WHEN: Today, Monday, February 29th
WHERE: CNBC's "Squawk Alley"
Following is the unofficial transcript of a FIRST ON CNBC interview with Apple attorney Ted Boutrous on CNBC's "Squawk Alley" (M-F, 11AM-12PM ET) today, Monday, February 29th.
All references must be sourced to CNBC.
CARL QUINTANILLA: THE ONGOING BATTLE BETWEEN APPLE AND THE FBI WILL HEAT UP AGAIN TOMORROW AS THE HOUSE JUDICIARY COMMITTEE IS SET TO HOLD A HEARING ON ENCRYPTED DEVICES. APPLE'S GENERAL COUNSEL IS EXPECTED TO TESTIFY IN A FIRST ON CNBC INTERVIEWS, WE'RE JOINED BY APPLE'S ATTORNEY TED BOUTROUS IN LOS ANGELES, AND OUR JOSH LIPTON IN SAN FRANCISCO. JOSH, TAKE IT AWAY.
JOSH LIPTON: TED, THANK YOU FOR JOINING US THIS MORNING.
TED BOUTROUS: THANK YOU FOR HAVING ME. IT'S GOOD TO BE WITH YOU.
LIPTON: SO TED, THE GOVERNMENT'S ARGUMENT HERE IS, LISTEN, WE'RE SIMPLY ASKING APPLE FOR HELP WITH A SINGLE PHONE IN A SINGLE CASE. IS THAT ACCURATE, TED?
BOUTROUS: THAT IS NOT ACCURATE. THEY SAY JUST THIS ONE TIME, JUST THIS PHONE. BUT FIRST, YOU HAVE PROSECUTORS STATE AND LOCAL PROSECUTORS LINING UP. CY VANCE, THE DISTRICT ATTORNEY IN NEW YORK SAYS HE HAS SOMETHING LIKE 175 PHONES. HE ABSOLUTELY BELIEVES APPLE SHOULD BE REQUIRED TO ASSIST AND CREATE SOFTWARE AND CREATE A BACK DOOR THAT WOULD ALLOW NEW YORK TO ACCESS THOSE PHONES. YOU ALSO HAVE THE FACT THAT THE FEDERAL GOVERNMENT IS GOING -- HAS GOT TEN OTHER MATTERS PENDING AGAINST APPLE ALONE. SO IT'S JUST WRONG TO SAY THAT. AND I'LL ADD ONE MORE POINT. THE DIRECTOR OF THE FBI, JAMES COMEY, HAS SAID THIS IS ONE OF THE HARDEST ISSUES HE'S EVER FACED IN GOVERNMENT. AND IT'S A BROAD POLICY QUESTION. IT'S NOT ONE LEGAL CASE. IT'S JUST NOT APPROPRIATE TO DEAL WITH THIS THROUGH AN ACTION IN COURT. THIS IS A POLITICAL AND POLICY QUESTION THAT CONGRESS IS GOING TO HAVE TO FACE.
LIPTON: AND TED, AT THE HEART OF THIS CASE IS THE ALL WRITS ACT, THIS CENTURIES' OLD LAW THAT HAS BEEN USED TO COMPEL COMPANIES TO ASSIST THE GOVERNMENT. BUT YOU ARGUE THAT THE GOVERNMENT'S INTERPRETATION OF THE THE ALL WRITS ACT OVERREACHES A GOES TOO FAR. CAN YOU WALK US THROUGH THAT POSITION, TED?
