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Bribery and private security

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Thursday, October 4, 2007
I try not to get too much into the guarding market, except for when it overlaps with systems integrators and installers, but this is a crazy story. Many security firms work with the GSA, and it seems as though the GSA isn't always on the straight and narrow. Here's the nut graph: According to court papers filed in the case, [Michael] Holiday, a former Montgomery [Maryland] police officer, plied a government contracting official with $100,000 in cash and paid for her $7,000 Caribbean cruise. In exchange, prosecutors said, the General Services Administration employee granted favorable treatment in the bidding process to Holiday's company. Holiday's firm, Holiday International Security, went on to acquire $130 million in government contracts. Pretty good return on that $107,000 investment, no? Among the agencies that awarded contracts to Holiday International Security was the Social Security Administration, which continues to use guards from the renamed company at its Woodlawn headquarters and several other buildings in the Baltimore region, federal officials said. ... The Silver Spring company, which changed its name to USProtect when it was sold in May 2003, provides armed and unarmed security guards for 18 federal agencies at 120 installations in 32 states and territories. So, I'm guessing the company won't now lose all of its contracts. While the prosecutor called the case the largest government corruption case in Maryland history, it's not clear that you can really ascribe all $130 million in contracts to the bribery. Theoretically, Holiday/USProtect were really providing the services, so maybe it's only the amount of the bribe that should be evaluated. That's semantics, though. In general, I love it when real life is just like the movies: Prosecutors allege that the former GSA contracting official, Dessie Ruth Nelson, 65, of Oakland, Calif., received a shopping bag filled with $35,000 in cash and an envelope stuffed with $10,000 from Holiday, in addition to the cruise, among other benefits. In turn, between 2000 and 2003, Nelson steered millions of dollars worth of contracts to Holiday's company, federal authorities charged. I mean, where did that happen? In her office? In a shopping mall parking lot? Did Holiday just waltz into the GSA with $35,000 in a shopping bag and hand it over like he had just picked something up at the grocery store for her? Oh, and I can't believe this paragraph was left for last: In addition to the bribery and tax charge, Holiday also admitted as part of his guilty plea that in April 2004, he sent a video file depicting a young girl engaging in sex with an adult male to an undercover FBI agent in New York. He could be sentenced to a maximum of 15 years in prison for bribery and 20 years for transporting child pornography. Holy smokes! So, the guy's involved with Maryland's largest-ever corruption case AND he's into kiddie porn? Does anybody else feel like this is bad PR for the private security marketplace? Wow.

Stanley Works to buy OSI Security Devices

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Wednesday, October 3, 2007
In a deal that's been long rumored, Stanley Works announced it has entered into a definitive agreement to buy OSI Security Devices, make of Omnilock, for an unannounced sum. Things are very vague all around. According to a press release received at our offices, but posted nowhere else on the Web (otherwise I'd link to it), this was announced Sept. 25, and it was through one of Stanley's subsidiaries. Which one is unclear. Through Mullen PR, Stanley's agency, both parties have expressed zero desire to talk about the deal. "The OSI Security Devices acquisition will enable Stanley to provide a complementary offering to customers and OEM partners," said Philip Bradney, VP of BD, in the release. "It will enable us to offer a full solution, from mechanical to online security." Stanley Works couldn't do that before? Shows how much I know. I'm sure they'll both talk more after the deal goes final. One thing I'll definitely be looking into: The press release quotes OSI CEO Dick Rasmussen, and the web site mentions a Rick Rasmussen, as VP of sales and marketing. Now, are they the same guy? Father/son? Or could they be brothers both named Richard, like in the Bob Newhart show, where Larry had a brother Darryl, and another brother Darryl?

