Kreller Forensics 
Risk Analysts Cut a Path for Latin American Investors
Published By: The Miami Herald
Mimi Whitefield
April 20, 1998
Harry "Skip" Brandon was waiting in a foggy jungle clearing in Mindanao just as day was dawning when suddenly the awakening birds fell silent.
The former deputy assistant director of the FBI knew he wasn't alone, but he couldn't see who or what was out there. As the fog burned off, the forms of 30 bandoliers armed with automatic rifles and bazookas emerged.
"I was thinking: 'What am I doing here?' " said Brandon, who was unarmed and had endured a long drive deep into the jungle with a rebel escort before arriving at the meeting spot around midnight.
Despite Brandon's background as chief of the FBI's counter-terrorism unit, the risky assignment had nothing to do with government service. Brandon was on a corporate mission. His task: negotiate a deal with the guerrillas so that his client -- a North American mining company -- could do business on their turf.
Brandon is a founding partner of Washington-based Smith-Brandon International, one of a growing number of risk analysis firms that provide specialized services for companies doing business abroad.
Secret negotiations
The 2-year-old firm recently opened a Miami office and named former Miami banker Bernardo Benes -- himself no stranger to foreign political intrigue -- as chief operating officer for its Latin American division.
Benes played a key role in the secret negotiations with Fidel Castro in the late 1970s that led to the release of 3,600 political prisoners and the reunification of thousands of Cuban-Americans with their families.
The subsequent contacts between exiles and the Cuban government became known as "the dialogue" -- one of the most controversial chapters in exile history. Despite the release of the political prisoners and the thousands of family visits, Benes was vilified by exiles who objected to any contact with Cuba as long as Castro remains in power.
The Smith in Smith-Brandon is Gene M. Smith, a former U.S. diplomat who served four years as political officer in Brazil and also followed political trends in Central Europe, the former Soviet Union, and other Latin American countries.
Her background also includes stints as a prosecutor and trial attorney in Louisville, Ky., and in Indiana.
Information gathering
Risk analysis firms -- often staffed by former intelligence agents, ex-journalists and private eyes -- are basically in the business of gathering information. They do background checks on potential business partners, and report on everything from a country's political stability to its economic outlook to their estimation of a joint venture partner's resources to swing a deal.
"It's a real specialized business. There are certainly security firms and investigative firms but we go beyond that," Brandon said.
Smith-Brandon prefers to use the term "risk avoidance" in referring to its line of work, and it will get personally involved in solving a company's problems -- if necessary.
That's how Brandon found himself in the jungle clearing in Mindanao -- an island in the south Philippines.
The mining company had made a large investment in Mindanao. What it didn't realize, however, was that "Mindanao has been at war since 1890 and is still at war today," Brandon said.
Two separate guerrilla groups are active on the island and they had made overtures to the company about paying so-called taxes. "The company didn't want to pay taxes," Brandon said. "It was bad practice. They said, 'fix it.' "
Brandon reached accommodations with both guerrilla groups, which didn't include paying taxes, and assured them the company wouldn't play favorites or set up a private army as some companies in the area had.
"They ended up agreeing to leave our people alone and they have," Brandon said.
Small going global
Going global is no longer solely the province of large corporations. Though some of Smith-Brandon clients are among the Fortune 50, increasingly the firm finds that small and medium-sized companies are exploring the international marketplace.
"We've had companies say, 'We want to go abroad. You tell us where and how,' " Brandon said.
Sometimes a company needs Smith-Brandon to make discreet inquiries.
One client, for example, needed Smith-Brandon to check out the feasibility of potentially very large sales to an Asian government.
"The government said it wanted to go ahead with the purchases. Our task was to find out if it had the resources to go ahead with the project; if there was the political will to make it happen and if the process was such that the company could compete and still be within U.S. law," Brandon said.
Although paying bribes to do business is rather commonplace in Asia, Brandon draws the line at working for a corporate client willing to pay off government officials to gain business. "We won't go around the Foreign Corrupt Practices Act," he said, "and we won't work with anyone who does.
