Asset Protection BLOG - Mark Nestmann

If You Have any Connection to an Offshore Trust, You Need This Book

Type the phrase "offshore trust" into a search engine, and you'll get a lot of hits.  When I did so a few minutes ago, I found 109,000 matches on Google. 

When I pulled up three of the first 20 matches, I found a lot about the benefits of an offshore trust.  But I found very little about the rather onerous reporting requirements that apply to offshore trusts a U.S. person creates, or with U.S. beneficiaries.  Or, for that matter, about the draconian penalties that apply for non-compliance with these requirements. 

Don't get me wrong.  Offshore trusts can be immensely useful instruments for asset protection, estate planning, and other uses.  But when an offshore trust has any connection whatsoever to the United States, it's important to understand the legal, tax, and regulatory implications.

That's why I was delighted to receive an e-mail message last week from my old friend and colleague, CPA Vernon Jacobs.  Vern and international tax attorney Richard Duke have written the first edition of a new tax guide for the U.S. grantors and beneficiaries of an offshore trust.  It's called The U.S. Tax Guide for Foreign Trusts.  And it's the only practical guide to the compliance rules for the U.S. grantors and beneficiaries of a foreign trust I've found. 

If you're a U.S. citizen or U.S. resident alien who has (or wants to have) an offshore trust, you need this book.  If you're the U.S. beneficiary of an offshore trust, you also need this book.  Indeed, if you have any connection whatsoever to an offshore trust with a U.S. grantor or beneficiaries, you need this book.  That includes trustees for offshore trusts, professional advisors who facilitate the formation of offshore trusts, asset manager for offshore trusts, and accountants who keeps the books for offshore trusts.

For years, I've been trying to get Vern to increase the price he charges for his excellent work.  Unfortunately for Vern—but fortunately for you—I haven't convinced him to do so.  You can purchase a digital copy of The U.S. Tax Guide for Foreign Trusts for only US$65, or a printed copy for only US$87. 

To learn more about this book, see http://www.offshorepress.com/faptax.htm.  Again, if you have any involvement whatsoever in an offshore trust with a U.S. connection, you need a copy of it in your library.

U.K.'s "Ultra Secure" National ID Card Cloned in 12 Minutes

National ID cards are becoming de rigueur worldwide. Governments like them because they replace multiple identification documents with a single, standardized, and widely recognized document.  And this document, so goes the argument, can be designed so that it's virtually impossible to fake. 

Armed with these arguments, the U.K. Labor government has for nearly a decade tried to force national ID cards on an increasingly skeptical population.  They've also tried to justify national ID cards as a means to reduce immigration fraud, welfare benefits fraud, identity theft, and terrorism. 

The problem—completely apart from the many civil liberties concerns that national ID cards raise—is that establishing a single standard document to prove your identity makes that document an overwhelmingly attractive to fraudsters.  For that reason, many security experts oppose national ID cards.  Far better to rely on various forms of ID, none of which are necessarily 100% trusted, than to put your faith in a supposedly secure national ID that turns out not to be not-so-secure.

The proposed U.K. national ID card is the embodiment of these concerns.  Hackers have repeatedly penetrated the supposedly ultra-secure database in which the government will maintain data for the cards.  This database will eventually include your name, birth date, home address, welfare benefit status, criminal records, national security status, and possibly your medical records as well. 

But it's not only the database where security is lacking.  Last week, reports surfaced in London that security expert Adam Laurie had tested the ID card now being issued to foreign nationals and managed to clone it in only 12 minutes. This card uses the same technology as the card that will be issued to U.K. nationals beginning in 2012.

Using only a mobile phone and a laptop computer, Laurie first cracked the code on the card, allowing him to copy the data on it.  He then created a cloned card and changed the data, including the name, physical description, fingerprints, etc.

So much for preventing identity theft or immigration fraud.  But surely the card would still prevent theft of welfare benefits?  Well, not exactly.  Laurie also rewrote these data fields, reversing the bearer's status from "not entitled to benefits" to "entitled to benefits."

But even so, wouldn't the card still make it more difficult for terrorists to operate in the United Kingdom?  Well, Laurie actually created fresh content on the card that would be visible to any official scanning the card.  The content read: "I am a terrorist—shoot on sight."  Of course, the content could also have read: "I am a high-level MI-6 operative with the highest security clearance." 

