The Wages-and Profits-of Fear

Executive safety is becoming not only a worry but also a growth industry

"The urban guerrilla follows a political goal and attacks only the government, the big capitalists and the foreign imperialists, particularly North Americans." Since the mid-1960s, when the late Brazilian revolutionary Carlos Marighella made that declaration in a manual that has since become a text for terrorists everywhere, businessmen have found themselves the targets of violence in many parts of the world, notably Latin America and some relatively prospering democracies of Western Europe. The bombings, kidnapings and assassinations have not spread--at least so far--to the U.S., but American firms are increasingly troubled by the phenomenon.

With reason. While the U.S. has not experienced anything like the murder of West German Business Leader Hanns-Martin Schleyer last fall or the kidnaping of Belgian Industrialist Baron Edoard Jean Empain last winter, American executives have been frequent targets of violence. Indeed, according to a tally kept by the CIA, more than 40% of the 232 terrorist-connected kidnapings reported since 1970 (almost all in Latin America and Europe) have involved businessmen, one out of five of them Americans.

As a result, the protection of executives, practically an old trade in West Germany and Italy, is becoming one of the U.S.'s fastest growing industries.

American companies now spend $7.1 billion on security annually at home and abroad (up from $3.2 billion five years ago). Former FBI Agent Charles Bates, now an executive at a San Francisco security agency, reckons that 80% of large U.S. firms have either started executive protection programs or are considering doing so. Scores of new firms specializing in executive safety have opened shop, and the big, old protection agencies are growing. Burns, the nation's second largest such firm (after Pinkerton's), reports that its executive protection business has doubled in the past year, and accounts for a sizable percentage of the firm's $200 million annual revenues. Other outfits, including makers of armored vehicles and surveillance systems, as well as anti-kid-nap driving schools, are also expanding. For years, says David Dearborn, director of investigations at Pinkerton's, selling security in the U.S. has been "a little like selling flood insurance in the desert." That is changing: "While the American businessman still doesn't typically think of security for himself or his family, the American business has to."

Pinkerton's and Burns offer an all-encompassing executive security service. Their advice does not come cheap: a major company that calls in an agency for a thorough study of its security needs may expect to pay $100,000 or so. Both Burns and Pinkerton's typically begin such a consultation with a "threat analysis," aimed at determining the degree of peril to which the company and its high-level executives are exposed. After that study, which may take as long as six months if the client has overseas branches, the advisers draw up a plan that outlines exactly how the company should react in various emergency and hostage situations, and designates which officers would make up the crisis staff.

The security firms also run "vulnerability tests," in which the travel patterns and behavior of an executive and his family are observed for two weeks without their knowledge. Then the executive is called in for closed-door consultation.

"We try to demonstrate to him where he is most vulnerable," explains Anthony Purbrick, a former Scotland Yard detective who is Pinkerton's assistant director of investigations. "What we continually stress is prevention and awareness. We feel that if we can alert the individual and his family to the signs of a threat, they can easily incorporate precautions into their lives."

A number of firms offer less elaborate--and less expensive--security training programs. The leader in this field is Chicago-based Motorola Teleprograms Inc., which has produced films and manuals covering every aspect of the terrorist threat, from the need to "harden the target" (that is, to make offices and homes more secure) to the proper handling of a kidnaping of a senior company officer. One of Motorola's competitors is William Brose Productions, a small Hollywood moviemaker that distributes security training films. A 25-minute epic titled Kidnap--Executive Style!

tells businessmen how to behave if taken hostage. Two bits of advice from the film:

> As early as possible, an executive should try to get on a "name" basis with his captors: "If they think of you as people, and not objects, they are less likely to destroy you."

> Members of a kidnap gang commonly run the gamut from intellectuals to dim-witted sadists. "But the intellectuals will be in charge. The sadists get to kick you around. See what you can do to spend more time with the intelligentsia, less with the kickers."

Security experts emphasize to corporate clients that 90% of all assassination and kidnaping attempts have taken place while the victim was either entering or leaving his car, or on the road. Moreover, 80% of such auto ambushes have succeeded, because the attackers have the advantage of striking while the victim is relatively isolated from help. Too often drivers play into the kidnapers' hands.

For example, rather than undertake evasive maneuvers, Hanns-Martin Schleyer's driver simply stopped in front of the terrorists' car that blocked the road; men guarding former Italian Premier Aldo Moro committed the cardinal error of driving him along the identical route in Rome each day.

