1 Introduction
The focus of previous chapters has been predominantly on the considerable autonomy of the corporate investigation sector (and its clients) when it comes to investigations and settlements of norm violations within organisations. Although corporate investigators and clients see many reasons—explained in Chapter 4—to keep matters private, there are also instances in which law enforcement agencies are involved in one way or another. This strategic behaviour, making use of the resources and options of both the public and private sphere to achieve an optimal result, is termed forum shopping in this book. Forum shopping occurs in all aspects of corporate investigations, influencing clients in the decision which investigator to use (Chapter 2), influencing corporate investigators in the decision which investigative methods to use (Chapter 3), influencing clients and investigators in the decision which corporate settlement to choose (Chapter 4), and finally, when a public sector solution is chosen, influencing the timing of law enforcement involvement, as well as the decision where to report (which is discussed in this chapter).
The question of public-private interconnections in security matters has been introduced in Chapter 1 of this book, describing the views of some leading criminologists about public-private relations in the various spheres of security. Relations between the public sector and private security are often posed in terms of cooperation by the latter with the former (Cools, Davidovic, De Clerck, & De Raedt, 2010; Dorn & Levi, 2009; Hoogenboom, 2009; Hoogenboom & Muller, 2002). By contrast, as previous chapters have shown, corporate investigators typically act quite independently from law enforcement (even though many corporate investigators are former law enforcement). In many instances, the work of corporate investigations professionals remains completely out of sight of the public sector. As van Ruth and Gunther Moor (1997: 129) state, parts of the activities of corporate investigators display overlap with police tasks—here corporate investigators fill the gap left by police (the junior partner argument). However, another significant part of corporate investigators’ work is completely separated from the criminal justice system; corporate investigators thus have an independent role to fulfil within the market. The corporate investigation sector may be regarded as a semi-autonomous social field, with a ‘capacity to generate rules and induce or coerce conformity’ (Falk Moore, 1973: 722). Semi-autonomous social fields are not fully isolated, nor completely autonomous. Legal frameworks provided by the state are in place for the corporate investigation sector, as discussed in Chapter 2—however within the context of these rules and the corporate investigation field, a high level of autonomy exists.
Corporate investigators do not operate in a vacuum, free from any public involvement in the process of investigation and settlement. As indicated in Chapter 4, there are several reasons for law enforcement to wish to be, or to be invited to be, involved in some corporate investigations. The question remains how such contacts may be conceptualised. Chapter 1 has introduced a very crude scale of relations, ranging from separation, through ad hoc coexistence/cooperation, to corporate investigators performing obligatory tasks for the state. The focus of this book is on the first two of these possibilities, the third being more extensively researched by others (mainly in compliance and anti-money laundering literature, see, e.g., van Erp, Huisman, van de Bunt, & Ponsaers, 2008; Verhage, 2011). Previous chapters have focused primarily on separation, leaving the ad hoc relations to be examined in the present chapter. Thus the focus of this chapter is on those instances where contact is established between public and private actors . It is argued that, while these—relatively rare—relationships have been conceptualised by some researchers as a form of cooperation (see, e.g., van Wijk, Huisman, Feuth, & van de Bunt, 2002), the fieldwork reported upon here suggests that public-private relationships are rather more organised as coexistence .
The following section focuses on formalised structures of coexistence between law enforcement actors and corporate investigators. Section 3 subsequently discusses public-private relationships which occur on an ad hoc basis, after which a typology is presented for these ad hoc (or as respondents call it, ‘case-to-case’) relationships. Section 5 focuses on information sharing and the existence of informal networks. A discussion concludes the chapter.
2 Formal Structures of Coexistence: Covenants and Public-Private Partnerships
When it comes to public-private relations, covenants1 and public-private partnerships (PPPs) are often used as a formal tool to achieve cooperation . A PPP may be defined as a ‘legally structured form of cooperation between one or more state agencies and one or more private entities, aiming to develop and execute a shared strategy for the realisation of policy’ (Hagenaars & Bonnes, 2014: 26). PPPs are used as governance tools by receding governments to ‘transfer the responsibility for the design and realisation of public service delivery to the private sector through long term contracting’ (Reynaers & De Graaf, 2014: 120). In this sense, the structure of PPPs fits well with the ideas of privatisation , responsibilisation and the junior partner theory . We can discern different models of PPP in practice. Based on the work of van Montfort, van den Brink, Schulz, and Maalsté (2012), we may define three main models: the economic partnership model, the partnership model and an improvisation model. The economic partnership model is contract-based: the private partner is contracted-in to provide a certain service (e.g. private security guards may be hired to provide surveillance services at a certain public event). This type of partnership is not very common in the security field and most often used for preventative tasks. This is a form of privatisation of certain public tasks, in which a vertical relationship between the partners exists: the public partner is leading. The partnership model is what we usually think of when talking about PPPs: although PPPs based on the partnership model can be occasional, often covenants are used to formalise the cooperation for the longer term. The partnership model is more prevalent in the security landscape. The idea is that goals of cooperation are collectively defined and that each partner has a comparable input in the cooperation. Sharing of information is an important part of the partnership PPP. Although the relationships between public and private partners are assumed to be horizontal within a partnership PPP, often this type of PPP is still initiated (and for an important part influenced) by public parties. In addition to these more classical models of PPPs, the authors identify a third possibility (an ‘improvisation model’), which is more loosely organised, and which originates from the private side of the equation. This may happen because (a) safety is a core activity of the private partner, (b) safety is a by-product of other activities of the private partner or (c) safety is a product of interaction between certain groups in society. Although the forms of ad hoc cooperation described below have commonalities with this third form of PPP (safety as a core activity), in my view it goes too far to use the term ‘public-private partnership’ for these types of public-private contacts. The term PPP implies some form of long term, formal partnership, which, as we shall see below, does not really exist in the corporate investigations field.2
Since the early 1990s, there have been many initiatives for PPPs in the security field, mostly along the lines of the partnership model as described above (van Steden & Huberts, 2006). Most of these, however, are focused on physical security (see, e.g., NVb, 2014). The formal goals of these PPPs are often formulated in language of the junior partner theory , with the private partners working towards public good objectives. Private security is seen as complementary to the public police force and is in this sense not considered to be a threat to the state’s legitimacy (van der Lugt, 2001).3 Such a viewpoint reflects a ‘social service view’ on private security, in which the private partner is defined in terms of the common good (Hoogenboom, 1990).
There are, however, also (partnership) PPPs between law enforcement agencies and corporate investigators/clients. Interestingly, these PPPs are focused on types of crimes that are typically committed from outside the organisation: for example insurance fraud (Openbaar Ministerie, Nationale Politie, Zorgverzekeraars Nederland, & Verbond van Verzekeraars, 2017) or attacks on ATM-machines, hacking or skimming (NVB,4 2016). These are incidentally also the types of crimes that, according to respondents, are reported most often to the authorities (see also PwC, 2017). Interestingly, quite recently, an attempt has been made to formalise public-private cooperation related to issues originating within organisations internally. Two pilot projects have been initiated, both with the aim of providing insight into the role that private investigation firms might have with regard to criminal investigations.5 Respondents do not consider these pilots to have been successful. The way the pilots were structured is mentioned as a key factor for this—pilot 1 for example had a very narrow focus, which led to a disappointing influx of cases (Friperson, Bouman, & Wilms, 2013). A follow-up pilot (pilot 2) was consequently executed, widening its net somewhat. This has, however, not led to more participation by private investigation firms (Kuin & Wilms, 2015).