Given this colossal failure, you'd think that the U.K. government might rethink its national ID scheme.  Not a chance.  The day after Laurie's exploit, a spokesperson for the U.K. Home Office said, "We are satisfied the personal data on the chip cannot be changed or modified and there is no evidence this has happened."

If national ID cards aren't useful to prevent welfare fraud, identity theft, or terrorism, what are they good for?  The only thing left is control.  National ID cards allow governments to control their populations much more closely than they would otherwise.  Through the centralized database accompanying a national ID card governments accumulate an immense amount of private and sensitive information on every citizen.  Anyone authorized to use the database can use it to retrieve information. 

It's no coincidence that the most fervent believers in national ID cards—in the United Kingdom and anywhere else—are politicians.  They understand the advantages of controlling this database and using it for their own purposes.  Perhaps some of these purposes are legitimate, but many are not.  One obvious use of the data would be surveillance of political opponents.  Armed with embarrassing data on a political opponent, inquisitive journalist, citizen blogger, or anyone else, our government masters could quash dissent almost instantly. 

Is this the true purpose of national ID cards?  Given their well-publicized failures, what else could it be?

Copyright © 2009 by Mark Nestmann

Don't Get Caught in a War with the Wrong Passport!

As fighting intensified in the Gaza Strip, Israel last Friday began allowing individuals possessing a foreign passport to leave the crowded Palestinian territory.  Hundreds left before Israel's ground forces invaded the Gaza Strip the next day.

They were the fortunate ones. Ordinary Palestinians have few options to escape the war zone.  Gaza is surrounded on three sides by Israel, and on the fourth by Egypt.  Both countries have closed all border crossings.  And while the Palestine governing authority issues a passport, Palestinians can't use it to leave Gaza.  Only Palestinians fortunate enough to possess a non-Palestinian passport can leave.

Even in better times, a Palestinian passport isn't an ideal travel document.  Only a handful of countries recognize it, although more than 100 countries have diplomatic ties with Palestine.  Even when the borders are open, persons carrying a Palestinian passport must negotiate a labyrinth of legal requirements to depart legally.  And, they may not be allowed to return. 

How you would react if the country you live in now became a war zone?  Would the authorities allow you to leave your own country?  Or, as in Gaza, would you become a virtual prisoner?  Further, what would you do if your own country—or an authority controlling access to it—wouldn't allow you to return home?

One way to protect yourself from this possibility—and to obtain many other benefits—is to obtain a second passport.  If you don't qualify for a second passport by virtue of your ancestry or your marital status, you can purchase one from a handful of countries that offer "economic citizenship."   The Commonwealth of Dominica, the Federation of St. Kitts & Nevis, and Austria all have official, legally mandated, economic citizenship programs.  To qualify under any of them, you must pass a strict vetting process that includes a comprehensive criminal background check. 

The least expensive option is to obtain economic citizenship from Dominica. Under this country's economic citizenship program, you may acquire citizenship and passport in return for a cash contribution.  Total costs including all fees for a single applicant come to about US$103,000.  Add US$25,000 if you need a passport for your spouse and up to two children under 18.  Dominican passport holders can travel without a visa, or obtain a visa upon entry, to nearly 90 countries and territories.

In the Federation of St. Kitts & Nevis, there are two ways to obtain economic citizenship.  The most practical strategy is to make a direct contribution.   Total costs including all fees for a single applicant under this option come to about US$215,000, or US$265,000 for an applicant with up to three dependents. Alternatively, you can purchase qualifying property worth a minimum of US$350,000. However, fees and taxes under this option are much higher than if you make a direct contribution.  St. Kitts & Nevis passport holders can travel without a visa, or obtain a visa upon entry, to more than 100 countries.

Finally, you may be able to obtain Austrian citizenship and passport after making a substantial investment in that country.  Unlike the programs in Dominica and St. Kitts & Nevis, in Austria, you must make your investment first and then apply for citizenship. You don't get your money back if you're not approved.  Generally, you must invest several million dollars to have a reasonable chance at qualifying, and pay legal fees of US$30,000 or more.  Austrian passport holders can travel to more than 120 countries visa-free and live and work in any of the 27 members of the European Union.

