French Government Acquires Major US Government Security Contractor

France’s Safran completed a $1 billion purchase of U.S. face-recognition software maker L-1 Identity Solutions after hiring a top former U.S. intelligence official to allay security concerns. Safran received approval for its purchase from the Committee on Foreign Investment in the US (CFIUS).

The $1 billion cash deal gives the French state-owned company control of a Connecticut company which specializes in biometric recognition systems, passports and finger-printing as well as background checks for public and private clients.

Safran said on Tuesday it had agreed to set up a three-person proxy board to manage sensitive U.S. contracts that make up about 80 percent of L-1’s business.

The proposed proxy board would include Barbara McNamara, Deputy Director of the National Security Agency from October 1997 until June 2000, and William Schneider Jr, a former undersecretary of state under President Ronald Reagan. The presence of McNamara and Schneider is designed to ensure L-1 can keep open its lifeline of U.S. contracts while having the French government as its largest single shareholder.

The French aerospace and defense company said on Tuesday that L-1 would join Safran’s existing Morpho security business and would be renamed Morpho Trust.

Formed through the 2006 merger of Viisage, Identix, and Stamford, L-1 combines face and other biometric recognition technologies with credentialing and access control systems for protecting identity. Its main customers are  U.S. government agencies, which use its products for improving homeland security and border security.

L-1’s secure credentialing solution has been used to produce more than two billion government-issued IDs to date. These include driver’s licenses, passports and Visas, the U.S. Passport Card and Border Crossing Card, international voter registration and national ID cards, as well as the production platform for the U.S. DOD Common Access Card (CAC).

The Committee on Foreign Investment in the United States (CFIUS) is an inter-agency committee of the US Government that reviews transactions that could result in control of a U.S. business by a foreign person (“covered transactions”), in order to determine the effect of such transactions on the national security of the United States.

CFIUS includes representatives from 16 US departments and agencies and is chaired by the Secretary of the Treasury. Established by Gerald Ford under Executive Order 11858 in 1975, the committee gained additional authority after Ronald Reagan delegated Presidential oversight to CFIUS under Executive Order 12661 in 1988.

In February 2006, Richard Perle related to CBS News his experience on the CFIUS panel, “The committee almost never met, and when it deliberated it was usually at a fairly low bureaucratic level.” He also added, “I think it’s a bit of a joke if we were serious about scrutinizing foreign ownership and foreign control, particularly since 9/11.“

FLORIDA SCHOOLS REQUIRE PALM SCAN TO PURCHASE LUNCH

Starting this fall, in an obviously manufactured “Problem-Reaction-Solution” scenario some Pinellas County, Florida schools will become the first in the country to use an infrared beam to help zip students through cafeteria lunch lines.

The district is outfitting all of its middle and high schools with Fujitsu PalmSecure technology that will scan a student’s unique palm vein pattern and match it to his or her meal plan.

Faster lunch lines have become a priority for schools as they contend with overcrowding or squeeze lunch periods to increase class time and boost students’ scores. That’s what happened at Boca Ciega High School, which is under state oversight after receiving a low grade.  Boca Ciega which has about 200 students eat lunch in the cafeteria each day, piloted the devices late last school year, said Art Dunham, Pinellas’s food services director.

The pressure to incorporate more fresh produce into school lunch also makes quicker lines vital, said Diane Pratt-Heavner, a spokeswoman for the School Nutrition Association. “It takes longer to eat an apple, but you can slurp apple sauce more quickly,” she said.

A 2009 survey of 1,207 school districts showed that 4.4 percent used biometrics like fingerprinting, though Pratt-Heavner said she has never heard of a palm scan being used.

Pinellas students will have the option of using their 10-digit identification number rather than the scan, which is more numbers than Social Security uses to uniquely track every person born in the US.  But Dunham hopes students will become more comfortable with it.

So far, she said there have been few privacy complaints.

“Administrators’ view of it is that it sounds very sci-fi but works and does what it says it’s going to do,”  Will Geoghegan, a senior marketing manager for Fujitsu said. “Most kids are just happy they don’t have to wait in line.”

The Pinellas School Board approved a $234,000 contract on June 14 that includes nearly $80,000 for 200 of the new Fujitsu scanners and the remainder for software, upgrades and maintenance.

Jim Wayman, a biometrics expert at San Jose State University in California, said fingerprinting at schools in England has already set off a push to write a code of conduct for using biometrics with children. “But nothing has been put on paper so far,”  he said. “Pinellas County is going without established guidelines.”

At least three other school districts in Florida already have expressed interest in it, as have schools in Maine, Alaska, California and Puerto Rico.

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ADDITIONAL TECHNICAL INFORMATION FROM FUJITSU

The PalmSecure technology has been integrated into [Pinellas County Schools] existing MCS Software’s Point-of-Sale system to provide a more reliable, hygienic, accurate, and secure authentication solution that is also easier to use and maintain. The fully integrated solution combines PalmSecure biometric technology and the MCS POS system to provide enhanced security without student PINs or fingerprint scanners and replaces them with a user-friendly PalmSecure palm vein authentication solution.

All food service program transactions will be done using PalmSecure biometric technology and the MCS Software POS system. The use of palm vein biometric scanning for food service program transactions has many advantages. For example, a simple palm vein scan rapidly identifies the student, assuring the students identity thereby reducing waste and impersonation, while providing a level of reliability not found in legacy fingerprint systems which often malfunctioned or simply froze, causing repeated disruptions in the student cafeteria service.

PalmSecure technology has been deployed worldwide in a wide range of vertical markets, including security, financial, banking, healthcare, commercial enterprises and educational facilities. Additional applications include physical access control, logical access control, retail POS systems, ATMs, kiosks, time and attendance management systems, visitor ID management and other industry-specific biometric applications.

Coin Seigniorage – $1 Trillion Coins To Settle National Debt

There’s a statutory limit to the amount of paper currency that can be in circulation at any one time. There’s no similar limit on the amount of coinage. An obscure statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. Some have recently suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.

US CODE: TITLE 31   SUBTITLE IV  CHAPTER 51  SUBCHAPTER II  § 5112
Denominations, specifications, and design of coins
(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

“Circulating coins are shipped to the Federal Reserve Banks (FRB) as needed to replenish inventory and fulfill commercial demand… Seigniorage is the difference between the face value and the gross costs of coins shipped. Seigniorage adds to the Federal Government’s cash balance, but unlike the payment of taxes or other receipts, seigniorage does not involve a transfer of financial assets from the public. Instead, it arises from the exercise of the Federal Government’s sovereign power to create money and the public’s desire to hold financial assets in the form of coins. The President’s Budget excludes seigniorage from receipts and treats it as a means of financing the national debt…” p. 28, US Mint, 2009 Annual Report

The United States doesn’t need, and shouldn’t have, a debt ceiling. The US is the only Democratic country besides Denmark with one. There is no debt limit in the Constitution. If Congress wants to cap and balance government debt, it already has a way that doesn’t risk economic chaos or a Constitutional meltdown — it’s called the annual budget.

If used routinely to close the revenue gap, such coin seigniorage would eventually reduce the national debt to zero, and remove it as an issue in US politics. In addition, the existence of platinum coin seigniorage as an option, removes the tension between the mandated debt ceiling and the 14th Amendment.