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U.S. Companies Object to Deal on Ports ID Cards
By Eric Lipton Executives from some of the nation's leading identity verification companies are pushing Congress to rescind a provision that they said could lead to a foreign-owned company handling sensitive personal records for as many as 750,000 port workers. The Department of Homeland Security, as part of the budget law passed last year, was ordered to hire the American Association of Airport Executives, an aviation trade group, to process applications for a new tamper-proof identification card for maritime workers. Representative Harold Rogers, a Kentucky Republican and chairman of the subcommittee that oversees the Homeland Security budget, had pressed for the language, saying that the trade association, a nonprofit group, could expedite the project because it had performed similar work for airport workers. But in recent days, documents have circulated in Washington showing that the association, before the budget bill became law, was offering prospective investors a role in future contracts in exchange for an investment totaling up to $25 million. While the prospectus mentioned the identity card contract, it made no reference to the legislation. The money would be used to set up a for-profit company that the group would hire as a subcontractor to handle the soon-to-be promised government work. The contracts with Homeland Security would produce $50 million in profits over three years for the new partnership, the business plan projected. Daon, an Irish biometrics company with offices in Reston, Va., ultimately bought 51 percent control of the new entity, said Andrew J. Sherman, a Washington lawyer who helped handle the transaction. Government records show that the new company, the Security Biometric Clearing Network, was incorporated last month in Delaware, as Homeland Security moved to start issuing the new contracts. That transaction, which was disclosed this week, is evoking protests. "We want to introduce a little more fair play into this whole process," said Jim Miller, chairman of ImageWare, a biometrics company in San Diego that is lobbying Congress to rescind the special treatment for the airport trade group. Echoing the debate over the Dubai ports deal earlier this year, several companies have also raised questions about a foreign-owned company handling information for background checks on American port workers. But Daon's board includes Tom Ridge, the former Homeland Security secretary, and the company has already sold its software to the government for some of these same programs. "Sensitive personal biometric and biographical data should more appropriately be managed and maintained by the government and housed in a federal facility," the International Biometric Industry Association said Friday in a written presentation for Congress. Steve Lunceford, a spokesman for BearingPoint, a company in Virginia that wanted to bid on the project, said the special treatment for the airport group raised questions that could delay the issuance of the new identification cards — something that Homeland Security Secretary Michael Chertoff wants to start before the end of this year. "This is going to allow a foreign firm to collect and maintain the personal records of 750,000 American workers," Mr. Lunceford said. "That does not seem right." Carter Morris, senior vice president at the airport group, said in an interview this week that the terms of any new contract with Homeland Security have not been decided. Thomas A. Grissen, Daon's chief executive, did not respond on Friday to a request for comment. Mr. Rogers's spokeswoman, Leslie Cupp, also did not respond to a request for comment. |
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