The CNET article says it's a system that [DHS] hopes will use factors such as ethnicity, gender, breathing, and heart rate. In the CBS News article linked from there, essentially the same claim is made.
There's no actual evidence in either article that ethnicity will be used.
One of the documents on the EPIC site (fastinstallation.pdf) says "The system is gender-, culture- and age-neutral".
I've skimmed through all the documents linked from there and can't find anything that admits to using ethnicity or gender. (There is one paragraph that says that a FAST trial will collect ethnicity and gender information "to understand whether the technology performs differently with different demographic groups", which is a different thing entirely.)
If the system is ever deployed, I wouldn't be desperately surprised if it turns out to use ethnicity as evidence of malintent. But it does look as if Declan McCullagh may be making a dramatic claim for which he lacks evidence.