The Abrams Report For September 10, 2002
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The Abrams Report For September 10, 2002
MSNBC Show: The Abrams Report 18:00
Dan Abrams; Steve Emerson; Pete Williams
September 10, 2002

 


 

Highlights of the Interview:

(...) ABRAMS: (...) We have got an A-list panel to talk about it. (...) former FBI counterterrorism Chief Skip Brandon and founding partner of Smith Brandon International (...)

HARRY "SKIP" BRANDON, SMITH BRANDON INTERNATIONAL: (...) whether you color-code it or whether you call it one, two, three, four, A, B, C, D, makes no difference. But it's a way of communicating to the people -- to the world, as a matter of fact -- that we do have information and that we are concerned and we're going to take all measures necessary to stop it. (...)

ABRAMS: But, Mr. Brandon, there shouldn't be a sense of complacency, I don't think, because we keep hearing, "Well, the threat is overseas." That's what we heard before 9/11 as well.

BRANDON: Well, no, I don't think anybody is complacent about this. And we can't be. You're exactly right, because while we may know that there are specific things targeted overseas, we don't know where all of them are.

We do know that there are support groups, for example, in the United States. We have to assume that there are al Qaeda operatives in the United States.

We had an interesting argument with a colleague today -- not argument, discussion, with a colleague today -- about what all this means. Have we in fact just thrown down the gauntlet and issued a big challenge to somebody out there? We may have to worry about the lone-wolf nut tomorrow. (...)

ABRAMS: And Skip Brandon, is that, you know, this is not the day to sort of say, this person is to blame or that person is to blame, but you know, but we do have to look back. I mean this is a time to look back and say where do we need to do more, where have we succeeded? (...)

BRANDON: (...) We don't know as civilians exactly what the FBI and CIA, the other intelligence agencies know about what's going on in the United States. At the same time, I think it's important to look back and also say that it's been very positive in the sense that we did uncover the fact there were gaps between the FBI and CIA.

This wasn't a surprise to those of us who have lived in this area. Those appear to have been patched quite a bit. There's information moving back and forth and a very positive thing is that intelligence is moving around the world. That's very obvious from the amount of arrests that have happened around the world. This is a sharing of information long overdue, a very positive step. (...)

For the full interview see below.




GUESTS: Barry McCaffrey; Harry Brandon; James Woolsey; Alan Dershowitz; Jonathan Turley

HIGHLIGHT:
The U.S. government increases the terrorism threat level both domestically and abroad.

BODY:
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOTBE IN ITS FINAL FORM AND MAY BE UPDATED.

ANNOUNCER: Here now, Dan Abrams.

DAN ABRAMS, HOST: Hi, everyone.

This is a special 9/11 edition of the program. We have a lot on the "Agenda" tonight, starting with a terror warning more serious and more specific than any other so far.

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, ATTORNEY GENERAL: The recommendation has been made to increase the national threat level currently classified at elevated risk to high risk.

(END VIDEO CLIP)

ABRAMS: Attorney General Ashcroft and President Bush say the information is similar to what they heard before 9/11, therefore, the terror alert level raised from Yellow, meaning elevated, to Orange, high, for the first time. We'll talk about what specific information led to the new warning.

And is it time to take the war on terror to a new level? Some civil libertarians say we've already gone too far. But Alan Dershowitz, for example, says more profiling may be necessary. He'll face off against Professor Jonathan Turley.

Plus, with troops now on high alert in Afghanistan, the question: Did we achieve our goals? Did we win the war? How much longer will it last? Retired General Barry McCaffrey will join us:

And, as always, we want to hear your thoughts about tonight's show. Send us an e-mail to abramsreport@msnbc.com.

On the eve of September 11, the nation on edge again amid new warnings that terrorists are planning to attack again, possibly as soon as tomorrow.

(BEGIN VIDEO CLIP)

ASHCROFT: The United States government has concluded, based on analysis and specific intelligence of possible attacks on U.S. interests overseas, to call government, law enforcement and citizens, both at home and overseas, to a heightened state of alert.