BOUTROUS: I CAN, JOSH. IT'S A VERY IMPORTANT POINT. THE ALL WRITS ACT WAS FIRST ENACTED IN 1789. SO THE -- NO ONE WAS THINKING ABOUT USING IT TO COMPEL A COMPANY LIKE APPLE TO WRITE SOFTWARE IN ORDER TO ALLOW THE GOVERNMENT TO HACK INTO A DEVICE LIKE THE iPHONE. SO IT'S REALLY AN OUTMODED STATUTE. BUT IT'S ONLY MEANT TO ALLOW COURTS TO BASICALLY FILL IN THE GAPS OF THE AUTHORITY THEY ALREADY HAVE. IT'S NOT MEANT TO ALLOW THE COURTS AT THE GOVERNMENT'S REQUEST TO RECOGNIZE A WHOLE NEW POWER. AND THE GOVERNMENT IN THIS CASE HAS SAID, WELL WE'VE DONE THIS BEFORE. WE'VE USED THE STATUTE BEFORE IN THIS WAY. IT'S JUST NOT TRUE. NORMALLY, THE ALL WRITS ACT HAS BEEN USED TO ALLOW COURTS TO COMPEL PRODUCTION AND SUPPLYING OF INFORMATION THAT ALREADY EXISTS TO THE GOVERNMENT. HERE THE GOVERNMENT IS ASKING THE COURT TO COMPEL APPLE TO WRITE NEW SOFTWARE THAT WOULD -- HAS NEVER EXISTED THAT APPLE THINKS IS DANGEROUS TO HAVE EXIST, BECAUSE IT WOULD THEN BE SUBJECT TO HACKERS, CRIMINALS, TERRORISTS AND THEFT BY THEM AND MISUSE BY THEM, WHICH THREATENS THE SECURITY OF HUNDREDS OF MILLIONS OF PEOPLE AROUND THE GLOBE. AND SO TO USE THIS STATUTE FOR THOSE PURPOSES WOULD BE IMPROPER, WOULD VIOLATE THE SEPARATION OF POWERS. IT WOULD HAVE THE COURT RESOLVING THIS POLICY QUESTION ABOUT ENCRYPTION THAT IS RAGING ACROSS THE COUNTRY. THAT'S SOMETHING FOR CONGRESS, NOT FOR THE COURTS TO DO -- USING THE ALL WRITS ACT.
JON FORTT: TED, IT'S JON FORTT HERE IN NEW YORK. DIG INTO THIS ARGUMENT, IF YOU WILL, ABOUT IT BEING DANGEROUS TO HAVE THIS SOFTWARE EXIST. BECAUSE A LOT OF PEOPLE HAVE SAID, WELL, JUST CREATE THE SOFTWARE, KEEP IT IN CUPERTINO, LET APPLE BE THE ONLY ONES WITH ACCESS TO IT. IS APPLE CONCERNED THAT THE PEOPLE WHO CREATE THE SOFTWARE, IT'S STILL IN THEIR MINDS, AND THEY COULD RECREATE IT SOMEWHERE ELSE IF COMPELLED TO? ARE THEY CONCERNED THEIR OWN SYSTEMS COULD BE HACKED OR MIGHT ALREADY BE INFILTRATED, SAY, BY FOREIGN GOVERNMENTS? WHAT -- WHY IS THIS SO DANGEROUS?
BOUTROUS: WELL, AS OUR ENGINEER LAID OUT IN HIS AFFIDAVIT AND THE COURT FILING WE MADE LAST WEEK, SOFTWARE AND CODE IS PERSISTENT. IT'S NOT GOING TO GO AWAY, EVEN IF APPLE WERE TO DESTROY IT AFTER THE FBI HAD ACCESS TO THIS iPHONE. AND THE OTHER THING IS THAT OTHER GOVERNMENTS, STATE, LOCAL, FOREIGN GOVERNMENTS, ARE GOING TO COME BACK AND SAY, DO IT AGAIN. AND SO IT'S NOT GOING TO DISAPPEAR. YOU CAN'T MAKE THIS SOFTWARE GO AWAY. AND AS YOU ALL KNOW, DATA IS UNDER ASSAULT. CRIMINALS, TERRORISTS, HACKERS, ARE TRYING TO BREAK INTO EVERYONE'S DATA. THE FEDERAL GOVERNMENT CAN'T KEEP CONTROL OF ITS OWN DATA. SO THERE ARE ALL SORTS OF RISKS. IT'S -- TIM COOK HAS NOTED THIS WOULD BE LIKE CREATING A MASTER KEY THAT COULD THEN BE EITHER RECREATED OR PULLED OFF THE SHELF AND USED OVER AND OVER AGAIN. AND EVERY TIME THAT HAPPENS, IT'S GOING TO CREATE A RISK, A SECURITY RISK. AND SO THE GOVERNMENT IS TRYING TO PORTRAY THIS AS NATIONAL SECURITY AND LAW ENFORCEMENT AGAINST OTHER INTERESTS, BUT THEY OVERLOOK THE SECURITY INTERESTS OF CITIZENS, THEIR DATA. SO WE DO THINK THIS IS A VERY SIGNIFICANT RISK. AND THAT WE'RE BETTER OFF PROTECTING DATA AND NOT CREATING THIS TOOL, WHICH WE THINK WOULD BE DANGEROUS TO EVERYONE.
