NEW BREED OF SECURITY FIRM CATERS TO SPECIAL NEEDS OF CORPORATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000706510001-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: February 22, 2012
• Sequence Number: 1
• Publication Date: August 4, 1985
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2012/02/22 : CIA-RDP90-00965R000706510001-5
AV"-
ON PAG
WASHINGTON POST
4 August 1985
New Breed of Security Firm Cis&r
a To Special Needs of Corporations Cases Range From Handling Ransom Demands to Plant Security
By Peter H. Stone
special to The Wasimpon Post
Since the late 1970s, when it
launched a $300 million-plus pro-
~ec m e Colombian province
Cordoba, the Hanna inii
has been concerned about the
security of its personnel in the
region.
Colombia has had its share of
violence-guerrilla attacks, gov-
ernment crackdowns on dissi-
dents, and a crime wave linked to
the burgeoning cocaine trade-
but Hanna believed the plant was
worth the risk and proceeded
with construction-but cautious-
ly.
Hanna hired Ackerman &
Palumbo nc., a Miami security
consu in firm run by two vet-
erans of the CIA's clandestine
services who have aye a key
role in advising the company on a
host of security questions over
the last six years. Donald Nelson
.
director of international opera-
tions at Hanna, says c erman
Palumbo produced a number o
treat assessments" for the
company based on its on-site in-
spections.
"W uused them as a source of
reference for finding a full-time
security director for the plant,"
Nelson explains. "They also ad-
vised us on the size of the guard
force, and we've used them for
intelligence gathering.... We
use these consultants mainly to
make sure that our own people
are secure." ,
Hanna Mining is hardly alone
in its concerns about the safety of
overseas personnel and plants.
Nor is it the only multinational
company to turn to Ackerman &
Palumbo for help.
International Paper Co. solic-
ited the consultants' security ad-
vice for its headquarters in New
York a few years back.
"They had a lot of input about
designing our security system,"
said Henry Bertelsen, igterna-
tional Paper's corporate security
manager. And American Can Co.
executives read the consultants'
reports regularly to assess risks
in countries where they have op-
eratiops.
By its own account, Ackerman
& Palumbo has about 250 clients,
most of them Fortune 500 com-
panies, and for whom the part-
ners provide a panoply of ser-
vices including protection, inves-
tigation and the handling of kid-
napping and ransom negotiations,
should the need arise. Ackerman
& Palumbo's fees begin at $750 a
day and E. C. (Mike) Ackerman
boasts that the 8-year-old firm
now does about $4 million in
business a year-or double that
of a few years ago.
Increasingly, big companies
are turning to Ackerman &
Palumbo-or such competitors
as Control Risks Ltd., Paul
Chamberlain International or In-
ternational Risks-for help with
an array of security problems.
Although the initial objective was
to protect U.S, executives and
plants overseas, chief executive
officers now are seeking advice
from security 'consultants on a
much wider range of issues, in-
cluding financial security threats
posed by corporate takeovers,
joint ventures and white-collar
crime at home.
While Ackerman & Palumbo
still does about 75 percent of its
work abroad and counter-terror-
ism remains its stock in trade,
Ackerman estimates that about
15 percent of his business now
involves white-collar issues. By
contrast, Chamberlain says that
most of his work-is based in the
United States and that the hot-
test area today is white-collar
crime, which he calls "rampant."
These consultants offer clients
a Chinese menu of services, in-
cluding reports detailing the lat-
est social and political conditions
in various countries and personal
consultations with CEOs. While
the consultants would not reveal
their clients' names, they said
they sometimes serve as liaisons
with the FBI here and law en-
forcement officials abroad, and in
some cases they take the lead in
negotiations with kidnappers.
Most of the consulting firms
are staffed by former CIA and
FBI o ~icia s, many of whom say
they have e up close contacts
wit their former associates.
Ackerman boasts: eve got
very good relations with the oca
police in L0 10m ia, ua ems a
and Salvador.' n Chamber-
lain, an FBI veteran of some
years, sa s his firm is asica
"an adjunct to law enforcement.
We're middlemen and hand-
holders.. .. you've got a unc
of old friends in the FBI, it helps
a lot.
These credentials have im-
pressed many insurance compa-
nies offering kidnap and ransom
insurance.
Since 1970, when the Amer-
ican Insurance Group offered the
first kidnap and ransom policies
in the United States, other lead-
ing insurers, including Lloyds of
London, Chubb and Son Inc. and
Professional Indemnity Agency,
have followed suit. One insurance
executive estimates that the
market for kidnap and ransom
insurance is now slightly under
$100 million a year. Further,
many insurers have established
retainer relationships with con-
sultants, whose services are in-
cluded as an option on policies:
Lloyds uses Control Risk, Chubb
uses Ackerman & Palumbo, Pro-
fessional Indemnity Agency uses
Chamberlain International and
the American Insurance Group
has just retained a British con-
sultant called Argen.
A brief look at several of the
QQ
Declassified in Part - Sanitized Copy Approved for Release 2012/02/22 : CIA-RDP90-00965R000706510001-5
 Declassified in Part - Sanitized Copy Approved for Release 2012/02/22 : CIA-RDP90-00965R000706510001-5
consultants in the field today of-
fers some insight into the wide-
ranging functions they now per-
form.
