October 18, 2011 Protests Are a Payday for Security Firms By KEVIN ROOSE http://www.nytimes.com/2011/10/19/business/protests-are-a-payday-for-security-firms.html?_r=1&ref=businessspecial3&pagewanted=print
They call when they make the Forbes 400 list. They call when annual hedge fund rankings appear, when their names are mentioned on CNBC and when their children travel abroad. And, these days, they call when protesters camped in Lower Manhattan grow uncomfortable with the idea of their existence. The ultra-rich bankers, hedge fund managers and private equity executives of New York City have long enlisted private security firms to help safeguard them and their wealth. But as the mood on Main Street turns increasingly hostile, New York’s financial titans are cranking their security measures up to 11. For the high-end security firms that provide the moneyed elite with specialty services like around-the-clock bodyguards and elaborate home security systems, Occupy Wall Street has been a stimulus package all its own. “We expect to more than double our revenue in New York this year,” said Paul M. Viollis, a co-founder of Risk Control Strategies, a firm that protects some of the top executives on Wall Street. Another company, Insite Security, has gotten dozens of calls since the protests began and expects to increase its revenue at least 40 percent this year, according to Christopher Falkenberg, its chief executive. (In accordance with the industry’s code of secrecy, none of the security experts interviewed for this article provided client names.) Executive protection, as the guard-the-rich industry is known, got an initial jolt from the financial crisis of 2008. Lloyd C. Blankfein, the chief executive of Goldman Sachs, got permission from a local review board to build a six-foot-high security gate outside his Hamptons house in April 2008, the month after Bear Stearns collapsed. Lehman Brothers, another crisis casualty, had a bomb-sniffing Labrador retriever named Bella stationed at its headquarters. And in 2010, when the activist group the Yes Men encouraged its supporters to perform citizens’ arrests on John A. Paulson, the billionaire hedge fund manager, Mr. Paulson’s firm hired additional security guards to combat the threat, according to a person with knowledge of the decision. A spokesman for Mr. Paulson declined to comment. But the most recent round of Main Street rage has raised the risk factor. Last week, when protesters picketed the homes of some of Manhattan’s richest residents, they made a stop at Mr. Paulson’s mansion, as well as the homes of Jamie Dimon, the chief executive of JPMorgan Chase, and Stephen A. Schwarzman, the billionaire co-founder of the Blackstone Group. One sign carried by protesters depicted Mr. Blankfein’s severed head on a stake. Scenes like these are causing executives to supplement their internal security teams with the services of outside specialty firms. A chief financial officer of a major bank recently called Risk Control Strategies with the news that he had received a menacing e-mail from an anonymous sender. “You filled your pockets, and now I’m going to fill mine, starting with your family,” the e-mail said, according to Mr. Viollis. The firm quickly dispatched a pair of guards to the client’s house. Another client, a C-suite executive at a large Wall Street firm, recently asked Mr. Viollis to send undercover agents to Zuccotti Park to find out if the protesters were planning to harm him or his colleagues. (Mr. Viollis said he would probably decline the request.) But as versions of Occupy Wall Street fan out across the country, even executives who aren’t recognizable to the general public are worried. “If Zuccotti Park is tapping into resentment against wealthy people, that really changes the calculus,” said Mr. Falkenberg, a former Secret Service agent. “It’s not that far of a connection between what’s happening now in that park and a more focused, research-based kind of attack.” The executive protection industry has existed as long as there have been executives, but it got a boost in 2003, when Edward S. Lampert, a Greenwich hedge fund manager, was kidnapped by four men on his way to his car. The men stuffed the billionaire into a Ford Expedition at gunpoint, took him to a motel and tied him up in the bathroom for two days. (Mr. Lampert survived the incident, and his kidnappers were caught and convicted.) These days, bankers and hedge fund managers are willing to spend millions of dollars to avoid enduring anything similar. “Typically, what happens is that these guys wake up one day, look around, and say, ‘Wow, I’ve really provided some great benefits for my family, and boy, it looks like I’ve also introduced a modicum of risk,’ ” said Mr. Viollis. “Then they call me.” The first step in securing an executive is building what is known as a risk profile. Security experts — typically retired detectives, C.I.A. agents and military veterans — conduct surveillance on a client and pick out every point of vulnerability. Does she eat at the same deli every Wednesday? Does he park his car in a spot labeled with his name? Are his children’s Facebook profiles filled with photos of the family’s vacation house? They then present the client with a list of the habits that could present an opportunity for thieves or kidnappers. “People think security is having a 300-pound bald guy named Tiny following you,” Mr. Falkenberg said. “In reality, it’s a lot more complicated than that.” After the risk profile is complete, firms begin fortifying the client’s life, starting at home, using a cornucopia of high-tech gadgets. There are biometric door locks that read palm prints, infrared cameras that can spot potential intruders in total darkness and in-ground sensors that can detect motion around a home’s perimeter and immediately transmit data to a dispatcher. “Now, instead of having a retired cop sitting in the garage on Maiden Lane, you have a whole command center at your disposal,” said Robert S. Tucker, the chief executive of T.& M. Protection. International travel, a staple of bank executive life, is among the biggest security hazards. In the downtown offices of Risk Control Strategies, a wall-mounted computer monitor displays a map of the world overlaid with blinking icons denoting security risks. There is an icon for hazardous materials, an icon for riots and civil disobedience and an icon indicating instances of cyber-hacking. Traveling executives are often given profiles of dangerous neighborhoods, and some are equipped with armored town cars. As anxiety has rippled through the gilded class, a cottage industry has sprouted to protect high-net-worth individuals from every threat imaginable. There are companies that sell kidnapping insurance, companies that will run background checks on domestic staff members, companies that will replace glass windows with bulletproof polycarbonate panels and companies that will build safe rooms with steel-fortified walls. Many of the latest technological advances in the executive protection industry are “technical surveillance countermeasures,” sensors that can sweep homes, offices, hotel rooms and cars for electronic spying devices. Mr. Viollis estimates that his business in that area has tripled this year, largely because of an influx of hedge fund managers who believe they may be the targets of an investigation and financial executives worried about the theft of trade secrets by competitors. All these provisions come at a startling cost. Just one highly trained bodyguard — “personal protection professional,” in the industry parlance — can run $200 an hour, and a full-time driver can cost an executive $150,000 per year. A thorough sweep for surveillance can cost $1.25 per square foot of space and a full-home surveillance system can run anywhere from $100,000 to $1.5 million. Even where paranoia is a cardinal virtue, there are those who seem to take caution too far. One executive contacted Insite requesting help planning his escape from the United States in the event the federal government was overthrown, said Howard A. Shapiro, Insite’s chief technology officer. The executive wanted to know how much gold to keep on hand and how to escape the United States by submarine in the event of a major incident. “He was spending the majority of his wealth on security,” Mr. Shapiro said. “We don’t encourage that.” But when personalized security programs work, they can turn life-threatening situations into mere blips on the radar. Late last year, Gertrude Boyle, the 86-year-old chairwoman of Columbia Sportswear, came home to find a man waiting in her driveway, asking her to sign a book for him. When Ms. Boyle refused, the man pulled a gun and demanded a large ransom payment. Ms. Boyle calmly told the gunman she had to disable her home security system before letting him into her house, and surreptitiously pressed a panic button that summoned the police. Officers arrived within minutes, and Ms. Boyle escaped unharmed. In a turbulent age for Wall Street’s power brokers, that kind of security has no price tag. “You can never protect someone 100 percent,” said Mr. Viollis, his face illuminated by the glowing icons on the global threat map in his office. “But you can get close.” _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