QUINTANILLA: TED, YOU MENTIONED THE FOREIGN GOVERNMENT ELEMENT OF ALL OF THIS. HOW MUCH OF THE LEGAL CALCULUS AT THE COMPANY IS AIMED AT PREVENTING A SNOWBALLING EFFECT ONCE THIS MOVES TO THE U.K. ONCE THIS MOVES TO CHINA AND OTHER PARTS OF THE WORLD?
BOUTROUS: IT REALLY IS AN IMPORTANT POINT. AGAIN, THE GOVERNMENT SAYS JUST DO IT THIS ONE TIME. JUST THIS ONE PHONE. BUT YOU KNOW THAT THE GOVERNMENTS AROUND THE WORLD WILL SAY, IF YOU CAN DO IT IN THE U.S., WHERE THE PROTECTIONS OF PRIVACY AND INDIVIDUAL RIGHTS ARE REALLY AT THEIR ZENITH, WE HAVE THE STRONGEST PROTECTIONS ANYWHERE IN THE WORLD OF CIVIL LIBERTIES. AND IF APPLE WERE WILLING TO DO THIS IN THIS ONE -- THIS PARTICULAR CASE, EVERY OTHER COUNTRY IS GOING TO SAY, WELL THEN YOU HAVE TO DO IT FOR US. YOU HAVE TO CREATE OR LET US USE THAT SOFTWARE THAT YOU'VE CREATED TO ACCESS THE DATA OF CITIZENS IN OUR COUNTRY. SO THAT IS A VERY SERIOUS CONCERN. AND, AGAIN, I THINK IT'S INACCURATE FOR THE DIRECTOR COMEY AND OTHERS TO SAY THIS IS A ONE-TIME SHOT. THEY KNOW THAT PROSECUTORS ARE LINING UP HERE IN THE UNITED STATES, AND AROUND THE WORLD. SO IT'S A VERY SERIOUS CONCERN, CARL.
LIPTON: AND TED, WE HAVE SEEN A LOT OF BIG TECH COMPANIES NOW SUPPORTING APPLE, RIGHT? SO MICROSOFT, FACEBOOK, GOOGLE. WHY IS THAT KIND OF SUPPORT FROM BIG TECH IMPORTANT IN THIS CASE, AND DO YOU EXPECT OTHER TECH COMPANIES TO RALLY TO YOUR SIDE, AS WELL?