Information indicates that al Qaeda cells have been established in several South Asian countries in order to conduct car bomb and other attacks on U.S. facilities. The most likely targets of al Qaeda attacks are the transportation and energy sectors and facilities or gatherings that would be recognized worldwide as symbols of American power or security.

Examples of such symbols are U.S. military facilities, U.S. embassies and national monuments.

(END VIDEO CLIP)

ABRAMS: For the first time, the government raised the terror alert warning from an elevated risk, Yellow, to a level, Orange, high risk. Where did they get the information? Well, MSNBC has learned from at least two al Qaeda members in custody, the most recent information: from a senior al Qaeda leader arrested a couple months ago somewhere in the Far East -- that's all we know -- some of the information obtained within the last 24 hours.

The supposed plot: a -- quote -- "simultaneous attack" involving U.S. facilities in Southeast Asia. Apparently, the highest-ranking al Qaeda member in custody, Abu Zubaydah, confirmed the information, hinting at the possibility of attacks around September 11. There was also information about possible suicide bomb attacks in the Middle East, leading to concerns about U.S. facilities there.

As for what Americans should do with this information, Homeland Security Director Tom Ridge echoed some familiar words.

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY DIRECTOR: If travel is in your plans, attendance at a public event is in your plans, we would like you to proceed, to do as you had planned to do, but be wary and be mindful.

(END VIDEO CLIP)

ABRAMS: So what to make of this?

We have got an A-list panel to talk about it. Former CIA Director James Woolsey joins us; as well as former FBI counterterrorism Chief Skip Brandon and founding partner of Smith Brandon International; and terrorist expert Steve Emerson.

Gentlemen, thank you very much for joining us.

Steve, let me ask you about the facts of this. What is your information as to what led the government to up the level of the threat?

STEVE EMERSON, NBC TERRORISM ANALYST: Well, the president was briefed this morning by the national security team and got a threat matrix.

What he basically was told was, one, there was an infrastructure already in place in Southeast Asia, in Indonesia, Malaysia and elsewhere, that were composed of al Qaeda remnants who were planning to attack U.S. embassies.

Number two, there were wannabes, like the couple arrested in Heidelberg, who had planned to attack U.S. military facilities in Germany on 9/11.

And, number three, there was a lot of increased -- quote -- what they call "chatter," the term used for electronic information. They pick up snippets of conversations.

All of this led them to believe: "Hey, there's a real problem here; 9/11 is a challenge for them. They want to show that they can hit us now. Let's raise the alert. Let's batten down the hatches. Let's empty the embassies in four countries. And let's let the Americans know to be aware."

ABRAMS: But, Director Woolsey, does this tell us that we still haven't gone far enough in terms of developing intelligence? Because what we're doing, based on Mr. Emerson's information and based on our information, is basically saying: "We're hearing a lot. A lot of it sounds pretty ominous. We put that together with 9/11 and it all sounds scary. And yet we have no sense of where this is going to happen."

JAMES WOOLSEY, FORMER CIA DIRECTOR: Well, it's true. Intelligence is often that way. It's sort of indeterminate with respect to time and place. Sometimes it's rather general.

I think one thing that Steve has written about widely is things like terror cells here in the United States. And in order to collect intelligence on those -- for example, on people like Atta, who, after all, planned their attack here in the U.S. -- we may need to do some things differently than we've done in the past.

There have been several distinguished Americans who have suggested we establish a domestic intelligence office, somewhat like Britain's MI5, which is not a law enforcement agency like the FBI, or, for that matter, Scotland Yard. It collects intelligence on, for example, the provisional IRA, the Irish terrorists.

So we may have to do some things differently than we've done in the past. That would be a big change for the United States. But I think we have to do something to expand our intelligence collection from just people that we capture overseas and these terrorist cells abroad and electronic intercepts. Those are very hard ways to get intelligence about domestic threats.