Other than giving you an "exit strategy" in case of domestic unrest, having a second passport and dual citizenship has numerous additional benefits. It can expand your travel possibilities, reduce your profile to terrorists, give you the right to reside in other countries, and give you a way to cross international borders if your primary passport is lost or stolen.  For Americans, a second passport has another benefit.  It is an essential prerequisite to expatriation; i.e., giving up U.S. citizenship in order to permanently disconnect from U.S. taxing authority.

The Nestmann Group, Ltd. can assist individuals seeking alternative citizenship and tax-advantaged residence. Please contact us for more information at info@nestmann.com.

Copyright © 2008 by Mark Nestmann

RFID Tags Enable 24/7 Surveillance [Part II]

in my last blog entry, I described how states on the U.S. and Mexican borders have begun to issue "enhanced driver licenses," which can be used at U.S. border crossings in Mexico and Canada.  Each license incorporates a RFID tag encoded with a unique identification number.  The ID tag number on your license is associated with your identity.

I also described how corporate American plans to install a nationwide network of"person tracking units" (PTUs) everywhere that people go--from airports to shopping malls to museums. 

How do corporate America and the U.S. government plan to use the massive amounts of data gathered through RFID tags?  ssentially, to facilitate 24/7 surveillance of everything you do and everywhere you go.  Here's how I think it will work.

Even if the RFID tag contains no personally identifiable data, that doesn't matter.  That's because once the PTU establishes the link between your unique RFID number and your identity, "personal information will be obtained when the person uses his or her credit card, bank card, shopper card or the like."  Enhanced driver licenses are ideal for this purpose because they are compatible with scanners already in use by many large retailers.

Corporate America plans to aggregate this data and use it to make better decisions about how to market specific products to specific individuals.  Based on your RFID profile, for instance, you might see the type of personalized advertising pitches that were a staple of the movie "Minority Report" (highly recommended).  But naturally, this data would also be available for government inspection as well…and there's the real danger. 

Consider how China plans to use RFID tags.  The new high-tech Chinese national ID card contains a record of the cardholder's employment status, ethnicity, health and reproductive history, and even religion.  Plans are underway to use these cards in conjunction with state-of-the-art CCTV and related surveillance technologies in Chinese cities.  The primary goal of the program, according to a company manufacturing the RFID tags, is "for the government to control the population in the future."  The same potential exists in the United States or any other country that adopts this technology without careful consideration of the consequences.

What can you do to slow down the RFID juggernaut?  For starters, don't apply for an enhanced driver's license if the state you live in offers one.  And while you're at it, get involved in the effort to reduce RFID surveillance.  The most influential organization in this fight is CASPIAN—Consumers Against Supermarket Privacy Invasion and Numbering.  Visit their Web site at http://www.nocards.org to learn more.

Copyright © 2008 by Mark Nestmann

RFID Tags Enable 24/7 Surveillance [Part I]

Are you ready to begin living a tagged life?  If you are, the future is here, courtesy of radio-frequency identification (RFID) tags.

Stage 1 of your tagged life is now here, in the form of new high-tech driver's licenses, which can be used at U.S. border crossings in Mexico and Canada.  Each license incorporates a RFID tag encoded with a unique identification number. 

As you approach a border crossing, a RFID reader sends out a signal that an antenna on the tag picks up.  The tag in turn reveals its ID number.  By the time you arrive at the border crossing, Customs agents already have your name, address, photo, and other details in front of them.

Ordinary U.S. passports also contain a RFID tag.  The only difference is that the tag can't be read remotely, at least in theory. 

States on the U.S. and Mexican border have now started to issue RFID-equipped licenses.  The state of Washington now issues an RFID tagged "enhanced driver license," which can be used for border crossings to and from Canada.  In the near future, Arizona, Michigan, New York, and Vermont will begin issuing them.

Although there's no law requiring you to obtain an enhanced driver license, once you sign up, you open the door to privacy invasion on an unprecedented scale.  That's because the RFID tag number on your license is associated with your identity.  Anyone with a RFID reader—an item you can pick up for a few hundred dollars—can interrogate the tag and access the data on it.  Combine that with the growing number of products which contain RFID tags—credit cards, ATM cards, cell phones, key cards, etc.—and the potential grows exponentially for surreptitious tracking, wherever you go.

