1 IN THE CIRCUIT COURT OF THE STATE OF OREGON 2 FOR THE COUNTY OF WASHINGTON 3 4 STATE OF OREGON, ) ) 5 Plaintiff, ) ) 6 vs. ) No. C9 CR ) 7 ) ) 8 Defendant. ) 9 10 11 TRANSCRIPT OF PROCEEDINGS 12 13 BE IT REMEMBERED THAT on the day 14 of, 1996, the above-entitled matter came on for 15 Hearing before the HONORABLE ALAN C. BONEBRAKE, a 16 Circuit Court Judge. 17 18 APPEARANCES 19 MR. THOMAS J. TIN Deputy District Attorney 20 Representing the Plaintiff 21 MR. Attorney at Law 22 Representing the Defendant 23 24 25 1 WITNESS INDEX 2 3 FOR THE DEFENDANT: 4 5 Richard Cower 118 119 120 6 Richard Pierce 138 144 145 7 8 FOR THE STATE: Direct Cross ReD ReX 9 10 James Lilley 77 11 Paul Lazenby 119 123 132 134 12 13 FOR THE DEFENDANT: 14 15 Richard Cower 98 16 17 18 19 20 21 22 23 24 25 76 1 AFTERNOON SESSION 2 BEGINNING AT 1:15 P.M. 3 SEPTEMBER 20, 1994 4 5 THE COURT: Proceed. 6 MR. SUSSMAN: Detective Lilley -- 7 MR. TINTERA: Before we start, Mr. 8 Pierce has brought up an interesting point. If 9 defense counsel wishes to call him as a witness 10 today, he may be better placed if witnesses are 11 excluded in the hall. 12 MR. SUSSMAN: That's true. We were 13 dealing with the discovery things and I had 14 forgotten and when we got started, I did forget 15 about that because we had asked that witnesses be 16 excluded for the substantive motions. 17 THE COURT: Okay, Mr. Pierce, you'll 18 have to remain outside. 19 Proceed. 20 21 22 23 24 25 77 1 CROSS-EXAMINATION 2 3 BY MR. SUSSMAN: 4 Q Detective Lilley, you had met with the 5 people at Intel Corporation the day that you served 6 the warrant? 7 A That's correct. 8 Q And you responded to a report from the 9 Intel people that one of their employees had been 10 illegally using a password cracking program? 11 A That's correct. 12 Q So when you met with them, you went out 13 there to respond to the -- to report the crime? 14 A That's correct. 15 Q When you met with them, you met to 16 prepare a search warrant to search for evidence of 17 the reported crime? 18 A First I met with them to determine 19 whether, in fact, a crime had been committed or not 20 and then determined what we would be looking for 21 and what we would need to look for in the way of 22 evidence and then I started the affidavit. 23 Q Who was present at that meeting? 24 A Myself, Mr. Stites, Mr. Cower, 25 Mr. Morrissey, Mr. Tintera, Mr. Pierce and 78 1 Mr. Kent, I believe, at least at one point. Then I 2 was later joined by Detective Lazenby and -- 3 Q You were later joined by whom? 4 A Detective Lazenby. He was somewhere else 5 and slow in responding. The other person that was 6 there is Janice, I forgot her last name, but she's 7 mentioned here in the affidavit. Janice Baldwin. 8 Q From Intel? 9 A From Intel. 10 Q You've testified that you have very 11 little understanding or training and expertise in 12 the area of computers. 13 A That's correct. 14 Q Did you bring anybody from -- Was there 15 anybody from the Washington County Sheriff's Office 16 who is expert in this area? 17 A Not expert, no. Detective Lazenby has 18 considerably more experience and training in 19 computers and in forensics, the forensic aspect of 20 computers. I can't say whether he's an expert in 21 that or not, but he has a lot more experience in it 22 than I do and that's one of the reasons that he 23 responded to Intel, was to help me out with the 24 more technical aspects of it. 25 Q Who is Alan Watson? 79 1 A I believe he's a police officer. He's 2 assigned to our scientific investigation branch, 3 property evidence, SI, and he also is what I would 4 term computer literate and I believe is a member of 5 IASIS, which is a law enforcement of computer 6 association that specializes in the criminal and 7 forensic aspects of computer crime. 8 Q And he's a member of the Washington 9 County Sheriff's Department? 10 A That's correct. 11 Q And was he asked to attend this meeting? 12 MR. TINTERA: Objection. I thought 13 this afternoon we were talking about statements of 14 the defendant. I don't see that this is relevant 15 to that. 16 THE COURT: Mr. Sussman, these are 17 areas that you may wish to inquire into ultimately, 18 but at this point, unless you can tell me how it 19 relates to the admissibility of statements that are 20 made, I'll sustain the objection. 21 MR. SUSSMAN: Just trying to 22 determine at this point if this person who may have 23 been an expert, and within the force, is available 24 and not available and how it relates to the 25 decision to have the Intel people participate in 80 1 the conversations. 2 THE COURT: Well, still, that's 3 remote from the question of the admissibility of 4 the statements. 5 BY MR. SUSSMAN: 6 Q So your assessment that a crime was made 7 was based upon your conversation with these Intel 8 employees? 9 A That's correct. 10 Q And you swore the warrant and -- 11 A That's correct. 12 Q And you asked several of these Intel 13 people to accompany you -- 14 A Yes. 15 Q -- in execution of the search warrant 16 and -- 17 A That's correct. 18 Q -- to assist with the search? 19 A No, not in the pure sense of the word. 20 Not to be going through and searching the house for 21 items listed on the search warrant as a police 22 officer would. That was not why they were invited. 23 They were invited, as I previously testified, for a 24 couple different reasons: One of them, for want of 25 a better analogy, almost along the lines of having 81 1 an interpreter if you were going to be interviewing 2 people who spoke a different language. Computers 3 have a language of their own. 4 At one point, we were going to be 5 employing them as an interpretive resource for 6 myself. Also in helping identify items of 7 evidentiary value, assist in maintaining the 8 integrity of that evidence and also to safeguard 9 against inadvertent damage to personal property 10 that was not necessarily covered in the search 11 warrant but which we would ultimately be held 12 liable for if it were damaged. 13 Q In that regard also then, to assist you 14 like an interpreter in your interrogation? 15 A To assist me. I wouldn't call it an 16 interrogation, for one thing. It was an interview 17 and never anything more than that. And to assist 18 me in understanding the answers that I was being 19 given by Mr. Schwartz. 20 Q In your interview with the person who was 21 a suspect, at that point, in a crime? 22 A Yes. 23 Q When you got to Mr. Schwartz' residence, 24 you knocked on the door and announced that it was 25 the police? 82 1 A No. We waited for someone to answer the 2 door. 3 Q And then did you announce that you were 4 the police when the door was answered? 5 A Yeah. When Mr. Schwartz' brother 6 answered the door, we identified ourselves as 7 police officers. 8 Q How did you do that? 9 A Words to the effect that, "we're police 10 officers and we're here to serve a search warrant." 11 Q Did you show a badge? 12 A I'm sure I did. I normally do. In 13 casual clothing that I was wearing, we would not be 14 readily identifiable as a police officer. 15 Q Did you ask if there was anybody else in 16 the house? 17 A I believe I asked if Mr. -- if Randall 18 Schwartz was in the house because I had not met him 19 and I did not know what he looked like. 20 Q Where was Detective Lazenby when the door 21 was answered? 22 A Physically? 23 Q Physically, yes. 24 A I couldn't tell you. I knocked on the 25 door and everybody else was behind me. 83 1 Q Everybody else means how many people? 2 A I would have to go back over all the 3 names. Are you talking about in total, police 4 officers plus Intel people? 5 Q People who were at the door when you went 6 to the door. 7 A Myself and other police officers for the 8 initial contact. I don't believe that I had the 9 Intel people present at the time of initial contact 10 and it's not a complete list, but I know the people 11 out there assisting me was Detectives Salsbury, 12 Bowman, Lazenby, Danielson, I believe, and there 13 may have been others. I don't recall now all of 14 who was there. 15 Q So there were at least five officers at 16 the door? 17 A Four to five, yeah. 18 Q And you identified yourself as police and 19 announced that you had a search warrant? 20 A I advised him that we had a search 21 warrant, yes. 22 Q And did you advise him what that meant, 23 that you had the warrant to come in and search the 24 house? 25 A No. I said, "We have a search warrant. 84 1 I'd like to come in and talk to Mr. Schwartz and 2 explain to him the circumstances." 3 Q And regardless of Mr. Schwartz' answer, 4 with a warrant, you were there to search the house? 5 A If we had been denied admission, we would 6 have, under authority of the search warrant, 7 entered the house, certainly. 8 Q Did you let him know that? 9 A No, I didn't. 10 Q When you went into the house, did any of 11 the officers go upstairs to look for other people? 