Strategy

Terror Inc.

Billions have been spent on security since 9/11. Who's profited—and are we any safer now?

Air travelers move through a main security checkpoint at the Denver International Airport on November 22, 2010 in Denver, Colorado (Photo: John Moore/Getty) 

Catching a flight is, in ways both subtle and profound, a very different experience than it once was. Before you arrive at the airport, your airline may check your name against so-called no-fly lists. As you await the privilege of placing your carry-on onto a conveyor belt or spread-eagling for a hand-held metal detector, another screener may carefully scrutinize your facial expression and body movements for the slightest hint of mal-intent. You may be selected to step into a machine that will electronically undress you. Meanwhile, in the bowels of the airport, a computed tomography (CT) scanner might study your checked luggage as closely as a doctor might your liver or pancreas.

A decade has passed since the attacks on Sept. 11, 2001, during which terrorists simultaneously hijacked four American passenger jets. Although 9/11 was not history’s first coordinated hijacking, never before had passenger jets been used as guided missiles. In addition to remaking global politics overnight, 9/11 spawned a culture of anxiety and vigilance that has yet to dissipate.

Tally commitments in Canada’s federal budgets for enhanced marine, rail, aviation, border and other security over the past decade, and it amounts to approximately $9 billion. Although not all of that was explicitly for anti-terrorism, it’s mostly attributable to post-9/11 vigilance. Sometimes, uniquely Canadian requirements inspired these investments; more often they were dictated by trading partners (notably the United States) or required by international organization or conventions. Meanwhile, marine, rail and urban transit authorities spent tens of millions on access control and lighting at their facilities, often aided by taxpayer-funded grants. Pipelines and electrical utilities secured their infrastructure. Few aspects of life escaped unaffected.

Security spending since 9/11 proved a veritable bonanza for consultants, contractors and equipment manufacturers with the best mousetraps to service emerging needs. But increased security invariably involves trade-offs, the most common being inconvenience and expense. Before a Special Senate Committee on Anti-terrorism late last year, Brian Jenkins, a senior adviser with the RAND Corp., testified that al-Qaida and its affiliates believe “by their attacks, they are bankrupting the West with its increasing investments in security.” Have we secured ourselves against them—or merely played into their hands?

Nowhere have security enhancements been more radical than at airport passenger and baggage screening checkpoints, through which Mohamed Atta and other 9/11 hijackers strolled so nonchalantly. Checkpoints had their genesis in the late 1960s and early ’70s, an era of hijackings and bombings; threats morphed continually as authorities plugged gaps, only to have new ones emerge. “Terrorists scout airports before they attack—and closed-circuit TV sometimes catches them doing it,” says Peter St. John, a retired professor of international relations with expertise in aviation security. “Terrorists keep going back to aviation. If they can’t attack the plane or the luggage, they’ll attack the airport.”

Since 9/11, the federal government committed more than $4 billion to stopping them. Much of that went to the Canadian Air Transport Security Authority (CATSA), formed after 9/11 to assume responsibility for screening passengers and baggage. (Previously, airlines were responsible for screening their customers.) Billions more will be spent over the next four years. This summer, for example, CATSA is wrapping up an experiment at Vancouver International Airport, where it has deployed specially trained employees to look for unusual behaviour among passengers in snake lines.

The most visible checkpoint addition is the full-body scanner. One variety, which bounces X-rays off the subject’s body, is prohibited by Canadian health regulations due to radiation concerns. Units based on millimetre-wave technology do something similar using low-level radio-frequency energy; the 3-D image looks like a photo negative. Both reveal non-metallic items metal detectors cannot, such as ceramic knives.

In 2008, CATSA acquired and tested a millimetre-wave unit from L-3 Security & Detection Systems for eight months at Kelowna, B.C.’s international airport, and also at its Ottawa lab. Late that year, 23-year-old Nigerian Umar Farouk Abdulmutallab allegedly attempted to detonate explosives concealed in his underwear as his flight approached its destination in Detroit. That incident prompted many governments, including Canada’s, to accelerate adoption of the scanners. “We were ready to deploy when we were asked to,” reports CATSA spokesman Mathieu Laroque. CATSA sole-sourced from L-3, which it says was the only manufacturer that could meet its requirements. Each “ProVision” unit cost about $250,000, including installation and training. CATSA now operates 51. They’re used on passengers selected for secondary screening, who can choose a standard pat-down search instead.

L-3 Security & Detection Systems’ ability to match its technology with evolving check point requirements has paid off handsomely. It’s a division of L-3 Communications, a New York–based aerospace and defence contractor that makes night-vision goggles, aircraft cockpit displays and much else besides. The group has prospered post 9/11: its revenues have grown more than sixfold since then.