ABRAMS: Mr. Brandon, what do you make of these color-coded warnings? We had talked a long time about the fact that they never seem to change, that it was always yellow. It was always this elevated risk. And we would get these warnings and nothing would change. Now something has changed. And it's scary. Is this the right way to be doing this, do you think?

HARRY "SKIP" BRANDON, SMITH BRANDON INTERNATIONAL: Well, I think it's the only way. And whether you color-code it or whether you call it one, two, three, four, A, B, C, D, makes no difference. But it's a way of communicating to the people -- to the world, as a matter of fact -- that we do have information and that we are concerned and we're going to take all measures necessary to stop it.

ABRAMS: Look, it makes sense. We need to know somehow that the threat is greater today than it was before. And when you just sort of use words, it gets difficult to assess exactly how different it was.

Steve, would you -- this is a question that I know that the government won't answer -- but would you change your plans tomorrow, based on what you've heard?

EMERSON: If I was traveling overseas, certainly in the Middle East or in Southeast Asia, I would certainly be much more cautious about where I set foot.

In the United States, absolutely not. I wouldn't change one directional intention in terms of where I was going, because I do believe that, even though there is a threat level that is much higher now than it was before 9/11 last year, we -- the odds of anything happening tomorrow in the United States are not great, because the bottom line is, the terrorists know that if they operate and attack on 9/12 or 9/13, that's when our guard is down.

ABRAMS: Mr. Woolsey, you agree?

WOOLSEY: I think that makes sense.

On the other hand, they do like anniversaries and they do like the mystique of observing them. So I think you have some countervailing tendencies there. But in terms of tactics and what would be smart for them to do, I think Steve is quite right.

ABRAMS: And would you change your plans tomorrow, if a family member said to you, "Should I cancel my trip to X, Y or Z?"

WOOLSEY: We don't know what's going to happen. And so I think that would be very difficult to rationalize. I mean, if the intelligence was attack on aircraft or attack on ports or something, then people would have a basis to make decisions. But that's not what we've heard. We've heard something.

And with something, you may stay a bit more alert, but there's not a lot more you could do.

ABRAMS: But, Mr. Brandon, there shouldn't be a sense of complacency, I don't think, because we keep hearing, "Well, the threat is overseas." That's what we heard before 9/11 as well.

BRANDON: Well, no, I don't think anybody is complacent about this. And we can't be. You're exactly right, because while we may know that there are specific things targeted overseas, we don't know where all of them are.

We do know that there are support groups, for example, in the United States. We have to assume that there are al Qaeda operatives in the United States.

We had an interesting argument with a colleague today -- not argument, discussion, with a colleague today -- about what all this means. Have we in fact just thrown down the gauntlet and issued a big challenge to somebody out there? We may have to worry about the lone-wolf nut tomorrow.

ABRAMS: Yes.

All right, Mr. Woolsey, Mr. Brandon, Mr. Emerson, we're going to join -- all of you are going to come back later in the program, talk more about this and talk about who has been captured, how well we're doing in the search to solve 9/11.

We'll have much more on the heightened terror alert in our next half-hour.

(...)

ABRAMS: Welcome back. Coming up this half-hour, how are we doing tracking the 9/11 terrorists? We'll take a look at who's been captured and who's still at large with our panel of terrorism and law enforcement experts. And with this new threat looming, should we have better intelligence within al Qaeda by now?

(...)

Should we be further along in our effort to infiltrate al Qaeda? As for the 9/11 plotters, the 19 hijackers went to their deaths willingly with a killing grudge against the U.S. What about those who made it happen? Osama bin Laden, of course, is either dead or somewhere in hiding. While Khalid Shaikh Mohammed, a key 9/11 planner and Ramzi Binalshibh, an early candidate to be the 20th hijacker, just gave an interview to Al-Jazeera television confessing that they and al Qaeda were involved.