12 A I believe so. 13 Q Who was that? 14 A I couldn't tell you. 15 Q You can't remember? 16 A I don't remember which specific officers 17 went up. They were police officers that went up to 18 search. 19 Q Did any of the officers bring anybody 20 downstairs? 21 A Not that I can recall. 22 Q When both Schwartz brothers were present 23 in the living room, they were both advised of their 24 Miranda rights? 25 A That's correct. 85 1 Q That was one of the first things that you 2 did? 3 A Immediately after the reading of the 4 warrant, yes. 5 Q And that, of course, is the warrant that 6 has been Exhibit -- have you seen Exhibit 2? 7 A No, I haven't. 8 THE COURT: I'll hand it to him. 9 MR. SUSSMAN: Thank you, Your Honor. 10 THE WITNESS: That's correct. 11 BY MR. SUSSMAN: 12 Q How long after you entered the house and 13 read Mr. Schwartz and his brother their rights did 14 you and my client go to the back room so that you 15 could talk to him? 16 A I can't give you a definitive answer to 17 that. It would have been within five minutes or 18 so. There are certain logistics to be accomplished 19 before we settle down and start talking. We need 20 to make sure that people know what their jobs are 21 and need to make sure that we've got everything in 22 place to do so that they need to know what they 23 need to do and just some logistical moving around 24 of people and evidence kits so we can seize 25 evidence, but surely within five minutes. 86 1 Q How long was Mr. Schwartz in this room 2 during the course of the questioning? 3 A Again, I'd have to estimate, but probably 4 hour to hour and-a-half, possibly even longer. 5 Q Did he remain there throughout the entire 6 search? 7 A I believe there were occasions when he 8 needed to use the bathroom. There was an occasion, 9 I think, when he left to use the bathroom. He was 10 certainly free to come and go. If he had a 11 legitimate reason to leave, he was afforded that 12 opportunity. 13 He was not -- It was not a custodial 14 situation. I was not concerned about him being a 15 threat to my safety or anybody else's safety. He 16 pretty much had the run of the house if he wanted 17 it. We would probably have accompanied him and, as 18 I said, I believe he went to the bathroom on one 19 occasion or he went to the kitchen for something, 20 but I can't recall exactly. 21 Q Did you accompany him anywhere outside 22 the room? 23 A Probably. I don't recall specifically. 24 Q Is that something that you would have 25 noted in your report, notes or report? 87 1 A Not necessarily. 2 Q Do you have a specific recollection of 3 doing that? 4 A No. 5 Q Do you have a specific recollection of 6 any of the other officers escorting Mr. Schwartz 7 outside of that room at any time? 8 A No, I don't. 9 Q Do you have a specific recollection of 10 Mr. Schwartz asking to leave the room to go to the 11 bathroom? 12 A I seem to recall at least on one occasion 13 Mr. Schwartz requesting to leave the room and 14 leaving the room. The purpose for that, I'm not so 15 sure on. It seemed to me it was either to use the 16 bathroom or possibly to go into the kitchen. In 17 fact, I'm not sure there wasn't at one point some 18 concern about the laptop and the phone line that it 19 was hooked up to and possibly needing help with 20 that. I can't be more specific with that. 21 Q Do you recall him asking to use the 22 bathroom to take a shower? 23 A Not specifically, no. 24 Q Let me be more specific. Did 25 Mr. Schwartz at any time ask to be able to take a 88 1 shower before you all left? 2 A He may have. I have no recollection of 3 that. 4 Q And you have no recollection of any 5 response to that kind of question if it was asked? 6 A No. 7 Q You mentioned in your direct that there 8 were people coming in and out during the course of 9 the questioning of Mr. Schwartz in this back room. 10 A That's correct. 11 Q Initially, you started questioning by 12 yourself? 13 A I believe I may have, yes. Let me 14 qualify that. I don't believe I would term that as 15 questioning as much as telling Mr. Schwartz, 16 filling Mr. Schwartz in as to who we were, why we 17 were there, what the purpose of it was and in 18 effect what was going to take place. It was mainly 19 just to bring him up to speed as to why we were 20 there. 21 Q What did you tell him about why you were 22 there? 23 A Told him we had been advised of some 24 irregularities at Intel that he was involved in, 25 that we wanted to talk to him about that and that 89 1 we were also looking for items of evidence that was 2 set out in the search warrant that we would be 3 looking for. 4 Q So you told him that he was, that he was 5 accused of committing a crime? 6 A I don't believe I ever used those words, 7 no. 8 Q What words did you use? 9 A Words to the effect that he -- that we 10 had received a report of irregularities in his 11 activities at Intel beyond the scope of his 12 duties -- those are not the words I used, but to 13 that effect -- and we were here to talk to him 14 about that and to see what explanation he had 15 regarding that. 16 Q And to search for evidence of these 17 irregularities? 18 A And to search for evidence. I don't 19 believe I elaborated as to what the evidence was at 20 that point other than what I read to him in the 21 warrant when I read the warrant. 22 Q But you were searching for evidence in 23 your capacity obviously as a police officer? 24 A As authorized by the search warrant, yes. 25 Q Now, after you -- after this initial 90 1 introduction then, how many people wound up in the 2 room during the questioning of Mr. Schwartz? 3 A I tried to keep those to a minimum 4 because the more people you have in an interview, 5 the more distracted people become and the more 6 crowded and intimidating it can become and it's 7 difficult to keep a focus. I tried to keep it to 8 two people in there, myself and one of the Intel 9 people, to assist in the answers, but at times 10 there were as many as, probably up to five people 11 in the room, but that was not for extended periods 12 of time. Some people would be leaving and others 13 would come in and kind of switch off. 14 For example, I'd be called away, 15 somebody had a question about something outside of 16 the room we were in, and I would leave. Detective 17 Lazenby would step in to talk with Mr. Schwartz or 18 just to be present. 19 Q Sometimes switch off in who was asking 20 questions? 21 A There were questions asked by other 22 officers. The purpose of the switching off was not 23 to change interviewers. 24 Q Just asked you if you switched off and 25 asked questions. 91 1 A When I switched off with Detective 2 Lazenby, I know that Detective Lazenby asked 3 Mr. Schwartz questions, yes. 4 Q And Intel employees were also asking 5 questions? 6 A Yes, they asked questions on occasion, 7 too, yes. 8 Q Can you describe this room? What room 9 was this? 10 A It was a back room. Probably closest 11 comparison I could make would be like a family 12 room, a couch, couple chairs. It was a large room 13 compared with the other rooms in the house, 14 probably roughly equal in area to the front living 15 room off the front door and the kitchen. 16 Q Was there an exit to the outside? 17 A Seem to remember there being a door on 18 the west side of the room, but I couldn't be 19 positive about that. 20 Q Where did Mr. Schwartz sit in relation to 21 the people who were questioning him? 22 A The room was oriented east-west. I was 23 sitting on a couch on the north side of the room. 24 Mr. Schwartz was sitting in a chair across from me 25 and a coffee table between us on the south side of 92 1 the room. 2 Q And then when there were the other people 3 in the room, where were they located? 4 A They were seated to my right, which would 5 be to the west end of the room. 6 Q All facing Mr. Schwartz? 7 A In a semi-circle form, yes. 8 Q Now, while you were questioning 9 Mr. Schwartz, were you taking notes? 10 A Yes. 11 Q Did you use any other means to record the 12 questioning, this conversation that you were having 13 with Mr. Schwartz? 14 A I don't recall using anything else, no. 15 Q You indicated that he was cooperative. 16 Did you ask him about tape recording his 17 statements? 18 A I don't recall. I don't recall asking 19 him if we could tape record. 20 Q Did you tape record his statements? 21 A No. 22 Q Did you bring a tape recorder along? 23 A I didn't have a tape recorder with me at 24 the house. I don't know whether I had one 25 available to me or not. 93 1 Q So you didn't check before you went over 2 there -- 3 A No. 4 Q -- to see if there was one available. 5 A No. 6 Q What about a video camera, was there a 7 video brought along for search purposes? 8 A No. 9 Q Was there one available at the sheriff's 10 office? 11 A If we needed it, yes. 12 Q Did anybody else assign the task of 13 taking notes of Mr. Schwartz' statements? 