BOUTROUS: IT'S VERY IMPORTANT. I THINK, ONE, IT GOES TO THIS POINT THAT THIS ISN'T JUST ONE EPISODE. THAT IT'S NOT JUST THIS ONE EVENT. THIS REQUEST BY THE GOVERNMENT, THE ORDER THAT THEY'RE SEEKING, HAS WIDESPREAD GLOBAL REPERCUSSIONS FOR TECH COMPANIES AND OTHER COMPANIES AROUND THE WORLD. SO IT'S VERY IMPORTANT. I THINK IT DEMONSTRATES THAT FACT. WE'RE VERY PLEASED THAT WE'RE GOING TO HAVE A STRONG SHOWING FROM AN ARRAY OF COMPANIES, CIVIL LIBERTIES GROUPS, OTHERS THIS WEEK WHO WILL FILE BRIEFS IN COURT, SUPPORTING APPLE'S POSITION AND SAYING YOU CAN'T GO DOWN THIS ROAD. WE HAVE COMPETING INTERESTS HERE. THE INTEREST IN PROTECTING THE SECURITY OF THE DATA OF MILLIONS OF CITIZENS IS AN EXTREMELY IMPORTANT INTEREST, AND I THINK THAT IT WILL BE IMPORTANT FOR THE COURT TO HEAR THOSE VOICES, TO HEAR FROM OTHER COMPANIES, CIVIL LIBERTARIANS, MEDIA ORGANIZATIONS, AND OTHERS SAYING THIS IS A FUNDAMENTAL PRINCIPLE. IT'S PART OF OUR DEMOCRACY, IT'S PART OF OUR SYSTEM. WE HAVE TO PROTECT THAT INTEREST, THOSE INTERESTS – SECURITY, PRIVACY OF CITIZENS – EVEN IN A DIFFICULT SITUATION LIKE THIS. AND TO THE EXTENT THERE ARE GOING TO BE CHANGES AND THAT THE LAW IS GOING TO BE CHANGED TO GIVE COURTS THIS SWEEPING POWER, THAT'S SOMETHING THAT CONGRESS NEEDS TO CONSIDER, AND THERE'S GOING TO BE A HEARING TOMORROW, AS YOU NOTED AT THE OUTSET.
LIPTON: AND I WANT TO TOUCH ON THAT POINT, TED. ARE YOU SUGGESTING THAT THESE ISSUES HERE ARE JUST SO BIG, SO COMPLEX AND CRITICAL, THAT IT SHOULDN'T BE HANDLED BY JUDGES THAT CONGRESS DOES, IN YOUR OPINION, NEED TO HAVE A MUCH MORE ACTIVE ROLE?
BOUTROUS: ABSOLUTELY. AND RELATED TO THE ALL WRITS ACT POINT THAT YOU ASKED ME ABOUT, JOSH, THE SEPARATION OF POWERS DOCTRINE, WHICH IS REALLY IMPORTANT HERE, SAYS THAT COURTS ARE TO DECIDE CASES AND UNDER THE LAW, AND UNDER THE POWERS THAT CONGRESS GIVES THEM. COURTS ARE NOT SUPPOSED TO BASICALLY CREATE NEW LAW. WHAT THE GOVERNMENT IS ASKING THE COURT TO DO IS TO ESSENTIALLY AMEND THE EXISTING STATUTES, TO GIVE THE GOVERNMENT MORE AUTHORITY TO PERSUADE COURTS TO REQUIRE THAT THE COMPANIES BASICALLY DO NEW SOFTWARE, WRITE NEW SOFTWARE, TO DECRYPT THEIR OWN – TO ALLOW THE GOVERNMENT TO DECRYPT THEIR OWN PRODUCTS. THAT WOULD BE A SIGNIFICANT CHANGE IN THE LAW, AND THAT'S SOMETHING CONGRESS NEEDS TO LOOK AT. WE THINK THAT CONGRESS, WHEN IT DOES LOOK AT IT, WILL SAY THAT AUTHORITY SHOULDN'T BE GRANTED. BUT THAT'S SOMETHING THAT CONGRESS NEEDS TO LOOK AT, AND DEAL WITH IT THROUGH THE LEGISLATIVE PROCESS, NOT THE JUDICIAL PROCESS.
LIPTON: IN THAT JUDICIAL PROCESS, THOUGH, TED, YOU KNOW, A BIG DATE TO CIRCLE IS MARCH 22ND. IT IS WHEN YOU'LL BE BACK IN COURT IN RIVERSIDE, CALIFORNIA. WHAT SHOULD WE EXPECT THAT DAY?
