Bids for maker of Nevada driver’s licenses criticized

A giant Paris-based defense contractor made an unsolicited offer to acquire the ID Systems business of an Oregon company that makes driver's licenses for Nevada, which one critic said "ought to raise the hair on a lot of people's necks."

Safran S.A., a company that is 30 percent owned by the French government, on Sunday offered to pay $300 million in cash for the ID Systems business of Digimarc Corp. of Beaverton, Ore. The offer exceeds the previously announced $250 million cash and stock offer from L-1 Identity Solutions of Stamford, Conn.

Digimarc's ID Systems business provides technology for making Nevada driver's licenses at Department of Motor Vehicle offices. In September, Digimarc will start making more secure, harder-to-forge Nevada driver's licenses in Sacramento and mailing the licenses to drivers, said DMV spokesman Tom Jacobs.

Digimarc's board has not made a recommendation to shareholders on the Safran offer, but the potential buyout already is stirring concerns.

The outsourcing of personal information for driver's licenses to a foreign company "ought to raise the hair on a lot of people's necks," said Tim Sparapani, senior legal counsel of the American Civil Liberties Union.

The proposed sale stirs memories of the public outcry in 2006 over plans to let a Middle Eastern company take over management of 16 U.S. ports, Sparapani said. The port controversy ended when DP World, which is controlled by the Dubai government, sold its port management business to American International Group in December 2006.

"These same people should be up in arms about a foreign company analyzing information and producing the cards," Sparapani said. Personal information about drivers is "more valuable than gold," and "needs to be guarded closer than Fort Knox," he said.

Robert LaPenta, chairman and CEO of L-1 Identity Solutions, raised similar concerns. "Placing the credentialing of U.S. citizens in the hands of a foreign entity calls to question concerns of many potential dangers, including concerns to national security," he said.

Sparapani, however, mentioned concerns about an acquisition by L-1 as well, noting that Digimarc makes the driver's licenses of most states and a merger with L-1 would give it a virtual monopoly on making driver's licenses in the United States.

The Federal Trade Commission, however, ended its antitrust review of the L-1 offer, the company said Monday.

The ACLU official said he fears that letting one company compile so much data creates the risk that personal information about drivers around the country would be compromised if a hacker broke into the merged company's database.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.