Risk Analysis in Post-Cold War World - Downsized Spies Turn to Corporate Track

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Risk Analysis in Post-Cold War World -- Downsized Spies Turn to Corporate Track
Published by Pacific News Service
Jeff Stein
Nov 20, 1996


One group of intelligence agents -- downsized out of their jobs by the end of the Cold War -- operate in a world where there is no question about whether or not cash payments will outweigh loyalty. Their clients are multinational corporations, and their activities are now dubbed "risk analysis." PNS correspondent Jeff Stein is a former deputy foreign news editor for UPI and author of "A Murder in Wartime: The Untold Spy Story that Changed the Course of the Vietnam War."

WASHINGTON, D.C. -- In his time, Harry B. "Skip" Brandon, a former senior FBI intelligence official, has hunted down Middle Eastern terrorists and CIA turncoats. Last spring, in a mission that marked a ground-breaking change, he ventured deep into the jungles of the Philippines to talk with rebel guerrillas, on behalf of a North American mining company.

For centuries Western companies have barged into Africa, Asia and Latin America without regard to local sensitivities. If trouble brewed, payoffs were the order of the day. If those didn't work, they hired mercenary soldiers to do battle with local warlords and rebels in places like the Congo, Peru, or the Philippines.

Some companies still pay bribes and hire "mercs" to protect their operations. But Skip Brandon and his client are pursuing a new tack. Their approach, increasingly adopted by Fortune 500 companies, usually goes by the non-descriptive term "risk analysis."

"I like to call it risk avoidance," says Brandon, as he slips his new business card across the table in a noisy micro-brewery a few blocks from the White House. "It just makes sense to find out what people are thinking before you move into their neighborhood."

Brandon and his partner Gene Smith, a former federal prosecutor and foreign service officer, are just two of the hundreds of ex-CIA, FBI, and military intelligence agents now downsized into the private sector.

Most function like a mini-CIA, reading economic reports, roaming the Internet for useful tidbits, talking with U.S. government contacts, and teasing "intelligence" out of police sources from Islamabad to Marrakech.

In a typical assignment, a Japanese client hired ex-agents now working at Pinkerton, Inc., of Arlington, Va., to survey the post-Desert Storm business climate in 13 Middle East countries. In 1992 a client interested in investing in Haiti hired Pinkerton analyst Hugh Barber "to psyche out" pro-Aristide sentiment.

The legal ramifications of these activities can be complex. In Colombia, oil and gas companies long ago gave in to the bribe demands of narco-rebels. Such payments are not illegal under U.S. law, which forbids bribes to foreign government officials, but not to rebels and other 'parastatal' groups.

"It's a complicated area," says Denise Healy, an attorney in the Justice Department's Foreign Corrupt Practices Act section. "If you're paying protection money so they don't kill you, it's covered by statute."

Nevertheless, paying off the rebels can leave a company precariously perched between the host government and the insurgents.

The oil-soaked regions of the former Soviet Union have been a nightmare for foreign companies. Russian mafiya as well as Muslim separatists want a cut -- or else, says David Lattin, who joined Control Risk, another major player in the business from Navy Intelligence. "Often the only solution is to develop a bigger and better fly swatter -- such as hiring your favorite former KGB general's security company to handle it."

A misstep in these jungles can bring embarrassing headlines at home, stockholder questions, even international protests and boycotts. In Indonesia, the Louisiana-based Freeport-McMoran mining company ignored local tensions with a vast excavation in Irian Jaya, and protests ensued. When the Indonesian Army started busting heads, the company had unwittingly turned itself into a rallying point for the Free Papua Movement.

"It's been a huge learning curve" for major corporations, Lattin says. "They're learning that a proper risk analysis is well worth the effort. Many have gotten burnt."

"American companies aren't really good at going abroad," says Skip Brandon. "There's a lot of 'I met that good ol' boy and he spoke good English -- what I call the school of 'If they speak good English they're all right."'

Brandon thinks the future lies in offering respect.

Last spring, Brandon made contact with guerrilla go-betweens in the Philippines and traveled deep into the jungles of Mindanao to negotiate directly with them. As dawn came to a jungle clearing where he sat in a truck, he found himself surrounded by guerrillas with automatic weapons and machine guns trained on him.

Eventually the rebel leader arrived. He and Brandon talked through the day, about politics, the Manila government, their personal lives -- and Brandon's client's interest in operating in Mindanao. How did they feel about that? Brandon asked.

The guerrillas settled for "schools, hospitals, that their dependents be able to use the facilities, stuff like that. They asked about their soldiers, and I said no, because the government wouldn't permit it," Brandon recalls.

"I asked the commander, 'Why did you come to talk with me?'

"And he said, 'Because we've never had a white man come to talk with us. I was curious."

Brandon's client began operations there this fall.

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