Apparently, they were in hiding somewhere in Pakistan. Said Bahaji, another plotter, disappeared shortly before 9/11. He was a member of the al Qaeda cell in Hamburg that produced the hijacked pilots; he's still missing, as is Mustafa Mohammed Ahmad (ph), an al Qaeda financier, who allegedly helped supply funds to Mohamed Atta.

But others have not been so lucky like Mohammed Atef, al Qaeda military commander, believed to have been killed in an air strike in Afghanistan. Operations chief Abu Zubaydah, captured in Pakistan, and Mounir El Motassadeq, a Moroccan, believed to have been the hijacked plot's treasure imprisoned in Germany.

Zacarias Moussaoui, the French Algerian, facing trial in the U.S., as Binalshibh's replacement and Mohammed Zammar, said to be an al Qaeda recruiter, closely tied to the plot, now in prison in Syria. And that's not counting as many as 3,000 arrests worldwide of possible al Qaeda members and supporters.

I'm joined again by terrorism expert, Steven Emerson, former CIA Director James Woolsey and former FBI Counter Terrorism Chief Skip Brandon. So gentlemen, one year later with another threat looming, can we look back and say that the past year has been a success in this regard? Director Woolsey, let me start with you.

WOOLSEY: I'd say a limited success. The most important thing we've done is win the war in Afghanistan. It's not complete. Some people got away. Some, we don't know whether they're dead or not, but we disrupted al Qaeda severely; we killed and captured a large number. We destroyed and learned about their weapons of mass destruction, laboratories. We got a lot of computers, and booklets, information, so I think that the war in Afghanistan was the main good news story out of the last 12 months ...

ABRAMS: Has the rest of it ...

WOOLSEY: ... of the war on terrorism.

ABRAMS: ... has the rest of it been a bad news story?

WOOLSEY: Well not necessarily, but it's been a very slow story. I mean I don't know about you, but I get sort of tired of going through airports and watching grandmothers get frisked and giving up their nail files. I mean we ought to be able to do something a bit more effective on the aviation front and on a number of fronts. We have a lot of networks in this country, the oil and gas pipe lines, electric power grids, that have weak points, just as the civil air transport system did with its flimsy cockpit doors 9/11. We have to get a lot of those things fixed.

ABRAMS: Steve Emerson, a lot of these people have either been arrested or at large, are people you've been following for a long time, well before 9/11 happened. What do you think? I mean in terms of where you thought we'd be back on 9/12 of last year, would you have thought we'd be further, would have captured more people, we'd know more about 9/11, or are we further along?

EMERSON: One of the problems is that the more we went into Afghanistan, the more we tried to destroy the al Qaeda infrastructure, the more we learned about what we didn't know, so we learned about operational networks throughout Europe, throughout South America, throughout Indonesia that we had no idea about. So to a certain extent, we're victims of our success.

And I think that essentially if I could take what Jim is saying, I think he's right insofar as we are really, I think, suffering a lack of intelligence about what al Qaeda is doing in the United States. That's our biggest void; that's our backyard. We have done very well in Europe. They have arrested over 1,000 people. The Germans have done a great job. So have the Spanish and the Italians.

The fact is in Pakistan there's been a major disruption, still a problem with most of the al Qaeda leadership intact. Unfortunately, Zubair al-Haili(ph), the guy that masterminded 9/11 is around, up and running and still doing things, but the bottom line is, we are suffering from the lack of intelligence in the United States.

ABRAMS: And Skip Brandon, is that, you know, this is not the day to sort of say, this person is to blame or that person is to blame, but you know, but we do have to look back. I mean this is a time to look back and say where do we need to do more, where have we succeeded? And you know Steve Emerson seems to be indicating that it's our counter terrorism officials here at home, the FBI, that is really lacking in what they've accomplished since 9/11.

