that mean by "configure Snoopy"? 9 A Configuring a system, making it work with 10 everything around it, telling where the network is, 11 who would be using it. It could mean a lot of 12 things. 13 Q Is that type of work done by a systems 14 administrator or not? 15 A Generally, by a systems administrator. 16 Q Is that the same Snoopy computer we have 17 heard a lot about, sort of the middle of this case? 18 A I would say yes. 19 Q Okay. And did you get any specific 20 authorization, or were you told to configure Snoopy 21 by anybody before you did that? 22 A No. 23 Q Were you told not to do anything with 24 setting up Snoopy, yet, because Mark Morissey was 25 taking over the job as systems administrator at that Schwartz D 71 1 time? 2 A I am sure I coordinated the configuration 3 with Mark. 4 MR. SUSSMAN: Your Honor, at this time I 5 offer Defendant's Exhibits 105, 176 -- let's see, 6 164, 174, 161, 170, 169, 166, 165, and 176. 7 MR. TINTERA: Are those all the invoices 8 for the time period? 9 MR. SUSSMAN: These are. 10 MR. TINTERA: I know they are invoices. 11 Are they all the invoices? 12 MR. SUSSMAN: They aren't all the invoices. 13 MR. TINTERA: I don't object. 14 THE COURT: Okay. Not necessarily in 15 order, but in order recited -- 105, 161, 164, 174, 16 171, 170, 169, 165, 166, and 176 are all received. 17 (Whereupon, Defendant's Exhibit 18 Nos. 105, 161, 164, 165, 166, 169, 19 170, 171, 174, and 176, being 20 invoices, were offered and 21 received into evidence.) 22 MR. SUSSMAN: Thank you, Your Honor. 23 Q (By Mr. Sussman) Now, Mr. Schwartz, while 24 you were there as an independent contractor, were you 25 aware of the policy, or did anybody tell you that Schwartz D 72 1 Intel had a policy that independent contractors were 2 not supposed to be systems administrators? 3 A I only became aware -- no, no. 4 Q Were you aware or informed in any way of 5 any policies that independent contractors were not 6 supposed to have responsibility for systems 7 security? 8 A No. 9 Q Did you, in fact, have responsibilities for 10 systems security at any time? 11 A Yes. 12 Q Now, I want to go back and ask -- to talk 13 about the work that you were doing at the IWARP 14 division. 15 A Okay. 16 Q You are a systems administrator, and while 17 you were there, was part of your responsibility as a 18 systems administrator for dealing with systems 19 security? 20 A Yes, I was. 21 Q What kind of things did you do to protect 22 systems security or test it? 23 A Well, there's a lot of things you do to 24 make sure systems are secure. The first and 25 foremost -- I can't say first and foremost. Maybe Schwartz D 73 1 they are equally important. 2 I would ensure that users' passwords 3 were selected properly to make sure someone couldn't 4 just walk up to a terminal and guess someone else's 5 password. 6 I made sure the systems themselves 7 were not able to be changed by users, the parts that 8 have to stay constant, like, the operating system, 9 which is the part of the system that runs -- oh, 10 boy. Let's see -- the part of the system that has to 11 be there in order for anybody to do their job. I 12 would make sure that would stay protected so users 13 couldn't change that. 14 I also had to make sure the routers 15 were set up properly. I also had to ensure the users 16 were just generally aware of the kinds of stuff they 17 were dealing with, that information in those machines 18 was the product that this company was producing. 19 Q Now, the machines at IWARP, were they 20 information -- was that actually product 21 information? 22 A Yes. 23 Q Now, is there -- was there a distinction 24 between the kind of information that might have been 25 in some machines and others in terms of either Schwartz D 74 1 product information or other kinds of information? 2 A Well, yeah. Most of the machines at IWARP 3 were all connected together in such a way that it 4 didn't matter whether you were sitting at this desk 5 or this desk or that desk or that desk. They all had 6 access to the same data, and on that data was the 7 product. So for the most part that was all connected 8 together, but we did have other machines that didn't 9 have access to that same data. They were off on 10 their own. 11 Q When you say that information was the 12 product, what do you mean by "the product"? 13 A The work output of the IWARP group is a 14 microprocessor. I mean, you heard of the Pentium and 15 386. Those are microprocessors. The IWARP group was 16 making another kind of microprocessor that was 17 particularly good at certain types of things. The 18 engineers were actually designing how the wires get 19 together on the microprocessor, and another group 20 with IWARP was designing the software, the computer 21 programs that would eventually run with this 22 microprocessor. 