Broker, Trader, Lawyer, Spy (26 page)

Doctor Marisa Randazzo is an expert in assassins, stalkers, and school shooters. She spent ten years with the United States Secret Service as chief research psychologist at the National Threat Assessment Center, developing elaborate profiles of potential killers. Today, she heads Threat Assessment Resources International, a firm based in Sparks, Nevada, just outside Reno. It offers a threat assessment training package for companies to help protect themselves from internal threats. The training includes walking executives through case studies of workplace shootings and insider sabotage, showing them the basic principles of threat assessment in the workplace, and conducting a mock emergency drill to hone crisis-response skills.

Shaw and Randazzo describe several key traits of dangerous insiders. Many have a medical issue, such as a psychiatric problem,
alcoholism, or a high level of anxiety. Others are on the extreme end of the personality spectrum—the office oddballs who are extremely shy, who require high maintenance, or who otherwise cause their colleagues to be uncomfortable around them. And many people who cause problems have a history of minor rule violations preceding a major incident. They may have broken rules regarding technology, or personnel. Many dangerous insiders are already on the radar screen of the human resources department even before they do major damage. And in about one-third of serious cases, a dangerous insider has a social network in place—other people who know in advance what the person is planning.

People who fit this pattern don’t always cause problems—they can do their jobs for years without trouble. It’s when people with these characteristics hit a problem in life that they start displaying what psychologists call “concerning behaviors.” They may have a personal or professional disappointment. A demotion, the death of a spouse, or a move to a new location can all trigger damaging behavior. And when that cycle starts, there’s no sure way to tell just how much damage will be done.

That’s why the services of intelligence specialists like Shaw and Randazzo can be so valuable: it’s much cheaper to head off a problem early than it is to pay to clean up the mess.

In April 2008, about a dozen lawyers and investment bankers gathered over muffins and coffee in a small room on the third floor of the Princeton Club on West Forty-third Street in Manhattan to hear from a spy.

They were there for a briefing sponsored by Veracity Worldwide, a one-year-old corporate intelligence firm with close connections to the CIA. And although the people in the room represented some of the top American investment banks, they weren’t there for anything to do with the New York Stock Exchange or the NASDAQ stock market. They were concerned about markets on the other side of the globe: the Tokyo Stock Exchange in Japan and the Korea Exchange in Pusan, South Korea.

The American corporate reps wanted to know what was going on in North Korea, the unpredictable communist enclave just across the Sea of Japan from the Tokyo market. The North Korean ruler Kim Jong Il had been acting increasingly erratically as his country’s economy collapsed and famine stalked his people. North Korea’s pursuit of nuclear weapons was an open secret. No one knew how stable Kim Jong Il’s control over the country was.

For the western businesspeople, those weren’t just interesting political issues. They were important business concerns. A collapse
of the North Korean government, a surprise nuclear test, or a mass famine could destabilize the region and cause capital to flee from the Japanese and South Korean stock exchanges. An adroit banker, though, would be well positioned to get his money out first. Or, better yet, he could bet in the markets that the Japanese and South Korean exchanges would decline, hoping to profit from political disaster.

All the participants that morning were Americans, but their business and intelligence interests spanned the globe. This multinational mind-set is increasingly the norm in the private-sector intelligence business. Today’s corporate intelligence industry has firms operating in nearly every country and finds clients all around the world. Old political enemies can find themselves working closely together in the private sector, and traditional allies sometimes become bitter rivals. The ethical question in this, as it always is for spies, is where true loyalty lies. Is it loyalty to a country? To a company? Or to any client that can pay the fee?

The stories of six corporate intelligence operations around the world show how intelligence is becoming increasingly interconnected with the global economy:

• Veracity, which hosted the meeting in New York, does business for clients all over the world.
  
• TD International, an intelligence firm that is run by several veterans of the CIA and is based in Washington, D.C., represents a sheikh who is based in Dubai.
  
• Johann Benöhr is a private investigator in Berlin, where he deals with strict government regulations and the German public’s angst about spying of any sort.
  
• Hakluyt, a firm based in London, once hired a German spy to penetrate Greenpeace on behalf of global oil companies.
  
• Hamilton Trading Group is a small consultancy founded by a former CIA officer and a former KGB operative who ran into serious trouble with the Putin government in Russia.
  
• Trident Group, based in Virginia, also has ties to Russia: it was founded by a former Soviet military intelligence officer. It works for some of the largest American companies and law firms.
  

