The next “edition” of the U.S. $100 Federal Reserve Note in 2008 will sport a hologram for the first time. It has been slightly more than 20 years since Ed Weitzen, the intrepid leader (CEO) of American Bank Note Co. (ABN), sought to have the Bureau of Engraving and Printing (BEP) adopt a hologram as a security deterrent for U.S. currency.

I was involved in the negotiations with Ed Weitzen and Sal D’Amato, president of ABN, during their efforts to sell holograms to the government. Thus, I view with great interest the recent BEP decision to adopt Motion™ “as the principal overt security feature on the new U.S. $100 due in late 2008.

The quote and subsequent quotes are from Holography News, vol. 21, no. 4, April 2007, published by Reconnaissance International, publishers and consultants, 2A High Street, Shepperton, TW17 9AW, UK).  The author consults with RI and their Authentication News.

Motion™  is a refractive optically-variable technology that will be introduced into U.S. currency as a thread. Motion™ is currently used in the Swedish 1,000 krone and will be a feature in a high denomination Mexican bank note prior to its use in U.S. currency.

Click here to see Motion in action.

Motion™ as a security device will be extremely effective. It will be embedded in the substrate making it extremely difficult to duplicate. Security threads have been very successful since their incorporation in five pound notes by the British government to thwart the counterfeit five pound notes created by the Nazis in World War II. Security threads have greatly improved over the years such as the Kinogram™  of Orell Fuseli Graphics Arts Ltd., Zurich, and the security thread of Crane & Co. as used in U.S. currency with “U.S.A. (Denomination)” imprinted on it.  Crane & Co, Dalton, Mass., has obtained an exclusive license to produce Motion™ and been awarded a $46 million contract by the BEP.

“Motion incorporates a micro-lens array that gives the graphics within the feature the appearance of fluid-like movement in a unique ortho-parallactic manner (see HN Vol 20, No 12).”  (Holographic News)
Officials of the Secret Service discussed how easy it is to counterfeit the current optical variable ink patch, currently used on U.S. currency.  The Secret Service discussed the optical variable ink at a Reconnaissance International seminar in Orlando, Fla., in 1997. For reasons of security, I will not pursue the ease of counterfeiting the patch, but it is unbelievably simple and it was college students who hit upon the uncomplicated counterfeit device to couple with digital counterfeiting of our currency. I am certain that the inclusion or addition of Motion™ is a result of the Secret Service findings. 

It is an axiom in security that if one is able to counterfeit the principal or most obvious overt device, the whole system either is compromised or flounders.

The optical variable ink patch that the BEP currently uses was originally developed under a mid-1980s contract issued by the Federal Reserve with a San Jose, Calif., firm.  The device was not successful but the basic technology was. Kudos to Theodore “Ted” Allison, Assistant to the Board for FRS Affairs, and John Denkler, Capt. (ret) USN, FRS Head of Counterfeit Deterrence, who pursued this technology.  SICPA S.A., the Lausanne, Switzerland, manufacturer of security inks, purchased the rights to the San Jose technology and developed it as an ink.  SICPA is the principal supplier of ink for the U.S. currency.

Ed Weitzen of ABN valiantly fought for the inclusion of a hologram on U.S. currency in the early and mid 1980s.  The U.S. Anti-counterfeiting Task Force was enthused about the prospect of a hologram as a counterfeit deterrent. A hologram was a de minimis yet very effective device. The House Subcommittee overseeing Treasury and currency issues and Treasury top officials were concerned about a major change to currency. The use or inclusion of colors as a deterrent was anathema. The hologram might be best described as today’s non-invasive surgery, subtle but effective.

I smiled then and do now about how the magnificently dignified Ed Weitzen reacted when we told him that his hologram flunked the vaunted crumple test to which currency and devices are submitted. Mr. Weitzen was upset at both the failure of the hologram and the test to which it had been submitted.

The standard crumple test was conducted by a respected technician in the BEP Research Department for the hologram. The test consisted of rolling up a currency note, in this case with a hologram affixed, and stuffing the note into a metal cylinder slightly larger than a cigarette. A plunger was inserted from the top compressing the paper. The currency notes would be removed after one or more “plunges.” The ABN hologram lost its image after two or three “plunges.” 