23 Q Was your -- while you were dealing with 24 security there -- again, were there any specific 25 programs or procedures or practices that you used to Schwartz D 75 1 make sure that the security was what you wanted it to 2 be? 3 A Well, as I said, towards the end of my 4 contract in IWARP, I discovered on the net, on the 5 Internet, that there was a program available called 6 "Crack" that would take and attack the password file 7 and look for passwords that it could get. 8 I started running Crack so to at least 9 achieve the same level of security as someone from 10 the outside who might also have access to Crack. If 11 the bad guys have that tool, you know, we at least 12 have to be as secure as they are if that tool is 13 readily available. 14 Q When you say "the bad guys," what do you 15 mean? 16 A Information thieves, people that want to 17 take information and appropriate it. 18 Q Now, was this program, Crack, set up in 19 order to get into -- guess passwords to get into 20 systems? 21 A I was using Crack in its original, intended 22 form, which is as a tool to -- well, the motivation 23 for writing Crack originally was that the bad guys 24 have tools kind of like this already anyway, and so 25 the guy that created Crack, Alex something -- I don't Schwartz D 76 1 remember his last name. He is over in the UK 2 somewhere -- wrote this program so the rest of us -- 3 the good guys -- could use it and test our own 4 security using a similar technique to what the bad 5 guys were known to be using anyway. 6 Q So did you start using that on the 7 passwords and the password file in the group you were 8 administering? 9 A Yes, I started running Crack on a regular 10 basis against the current IWARP password file. I 11 think I had it set up as some automatic job. It was 12 running frequently, and when it found a bad password, 13 something that was guessible by Crack, something that 14 was either a piece of the name of the user or maybe 15 something out of a dictionary or maybe a dictionary 16 word backwards, something that was easily guessible, 17 it mailed me a message -- electronic mail we are 18 talking here -- mailed me a message and also mailed 19 the person who selected that password letting them 20 know their password was dangerous, insecure. 21 Anyone could take Crack from the 22 Internet, make it work on the machine there, and run 23 it the same way I had run it. The password 24 information is not private. It is available to 25 anyone on that system. Anyone in the group could Schwartz D 77 1 have done what I did and discovered the same 2 password. That is why I ran Crack to make sure there 3 was no possibility that anyone in the group might 4 eventually or could misappropriate the information. 5 Q Now, did you also have any other programs 6 that would keep you up to date on who had passwords 7 and who was using them and how often they were being 8 used? 9 A Well, there's the standard tools that come 10 along with the Unix operating system. You can check 11 when people logged in, logged out. What I mean, when 12 somebody sits down to the terminal and says, "Hi, my 13 name is Randal. Here is my password," that is called 14 "logging in." The system records that. It puts a 15 little entry into a file somewhere saying, "Hey, I 16 logged in." 17 When you leave the system and leave it 18 open for the next person to use it, it records that 19 as a log-out. The system is always tracking all of 20 those. I had some tools that I wrote that would go 21 through all the systems and look for any users that 22 had not logged in in a really long time. That tool 23 would warn me, then, that maybe somebody has left the 24 group without telling us systems administrators, and 25 it's important to know that. If some user I.D. is Schwartz D 78 1 not using, is that person gone? If he is, we should 2 turn off his access. 3 Q Is that a tool you wrote or or used 4 commonly amongst systems administrators at Intel? 5 A That is a tool that I wrote. 6 Q In addition to doing the systems 7 administrator's work that involved security, did you 8 also do work invloving access to the network, network 9 and communication from IWARP to outside? 10 A Yes, yes. Part of my specific 11 responsibility as one of the IWARP systems 12 administrators -- there were actually a small group 13 of us, two or three or four, depending on how far 14 along in the contract it was -- one of my specific 15 responsibilities was to help administer the 16 connection that we and SSD shared to the Internet, 17 the Cisco router at our end and the telephone line 18 that connected us to, I believe -- actually, it 19 was -- I believe it was Sequent Computer Systems that 20 provided the local connection at the other end. 21 Q One thing I forgot to ask, as a systems 22 administrator there -- I am sorry. Let me rephrase 23 that. There has been some discussion about what 24 "root access" is. Just again, just to refresh our 25 memories, what is that? How is that -- is that Schwartz D 79 1 something that was important or necessary for you as 2 a systems administrator? 