October 17, 2004 | CAPPS II Privatised and Outsourced

Robert O'Harrow of the Washington Post has a fascinating scoop on the former head of the CAPPS II program setting up shop offshore. Here's the deal.

Here's a few relevant grafs:

[CAPPS II] has cost almost $100 million. But it has not been turned on because it sparked protests from lawmakers and civil liberties advocates, who said it intruded too deeply into the lives of ordinary Americans. The Bush administration put off testing until after the election.

Now the choreographer of that program, a former intelligence official named Ben H. Bell III, is taking his ideas to a private company offshore, where he and his colleagues plan to use some of the same concepts, technology and contractors to assess people for risk, outside the reach of U.S. regulators, according to documents and interviews.

Bell's new employer, the Bahamas-based Global Information Group Ltd., intends to amass large databases of international records and analyze them in the coming years for corporations, government agencies and other information services. One of the first customers is information giant LexisNexis Group, one of the main contractors on the government system that was known until recently as the second generation of the Computer Assisted Passenger Pre-screening Program, or CAPPS II. The program is now known as Secure Flight.

Let's get this straight. A former spook who designed a $100 million airline surveillance checkpoint system that privacy advocates, business travelers, Congress, independent auditors and the airlines themselves opposed, "retires" and then goes offshore to set up the same kind of system. He does so with the help of a contractor who worked on the original system, possibly while he was still getting a government check weekly?

Company officials said they are not trying to evade scrutiny. They contend that Bahamian law also protects privacy but is not as cumbersome as U.S. regulations. They said the company's location will help them collect information from abroad because businesses and information brokers would be more likely to ship electronic records to the Bahamas than to the United States. Commercial information services in the United States have billions of records about Americans, but far fewer about people living abroad. Bell and Thibeau argue their services will eventually make the United States and other countries safer.

"The intent was not to run offshore and hide stuff," said Bell, Global's chief executive. He left the government at the end of March as director of the Office of National Risk Assessment, which ran the aviation screening program, and previously served as an intelligence official with the Immigration and Naturalization Service. "Global information is the brass ring."

Hmm, American privacy laws? There are a patchwork of laws protecting some financial and health data, but Mr. Bell can't evade those laws by going overseas. They still apply to Americans' records. Is he interested in compiling data on foreigners from foreign countries? No law against that here.

And ten seconds on Google finds that the Bahamas has a strict privacy protection law that resembles the ones in the European Union.

The policy even covers Americans.

That makes it pretty clear that Mr. Bell is not incorporating his company offshore to avoid pesky American privacy laws or for the nice beaches.

My guess is that the intrepid data miners are betting that the Bahamas won't much enforce the policy and that being outside the United States will help them hide from public scrutiny.

Kudos to O'Harrow for another great piece of reporting.

Posted by Ryan Singel at October 17, 2004 03:49 PM