BRANDON: Well, I'm not sure that's exactly what Steve said. We don't know as civilians exactly what the FBI and CIA, the other intelligence agencies know about what's going on in the United States. At the same time, I think it's important to look back and also say that it's been very positive in the sense that we did uncover the fact there were gaps between the FBI and CIA.

This wasn't a surprise to those of us who have lived in this area. Those appear to have been patched quite a bit. There's information moving back and forth and a very positive thing is that intelligence is moving around the world. That's very obvious from the amount of arrests that have happened around the world. This is a sharing of information long overdue, a very positive step.

ABRAMS: All right let me just read -- again, let's go back to the fact that we've got this orange, this code orange alert out there, which means that there is an elevated risk now, according to the government. Let me just day lay out what a high-risk terror alert means.

It means that they're going to need to coordinate necessary security forces that includes armed forces. It includes law enforcement agencies, a lot of additional coordination. It means that they're going to be taking additional precautions at public events, that they're supposed to prepare to work at an alternate site or with a dispersed work force. Restrictions of access to essential personnel only of certain areas.

With all this in mind, the fact that it has been raised to orange, Director Woolsey, is it time, do you think, that they cancel some of these events? I mean basically, the Homeland Security Director, Tom Ridge, saying look, we're not going to be canceling anything. We're going to move forward. If this orange alert is such a great threat, should we be doing more to respond to it?

WOOLSEY: Well, if we had anything specific about time and place, or even nature of threat, it's going to be against big gatherings in parks or bridges or whatever, then sure. But apparently we don't have that, and one major objective of terrorists is to terrorize us into changing the way we live.

So I think in a circumstance like this, staying particularly alert may be the best thing we can do. Remember, sometimes that works. Those passengers on the flight in December across the Atlantic where Reid had the bombs in his shoes ...

ABRAMS: Yes.

WOOLSEY: ... were extra alert because of what had happened 9/11 and they and the crew saved that airplane and ...

ABRAMS: Yes.

WOOLSEY: ... and just before the millennium celebrations in late December, a very alert Customs agent up near Seattle, just because everybody was worried about around the time of the millennium celebration, she was especially careful, and she caught the fellow who was coming into blow up the Los Angeles airport, so alertness can help.

ABRAMS: Yes. And you know I have to say, I still question the veracity of Abu Zubaydah, this guy they've got captured, this operations chief who apparently knows where all the terror cells are. Every time we get a warning, somehow it's indirectly linked to Abu Zubaydah, and I still wonder whether this guy -- Steve, I've got five seconds. Can we trust Abu Zubaydah?

EMERSON: You know I didn't up until a while ago. I spoke to a senior law enforcement official, and he said he's telling the truth most of the time.

ABRAMS: All right.

EMERSON: So you know what? We'll see what he says.

ABRAMS: Good enough for me. Gentlemen, thanks a lot for coming on the program. We appreciate it, great panel.

(CROSSTALK)

ABRAMS: Up next, U.S. military forces on a higher state of alert in the Middle East and Southeast Asia in response to specific and credible threats against U.S. targets. The latest, plus an update on the war in Afghanistan with General Barry McCaffrey. Coming up.

(...)
Highlights of the Article:

(...) Although the economy is doing well, companies that want to conduct business in the global market should not throw caution to the wind, said Gene Smith, founding partner of Smith Brandon International, specializing in international investigative services. A significant sale can go sour after the product is delivered due to a lack of background knowledge and business intelligence, she told delegates. (...)

"Some business gurus advise Western-based businesses to set foreign sales targets of 40 percent of all business revenues. But any global ventures must take into consideration the potential risks as well as rewards," she said. (...)

The Internet enables companies to do business around the world by connecting them, but global connections also "create serious security concerns," said Harry Brandon, founding partner of Smith Brandon International. The "Love Bug" virus was created in the Philippines but quickly swamped computer networks around the world, he reminded delegates. "Is the credit information you have on file secure from hackers?" he asked the delegates. (...)

Even with the risks associated with the Internet, Brandon says companies have "no choice" but to embrace electronic commerce. "The goal is to do it right, in a safe, secure, protected environment." (...)