Both pilots were meant as a way to formalise the participation of corporate investigators in criminal justice investigations. Prosecutors and police are aware of the general complaint from the private sector that ‘nothing happens’ with the reports they make to the authorities. The expectation was, therefore, that many private investigators would bring in cases and the choice was made to limit the influx by setting some criteria for inclusion (Friperson et al., 2013). In reality, there was very little interest in the pilots from the private side. The target of twenty cases was not reached for pilot 1, settling for eight cases instead. It was therefore decided to expand the criteria for pilot 2, and the target of twenty cases was made (selected from a modest total of thirty cases). The question remains why so little cases were reported to be included in the pilots. One reason may be the narrow focus of the pilot projects on specific crimes and regional police forces. However, the authors of the report evaluating pilot 1 also mention a non-procedural issue: many clients of corporate investigators do not want to report the case to the police (Friperson et al., 2013). The private interests of the client are in such a case apparently not aligned with the (public) interests served by the PPP. This is an essential point that makes long-term, formal cooperation difficult and we will return to this in Chapter 6 of this book .
Chapter 4 of this book has discussed the main reasons for organisations not to report to the authorities (see also, Hoogenboom, 1990). Corporate investigators may (and often do) influence this decision with their advice; however, the decision ultimately lies with the client. Whether or not corporate investigators are willing to cooperate thus depends for a large part on the wishes of the client. This focus on the private interest does not fit well with the rationale of covenants or PPPs—private interests differ among clients and corporate investigators representing multiple clients will not easily commit to a structural form of cooperation, compelling them to report all cases fitting certain criteria. As Chapters 3 and 4 show, the flexibility of corporate investigators to choose one of many potential venues for (investigation of and) solution to a case is one of the reasons for its existence. Additionally, the corporate investigation market itself is highly competitive. Hoogenboom already described this in 1994. Since his publication, the market has diversified even more, with lawyers also entering the corporate investigations arena (see Chapter 2). The ad hoc nature of the work, the competition between both investigators and clients and all these different and sometimes conflicting interests make uniting the ‘sector’ in public-private cooperation initiatives very challenging. ‘The repression of fraud [within the commercial sector] is highly fragmented, almost chaotic even’ (Hoogenboom, 1994: 26).
These circumstances make structural, formalised cooperation difficult—only with those corporate investigators who have one and the same client (i.e. in-house security departments), arrangements may more easily be made for long-term cooperation (and even then different parts of this one client may take a different stance). It is therefore not surprising that the covenants described above all have been agreed between public agencies and a specific sector of economic activity (mostly the financial sector). The fact that there is not one representative organisation, acting on behalf of the entirety of corporate investigators, makes creating a policy for cooperation even more challenging (see Chapter 6 for more on this).
The next section focuses on the instances in which there is contact in one way or another between law enforcement authorities and corporate investigators. As may be expected from the above, these contacts concern specific cases, rather than representing any ambition to formalise or institutionalise longer-term cooperation.
3 Ad Hoc Relations and Traditional Theories
The nature and composition of the corporate investigation sector, and the types of norm violations corporate investigators deal with (internal, white-collar norm violations), make long-term cooperation between private and public actors fundamentally difficult. Relations between corporate investigators and law enforcement officials are characterised by their ad hoc nature rather than by formalised long-term structures (however, this does not mean there are no long-term (personal or professional) relationships between individuals—for more on this see below). I furthermore argue that cooperation is an appropriate term for only a small portion of the public-private relationships, others being more correctly dubbed as coexistence. The public and private sphere usually ‘keep to themselves’—the low level of reporting to the authorities may be taken as a sign for that (see also PwC, 2017). There is, however, overlap between the activities of corporate investigators and the criminal justice system and in some cases the two meet. Before turning to the different types of public-private coexistence, the next section focuses on public-private relations more generally. The junior partner theory and loss prevention theory provide us with two competing arguments: on the one hand, the private sector is seen as a subordinate to a dominant public sector, complementing this sector when necessary (junior partner theory). On the other, the private sector is seen as the private equivalent of the criminal justice system, doing the same types of investigations and providing corporate justice to its client. According to the loss prevention theory , a strict distinction between public and private cannot be made. The two theories are contrasted below and it is explained why neither of these influential theories on public-private relationships within the security field provide a suitable conceptual framework for public-private relationships connected to corporate investigations.
3.1 Junior Partner Theory Revisited
The involvement of law enforcement agencies may come about in different ways. One way—the most prevalent according to respondents—is that the criminal justice system is actively involved by corporate investigators and clients, through an official report. Although this could be done during or even before the corporate investigations, respondents indicate that they usually wait until the corporate investigations have been finalised. If, as described in Chapter 4, law enforcement agencies are invited in by corporate investigators or their clients only after the corporate investigations have been finalised, these private actors are largely able to give priority to their own goals. As long as law enforcement agencies have not yet been involved, corporate investigators may pursue clients’ interests without interference.6 One could claim a fair degree of autonomy for corporate investigators here—and the primacy is then located in the private sphere. This autonomy may be diminished by clients or corporate investigators through a report to law enforcement authorities at the end of the investigations. By that stage, however, the organisational problem may have already been solved (e.g. through a corporate settlement) and a report to the authorities may be an afterthought. Reporting to the authorities has little priority for many clients, and they are often not very invested in cooperation at this stage. ‘You see, they [police and prosecution] will deliberate about the case internally, that’s up to them, we report and then it’s out of our hands. We’ve done our duty. The rest is their business. Well, as far as responsibility goes I mean’ (Respondent 20—corporate investigator). From the moment of reporting, the case is deemed the responsibility of the criminal justice system and often corporate investigators are no longer involved.
Look, the moment they [corporate investigators or their clients] come to us to report, things get a little bit easier because we can say: you are the one reporting, so I expect you to cooperate. The moment you report, you can’t turn back anymore, that ship has sailed. The employees who are involved, we want to speak with them as witnesses. I could go and track them all down, they might refuse. I can do it all myself. But I can also tell the organisation, look, you make sure those ten people are here next week, we’ll be there and we’ll interrogate them. Same rules, same level of protection under the law, that’s not the issue. It’s just making use of the employee-employer relationship. (Respondent 55—FIOD9 investigator)
In addition to this ‘voluntary’ cooperation of organisations, law enforcement agencies may also subpoena information. Corporate investigators may in this way be used by law enforcement actors to do the preparatory work for criminal justice investigations, making the latter less complicated and time consuming for the criminal justice officials, working with scarce means. The same type of reasoning was used to initiate the (not very successful) pilots for public-private cooperation in criminal cases, as discussed above.10
FIOD might say to the person reporting, ‘that’s great that you have found irregularities in the books and you want to start with a clean slate but you need to make sure that your report is substantiated’. So, you basically tell them to do the work. These are big cases, taking up years and the capacity is limited – whether it is the police or FIOD, when it comes to these fraud cases taking up huge amounts of limited resources, if the state needs to do all of that itself… If you can make them do some preliminary work, tell them: it’s in your interest that this thing is investigated so you make sure you make a selection for us and substantiate your claims and then we’ll see what we can do. (…) Sure they can give us their entire financial administration of the last decade with the comment ‘I think there’s something off somewhere in there’ but that won’t really do. (Respondent 54—prosecutor)
The state has limited capacity (and expertise) and when there is a report by a forensic accountant they will at least have a large portion of the information available. Sure, they’ll need to do some things to meet the standard of evidence in court but especially when it comes to financial data they’re happy to get it. I have heard that they might even take our interview report and just ask the involved person ‘is this what you want to say, do you stand by it?’ Relatively easy for them this way. (Respondent 36—corporate investigator)
Although it cannot be ruled out that law enforcement agencies may decide to dig deeper and in another direction after all—indeed, one of the frustrations of both public and private sector respondents is that much investigative work is repeated after a report to law enforcement authorities (van der Lugt, 2001)—corporate investigators may influence the focus of criminal justice investigations by these means. The junior partner theory therefore falls short in elucidating the more complex social realities of corporate investigations (see also Shearing & Stenning, 1983). Even in situations which may be considered to be directed by law enforcement agencies, corporate investigators cannot be regarded as simple handmaidens to the public sector. Indeed, corporate investigation firms (and departments) introduce into the public sphere the private interests of their clients (as a reflection of the way that public interests may still be influential in a fully private investigation—see Chapter 4).
