Broker, Trader, Lawyer, Spy - Eamon Javers [62]
For Kroll it was as close to a total victory as the firm was likely to get. Jules Kroll dismantled his command center at the Mayflower Hotel and returned to New York. He’s still angry about the incident. Dingell’s accusations, he says, were “an outrageous thing to do. These were trumped-up charges.” In the end, he says, Kroll’s investigators were told that Dingell’s staffers had hoped the whole incident would pressure Kroll to turn over the material it had gathered in its files about Ivan Boesky. But no pressure was necessary, he insists. “We would have given it to them.”
If anything, Gibbons remains even angrier than Kroll about the way Congress treated him: “Dingell, as far as I’m concerned, is an evil bastard,” Gibbons says. Told that the aging Dingell gets around Capitol Hill today in a wheelchair, Gibbons responds, “Good. And I hope he’s in pain, too.”
Gibbons remained with Kroll until 1991, when he left to start his own company, which is now known as Spectrum OSO Asia and conducts due-diligence investigations on behalf of banks, insurance companies, and hedge funds. Gibbons became part of an enormous diaspora of talent from Kroll, as investigators inculcated in Kroll’s techniques and business culture began to leave the firm to form competing outfits of their own. There are dozens of firms around the world that have roots in Kroll’s offices. By the time Jules Kroll retired from the firm that bears his name in 2008, he had become the Johnny Appleseed of corporate intelligence firms.
The year 2009, though, began for Kroll as grimly as it did for many in the private intelligence business. The economic crash of 2008 caused business of every kind to slow down, hitting private investigators hard as a result. But even worse for Kroll than the sour economy was the embarrassing disclosure that the company had been working for Allen Stanford, who was accused of running a $7 billion Ponzi scheme and whose empire, the Stanford Financial Group, stretched from Texas to the Caribbean island of Antigua. Writing in the magazine Vanity Fair, Bryan Burrough revealed that Stanford hired Kroll to cement his reputation with potential investors. One former FBI agent told Burrough, “Kroll was essentially running a propaganda campaign in defense of Stanford’s good name. They beat on me many times: ‘Hey, you got this all wrong, he’s not a money-launderer, he’s a great guy, leave him alone.’”9
It was a blow to the reputation for independence that Kroll had carefully crafted over the previous decades. Worse, this publicity was followed by news, first reported in the industry newsletter Intelligence Online, that Kroll was facing a lawsuit as a result of its work for the shadowy Caribbean financier.10 A client—the Foundation for Electrical Construction, Inc.—sued Kroll for gross negligence in the U.S. district court in Florida. The client alleged that it hired Kroll to investigate the Stanford International bank in Antigua and warn of any red flags or concerns about Stanford’s business practices. According to the lawsuit, Kroll completely missed Stanford’s alleged fraud, despite giving assurances of a thorough investigation. And the suit says Kroll never informed its new client that the Kroll official who signed the contract was himself a former consultant to Stanford. That, said the suit, was a conflict of interest Kroll should have disclosed. As a result of Kroll’s “gross negligence,” the foundation said, it lost more than $6 million in investments with Stanford.
For its part, Kroll denies any wrongdoing and says it was hired