For the full article see below.




If credit managers felt they were somehow immune to the business effects of the digital revolution, electronic commerce innovation and global economic transformation, they discovered differently at "Exploring the New Frontier", NACM-Canada's second annual Credit Conference and Expo held in Toronto, Ontario on October 11 and 12.

The Internet brings disparate cultures together for social and commercial interactions. Global communication at Web speed changes both the nature of societies and the culture of business, conference speakers told the NACM delegates. In a world where almost every new business venture begins with an "E", geographic boundaries are disappearing, and companies are open 24 hours a day.

Instant digital connectivity creates a host of business opportunities and challenges, delegates were told. Credit managers need to protect corporate financial interests while supporting the development of new opportunities. Armed with new digital tools, they can process information faster and make decisions quicker. At the same time, they are dealing with more information from more sources than ever before. That's life on the new frontier.

OUTLOOK POSITIVE

When it comes to overall financial matters, "the global outlook for the next 18 months or so continues to be upbeat, not withstanding the sharp increases in oil and natural gas prices," Dr. Lloyd Atkinson, chief investment officer for Perigee Investment Counsel Inc., an investment and money management solutions firm, told conference delegates.

Growth is driven by the technology revolution, and the pre-emptive action taken by central banks, most notably the US Federal Reserve, to keep inflation in check. The result: US productivity has increased significantly at inflation-safe speeds. Inflationary pressures have been contained and there have been real gains in wages, salaries and corporate earnings.

While there will be economic slow downs, "they will be much more muted than in the past, and there is no recession in the five year forecast... Barring economic accidents, such as occurred in Asia in 1997, we continue to be very optimistic about the longer term," Atkinson said.

While business-to-consumer e-commerce ventures such as Amazon.com have received a great deal of media play, Atkinson called them "small potatoes" compared to business-to-business e-commerce. The old economy--automotive, financial services and other traditional sectors--are using the tools of the new economy to change the way they do business. For instance, General Motors will use the Internet to reduce distribution costs by 30 percent over three years. This is a direct benefit to General Motors and suppliers who adapt to the news ways of doing business in the digital age will also benefit.

CAUTION ADVISED

Although the economy is doing well, companies that want to conduct business in the global market should not throw caution to the wind, said Gene Smith, founding partner of Smith Brandon International, specializing in international investigative services. A significant sale can go sour after the product is delivered due to a lack of background knowledge and business intelligence, she told delegates.

Even though there are risks, "there is no option to sit out e-commerce." Forecasters indicate that e-commerce will generate $ 1.3 trillion dollars in global sales in 2003. "Some business gurus advise Western-based businesses to set foreign sales targets of 40 percent of all business revenues. But any global ventures must take into consideration the potential risks as well as rewards," she said.

To successfully tap global markets, companies require strategic plans that integrate e-commerce into their overall business strategies before they build secure, transactional-based Web sites. And they cannot afford to overlook due diligence. "A classic case of 'it's too good to be true' is often accompanied by an online request--or even demand--to evaluate a proposal quickly and sign the necessary papers at once," she said. "If the prospect is so compelling, it can wait until it is given adequate review."

If a new client places an order from your web site, how do you determine who they are, if they have the authority to place such an order and if their company has the ability to pay? A company can "proceed on faith," or it can sort out all potential transactional dilemmas before hanging its shingle in cyberspace. The Internet is making it easier for companies to conduct business in foreign countries, and it is making it easier for companies to conduct credit checks on foreign companies, said Julie Gage, business project manager, Dun & Bradstreet Canada, a NACM-Canada Credit Conference sponsor. Companies like Dun & Bradstreet can help credit managers adopt to the new global reach of the Internet by providing them with background and credit information online or by e-mail, she said. Scott Blakeley, partner with Blakeley & Blakeley LLP, concurred. The most dramatic effect on the Internet "is the shortening of the credit cycle," he said. Vendors are using the Internet to conduct background and credit checks on com panies, cutting dramatically into the time required to approve credit.