3.2 Loss Prevention Theory Revisited
Junior partner theory , then, provides little help for public-private relations in the field of corporate investigations. We now turn to the other popular theory of private security, which is often posed in opposition to the junior partner theory , the ‘loss prevention theory ’ (also known as ‘economic theory’: Hoogenboom, 1990). This theory is primarily focused on the economic relationships between private security and its clients. The emphasis on loss reduction instead of crime reduction makes for a different focus (private versus public interests). This theory furthermore suggests that the activities of law enforcement and private security (especially private investigators) are similar (ibid.). Although the theory certainly has merit, the situation warrants a more nuanced interpretation. Many investigative methods, for example, are used by both public and corporate investigators (though not necessarily in the same way or to the same extent: see Chapter 3); however, the range of investigative activities of corporate investigators is wider (and with new technologies, ever expanding). Furthermore, Chapter 4 has shown that, although private interests are leading in decision-making in the investigations and settlement processes, there is also room for public interest-type arguments. When it comes to public-private relations, the loss prevention theory emphasises that private security poses a threat to the exclusive position of the state (ibid.). This is the argument that public and private are ‘fishing in the same pond’ and are in that sense competitors and are (partly) interchangeable (depending on the needs of the person or organisation affected) (Williams, 2005). This is related to the ideas of nodal theorists in the sense that public and private are seen to be competing for the same cases (Shearing & Stenning, 1983; Wood & Shearing, 2007). As respondents suggest, however, this is not necessarily true for corporate investigations, for several reasons.
First, for reasons described by loss prevention theory itself: the range of ‘problematic behaviour’ which can be the object of corporate investigations is not the same as that which is described as criminal behaviour in the Criminal Code (see also Williams, 2005). For this reason alone, corporate investigators and law enforcement agencies are not (exclusively) working on the same kinds of cases. Traditionally, the criminal justice system has had difficulties responding to white-collar crime in general. There have been many initiatives over the years to make fraud a bigger priority within the law enforcement system (resulting in several different organisational forms, such as specialised teams) and even though a specialised prosecution office such as the Functioneel Parket (established in 2003) may boast some success, fraud cases still get relatively little attention from law enforcement agencies (see, e.g., Verhoeven, 2015). The establishment (and disappearance) of specialised fraud units and special fraud contact points is evidence of the uneasy relationship of the police organisation with white-collar crime (see, e.g., Faber & van Nunen, 2002). This is not to say that there is no overlap in activities—overlap, however, is not the same as corporate investigators and police investigators being interchangeable. We can add to this that while there are elements in corporate investigations that are aligned with the criminal justice process, parts of the corporate investigation industry follow the logic of private law proceedings, rather than criminal law proceedings (see Chapters 3 and 4).
That’s the error in thinking you know. And it’s very persistent in this world. Thinking that private investigations are somehow always a stepping stone to a criminal justice solution. Sure, but those are the exceptions you know. If there’s no other way to solve a matter yourself, if the money’s gone or out of our reach. Then there’s a reason to take that path. But otherwise, no. (Respondent 40—corporate investigator)
While arguing against the idea of dominance of the public sector (prevalent in the junior partner theory ), Shearing and Stenning (1983: 502, 503) state that junior partner theory falls short in that it is based on three fallacies: that the private security sector is only concerned with minor cases (leaving police to concern itself with the more serious matters); that it is the police who directs private security; and that the police have more resources to draw upon. Based on my research, I agree with these arguments. However, the authors continue to state that the relationship between public police and private security is ‘a co-operative one, based principally on the exchange of information and services’ (ibid.: 503). Button similarly stresses that the private security sector is ‘centred upon the reduction of losses for its corporate clients through preventative strategies and working in partnership with the agents of the state’ (2004: 101), later adding, however, that many fraud investigations never reach the criminal justice system. Most of this book shows that ‘cooperation’ may not be the best term to signify public-private relationships in the context of corporate investigations, as corporate investigators largely tend to move predominantly in their private niche. The next section starts with the presentation of a scheme of ideal types (Fig. 1), which is then elucidated in the following sections of this chapter with the use of fieldwork data.
4 A New Coexistence Theorisation of Corporate Investigations
A conclusion based on the above, then, is that public-private relationships are not easily captured within existing theories. Figure 1 is an expansion of Fig. 1 presented in Chapter 1 of this book, the categories of which may be considered helpful ideal types. Within each category, there is a wide range of varieties possible. Ad hoc coexistence may mean that cooperation—in the sense of working together—may ensue. However ad hoc coexistence may very well remain on the very basic level of two parallel investigations, only touching in very minor ways—for example because in the end the private side shares information with law enforcement, without much further contact. In other cases, ‘cooperation’ may mean there is minor information sharing both ways. It is therefore concluded that the term ‘cooperation’ is misleading when it comes to describing the range of possible relationships between the criminal justice system and corporate investigators. ‘Coexistence’ is introduced as being a better term instead.
Schematic representation of ideal types in public-private relationships (2)
4.1 Type A—Private to Public Information Transfer
According to respondents, the transfer of information is the most common way in which public-private relations manifest themselves. Generally, information is transferred to the criminal justice system by private actors through an official report to the law enforcement authorities. As discussed in Chapter 4, reporting is most commonly done after corporate investigations have been concluded. However, in some cases law enforcement actors are involved at an earlier stage, for example because there are strategic reasons to do so (most notably because the privately generated information does not suffice and powers of investigation are necessary to reach additional information) (Meerts, 2016). Below, first those (more common) instances in which law enforcement actors are involved after the corporate investigations have been concluded are discussed, after which ‘parallel involvement’ is elucidated.
4.1.1 Private and Public Involvement as a Sequence
Generally, law enforcement will get involved at the final stage of the investigations, preferably after the investigations have been concluded and a report has been made (van der Lugt, 2001). One of the reasons for this, discussed in Chapter 4, is that a well-substantiated report to the authorities is more likely to be investigated by the latter. ‘For us [the police] it is much easier if a corporate investigator comes to us after he’s finished his investigations. And then gives the information to us. Then we won’t get in each other’s way you know’ (Respondent 56—police investigator). Corporate investigator respondents indicate that in such cases, they hand over their investigative report but usually the contact between corporate investigators and public law enforcement ends there. ‘See, the police won’t notify me about their progress. I hand over my material to them but they won’t call me and say, “you concluded this from your investigations but we found something else”. But if cases reach court I will attend’ (Respondent 15—corporate investigator). Much of the information generated by police investigations thus stays unknown to corporate investigators and their clients. Through a public court, case information may be gathered; however, not all corporate investigators follow up on these matters.12
Case Study 2—Theft of Money
In this case, a care-takers organisation discovered that money had been stolen from a resident of one of their care-taking facilities. This organisation decided to report to the police but was told there was not much for the police to go on. Observation Company 1 was contracted to do internal investigations. Before accepting the assignment, Observation Company 1 made clear that chances were slim with regard to proving what had actually happened. In this case, there was no paper trail, no digital evidence or evidence of another kind. The money had been stolen from a vault, to which multiple people had access and there was no process in place to check who had accessed it.
The police were notified after the corporate investigations were concluded but there was no conclusive evidence to report. The person who was suspected of the theft did not confess to it and other information was circumstantial (consisting of statements by colleagues and inconsistencies in the involved person’s story). The police were notified and given general information about the case but no official report was made. The police took no further action.
The description of case study 2 above is an illustration of a situation in which police were notified about the results of a corporate investigation, but no official report was made. According to the investigators, this was done because police had indicated at an earlier stage they would not investigate and the corporate investigations did not generate enough evidence to change their minds. There was no further contact between police and corporate investigators.
Case study 13 (below) is an example of a case which has been investigated fully by corporate investigators and reported to the police in the end. In the report to the police, the corporate investigators had given a summary of the relevant information, indicating that more detailed information was available when deemed necessary. It was a disappointment to the investigators that police did not investigate the matter, as they felt it would have been ‘an easy win’ for the police and prosecution. Furthermore, the reason for reporting was that public interest was felt to be at stake, as there was an organised crime network involved, using the same modus operandi to defraud several different companies.