"We think operating under the table is bad business," he said. "Once you're there and you've paid bribes, you can't stop. It builds a pretty shaky business foundation."
Goes both ways
Not all of Smith-Brandon's clients are American companies; some are foreign corporations trying to break into the U.S. market.
Foreign companies often tend to judge American business norms by the standards in their own countries. If they hit a roadblock on the way to a deal, the first thought is "they haven't found the right person to pay," Smith said.
Instead, what they've often come up against is a regulation they don't understand, she said.
Smith-Brandon charges a flat fee for its services -- depending on the difficulty of the job. "It is not inexpensive," Smith said.
She and Brandon met after they had left government service and were doing political consulting for a Washington firm, but Brandon's relationship with Benes goes back much further.
They met some 20 years ago when Brandon was heading the FBI's Cuba desk, and Benes was working on family reunification.
Benes brings not only his own experience on the political hot seat to the mix, but his background as a certified public accountant, lawyer, and banker.
A graduate of the University of Havana Law School, Benes is schooled in Napoleonic law -- the basis for the Latin American legal system. "I was reviewing some Latin American legal documents for a bank recently, and I felt just like I was back in my law firm in Havana," he said.
Benes was the co-founder of Continental National Bank of Miami, and has been associated with Washington Federal Savings & Loan Assn., the Universal National Bank, and the Jefferson Bank of Florida.
'In-country sources'
While at Washington Federal, he served as director of training for a U.S. State Department-sponsored program that helped draft savings and loan legislation for Latin American nations, and trained more than 350 Latin American S&L executives.
Those contacts, Benes said, should serve him well in his new role at Smith-Brandon.
"We always use in-country sources before getting on a plane," Smith said. "They're people we have known from our former lives."
The firm has resources it can use throughout the Caribbean. Venezuela, Colombia, Chile, Argentina, Mexico, and Brazil are also important markets for the firm, which does about a third of its business in Latin America.
"There's been a U.S. look southward for the past four or five years that's lasted longer than in the past. There's also a renewed interest in looking South after people have been hurt in Asia," Smith said. "That makes Miami key."
The former deputy assistant director of the FBI knew he wasn't alone, but he couldn't see who or what was out there. As the fog burned off, the forms of 30 bandoliers armed with automatic rifles and bazookas emerged.
"I was thinking: 'What am I doing here?' " said Brandon, who was unarmed and had endured a long drive deep into the jungle with a rebel escort before arriving at the meeting spot around midnight.
Despite Brandon's background as chief of the FBI's counter-terrorism unit, the risky assignment had nothing to do with government service. Brandon was on a corporate mission. His task: negotiate a deal with the guerrillas so that his client -- a North American mining company -- could do business on their turf.
Brandon is a founding partner of Washington-based Smith-Brandon International, one of a growing number of risk analysis firms that provide specialized services for companies doing business abroad.
Secret negotiations
The 2-year-old firm recently opened a Miami office and named former Miami banker Bernardo Benes -- himself no stranger to foreign political intrigue -- as chief operating officer for its Latin American division.
Benes played a key role in the secret negotiations with Fidel Castro in the late 1970s that led to the release of 3,600 political prisoners and the reunification of thousands of Cuban-Americans with their families.
The subsequent contacts between exiles and the Cuban government became known as "the dialogue" -- one of the most controversial chapters in exile history. Despite the release of the political prisoners and the thousands of family visits, Benes was vilified by exiles who objected to any contact with Cuba as long as Castro remains in power.
The Smith in Smith-Brandon is Gene M. Smith, a former U.S. diplomat who served four years as political officer in Brazil and also followed political trends in Central Europe, the former Soviet Union, and other Latin American countries.
Her background also includes stints as a prosecutor and trial attorney in Louisville, Ky., and in Indiana.
Information gathering
Risk analysis firms -- often staffed by former intelligence agents, ex-journalists and private eyes -- are basically in the business of gathering information. They do background checks on potential business partners, and report on everything from a country's political stability to its economic outlook to their estimation of a joint venture partner's resources to swing a deal.