^ Ackerman & Palumbo was
founded in 1977 shortly after
e
Ackerman resinvied from 5i CIA
to protest sensation-seeking
congressional investigations of
the agency and preserva-
tion of ad American intelligence
capability." is partner, ou
Palumbo, spent 22 years wit the
agency. his resume says tha he
on mate muc t of the defensive
methodology currently employed
throughout government and m-
ustr
Ac ckerman and Palumbo com-
bine common sense with their
years of experience in clandes-
tine operations. Under the rubric
of "protective services," for ex-
ample, the consultants offer a
course in defensive driving that
includes "an in-depth briefing on
the conceptual basis for defen-
sive-driving methodology and
instruction in technique." One
seminar for traveling executives
explains "gray or anonymous
travel and other executive coun-
termeasures" designed to foil
terrorist or criminal plots.
If an executive is kidnaped,
Ackerman and Palumbo move
into high gear. They promise to
he available 24 hours a day and
will participate in delicate nego-
tiations or pay ransom monies, if
needed. (Ackerman says he fa-
vors the policy of paying ransom
first and seeking out kidnapers
later.)
Although most of their work is
overseas, the consultants say
their caseload in the United
States is growing, particularly
among companies worried about
corporate takeovers, friendly or
not.
"We've been involved in ward-
ing off a few unfriendly foreign
corporate takeovers of U.S. com-
panies," Ackerman says. "We've
been able to arm the general
counsel of the defending compa-
ny with information that's some-
what derogatory."
Ackerman & Palumbo also has
helped companies with joint ven-
tures abroad, especially in Col-
ombia. "You have to be very care-
ful there because of the heavy
amount of drug money," Acker-
man says. "It permeates every-
thing, including finance."
^ Peter Goss, the director of
Control Risks' U.S. headquarters
in Bethesda, echoes Ackerman's
assertion that kidnappings of ex-
ecutives has declined in the last
few years. "They're now taking
oil technicians, construction su-
pervisors, missionaries and jour-
nalists rather than local corpor-
ate representatives," Goss says.
The London-based firm's re-
cent cases have taken it to the
Sudan, where it sought the re-
lease of some kidnapped techni-
cians, and to Angola, where Unita
rebels fighting the leftist Angolan
government had engaged in kid-
napings. Overall, the company
says it has 700 clients worldwide,
about 350 of these in the United
States.
In Europe, Goes ? says, defense
industry companies have been tar-
gets of attack, and at the Paris Air
Show this spring, several defense
contractors based in the United
States, Canada and Europe sought
the firm's help. Goss and a three-
man team coordinated security, hir-
ing more than 30 local guards to
watch hotels and nightspots where
,defense executives were entertain-
ing. In this case, however, Goss
says the fear of terrorist attacks
probably was overblown. "I think
the threats tended to get exagger-
ated," he says.
Like Ackerman & Palumbo, Con-
trol Risks relies heavily on former
i s lea er-
intelligence officials for
ship. Goss, a 30-year veteran of the
British army, served in the special
forces and intelligence divisions and
saw action in such hot spots as
an, Northern Ireland and Ma'ia
sia. Karl Ackerman another
director, was chief securit at the
State Department or many
years.
tough it has concentrated on
kidnaping cases since it was
founded in 1976, Goss said Control
Risks Wbroad its focus to in-
clude white-collar erinie.
"I'd .say that there's increasing
ooticbili over computer fraud and
fraud in general," Goss says. Con-
t1rol Risks has a computer center at
its London headquarters and is
planning to expand the operation to
its U.S. offices.
He said, "We're focusing on high-
technology security, general con-
tingency planning and across-the-
board crisis management. In. the
aftermath of things like Tylenol and
Union Carbide, corporations `are
now reviewing their operators
broadly."
^ Paul Chamberlain International
has handled nearly 86 kidnaping and
extortion cases since 1981, 76 of
those in the United States, Cham-
berlain says. But he adds that
white-collar crime now constitutes
about 50 percent of his firm's over-
all caseload.
"In-house white collar crime is
becoming rampant. It's becoming
epidemic," he says. "Anybody who
can take some money is taking it,
including high-level guys at major
financial institutions. We have ma-
jor financial institutions placing bad
loans. We have S&Ls who are being
taken by employes putting out bad
loans." Chamberlain estimates that
his firm has worked for about a doz-
en savings and loan institutions
over the last few? years, investiga-
ting improprieties and criminal acts
by employes, including kickbacks on
some loans.
Chamberlain and his associates all
boast of lengthy careers with the FBI
and a number worked on the cele-
brated Patty Hearst kidnaping case.
Chamberlain estimates his firm has
about 25 clients on retainer; another
1,200 clients purchased optional in-
surance policies from professional
indemnity agents. He estimates that
revenue will total between $2 m ion
end $3 million thia?year.
Chamberlain is bullish on thepro-
sects for his business. Reeenttl~ he
was hired by a couple of defense
companies to investigate mid-level
employes suspected of taking kick-
backs. And he just finished a case in
which a corporate lawyer earning
$500,000 a year received a three-
year jail sentence for "taking kick-
backs from outside law firms."
Says Chamberlain: White-collar
crime "is where it's really at."
a1i
Declassified in Part - Sanitized Copy Approved for Release 2012/02/22 : CIA-RDP90-00965R000706510001-5