Case Study 13—Embezzlement Through False Invoices to Suppliers
In this case, invoices to suppliers were altered to contain a different bank account number and website. The money was then paid to shell companies instead of the actual suppliers. The security department of Observation Company 2 investigated the case, concluding in the end that two temporary workers were responsible for the alterations of the invoices. It was suspected by the corporate investigators that the two had been strategically placed in the financial administration department by an organised crime network with the specific purpose to embezzle money with false invoices.
After the internal investigations were concluded, a report against the two temporary workers was made to the police. The report to the police contained the necessary information and was a summary of the report made by corporate investigators. The full statements made by the involved persons to the corporate investigators were not included in the report to the authorities, but it was stated that these ‘may be provided upon request’. Privately generated information was transferred to the criminal justice system. The police did not investigate.
Case studies 2 and 13 are examples of privately generated information moving into the public realm by a notification or report to the authorities. In both cases, the police did not investigate in the end, which is something the corporate investigators learned from the client. In many cases, however, corporate investigators do not know what happened to a case once they have reported it to the police. As this prosecutor explains this is ‘because, you know, they’re no party in this process. The organisation [client] is. And the organisation will be notified about the process if he wants that and it’s his responsibility to report that back to the investigators. We don’t do that’ (Respondent 54—prosecutor).
Case study 21, reported on in the text box below, is another example of a report to law enforcement at a late stage. However, the intention of (some of) the corporate investigators here was to involve the police at an earlier stage in order to make strategic use of their powers of investigation .13 This type of strategic use of public resources has been discussed in Chapter 4. Corporate investigators and clients make use of resources available in both the public and the private sphere to get to an optimal result (forum shopping).
Case Study 21—Theft of Electronic Equipment
In this case the security department of Observation Company 2 was contacted by the in-house security department of another company (being a client). An employee of (a subsidiary of) Observation Company 2 was suspected by the client of stealing laptops. The manager of the subsidiary had bad experiences with the security department of the client company and wanted the corporate investigators of Observation Company 2 to take the lead. It was decided otherwise, as the client company was the one affected by the behaviour. The case journal indicates that the cooperation between the two in-house departments did not run very smoothly.
In the end, a report to the police was made, however, too late according to the lead investigator from Observation Company 2, who uttered the opinion that law enforcement should have been involved at an earlier stage: “Additionally, there hasn’t been a report to the police (yet)! At [date] Investigator of [the client company] did say he would ask the local police to act swiftly but apparently this didn’t happen yet. It would have been far better, as far as I’m concerned, to have the police involved, they have the powers of investigation and could have executed a search. Now we are left empty handed. But it is as it is” [quote from the case journal]. In a later entry it is added that “We have given them [investigators from the client company] an update about our interviews and again requested them to make a report to the police. He said he would. We’ll wait and see” [quote from the case journal].
Privately generated information was transferred to the criminal justice system. No conclusive evidence has been found to link the involved person to the thefts. The corporate investigators were unable to obtain the stolen equipment because it was (probably) kept in the involved person’s house and they are not allowed to enter. For this reason, the corporate investigators from Observation Company 2 were pushing for a report to the authorities. No information is available about whether or not the police investigated the case, nor whether it was prosecuted.
The three case studies presented above are examples of corporate investigators reporting to law enforcement authorities after they have completed the internal investigations. Both private and public sector respondents indicate that many of these cases are not investigated further by the criminal justice authorities. The presented case studies are no exception in this regard: they were not investigated by the police or prosecuted (for case study 21 it remains unclear whether there was a police investigation and prosecution).
4.1.2 Private and Public Involvement Running Parallel
If they come to [the prosecution office] during their investigations, it’s usually because they can’t get to the information themselves and think, the police and the justice department have more powers to get to things they can’t get to. For example when they find a missing amount of money which has been funnelled to god knows where, then we have more options to seize the money. (Respondent 54—prosecutor)
We had such a situation in a case, it started with a police raid. We were hired by the organisation to investigate as well. It is very difficult for us in such a situation that the police won’t share any information. It depends on the circumstances of course, here there was a lot of political pressure so the prosecutor was very wary. There was no information sharing whatsoever. (Respondent 5—corporate investigator)
So what happens when law enforcement gets involved? An organisation may report and they’ll tell them the case has no priority so the report is written down but they won’t investigate. Or they do investigate and somewhere along the line it all breaks down or the case is dropped. Or they only take two or three pieces out of the bigger story and the involved person is convicted for that but that’s not going to solve the problem for the organisation. Or when action needs to be taken labour law-wise and the criminal investigations take two years, what are you to do with your labour issue? Are you supposed to suspend someone for two years waiting for a trial? And what if he appeals his conviction? So it’s all great, saying that it is only the police who should investigate but that’s not very realistic. (Respondent 13—corporate investigator)
Those investigations run parallel to each other usually. There’s no information sharing besides that we give our results to the justice department. At most you may have a collegial conversation about how long their investigations will take, what parts they’ll investigate. But we will not be given information. We know more or less what they’re doing because through the client we know who they have interrogated etc. They always zoom in at some particular part while the client wants to have the full picture. (Respondent 1—corporate investigator)
We have our suspicions of course, because they interrogate people and those people get a copy [of the interrogation report] so through those means we get to know which direction they’re taking. And in this case [real estate fraud], we know they are focussing only on some projects but which ones..? We can guess through the questions they ask. But that’s not even close to a full picture, essentially we don’t really know what they are doing. (Respondent 3—corporate investigator)
Case study 9 (below) is an example of early involvement of law enforcement actors. Both investigations ran parallel, not sharing information until the corporate investigations were concluded. In this case, although law enforcement agencies were involved almost from the start, the corporate investigations report proved leading for the police investigations. In an informal conversation, an investigator explained that the police postponed most of their investigative efforts until Observation Company 1 provided them with a report of the corporate investigations. In this way, the corporate investigations report served as a guide to criminal justice investigations (being an example of the steering influence corporate investigators may have in criminal justice investigations—see Chapter 4).
Case Study 9—Employee Fraud
An administrative manager used his position to embezzle money. He made false invoices for fictitious bills, while actually investing the company’s money on his own behalf. Observation Company 1 was contracted to investigate and reclaim the money. At an early stage, a report to the police was also made, involving law enforcement actors. Initially, the prosecutor did not seem eager to prosecute the matter but eventually the case was investigated and prosecuted. For a large part, the criminal investigations and prosecution were based on the corporate investigations report.
One of the investigators has indicated that the corporate and criminal investigations ran parallel (they happened at the same time), without overlap between them. Observation Company 1 was contracted to investigate internally with the aim of building a civil case and reclaiming money. However, the mission statement of the assignment also states that “[Observation Company 1] will provide assistance in civil actions and a criminal report to the police”. In the end the corporate report was used as the basis for the prosecution. Through the report to the police, privately generated information was transferred to the public realm.
As discussed in Chapter 4, respondents indicate that when they report to law enforcement authorities with the results of their own investigations, this enhances their chances of the case being investigated and prosecuted. This is no guarantee, however: many cases are still left un-investigated by the criminal justice system (as was the case with the case studies discussed in Sect. 4.1.1). Investigations starting by criminal justice investigations efforts, with corporate investigators getting involved later, often are investigated and prosecuted in the criminal justice system, respondents suggest. As this involves an initial investment of law enforcement actors (which is not the case if a norm violation is initially only investigated by corporate investigators), this is not surprising. Investigative efforts would have already been made by law enforcement, making the abortion of the case less likely than in a situation when no manpower has been spent on the case yet.15
Case study 20 is another example of a report to law enforcement being made early on. In this case, pressure from corporate clients of the organisation led to early reporting. It seems that, as was the case in case study 9, there was no information sharing between the corporate and police investigators up till the point of reporting the crime to the police.