"It's a real specialized business. There are certainly security firms and investigative firms but we go beyond that," Brandon said.
Smith-Brandon prefers to use the term "risk avoidance" in referring to its line of work, and it will get personally involved in solving a company's problems -- if necessary.
That's how Brandon found himself in the jungle clearing in Mindanao -- an island in the south Philippines.
The mining company had made a large investment in Mindanao. What it didn't realize, however, was that "Mindanao has been at war since 1890 and is still at war today," Brandon said.
Two separate guerrilla groups are active on the island and they had made overtures to the company about paying so-called taxes. "The company didn't want to pay taxes," Brandon said. "It was bad practice. They said, 'fix it.' "
Brandon reached accommodations with both guerrilla groups, which didn't include paying taxes, and assured them the company wouldn't play favorites or set up a private army as some companies in the area had.
"They ended up agreeing to leave our people alone and they have," Brandon said.
Small going global
Going global is no longer solely the province of large corporations. Though some of Smith-Brandon clients are among the Fortune 50, increasingly the firm finds that small and medium-sized companies are exploring the international marketplace.
"We've had companies say, 'We want to go abroad. You tell us where and how,' " Brandon said.
Sometimes a company needs Smith-Brandon to make discreet inquiries.
One client, for example, needed Smith-Brandon to check out the feasibility of potentially very large sales to an Asian government.
"The government said it wanted to go ahead with the purchases. Our task was to find out if it had the resources to go ahead with the project; if there was the political will to make it happen and if the process was such that the company could compete and still be within U.S. law," Brandon said.
Although paying bribes to do business is rather commonplace in Asia, Brandon draws the line at working for a corporate client willing to pay off government officials to gain business. "We won't go around the Foreign Corrupt Practices Act," he said, "and we won't work with anyone who does.
"We think operating under the table is bad business," he said. "Once you're there and you've paid bribes, you can't stop. It builds a pretty shaky business foundation."
Goes both ways
Not all of Smith-Brandon's clients are American companies; some are foreign corporations trying to break into the U.S. market.
Foreign companies often tend to judge American business norms by the standards in their own countries. If they hit a roadblock on the way to a deal, the first thought is "they haven't found the right person to pay," Smith said.
Instead, what they've often come up against is a regulation they don't understand, she said.
Smith-Brandon charges a flat fee for its services -- depending on the difficulty of the job. "It is not inexpensive," Smith said.
She and Brandon met after they had left government service and were doing political consulting for a Washington firm, but Brandon's relationship with Benes goes back much further.
They met some 20 years ago when Brandon was heading the FBI's Cuba desk, and Benes was working on family reunification.
Benes brings not only his own experience on the political hot seat to the mix, but his background as a certified public accountant, lawyer, and banker.
A graduate of the University of Havana Law School, Benes is schooled in Napoleonic law -- the basis for the Latin American legal system. "I was reviewing some Latin American legal documents for a bank recently, and I felt just like I was back in my law firm in Havana," he said.
Benes was the co-founder of Continental National Bank of Miami, and has been associated with Washington Federal Savings & Loan Assn., the Universal National Bank, and the Jefferson Bank of Florida.
'In-country sources'
While at Washington Federal, he served as director of training for a U.S. State Department-sponsored program that helped draft savings and loan legislation for Latin American nations, and trained more than 350 Latin American S&L executives.
Those contacts, Benes said, should serve him well in his new role at Smith-Brandon.
"We always use in-country sources before getting on a plane," Smith said. "They're people we have known from our former lives."
The firm has resources it can use throughout the Caribbean. Venezuela, Colombia, Chile, Argentina, Mexico, and Brazil are also important markets for the firm, which does about a third of its business in Latin America.
"There's been a U.S. look southward for the past four or five years that's lasted longer than in the past. There's also a renewed interest in looking South after people have been hurt in Asia," Smith said. "That makes Miami key."
