The percentage of Americans who trust in the ability of the Department of Justice to maintain their privacy dropped to just 21 percent, a nine percentage point decrease since last year, according to a recent annual survey by the independent research center the Ponemon Institute.

The institute surveyed over 9,000 Americans on their opinions concerning privacy and the federal government.

The survey asked Americans to rate the privacy efforts by various federal government agencies.  Over the past six years the survey has been conducted, the Justice Department has ranked as one of the least trusted parts of government. The percentage of Americans who trust the DOJ has hovered in the mid-20s over the past six years, averaging about 26 percent.

The report is available here (PDF).

Administrators of Web sites should look to banks as models of consumer trust in their efforts to keep sensitive personal data private online, consumer advocates said Tuesday morning at a panel discussion at the Federal Trade Commission.

The panel was part of the last of three workshops at the FTC examining privacy online and in other industries.

Privacy issues are handled by the consumer protection side of the FTC and often not considered by the agency in merger reviews. But when Commissioner Pamela Jones Harbour disagreed with the agency’s decision on Google Inc.’s DoubleClick acquisition in 2007, she outlined her concerns about the trove of consumer data the combined firm could access.

The FTC is currently reviewing Google’s acquisition of mobile advertising platform AdMob, and news reports have suggested the agency might challenge the deal.

Google also has come under fire from privacy advocates for making some personal user information public when it launched Buzz, its social networking service, last month.

At Tuesday’s discussion, experts focused on how to build a new layer into the Internet’s communication architecture that can give Web sites the information they need about their audience while also making sure sensitive information isn’t stored or shared with other providers.

Jules Cohen, who heads the Trustworthy Computing Group at Microsoft, suggested one online model that might replicate how identity works offline. Most individuals carry a wallet with a driver’s license, a corporate ID, an ATM card, retail cards, and other identifying cards, he said.

A person can take a utility bill to the DMV in order to prove who they are, for example, and get a driver’s license in return. Online entities can mimic that process, he said, and tailor it to the Internet’s needs.

If a person goes to a museum and uses a student ID card to get a discount, Cohen said, the card would show his name, his university, his graduation date, and other information that the museum does not need. “They just need to know that I am a student,” he said. “On the Internet, we can do that kind of redaction.”

Panelists suggested a third-party provider could play the role of an identity broker by taking personal data, validating it, and providing it to Web sites on a limited basis without sharing it between sites.

Some panelists expressed concern about how independent that service might be.

“Who does this broker work for?” asked Peter Eckersley, a senior staff technologist at the Electronic Frontier Foundation. The worst answer, he said, would be for a data service who would sell information to companies that want to know more about consumers. The best answer, he said, would be a broker that works on behalf of consumers.

The Federal Communications Commission’s plan to improve broadband access in America, released on Tuesday, included a framework akin to the FDIC, which protects bank deposits, to oversee identity brokers and ensure that consumer data is secure.

The kind of framework is only part of the goal, Eckersley said. “How do we get from the Internet of today, where most of us have no privacy, to the Internet of tomorrow?” he asked. “It involves throwing lots of kitchen sinks at the problem.”

Texas Speech. The topic of online privacy has been an issue elsewhere in the country recently. Online privacy in the age of Facebook and Google Buzz was the subject of a keynote speech at South by Southwest, a popular music and tech conference in Austin, Texas, this week. Microsoft Research’s Danah Boyd discussed user expectations and said that “just because something is publicly accessible doesn’t mean people want to be publicized,” according to the popular tech-site GigaOm.

Robert Mueller (file photo by Ryan J. Reilly / Main Justice).

The Washington Post is reporting the Federal Bureau of Investigation invoked non-existent terrorism emergencies to illegally collect more than 2,000  U.S. telephone call records between 2002 and 2006, and issued retroactive approvals to justify its actions.

While the improper phone record collection has been known publicly since 2008, the Post obtained internal Bureau emails that shed light on the behind-the-scenes skirmishing over them.

A Justice Department inspector general report slated for release later this month “is expected to conclude” the FBI frequently broke the law by invoking emergencies, the Post said.

FBI director Robert Mueller did not know about the problem until they came to light in an inspector general investigation that began in mid-2006, according to the Post.

“What this turned out to be was a self-inflicted wound,” FBI General Counsel Valerie Caproni told the newspaper. She also acknowledged that the Bureau “technically violated the Electronic Communications Privacy Act when agents invoked nonexistent emergencies to collect records,” the Post reported.