14 A Nobody was assigned the task of taking 15 notes, no. 16 Q Did any of the other people there take 17 notes that you saw? 18 A I seem to recall that some of the Intel 19 people that were there did take notes. 20 Q What about Detective Lazenby? 21 MR. TINTERA: Judge, I don't see 22 what this has to do with the admissibility of the 23 defendant's statements. 24 THE COURT: Well, it could. 25 Overruled. 94 1 THE WITNESS: You'd have to ask 2 Detective Lazenby. I believe he did, but I don't 3 recall now. 4 BY MR. SUSSMAN: 5 Q You testified that you told Mr. Schwartz 6 that he was not under arrest and he was not going 7 to be under arrest. Where did you say those 8 things? 9 A In the back room. 10 Q And you also indicated that this give and 11 take, questions and answers that you were having 12 with Mr. Schwartz, that he was cooperative and that 13 he was forthcoming, was that throughout this hour 14 and-a-half or was there a period where the tone 15 changed at all? 16 A Not that I can recall, no. 17 Q You said that you were non- 18 confrontational and just kind of chatted then 19 throughout the entire questioning? 20 A That's correct. 21 Q Did you ever tell him that you didn't 22 believe what he was telling you? 23 A At one point, I do seem to recall saying 24 something to that effect, that I didn't believe 25 him. 95 1 Q At one point on -- 2 A I couldn't be specific. 3 Q Are you having trouble remembering some 4 of the details of the conversation? 5 A I'm having trouble remembering minute by 6 minute details, yeah. My recollections are what 7 are reflected in my report, and independent 8 recollection, some of which are clearer than 9 others. What I'm testifying to at this point in 10 time is what I perceive the nature of our interview 11 to be and that was an informal, non- 12 confrontational. 13 Q Did you at some point suggest to him that 14 if he wanted to prove that he was telling the 15 truth, he needed to take a lie detector test? 16 A I don't believe that I would ever use 17 something like that. I would ask people if they 18 would be prepared to take a polygraph examination, 19 but I don't recall using those specific words, no. 20 Q What words do you recall using with 21 respect to -- 22 A To be honest with you, I do not now 23 recall a conversation about a polygraph. That's 24 not to say that I didn't discuss it. I just don't 25 recall. 96 1 Q Then at this point, without asking you to 2 go and detail everything that was said, would it 3 be -- do I understand your last answer about 4 recollection, that your report then would be a 5 complete and accurate recordation of the statements 6 that you remember Mr. Schwartz making to you? 7 A The report is a summary of the results of 8 the interview that I had with Mr. Schwartz, at 9 times being very specific, particularly in points 10 that I was not comfortably at ease with, 11 specifically technical points as far as the names 12 of the different computers and software programs 13 and things like that. My report is a substantive 14 summary of the outcome of the interview, questions 15 that I -- information that I obtained from 16 Mr. Schwartz through questions, without spelling 17 out specific questions, and always spelling out 18 specific answers. 19 MR. SUSSMAN: I have nothing further 20 at this time. 21 MR. TINTERA: No further questions. 22 THE COURT: Thank you. You may step 23 down. 24 Call your next witness. 25 MR. TINTERA: Call Paul Lazenby. 97 1 Judge, Detective Lazenby must be a 2 little bit late. He went to pick up reports in 3 Clackamas County or somewhere. 4 DETECTIVE LILLEY: When I talked to 5 him on the phone at noon, he said he would be back 6 by 1:15. 7 Am I excused the rest of the day or 8 do you need me to wait around? 9 THE COURT: We don't need him any 10 more today, do we? 11 MR. TINTERA: I don't. 12 MR. SUSSMAN: No. 13 MR. TINTERA: I don't intend to call 14 Rick Pierce, but if counsel wants to call him 15 for -- 16 MR. SUSSMAN: Is Mr. Cower here? 17 MR. TINTERA: Yeah. 18 MR. SUSSMAN: Let's go ahead and 19 call Mr. Cower. 20 21 22 23 24 25 98 1 RICHARD RAYMOND COWER 2 called as a witness on behalf of the Defendant 3 having been first duly sworn under oath, was 4 examined and testified as follows: 5 6 THE CLERK: State your full name and 7 spell it for the record, please. 8 THE WITNESS: Richard Raymond Cower. 9 C-o-w-e-r. 10 11 DIRECT EXAMINATION 12 13 BY MR. SUSSMAN: 14 Q Mr. Cower, how are you employed? 15 A I work at Intel. 16 Q And in what capacity? 17 A I'm a network security specialist. 18 Q What does that mean? 19 A That means I'm responsible for the 20 security of intelligence networks. 21 Q Can you describe what you do? 22 A Well, what I do has changed over the last 23 year. So do you want to know what I do today or 24 what I did a year ago? 25 Q In October and the beginning of November 99 1 of 1993, what were your responsibilities? 2 A At that time, I was responsible for some 3 of the unique security policies that were written 4 as security at Intel and some of the Internet 5 policies that were written. 6 Q Now, in your capacity as the security 7 specialist, were you contacted by anybody about an 8 incident involving Randall Schwartz running a crack 9 program? 10 A Yes. 11 Q And who were you contacted by? 12 A Mark Morrissey. 13 Q And as a result of that contact and 14 initial investigation, were you -- did you meet 15 with any officers from the Washington County 16 Sheriff's Office? 17 A Yes. 18 Q And when was that? 19 A The date? 20 Q If you remember, yes. 21 A I remember I missed Halloween trick or 22 treating with my kids. That was a Sunday. Monday 23 was November 1st. Probably November 1st. I think. 24 I don't know. I'd have to look at a calendar. 25 Q Did you attend a briefing with detectives 100 1 from the Washington County Sheriff's Office on the 2 1st? 3 A Yes. That evening or the following 4 evening. 5 Q As a result of that meeting, a search 6 warrant was drawn up for the search of 7 Mr. Schwartz' residence? 8 A I think there was a search warrant being 9 drawn up throughout the day. 10 Q And did you happen to -- You happened to 11 go along to Mr. Schwartz' house; is that correct? 12 A Yes. 13 Q What were the circumstances of that? How 14 is it that you happened to go along? 15 A The police asked me to come. 16 Q What were you told about why the police 17 asked you to come along? 18 A They wanted me to look at anything they 19 found there in terms of evidence, I guess is what 20 it's called, and to participate, possibly 21 participate in an interview with Randal to help 22 with technical issues that would arise. 23 Q What kind of technical issues were you 24 anticipating? 25 A I wasn't anticipating any. 101 1 Q Did they explain what kind of technical 2 issues they were talking about regarding your help? 3 A Regarding the things that Randal -- that 4 they were investigating. 5 Q To explain to them answers, then, to the 6 questions? 7 A Yes. 8 Q So the police had been told that 9 Mr. Schwartz, from your investigation, the 10 investigation at Intel, had committed -- 11 A I believe so. I'm not sure what Clyde's 12 responsibilities were. I know what Rick was doing. 13 Q And what was your understanding of that? 14 A Rick was there to hand Randal a -- I 15 don't know what it was he gave him, some sort of 16 termination paper, I think. I think Clyde was 17 there to get his badge or badges. They thought he 18 had two badges. 19 Q What kind of badges? 20 A Intel badges -- they gain you access to 21 the facilities -- with pictures on them. 22 Q What was his capacity at Intel? What was 23 his job? 24 A At that time, my understanding was he was 25 working on a DDNS program. That it was being done 102 1 for Clayton Kramer. 2 Q What was his capacity on that, his job? 3 A Programmer. He was a programmer. And I 4 believe he was doing some work for Bob Wilcox. 5 Q And do you know what kind of work he was 6 doing for Bob Wilcox? 7 A Not exactly, no. 8 Q Did you go into the house along with the 9 sheriffs? 10 A Not initially. They went in. We parked 11 across the street. I think there is a culdesac 12 there. They went in and I don't know how much time 13 elapsed. I don't have -- I don't have a watch so 14 I'm not good with time, but they were in there for 15 a period of time, then they asked me to come in and 16 look at a McIntosh portable computer that Randal 17 was downloading files on and they wanted me to look 18 at it and I looked at the screen and said it looked 19 okay to me. 20 Q At what point did you join the officers 21 who were questioning Mr. Schwartz? At any time did 22 you join them? 23 A Yes. 24 Q And how long was that after you had 25 arrived? 103 1 A I don't know. I really don't know. 2 Thirty minutes. I don't know. Some period of 3 time. 4 Q And how long were you in the room with 5 Mr. Schwartz? 