In each case, the activities of the investigators span continents. And each operation has a “hall of mirrors” quality. Take the Russians, for example: can men who were loyal communists and rose through the ranks of the Soviet establishment truly embrace working for capitalist corporate titans? Or take the former CIA officers: how do patriotic spies who once served their country feel about working for an unelected hereditary billionaire? Such questions do not necessarily involve a conflict of interest, but they may involve a conflict of values. Do spies in the global economy ever feel a disconnect between who they are and who they work for? Does that question even matter?

O
NE THING MOST
of the people in this industry have in common is that they didn’t start their careers with the goal of becoming private spies. When they began their careers in government, most of them didn’t know there was an international corporate intelligence industry. They wanted to be soldiers, spies, or diplomats. But somewhere along the way, they became operatives for hire.

That’s the story of Steven Fox, who founded Veracity. Fox is thirty-nine, and with his slicked-over hair, aquiline nose and deep voice, he could pass for Hollywood’s version of a 1920s society man. The industry trade publication
Intelligence Online
reports that Fox is a veteran of the CIA’s Directorate of Operations. And although a bio Fox once used in the private sector described him as having once worked “on counterterrorism in the U.S. intelligence community,” he denies he was ever in the CIA. As he tells it, he’s a veteran of the State Department, and he took some time off to be an Internet entrepreneur during the dot-com boom in the early
2000s. Still, in his private-sector career he has surrounded himself with lots of alumni of the CIA.

Fox’s description of his background—which may or may not be a cover story—goes this way. He is a native of Manhattan, speaks French, and graduated from Princeton University in 1991. He landed a job in the State Department and soon was as far from New York society as it gets—at Bujumbura, the capital city of Burundi in central Africa.

Situated along the Great Rift Valley on the shore of Lake Tanganyika, Bujumbura has, since Burundi’s independence in 1962, been a scene of terrible fighting between the majority Hutu ethnic group and the ruling minority, the Tutsi. This ethnic rivalry escalated into open genocide in 1994 in Rwanda, the country just to the north.

In 1996, the Hutu and Tutsi were slaughtering each other again. More than 150,000 Burundians had already died. And when Tutsi paratroopers took up positions at key government outposts, the capital city’s television station, and its radio station, the Hutu president of the country, Sylvestre Ntibantunganya, knew he couldn’t cling to power much longer. Burundi didn’t have much history of peaceful transitions of government—both of Ntibantunganya’s predecessors had been assassinated. To avoid the same fate, the president headed for the U.S. embassy and into the arms of Steven Fox, who says he was then a young State Department officer.

The United States agreed to give Ntibantunganya sanctuary, and it became Fox’s job to figure out how to get him safely out of the American facility. For eleven months, Fox worked out the logistics of the former president’s new life: Where would he live? How could he be kept safe? The American ambassador secured a commitment from the new military government that Ntibantunganya wouldn’t face prosecution if he left U.S. custody—and even more important, that the new Tutsi leadership would guarantee his safety.

With that assurance in hand, Fox’s work came down to the little things. Fox found a house that had been owned by the local
Heineken brewery. He arranged for cars. He worked with Ntibantunganya on security, settling on a thirty-man detail of trusted former officers and men from the Hutu tribe. But the ex-president balked at moving into his new home, announcing that he didn’t approve of the furniture the government had agreed to provide for it. Fox scrambled to find suitable furniture from the embassy’s own surplus, and obtained approval from Washington to have movers install it in the new home.

Fox and Ntibantunganya passed long hours together. The cooped-up, bored ex-president was happy to have someone attentive to talk to. Over the months, he gave Fox a tutorial on central Africa, from the inner workings of the coffee industry to Burundian politics.

The episode was a success, as such things go. Ntibantunganya was transferred from the American compound into the former Heineken house. He was not killed, and he began a new life in exile. In 1999, he published a memoir in French, whose title loosely translates as
A Democracy for All Burundians.

Fox was moving on as well. After the stint in Burundi, he transferred to the U.S. embassy in Paris. Although Paris has always been a favorite posting for American diplomats, Fox found it stifling. He also found that there wasn’t much for him to do. Soon he applied for and was accepted by the prestigious INSEAD MBA program in Fontainebleau, France. That city, just under an hour’s drive south of Paris, is the site of the celebrated château of Fontainebleau, which was built by French kings and used as a home by Napoleon. In 1999, Fox spent a year there, as a member of a 300-person class that included students from forty countries. Some of the people he met there form the core of his European business contacts today. He didn’t know it yet, but his experiences overseas were laying the groundwork for an excellent résumé in the world of international financial consulting.