Case Study 20—Employee Fraud
The organisation of a large store which is part of Observation Company 2 was discovered to be faulty. Among other things there were issues with the manipulation of the rewards structure for sales, items were given away for free to customers, there were problems with invoices and with the delivery of goods, and signatures were forged. Many of the identified norm violations could not be defined as criminal, but rather as being against corporate policy. All of this led to disgruntled (corporate) clients and the loss of clientele. Through pressure of these clients, a report to the police was made before the corporate investigations were finalised.
There is no mention of Observation Company 2 receiving information from the police. It seems that the investigations ran parallel (from the moment law enforcement got involved) and that the corporate investigators were not informed about the progress of the police investigations. Private information was transferred to the public realm through a report to the authorities.
As the description of the case studies in this section shows, corporate investigations, commencing after criminal investigations have already started, are an addition to the latter, providing the organisation with information and—as police and prosecution are already involved—usually complementing police evidence with additional information, through an official report to the authorities. In these instances, corporate investigations may indeed serve as an addition to criminal justice proceedings in the way the junior partner theory describes. In most instances, however, the criminal justice proceeding is initiated at a later point in time as an addition to the private investigations (either after the investigations have been finalised or during the investigations, e.g. when investigative powers are necessary). In this way, the assumptions of the junior partner theory may be considered inverted.
Respondents indicate that this type of information sharing is the most common—law enforcement agencies demanding or simply accepting information but not volunteering it. Investigations run parallel, and contact is limited: the two separate investigations coexist. In their own domain, corporate investigators are still autonomous; however, when information and cooperation is demanded from them by law enforcers they will have to comply. In terms of primacy, the centre of gravity therefore lies with the criminal justice investigations. Corporate investigators are here merely a (very useful) bystander, in no position to demand information in return for their ‘cooperation’. ‘But if you pay close attention to what they [public law enforcement agencies] want from you, you may derive from their questions the focus of their investigations’ (Respondent 27—corporate investigator).
4.2 Type B—Minor Mutual Information Sharing
We get some information, for example they may tell us they want to interrogate someone. That kind of stuff, that they’ll keep you in the loop that something is about to happen. Sometimes you get the offer that when everything is done you get together and talk everything over. Never heard from that one again though. You know, information is shared but we share a lot and they share a little. (Respondent 18—corporate investigator)
Private sector respondents indicate that most of the information they receive is in line with the experiences of Respondent 18 (quoted above). Usually it is not very detailed or informative, being more about investigative activities than investigative results. The information that is shared by law enforcement on such occasions may purely be meant as useful to corporate investigators. However often this information sharing is also beneficial to the criminal justice investigations. When corporate investigators and their clients are aware of for example a planned search on the premises, they may facilitate the search by ensuring that the people who have access to certain areas of the building are present.
Case study 1 is an example of this type of coexistence, in which some information was shared both ways. Although the investigators in case study 1 have indicated in informal conversations during observation 1 that they have done their investigations separately from and parallel to the criminal justice investigations, there was some degree of coordination between public and private, at a later stage at least. It is interesting to note that although the public and private investigations merely coexisted for a large part, both corporate investigators and police investigators felt they were in good contact with each other.
Case Study 1—Irregularities with Construction Tenders
Case study 1 was brought to the attention of the client of Observation Company 1 by a police raid. The police had been investigating for some time already, the organisation being completely unaware of this. No information was given to the organisation about the allegations. Observation Company 1 was approached by the organisation to investigate. From the initial investigations, other investigations followed.
There was no cooperation, investigations ran parallel to each other. After some time, information was shared between the prosecutor and the law firm that acted as the client for Observation Company 1. This information was then made available to Observation Company 1. The information that was shared consisted of a notification that a suspect had been arrested, the grounds for the arrest and the scope of the investigations: “The investigations by the prosecution office are limited (capacity). They’ll only look into some dossiers. They will not investigate subject X unless we provide a report about him” [quote from the case journal]. The latter circumstance led Observation Company 1 to speed up its investigations, so police and prosecution could take the privately generated information about this person into account, alongside their own information.
Although information sharing or cooperation was very limited and happened only at a late stage (the prosecutor initially prohibiting this), the corporate investigators felt they had established good contact with the police. For a long time, the corporate investigators were in the dark regarding the police investigations (the same being also true the other way around). The corporate investigators did not volunteer all of their information, because, as one investigator explained, “it is not in the client’s interest to have law enforcement access all the information from the much broader corporate investigations”. Such access might have led to an indictment of the organisation, as there were major flaws in the control structures of the organisation.
Mention of minor mutual information sharing is far less prevalent in the observations, case studies and the interviews than private to public information transfer . Section 5 of this chapter focuses specifically on the issue of mutual information sharing. This is a pivotal point in much private-public relationships and a source of frustration on both sides. When information is shared by law enforcement authorities, it usually remains at the limited level described in this subsection, exemplified by case study 1. However, more extensive information sharing also occurs—in this chapter this is called ‘coordination of actions ’.
4.3 Type C—Coordination of Actions
I think both sides can benefit from just talking to each other. And to confer, to learn to trust each other. Say a big listed company finds out at a certain point that they have a corruption issue within their company. That means the company is in trouble, they’re going to have reputational issues and the stock value will react but it also has a criminal component. It also brings about an environment that we don’t want to have as a society. I think, in a case like that, you can benefit greatly by coordinating with each other early on, getting the full picture, pinpointing the problem, deciding who is going to do what. I can imagine that we will focus from a criminal law perspective on that one employee who has behaved so badly and make a case out of that and that we coordinate with the company and give them the opportunity to put measures in place to prevent it in future. And to inform their stake holders. The company will definitely not be served by us running around in there, searching the whole premises without a plan and exposing them to bad press, we don’t want that either. I think you gain a lot by just talking to each other early on. And that’s hard, you know, it’s hard for us as well, we’re not used to sharing information. Or to trust that a company will cooperate. We know these companies as the bad guys. So it’s a process. But for the effect you want to produce, it’s best to inform each other early on. (Respondent 52—prosecutor)
So everybody can do their own thing you know. Let the police and prosecution focus on the person, on the suspect and let the private investigator record the nature and scope of the fraud, maybe together with the police and prosecutor especially when it comes to retrieving the assets. Then everybody is doing what they do best with respect for one-another and you just share information based on the possibilities our legal system grants you. (Respondent 13—corporate investigator)
Case study 11 (see below) is a good example of this type of coexistence. In this case, the specialised FIOD detectives of the tax authority were investigating prior to the start of the corporate investigations. From the beginning, there was much cooperation and coordination between law enforcement and corporate investigators, coordinating their actions. For a large part, the criminal and corporate investigations were aligned in this case.
Case Study 11—Theft of Equipment and Fencing
Case study 11 came to the attention of FIOD investigators by chance, through a traffic violation. It turned out that the suspect had in his possession some unusual equipment and had unexplained income. During their investigations, FIOD investigators discovered that he was an employee of Observation Company 2. The in-house security department was contacted and after details about the equipment were given, the corporate investigators found the equipment was indeed company property.
From the start, information was shared both ways and meetings were held about the case. For example, Observation Company 2 was brought up to speed prior to the moment that the premises would be searched. This seemed to be both a courtesy call and a necessity, as help from the company was necessary for an efficient search of its premises. Seized administration was investigated by both, and the corporate investigators received information they required from the prosecutor and FIOD. At the same time, the corporate investigators also investigated some matters specifically at the request of the prosecutor/FIOD. Corporate investigators followed the pace of the criminal investigations (moving slower than they otherwise would), to avoid impeding the criminal investigations. Interviews were held only after the involved persons had been arrested and released pending trial.
The corporate investigations were wider than the criminal justice investigations. At a certain point, Observation Company 2 made two official reports to the FIOD. In addition, civil action was brought against two subjects and labour action was taken against other people involved (dismissal, official warning). An audit report was made to identify and fix internal shortcomings within the organisation and (an anonymised version of) the case was published on the intranet of the organisation.
