Judge in Hacktivist Case Refuses to Step Aside

MANHATTAN (CN) - A chief federal judge refused to step down from the case of a computer hacker who allegedly exposed her husband's work email address in a cyberattack.

Chief U.S. District Judge Loretta Preska said that her husband, Cahilll Gordon & Reindell attorney Thomas Kavaler, was not a victim because his email already was publicly available on the firm's website.

"Finding otherwise on a record as suspect as here would only encourage supporters of this defendant - or other defendants-to allege unsubstantiated conflicts of interest against any my brothers and sisters the court until no judge remained qualified to hear his case," Preska wrote. "Therefore, accepting defendant's invitation for recusal in this case would actually undercut the very policy defendant prays this court to sustain - namely, promoting public confidence in the Judiciary."

The decision means Preska will continue to preside over the case of hacker-activist Jeremy Hammond for his role into the online infiltration of Strategic Forecasting, or Stratfor, a self-described "global intelligence" outfit.

The FBI breached the collective in a March sting operation after making an informant out of Hector Monsegur, a hacker known online as Sabu, who led a group called LulzSec.

Agents picked up Hammond at his home in Chicago, but the other defendants - Ryan Ackroyd, Jake Davis, Darren Martyn and Donncha O'Cearrbhail - were arrested in the United Kingdom and Ireland.

Prosecutors say the quintet exposed the private information of 860,000 Stratfor clients, extracting more than 5 million emails that WikiLeaks published under the name Global Intelligence Files.

When a web-development company named Dazzlepod published a website for Stratfor subscribers to discover whether they were victims of the hack, Hammond's supporters in the Anonymous hacker collective trumpeted a connection to Kavaler.

Hammond's lead defense attorney Elizabeth Fink used this information in a motion to have Preska recuse herself from the case.

In arguing against recusal, Hammond's prosecutors said that a subsequent FBI probe found that none of Kavaler's sensitive information had been compromised.

"Based on this investigation, the FBI has determined that the only personal identifying information related to Mr. Kavaler that was 'stolen' or disclosed as a result of the hack was Mr. Kavaler's publicly available law firm email address; Stratfor's data did not contain any credit card information associated with Mr. Kavaler," prosecutors wrote in a Dec. 21, 2012, memo.

Kavaler added in an affidavit that he had only subscribed to Stratfor for two weeks, never gave the company his credit card, and does not even recall his membership.

At a hearing Thursday morning, attorney Fink acknowledged that she could not prove Kavaler had been directly harmed by the hack. She insisted, however, that the "appearance of partiality" demanded that Preska step down from the case.

Preska countered that the standard calls for her to consider the "views of the well-informed observer, not thousands of blog pages with wrong information."

Fink responded by handing Preska more mainstream coverage of Attorney General Eric Holder's recent speech on protecting trade secrets. Holder's speech focused on the threat of hackers linked to the Chinese military, but the White House strategy on the issue also implicated hacker collectives and WikiLeaks.

Unimpressed, Preska said, "How am I supposed to read a news article? It's rank hearsay!"

Fink's co-counsel, Sarah Kunstler, added that Kavaler's position with Cahill Gordon underlined that concern.

Hammond's attorneys believe that more than 20 Cahill Gordon clients were victims of the hack, and that their exposed clients went on to win an estimated $1.75 settlement from Stratfor.

Even though Kavaler was not a member of that class action, Kunstler said his supposed position as a "managing partner" of the firm gave him a strong connection to it.

Preska said that Kunstler was mistaken about her husband's role in the firm.

"He'd be flattered to hear that, but it's not reflected in the papers," she said. "I also happen to know it's not true, the managing partner part."

Kunstler then argued that a lack of financial ties would not preclude Kavaler from having a more emotional stake in the case.

"There are clients, and these are not only financial relations," she said. "These are personal relations. ... You care about the release of their information."

Prosecutor Thomas Brown called that notion "rank speculation."

In denying recusal, Preska said that describing Kavaler's ties to the case as "arising even to the level of remote, contingent, or speculative would be a misuse of such adjectives."

Another facet of the hearing related to Hammond's demand for more computer time at MCC to look through the evidence.

Prosecutors said they had arranged for Hammond to have much more time, but that the 28-year-old inmate lost that access when he tested positive for smoking contraband pot. The Metropolitan Correctional Center punished Hammond by putting him in solitary confinement. Special Housing Unit placement limits Hammond's access to government-provided laptops and hard drives for his research, prosecutors said.

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