Fox briefly left the government to work on an Internet start-up, but after 9/11 he decided he had to get back into government
service. He still held his security clearances, which made it relatively simple to reapply to the government. He says he worked as a State Department desk officer on Israeli-Palestinian issues and counterterrorism. Fox went to Algeria in 2003, after its civil war, running the political and economic section of the U.S. embassy. There, he roved the North African country in an armored Chevy Suburban with two bodyguards.

But soon Fox left the government again. This time, he did a stint in the New York office of Diligence, learning the ropes of the private intelligence business. Then in 2007, along with another veteran of Diligence, the dapper Charles Garnett (who was also a veteran of the British army), Fox started Veracity. It would be similar to Diligence, but would take a new approach to this kind of work: eschewing much of the traditional investigative work in place of high-end, emerging-market due diligence. Fox lined up a single investor who provided start-up funding and opened doors—but whom he declines to name.

Fox began lining up distinguished international spies and business executives to serve on Veracity’s board of directors. He soon landed two impressive names. One was Sir Richard Dearlove, who served as the chief—known as “C”—of the British Secret Intelligence Service (SIS) from 1999 until 2004. The SIS is commonly known in Britain as MI6, and its head is the nation’s top spy. Dearlove is a British knight, and a member of the Most Distinguished Order of Saint Michael and Saint George, a class of knighthood generally reserved for foreign-service officers and diplomats. Fox also brought in an American, Stuart Eizenstat. A partner at the law firm Covington and Burling, Eizenstat heads the international trade and finance practice, and could provide an invaluable connection to the top of the international corporate world. Eizenstat was a deputy secretary of the treasury under President Clinton and helped negotiate the Kyoto Protocol, among other international agreements.

And Fox began hiring intelligence veterans. The former CIA
intelligence analyst Josh Mikesell became a partner. As senior advisers, Fox brought in Frank Anderson, the former chief of the CIA’s Near East Division; Mel Gamble, former deputy chief of the CIA’s European Division; Flynt Leverett, a veteran of the CIA who served as senior director for Middle East affairs at the National Security Council; and another CIA veteran, Art Brown.

T
HOSE CONNECTIONS LED
Fox to Veracity’s briefing in New York on North Korea. Like any other businesses, corporate intelligence firms have to hustle for new clients. But this can be tricky when the work product, and the techniques that produce it, are confidential. Often the secret is to show prospective clients just a glimpse of what a firm can do—and dazzle them with behind-the-scenes tales of spycraft.

As the audience members noshed on bagels and poured themselves cups of coffee, Fox welcomed guests from the prestigious law firm White and Case, the investment banks Morgan Stanley and Credit Suisse, and two private equity firms. The main attraction on this morning was Art Brown, who had retired from the CIA in 2005 and whom Fox had recruited as a senior adviser for Asian issues. With a bullet-shaped bald head and eyeglasses, Brown looked like Hollywood’s idea of a CIA officer. His credentials are impressive. During his twenty-five years in the CIA, Brown lived in Asia for more than twenty years, served as a chief of station in three Asian capitals, and rose to become the chief of the Asia Division for the CIA’s clandestine service. He advised the president of the United States in person on Asian issues, and testified in closed-door sessions of Congress about national security and economic and regional stability in Asia.

Brown sat at the head of the table at the Princeton Club and gave the same insights he’d given to presidents and senators, but this time to the paying clients—and prospective clients—of Veracity. He was joined at the head of the table by the former U.S.
ambassador to South Korea, Stephen Bosworth. Today, Bosworth is dean of the Fletcher School of Law and Diplomacy at Tufts University and sits on the advisory board of Veracity Worldwide.

Together, the two men gave a short presentation on North Korea. In deference to protocol, Bosworth spoke first. He alerted the bankers and lawyers that the North Koreans thought a deal was at hand in the protracted talks with the West about their rogue nuclear weapons program. He also laid out North Korea’s two goals for diplomacy with the outside world: removal of North Korea from the State Department’s list of countries that sponsor terror, and removal of economic sanctions imposed by the Trading with the Enemy Act, a law which limits American companies’ ability to conduct business with designated enemies.
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Next, Brown laid out his somewhat controversial vision for future relations between the United States and North Korea. Although the United States had up to that point focused on preventing North Korea from building a nuclear weapon, Brown said that either the North Koreans already have one, or it’s only a matter of time until they do. Continuing U.S. policies designed to stop that from happening would be pointless, he said. Instead, Brown argued, the United States should tolerate a nuclear-armed North Korea. “My vision is we should just belly up to this,” he said. Then, tailoring his pitch to the audience in the room, Brown told the bankers and lawyers that even such a radical departure from U.S. policy wouldn’t have a shock effect on the stock market in Seoul. The market there has probably already priced in an expectation that North Korea would develop a nuclear bomb.
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