I’ve had cases in which we could coordinate at the level, ‘what are you investigating, what are we investigating’, because if you have reported you don’t want to impair their investigations. I may for example say, ‘we need to finish our internal investigations so we want to interview this person but let me know whether that will be an issue for the criminal investigations right now’. (Respondent 30—forensic legal investigator/client)
5 A Closer Look at Information Sharing
It would be great if the sector would get a person to contact within the public prosecution office. So we could talk, with all the guarantees of confidentiality on both sides. They have some projects with private investigation firms when it comes to vehicle theft but that’s more about what a report should look like to get it to the prosecution. The ultimate would be, we did our investigations, the subject has confessed, the only thing the prosecutor has to do still is to interrogate again with the formal caution. If he [the involved person] confirms that he stands by what he said to us, done deal. Efficient for everyone involved. This isn’t always possible of course, sometimes they need to investigate further, use their investigative powers. But that’s the ultimate thing, when they can use our report with minor effort for them. (Respondent 1—corporate investigator)
Why does it have to be so difficult? Say I want to get in touch with the police detective working on the case – with whom I have talked before! – but I don’t have his number. I call the general number but they won’t even put me through or give me contact information. I just want to give you additional information for your case and I don’t even get to talk to the right person. Why? (Respondent 48—corporate investigator)
The other day, I was at an investigation firm or something like that and they were complaining that police will not react to their reports. So I told them, of course the state won’t act. Why should it care about a 1000 sunglasses that have been stolen, aren’t they your sunglasses? Take care of it yourself. Make sure you lock your container properly. You can report it to the government and they can write it up but don’t you tell me you expect this copper who needs to make sure senior citizens are not robbed has to go and take care of your sunglasses. And if you have a serious case and they won’t act because they don’t get it, well then you didn’t do your job. Then you’ll have to make sure your report to them is better. And that you go to the right place to report. (Respondent 32—forensic legal investigator/client)
The above quote relates back to the question of which interests are/should be served by investigations. The normative considerations involved in the corporate investigations and settlement process, discussed in Chapter 4 of this book, show that corporate investigators take more into account than merely the private interests of clients. Similarly, clients may feel that in a certain case, ‘the public interest’ is at stake, which may compel them to decide to report to the authorities. As case study 13, discussed in Sect. 4.1.1, shows, this (private) assessment of interests involved might not be enough for the criminal justice system to take action. The general capacity of the criminal justice system is limited—and the capacity for white-collar offences is even less (Beckers, 2017).
We [corporate investigators] want to be informed, depending on the case this will happen. Sometimes they’ll tell you nothing, sometimes you’re informed when they arrest people, sometimes you read things in the newspapers, and sometimes the prosecutor informs us that the case is pending for trial or that they’ll take no further action. This depends on the person of the police officer and the prosecutor. But we find that if we know them from previous cases things run much smoother. Well, we’re only human in the end, aren’t we? (Respondent 14—corporate investigator)
It’s hard to find the right person within the Dutch police. For me as well. In Rotterdam, we have a central point of contact for fraud cases. They used to be everywhere but in the new police structure they did not return. Rotterdam is the only one who wanted to retain it because it proved useful. I’m sure it will come back in other parts of the country as well. Organisations and private investigators need it, I mean when they come to report and end up at the general desk – I mean the policemen there can write a report but when things get a little complicated they won’t know what to do. So it’s convenient if they could call a fraud contact within their force. And it goes both ways, I mean it’s convenient for me as well if I know who to contact in, say, a bank for formal requests. (Respondent 56—police investigator)
But it means you have to put in a lot of effort because it starts with someone in uniform, then it gets to a department where it stays for a long time, eventually it’s kicked over to a different department and every time you need to push the case, ask who is involved, who is working on it. This case ended up at the right place but is certainly not a given. (Respondent 18—corporate investigator)
Interestingly, during the research (2017), contact points were reintroduced in the form of ‘Front offices Financial Crime’. These Front offices serve as an information point for both professionals within and outside the police organisation (Politie, 2018). The introduction of the Front offices Financial Crime could potentially provide corporate investigators with a (formalised) entrance into the police organisation. The Front offices were (re)instated after the fieldwork for this research was completed. However, recent informal conversations with corporate investigators point to anecdotal evidence that corporate investigators are largely unaware of the existence of these contact points. In addition, because there is no fixed format for the Front offices, the way in which the Front offices are used in practice differs over the regions of the National police (some having merely a mailbox function and others actually facilitating smooth public-private relations).
Those private sector respondents who have some experience with specialised fraud units within the police and especially with specialised agencies such as FIOD and the fraud department of the public prosecution office (Functioneel Parket—FP) are much more positive about these contacts and about the expertise of the public officials than those who have dealt with general police forces and prosecutors. Not only is it the case that these specialised law enforcement actors have expertise when it comes to complex financial investigations, they also tend to be more open to the private interests involved in a case and to have a more comprehensive understanding of the laws regulating public-private cooperation and information sharing. Still, the question remains what the gain in information sharing would be, should there be a central point of entry for corporate investigators. The structural problems for long-term cooperation as set out above also apply to information sharing (although maybe to a lesser extent as information sharing requires less long- to mid-term efforts for investigators). As a case in point one may regard the pilots meant to streamline the use of information generated by private investigation firms in the criminal justice process, mentioned in Sect. 2 of this chapter. To facilitate information sharing on the cases included in pilot 2, a structure for formal, recurrent deliberation between police, prosecution and private investigators was put in place to discuss the progress of cases. The report following this pilot states that for none of the cases included in the pilot this was actually used—instead the (occasional) consultations occurred on a more informal basis (Kuin & Wilms, 2015). Van Ruth and Gunther Moor (1997: 287) have made a similar observation almost two decades earlier in their report on informal information sharing by the police, based on case studies: even for formal information sharing, (pre-existing) social networks and informal contacts are essential (see also Terpstra & Kouwenhoven, 2004). Respondents furthermore indicate that the role of the individual prosecutor involved in the case is essential for whether or not information is shared both ways. The next section explores this role a bit further.
5.1 Ad Hoc Information Sharing with the Private Sector: The Importance of the Prosecutor
The police are being difficult with these kinds of things. In some areas they are more flexible – because the law does actually allow it when necessary for the repression of crime, the maintenance of public order or whatever, article 19 Politiewet [CM: respondent most likely means article 19 Wpol]. So some police know this and know how to deal with it. But others are still: ‘no way’. (Respondent 40—corporate investigator)
The public prosecutor is the leader of any criminal justice investigation. It is, therefore, the prosecutor who should take decisions on whether or not information may be shared by the police. Respondents indicate that the willingness of a prosecutor will determine whether or not corporate investigators may receive information. This is exemplified by the role of the prosecutor in the case studies mentioned above. In case study 11, in which there was extensive cooperation and information sharing, the prosecutor was willing to look for opportunities to not only receive information from corporate investigators but also to return the favour. The case journal of the private investigations of case study 11 shows many details of the FIOD investigations. As mentioned before, this situation seems to be rather exceptional. A more common attitude of the prosecutor—one of caution—may be found in case study 1. While contacts with the police were deemed ‘good’ by the corporate investigators and in informal conversations with the investigators of the case it was indicated to me that police were willing to share information, it was prohibited by the prosecutor. The journal shows evidence of corporate investigators being in the dark with regard to much of the police investigations, as this quote from the case journal exemplifies: ‘[Suspect X] has been arrested, but we don’t know on what grounds (it is not about […] though)’.
