ID Technology Eyed In War On TerrorID Technology Eyed In War On Terror

NEW YORK — As states across the country begin to comply with the 2005 Real ID Act's stringent standards for ID documentation, many citizens are going to be stuck in limbo. L-1 Identity Solutions doesn't have a problem with that, and neither should anyone else, its CEO told a Needham & Co. conference.

"It took just $25,000 and fake IDs to attack this country on Sept. 11, 2001," Robert V. LaPenta, chairman, president and CEO of L-1, told an audience here Tuesday (Jan. 9) at the Ninth Annual Growth Conference, a yearly update for Needham Equity Research Department clients looking to invest in high-tech companies. "Compare that with the close to $500 billion defense budget of the U.S., and you'll see that we need systems to identify every one of us."

L-1 "was created as a product of 9/11" and "has now merged eight companies to address the identity security market," LaPenta said, claiming that the company addresses 85 percent of that growing business. "We can do background checks of 1 million people a year. The ID technology is here to make the U.S. a safer place in an uncertain world."

LaPenta, who was a witness to the 9/11 attack, said he urges his family not to use any tunnels in New York City because they are easy targets for "people with fake IDs" looking to "explode Lincoln Esplanade SUVs in the middle of the river."

And ID misuse is a real problem, he said, pointing to personal experience. LaPenta owns a time-share in a corporate jet "I was informed that my upcoming trip from Rome to St. Tropez was confirmed," he said, "only I wasn't in Rome, and I wasn't going to St. Tropez."

But there are ruts in the road to authenticated identification of everyone in the country.

The Real ID Act creates national standards for issuing state driver's licenses and identification cards. According to a recent report on Stateline.org, an independent element of the Pew Research Center (Washington), most of the 245 million driver's license holders in the United States aren't aware yet that Real ID's document dragnet for terrorists, illegal aliens and impostors is about to entangle them, too.

"State officials are . . . set to bang on the doors of the new Congress demanding more time and money" to comply with the law's stipulations, according to the report. But "states are throwing up their hands at the requirement that each driver come in person to motor vehicle offices to renew licenses starting in May 2008."

Real ID will force state motor vehicle departments to handle 686 million customer transactions face-to-face over a five-year period, up from 295 million, according to a study by the National Governors Association and other groups. The report estimates a cost to the states of more than $11 billion.

Enter companies like L-1, which proposes to combat ID fraud by throwing the latest technologies in fingerprint, face and iris recognition at the problem. "We need face recognition for document authentication, iris authentication for access to secure areas and fingerprinting technology because it is the oldest ID tech and has millions of records," LaPenta said.

With such former government officials as former FBI director Louis Freeh and former CIA director George Tenet on his board of directors, LaPenta is confident that L-1 will provide the needed solutions.

LaPenta launched L-1 Investment Partners in June 2005. Earlier, he co-founded L-3 Communications in 1997, following a 24-year executive career at defense contractor Loral Corp. "We had cruise missiles that could fly undetected and hit a specific window in the Kremlin," said LaPenta. "But after 9/11, I knew we needed more than that to enter the war with the terrorists.

"Finger, face and iris authentication need to be applied to some 500 million records with 99.99 percent accuracy. Identity theft today is a $55 billion problem, and it's not going away by itself."

Today, fingerprint technology dominates, yet only 200 of the 17,000 police departments in the country have automatic fingerprint ID systems in place, according to LaPenta.

He argues that iris scans should be required for access to secure areas. By March, L-1 expects to have a prototype system that will be able to process "100 million iris records within 3 seconds, with 99.99 percent accuracy," he said.

At the Needham conference, analysts were cautiously optimistic about economic trends this year. "While the semiconductor market exited 2006 in a 'mini downturn,' we believe 2007 will see nice incremental drivers [such as Vista, Wii, the iPhone and wireless LANs] but no 'killer application' to fuel a snapback," said analyst Charlie Glavin.