NC Office of the State Auditor: ESC employees violating copyright law on state computers

An audit by the North Carolina Office of the State Auditor indicates that what at least one employee in the Employment Security Commission (ESC) was doing on state computers and state time was, well, illegal.

The report (pdf),  released yesterday, reveals:

Our examination of computers and disk drives assigned to a Systems and Operations Analyst (Systems Analyst) revealed the presence of prohibited software and copyrighted digital media such as movies and computer games. We determined through forensic analysis of the Systems Analyst’s computer that software was installed to illegally duplicate copyrighted movies and computer games. The Systems Analyst admitted using his State-owned computer and the ESC telecommunications network to access and duplicate copyrighted movies and games.

The report gives an interesting description of the employee’s response:

The Systems Analyst admitted that he had installed various forms of DVD ripping software on his State-owned computer. He said that he purchased the software himself and that he had the license for each program. The Systems Analyst said that the ripping software was on his computer so that he could watch movies “without having to worry about the encryption thing.” He also said that he owns approximately 1,200 to 1,500 movies that he has purchased and he uses the ripper programs to make copies to preserve the original and use the copies while at work. The Systems Analyst also admitted that there were video games that he had installed on his State-owned computer. When asked if he thought that this was appropriate, he said “probably not.”

The Systems Analyst estimated that he stored “a bunch” of movies on his State-owned computer. When we asked him to clarify, he said “more than one and less than a thousand.”

Being collegial, the analyst reportedly shared his movies:

The Systems Analyst also said that, a couple of years ago, he maintained a “share drive” on the ESC network. He said that he downloaded movies to the share drive and it was “out there for others to use to pass the time when waiting for vendors.” The Systems Analyst said that the share drive was discovered by management when he “inadvertently shared the drive.” He said that he was told by his supervisor, “you have movies on your machine and you need to get them off.”

Clearly a scholar on copyright law, the analyst also reportedly told the auditors:

“I understand the copyright thing; the way I view copyright laws, this is my personal use. If I make copies for friends, then that is my personal use.”

Presumably one of his friends is an Enterprise Applications Manager because the analyst said he “regularly downloaded” movies to the manager’s computer. When confronted by the auditors, the Applications Manager denied downloading the software or files to his computer. Because everyone in the Information Systems Section has administrator rights, anyone could have loaded the software on his computer, he claimed.

The Applications Manager said that he had no idea how those programs were installed on his computer and added, “I cannot say who put them there.” The Applications Manager also said, “If I knew it was there, I would have erased the damn thing. Nobody could ever prove who put it there. We are at a stalemate. I can’t prove how it got there and you can’t prove who put it there.”

But wait, it gets better….

When we attempted to review the Applications Manager’s computer, our forensic examiners could not gain access to the computer using an administrator id and password that should have allowed access. The Applications Manager told us that, two weeks prior to our meeting (two weeks into our investigation), he had installed a Windows program that blocked access to his computer. The Applications Manager said that he installed the software to test it for use by the entire agency. The Applications Manager said that he was working on it with two employees that he supervised.

The two employees contradicted the Applications Manager’s claims. The first employee said that the Applications Manager had never spoken with him about anything related to blocking software and he doubted that the Applications Manager would know how to configure his computer that way. The second employee said that the Applications Manager had approached him around the time the investigation began because the Applications Manager was concerned that the Systems Analyst might be able to put something on his computer.

The second employee said that he set up the administrator id for the Applications Manager because the Applications Manager did not know how to do it. The second employee said that there was never any discussion about the need to do this for all of the other computers in the agency. He said that the only concern the Applications Manager had was the Systems Analyst’s ability to access the Applications Manager’s computer.

In partial response, the Systems Analyst was terminated effective October 16, 2009. The Applications Manager was put on disciplinary suspension, unpaid, for 10 work days in November 2009. As of July 27, 2010, “additional disciplinary action” was currently under review.

Hat-tip, Charlotte Observer.

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