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By Root 1321 0

Houston, and Floyd strolled into the conference room at Goldman’s headquarters at 85 Broad Street in lower Manhattan. They were used to being greeted deferentially. Even brash investment bankers are a bit intimidated by certified spies, particularly the CIA’s legendary interrogators. But this time the BIA team met a harsh reception. Goldman’s fourteen or so employees in the room asked question after question as the BIA team struggled to plow through its standard proposal. One Goldman employee at the meeting was Jeffrey Starr, who was then on loan to Goldman’s business intelligence team from an intelligence agency at the Department of Defense. As an expert on intelligence tactics, he began to rip up the BIA argument piece by piece.

Starr pushed his chair back from the table and began to grill BIA’s presenters. Are you saying that these indicators prove someone’s a liar? Why wouldn’t actions outside the five-second window be relevant? What if somebody’s just combing his hair? How can you put your faith in this kind of stuff? It was the roughest treatment Houston and Floyd had received. When they showed a short video to illustrate their point, Starr laid into them.

In the video, an investigator quizzes five people about a stolen laptop. The audience members at the training session are supposed to look for the indicators of deception and figure out who stole the laptop. Starr pounced on a flaw. The video featured actors, not real people. If the actors had been coached on what to do, they wouldn’t be giving the indicators that real human beings would give—they’d be giving the indicators BIA told them to give. Starr was incensed. What good was this video? Why didn’t they bring in a video of a real interrogation? BIA’s team couldn’t come up with a good answer for him. They felt as though they’d failed.

They hadn’t. Ultimately, the weight of BIA’s argument began to convince even the skeptical Starr. He saw some potential in what Houston and Floyd were offering. Goldman, despite the disastrous pitch meeting, soon became a client of BIA. Of course, not everyone within Goldman is bullish on BIA. Asked about BIA’s intelligence techniques, Goldman’s global head of communications, Lucas van Praag, mocks the capabilities of veterans of U.S. intelligence: “If these guys were really that good, and the techniques worked as well as they said they did, how come we’re still in Iraq?”

Training in deception detection and eavesdropping on conference calls are just BIA’s baseline service. Prices, and services, get more elaborate from there. For about $50,000 per day, a client company can hire a team of CIA-trained interrogators to come to its offices and question subjects, typically when the company suspects some internal fraud or wrongdoing.

Perhaps BIA’s most important—and least known—client is Cascade Investment, LLC, a small outfit in Kirkland, Washington, which is just across Lake Washington from downtown Seattle and easily accessible by boat via an adjacent marina.11 In this bland suburban office park is one of the most powerful financial firms in the world, a firm that almost no one has heard of. Cascade isn’t just any private equity firm. It’s the personal private equity firm of one of the richest men in the world, Bill Gates. With just over $4 billion in assets under management, Cascade’s year-end 2007 filing with the Securities and Exchange Commission (SEC) showed that it owns shares of assets as diverse as Coca-Cola, Pacific Ethanol, and, of course, Berkshire Hathaway, the successful company owned by Gates’s friend and fellow billionaire, Warren Buffett.12

People familiar with Cascade say it uses BIA to help with due diligence. The old saying caveat emptor—let the buyer beware—was never more true than in the private equity industry, where money managers live in fear of investing $100 million in a company that turns out to be a lemon. Private equity investors need every scrap of information they can find to help them make a good decision. But BIA’s due diligence for Bill Gates’s team at Cascade goes beyond the information gathering