Kroll’s Sleuths are More Clouseau than Columbo
Kroll`s sleuths are more Clouseau than Columbo…
An email error has put the investigation firm in a poor light
James Doran The Observer, Sunday 4 May 2008
Inspector Clouseau is alive and well, and he works for Kroll Associates, the corporate spies who are supposed to specialise in finding, and keeping, company secrets. Last week the super sleuths- or, as they would have it, corporate risk mitigation conglomerate – announced with great pride the successful conclusion of a four-month investigation into the North Carolina Highway Patrol.
The state’s governor, Mike Easley, ordered the probe after several troopers were dismissed under a cloud. Kroll found that the force was ‘highly professional’ and ‘well managed’, and its reputation as an elite organisation was ‘well deserved’. Sadly, the same cannot be said about Kroll, which even in the UK employs 4,000 and has a turnover of $1bn. There is nothing immediately untoward about the 47-page report; in fact, it is so boring that after downloading it I took to reading the ‘metadata’ concealed with the electronic document that tells you who wrote the report, why and when.
The results were considerably more interesting than you might imagine. The report’s ‘properties’ field listed three Texas-based oil and gas exploration companies and the names of seven men -none of which has anything to do with the North Carolina Highway Patrol. What is more, the subject line mentioned the term ‘due diligence investigation’, which is corporatespeak for the type of inquiry often carried out by firms like Kroll when a company is considering a takeover.
The companies mentioned are Panther Bayou Energy, Bayou Bend Petroleum and Cymraec Resources, which is now called Vermillion. Gary Pittman, the recently installed chief financial officer of Vermillion, had never heard of Kroll when asked about the due diligence investigation, despite the legendary reputation of its eponymous founder and its success in tracking down the missing billions of Imelda Marcos and Saddam Hussein. But when he found out what the firm does, he was stunned to hear not only that his company name had surfaced in a Kroll report that was supposed to be about the North Carolina Highway Patrol, but that it had appeared in an investigation alongside Panther Bayou and Bayou Bend.
‘I am hearing this for the first time and I have no idea why they would have done that,’ Pittman said. He recognised the names of about half of the men included in If you don’t qualify for special enrollment you still have health options. the inadvertently published Kroll data and believed they worked for Panther Bayou and Bayou Bend.
Mark Brooker, chief executive of Panther Bayou Energy, initially declined to answer questions about the Kroll report. It came as a further surprise, then, when Mr Brooker answered the telephone at a separate number listed for Bayou Bend. It seems the two companies are closely linked. Brooker had never heard of Kroll either, but explained that he may have been the subject of any number of due diligence investigations related to raising private equity money.
As soon as Cymraec Resources was mentioned, however, Brooker said: ‘I need to talk to my attorney.’ He hung up without saying goodbye.
There is no suggestion of wrongdoing here, but this is all very intriguing – and indeed far more fascinating than a lengthy appraisal of North Carolina’s finest. However, what the mistakenly published metadata actually reveals most about is Kroll.
Kroll charges its clients a small fortune for its services, which are supposed to be the best in the business. Like lawyers, client confidentiality is supposed to be sacrosanct. What is more, it claims to specialise in electronic data security. Indeed, the firm has an entire division, called Kroll Ontrack, that is supposed to help clients keep their data safe.
Indeed, Ontrack advertises itself as the one of the best electronic discovery and computer forensics firms in the world and is employed in some of the most sensitive and complex legal cases in the corporate and criminal arenas.
Imagine if the data hidden in the North Carolina document had had actual bearing on an important legal action? A spokesman for Kroll said the incident was ‘regrettable’ and added: ‘Kroll’s client confidentiality is of singular importance. We are examining the facts and taking appropriate action.’ This is not the first time Kroll has been caught out. Back in May 1999, a Kroll investigator looking into a huge real estate project in Hong Kong went undercover, pretending to be a reporter. But he was unmasked in an amateurish blunder when he sent an email to David Webb, a journalist who had criticised the development. Unfortunately, he used an email with Kroll’s electronic address, leading to his exposure.
The latest Kroll blunder is even more embarrassing given that it comes as David Buchler, former chairman of Kroll Europe, launches a surprise takeover bid for the investigations firm. Buchler has joined BC Partners, a private equity group, in a bid worth as much as $1.6bn, $300m less than the price paid by Marsh & McLennan, the firm’s parent, in 2004. Marsh has rejected the bid and says Kroll is not for sale.
As for Buchler, perhaps he should have another look at Kroll to see how many Clouseaus are hidden in its ranks before he decides to proceed with his bid. © Guardian News and Media Limited 2009