New Surveillance Industry Cashing In On ID Systems
Pastor Dale Morgan
New Surveillance Industry Cashing In On ID Systems*
Apr 5th, 2007 7:43 AM
Cashing in on ID systems
By DAVE MONTGOMERY
STAR-TELEGRAM WASHINGTON BUREAU
WASHINGTON — The U.S. government’s growing appetite for biometrics-based
ID systems to bolster security, detect terrorists, fight crime and
control illegal immigration is generating billions of dollars of
business for an evolving industry that’s coming of age in the post-9-11 era.
The growth of the identification industry has also spawned an aggressive
push-back from privacy advocates against what they call an emerging
“surveillance-industrial complex.”
Regardless of the perspective, few would deny that the expanding
government market for more secure identification programs is laden with
business potential.
Players range from big-name defense contractors to obscure specialty
firms. And the product line includes commonplace offerings that might
have seemed possible only on Star Trek just a decade or so ago.
Video or audio scanners can identify individuals by facial features,
voice or even the blood vessels in their eyes, matching the information
against data stored in a secure digital clearinghouse. Fingerprints are
widely used for everything from firing up the computer to opening the
office door. 9-11 accelerated the identification boom as high-tech
companies stepped forward to supply several new security networks for
transportation, government buildings, law enforcement and other venues.
After a shakedown period in which some hastily formed enterprises
crashed and burned, the industry is beginning to mature and may be
poised for years of steady growth, said Jeremy Grant of Stanford
Washington Equity Research, a stock analyst who has extensively studied
the industry.
At least 10 major U.S. government initiatives will generate more than $8
billion in business over the next five years, with overseas projects
generating another $14 billion, Grant said.
The U.S. projects include issuing biometric cards to all 2 million
federal workers, as well as to federal contractors, and giving travelers
registered “smart cards” to speed through airport security.
Perhaps the biggest customer is the Homeland Security Department, the
multiagency bureaucracy whose purpose is to guard the borders and
protect the home front from terrorism. Other big government markets
include the Defense and State departments and the FBI.
President Bush’s call for overhauling the nation’s immigration system
could also generate more business for the industry if Congress reaches
an accord on the volatile issue. Most legislative proposals call for
biometric cards and employee-verification databases to determine whether
immigrants are in the United States legally.
“That’s a significant business opportunity for these companies,” Grant said.
The American Civil Liberties Union and other privacy advocates are
fighting to limit the industry. They say biometric cards and centralized
databases open the door to government snooping and do not offer
foolproof protection from terrorists and criminals, even with recent
technological advances.
“Decisions being made now are going to dramatically affect what our
lives look like in the future,” said Jim Harper, the director of
information-policy studies at the Cato Institute, a Washington research
center that advocates limited government.
Industry executives say that the privacy dangers are exaggerated and
that companies follow rigid procedures to prevent the distribution of
confidential information.
One privacy-versus-security showdown centers on the REAL ID Act, enacted
in 2005 to require tamperproof driver’s licenses that would be available
only to legal U.S. residents. More than two dozen states are considering
legislation opposing the law, saying it would cost $11 billion to implement.
Business executives say they’re part of an industry with a bright
future, made up of companies that offer unique specialties. Some niche
companies have been in business for less than five years. Others, such
as defense giants Lockheed Martin and Raytheon, are expanding into the
identification realm.
One of the bigger companies, Grant said, is L-1 Identity Systems of
Stamford, Conn., which was formed by the merging of two other companies.
It is headed by Robert LaPenta, one of the founders of L-3 Communications.
Another established company is Digimarc, in Beaverton, Ore., whose
systems have produced more than two-thirds of U.S. driver’s licenses.
Other players include IndentiPHI of Austin, which is teamed with Dell,
and Cross Match Technologies of Palm Beach Gardens, Fla., headed by
James Ziglar, former commissioner of the Immigration and Naturalization
Service.
“There’s definitely a big space, a lot of growth going on,” Grant said.
“This is a classic growth industry right now. But not everybody’s going
to win.”