3 A As a systems administrator -- let me back 4 up a step. In Unix, the operating system, Unix, 5 files are owned by a particular user. Now, it's up 6 to that user whether he wants to make that file 7 available only to himself or to everyone. I am 8 simplifying a little bit here. I hope you appreciate 9 that. 10 Anyway, he can make it available 11 either to himself or to everyone. So associated with 12 each file is a set of permission -- permission 13 information. Let's just call it permission 14 information. 15 Now, if a person created a file and he 16 set that file up so that he was the only one that 17 could read it, then if I, as a systems administrator, 18 came along and wanted to put everything on the disc, 19 everything that was being stored by the computer, 20 onto a backup tape so that if the disk blew up 21 tomorrow, I could still recover everything from the 22 tape, I wouldn't be able to read his file, because he 23 has told the computer, "I am the only one that can 24 read that file." So by necessity, there is a user 25 called "root." This user bypasses all permissions Schwartz D 80 1 within the computer system. It allows the root user 2 to make records of everything that is on the system, 3 to remove files, to read files, and there is also a 4 few other operations of the system that are 5 restricted only to root. 6 For example, creating a user account, 7 creating the ability for me to log in is restricted 8 strictly to the root user. Other users cannot create 9 other users. Only root can create users on the 10 machine. 11 Q While you were systems administrator, did 12 you have root access to the -- 13 A To everything at IWARP? Yes. 14 Q Did you receive any memoranda, any policy 15 statements that told you you could not use root 16 access to look at files of the users within your 17 group? 18 A I don't recall any memoranda. 19 Q Now, were you aware of any policies at that 20 time that you were working on administering the 21 network configuration or the access to the Internet 22 at IWARP about allowing -- that restricted or -- 23 inbound communication or inbound telnetting was not 24 permissible? 25 A I was aware of a corporate policy that we Schwartz D 81 1 used as a guideline that established that inbound 2 telnet was dangerous. 3 Q Now, was that policy or was that guideline 4 in effect when you were working on the connections 5 between IWARP and Carnegie e-mail? 6 A I don't know exactly when that was brought 7 to my attention, but it was brought to my attention 8 by Seth. 9 Q What were you asked to do? What were you 10 asked about connections from IWARP -- giving -- 11 giving access to the Internet for outbound and 12 inbound communication? 13 A When Dave Riss stopped being my manager, he 14 was still managing the part of IWARP that was making 15 the software, the programs that would run on this 16 chip, run on the microprocessor. Some of his people 17 were working very closely with their counterparts at 18 Carnegie-Mellon University. So through some series 19 of conversations with me and Dave and the people in 20 his group, we came up with a strategy of allowing an 21 inbound telnet on a nonstandard place. In other 22 words, when you have telnet to a machine, you try to 23 get to it at a certain port, port No. 23. What we 24 decided -- 25 Q What is the significance of port No. 23? Schwartz D 82 1 A That is where everybody expects to find 2 something that can be connected to for a telnet 3 connection, sort of like this is the rendezvous 4 place. If you are going to telnet to a machine, that 5 is what you telnet to. It is built into the 6 software. 7 Q Significantly, was there a port e-mail went 8 to? 9 A Port No. 25. These were all magic numbers 10 we had to remember as systems administrators. 11 Q What was the strategy? 12 A Our strategy, "Let's not put an inbound 13 port to port No. 23." That was real dangerous. We 14 decided to put a port at 2,003, absolutely mnemonic, 15 but at least it was away from port 23. 16 Q And what would that allow to happen? 17 A That means that people at CMU, or from 18 anywhere, that were aware of this connection could 19 connect from the outside into IWARP to a specific 20 machine that was watching at port 2,003. When they 21 got there, they would be confronted with a standard 22 log-in prompt. They would still have to provide the 23 proper user name and password in order to get through 24 into the actual computers. 25 Q Why was that procedure, that setup, Schwartz D 83 1 necessary? 2 A It was made clear to me by Dave and his 3 group they were working closely with the people at 4 CMU, and from time to time the people at Cornell Oaks 5 would have to fly back to Pittsburgh, and so they had 6 to be able to get back to their data here in order to 7 keep the project moving. Either they were working on 8 things here, or when they were there, they discovered 9 some part of a conversation there they needed to look 10 at. To keep the work moving, we set the system up. 11 Q You mentioned you learned about some things 12 from Seth Bradley. At some point did he have a 13 discussion with you about changing that, or there was 14 a policy against that? 15 A Yes. Seth looked at the setup, and even 16 though I had set it up so it was at a nonstandard 17 port -- so we had taken that security precaution to, 18 at least, make it difficult to find -- he said that 19 still didn't comply with his interpretation of the 20 security policy. 