Carry-on luggage also receives greater scrutiny. Over the past two years, CATSA ordered $36 million worth of the latest generation of X-ray scanners from Smiths Detection, another leading screening equipment provider. Although the familiar conveyor belt still delivers your briefcase into a dark, mysterious chamber, there’s now a second monitor: these “multi-view” models scan your bag not only from above but also the side. Crisper images are welcome: terrorists are said to be concealing improvised explosives in sex toys and stuffed animals.

Your checked bags still disappear behind rubber flaps along a complex network of conveyor belts. But before 9/11, only selected luggage was examined, and then only with antiquated X-ray equipment. Today, all items run a gauntlet that begins with new X-ray equipment capable of detecting explosives and organic material. These scan up to 1,000 bags an hour from different angles and are equipped with specialized pattern-recognition software that identify suspicious items. Bags selected for further scrutiny may go through huge computed tomography (CT) scanners, which operate much like their medical equivalent. These produce high-resolution 3-D images; they cost $2 million each and are provided by General Electric. There are also explosive vapour detection (EDT) units. When all else fails, there’s manual inspection. Your suitcase may undergo as many as five different tests before being loaded onto the aircraft. And owing to passenger-baggage reconciliation rules introduced after the 1985 Air India bombing, your luggage will not leave without you.

CATSA’s 6,000-plus pieces of hold-baggage screening equipment “is coming to the end of its lifecycle,” Laroque says. “Over the next 10 years, we will replace it.” Equipment suppliers must be salivating: most of CATSA’s $800-million worth of equipment screens checked luggage. Smiths Detection is but one of many contractors vying for that business. Its parent is another conglomerate, U.K.-based Smiths Group, which unlike L-3 actually earns less revenue than it did a decade ago. But the detection business has grown significantly, and claims a 32% share of the detection equipment market (compared to 11% for L-3). Its sizable portfolio of equipment detects explosives, radioactive materials, biohazards and other dangers: they’re used at ports and borders and by emergency response personnel. The company expects this market to grow 10% annually in the near term.

Private industry supplies even the screeners themselves. Today, you’ll usually encounter five at a checkpoint: one greets you and inspects your boarding pass, a second examines X-ray images of your bags, a third may open and search them, a fourth swabs for explosives and a fifth operates the metal detectors. Since its formation, CATSA has contracted private security companies to provide screeners. In early August, it awarded four screening contracts covering all airports, worth up to $2 billion over five years. Aeroguard Co. Ltd. won the Prairies region, for example, while Garda acquired the coveted Central region (that is, Ontario). The winners begin their contracts in November.

Montreal-based Garda is a good example of a company thriving post 9/11. In 2001, it earned about $60 million in revenue, but noted presciently in its annual report that “the growth potential of this market is enormous.” Last year, it raked in more than $1.1 billion and employs more than 50,000. The security division’s customers include everything from oilsands energy companies to news organizations covering international summits like the G8.

Not everyone’s thrilled; many accuse CATSA of favouring the lowest bidders. “You’ve still got rent-a-cops looking after the security of people who go aboard Canadian planes,” St. John says. The Air India Commission of Inquiry Final Report credited Transport Canada and CATSA with completing “considerable work” to overcome numerous HR issues. (CATSA reports an annual attrition rate of 23.5%, an improvement over the 30% seen a few years ago.) However, the Commission noted screeners earn about $15 an hour on average. Many hold second jobs. In contrast, screeners in the Netherlands, Belgium and other European countries are paid considerably more. “It’s a big responsibility they have,” says John Aman, director of organizing for the Canadian Auto Workers’ union (which represents screeners in Toronto), “and they certainly don’t get paid in kind.”

One notable consequence of 9/11, as an otherwise dry 2003 report from the Organization for Economic Co-operation and Development put it, was that “the risk of mega-terrorism, once the stuff of spy novels, suddenly became very real.” Filmed shortly before 9/11, the thriller The Sum of All Fears (based on a Tom Clancy novel) featured a nuclear device disguised as a vending machine, which detonated. That premise seemed less sensational as lower Manhattan’s World Trade Center smouldered in ruin. But whereas Clancy’s CIA protagonist, Jack Ryan, rarely worries about busting his department’s budget, his real-life Canuck counterparts face real-life constraints.

Obtaining a nuclear device is no simple matter; delivering one to a target might be. Much of the world’s cargo travels in the ubiquitous shipping container. “It is common knowledge that only a small percentage of containers entering North American ports currently are searched,” warned the Standing Senate Committee on National Security and Defence in a 2003 report. The senators began pondering worst-case scenarios. “Consider the immense potential for devastation if just one of the unsearched contained a dirty bomb,” its report fretted.

At least $2.7 billion has been spent hardening border security since 9/11. The Canada Border Services Agency is charged with preventing illegal or dangerous goods from entering the country. Whereas before 9/11 inspectors were armed primarily with mirrors and scopes, after 9/11 Canada invested in new tools to detect explosives, weapons and dangerous goods. One example: radiation detection portals. Found at ports, these consist of two four-metre-high steel monoliths spaced widely enough for a container to pass between them. Portals scan for ionizing radiation from both natural and artificial sources, triggering a silent alarm if any is detected.

