Naked Scanners paid for by Stimulus money; George Soros holds financial interest in company
It’s about control, not security
By Douglas J. Hagmann
14 November 2010: Perhaps one of the most controversial topics today is the use of “naked” body scanners at airports by the Transportation Security Administration (TSA), a branch of the U.S. Department of Homeland Security (DHS). As this investigation found, it is indeed a matter deserving of such controversy and further investigative focus.
Using the attempted Christmas Day 2009 bombing of Northwest Airlines Flight 253 by 23-year-old “underwear bomber” Umar Farouk Abdulmutallab as “Exhibit A” for needing the ultra-intrusive “naked” body scanners, the TSA, under the direction of the U.S. Department of Homeland Security, stepped up their purchases and deployment of the scanners to U.S. airports.
On Christmas day 2009, a total of 40 full body scanners were present at only 19 airports in the U.S., but that would soon change. Immediately following the significantly odd incident aboard flight 253 where Abdulmutallab, a Nigerian national traveling from Amsterdam to Detroit reportedly attempted to light explosives hidden in his crotch, former DHS secretary Michael Chertoff and co-author of the U.S. Patriot Act took to the airwaves to lobby for the placement of the nuclear scanners at all airports. Chertoff, the head of the Chertoff Group, a private security consulting agency, served as former DHS secretary from 2005 to 2009.
While working in that capacity in 2008, Secretary Chertoff authored a 38 page terror assessment warning of terrorists, posing as refugees for example, would exploit our security deficiencies, including air travel. In hindsight, his warning seemed almost like a prediction that Christmas day.
In the wake of his flurry of media appearances suggesting that full body scanners would have likely caught Abdulmutallab before he boarded flight 253, and article critical of Chertoff appeared in the January 1, 2010 edition of The Washington Post. The former DHS secretary was criticized for “using his former government credentials to advocate for a product that benefits his clients.” It was disclosed that Chertoff’s security consulting agency included a client that manufactures the controversial scanners. That client is Rapiscan Systems, the leading provider of the scanners to the TSA and numerous other airports across the world.
The units often referred to as “naked” or “nuclear” body scanners are more officially known as the Secure 1000 Single Pose scanners, made by Rapiscan. They also produce scanning units for air cargo inspection.
Rapiscan is a wholly owned subsidiary of OSI Systems, Inc., a worldwide company based in California that develops and markets security and inspection systems. It is one of a handful of such companies trying to corner the market on security hardware for the air transportation industry – a market estimated to be worth $300 billion in the United States alone.
As indicted by the per-share price of the company’s stock, various divisions within OSI Systems, Inc., with the exception of Rapiscan were posting financial losses during the fiscal years 2007 through 2009. Month end stock prices of OSI Systems, Inc. (OSIS) fell from $27.35 per share in June 2007 to $20.85 in June 2009.
OSI Systems, Inc. received a financial boost in September 2009 when it entered into a $173 million Indefinite Delivery, Indefinite Quantity (IDIQ) contract with the U.S. Transportation Security Administration. On October 1, 2009, the TSA purchased “multiple scanners” from Rapiscan at a cost of approximately $25 million under the terms of that contract.
As shown by the following graph, demand for the scanners and the value of OSI stock did not take off until the attempted ChristmasDay bombing. The demand sharply increased not only in the U.S., but worldwide. Rapisan suddenly grew as other countries contracted with Rapiscan for their scanning units. Most notably, perhaps, was a February 2010 deal between Rapiscan and the government of Nigeria, the very country of origin of Umar Farouk Abdulmutallab. Immediately before that deal, OSI Systems, Inc. announced a deal with Great Britain for scanners at Heathrow and Manchester International Airports.
Thanks to the worldwide scanner market demand, the revenues of OSI Systems, Inc. grew nearly 25% during the first quarter of 2010 over the same period of 2009, to over $65 million as a direct result of major government investments.