SECURITY A CONCERN

The Internet enables companies to do business around the world by connecting them, but global connections also "create serious security concerns," said Harry Brandon, founding partner of Smith Brandon International. The "Love Bug" virus was created in the Philippines but quickly swamped computer networks around the world, he reminded delegates. "Is the credit information you have on file secure from hackers?" he asked the delegates.

Companies are even posting order acknowledgement forms and invoices on secure web sites that customers can access. While clients enjoy the freedom of accessing information any time, they want to be assured their credit and purchasing history is secure, or they will look for other vendors.

"Computers are efficient, and they empower employees, but there are downsides," Brandon said. Fraud cost North American businesses $ 350 billion in 1990 and $ 400 billion in 1999. Computer fraud grew exponentially over this same time. Damages pegged at $ 300 million in 1990 hit $ 50 billion in 1999. Over 25 percent of Fortune 500 companies are computer crime victims, and employees have perpetrated many of the crimes.

Risk avoidance is obligatory. Firewalls and virus protection are required to keep hackers out. ID, passwords and other internal measures, including forensic audits, are required to prevent or track down illegal activity by employees.

Even with the risks associated with the Internet, Brandon says companies have "no choice" but to embrace electronic commerce. "The goal is to do it right, in a safe, secure, protected environment."

STREAMLINING THE CREDIT DEPARTMENT

Using technology to do it right also includes employing information technology systems to make the credit department more efficient, says Brian Cheney, vice president technology, IHS Solutions Limited, an information management solutions technology company. Companies can increase collection efficiency without increasing operational collection costs using technology, he said.

Companies moved from paper-based document management to microfiche and then to CD-ROM. Now they are moving to Web-based data that puts information in the hands of clients. For example, if a vendor establishes a secure e-business web site, clients can search for the status of orders or for lost invoices based on purchase order number, product code or other criteria. Centralized credit databases and computer networks allow credit managers to fax or e-mail "lost" invoices from their desktop to overdue accounts while on the phone. This gives the credit manager the opportunity to say: "It's there now, so let's talk about the bill."

Information management automation is not a process than can be implemented overnight. Companies must review existing business practices and define ideal practices and then build systems that meet defined needs. Staff input is important if they are to buy into, rather than resist, automation, Clients also have to be kept in the loop and reassured that credit and payment information is secure.

Automating the credit department and integrating back office databases with web sites can be expensive propositions. The results, however, can include streamlined business practices, improved productivity and a higher rate of closure on outstanding accounts, Cheney said. "But why stop there?" asked Mark Visic, vice-president sales, Kubra Data Transfer Ltd., a document fulfillment, management and e-commerce company. Although companies have automated many aspects of traditional "print and mail" bill presentment, they still spend time and money printing invoices, stuffing and stamping envelopes and mailing bills. The post office then takes time delivering bills, which customers lose or claim they did not receive. Some companies have outsourced the entire print and mail process, which means a third party has to spend time doing what internal staff once did. And the post office is still involved in the equation. An automated electronic bill presentment and payment (EBPP) can reduce the time it takes to get invoice s in the hands of customers and payment in the bank, Visic said.

EBPP is an emerging technology that will eventually replace mail, fax and electronic data interchange (EDI). "EBPP offers corporations the ability to send invoices or statements to consumers via the Internet and process an electronic payment. Companies employing EBPP can post bills on their web site, with a financial institution or a third party clearinghouse. The client receives a secure notification and can view and pay bills online using credit cards, debit cards or other forms of electronic payment, trimming time off the invoice-to-payment cycle. The electronic bill is traceable from the moment the client receives notification, Visic said.