Some people don't believe that's a problem.  I do, though, because the data on the RFID tags in enhanced drivers' licenses isn't encrypted.  An identity thief, a stalker, a private investigator, or anyone else who wants to learn your identity, and potentially match it to the growing array of data tied to your tag number, can remotely interrogate the tag with a simple RFID reader.  You won't even know when it happens. (In contrast, the data on the RFID tags in U.S. passports is encrypted--although hackers have already figured out how to clone the data).

Combine this potential for abuse with the huge plans corporations—and the government—have for "people tracking" via RFID tags, and the potential for 24/7 surveillance is obvious.  For instance, an IBM patent granted in 2006 describes a network of interconnected RFID readers that IBM calls "person tracking units" (PTUs).  IBM envisions installing PTUs everywhere that people go—in airports, shopping malls, sports arenas, theaters, etc.  According to the patent, the PTU network would "keep records of different locations where the person has visited, as well as the visitation times."

How do corporate America and the U.S. government plan to use the massive amounts of data gathered through RFID tags?  Essentially, to facilitate 24/7 surveillance of everything you do and everywhere you go.  I'll have more to say about that in my next blog entry...stay tuned.

Copyright © 2008 by Mark Nestmann

The US "Passport Card": Your New National ID

Back in 2005, Congress enacted the "Real ID" Act.  This law, which Congress enacted unanimously, with no discussion, and without even reading the bill, imposed national standards to insure state-issued identity documents couldn't be counterfeited or falsified. 

Real ID seemed relatively harmless, except for one key component: the creation of inter-connected state databases to include details on nearly 250 million licensed drivers.  Any state could interrogate any other state's database.  And naturally, the federal government could interrogate any state database.  As such, critics, including myself, accused Congress of imposing a national ID card through the back door.

Three years later, the Real ID initiative is moribund.  Legislators in nearly 30 states have refused to go along with this federal mandate.  And while the Department of Homeland Security has issued "extensions" to the May 2008 compliance deadline, most states appear to have no intention of complying.

Perhaps that's the reason that on July 22, 2008, in a joint press release from Departments of State and Homeland Security, the government announced that it's now producing something called the "U.S. passport card."

According to the news release,

"The passport card facilitates entry and expedites document processing at U.S. land and sea ports-of-entry when arriving from Canada, Mexico, the Caribbean and Bermuda.  The card may not be used to travel by air.  Otherwise, it carries the rights and privileges of the U.S. passport book and is adjudicated to the exact same standards."

Sounds harmless enough.  But I think there may a hidden agenda. 

First, consider that any company that employs anyone in the United States must now verify the identity and employment eligibility of all new employees.  Wouldn't it be great if the new passport card could be used for that purpose?  Well, it can...what a coincidence!

Second, consider that according to the news release:

"To facilitate the frequent travel of U.S. citizens living in border communities and to meet DHS’s operational needs at land borders, the passport card contains a vicinity-read radio frequency identification (RFID) chip.  This chip points to a stored record in secure government databases.  There is no personal information written to the RFID chip itself."

So, what do we have here?  Essentially, we have an identity document you can use both to confirm your identity in the United States and at U.S. borders.  What's more, since it's equipped with a RFID chip, the government can add driver's license data any time it wants. 

I wouldn't be surprised if after a decent interval—six to 12 months—DHS issues another press release to announce that the passport card can be used for all "federal purposes" that the Real ID initiative was supposed to address.  In plain English, that means you'll need Real ID compliant driver's license, a passport card (or an actual passport) to travel on an airplane or enter any secured federal facility, such as a federal courthouse or even a Social Security Office. 

Of course, since the passport card is a federal initiative all along, there's no longer a need for a national interconnected database of drivers' license information.  The feds will have something even more valuable—and dangerous—a national database it can use for whatever purpose it deems suitable without any state-imposed restrictions.

Should this scenario come to pass as I anticipate, the government will have effectively bypassed state opposition to the Real ID Act and imposed a national ID, albeit in a very sneaky way. 

I hope that I'm wrong, but if not—you read it here first. 