BOUTROUS: IT'S GOING TO BE A VERY IMPORTANT DAY. WE'LL BE BEFORE THE MAGISTRATE JUDGE, AND BOTH SIDES WILL HAVE THE OPPORTUNITY TO LAY OUT THEIR ARGUMENTS, AND TALK ABOUT THE EVIDENCE AND TALK ABOUT THE LAW HERE. AND WE OBVIOUSLY WILL ARGUE THAT THE LAW DOES NOT EXTEND THIS FAR. THERE IS THE FACT THAT THE COURTS ARE NOT ALLOWED TO ORDER INDIVIDUALS TO SPEAK. THIS IS A FORM OF COMPELLED SPEECH. WRITING CODE IS A FORM OF SPEECH. AND HERE, THE ARGUMENTS WILL BE LAID OUT BY THE GOVERNMENT AS TO WHY THEY THINK THEY NEED TO ACCESS THIS INFORMATION AND WHY THEY THINK THE GOVERNMENT HAS THE POWER TO DO THIS. AND WE'RE GOING TO ARGUE THAT THE COURT SIMPLY DOES NOT HAVE THAT AUTHORITY, AND THAT IT WOULD BE DANGEROUS TO GO DOWN THIS ROAD.
FORTT: TED, DO YOU EXPECT –
LIPTON: WHAT DO YOU MAKE, TED, I'M INTERESTED – I'M SORRY, GO AHEAD, JON.
FORTT: TED, DO YOU EXPECT THIS TO GO TO THE SUPREME COURT? DOES IT NEED TO REACH THAT LEVEL BECAUSE OF THE LACK OF PRECEDENT IN SO MANY OF THESE AREAS THAT WE'RE TALKING ABOUT HERE. THE FACT THAT SOFTWARE HAS BECOME SUCH A PROMINENT FEATURE IN AMERICAN LIFE, AND THAT THESE ISSUES OF DATA SECURITY HAVE TAKEN ON GLOBAL IMPORT.
BOUTROUS: THESE ARE BIG ISSUES. AND THE SUPREME COURT HAS LOOKED AT ISSUES SIMILAR TO THIS AND HAS RECOGNIZED IN A RECENT CASE THAT THE GOVERNMENT CITED, ACTUALLY, THAT IT'S INACCURATE TO JUST THINK OF THESE AS PHONES. THESE DEVICES. THE iPHONE. BECAUSE IT HAS EVERY DETAIL OF A PERSON'S LIFE. IT'S WHO YOU ARE IS ON THE PHONE. AND THE SUPREME COURT HAS SHOWN A GREAT SENSITIVITY TO PROTECTING THE PRIVACY RIGHTS OF CITIZENS. AND THAT CUTS ACROSS THE IDEOLOGICAL SPECTRUM, TOO. SO I THINK THESE ISSUES COULD WELL END UP IN THE SUPREME COURT. BUT FROM OUR PERSPECTIVE, WE'RE IN THE NINTH CIRCUIT COURT OF APPEALS, WHICH HAS VERY STRONG CASE AUTHORITY THAT SUPPORTS OUR POSITION, BOTH IN TERMS OF THE REACH OF THE ALL WRITS ACT OR THE LACK OF REACH. AND IT'S VERY PROTECTIVE OF CIVIL LIBERTIES. SO WE FEEL THAT THE COURTS ARE GOING TO HAVE TO BE LOOKING AT THESE ISSUES, AND WE'RE, I THINK, CREATING A RECORD IN THIS CASE THAT WILL PUT US IN GOOD POSITION IF THE CASE MOVES FORWARD AND THE GOVERNMENT KEEPS PRESSING THESE ISSUES.
QUINTANILLA: TED, A LOT OF PEOPLE STILL ASK, YOU KNOW, TECHNOLOGY ALWAYS EVOLVES. WHY CAN'T LAW ENFORCEMENT'S ABILITY TO LEVERAGE IT ALSO EVOLVE? IN OTHER WORDS, YOU CAN'T HAVE WIRETAPS UNTIL THE TELEPHONE CAME ALONG. WHY CAN'T WE HAVE THE KIND OF CODE THE GOVERNMENT WANTS NOW THAT, IN FACT, ENCRYPTION HAS BECOME SO PERVASIVE?