I think the police should be obliged by law to give us information based on a checklist or something. When the requirements of the checklist are met they should be able to provide information. Now, we do everything, bring them a complete case, give them all our information and we get nothing back. They just say ‘we’re not allowed to’. But there is a policy brief from the prosecution office which indicates that some information may be given to parties concerned. They have to take proportionality and subsidiarity into account, look whether or not the motives of the party concerned are pure, things like that. So it is possible but the police hide behind privacy regulations. They say ‘wait for the court case, you can ask for the information then’. But it will take forever for a case to get to court, and that is if they even decide to prosecute. We need the information now, it’s relevant now, we need to take action now. We could be wrong you know, maybe the police will find out with their powers of investigation that it wasn’t him, or maybe we couldn’t quite get to the truth and didn’t get to an involved person in the first place. You need their information then. And they’ll say ‘we can’t give you that, you know this, having a police background’. But it is possible. So I called the prosecutor and told him about this policy brief. Well, within half an hour it was in my mailbox. (Respondent 48—corporate investigator)
Look, we’re bound to regulation as much as they are. Maybe even more. The government has to take the law into account, we have to do that as well but in addition to Dutch law, the law of every jurisdiction we’re in applies. And just looking at Dutch regulation – we can’t just share information about our clients. So saying they [police] can’t share anything and we can share everything is nonsense. They might get into trouble internally within the police organisation, for us it might be a hundredfold worse. So that’s no argument not to share. I think we should all try to find a way. And I’m not talking about investigative information about any active cases, I don’t want that. I have no use for it and don’t want to run the risk of compromising a criminal investigation by knowing too much. (Respondent 10—corporate investigator)
We are bound to strict rules when it comes to information gathered through criminal investigations. Which is appropriate because we are bound to be cautious with a suspect’s information, that’s his right. That’s why we’re doing the whole criminal justice thing in the first place, otherwise we could just use vigilante justice. It’s not like we find it desirable to have someone stand in the square in the scaffold for everyone to mock. That’s the thing we didn’t want. So those rules are important but at the same time, I do get that the corporate sector feels they are just providing information without getting anything in return. (Respondent 52—prosecutor)
I am still bound by these strict regulations, but if you try to understand one another and look for each other’s interests, then you’ll see that there is some room. Within those rules, there are some possibilities left. One important reason for me to share information is when a company has been aggrieved. An aggrieved party has the right to do damage control. And in the context of damage control I can give them certain information, giving them the opportunity to control their damage. It’s not the full record of course but at least some parts. And I can for example tell them we have seized assets, so they can try to confiscate that. We can at least give them the opportunity to get the money back in that way. (Respondent 52—prosecutor)
A prosecutor can share information with the person or organisation affected, that’s article 51 of the Code of Criminal Procedure [article 51 WvSv]. And information such as ‘we found these assets’, that won’t hurt the suspect [in his defence]. I’m not interested in his personal circumstances, his bad childhood et cetera. So if the prosecutor doesn’t want to share that with me that’s ok, I don’t need to know. So it’s possible to share information while respecting each other’s position. And I feel it’s perfectly normal for a prosecutor to have certain demands, quality-wise, for the information we give them. And I have been baffled for years why this isn’t working in practice. (Respondent 13—corporate investigator)
To summarise, there are formalised opportunities to share information between public and private investigators. Much of the legal leeway in this regard rests on the rights the organisation has as the aggrieved party (in the same way that many of corporate investigators’ investigative possibilities rest on the rights of the organisation as an employer). This provides an additional barrier as some law enforcement professionals do not regard corporate investigators as the ones who are entitled to the information, even when they are explicitly acting on behalf of their client. Discretion on the side of the criminal justice system—often claimed by corporate investigators and clients to be lacking (information is seen to be leaked to journalists)—is a frequently mentioned barrier for information sharing. Since formal information sharing proves difficult in practice, many commentators have expressed the fear that information is shared illegally, through the informal circuit. Section 5.2 focuses on such informal networks .
5.2 Informal Networks
Above the importance of ‘knowing the right people’ has been touched upon. As a result of the law enforcement background of many corporate investigators, there are many long-term connections between corporate investigators and law enforcement professionals (Williams, 2005). The networks existing between (public and private) investigators are subject of much debate. One recurrent theme in literature is the danger of old boys’ networks (see, e.g., Hoogenboom, 1988). This concept comes down to the informal use of contacts between former police officers, now working in the private sector, and their former colleagues (van Ruth & Gunther Moor, 1997). The term ‘old boys’ network’ has a negative connotation and is usually used to signify the misuse of former contacts to get to information one should not have. Despite the concerns which are voiced frequently, there is little evidence of misuse of contacts occurring regularly (Klerks, van Meurs, & Scholtes, 2001).
I have cut my ties with former colleagues, I don’t want to get anyone in trouble. Leaking information from within the force will cost them their jobs. I have a lot of friends and family there but you shouldn’t ask for information they’re not allowed to give you. And besides, that information is useless. I can get much more valuable information from the internet than from the informal circuits. (Respondent 48—corporate investigator)
If one of our investigators would obtain illegal information, that’s it for him – he’s done. Immediately. Leaving aside that the client wouldn’t be served with it anyway, on the contrary it can only do harm. It will be no help to you. But I’m sure it happens. There are enough little investigation companies who use their old police contacts to get information. (Respondent 41—corporate investigator)
Private-private cooperation is just as interesting I think. Cooperation and information sharing are important issues there as well. There still is regulation for it of course but it’s somewhat less strict than when it comes to public-private. And there is a large willingness to cooperate within the legal boundaries when you really need each other. There are a lot of people with the same background in most in-house security departments . There are many informal contacts. Some people might call it an old boys’ network but I don’t like to call it that. I have said from the very beginning, when I came to work here and also when I had a managerial role: I don’t want us to embarrass former colleagues. It’s no use and it will always catch up to you, it will only bring you trouble. I just don’t want that. But within the legal possibilities you can still do a lot. If you know people well, when you trust them not to abuse the information you give them, you might step over the line every once in a while, into a grey area. But only when we know that the person providing the information, the person getting the information and the person whose information it is are all in agreement. For example: at a certain point I got a call from someone within our organisation, he had found a wallet and wanted to return it to its owner. But he didn’t have a clue who that might be. There was an ATM card in the wallet. So I called my contact with that bank and explained why I wanted the information and asked if he could give me the address. Strictly speaking, he’s not allowed to give me that kind of information because of privacy regulation. But it was obvious what we were going to do with it and because it was done in the context of service provision, he could defend his actions. And of course we’ll tell the person who is involved how we got his information. He’s only going to be happy with it because he got his wallet back. (Respondent 46—corporate investigator)
Interestingly, this respondent is very critical of informal/illegal information sharing, but at the same time he admits to sharing some information with ‘pure intentions’.23 When the person with whom the information is shared is trusted and the person whose information is shared is not harmed but actually served by the action, the willingness to ‘move into the grey area’ seems to be greater. This may be a result of the focus of corporate investigators on normative considerations and principles of law rather than on formally defined laws: since they focus on (legal) principles, rules may occasionally be broken in order to make the principles prevail.
