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In Age of Security, Firm Mines Wealth Of Personal Data

By Robert O'Harrow Jr.
Washington Post Staff Writer
Thursday, January 20, 2005; Page A01

It began in 1997 as a company that sold credit data to the insurance industry. But over the next seven years, as it acquired dozens of other companies, Alpharetta, Ga.-based ChoicePoint Inc. became an all-purpose commercial source of personal information about Americans, with billions of details about their homes, cars, relatives, criminal records and other aspects of their lives.

As its dossier grew, so did the number of ChoicePoint's government and corporate clients, jumping from 1,000 to more than 50,000 today. Company stock once worth about $500 million ballooned to $4.1 billion.

"The stakes have escalated since 2001," ChoicePoint Inc. chief executive Derek V. Smith said.

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Information Control: The information industry has become an integral part of the U.S. economy and increasingly a contractor in the war on terror. A closer look at ChoicePoint, the Georgia firm that has become a one-stop show for private and government organizations seeking people's personal information.
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Now the little-known information industry giant is transforming itself into a private intelligence service for national security and law enforcement tasks. It is snapping up a host of companies, some of them in the Washington area, that produce sophisticated computer tools for analyzing and sharing records in ChoicePoint's immense storehouses. In financial papers, the company itself says it provides "actionable intelligence."

"We do act as an intelligence agency, gathering data, applying analytics," said company vice president James A. Zimbardi.

ChoicePoint and other private companies increasingly occupy a special place in homeland security and crime-fighting efforts, in part because they can compile information and use it in ways government officials sometimes cannot because of privacy and information laws.

ChoicePoint renewed and expanded a contract with the Justice Department in the fall of 2001. Since then, the company and one of its leading competitors, LexisNexis Group, have also signed contracts with the Central Intelligence Agency to provide public records online, according to newly released documents.

Attorney General John D. Ashcroft and other government authorities have said these new tools are essential to national security. But activists for civil liberties and privacy, and some lawmakers, say current laws are inadequate to ensure that businesses and government agencies do not abuse the growing power to examine the activities of criminals and the innocent alike.

These critics said it will soon be hard for individuals looking for work or access to sensitive facilities to ever shake off a criminal past or small transgression, such as a bounced check or minor arrest.

Chris Hoofnagle, associate director of the Electronic Privacy Information Center, a nonprofit group in the District, said ChoicePoint is helping to create a " 'Scarlet Letter' society."

The information industry has traditionally fought regulations, arguing that it can police itself. But hoping to avoid a regulatory backlash that could curtail his company's access to information, ChoicePoint chief executive Derek V. Smith said he'll be reaching out to Capitol Hill in the coming months to promote the industry's benefits -- and express his willingness to work with lawmakers to develop new regulations.

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