6 A There was two periods when I was in the 7 room. I was in the room for one period and then I 8 went outside. Detective Lilley and I went outside 9 to discuss something that Randal had said and then 10 we went back and probably the total time was maybe 11 an hour. 12 Q That you were involved in the 13 questioning? 14 A Yeah, maybe an hour. 15 Q What was it that you went outside to 16 discuss? 17 A We discussed -- Randal was bringing up a 18 point about that a lot of the problems that he had 19 encountered were due to security policies that Rich 20 Cower had written him and Detective Lilley didn't 21 understand that answer being that Rich Cower was 22 sitting in the room so it was confusing. 23 Q Did you get that clarified? Was he 24 talking about you? 25 A He was definitely talking about me. We 104 1 never did get it clarified. It was like a third 2 person. 3 Q How much contact had you had with Randal 4 Schwartz before that day? 5 A Randal and I had met on two occasions. 6 Q And in what context? 7 A Intel-work related. 8 Q And this was over what period of time? 9 A Two years. 10 Q Do you recall how long it had been since 11 the last time that you saw him before that date? 12 A No. It was quite a while. 13 Q While you were in -- Can you describe the 14 room that you were in where this questioning was 15 taking place? 16 A Sure. It was a back room in the house. 17 Looked like a back room. 18 Q When you say a back room, what do you 19 mean? 20 A You went in the front door and then I 21 think the kitchen was on the right and you went 22 straight back and there was a door there with glass 23 panes in there. There was a sofa, chair, maybe a 24 wood stove, fireplace, a lot of videotapes, a lot 25 of little figures. 105 1 Q Was there an outside exit to that room? 2 A I don't recall. 3 Q How many people were in the room during 4 the time you were there? 5 A It varied. At times there were two 6 policemen in there. Clyde was in the room for a 7 very brief period of time. Rick was in the room 8 for a very brief period of time. 9 Q Just a period of time? 10 A Yeah. 11 Q So the main person who was in there 12 during the course of these statements was yourself? 13 A Yeah. I was in there probably more than 14 anyone else. 15 Q So there was usually at least three 16 people there? 17 A Counting Randal? 18 Q Besides Randal. 19 A Usually three people counting Randal. 20 Detective Lilley, the person that just left and 21 myself and Randal. 22 Q And how much of the time was Detective 23 Lazenby there? 24 A I don't know who he is. 25 Q The other -- Was there another detective? 106 1 A There was another detective -- he had 2 glasses -- but I don't know his name. 3 Q How much of the time was that officer 4 there? 5 A Fifteen or 20 minutes. 6 Q Describe the tone of the questioning 7 between Detective Lilley and Mr. Schwartz. 8 A It was friendly. 9 Q Throughout the entire period of time? 10 A Yes. Yeah. I would say it was, yeah. 11 Q Did Mr. Schwartz leave the room during 12 that period of time at all? 13 A That's a year ago. I think he did, but I 14 don't know why. 15 Q I'm sorry. 16 A I -- I don't know. 17 Q You don't remember? 18 A Not accurately enough to give you a yes 19 or no. Maybe he left. I don't know. 20 Q Did he ask to leave the room at all while 21 you were there? 22 A I don't remember. 23 Q Were you taking notes of Mr. Schwartz' 24 statements -- 25 A Yes. 107 1 Q -- while this was going on? 2 A Yes. 3 Q Did you keep those notes? 4 A Yes. 5 Q And did you also make a report based on 6 this conversation? 7 A No. 8 Q Did Detective Lilley at some point accuse 9 Mr. Schwartz of lying to him? 10 A I don't know. I don't remember that. 11 Q You don't remember? 12 A No. 13 Q Was there any point in which 14 Mr. Schwartz' responses or tones during the 15 conversation changed and he became more upset, 16 perhaps more anxious? 17 A I'm trying to remember. No. To me, it 18 appeared to be almost a friendly conversation. 19 Q He was then trying to explain -- 20 A Yeah. 21 Q -- explain himself. He was being pressed 22 to explain what was going on? 23 A Yes. 24 Q And so he continued to respond? 25 A Yes. 108 1 Q You had mentioned that you came in and 2 you were brought in to take a look at a McIntosh. 3 A Yes. 4 Q Was this a computer that was hooked up to 5 a phone line in the kitchen? 6 A It appeared to be. 7 Q And after you observed that, what did you 8 do? What happened? 9 A I left the house. 10 Q Did you go into the room with 11 Mr. Schwartz at that point? 12 A No. 13 Q And did you have any discussion with 14 Mr. Schwartz or hear any discussion with 15 Mr. Schwartz about what to do about turning that 16 off? 17 A He did. He did request that it be turned 18 off gracefully or disconnected gracefully. I'm not 19 sure. I don't remember. 20 Q Mr. Schwartz made that request? 21 A Yes. 22 Q And when did he make that request? 23 A It was early in the evening. 24 Q So after you saw that, you went to talk 25 to Mr. Schwartz about -- 109 1 A No. After I saw the McIntosh, I left the 2 house and went back outside. My job was done. 3 Q But at some point, you remember 4 Mr. Schwartz asking that that be turned off gently? 5 A Yes. 6 Q Or graceful? 7 A Yes. 8 MR. SUSSMAN: May I approach? 9 THE COURT: You may. 10 BY MR. SUSSMAN: 11 Q Setting aside my coloring on this, do you 12 recognize this statement? 13 A Yeah. I think I did write this. 14 Q You did write this yourself? 15 A Yeah. 16 Q I'd like to show you on the lower 17 portion, which is Page 13, where I start marking 18 this to put this in context. Would you just kind 19 of read here to yourself to where it says "he 20 admitted that he knew --" 21 A Why is this blocked out, do you know? 22 Q There appears to be a problem with the 23 transcription. Just finish reading to down here. 24 A (Witness complies.) 25 Q Now, you'll note on this page that there 110 1 are a couple lines which are across on top of each 2 other and they are garbled. Do you remember -- Can 3 you tell me what that says or what that is supposed 4 to say? 5 A No. I can't read it. 6 Q But do you remember what that is supposed 7 to say? 8 A No. I don't even remember writing it. 9 No, I don't. 10 Q And you don't remember writing this 11 report? 12 A I do now that you show it to me. I mean, 13 I remember it. Why did it come out like this? Did 14 you do this to it? 15 Q No. This is the copy that we got. We're 16 trying to find out what you're reporting that 17 Mr. Schwartz said. 18 Looking at the context of that, you 19 have no recollection of what it was that 20 Mr. Schwartz told you? 21 A No. (Pause to allow for reading.) Can I 22 spend some time on this? 23 THE COURT: Is what he's being shown 24 a photocopy? 25 MR. SUSSMAN: Yes. 111 1 THE COURT: Is there the original of 2 that document somewhere? 3 MR. SUSSMAN: The copy that 4 Mr. Tintera has, which this was made from, is in 5 that condition also. 6 THE COURT: So the problem is with 7 the copying? And you're asking what the original 8 words were? 9 MR. SUSSMAN: Yes. 10 THE COURT: And he can't read it. 11 THE WITNESS: I can't recall. 12 THE COURT: Does somebody have the 13 original of that? 14 MR. TINTERA: He generated the 15 report, Your Honor. I don't know. It's not a 16 copying problem. It's a problem that when the 17 document was printed, it over printed two lines. 18 THE WITNESS: Looks like an 19 overstrike. 20 THE COURT: That's not an Intel 21 product, is it, that printed that out? 22 MR. TINTERA: Intel is inside. 23 THE WITNESS: Probably an HP 24 product. 25 112 1 BY MR. SUSSMAN: 2 Q Mr. Cower, the other thing, I just 3 noticed at the bottom of that page, you mentioned 4 quite a bit of discussion towards the end of that 5 questioning of Mr. Schwartz involved the 6 questioning of industrial espionage. Who brought 7 up that subject? 8 A Detective Lilley. 9 Q And had you given him any information 10 that would suggest that Mr. Schwartz had been 11 involved in industrial espionage? 12 A No. 13 Q And do you recall what Detective Lilley 14 asked about that? 15 A I remember him asking a question, had 16 Randal ever thought of doing industrial espionage. 17 Q And what was Randall's response? 18 A It was yes, that he had thought about it 19 and that there was a lot of money in it. 20 Q What? 21 A He had thought about it and that there 22 was a lot of money in it, but that he wouldn't know 23 how to do it. 24 Q Do you recall him saying anything about 25 that in context with work and security concerns in 113 1 the context of his work? 2 A No. That didn't come up at all. 3 Q Pardon. 4 A No. 5 Q There is one point that you mentioned 6 that somebody asked Mr. Schwartz if he knew where 7 some secret chip design would be kept or 8 manufactured within Intel. 9 A Yes. 10 Q Do you recall that? 11 A Yes. 12 Q Who asked that? 13 A Probably Detective Lilley. 14 Q And -- 15 A He asked most of the questions. 