A second purchase for “multiple units” was announced on 29 April 2010 for $16 million. It is interesting to note that OSI Systems, Inc., announced at this time that the “naked” body scanners were bought with funds from the American Recovery and Reinvestment Act of 2009 (stimulus) money, from a bill signed into law by President Barack Obama on 17 February 2009.
On 22 September 2010, Rapiscan announced that it received orders from the TSA totaling $35 million for the 620DV Advanced Technology (AT) checkpoint X-ray baggage inspection system. The delivery orders were the first of that type placed by TSA under the terms of a five year Indefinite Delivery, Indefinite Quantity (IDIQ) contract. The systems will be deployed by TSA at airport checkpoints in the United States, where they are to be used to screen passengers’ carry-on baggage.
A look at OSI Systems, Inc., including its Rapiscan subsidiary identifies Deepak Chopra as the president and CEO. Chopra, individually and through his PAC, has been identified as a significant donor to the Democratic party, including contributions to the campaigns of Obama and Hillary Rodham Clinton. It should come as no surprise, then, to learn that he accompanied President Obama and his royal entourage by invitation on his trip to India to promote further trade between the two countries. The trip was paid for by U.S. tax dollars.
Investigation into the financials of Rapiscan and its parent company becomes even more interesting when it is learned that George Soros also holds a financial stock interest in the company. As of last June, Soros held about 12,000 shares of OSI stock.
But if these scanners have been around for some time, what then, caused the most recent uproar regarding their use?
Based on my investigative findings, I submit that there are two primary reasons for the growing public outcry over the “naked body scanners.” Both have been expertly addressed by investigative blogger and talk show host Alex Jones via the Drudge Report, who has been warning the public about the scanners since they were first introduced.
First, there has been heightened awareness of the possible radiological dangers posed to the TSA agents operating the scanners as well as to the passengers being screened. Although there have been numerous official assurances to the public that the scanners pose no health risks, several scientists and radiologists have concluded otherwise.
Secondly, there are the images themselves. It is important for the public to understand that the images of scanned passengers shown to the public have passed through filters to “tone down” their graphic nature. In reality, the images that are visible to TSA officials are much more revealing. Having seen actual images of a full body scan on a TSA computer for the purpose of completing my investigation, I can tell you that the images are extremely graphic and leave very little to the imagination. To be sure, they do not resemble the images that are being shown to the public.
Additionally and despite assurances to the contrary, there have been many documented abuses and misuses of the scanned images taken by TSA officials. Despite denials, images are stored in databases, ostensibly for “training” purposes. However, the number of images currently being maintained, along with the location of their storage (in some cases, outside of the TSA), indicate a purpose beyond any legitimate training program.
What has yet to be publicly disclosed is, in my professional opinion, most alarming.
Based on the instructions from Department of Homeland Security Secretary Janet Napolitano, a directive was reportedly issued by the TSA on 29 October 2010. That directive instructs all TSA screening agents to perform “enhanced” pat down searches that involve the actual groping of women’s breasts and the genitalia of all passengers, including children.
Upon learning of that directive, I conducted an interview with a trusted source working within the U.S. Department of Homeland Security on 12 November 2010. According to the information obtained during that interview, the enhanced pat down directive was not in response to any intelligence or actionable threat. Instead, it was issued as a result of the number of airline passengers “opting out” of the body scans. The reasoning was that passengers would be more likely to select the more passive and less invasive of the two options. In other words, the directive was meant to “convince” people to choose the (ostensibly) less personal and humiliating scrutiny of a full body scanner instead of being groped by a TSA agent.
One might wonder why one option over the other would matter so much to the Department of Homeland Security. The answer might possibly be found in DHS documents described as “conceptual discussions” about trial deployments of the full body scanners to non-aviation public locations, such as sports stadiums, schools and malls. It appears that it is the intent of DHS to eventually install naked body scanners in these venues. But first, the public must be “conditioned” to accept their use at airports.