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From:     Steve Jackson
Subject:  Steve Jackson Games (SJG) Update
Date:     October 23, 1990

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***  CuD #2.09: File 5 of 8: Steve Jackson Games Update          ***
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{The following, by Steve Jackson, is reprinted with permission
from two posts on The Well--moderators}.

++++++++++++
UPDATE ON SJ GAMES
++++++++++++

We were raided on March 1. Most people here have heard that story, though
I'm working on an article for upload. This is an excerpt, because I don't
know when I'll have time to finish the whole thing.

The brief story: The Secret Service took 3 computers, a laser printer, lots
of assorted hardware, lots of disks and papers, and lots of my business
data.  In particular, they took every current copy, on paper or disk, of
the new book we were about to send to the printer.

Because of the confiscation of the GURPS Cyberpunk book, our business came
to a standstill for six weeks - the time it took us to reconstruct it and
get it to the printer.

THE RETURN

In early June, we started talking to the people setting up the EFF, and
word leaked out; I got several inquiries from reporters. On June 20, quite
suddenly, the Secret Service called to say we could have our property back.
So we went to pick it up. They really did give most of our stuff back. They
kept one hard disk and some assorted hardware, as well as some papers. Of
the things they returned, one computer required $200 in repairs before it
would work. Another has so much visible damage that I don't even want to
turn it on.

Loyd hasn't gotten ANY of his things back.

And we still don't know why they raided us. They took our book; they took
our BBS computer; they took a lot of things. And their application for a
search warrant is STILL sealed. So we can speculate, but that's all.

Nobody connected with the business has been arrested. Nobody has been
indicted. Nobody has been charged. Nobody has even been QUESTIONED again.
And these guys are still saying "No comment." Well, if I were in their
shoes, I wouldn't have any comment, either.

OUR CURRENT STATUS (SIGH)

We're not a big business, and the cost of the raid (now well over $125,000)
pushed us to the wall. We have been squeaking by ever since then -
sometimes things look more hopeful, sometimes less. The problem is cash
flow.

We have kept up with our long-term debt (in fact, we've cleared all but
$50K of it up, making most payments on the last day of the grace period),
but we have been very slow-paying with current suppliers. We simply have no
margin for error; any unexpected expense or failure of income will knock us
off.  As I write this, a couple of big receivables didn't come in when they
should have; we're about to default on a note payment, and our big printers
are demanding CASH NOW OR NO MORE PRINTING, for which I can't blame them.

So the current news is not good. We should still be all right if we make it
into 1991, but current cash is tighter than it has been for months.

+++++++++++++
SIGNIFICANT STATUS UPDATE:
+++++++++++++

The warrant application under which my offices were raided has been
unsealed. It was unsealed a month ago! Apparently this was just after the
last request from Silverglate and Good, but they were not informed that it
had been unsealed. (Question of etiquette here?)

At any rate, I got a copy today in a package from Senator Bentsen's office,
in reply to my last letter asking if the Senator could help get this
information. He could and did.

Ver-r-r-r-y interesting. A copy has gone to Silverglate and Good, who
should have comments shortly. Brief answers to oft-repeated questions, now
that I really do know what's going on:

Yes, this was connected to the Neidorf case. Specifically, my managing
editor was being "accused" of receiving a copy of the Phrack issue with the
E911 file and posting it on the BBS, Phoenix Project.  The description of
the E911 file included the same wild allegations that were exploded during
the Phrack trial.

No, there is nothing in the application to indicate that the GURPS
CYBERPUNK game was a target when they came in the door (which does not
mitigate the seriousness of their effective suppression of the text).

Yes, they definitely knew that they were raiding a BBS system; it was one
of the things they were after. The application specifically defined what a
BBS is - though it did not mention the ECPA or the protections granted
therein.

No, they alleged no criminal behavior on my part or on the company's part.
SJ Games was invaded because Loyd Blankenship was an employee and a
co-sysop and frequent user of our BBS.

No, there's nothing there to change my attitude toward Loyd. He is a valued
employee, innocent until proven guilty, and they haven't even STARTED to
prove anything.

I am, no doubt, oversimplifying in my attempt to boil a large stack of
paper down to a short update - but that does seem to me to be the gist of
it. I'm sure the attorneys will have more to add soon.

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