CBSA installed 34 portals since 2005. Each cost about $300,000, including installation, and were built in Canada by SAIC Canada, a subsidiary of a Science Applications International Corp., a huge multinational science, engineering and technology conglomerate. Last year, about 2.8 million scans were performed; portals in Vancouver constituted part of Canada’s efforts to prevent terrorism during the 2010 Winter Olympics.

The added margin of safety, though, is difficult to measure. One recent examination of CBSA noted the agency intercepts large quantities of drugs, weapons, tobacco, child pornography and hate propaganda. Nuclear devices and terrorist plots, though, went unmentioned. All silent alarms to date have proven to be non-events; there are plenty of innocuous sources of radiation, from ceramic tiles to kitty litter. Meanwhile, “radiation portals have difficulty detecting shielded, highly enriched uranium—a key ingredient in nuclear bombs,” noted a 2007 report by the Standing Senate Committee on National Security and Defence.

In Halifax Harbour’s narrows in 1917, the French cargo freighter Mont-Blanc and the Belgian relief ship Imo collided. The Mont-Blanc was loaded with explosives, some of which caught fire. The result: the largest-ever man-made explosion to that date, completely levelling several square kilometres. Thousands died.

The Halifax Explosion was essentially a traffic accident made immeasurably worse by wartime cargo. But after 9/11, authorities realized a well-funded terrorist group might try something similar. Tens of thousands of merchant vessels ply the world’s oceans; acquiring one would be relatively straightforward. Terrorists could load one with ammonium nitrate—or worse, a nuclear device—and set course for a target port.

The absence of major marine incidents contributed to complacency. Prior to 9/11, activity in Canada was largely confined to screening cruise-ship passengers for weapons and other undesirable items during warmer months. Transport Canada’s special port police service was eliminated during the 1990s as ports were privatized. “Overall maritime security was at a very low ebb just before 9/11,” says John Lavers, a maritime security consultant and former senior Transport Canada official.

Following 9/11, maritime attacks suddenly seemed inevitable. One American security expert warned that unless the international community greatly increased its capacity to track “terrorist ships,” another 9/11 would arrive within months, only this time from the sea. Canada, which had been slow to respond to American pressure to beef up maritime security, suddenly became amenable to working with U.S. authorities—most notably its coast guard—to make North American ports more secure. “The Americans were pushing the Canadians to meet a higher standard,” says Lavers. “It was good we went that way….but it certainly did come at a very high cost.” Over $1 billion went to various agencies to plug the leaks.

Coastal defence requires identifying and tracking vessels long before they appear on the horizon. In 2006, the International Maritime Organization (a UN creature that governs global shipping) created the international long-range identification and track ing system (LRIT). It uses radio equipment to transmit information about large commercial vessels (such as ship’s name and its location at a specific time and date) to satellites, which in turn send the information for ground stations and on to countries that participate in the system. Canada, an IMO member, introduced laws last year requiring Canadian passenger and cargo vessels to carry LRIT transponders. It’s one way CBSA attempts to “push the border out” so as to intercept threats well offshore.

Iridium Communications benefited from the rise of LRITs. You may recall it as the Morotola-backed company behind mobile satellite phones in the late 1990s. It went bankrupt in 1999 but was salvaged by new investors who converted it into a service provider using the same constellation of satellites. Now numbering 66, those satellites provide global coverage, allowing McLean, Va.–based Iridium to partner with other companies that sell on-ship LRIT terminals. Although Iridium recently told investors “we believe the maritime market is one of our most significant market opportunities,” any large windfalls from the LRIT market have largely passed. That’s because virtually all ships required to carry the equipment have already been fitted, and the shipbuilding industry is in the doldrums.

Again, the margin of safety is unquantifiable. The U.S. government believes LRIT provides four days to investigate an approaching vessel, but notes the system depends on vessel operators’ co-operation—something terrorists wouldn’t likely provide. (Transponders can be “spoofed” to transmit misleading information.) Geographical coverage is spotty, and many less-developed countries have insufficient resources to meaningfully participate. Moreover, LRIT does not apply to smaller or non-commercial vessels, which are the very sort likely to evade radar and other complementary tracking equipment. “There’s a lot of money being pumped into LRIT,” says Lavers. “There are a lot of people who are not high on the system because of its gaps, and there’s lots of people that support it. But at the end of the day, it will not give you the full picture.” Intelligence from LRIT must be combined with a plethora of other information—sonar, ship-to-shore communications, etc.—if it is to be expected to warn of imminent threats.

No amount of spending—not even $9 billion—can render us invulnerable from those intent on harm. Lavers, for his part, warns Canada cannot afford a short memory. “We’re in great danger of falling into apathy,” he warns. “The further we get from 9/11, the more senses tend to be dulled to the potential of another horrific attack.”