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Weekly Column

Fortress of Cards: The IT Infrastructure of U.S. Homeland Security Might Never Come to Be

Status: [CLOSED]
By Robert X. Cringely

After the 9-11 terrorist attacks, the United States threw its considerable fortune into the War on Terror, of which a large component was Homeland Security. We conducted a couple wars abroad, both of which still seem to be going on, and took a vast domestic security bureaucracy and turned it into a different and even more vast domestic security bureaucracy. We could argue all day about whether or not America is more secure as a result of these changes, but we'd all agree that a lot of money has been spent. In fact, from a pragmatic point of view, ALL the money has been spent, and that's the point of this particular column. For a variety of reasons, there is no money left to spend on homeland security � none, nada, zilch. We're busted.

But we pretend we're not. We pretend like we have all the money in the world, though not for much longer.

Governments, since they are the ones who own the printing presses, are always inclined to print more money as needed, causing inflation. Certainly, the current U.S. Government has shown few spending qualms up until now...that is, UP UNTIL NOW. What's changed is an unpopular war, an impending election or two, and a nasty hurricane. In the next few days, Congress will throw another $72 billion into Afghanistan and Iraq, bringing the total prices for those wars to just about 10 times their original estimates with no end in sight.

Wars will continue to be funded (we don't walk away from those) and Hurricane Katrina repairs will continue to be made, however inefficiently, because the devastation is real and, by the way, that's a huge block of potentially alienated voters. But the data infrastructure of homeland security can't be seen, so it is easy to save money there simply by not doing it, which is where we are headed.

What lands this topic on my watch is the simple fact that once we've bought all the Coast Guard cutters we need and hired all the G-men, the rest of homeland security is mainly information technology �- tracking bad guys and bad stuff as it enters and leaves the country.

So much money was spent on homeland security, post 9-11, that it was expected to fuel the next high-tech boom. A lot of startups were funded with that in mind. There are private equity funds being raised, AT THIS MOMENT, with this as their sole guiding concept. But now we are in a position where homeland security spending is actually in decline, and some of the big companies that were expected to play a part in this industry are actually withdrawing.

Take Boeing, for example. Last year, Barrons compared Boeing with its rivals Lockheed Martin and Northrop Grumman, and said Boeing was the better bet for investors mainly because of the company's homeland security work. Only last month, Boeing closed its homeland security division, and is busily laying-off most of the people who worked there. (Take a look in this week's links for this one �- it is VERY interesting.)

Barrons, Boeing, and all of us were suckered by the homeland security opportunity, which seemed at the time to have infinite funding. Today's reality says otherwise. The current dearth of funding was probably tipped by Katrina, but it would have come anyway, driven by that age-old imperative of police work, that empires are built of men and women, not computers. I'm not saying it was wrong to do so, but by the time all the new nobility of homeland security got finished hiring their vassals and nephews, there wasn't much money left over. That was okay, they thought, because the trough was infinitely deep. Only, it really wasn't.

Another reason for Boeing's departure from the homeland security field was the company's concern about legal liability. Though there are indemnification clauses in the law post-9-11 (to protect the company just in case a terrorist plot succeeded despite the use of Boeing technology), the company was worried, I'm told, that it wasn't protection enough. Not all the clever lawyers work on Capitol Hill. So the potential gain wasn't worth the potential risk.

Americans hate terrorists, but we love to sue.

Boeing is just one example of this trend. Another is HSPD-12, a Presidential Directive from 2004 requiring more secure IDs for government workers and contractors. HSPD-12 has been broadly interpreted to require biometric identification, which to do in real time would require a huge IT infrastructure storing and comparing fingerprints, retina patterns, voiceprints, whatever. Gartner called it the biggest government IT project of the decade. But it is also an IT project without a budget �- mandated, but unfunded.

The first deadline for HSPD-12 compliance is this August. And while many in the press and industry continue to be excited about it, there is a very real question about how many agencies will actually meet the deadline. I'm guessing few, if any, will do so. Unless Congress responds with a huge supplemental appropriation to fund HSPD-12, which is unlikely to happen within three months of an election, compliance work will slow further as suppliers see the light and begin, like Boeing, to withdraw from a field where to this point most of the risk capital has been theirs.

Part of the problem with homeland security technology is that it tends to be very expensive. Envisioned at a time when money seemed to be no object, these projects are grand in the extreme. Not that they wouldn't work or wouldn't be useful, but they are just really big ideas. Like Boeing's Container Security Initiative, which would X-ray shipping containers in foreign ports, then schlepp the X-rays over a network to examiners in the U.S. It's a great idea that would save time, money, and maybe lives, but it would cost billions to deploy and those billions simply aren't available.

Some of these programs will go underground, of course. If they are valuable enough to the U.S. government, they'll be continued as military projects or as part of some black intelligence budget that is unreported to the American people. But there isn't enough space in Area 51 to hold all the good ideas, so some will die and others will continue, but without the sort of oversight that they ought to have.

So it is probably not a good time for homeland security startups, unless, that is, their success doesn't depend on federal funding. This could all change in an instant, of course, if some terrorist plot succeeds on American soil and federal money flows anew. Let's hope that's not the case.

The bright side is that a lot of money has already been spent, and there are many technologies available that are useful for non-security work and might otherwise never have been developed. The SIDS monitor I've been developing is just such an example, with the next model based primarily on security research. Though in my particular case, the original funding agency wasn't the Department of Homeland Security. It was the KGB.

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