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For years, Kurz Transfer Products has been trying to persuade the federal government to use its merchandise to prevent counterfeiting of money, identification cards, passports and visas. The firm’s German parent company already supplies its Kinegram — which looks like a high-tech, digital hologram — for use on Euro notes, English pound notes and European Community and Canadian visas. After Sept. 11, the security of U.S. money and government documents assumed a new urgency. Since then, Charlotte, N.C.-based Kurz has stepped up its campaign — meeting with lawmakers, appropriators and agency personnel interested in new technology. “We have to tell people that we have a very serious problem and that we have a solution for it,” said Kurz Vice President John Keane last week, before running off to a day of meetings with congressional staff members. “We want to make sure that they know what is available.” This was Keane’s second trip to Washington, D.C., to pitch his products. On Aug. 7, he chatted with staffers from the North Carolina delegation, and with those on the House and Senate Judiciary and Financial Services committees. The following day, Keane was back at his company’s headquarters to take Rep. Melvin Watt, D-N.C., on a company tour. Kurz has hired Verner, Liipfert, Bernhard, McPherson and Hand to help its executives navigate the shoals of Washington. Kurz is one of hundreds, if not thousands, of companies pitching products for the government’s war on terrorism. After the September attacks, the government asked private companies to bring forward new research, new products, new technology. Business responded. “With the homeland security call going out, almost every smart R&D person is thinking of something,” says Joseph Hardy, a lobbyist with Strategic Marketing Innovations. “Every company is going to try to make something with a homeland security use.” But pitching a homeland security product is proving just as difficult and confusing as everything else involving homeland security. With Congress and the administration still wrangling over the structure of a new Cabinet-level Department of Homeland Security, there remains no central target for lobbyists. Business executives and their Washington advocates are thus forced to make endless rounds from agency to agency and from lawmaker to lawmaker. For a company with a new security camera or a chemical weapons detector, the list of potential government offices to lobby is nearly endless, from the Coast Guard, to the Department of Defense, to the Centers for Disease Control and Prevention. Company interest is certainly leading to new clients and more business for lobbyists. But tangible success may be more elusive. And companies new to the Washington arena may find that homeland security largess is not as bountiful as imagined. “A lot of people are trying to find this mythical money,” says defense lobbyist Michael Herson, president of American Defense International. “Nobody knows how much is out there, where it went, and who is responsible for it.” The business community is clearly meant to be an important player in homeland security. At a recent speech to the U.S. Chamber of Commerce, Director of Homeland Security Tom Ridge said the administration would be relying on business for new ideas and new products. “We can’t just look to the federal government. We need to look to the private sector,” he said. WIDGETS FOR SALE In the immediate aftermath of the Sept. 11 attacks, the Department of Defense asked companies to submit information and proposals for any new technology that would help in the battle against terrorism. The department received about 12,500 responses. And the pace has kept up. With the appropriations process in full swing and a new Department of Homeland Security being created, companies are hawking their technology as the answers to government’s security concerns. “Every little widget maker has been trying to shop their wares in town,” says Glenn LeMunyon, a lobbyist at Tate-LeMunyon. “It’s tough to cut through that.” LeMunyon is representing Kensington, Md.’s Genex Technologies, which makes a camera capable of capturing, in one shot, a 360-degree picture. LeMunyon says he has been discussing the company’s products with the National Security Agency, the Department of Energy, and the Transportation Security Administration, in addition to alerting the company’s local members of Congress, including Sens. Paul Sarbanes and Barbara Mikulski, both Democrats, as well as Rep. Constance Morella, a Republican. His experience is proving typical of many pitching homeland security. Herndon, Va.’s Blackbird Technologies, which specializes in cybersecurity, hired Vinson & Elkins’ Frank Verrastro. The company is already a government contractor and is looking for ways that its products can help in the homeland arena. The list of agencies and lawmakers that Verrastro is talking to is just as long. “One of the things we have realized is there is no central point for this stuff,” says Verrastro. “It’s not one-stop shopping at all.” Although Ridge’s office has met with more than 500 businesses, getting a sit-down with Ridge is not a top priority for many lobbyists because his office doesn’t have any money to dole out. “Clients hear about Ridge and this new department and they say we have to meet Ridge,” says Barry Rhoads, chief executive officer of RhoadsWeber Shandwick Government Relations. “But that may not be the soundest advice to give to a client.” Instead, lobbyists are steering clients to congressional appropriators and Cabinet agencies that have sizable budgets and government contracts to award. President George W. Bush’s budget for the fiscal year that begins Oct. 1 calls for $37.7 billion to be spent on homeland security — on everything from new personnel to new technology. Agencies with dollars and contracts to give out include the Department of Defense, the Department of Transportation, the Department of Health and Human Services, the Immigration and Naturalization Service, and the Customs Service. The president’s submitted budget calls for a $282 million increase in the Coast Guard’s homeland defense funding, a $1.2 billion increase for INS enforcement, and a $619 million increase for customs inspections. There are and will be success stories this year. But most of them, many lobbyists say, are companies that already have government contracts and are, in other words, veteran players in the appropriations game. These clients and their products are known quantities to the lawmakers and executive branch officials who write the government’s request for proposals. For example, the Boeing Co. this summer won a $1.4 billion contract to install explosives detectors in U.S. airports. HARD MONEY But success will not come so easy. Of the 12,500 proposals the government received in the wake of Sept. 11, only a few netted actual government contracts. “People believe there is a lot of money out there,” says Brad Card, head of the Dutko Group. “They think they just show up and they will get some. It’s not quite that easy.” Lobbyists say they are seeing a certain reluctance by some agencies to commit themselves to products and technologies. Because a number of agencies and divisions of departments are slated to move into the new Department of Homeland Security, lobbyists say some at the agencies are hesitant to lock in expensive, long-term product buys right before they move to a new agency and get a new boss. And the executive branch has in some cases asked agencies to go slowly. In July, the Office of Management and Budget declared a freeze on any information technology purchases by the agencies slated to move to the new department to prevent overlaps or contradictions in computer systems. Many say that the lobbying on homeland security has really just started and may take time to come to fruition. A technology that a company starts pushing for today may take three years to actually get funding. “We are advising our clients, if you want to work effectively in Washington, you have to view it as a long-term process,” says H. Stewart Van Scoyoc, head of Van Scoyoc Associates. “You don’t just come in and come out. You have to be long-term, and you have to focus on both Congress and the administrative agencies.” And the creation of the Department of Homeland Security has the potential to muddy the lobbying waters again. Ridge’s office is planning to soon launch a Web site designed to help small companies that normally don’t work with the federal bureaucracy to bring forward their ideas. The new department is expected to help set standards for the products the government will be relying on in the homeland arena. And the president is asking for flexibility in the agency’s procurement and contracting methods. But the new department will not eliminate the diffuse nature of the government. “I think companies will continue to go to different agencies,” says a staff member at the White House’s Office of Science Technology Policy. “The Department of Homeland Security will not supersede the mission of other agencies.” As for Kurz Transfer Products’ Keane, so far he’s happy with language in the Treasury appropriations bill that would direct the department to fund anti-counterfeiting technology. But the effort to pitch the company’s Kinegram for visas and identity cards has been slower going. “It’s very confusing,” Keane says. “There are dozens of people with influence over the decision of what to buy. We are trying to figure out who makes the decision. We are just putting one foot in front of the other and trying to figure that out.”

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