The FBI broke into the San Bernardino terrorist iPhone without Apple’s help. Their fast-escalating court battle is now moot.

A problem remains, however.  The U.S. government now has the encryption “back door” that FBI Director James Comey has long wanted.

President Barack Obama, who initially stayed mum on this issue, told tech leaders at the South by Southwest Interactive conference they could either cooperate now or get something much worse later. Presumably the latest development makes him happy.

Donald Trump is probably pleased, too. Referring to the terrorist iPhone, Trump said on Feb. 17, “We have to open it up.”

They all celebrate too soon.

Whatever method they used to break into this phone will almost certainly fall into the wrong hands, rendering other devices unsecure. This could even include the U.S. intelligence community’s own networks.

Obama can’t say no one warned him.

He convened a special review panel when Edward Snowden first exposed the National Security Agency’s domestic surveillance efforts in 2013. Its mandate: advise Obama how he should balance intelligence gathering, civil liberties and online security.

The panel’s January 2014 report made 46 specific recommendations.

I noted at the time an odd section which said the government should not “manipulate the financial system.” More than two years later, we still have no idea what that was all about.

The report was crystal clear about encryption, though.

Recommendation # 29 said the U.S. government “should not in any way subvert, undermine, weaken or make vulnerable” commercial software.

In other words, Obama’s hand-picked experts told him just two years ago not to do what the FBI just did. Oops. 

Of course, Obama is free to ignore the panel’s advice — and he did ignore almost everything they said. Maybe it was all a charade for public consumption.

Here’s what is not a charade:  the box in which Obama’s administration has placed U.S. businesses.

On one hand, the Federal Trade Commission and other regulators demand companies protect customer data with strong encryption systems.

On the other, FBI and NSA want back-door keys to every such system.

Computer security experts unanimously agree that intentionally weakening encryption is a terrible idea. Hackers will find and exploit any such weaknesses. Terrorists will simply communicate in other ways.

Obama doesn’t care. Neither does Trump — or Hillary Clinton, for that matter. Either of them will likely continue Obama’s policies.

This might be less worrisome if the government could protect its own secrets. The fact that Snowden walked out with the crown jewels proves it can’t. How long before another Snowden walks out with the encryption backdoor keys?

My guess: not long at all. The government doesn’t pay much and a key to every iPhone is worth billions. That’s a lot of temptation to bear.

The only way to lock this back door is to never build it.

Patrick Watson is an Austin-based financial writer. Follow him on Twitter @PatrickW

To read more of his insights, CLICK HERE NOW.