16 Q Do you remember what was Randal's 17 response? 18 A Yes, I do remember it. 19 Q And what was his response? 20 A It was something like probably on some 21 Vax or something. It's a computer type. 22 Q I had trouble hearing your response. 23 A I think Randal said it was probably done 24 on some Vax computer. 25 Q And what was your reaction? 114 1 A Astonishment. 2 Q Why? 3 A Because I think he would know better. 4 Q Why would you think that? 5 A Randal had been around Intel long enough 6 to know where the designs are done. 7 Q Is it standard practice for people in the 8 different kinds of groups at Intel to know or to 9 have access to the information about what's being 10 done in other groups? 11 MR. TINTERA: Objection. Has 12 nothing to do with the defendant's statements. 13 THE COURT: Sustained. 14 THE WITNESS: What's that mean? 15 THE COURT: Means don't answer. 16 MR. SUSSMAN: I have nothing 17 further. 18 THE COURT: Mr. Tintera. 19 20 21 22 23 24 25 115 1 CROSS-EXAMINATION 2 3 BY MR. TINTERA: 4 Q Mr. Cower, let me bring you back to the 5 first time that you had contact with Randal on that 6 day when he was at his home, do you remember that, 7 in the back room? 8 A In the back room, yes. 9 Q The first time that you had contact with 10 him, was there any discussion about your presence 11 in the room with Mr. Schwartz? 12 A No. Detective Lilley, I'm pretty sure, 13 introduced me to Randal as Rich Cower and said, 14 "Rich will sit in on this," and we shook hands and 15 I guess the interview started, if that's what it's 16 called. 17 MR. TINTERA: That's the only 18 question I have. 19 THE COURT: Any redirect? 20 MR. SUSSMAN: Just one question, if 21 I may. 22 23 24 25 116 1 REDIRECT EXAMINATION 2 3 BY MR. SUSSMAN: 4 Q You previously mentioned one time you 5 stepped outside to talk to the detective to clarify 6 the questioning about that Rich Cower had put some 7 road blocks, policies or technical software, what 8 did you mean by that? 9 MR. TINTERA: Objection. Beyond the 10 scope of my cross-examination. 11 THE COURT: I'll let him reopen. 12 MR. TINTERA: How is it relevant to 13 to come back? 14 THE COURT: Go ahead. 15 BY MR. SUSSMAN: 16 Q What I was asking about is where you had 17 tried to clear up the confusion of Mr. Schwartz 18 talking about Rich Cower placing certain road 19 blocks. 20 A When we stepped outside, that was -- that 21 wasn't the only thing discussed. That was one 22 thing discussed. It was probably the first thing. 23 Then there were other questions and answers 24 discussed. 25 Q I was trying to -- Anything other than 117 1 what? 2 A Mail, electronic mail. 3 Q So the access is allowed for electronic 4 mail? 5 A Sorry. 6 Q The access is allowed for electronic 7 mail? 8 A We do allow electronic mail, yes. 9 MR. SUSSMAN: Thank you. Nothing 10 further. 11 THE COURT: Mr. Tintera, anything 12 else? 13 MR. TINTERA: Yes. 14 15 RECROSS-EXAMINATION 16 17 BY MR. TINTERA: 18 Q And are there certain procedures for 19 accessing Intel through the firewall? 20 A From the outside? 21 Q Yes. 22 A There really is no way to access Intel 23 from outside the firewall other than mail, even 24 with our business partners with whom we have very 25 close relationships with in chip designs and other 118 1 work. It's just mail. 2 Q So there is no other way to access mail 3 through the firewall? 4 A No. 5 Q Were you ever aware that Mr. Schwartz had 6 developed his own way for access through the 7 firewall and not mail? 8 A I was told about it once before, but I 9 don't recall. I don't remember it. I would say 10 no. 11 MR. TINTERA: Thank you. Nothing 12 further. 13 MR. SUSSMAN: Nothing further. 14 THE COURT: I believe Officer 15 Lazenby is here now. 16 17 PAUL LAZENBY 18 called as a witness on behalf of the State having 19 been first duly sworn under oath, was examined and 20 testified as follows: 21 22 THE CLERK: State your full name and 23 spell it for the record, please. 24 THE WITNESS: Paul Lazenby. 25 L-a-z-e-n-b-y. 119 1 DIRECT EXAMINATION 2 3 BY MR. TINTERA: 4 Q Mr. Lazenby, you are employed with the 5 Washington County Sheriff's Department? 6 A Yes. 7 Q And how long have you been involved in 8 law enforcement? 9 A Twenty-two years. 10 Q And in the course of your duties, 11 investigating computer crime, did you have contact 12 with a Randal Schwartz on November 1st, 1993? 13 A Yes, I did. 14 Q And what led up to that contact? 15 A It was a search warrant being executed by 16 the special investigation unit of the sheriff's 17 office at his residence. 18 Q Were you present when contact was made at 19 the home? 20 A Yes, I was. 21 Q What happened? 22 A Detective Lilley and myself were the two 23 lead people. We knocked on the door. 24 Mr. Schwartz' brother answered the door. Told him 25 why we were there. He invited us in. Mr. Schwartz 120 1 came to the living room and that's when we first 2 made contact. 3 Q What happened when Mr. Schwartz, this 4 defendant, came into the living room? 5 A Detective Lilley read the search warrants 6 to both the brothers and advised them both of the 7 Miranda rights. 8 Q Did you make any statements at that time 9 to Mr. Schwartz in regard to his custody status? 10 A At that time? 11 Q Yes. 12 A No, I did not. 13 Q Did you make any statements to 14 Mr. Schwartz during any time of the search warrant 15 of his custody status? 16 A Yes. There in the back room there was a 17 time when I interview him and told him he was not 18 under arrest, but he was free to go, but told there 19 could be misdemeanor, felony and possibly federal 20 charges if he used the phone systems out of state 21 and he said that he understood that. 22 Q And was that the extent of your 23 conversation? 24 A No. There was some other conversations 25 about the systems and what he accessed and how he 121 1 did it and stuff. 2 Q So after he was advised of his rights, 3 did he indicate in any way that he understood them? 4 A Yes. He said he understood. Both of 5 them did. 6 Q When you talked to Mr. Schwartz, did you 7 make any threats to get him to talk to you? 8 A No. 9 Q Did you make any promises? 10 A No. 11 Q Did he appear to be understanding of the 12 circumstances he was in? In other words, he was 13 not intoxicated or mentally affected? 14 A No. In fact, he's very intelligent. 15 Q During the course of your interview with 16 him, did he ever say he didn't want to talk to you 17 any more? 18 A No. 19 Q Did he ever request counsel? 20 A No. 21 Q Could you describe the place where the 22 interview took place? 23 A It's a back room of the house. Pretty 24 good-size room. I would call it like a 25 mini-family-room or probably even bigger than the 122 1 living room area of the house. Lot of computer 2 stuff, couches and chairs and I think a woodstove 3 in there. 4 Q What was the atmosphere while you were 5 talking with Mr. Schwartz? 6 A He sat in the chair and I sat across on a 7 couch or big chair. I can't remember if I sat in 8 the couch or the chair. 9 Q And what type of conversation were you 10 having as far as -- 11 A Basically having him explain to me these 12 programs and how he accessed them and where the 13 passwords were at. I think at first we talked 14 about his system was hooked up in -- we found his 15 laptop computer on line on a phone modem in the 16 kitchen and we didn't want to -- we wanted to seize 17 it and not damage it, so I asked how to turn it off 18 without damaging it and he told me that and we did 19 that first and then we went over the discussion on 20 how he did what he was doing. 21 MR. TINTERA: Those are the only 22 questions I have. 23 24 25 123 1 CROSS-EXAMINATION 2 3 BY MR. SUSSMAN: 4 Q Detective Lazenby, when you arrived at 5 the apartment, how many officers were at the door? 6 A I don't know the total number of 7 officers. Myself and Detective Lilley. Jim 8 knocked on the door and I was standing next to him. 9 Q And he knocked on the door and when the 10 door was opened, he announced you as police 11 officers? 12 A Yeah. Identified ourselves and said what 13 we were there for and his brother said come in. 14 Q You said you were there to serve a search 15 warrant? 16 A Yes. 17 Q Did you ask if there was anybody else in 18 the room? 19 A Yeah. I don't know if it was anybody 20 else in the house, but we asked if Randal was here 21 and he said yes. We asked him if Randal was there 22 and he said yes. 23 Q And then what did you do? Where did you 24 go? What did you do next? 25 A We went in and sat in the living room. 124 1 Q Did you go upstairs? 2 A Later, I did, yes. I did go upstairs. 3 Q During the search or did you go upstairs 4 to look for anybody? 5 A No. During the search. His brother took 6 me upstairs to show me -- his brother had a bunch 7 of computer stuff upstairs and he took me upstairs 8 and we walked through this stuff and he helped me 9 eliminate his stuff, as opposed to seizing it, and 10 he told me what it was and if it was a computer 11 system he'd turn it on and we left all that stuff 12 there. 