It was during these tests, that upon a recommendation of a BEP official, Howard Payne, the art director for  National Geographic, arranged with Messrs. Weitzen and D’Amato for two fantastic covers for National Geographic during the mid-1980s. These two covers featured unique holograms in silver that were manufactured by ABN and applied to covers of National Geographic at a printing plant in Baltimore, Md.

In mid-April 2007, the History Channel featured a new program on the “Making of U.S. Currency” that included somewhat equal segments on the production of coins, bank notes and counterfeiting of bank notes. It was interesting to learn that our bank notes must have a design change at least every eight years to thwart counterfeiting. Having lived through and suffered the battles of changing our currency in the 1980s because of the threat of counterfeiting, this is rather amazing.

Today I am still involved in the security of protecting products, trademarks and currency. We label devices to inhibit counterfeiting as “deterrents.” And the devices are just that. As Joe Carlon, a former assistant director for intelligence, U.S. Secret Service, sagaciously told me one day, “Given time and money, any security device can be compromised.”   

However, when I reflect back to the 1980s and the fact that I had to depict our currency “as anachronistic as the 1927 Tin Lizzie” on the back of the $10 bill,” to encourage Treasury officials and members of Congress to allow us to pursue and eventually change the design of currency, it is overwhelming to witness what computers have done to compromise currency security deterrents. 

I remember the late 1980s PBS program on the counterfeiting of U.S. currency and how the producers had me stand in the middle of the busy intersection of Constitution and 15th Streets, outside of the Treasury building, so they might capture the site of the “Tin Lizzie.”  I dodged many cars during rush hour traffic, and my ears still ring with the honking of car horns as I impeded traffic.  What is worse, the producers did not use that segment.

Former Treasury Secretary Donald Regan directed Joe Carlon of the Secret Service and me to visit the main producers of color photocopiers to assess their capabilities to counterfeit currency and determine whether the companies would incorporate a device to inhibit the reproduction of U.S. currency. Our quick review showed that virtually all photocopy manufacturers could now or soon be able to reasonably duplicate U.S. currency. Also, the CEOs of the photocopier manufacturers or their U.S. representatives stated that they would incorporate any device the U.S. government developed to prevent the photocopying of U.S. currency.

This quick study was undertaken at a time that color copiers cost $40,000 apiece and there were fewer than 10 in the United States and the Secret Service knew where each machine was located and visited the premises on a regular basis.

The CEOs or presidents of the U.S. divisions of the Japanese photocopier manufacturers were extremely candid and what they told us shaped Secretary Regan’s decision not to pursue a device that might be added to photocopiers to deter the copying of U.S. currency. These Japanese officials stated that the color copy technology was increasing at warp speed. This would increase the number and reduce the size of color copiers, and greatly reduce the costs of new machines.  Thus, soon there would be a proliferation of color copiers and make them as common as black and white copiers.

BEP recently contracted with the U.S. National Research Council to study the next generation of security devices for U.S. paper currency. The Council, through its Committee on Technologies to Deter Currency Counterfeiting, submitted its findings (February 2007) of a two-year study in “A Path to the Next Generation of U.S. Banknotes: Keeping them Real.” 

The study stated: “Scientists and engineers from across the country suggested 16 changes that could be put into practice in the near term, including altering the bills’ distinctive feel, adding patterns too complex or too small for modern printers and copiers, and incorporating materials to create holograms or shifting visual effects.

“One near-term option would embed a Fresnel magnifying lens – a distant cousin to those used in Victorian lighthouses – to a corner of the bill for spot inspection of minute anticounterfeiting print. Another recommendation would put heat-sensitive material into bills causing warmth to change the note’s color.”

Other changes might be a substrate you cannot cut with a scissors, or a substrate that becomes taut if you grasp it at the ends and snap it.

In retrospect, I think of my young daughter, Mary Ellen, who has just entered graduate school. When she was born, the reproductive printing and copying technologies were limited to printing presses, high-grade black and white photocopiers, embryonic and very expensive color copiers, and black and white printers for computers and “luggable” laptops.  Today, college students, high school students and grade school students take for granted the fascinating and highly exact reproductive devices of personal and laptop computers, Blackberries and allied printers.

I wonder if the technology advances we are witnessing in reproductive technologies will allow the U.S. government to be complacent and will be satisfied that changes to the design of U.S. currency should take place only every eight years?

Robert J. Leuver retired as the director of the Bureau of Engraving and Printing in 1987.