In the U.S., at least three schools have sprung up that teach practical and effective evasive driving. One of the most professional is the BSR Counter-Terrorist Driving School in McLean, Va., run by Bill Scott, 39, a Yale Ph.D. (in geology) turned racing driver. In four days of instruction that costs their employers $1,295, company chauffeurs who had prided themselves on never scratching a fender learn to ram through barricades at high speed and bulldoze blocking autos out of their path. Most of all, they learn the getaway tactics pioneered by moonshiners on the dusty roads of the South.

For example, a driver will be confronted with the problem of what to do when, while he is traveling in traffic or on a narrow road, a barricade too solid to breach suddenly looms ahead. The proper evasive action? A bootleg turn, of course: pull on the hand brake, locking up the rear tires, and spin the steering wheel; the car will do an abrupt about-face, using hardly more than a single lane for the turn. Or, if the road behind is clear, a J turn might do: brake to a panic stop, put the car in reverse at high speed, then hit the foot brake again and cut the steering wheel sharply so that the auto nips backward into a tight 180DEG turn; then accelerate away in the direction you came from. Executed properly, these maneuvers take only five or ten seconds and will probably leave the terrorists too dumbfounded even to contemplate pursuit.

A second approach to ambush survival is to protect the car with layers of armor plating, fiber-glass webbing and bullet-resistant glass, known in the trade as plastic armor. Dozens of firms in the U.S. and Europe now convert Cadillacs, Rolls-Royces or Mercedes into moving fortresses that can withstand attack by all but the most powerful assault rifles and rocket launchers.

Armored cars have two major disadvantages: cost and clumsiness. The price of rendering an auto secure from pistol or submachine-gun attack can run from $50,000 to $350,000, depending on the extent of the defensive features. Further, a fully secured limousine is so heavy (about five tons) that it is incapable of executing quick getaway maneuvers.

Seeking an intelligent compromise, BSR's Scott has turned Chevrolet Impalas and Pontiac Catalinas into counterforce vehicles by adding 900 lbs. of armor plating around the engine and the passenger compartment and bullet-resistant glass in all windows. Then, to offset the added weight, which brings the total up to some 4,500 lbs., he equips the car with a high-powered engine (400 h.p. or more) and an especially strong, road-hugging suspension system. The result: an auto that can absorb considerable punishment and still execute bootleg turns and high-speed escapes. Price: $27,850 for the most heavily armored version. Among the features are front-door gunports, invisible from the outside, that enable the driver and guard to fire through the car's outer metal skin at approaching terrorists, and high-intensity back-up lights that can be flicked on at will to blind pursuers.

In the home and office, a second line of defense exists in a myriad of ultraclever devices that would have filled James Bond's weapons expert with envy. Visitors to Miami's Rayne International, a security outfit run by Fred Rayne, a former British counterintelligence agent, can select a device (for $300) that starts a car's engine and switches on the electric system from 1,000 ft. away --a safe distance in the event an auto has been wired with a bomb. Did a suspicious-looking envelope arrive in the mail? To hold it until the explosives experts arrive, R.I. supplies (for $280) a woven synthetic pouch capable of absorbing the blast of a letter bomb. What if an intruder breaks into the house at night? An executive-model flashlight that doubles as a gas gun will reduce him to tears. But suppose the executive is sound asleep? Acoustic devices will detect the loud noises and automatically alert security guards.

More and more companies are preparing for the chance that their precautions may fail by buying K and R (for kidnaping and ransom) insurance policies sold by Lloyd's of London and some oth er companies, including several U.S. firms. Insurance officials do not speak much about this business, fearing that more countries will follow Italy in banning K and R policies on the ground that they encourage kidnapings. But some brokers say that sales of such policies on the London insurance market alone have more than doubled in the past two years, with as much as 70% of Lloyd's K and R business coming from American multinationals. The insurers commonly require the client corporation to exercise "due diligence" in protecting its executives; this means retaining security experts and acquiring protective gadgetry. (Lloyd's, not surprisingly, owns a prospering corporate security agency, Control Risks Ltd.)

If an executive is kidnaped and his company fails to free him as quickly as possible, he or his family can bring--and possibly win--a damage suit against his employers for negligence. Fred Rayne admits that on behalf of two foreign corporations he has handed over $1.5 million to Latin American terrorists as ransom for kidnaped executives. It was a bargain, he argues, since the executives might otherwise have sued for much more.

He has a point. Gustavo Curtis, the former chief of Beatrice Foods in Colombia who was held by terrorists for eight months, is suing his company for $185 million. His complaint: though the firm had had prior indications that he would be a terrorist target, Beatrice Foods treated his disappearance as a hoax at first, then dawdled over negotiating his release, condemning him and his family to a long, anxiety-laden ordeal.

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