21 Q Why was that? 22 A The way he read it was it just didn't fit 23 what he believed to be true. It was inbound telnet, 24 in general, that was being restricted. 25 Q Was the concern -- was it anything -- Schwartz D 84 1 anyway, so what changes did you make to that system? 2 Did you just eliminate the inbound telnetting? 3 A What Seth and I came up with was a plan to 4 have the data on another system, only the data that 5 they would probably need while they were over in 6 Pittsburgh, or only the data the people in Pittsburgh 7 probably needed. We set it up so they could connect 8 to that machine. It was not a huge product data, but 9 it was a small setup, and it would limit the damage 10 if there was a break-in. 11 Q Why was it necessary to continue the 12 two-way -- why did you continue the inbound 13 connections? 14 A The job needed to get done. 15 Q Were there any other ways to get the 16 inbound -- 17 A I believe at the time there was a modem 18 connection between CMU in Pittsburgh and IWARP, but 19 it did not allow interactivity. 20 Q What do you mean by "interactivity"? 21 A What I mean by that is the modem connection 22 allowed them to send electronic mail back and forth, 23 but someone sitting in Pittsburgh can't say, "Oh, 24 what was in this file over here?" or, "Oh, let me 25 move these three lines around in this file and start Schwartz D 85 1 the process again to see if it works now." All they 2 could do was send a whole file over, take a whole 3 file back, send a piece of e-mail back, take a piece 4 of e-mail back. It was a very slow mechanism to be 5 able to do their work. 6 Q Now, you -- you are describing working at 7 IWARP with sort of general corporation policy to be 8 treated as guidelines -- 9 A Uh-huh. 10 Q -- that were not consistent. Would you 11 describe for the jury what that working environment 12 at IWARP was like, its relationship to SSD and the 13 rest of the company. 14 A Well, IWARP, to me, seemed like every other 15 place in Intel. They all seemed to be these little 16 pods. They are, like, their own little kingdom, 17 their own little domain, and they used the corporate 18 guidelines as guidelines, but they still establish 19 the policies here -- how to set up the wires, how to 20 set up connections to Internet, how often to do the 21 backups. We listen to the corporate guidelines, but 22 this little pod seemed to have some degree of 23 autonomy on its own. 24 Q Was there some change on that when SSD -- 25 well, IWARP merged into SSD? Schwartz D 86 1 A Our pod merged into the SSD pod. We had to 2 do things the way SSD had done them. It was 3 different, but different from us and still seemingly 4 different from -- well, it was just different. 5 Q Now, when -- you mentioned this merger 6 occurred the end of '91, beginning of '92? 7 A Uh-huh. 8 Q How did things change for you when this 9 merger occurred, in terms of your responsibilities, 10 the work you were doing, and who was reporting to 11 whom? 12 THE WITNESS: Could I get some more water? 13 THE COURT: Sure. 14 THE WITNESS: Thank you. 15 How did it change the end of '91, 16 beginning of '92? 17 Q (By Mr. Sussman) Yeah. When IWARP became 18 a part of SSD, what changes took place? 19 A IWARP split in two different ways. People 20 responsible for the actual chip went one way and 21 became SCIC, S-C-I-C. I don't know what it stands 22 for. They make up acronyms all the time. And the 23 group that was in charge of the software, Dave Riss' 24 group, went the other way and merged in with SSD. 25 The group split up in two different directions. Schwartz D 87 1 My -- Seth Bradley, who was my 2 coworker in IWARP, went with SCIC to be the 3 administrator for that group, and I stayed in IWARP 4 as the remaining systems administrator as we were 5 merging into SSD. 6 Q How long did you remain at SSD after this 7 merger occurred? 8 A Well, the merger was happening, as I said, 9 towards the end of '91 and beginning of '92. 10 My supervisor during that period of 11 time was John Gray. John had told me that starting 12 January 1st, 1992, that that was my last six-month 13 stint; so that would be the end of my contract. I 14 was very clearly told that my contract would be out 15 in -- whatever six months after January 1st is, May 16 or June -- did that answer it? I am lost. 17 Q Now, over the next several months, what 18 kinds of things were you working on? 19 A I was assisting the SSD systems 20 administrators to move IWARP in its process of being 21 absorbed by SSD. I was changing the way the computer 22 systems were configured; so it was a humongous 23 setup. That was to have it all the same. 24 Q Who were you working for? 25