13 Q Did you go into a back room immediately 14 with Detective Lilley to do the questioning of 15 Mr. Schwartz? 16 A No, not immediately. 17 Q And so how long afterwards did you join? 18 A I think the first time I talked to him 19 was within about five minutes because we wanted to 20 take care of securing his system, which was on 21 line, and I did a short one there. That's my first 22 short interview. And then later, after I found out 23 there was over 50 passwords accessed as opposed to 24 the 10 or 12, I think I went back and did another 25 short interview. 125 1 Q What do you mean by that? 2 A I asked questions in regard to that 3 because of the discrepancies there. 4 Q How long did that interview last? 5 A Less than five minutes. Maybe five 6 minutes. 7 Q So you went back and told him there was 8 discrepancies? You told him he hadn't been 9 truthful? 10 A No. I told him, "You said there were 10 11 to 12 words accessed and you said there -- and they 12 said there is 40 or 50 and that doesn't fit." He 13 told me why. 14 Q How many times were you actually a 15 participant in the interviews with Mr. Schwartz? 16 A Probably five to 10 minutes maximum the 17 two times. 18 Q Did you take notes while you were there? 19 A No. I wrote a report that night. 20 Q Just from your memory then? 21 A Yes. 22 Q And so the rest of the time you were 23 concentrating on executing the search warrant? 24 A That's correct. 25 Q How long did this whole process take from 126 1 the time you entered until the time you left? 2 A From the time we got in the house to the 3 time we left? Couple hours, I think, or longer 4 because of the -- You have to be careful in taking 5 computers apart and stuff so we had to do it -- 6 there is a certain system you have to do. You have 7 to tag all the cords, tag all the disks and you 8 have to take a lot of time doing that. It's very 9 time consuming. That was the time delay. We were 10 done. The delay was getting things tagged and 11 bagged properly. 12 Q Who assisted you in doing that? 13 A The other officers. There was Kuni, and 14 Sergeant Tom Siper came along because he's a member 15 of the IASIS and search, which is a computer 16 crime -- classes that are taught to police 17 officers. It's a nationwide support group and he's 18 the president of it in the Portland area. 19 Q Do you have some particular training and 20 experience in investigating computer crimes? 21 A I've been to the search school, two-week 22 search school on computer crime, yes. 23 MR. SUSSMAN: I'd like to ask a few 24 questions about that because those would be the 25 only questions that I would have of Detective 127 1 Lazenby for the later motion to controvert. 2 THE COURT: About his schooling? 3 MR. SUSSMAN: Yes. And I wouldn't 4 need to call him back for that unless the State 5 did. 6 THE COURT: Mr. Tintera. 7 MR. TINTERA: With the understanding 8 that I'm not conceding the point whether any of the 9 threshold questions have been answered, answered 10 successfully. 11 THE COURT: That's fine. We'll just 12 perpetuate the testimony. 13 MR. TINTERA: That would be fine. 14 BY MR. SUSSMAN: 15 Q Can you tell me about that school, what 16 it involved? 17 A It just involved police officers that 18 were in IASIS. Kind of -- 19 THE COURT: Spell that for us. 20 THE WITNESS: I-A-S-I-S. That is 21 the level where technicians go and learn how to 22 actually unhook the computers, lock 'em down, do 23 mirror imaging and do the technical aspects of 24 seizing and making copies of the hard drive without 25 damaging the stuff. Search is the next step down, 128 1 the actual investigators that are responsible for 2 writing search warrants that are going to be 3 investigating the computer crimes and stuff like 4 that. 5 BY MR. SUSSMAN: 6 Q So you attended training in both of 7 those? 8 A No. I attended search. We have Alan 9 Watson from the sheriff's office that has been to 10 IASIS. 11 Q What did your training in search consist 12 of? 13 A It's almost brand new. This was the 14 first class in the State of Oregon. It dealt with 15 computers, the type of computer crime that's going 16 on, the fact that people can access computers with 17 specialized programs, steal passwords, gets in 18 their data. With the phone modems, they can take 19 the data and move it to other computers and other 20 systems anywhere in the nation. Pretty easy to do. 21 Q So this is, in sort of general terms 22 about how computer hacking, computer crimes like 23 that can be accomplished? 24 A Correct. An example would be a person 25 working for a company could go into the company's 129 1 computer, take stuff and through the phone lines 2 transfer it outside the company without ever 3 leaving the company's grounds. They can hide it in 4 another computer, on a bulletin board, send it to 5 the home computer. There is just hundreds of ways 6 of doing that. 7 You can hide it within your own 8 computer and incript it and have it hidden and it 9 could be there and you won't know it. You can turn 10 the computer on and nothing will be there, but when 11 you go in and make a mirror image of that computer 12 and they search it with the right data, the stuff 13 is there. It can be hidden on the computer. 14 That's the kind of stuff that's happening. 15 Q And when -- You assisted Detective Lilley 16 in the preparation of the search warrant? 17 A Yes. I got there -- I was on something 18 else and I got there late and helped out in the 19 end. 20 Q And your assistance in preparing the 21 search warrant consisted of telling him about your 22 knowledge that you gathered from in this course? 23 A Yeah, the kind of things you have to 24 seize. You can't just go in and look at the 25 computer and expect to find it. You have to seize 130 1 the system. You have to tag the system right. You 2 have to turn the system off a certain way. You 3 have to hook the system up the way it was taken. 4 Part of that is to protect stuff that's on the 5 system that might not be illegal. 6 The problem is, people put stuff 7 that's legal on the system and might be illegal. 8 So you don't want to damage their property that's 9 legally there. If you do it right, you can do 10 that. If you don't, you give it back to the expert 11 that has been through the system and it gives them 12 a mirror image. 13 Q Where is the mirror image taken from? 14 A Taken from their hard drive and put on 15 another hard drive. 16 Q And you have an expert in the Washington 17 County sheriff's office who is capable of doing 18 that? 19 A No, he's not totally trained. He still 20 has to go through an extensive testing process, 21 which he has not completed. 22 We have to access -- I think in this 23 case, in fact, we had to access a couple people 24 from back east and from the feds that had a hard 25 time, especially dealing with Apple products. They 131 1 add more confusion to it and make it more 2 difficult, and he had an Apple product. 3 Q Had you had any specific experience prior 4 to this case in investigating computer crimes? 5 A No. This was the first one. 6 Q So the information that you provided to 7 Detective Lilley based on -- about how somebody who 8 might be computer hacking could conceal things was 9 based entirely on what you learned in this class? 10 A I would say most of that was, yes. 11 Q And when had you completed that course? 12 A It was in 1993. I'd have -- 13 Q The search warrant was executed November 14 1st, 1993. So using that as a guideline, how long 15 before that? 16 A Couple months prior to that. I'm not 17 positive. Two or three months. 18 Q And you said this course consisted of how 19 much training time? 20 A Two weeks. 21 Q Seven days a week? Five days a week? 22 A Five days a week. 23 Q And where was this course given? 24 A IBM in downtown Portland. 25 MR. SUSSMAN: Thank you. Nothing 132 1 further. 2 3 REDIRECT EXAMINATION 4 5 BY MR. TINTERA: 6 Q Besides this training and this being the 7 first computer crime case in Washington County, did 8 you have any other experience in this area? 9 A Yes. I've -- Me and Al Watson, who is 10 with IASIS, have gone through scenarios and 11 discussed them and how we would do it, but kind of 12 in our head because we have seized some other 13 computers like in drug cases and some other cases 14 but not an actual computer crime case. 15 Q Have you ever worked with Tom Siper in 16 regard to computers? 17 A Tom Siper, yes, I have. 18 Q And who is he? 19 A He's the president of IASIS for Portland. 20 He's the one that started the system in Portland. 21 Q And these questions are directed before 22 November 1st of 1993? 23 A Yes. 24 Q What type of work had you done with 25 Mr. Sipert? 