3Q earnings round up

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Tuesday, October 2, 2007
With a number of security firms posting earnings lately, I thought a Friday round-up might be interesting: • L1's business is finally rolling like they've promised. These strike me as particularly positive developments: Revenue for the third quarter of 2007 was $115.5 million compared to $39.8 million in the third quarter of 2006, an increase of $75.7 million or 190 percent. The Company had impressive organic growth of 32 percent for the quarter. The Company’s net income in the third quarter amounted to $1.5 million, or $0.02 per diluted share, compared to a net loss of $29.3 million, or $0.66 per diluted share, in the third quarter of 2006, which included asset impairments and merger-related charges of $22.8 million. It's certainly always better to make $2 million rather than lose $29 million. • Stanley's security segment sales are up 24 percent • UTC Fire & Security's organic revenue growth in the quarter was 4%, led by Lenel, the security businesses in the Americas, and Asia. • Honeywell's income is up 14 percent, but see these paragraphs: "People might be concerned whether there is the margin potential in ACS that the company has intimated," he said. The ACS business, representing nearly 40% of Honeywell's quarterly revenue, provides technology and services to improve efficiency in manufacturing and home and building climates, as well as provides products for security and fire detection. • Brink's third-quarter revenue was $817.0 million, up 15.2% (10% on a constant currency basis) from $709.5 million in the third quarter of 2006. Operating profit increased to $60.5 million, up 11.2 % from $54.4 million in the year- ago period. • Ingersoll Rand'srevenues from continuing operations for the first nine months of 2007 have increased approximately 9 % compared with the same period of 2006, and remember that: The Company's Bobcat, Utility Equipment, Attachments and Road Development business units are now being reported as discontinued operations. It's still a good time to be a security company, but not as good as it has been.

One last thing about ASIS

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Tuesday, October 2, 2007
Sorry, I wasn't going to post on ASIS again, but a friend sent me this photo and I just couldn't help myself. Seriously, who was the drone that a: thought L. would be the name by which I'd like to be addressed, and b: mis-spelled "Samual"? Really, Samual? I mean, the name is only about 2,500 years old. You'd think people might be acquainted with it. But that's neither here nor there - people make typos. The big, giant, overarching question is this: Were they retyping the information submitted electronically via the web site? Have they not heard of cut and paste, or, say, a SQL server? Isn't this supposed to be a high-tech industry? Still, I shouldn't complain. It was quite the conversation starter: "So, L., are you having a good show?"

Getting home

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Sunday, September 30, 2007
Normally, I'm a big fan of Jet Blue. I mean, who doesn't like to be able to watch football games in-flight on DirectTV? But getting home from ASIS on Thursday was an adventure. First, the plane was delayed out of Vegas. Rumors are that Dick Cheney was coming into town, and that disrupts everything. Then, when we get to JFK, the Blue tells 14 of us that we've missed the last flight up to Portland, so tough noogies. Sweet. Luckily, the regional rep for DSX not only was down with the plan to fly to Boston instead and drive up, but his fiancee actually drove down from Portland to pick us up. Completely cool. The result? I walked in the door at 4 a.m. I'm sure everybody coming back east had similar experiences. What a kick in the teeth. Anyway, I've got to say that ASIS really seemed to be hopping this year. Partnerships were being announced every minute. Analytics companies were slandering each other like there was no tomorrow. I'd love to hear which company you think has the best analytic bang for the buck. I sure had my head spinning listening to all the claims, most of which seemed to be backed up with little red and yellow boxes dancing across screens. Gotta say, Cernium did a nice job on that front, but ObjectVideo was in every booth, it seemed. How much business was done in Vegas? It's hard to say, obviously, but the aisles seemed busy and the front of the hall at times was very crowded. Those guys back in row 100? They might have been less than pleased with the flow. All in all, I think the show was worth my time and that those companies I did have a chance to speak with all took the opportunity seriously and had good stories to tell. There was very little smoke being blown, and that's as good a sign as any of a healthy industry. Now, back to work.

