Unseemly realities of corporate spies

February 11, 2010|Chuck Leddy

Veteran journalist Eamon Javers shines light on the murky but expanding world of corporate espionage. What he finds is that global companies increasingly can avail themselves of the same spying and intelligence-gathering resources, from covert surveillance to satellite imagery, as the US government. When companies contract an “intelligence consultant’’ (i.e., a spy) to gather information on parties who may damage their bottom line, whether a critical journalist or a hostile environmental group, they’re paying for secrecy and deniability. As Javers admits about his task, “[s]ometimes it’s impossible to know the truth.’’

Javers’s narrative approach is to offer an overview of the diverse services private spies offer corporate clients. Javers is also interested in the ethical questions posed by corporate spying, though he tellingly provides no answers. The vast majority of private spies, he finds, are contractors who’ve left the CIA or military intelligence for the more lucrative world of corporate espionage. They’ll work for anyone “who can afford to pay,’’ Javers writes, including “corrupt companies, Russian oligarchs, [and] Middle Eastern sheikhs.’’

Javers describes how now-defunct energy giant Enron paid a private intelligence firm to secretly find out when power plants would be shutting down for scheduled maintenance. During these shutdowns, the price of power would increase, and Enron made huge profits from this data.

Javers also describes how Kroll Associates, perhaps the world’s best-known “intelligence contractor,’’ worked for now-indicted billionaire Allen Stanford (accused of running an $8 billion Ponzi scheme) to bolster his reputation with investors. As an FBI agent cited by Javers says, “Kroll was essentially running a propaganda campaign’’ for Stanford, convincing investors that his fraudulent fund could be trusted.

Mergers and acquisitions provide a lot of business to private intelligence firms, which help conduct “due diligence’’ investigations that help corporate buyers understand the companies and assets they’re targeting for purchase. Javers describes how one company, the target of a potential hostile takeover, hired Kroll to dig up dirt on the other side. Kroll found tax problems in the larger company, and the takeover bid was dropped.