133 1 A I spent over a year -- we had a special 2 suppression team with the sheriff's office and I 3 spent a year working with Tom's team in Portland on 4 career criminals and stuff we targeted and major 5 offenses. 6 Q And did that have anything to do with 7 gaining any type of insight or information with 8 regard to computer crimes? 9 A That's where some of the ideas of the 10 IASIS and a lot of this came out of stuff like 11 that. We were running into more and more 12 computers, running into fences that were using 13 computers. Tom got on the ball, got with the 14 hi-tech people and other states that were doing it 15 and started a chapter in Oregon. 16 Q Were you involved in that at all? 17 A Yeah, I'm a member of the search. As far 18 as the technical aspect, the mirror imaging, I 19 don't touch that part of it. 20 MR. TINTERA: Thank you. That's all 21 I have. 22 MR. SUSSMAN: Just a couple. 23 24 25 134 1 RECROSS-EXAMINATION 2 3 BY MR. SUSSMAN: 4 Q That year you spent working with Tom 5 Sipert and IASIS, that did not involve any case 6 where you were investigating somebody charged with 7 a computer hacking, computer crime -- 8 A No. 9 Q -- a charge that is the subject of this 10 particular case? 11 A None. 12 MR. SUSSMAN: Thank you. 13 THE COURT: Thank you. You may step 14 down. 15 MR. TINTERA: I have no further 16 witnesses with regard to the defendant's 17 statements. 18 THE COURT: Are you going to call 19 Mr. Pierce on? 20 MR. SUSSMAN: Yes, briefly. 21 THE COURT: Based on Mr. Cower's 22 testimony, probably won't take more than five 23 minutes. 24 The other witnesses may be excused 25 for today. 135 1 RICHARD D. PIERCE 2 called as a witness on behalf of the Defendant, 3 having been first duly sworn under oath, was 4 examined and testified as follows: 5 6 THE CLERK: State your full name and 7 spell it for the record, please. 8 THE WITNESS: Richard D. Pierce. 9 P-i-e-r-c-e. Also known as Rick Pierce. 10 11 DIRECT EXAMINATION 12 13 BY MR. SUSSMAN: 14 Q Mr. Pierce, for the record, would you 15 indicate what your position is? 16 A Yes. I'm the senior managing attorney 17 for the Intel Oregon site. 18 Q And in that capacity, you were involved 19 in the investigation of activities that the company 20 had of Mr. Schwartz involved in running a crack 21 program in October and beginning of November of 22 1993? 23 A Yes, that's correct. 24 Q And you asked to accompany the Washington 25 County sheriff's detectives when they executed the 136 1 search warrant at Mr. Schwartz' residence? 2 A Yes, that's correct. 3 Q And did you -- Were you also asked to 4 assist in -- when they did the questioning of 5 Mr. Schwartz about what had happened? 6 A Yes, that's correct. 7 Q Can you tell me what you were asked to do 8 with respect to the questioning of Mr. Schwartz? 9 A Well, there were really three aspects to 10 my involvement in the particular investigation. 11 The first was primarily to represent Intel 12 Corporation, and in a brief conversation I wanted 13 to have with Mr. Schwartz was to insure that he 14 understood that we wanted to deny him access to the 15 Intel building and we wanted his contractor's badge 16 and any other access papers that he would have such 17 that our security guards could prevent his physical 18 entry into our facilities. 19 Second thing was to, I think from an 20 Intel perspective, help identify the aspects that 21 would be in question because we're talk -- excuse 22 me, the assets that would be in question because 23 we're talking about intangible assets because they 24 would be located on diskettes or perhaps running on 25 a computer screen somewhere. So that's what my 137 1 primary involvement would be. 2 Q So the first thing then was to be there 3 to fire him and the second was -- I'm sorry. Am I 4 misstating that? 5 A If you want to use the word fire, I guess 6 I could live with that. It's basically just to 7 terminate his entry and access into the buildings. 8 Q Actually, he was an independent 9 contractor? 10 A Right. 11 Q So firing wouldn't be the right word? 12 A Right. 13 Q Because he wasn't an employee. 14 A Right. 15 Q And the second then was to actually 16 search through the materials to identify what was 17 Intel property of any kind? 18 A Primarily looking for trade secrets, 19 password files or anything that would indicate that 20 he had obtained other assets by using intelligence 21 password files. 22 Q Did you have to distinguish that from 23 other Intel material that would have been on his 24 computers that he was entitled to have because of 25 his status there as a contractor? 138 1 A I don't have any recollection of that. I 2 don't think we would have had the ability to do 3 that. 4 Q What do you mean you wouldn't have had 5 the ability to do that? 6 A I think the volumes of computer material, 7 that the search would have taken months and months 8 and months probably. 9 Q So how were you going to identify what 10 was sensitive material or trade secret material 11 during the course of that search? 12 A By looking for particular references to 13 SSD, which was, in terms of intelligence 14 perspective, where the trade secret violation would 15 have occurred. Mr. Schwartz had done work in other 16 various -- actually was engaged in doing work of 17 other Intel areas at the point of the incident, so 18 I would have been focusing on SSD materials. 19 Q So in conducting the search, really, to 20 distinguish the things, you focused on any 21 references to SSD? 22 A I primarily focused on reference to SSD, 23 that's right. 24 Q Were there other references that you were 25 focusing on? 139 1 A Not to my recollection. 2 Q Did you, during the course of those 3 activities, participate in the questioning of 4 Mr. Schwartz? 5 A My recollection of the evening is that 6 Mr. Schwartz was located in a room in the back of 7 the house and the primary search was focused around 8 his laptop computer, which was, if I'm not 9 mistaking, executing Intel passwords at the time 10 that we arrived at the house. I did go back into 11 the location where Mr. Schwartz was engaged with 12 the Washington County Sheriff's Department and had 13 a conversation about turning over his contractor 14 badge, which he was more than willing to do. 15 I identified myself as Richard 16 Pierce from Intel Corporation and "I understand 17 that we want to deny you access to our facilities. 18 Do you understand that?" He understood that. I do 19 not remember engaging specifically in any 20 investigatory type questions because we had 21 technical people that would have been more adept at 22 that. 23 Q Did you ask him about the Intel password 24 that you said you thought the computer was 25 executing at the time? 140 1 A I don't remember if I did or not. I 2 don't believe I did. 3 Q Would there be any record in the computer 4 or any of the documentation of that process of 5 executing those? 6 A I don't have any recollection. I don't 7 believe that we would have made a hard copy of 8 that. 9 Q Did you note what passwords were being 10 executed? 11 A No. I believe that Mr. Cower indicated 12 that that's what was happening at the time that we 13 were focused around the laptop. 14 Q So that's based on Mr. Cower's comment to 15 you? 16 A Yeah, I believe so. 17 Q And are you referring to the laptop that 18 was in the house when you say there were passwords 19 being executed at the time that the search was 20 going on? 21 A Yeah. There was an Apple notebook 22 computer in the kitchen that was connected up that 23 was executing instructions. 24 Q Are you sure you're not confusing that 25 with a Snoopy machine that was -- 141 1 A No. No. 2 MR. SUSSMAN: Thank you. I have 3 nothing further. 4 5 CROSS-EXAMINATION 6 7 BY MR. TINTERA: 8 Q Mr. Pierce, I know we've been using this 9 language and assuming the court knows what we're 10 talking about, but when you refer to the SSD, that 11 part of Intel, what are you talking about? 12 A Intel, like a lot of other companies, is 13 divided into many organizations. The SSD 14 organization is an acronym for the scientific super 15 computer division, which is a division of Intel 16 that manufactures and sells various types of super 17 computers. Current generation is a massively 18 parallel machine which is very state of the art, 19 very leading edge in terms of applications and is 20 of great interest, for instance, to the Department 21 of Defense. 22 Q Does the SSD division have any different 23 security proceedings than any other division at 24 Intel? 25 A The super computer division does have 142 1 additional security requirements. They do 2 administer certain types of procedures of SSD 3 through one of our organizations called the Federal 4 Programs Office and they have to go in and certify 5 certain kinds of procedures in order to comply with 6 the Department of Defense regulations for 7 protection of intellectual property. 