Copyright © 2008 by Mark Nestmann

Expect a Bureaucratic Nightmare when You Renew Your Driver's License

Back in 2005, our Congressional kleptocrats snuck an obscure provision into a military spending bill that, in effect, creates the first national ID card in U.S. history.

The "REAL ID" Act imposes security, authentication, and issuance standards for American state driver's licenses and state ID cards.  But as I pointed out in a previous blog entry, the most threatening aspect of the Real ID initiative is its creation of 50 inter-connected state databases to include details on nearly 250 million licensed drivers.  Each state must provide electronic access to all other states to information contained in its motor vehicle database.

While no state has yet to comply with the Real ID Act's security and authentication standards, this database, or at least a part of it, is already up and running.  Before renewing your driver's license, your state Motor Vehicles Department must now check your driving record in all 50 states.  If you have an outstanding violation in any other state—even an unpaid speeding ticket from decades ago—you won't get your new license.  And, you may have to negotiate a bureaucratic labyrinth worthy of a Kafka novel to resolve the problem. 

I recently read in Liberty magazine about the experiences of Jim Walsh, a resident of the state of Washington, when he tried to renew his driver's license.  He couldn't, because computer records from Massachusetts revealed a 20-year-old unpaid speeding ticket.  In fact, Jim had paid the ticket, but he couldn't produce a canceled check from 1988. 

Here's what he's had to go through so far to get the problem resolved.

First, Jim called the Massachusetts Registry of Motor Vehicles (MRMV) to see if their records indicated that, in fact, the ticket had never been paid.  After waiting for 90 minutes on hold, a rude clerk confirmed that unfortunate "fact."  Nor could the clerk accept a second payment.  He would have to send in another check to the county court that issued the ticket.

Next, Jim contacted the appropriate county court in Massachusetts.  A clerk helpfully provided instructions on how to pay the ticket a second time.  After receiving Jim's duplicate payment, the county court sent a payment confirmation to the MRMV.

Now it was time to call the MRMV again.  After another extended period on hold, another rude clerk told Jim that the payment confirmation didn't match the required Department of Homeland Security format.  To have the payment acknowledged in the required format, Jim would have to produce a court order issued by a judge in the county where the ticket was issued.

It was time for another call to the county clerk.  It would be no problem to request a judge to issue the court order.  However, Jim would need to make a personal appearance before a judge to request the court order.  Since Massachusetts is 2,500 miles from the state of Washington, this would require an overnight trip and several hundred dollars in travel expenses. 

When Liberty published this article, Jim still hadn't been able to renew his driver's license.  The court clerk in Massachusetts suggested that it might be possible for Jim to hire a local attorney in lieu of a court order to satisfy the MRMV.  The attorney could present the MRMV with a sworn statement that the receipt from the county, in fact, represented proof of payment.  It might also be possible to take the receipt marked "paid" to the Washington Department of Motor Vehicles to see if it would be possible to bypass the Real ID database. 

But there were no guarantees.  Jim's ability to operate a motor vehicle legally rests in the hands of unaccountable bureaucrats. (I've yet to hear back from Liberty as to whether Jim's heroic efforts were, in fact, successful.)

Benjamin Franklin warned us more than two centuries ago that, ""He who sacrifices liberty for security deserves neither security nor liberty."  As I've written previously, there's no indication any national ID initiative has ever improved security.  And, as this sordid tale of bureaucracy run amok illustrates, it's already thwarting our shrinking liberty.

Copyright © 2008 by Mark Nestmann

Fingering Big Government's (and Big Businesses') Obsession with Fingerprinting

Could you be forced to submit your fingerprints for the offense of "driving while Latino?"  To apply for a job?  Or even as a condition to enter a Disney theme park? 

If you live in the United States, the answer is "yes."  And that's got me pointing my finger at some serious problems with these developments. 

Last night I had dinner with some friends here in Phoenix.  One of my friends—I'll call her Mary—has a friend named Roberto. 

Roberto is a native-born American, but comes from a Hispanic family.  And he received the shock of his life a few days ago when sheriff's deputies in Maricopa County, Arizona pulled him over while he was driving.

Roberto wasn't intoxicated or driving erratically.  In fact, it appears the reason he was pulled over—and detained for nearly an hour—was because he has a Hispanic appearance.