BOUTROUS: WELL, THAT IS REALLY THE ISSUE, I THINK, THAT CONGRESS WILL NEED TO ADDRESS. AND YOU'RE RIGHT, THAT AS TECHNOLOGY DEVELOPS, CONGRESS AMENDS STATUTES, ENACTS STATUTES, TO ADJUST TO THESE ISSUES THAT ARISE THROUGH EVOLVING TECHNOLOGY. THAT'S TRUE. BUT I WANT TO MAKE ONE POINT CLEAR. APPLE HAS COOPERATED AND SUPPORTS LAW ENFORCEMENT EFFORTS UNDER THE CURRENT LAW. IN THIS CASE, IN THE SAN BERNARDINO CASE, THE COMPANY WORKED VERY HARD TO RESPOND TO THE GOVERNMENT'S REQUEST UNDER THE LAW. SO THERE'S NO QUESTION THAT COMPANIES LIKE APPLE HAVE AN OBLIGATION TO HELP LAW ENFORCEMENT WHEN IT'S REQUIRED UNDER THE LAW. BUT HERE THIS IS REALLY EXTRAORDINARY. THE GOVERNMENT WANTS THE AUTHORITY TO REQUIRE THE COMPANY TO CREATE A DEGRADED VERSION OF ITS OWN PRODUCT. THAT IS SOMETHING IT SHOULDN'T BE PERMITTED. BUT THOSE ARE THE KIND OF ISSUES IN TERMS OF THE INTERSECTION OF TECHNOLOGY, CIVIL LIBERTIES, LAW ENFORCEMENT, THAT NEEDS TO BE LOOKED AT BY LAWMAKERS. IT'S JUST NOT AN ISSUE FOR A COURT TO DECIDE IN ONE PARTICULAR CASE, WHICH COULD HAVE SIGNIFICANT RAMIFICATIONS FOR ALL CITIZENS EVERYWHERE.
LIPTON: AND FINAL QUESTION, TED. YOU KNOW, AND I WANT TO GIVE YOU THE CHANCE TO ADDRESS THIS ARGUMENT. I'VE HEARD SOME ARGUE THAT, LISTEN, ULTIMATELY, WHAT THE GOVERNMENT IS ASKING FOR IS A LOT LIKE WHEN THE GOVERNMENT ASKS FOR E-MAILS OR FOR PHONE RECORDS FROM A COMPANY LIKE AT&T. IS THAT A FAIR COMPARISON, TED?
BOUTROUS: THAT REALLY GOES TO THE HEART OF THE PROBLEM WITH THE GOVERNMENT'S ARGUMENT. IT'S NOT A FAIR COMPARISON. APPLE PRODUCED INFORMATION LIKE THAT TO THE GOVERNMENT IN THIS VERY MATTER. AND SO WHAT THE LEAP FORWARD THAT'S BEING TAKEN HERE IS THE GOVERNMENT IS ASKING THE COURT TO ORDER THE COMPANY TO WRITE NEW SOFTWARE THAT WOULD ALLOW THE GOVERNMENT THEN TO CREATE BASICALLY A DIFFERENT iPHONE SO IT CAN HACK INTO THE iPHONE. THAT IS – IT'S LIGHT YEARS AWAY FROM THE KIND OF AUTHORITY THAT NORMALLY IS EXERCISED BY COURTS AND THE KIND OF REQUESTS THE GOVERNMENT MAKES. SO THAT'S WHY IT'S COMPLETELY UNFAIR TO SUGGEST, WELL, THIS HAPPENS ALL OF THE TIME. IT'S NEVER HAPPENED BEFORE. IT IS AN EXTRAORDINARY REQUEST. AND IT WOULD HAVE AN IMPACT ON THE SECURITY AND PRIVACY OF EVERY PERSON WHO HAS AN iPHONE OR OTHER DEVICE. AND SO THAT'S WHY WE THINK THIS IS SUCH AN IMPORTANT ISSUE, AND EVERYONE NEEDS TO KNOW THE FULL STORY.
LIPTON: WELL, TED, THANK YOU SO MUCH FOR YOUR TIME THIS MORNING, SIR. WE DO APPRECIATE IT.
BOUTROUS: THANKS SO MUCH FOR HAVING ME.
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