Latvia takes second crack at whistle-blowing 'hacker' Neo

Three years after his whistle-blowing "hack" of Latvian government information as the pseudonymous "Neo," computer scientist Ilmars Poikans is back in prosecutors' cross-hairs.

In the spring of 2010, Mr. Poikans made headlines as "Neo" after he released salary information he obtained from a hole in the Latvian State Revenue Service (SRS) website to highlight high government salaries – despite Latvia's official austerity policies amidst a grueling economic downturn. Though Latvian authorities determined that Poikans had not violated the country's hacking laws, earlier this month they formally charged Poikans with violating laws protecting personal privacy and the confidentiality of commercial data.

But despite the legal difficulties that have beset him since, Poikans says that his whistle-blowing, arrest, and the media and public uproar that followed seem to have served the interests of more government transparency.

“The Neo incident led to a law mandating monthly disclosure of public employees' salaries. It also raised awareness of data security issues in the public sector, leading to extra audits of government IT systems and, hopefully remedies of any deficiencies found,” he says.

Neo's whistleblowing

In late 2008, Latvia suffered one of the most severe economic downturns in Europe, with a double-digit drop in gross domestic product (GDP). As a result, the country adopted a variety of austerity policies, including purported cuts in public servant salaries and in salaries for managers of state-owned companies.

In the summer of 2009, Poikans, an artificial-intelligence researcher at the University of Latvia’s Institute of Mathematics and Computer Science, discovered a hole in the SRS website's security. By simply changing the last digit of a particular web address, usually used by taxpayers for filing or examining their own tax returns, he found that he could access salary data for most government employees.

Poikans then unobtrusively downloaded 250 gigabytes of data, including salaries from a wide range of Latvian government ministries, state-owned companies, and municipalities. He processed and, with some exceptions, anonymized the salary data for thousands of public sector employees in an effort to see whether Latvia’s public sector had cut bonuses and high salaries in accordance with austerity policies.

He found that many, but not all, state and municipal institutions continued to pay high salaries and bonuses to top officials – flaunting the austerity demanded by the government, the International Monetary Fund, and other international lenders participating in the bailout of the Baltic country. While some ministries, companies, and municipalities fell into line, many institutions were spending as if the economic crisis had never happened.

Poikans leaked the data to Ilze Nagla, then a prominent Latvian television journalist, who broadcast the story in February 2010 on her Sunday night investigative news program “Defacto.” He also left the data as compressed files on Internet file drops to which other journalists were alerted on Twitter after the TV report.

Catalyst for change

Poikans, who was unmasked just a few months later and briefly arrested, was quickly heralded as a hero for his whistleblowing efforts.

Ms. Nagla told the BBC at the time that "A lot of people perceive him as a modern, virtual Robin Hood."

"On the one hand of course he has stolen confidential data... and he actually has committed a crime. But at the same time there is value for the public in the sense that now a lot of information gets disclosed and the whole system maybe becomes a little more transparent," she said.

In fact, in September 2012, more than two years after his arrest, the Latvian authorities dropped an investigation into whether Mr. Poikans was guilty of hacking or breaking into the Revenue Service’s computer network. Prosecutors admitted that Mr. Poikans had committed “no crime” by walking through what was an unlocked electronic doorway.

And now, many say that the Neo incident accelerated much needed reforms of information security in the Latvian public sector.

“The incident had a positive effect on subsequent developments. It brought attention to these problems and society talked about it, which was important and was one of the factors leading to the drafting of a law on information security,” Maris Andzans, the chairman of Latvia’s National Information Security Council and a high security official in the Ministry of Transport, told TV3 in Latvia earlier this month.

“Neo came at a time when there was a crisis of legitimacy for those in power in Latvia, and what he did influenced government decisions against the background of a public desire for change, which Neo addressed,” says Ivars Ijabs, an assistant professor of political science at the University of Latvia.

“Transparency is becoming a new religion,” says Mr. Ijabs. “Mr. Poikans is one of its high priests.”

Media activism

Poikans' whistleblowing also indirectly led to the founding of a new, more activist journalists’ organization and a series of protests in Latvia, for various causes, in which Twitter and social media played a key role.

When on May 11, 2010, police went after Neo, now exposed as Poikans, they also sent three plainclothes officers to push their way into Nagla’s apartment as she came home around 10 p.m. and seize her laptop and other digital media. The young journalist, living alone at the time, first thought criminals were invading her home.

The search of a well-known television reporters’ residence outraged media workers in Latvia, and 120 of them signed an open protest letter, with some of the signatories forming the core of a new Latvian Journalists’ Association – after the Soviet-legacy Journalists’ Union failed to act quickly on Nagla’s behalf.

A “flash protest” organized on Twitter gathered several hundred demonstrators in front of the Cabinet of Ministers in downtown Riga and a second smaller demonstration took at the State Prosecutor’s office. The use of social media for spontaneous protests became commonplace after these events.

As Nagla said on a recent television talk show discussing the pending charges against Poikans, the events he triggered three years ago did trigger changes, even if they were small ones.

Neo's future

The charges pending against Poikans can carry up to two years in prison, an equivalent suspended sentence, a fine, or community service work. When asked how he saw his chances of acquittal or conviction, Poikans uses a common Latvian expression for complete unpredictabiliy.

"The courts are like a swarm of bees. You never know what they will do," he says.  

But the possible criminal prosecutions hanging over the computer scientist haven’t detered him from continuing his awakened activism. Poikans has been involved in a series of civil lawsuits challenging what he and his lawyers allege are unfairness and a lack of transparency in the way electricity tariffs are regulated in Latvia.

“The citizens of the country have to have the possibility to check these against the facts,” Poikans says. "The more transparent you make process in the government, the lesser the chance that something will be done against the interests of society."