According to the Post, among those who raised concerns internally was FBI Special Agent Bassem Youssef, supervisor of the communications analysis unit that dealt with the records. Youssef brought the matter to the attention of his superiors in 2005, after he received complaints from phone companies about the FBI’s failure to provide documentation showing the searches were legal, the newspaper said.

Youssef earlier had “fallen out of favor with FBI management” because he filed a whistleblower claim alleging he had been denied promotion and retaliated against because of his ethnicity, the Post reported.

The documentation sought by the phone companies were so-called national security letters, which were controversial in their own right because they allowed the FBI to obtain records without obtaining a formal court-approved search warrant.

Read the full Post report here. It was written by former Washington Post reporter John Solomon, who recently resigned as top editor of the Washington Times amid major staff cuts and management turmoil, and Washington Post staff writer Carrie Johnson.

Google’s antitrust lawyers got some good news today, when word broke that Apple Inc. is buying mobile advertising company Quattro Wireless.

Apple’s entry into the mobile advertising market comes two months after Google’s $750 million bid for rival mobile advertising platform AdMob. Critics of the deal have said it would substantially decrease competition in the nascent mobile advertising market and put Google on the path to having a monopoly in that industry.

The entry of another large rival into the field could help Google’s claim that the deal does not raise antitrust concerns.

In a post on it’s public policy blog today, Google product manager Paul Feng argued that Apple’s purchase of Quattro proved that mobile advertising is a competitive industry.

“[W]ith more investments and acquisitions in the space, including from established players like Apple and Google, that’s a sign that vigorous growth and competition will continue,” Feng writes.

The Federal Trade Commission extended its review of Google’s purchase of AdMob last month, a sign that it had some concerns about the deal.

Google’s critics remain skeptical the Apple-Quattro deal will alter the landscape for Google. “It really doesn’t change things because the core fact of Google being the dominant search engine buying the number one in applications advertising isn’t changed,” said Scott Cleland, a consultant and vocal Google critic who has urged the FTC to block the deal.

Critics have also raised concerns that extend beyond a traditional antitrust analysis. Two watchdog groups, The Center for Digital Democracy and Consumer Watchdog argued that the deal raises concerns about consumer privacy that arise from combining the Google’s vast data mines with those of AdMob.

Even though privacy issues are not often considered by the FTC when it reviews a merger, Chairman Jon Leibowitz has raised the issue in reviewing a previous Google deal.

After an eight-month investigation in 2007, the Commission approved Google’s purchase of DoubleClick, an online display advertising platform (as opposed to Google’s text-based advertising).  In a separate statement then Commissioner Leibowitz called attention to the privacy concerns the deal, and the industry, raised.

The “rampant tracking of our online conduct…raises critical issues about the sufficiency of companies’ disclosures…and the security and confidentiality of the massive collection of sensitive personal data,” he said at the time.

Google’s critics raise that precedent in arguing against this deal. “The Obama FTC has shown a willingness to use [its authority] to protect competition but also to protect consumers,” Jeff Chester, the director of the Center for Digital Democracy, said in a interview.

Google also launched its own Nexus One phone today, highlighting the potential vertical concerns of its AdMob acquisition. “The FTC may be concerned that Google will control access to key mobile advertising technology or services needed by competing smart-phone platforms,” said former FTC assistant director and current Howrey partner Michael Cowie, in an interview.

Google has continued to say it doesn’t anticipate any regulatory issues with the deal.

updated 1/6/09 at 9:47 am

State Department official Debra Sue Brown pleaded guilty to illegally accessing confidential passport application files, the Justice Department announced Friday.

Between 2005 and 2008, Brown repeatedly logged  into the department’s Passport Information Electronic Records System (PIERS) to view passport information for more than 60 celebrities and their families, professional athletes, musicians, comedians and other people who were in the news, the DOJ said. She also viewed information on personal friends and acquaintances. Brown admitted her motivation was “idle curiosity,” the DOJ said.

Brown is the ninth current or former State Department employee or contractor to plead guilty to illegally accessing files in the department’s Passport Information Electronic Records System (PIERS). She is scheduled to be sentenced on Mar. 23, 2010.

Of the eight individuals who have already pleaded guilty to unlawfully accessing passport files, five  have been sentenced. All received 12 months probation and either community service of 50 or 100 hours or pay a $5,000 fine.

The cases are being prosecuted by Armando O. Bonilla of the public integrity section of the criminal division at DOJ.

A new report from the Administrative Office of the U.S. Courts has the details. Thomas O’Toole at BNA wonders if the decrease means more surveillance is taking place outside of court supervision?