During the encounter, the deputies grilled Roberto about his immigration status.  They didn't believe his claims that he was a native-born U.S. citizen.  To add insult to injury, the deputies fingerprinted him.  Not subjecting to fingerprinting, they told him, would subject him to arrest. 

Maricopa County is hardly alone in this regard.  Police in Hawaii, Kansas, New York, Wisconsin, and perhaps other state as well, now routinely scan fingerprints when they stop motorists for traffic infractions.  At the same time, the FBI is investing US$1 billion in a national database that will combine fingerprint data with retinal scans, and even tattoos.

What's more, if you want to apply for a job, you may have to submit your fingerprints along with your job application.  Both state and federal laws now require fingerprinting for many types of jobs, particularly those involving contact with children, security, or with large sums of money.

But what really makes my finger wag is a policy instituted in 2006 at Walt Disney World in Orlando, Florida.  To enter the "Magic Kingdom," you must now submit to a fingerprint scan.  This is to prevent you from sharing or re-selling your admission tickets. 

However, as with many other surveillance technologies, fingerprinting is in many cases essentially "security theater."  The FBI claims a "zero error rate" in its fingerprint identification.  But that's simply not true. 

One problem is false matches.  A false match on a fingerprint left on a bag linked to a 2004 bombing in Spain that left 191 dead led to the arrest and detention of Portland attorney Brandon Mayfield.  After Mayfield spend two weeks in jail, prosecutors finally released him after realizing that "zero error rate" doesn't necessarily mean, well, "zero error rate."

Fingerprint readers can also be spoofed.  In 2005, Japanese cryptographer Tsutomu Matsumoto designed a system to trick biometric fingerprint readers.  Matsumoto's system involves duplicating an actual fingerprint through digital photo editing software and other advanced technology.  His design apparently fools fingerprint readers about 80% of the time. 

In other words, in the not-distant future, someone could hack the FBI biometric database, steal your fingerprints, duplicate them using Matsumoto's techniques or even more advanced methods, and then leave them at the scene of various crimes.  Guess who would be arrested? 

What routine fingerprinting is effective for is conditioning all of us to accept surveillance and routine searches and identity checks as a routine part of life.  And that has me pointing my finger…skyward.

Copyright © 2008 by Mark Nestmann

Is "Real ID" Dead—or Just Waiting for the Next Terrorist Crisis?

Are there limits beyond which Americans will refuse to go in the so-called "War on Terrorism?" 

Apparently so.  Legislators in more than two-dozen states have enacted laws refusing to go along with an unfunded federal mandate that imposes security, authentication, and issuance standards for driver's licenses and state ID cards. 

The initial deadline for compliance with this "Real ID initiative" is May 11, 2008.  After that date, residents of states that haven't promised to issue Real ID-compliant identity documents won't be able to use their drivers' licenses to board a domestic airline flight, enter a federal courthouse, or for other official government purposes. 

Only, it appears that the Department of Homeland Security isn't that serious about enforcing the Real ID mandate.  To avoid a May 11 showdown, it has issued extensions to compliance with Real ID to every state that passed laws refusing to comply with it!  The DHS merely received assurances that these states will "eventually" comply with the requirements. 

Supporters of the Real ID initiative—part of a 2005 military spending bill—claim that it merely establishes common-sense standards to insure identity documents can't be counterfeited or falsified.  That, in turn, they say, will reduce terrorism, illegal immigration, and a host of other social ills.

If only that were true—it's not.  Harder-to-forge IDs won't stop terrorism, because making sure someone is who they claim to be doesn't prove they won't conduct a terrorist act.   

Most terrorists have no previously known links to terrorism.  Many of the 9/11 hijackers had no previous links to terrorism.  For that matter, neither did Oklahoma City bomber Timothy McVeigh.

Then there's the matter of whether Real IDs will actually be, well, real.  Proponents say the high-tech identity documents produced under the initiative will be tamperproof and impossible to counterfeit. 

But this claim is a bald-faced lie.  We need look no further than the newest generation of U.S. passports—those equipped with a supposedly tamper-proof radio frequency identification (RFID) chip similar to the one slated to be inserted in all Real ID compliant identity documents.  Last August, a computer security actually cloned a RFID passport.  Is it too much to imagine that clever hackers will similarly find a way to hack Real IDs?