8 MR. TINTERA: Thanks. I don't have 9 any other questions. 10 MR. SUSSMAN: If I might. 11 12 REDIRECT EXAMINATION 13 14 BY MR. SUSSMAN: 15 Q At one time, Mr. Schwartz was a 16 contractor with SSD, wasn't he? 17 A I believe that's true, yes. 18 Q And you say that Intel has many 19 divisions. Are the divisions, these discrete 20 divisions within Intel? 21 A Yes, they are. 22 Q And then is there kind of a policy or 23 procedure where the activities of these divisions 24 are compartmentalized, people working in one 25 division would not necessarily be cognizant of the 143 1 activities in another division? 2 A That's true. The divisions are regarded 3 as what we call separate P&L's, separate profit and 4 loss organizations. They generally have separate 5 objectives and key results, different revenue 6 goals, different cost goals and many of the 7 divisions in Oregon are really operating totally 8 unconnected markets: SSD would be one, networking 9 division would be another, addressing totally 10 different products and customers. 11 Q Chip division would be another one? 12 A Yes. 13 Q So somebody working in one division might 14 not have any real idea or what was going on in 15 another division? 16 A That's true. Could go the other way. 17 Really depends on the nature of the product line. 18 Q And the work that the person is being 19 asked to do? 20 A That's true. 21 MR. SUSSMAN: Thanks. I have 22 nothing further. 23 MR. TINTERA: No further questions. 24 THE COURT: Thank you. You may step 25 down. 144 1 MR. SUSSMAN: We have no objection 2 if Mr. Pierce goes on his trip to Santa Clara. 3 THE COURT: You may be excused. 4 MR. SUSSMAN: Before Mr. Pierce 5 does, perhaps we ought to talk about the issue of 6 scheduling. 7 THE COURT: I assume we're going to 8 need a day. 9 MR. SUSSMAN: Easily. Part of that 10 will depend on how long we need to be with the 11 arguments over the discovery. I would expect that 12 we can have the motion filed on the requesting 13 material that is the subject of our subpoena by 14 tomorrow. I don't know, based on that, then, 15 when -- how much time the State and Mr. Pierce 16 would like to respond to that to set that for 17 hearing. 18 MR. TINTERA: Is this just for the 19 motion? This is just for the motion to request the 20 court to authorize the subpoena? 21 THE COURT: Well, to make good use 22 of time, I'd like to go ahead and schedule that and 23 then whatever evidentiary matters we need will 24 follow. 25 MR. TINTERA: I see it a little 145 1 differently. I know the statute is new to all of 2 us. As I see it, there is a preamble to get any 3 documents produced is a motion by the defendant to 4 request of the parties before hearing or trial to 5 produce documents to the court and the Judge has 6 some active role in whether he's going to approve 7 those subpoenas or not. 8 I assume the court would address any 9 concerns that the State would have. Then I see 10 after those subpoenas are judicially authorized, 11 then I see them being served and then I see that's 12 where Mr. Pierce may have some objections in regard 13 to the content of the subpoenas once we hammer out 14 what is going to be in them. 15 THE COURT: That's probably 16 mechanically a good way to do it. Then we need a 17 day we can meet and talk about defense motions and 18 any objections there may be. Depending upon my 19 ruling, we'll have a hearing at a later date, 20 evidentiary hearing. If I order that the material 21 be produced, that the witnesses could testify and 22 the evidence would be received. What we need first 23 is a day for argument. 24 THE COURT: Could counsel be ready 25 next Tuesday? 146 1 MR. TINTERA: I'm familiar with the 2 subpoenas. If there aren't going to be any 3 material changes and counsel gets his motion filed, 4 we can. The three of us could meet next Tuesday. 5 Mr. Pierce would like 10 working 6 days after the court authorizes the subpoenas in 7 which to respond; is that correct? 8 MR. PIERCE: Your Honor, I'd like 10 9 business days to prepare the protective order and 10 then do a little research into the attorney work 11 product issue. I think by then we should -- 12 THE COURT: Let's meet next Tuesday 13 and I'll hear argument, try to rule on the law and 14 then depending on how I rule, we'd have at least 10 15 days to give Mr. Pierce an opportunity to take a 16 look at drafting anything he might have. Probably 17 shoot for about two weeks to begin evidentiary 18 hearing and hear any objections or motions. 19 MR. SUSSMAN: Your Honor, 20 Mr. Schwartz asked if it would be possible that he 21 be excused from appearing on Tuesday because he has 22 over the next several weeks, he has in his current 23 work contracts that would have him doing either 24 teaching classes or doing specific work out of town 25 a portion of next week and so if he doesn't have to 147 1 be here on Tuesday, he can take care of some 2 business. 3 THE COURT: It's a bit unusual for a 4 defendant in a criminal case not to be present 5 during the proceedings. 6 MR. SUSSMAN: Your Honor, I'm going 7 to withdraw that because as I think about it, I 8 think I'll need him here anyway. 9 THE COURT: Thank you. Tuesday at 10 9:30. We'll decide our next step at that time and 11 set a day for further proceedings. 12 MR. SUSSMAN: Thank you. 13 MR. TINTERA: Before we adjourn, I 14 know this is done sometimes in civil cases, I'm not 15 sure that it's done in criminal cases, at least not 16 through the actual court, but as the court has 17 picked up, this is somewhat of a specialized area 18 and I know Your Honor has agreed to keep certain 19 cases and you might want to consider this 20 particular case because we really, even today, you 21 probably notice that you're getting more familiar 22 with the area and we're going to really have to 23 recreate a rather large wheel if we have a 24 different trial judge. 25 THE COURT: The thought entered my 148 1 mind. This is a very interesting case and 2 occasionally on complex cases, it's appropriate for 3 the judge hearing the motions to also be the trial 4 judge. I already have a complex trial case set to 5 begin November 8. When is this trial set to begin? 6 MR. TINTERA: It's set for the 1st. 7 THE COURT: It might be possible. I 8 think there is a fair possibility that that other 9 case might settle, so if counsel don't have any 10 objection, I'll stay on for now and see where we 11 go. 12 MR. SUSSMAN: I have no objection. 13 In fact, I concur. I think that as this develops, 14 it will be very important for the same judge to be 15 hearing things because I think there will be 16 evidentiary questions at trial which would put the 17 trial judge at a great disadvantage in ruling based 18 on -- 19 THE COURT: I understand. I don't 20 disagree with that at all. I like the concept in a 21 complex or unusual case that the judge hearing the 22 motion is also hearing the trial. Makes it easier 23 for the court and for counsel. We'll see. I'll 24 let calendaring and presiding judge know that I 25 have that interest and counsel has made that 149 1 request and we'll see if we can do it. 2 MR. SUSSMAN: Perhaps we can also 3 clarify that we can address additional scheduling 4 on Tuesday. I have some concerns, based on 5 Mr. Pierce's request, in terms of the timing on 6 things. I have no problem with him having the 10 7 days, but on October 17, I will be starting a 8 murder trial in Multnomah County. 9 Mr. Tintera and I have already 10 discussed potential problems with that, but it will 11 make scheduling certain things between October 17 12 and close to the beginning of trial date very 13 difficult. 14 THE COURT: Let's keep that in mind 15 and talk about it next Tuesday. Thank you. 16 MR. TINTERA: Thank you, Judge. 17 MR. SUSSMAN: Thank you. 18 THE COURT: I encourage and I 19 appreciate the degree of cooperation I've seen 20 between counsel here in this case. It makes it 21 most helpful to the court and I appreciate that. 22 Keep up the good work. 23 MR. TINTERA: Thank you, Judge. 24 THE COURT: You can be good 25 advocates and yet get along and cooperate. 150 1 MR. TINTERA: Can I get a 2 certificate? 3 THE COURT: You may. With that, we 4 are in recess until next Tuesday. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 151 1 STATE OF OREGON ) ) ss. 2 County of Washington ) 3 4 5 I, Frank R. Rosales, CSR, the 6 undersigned, do hereby certify that on the date so 7 stated in the before-captioned matter, I was an 8 Official Court Reporter for the Twentieth Judicial 9 District of the State of Oregon and that as such, I 10 did make a record by means of Stenotype of the 11 before-captioned matter and that the foregoing 12 transcript is a true and accurate record of said 13 proceedings. 14 DATED this 15th day of January, 15 1997. 16 17 18 ____________________________ 19 Frank R. Rosales, CSR Official Court Reporter 20 21 22 23 24 25