DIRECTIVES ISSUED ON NET PRIVACY

WASHINGTON -- The Clinton administration's budget office issued strict
new rules Thursday for how government agencies use software to track
Internet users and ordered all departments to immediately review their
compliance with existing privacy policies.

The directive from the Office of Management and Budget comes a day
after the White House ordered its Office of National Drug Control
Policy to stop tracking computer users viewing its anti-drug
advertising on the Internet. The ads, sold by a company contracted by
the drug office, used ``cookies,'' small software files often placed
on computers without a person's knowledge that can can track movement
on the Web and collect personal data.

In a memo to all government agencies, budget director Jack Lew
explicitly pointed out that the administration's privacy policies
include all contractors operating Web sites on behalf of the government.

``Under this new federal policy, 'cookies' should not be used at
federal Web sites, or by contractors when operating Web sites on
behalf of agencies,'' Lew said, noting there would be strict
requirements for using the software.

Federal agencies will have to demonstrate a ``compelling need to
gather the data,'' publicly disclose how any collected personal
information would be protected and get the authorization of the agency
head. For example, using a cookie on a State Department Web site would
require the personal approval of Secretary of State Madeleine Albright.

The new directives also require agencies to include descriptions of
their compliance with the Web privacy policies in their budget
submissions this fall.

As far as protecting a person's personal information, the government
must make sure it practices what it posts.

``If an agency Web site states that the information provided will not
be available to any other entities, it is the responsibility of the
agency to assure that no such sharing takes place,'' Lew said.

Earlier Thursday, Republican lawmakers denounced the drug policy
office for its tracking of computer users, a practice contrary to the
administration's own guidelines.

``The government should not be in the business of cybersnooping,''
said House Majority Leader Dick Armey, R-Texas. ``These sites ought to
be an essential link for citizens who want to become more involved in
our government. It is an outrage when this vital trust is violated by
the lack of concern for personal privacy.''

Following the White House's order to cease using the software, the
drug policy office ordered their contractors to stop using the cookies
as soon as possible, said Don Maple, who helps run the office's media
campaign.

``We had obviously underestimated the administration's sensitivity to
the use of this technique,'' he added.

Last week, Armey, along with Reps. Bill Tauzin, R-La., and Bob
Goodlatte, R-Va., wrote the White House requesting all federal Web
sites be checked for compliance with Internet privacy standards
proposed for business by the Federal Trade Commission.

``A project with links and tracking to proprietary Web sites and
business has vast privacy implications with which Congress should be
consulted,'' Tauzin said in a letter to Barry R. McCaffrey, head of
the drug policy office.

Various Web sites displayed the anti-drug ads, which also appeared on
Internet search engines when users typed in key words related to
drugs. Users clicking on the ads were taken to a drug policy office
site called ``Freevibe,'' which targeted young people. Upon entering
the site, a cookie was placed on users' computers.

The tracking totaled the number of people clicking on ads, which ads
they clicked on and what pages they viewed on the Freevibe site, Maple
said.

For the campaign, reported by Scripps Howard News Service this week,
McCaffrey's office used the firm Ogilvy & Mather, which in turn
contracted with DoubleClick, the nation's largest Internet ad agency.

DoubleClick spokesman Josh Isay said the tracking technology wasn't
used to create profiles of Web users.

``It's totally anonymous,'' he said. ``It's not shared with anyone
else.''

However, some critics contend there is no such thing as total
anonymity with cookies.

Ari Schwartz, a policy analyst for the Washington-based consumer
advocacy Center for Democracy and Technology, said even the most
innocuous Web tracking contains some minimal identifying
information.

``We're talking about tracking people on drug sites,'' he said. ``It's
not too far of a step to assume a law enforcement agency could come
asking for this information and track down individuals.''

Isay said he didn't know if other government agencies had contracted
his company for similar services.