Consumer Federation of California

Even as cost-conscious Gov. Arnold Schwarzenegger looks to trim state spending every way he can, officials at the Department of Motor Vehicles are planning to spend tens of millions of dollars on new driver’s license technology.

And privacy advocates say finances are the least of the plan’s problems.

The proposed $63 million contract includes facial recognition software that would allow the DMV to quickly compare an applicant’s new photo against other photos in the agency’s database in an effort to deter identity theft. The system could eventually include as many as 25 million images of drivers statewide.

Similar software is used in Oregon, New Mexico, Texas, Colorado and Georgia. California DMV officials say that by flagging applicants who already have a license under a different name, the software has led to a reduction in fraudulent licenses and identification cards by as much as 10 percent in those states.

But the five-year contract, which is being fast-tracked and could be approved as early as next month, is drawing objections from privacy advocates who fear state and local authorities could use the biometric technology to monitor the movements of "innocent people" ‘ for instance, spectators at a sporting event or an anti-war rally.

"What this would allow law enforcement to do is scan a crowd of folks, check that image against the database and have their names and addresses," said Valerie Smalls

Navarro of the American Civil Liberties Union in Sacramento.

The ACLU is fighting the proposal with a handful of other groups, including Consumers Union, the Electronic Frontier Foundation and the Consumer Federation of California, which says the plan poses "massive threats" to personal privacy.

"We see this as sort of creeping Big Brother government, an invasion of people’s privacy," said Richard Holober, executive director of the San Mateo-based Consumer Federation of California.

The DMV says privacy concerns are overblown because, under its interpretation of state law, police departments don’t have "open access" to the current database that contains drivers’ information.

When police need to track down a license holder’s address or driving record, said Dennis Clear, a DMV assistant director for legislation, they must request it from the department. Similarly, police would have to ask in order to check a suspect’s picture against the new database. The database is protected, he said, "and that’s not going to change."

If anything, Clear said, the new system will significantly improve privacy. "We believe this new contract is in the best interest of the citizens; it is in the best interest of all of us."

But the proposal also is eliciting criticism for the hasty manner in which it’s being driven through the state’s bureaucracy ‘ using an expedited process for select budget items that can be funded without the scrutiny of public hearings.

The state Department of Finance, which allocates the DMV’s budget, is processing the contract proposal through a so-called Section 11 application, which in many cases allows for a speedy, 30-day approval. The state would be able to sign the contract after Feb. 14, unless the Legislature intervenes before then, and the biometric features could be in place as early as 2010.

The current contract to manufacture driver’s licenses expires in June. Under that contract, the state pays 65 cents for each license. The new contract will push the price to $1.40 per card, which amounts to $63 million in a five-year period, Clear said.

"We feel it’s worth it as an investment because, frankly, the system we have today is wearing out," Clear said. "We have cameras that are no longer functioning, we have hardware that is breaking down."

State officials turned to the fast-track process ‘ instead of waiting for the state budget to be approved in what has become an increasingly drawn-out process ‘ because they say California desperately needs to improve security features on its licenses.

Sen. Joe Simitian, D-Palo Alto, perhaps the most outspoken lawmaker when it comes to privacy issues, is urging his colleagues to put the contract proposal before a public hearing, where DMV officials could provide more details about the facial recognition technology.

"There are at least four questions I want to ask," Simitian said. They are: Does the technology work? How much does it cost? Does it make the public safer? How will privacy be protected?

"None of those questions should be avoided or evaded by doing an end around the process, which is really what’s being proposed here," Simitian said.

Wednesday, he formally asked the Joint Legislative Budget Committee to reject the finance department’s fast-track application for the contract.

Committee spokesman John Ferrera said the committee is aware of the concerns raised by the application and is "giving the request consideration."