Fun with cool technology

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Wednesday, September 26, 2007
Great morning for seeing innovators in the industry. 1. If you haven't seen Optellios before, and you're doing a lot of large perimeter work, you might want to check them out. Basically, they run fiber-optic cable along a fence line, either woven into the fence or buried underground, and then use the fiber as a sensor that can detect any vibration and tell you where it came from within about 10-20 feet. Plus, they've got the software that makes it so as soon as the alarm comes in, the PTZ points right at it. 2. Orsus now eschews the use of "command and control" and is going with "situation management," and they do seem to have some differentiators. First, they've got a cool feature where you can track the guard tours and make sure they check in where and when they're supposed to. Then, in real time, you get an alert when they're not where they're supposed to be. Second, they've got a function where you can run a class-room style debriefing that incorporates the video, notes, alerts, etc., that happened during an incident and break down how the response was handled and how it could have been handled better. That seems like something end users would want to do on a regular basis. 3. Everybody wants to work with Arecont right now. They don't have a lot of glitzy marketing, but people like their imaging and their price. 4. Tyco's Kantech brand has a new option for central stations who want to get into access control as a service. Developed for sister company ADT, they're now rolling it out for other centrals. It seems like a good way to drive that service revenue that everybody's looking for.

Party, party

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Wednesday, September 26, 2007
Okay, so I experienced a little of the Las Vegas nightlife last night, but look how early I'm up blogging. It's like 7:45. I'm rather impressed with myself, especially since I'm normally such a tea-totaler (the web seems ambivalent on whether there's one or two ls in that). Anyway, thanks to Cisco for a very nice dinner at Mix, the restaurant high atop THEhotel at Mandalay Bay. The shop talk was even keeled and the view and food were top notch. Congratulations to Security Technology and Design managing editor Paul Rothman, by the way, who's got his first child due in about three months. I'll kill the suspense: It's a boy. Later, I hit up the ADT party held on the Brooklyn Bridge at New York, New York. Talk about in-demand. While the event never got oppressively crowded, ADT staffers were kept very busy by those who didn't have coveted entry chips (like, say, me, who left his chip in the hotel, because that's what generally happens to me). However, while the band did do a great "Hips Don't Lie" cover, they really couldn't compete with the roller coaster. I was glad I hit it before the party and not after. Things finished up at they Wynn, about which I will only say: Their bartenders make great old fashioneds. Meetings today include Tyco, Johnson Controls, Cernium, Orsus and a number of others, so maybe I'll have some real news later.

Door to desktop, Bioscrypt and Lenel

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Tuesday, September 25, 2007
Bioscrypt and Lenel partnering up isn't new news, but they've added a new functionality whereby, regardless of the authentication token, they can actually prevent you from logging on to your office computer if you haven't walked through the front door. Even if you haven't walked through the front door and arrived at your desk in the appropriate amount of time. In fact, Bioscrypt's software is now embedded in OnGuard, so when you buy the Lenel product, you have the Bioscrypt product already installed, and all you have to do is buy licenses. It's very similar to the Imprivata solution, but you don't have to buy another box. When they tried to show it to me in the Bioscrypt booth, the software malfunctioned, but I saw it work for someone else...

New GE head introduced

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Tuesday, September 25, 2007
Dean Seavers met the industry for the first time this morning and looked remarkably comfortable for someone on the job only three weeks. He let the VPs do most of the talking during an hour-long press conference, but led off with a nice quote from Colin Powell about not being afraid to let people under you show their own leadership capabilities. Very apropos, I thought. Also, he addressed the Smiths fall out, if briefly, saying, "we couldn't agree on combined strategic vision." I'll have more with Dean for the newswire, after a meeting later today.

UTC consolidates all systems integration into Red Hawk

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Monday, September 24, 2007
Breaking news from the ASIS floor: UTC Fire & Security is celebrating the one year anniversary of its buy of integrator Red Hawk by consolidating all of its U.S. systems integration business under the Red Hawk name. Chubb and Initial, notably, will cease to exist as U.S. brands. On the other hand, all Canadian integration business will consolidate under the Chubb name. UTC's monitoring operation, Counterforce, will continue throughout North America. I interviewed Antonio Cintra, the president of security services America for UTC, this morning and I'll have a full report of what he had to say on the newswire Thursday morning. Suffice it to say, though, that UTC is investing a lot of money in the Red Hawk brand and intend to be a force in more than just the financial vertical that Red Hawk currently specializes in.

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