But the most threatening aspect of the Real ID initiative is its creation of the equivalent of a national database to include details on nearly 250 million licensed drivers.  Each state must provide electronic access to all other states to information contained in its motor vehicle database. 

An interlinked system is a far greater security risk than a decentralized one with each state issuing ID cards according to its own rules.  That's because if hackers manage to penetrate it, they'll have access to identity documents in all 50 states—not just one. 

Moreover, since there's no requirement that the data on your Real ID be protected in any way, private companies can use the information in it at will.  Every retailer that requires identification will swipe your Real ID and then sell the data to information aggregators to be data mined at will.

Does the current standoff over Real ID mean the end of efforts to establish a national ID card?  Not at all.  If a lie is repeated often enough, people will believe it's true.  That's particularly true when it comes to the War on Terror.  If there is another terrorist attack on U.S. soil, the trend toward a national identity card—and national ID database—may be unstoppable. 

Copyright © 2008 by Mark Nestmann

U.K. National ID Card Proposal Delayed

The Nazis had one, and so did the Soviets and apartheid South Africa.  Communist China has one.  And an increasing number of "free" countries have them as well.  Residents of Hong Kong, Singapore and even the Netherlands now have to carry their cards at all times.

What I'm referring to, of course, is a national ID card.  When the authorities ask for it, you MUST present it.  If you don't, you can be fined and in some countries, even imprisoned.

Without your national ID card, you can't leave your home.  In some countries, you can't shop without it.  In others, you need to present your national ID to obtain medical treatment.  Naturally, it's used to track all your financial transactions, your electronic communications, your travel history, etc. 

Governments that promote national ID cards say they're needed as an "anti-crime" measure.  Only, it turns out that the security surrounding any centralized database is often so poor that crime—especially identity theft—rises exponentially.

The United Kingdom is a case in point.  In just the last six months, the U.K. government:

• Lost two CDs containing bank details and addresses of 9.5 million parents and the names, dates of birth and National Insurance numbers of all 15.5 million children in the country;
• Sent 7.25 million parents an apology letter for this breach, with the letter containing much of the same sensitive personal data! 
• Had a Royal Navy officer's laptop stolen which contained personal identifying details of more than 600,000 people.

Not surprisingly, these losses, and similar ones, are causing an explosion in identity theft.  Even the chairman of banking giant Barclays isn't immune.  Earlier this month, the bank announced that a con man had stolen the equivalent of US$20,000 from his personal account in a credit card scam.

Who's taking responsibility for these losses?  Naturally, it's not the government.  Indeed, the U.K. Revenue & Customs agency actually blamed parents for letting their children's details fall into the wrong hands!

Despite its shameful efforts to blame parents for government data losses, the U.K. government has apparently come to realize that forcing a national ID card into existence isn't politically expedient.  A national identity "White Paper" recently proposed delaying the mandatory identification cards until at least 2012.  A voluntary scheme will begin in 2009 for U.K. citizens renewing their passports.

When that happens, you can count on an explosion in crimes, especially identity theft and forgery.  As security expert Bruce Schneier, author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World, observes:

"ID cards will not reduce crime, fraud or illegal immigration.  Instead, ID cards encourage criminals to attempt forgeries, potentially exacerbating crime rather than reducing it.  Every credential has been forged.  As you make a credential more valuable, there is more impetus to forge it.  And even if we could guarantee that everyone who issued national ID cards couldn't be bribed, initial cardholder identity would be determined by other identity documents ... all of which would be easier to forge.

"But the main problem with any ID system is that it requires the existence of a database.  In this case it would have to be an immense database of private and sensitive information on every citizen -- one widely and instantaneously accessible from airline check-in stations, police cars, schools, and so on.  And when the inevitable worms, viruses, or random failures happen and the database goes down, what then?  Is the whole country supposed to shut down until it's restored?"

National ID cards are also a bad idea not only because the potential for abuse, but because of "surveillance creep:" a technology or law intended for one purpose, winds up being used for many others.

A classic example is the U.S. Social Security card.  Once stamped "not for identification," the number on your Social Security card is now required to file a tax return, open a bank account and to obtain a driver's license.  Does anyone really think national ID cards--including the U.S. "Real ID" initiative--will be any different?

Copyright © 2008 by Mark Nestmann