While 7 in 10 companies indicate that billing cost reductions are key to EBPP, the process can also be used to bring clients to a vendor's web site, allowing the vendor to market its brand and continue to sell to the client. "Now bill payment can be used to increase brand awareness, loyalty and sales," Visic said. "This represents a new opportunity for businesses to strategically use billing to sharpen their competitive edge in the new electronic economy."

EBPP is not yet simple or inexpensive to implement. "There is considerable sticker shock," said Visic. The return on investment is not there for every company considering it. Even so, the future holds some form of EBPP for most companies.

If you are still skeptical, look back over the last five years and review how the digital revolution has influenced the way your company does business, and the way you work. "When it comes to advances in technology, we haven't seen anything yet," said Dr. Atkinson. "In five to ten years, we'll look back at the technology we are using today the way we look back at dinosaurs." In other words, companies and credit departments will continue to evolve with the digital world and global economy, or face extinction.

Paul Lima is a freelance journalist and workshop leader based in Toronto, Ontario.

As companies begin to conduct e-commerce in the global market place and move to online billing and payment systems, they must tackle the issue of international law head- on, speakers at NACM-Canada's second annual Credit Conference and Expo told delegates in Toronto.

"In the virtual world, as in the paper world, commerce is based on contracts," said Marie-Pierre Simard, copyright lawyer with the law firm Brouillette Charpentier Fortin. Before a dispute over a virtual contract arises, credit managers need to know what makes virtual contracts acceptable to the courts. "Sometimes it seems as if the law cannot keep up with the information age. Yet, people involved in e-commerce must be able to identify the laws upon which e-commerce relies so that [virtual contracts] may be seen as a valid, enforceable, credible way to do business."

The federal governments in Canada and the US are developing national standards to govern e-commerce transactions, but many provinces and states have different laws, as do different jurisdiction around the world.

In some countries, only contracts with handwritten signatures are allowed in court. In other countries, an electronic signature (fax, scanned document, use of a PIN or password) is acceptable. Other jurisdictions--particularly in North America and Western Europe--will accept digital or encrypted signatures to prove a client ordered a product, and the vendor shipped in good faith.

In the US, electronic signatures cannot be "denied legal effect, validity or enforcement solely because it is in electronic form", said Scott Blakeley of Blakeley & Blakeley LLR. However, an electronic signature does not mean a company will win its case. All other laws for commerce come into play.

Blakeley also warned credit managers to be careful about what they write in email, especially if discussing a client's credit information with a third party. E-mail is easy to send, receive and forward, and sometimes people forget slander and conspiracy laws that cover the printed word, he said.

There are risks and opportunities associated with doing business in the global economy. When dealing with new clients in foreign countries, companies can protect themselves by insuring receivables, explained Angela Boston, business development manager, Export Development Corporation, which is a Canadian crown corporation that helps credit managers mitigate risk in 160 countries.

Her thoughts were echoed by Mark Hall, associate broker and credit insurance specialist with Dan Lawrie Insurance Brokers Ltd. Hall, which offers credit insurance for both domestic and global markets. "This is not a replacement for due diligence or a well-managed credit department," he said. "But it adds another layer of security."

If companies are having difficulty collecting uninsured payables, they can use training or technology to improve their ability to collect, or outsource collectables.

"Effective training can show people how to be assertive, not aggressive and collect more while retaining customers they want to keep," said Tim Paulsen of T. R. Paulsen & Associates, a company specializing in "creative receivables management."

Automating the collection process can boost the rate of return, says David Phillips, Guthrie Phillips Group (GPG) president and CEO. GPG's CAT2000 recovery system puts complete customer history in the hands of each staff member and schedules follow-up correspondence and calls. It can be connected to the company accounting system and updated the moment an invoice has been paid, so collectors are working from current information.

If collectables get out of hand and hiring more staff is not an option, then companies might look to outsourcing some or all the responsibility, says Robert Ingold, president of The Commercial Collection Corp. He admits some companies resent having bills turned over to collection agencies. However, his company can "work as an extension of the credit department" so the overdue client doesn't know the account has been turned over to a collection agency.

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