In my experience, with the private investigators I have dealt with, they know how to report. Nine out of ten of these guys have been a police detective so they have the experience. I have to say, that’s good. They know how things work around here. And they might come here to discuss a case kind of off the record, like what are the options, see where we stand. Their client does not always want to give the information to the police. But when they come here like that, it’s confidential. And we know that there are situations which are on the edge with regard to what you share with each other. But you have to know each other then. Trust is the basis of everything. The contacts we have with private investigation firms, with banks, you know each other and at a certain moment you know that you can trust the other not to abuse the information given to him. If I say ‘this is a blue cap but it is supposed to be a red cap but you shouldn’t know that’, they will not use that information. Because the second they do, it is done. We are restricted by laws and everyone knows that. And the other way around a private investigator might say ‘I have this information and my client does not want you to know but here it is’. Because he might have to give us that information to get his case together. We won’t record it then but we will try to do some things to help each other out. Within limits. (Respondent 56—police investigator)
[That cooperation] was also more based on contacts, [Investigator] has a police background. He indicates ‘it is a small world. You share information because you know you can trust one another and you won’t get each other into trouble with your actions. [That part] is not based on rules and laws or guidelines. I know what I can share with the police without giving them information that would harm their case. This is why they trust me and why we can share information. When you trust each other you put effort into it and you make it work. But we more often come across situations where nothing is shared in the name of privacy. People then say that privacy legislation prohibits information sharing but that’s not necessarily the case, you have enough room. I call that a fear to burn yourself on cold water [CM: you’re afraid you break the rules but there is no rule to break]. Then you hit a wall right from the start.’ (Excerpt from observation 2—informal conversation)
It works both ways – I don’t want my people to just give information to the police either. The reason for this is that we are also bound to discretion to our clients. So I tell the police, you need to be careful not to sabotage your investigations in that way. So make sure you ask me for information through the formal channels and summon the information from me. But what does happen are yes/no questions, as I call them: so they might ask us ‘we have found this, does it look familiar?’ ‘Would it be useful for us to subpoena this information?’ And answering that is also sort of a grey area but still on the right side I think. But if you’re strict you’d have to say without a subpoena I’m not giving you anything – which makes it a very slow process of course. But in the end and above all, you don’t want to impede the police investigations on the grounds that formal procedures have not been followed. (Respondent 14—corporate investigator)
Law enforcement agencies are regulated by the laws mentioned before when it comes to information sharing with others. This is not the case for corporate investigators; however, they do have to comply with privacy regulations and often there is a duty of confidentiality towards the client. With a formal subpoena from a law enforcement agency, these duties are overruled and corporate investigators and clients need to provide the information demanded by law enforcement. Respondents indicate that they are careful not to ‘over-share’: they hand over the specified information but not more than necessary (as was the case in case study 1, explained above). With the introduction of the GDPR, this tendency seems to have become more pronounced.
I think the type of information that a private investigator wants is directive. It shouldn’t be cardinal information, that’s just not allowed. But you may help them a little, say ‘you have to go right or left’. They might ask you, ‘what are your thoughts about this case’? I think you may help each other in these minor ways. But it depends who you ask. If you ask some other police detective they might tell you ‘look the private investigator hands over his information [by an official report] and I will use that in the criminal justice procedure and that’s that. We won’t discuss it because I can’t’. I guess it depends on your private beliefs as well. But I think we accomplish the most if we just discuss matters and try to trust each other. (Respondent 56—police investigator)
Or the question is, is this a police case or a FIOD case? We’ll search for the best place for the case to go and yes you may use your network for that. Making contacts, having an informal conversation whether or not they might be interested in the case and whether they have the space to do it, what would be the timing of the investigations, which information do you need, what can we do for you here. (Respondent 38—client)
It matters enormously. I still cannot enter a police station in the larger cities without running into someone I know. It makes for an easier conversation. But the same goes the other way around. Every once in a while, we help former colleagues when they run into something they don’t understand. I think at a professional level there should be room for such a thing. But it doesn’t mean we actually share information with each other. (Respondent 41—corporate investigator)
There also are contacts with other colleagues who do the same work for other companies. Not everything is black and white, there’s a large grey area and it’s important that you cross no boundaries. For example, I got the urgent advice from a colleague from a telecom company to tell the police they should subpoena the telephone records of a certain number because there were some interesting leads there. No sensitive information was shared but now we were able to tell the police, go and check it out. Well, it took months but they did look into it and they arrested the guy in the end. (Respondent 18—corporate investigator)
Nevertheless, there are also plenty of reasons for private actors not to cooperate with each other (Hoogenboom, 1994). From a commercial point of view, it is prudent not to share information with competitors. Interestingly, however, respondents indicate that they do share basic information within their informal networks . Respondents stress that no personal or specific information is shared here about individuals, however, modus operandi might be shared. In this way, corporate investigators may benefit from each other’s experience: ‘I have a vast network of other security managers of other companies and we talk and now and then you hear something about drivers being robbed or something like that’ (Respondent 15—corporate investigator). Mostly though, and similar to the information sharing between private and public, information sharing between private actors seems to be limited to a certain case in which both actors have a stake (such as case study 21).
Informal (and formal) contacts between public and private and within the private sphere are thus not just important for (incidental) cooperation, but have value for the finalisation of investigations as well. Having contacts and knowing people works to create trust and ‘goodwill’, which are essential to get things done within large organisations (Hoogenboom, 1994). The room granted by the legal framework will still be useless if no one is willing to make use of it. As discussed above, the willingness and knowledge about the rules of individual police and prosecutors is essential in information sharing . It is important to note at this point that one cannot simply speak of ‘public law enforcement’ or ‘the corporate investigation sector’ in this sense: within both the public and private sector many different opinions, interests and connections make public-private coexistence either easier or more difficult (Yar, 2011: 11).
6 Discussion: Public-Private Relationships and Information Sharing as a Source of Frustration
This chapter has discussed the relationships between public and private actors in the field of corporate investigations, defined here in terms of coexistence rather than cooperation. Despite the good intentions which seem to be present in both the public and the private realm, there is very little actual cooperation taking place. For reasons presented earlier in this book, many organisations prefer to keep the corporate investigations within the private sphere. In those cases that public law enforcement is involved—either ex officio or by a decision from the involved organisation—the contacts between public and private often still remain very limited. This chapter has given some examples of cooperation—however, respondents indicate that usually the formal contacts between public and private go no further than corporate investigators presenting information to law enforcement agencies through a formal report to the authorities. As such the term coexistence may be better suited to the mutual relationships in most cases.
I think, if I am being completely honest, that it is one big black hole for us [laughs]. Maybe there are people in the FIOD who think they know but I wonder how they would know. There’s not a lot of [scientific] research on it. Keep in mind that we are present in two fields – you may report either to the police or to the prosecution, so there’s a difference there. So we don’t even know from each other [FIOD, police and prosecution] how many corporate reports there are. We are involved more than usual because we have a close cooperation with the prosecution office [on fraud]. But I have no clue whatsoever on how much [corporate] settlements there are. No. How should I? Especially when it goes through civil court or they keep it internal. We keep an eye out in the papers and we might get a nice case through those channels. And then they [organisations] say ‘but we handled it already’. Sure, but I’m going to have a look anyway. But that is through the newspapers. How else would we know? There’s not much more we can do. And I have to say – we are swamped with fraud as is so we are a bit reluctant to actively search for more. (Respondent 55—FIOD investigator)
Law enforcement respondents generally only have some experience with corporate investigators in specific cases. Their overall opinion of the corporate investigation sector is rather positive.24 ‘My experience is that their investigations are good. I don’t think they just speak to the liking of their client. They know that that’ll be the end of them getting assignments’ (Respondent 9—police investigator). However, this is based on only very limited contact with corporate investigators.
Partly, this may also be caused by the scattered nature of the corporate investigation sector and the low level of control that is exercised by the state, as described in Chapter 2. All of this has some consequences for the public-private relationships (which are often characterised by frustration rather than cooperation) but also for the use of information from corporate investigations in criminal justice procedures. Although reports and other information from corporate investigators may be used in criminal court, not all law enforcement actors feel comfortable doing this. As shown above, the pilots aimed at simplifying the use of this type of information by the police did not prove overly successful. Although public law enforcement respondents are generally rather positive about corporate investigators, they remain wary when it comes to the information gathered by them. ‘Those private investigators, they don’t have to follow rules. We can use the information because it’s handed to us, we don’t have to wonder whether it’s obtained legitimately. Of course, [if we’re going to use it] we check the evidence, whether it holds up to the burden of proof in a criminal case’ (Respondent 21—police investigator). This quote refers to the situation that criminal justice officials may make use of information provided to them even if this information is gathered in an illegitimate way (Blonk et al., 2017). This is discussed in more detail in Chapter 4. Even though illegitimately gathered information may therefore formally be used in the criminal justice procedure, many law enforcement respondents do not feel comfortable with this. The consequence of this attitude is that in most cases, much effort is put into checking the information provided by corporate investigators. Often, respondents suggest, a full-blown criminal investigation follows, which repeats much of the investigative efforts of the corporate investigators, in the context of criminal law. Many corporate investigators have expressed their frustration about this, as they believe it is unnecessary. Public sector respondents on the other hand indicate that they are concerned that possible illegal actions of corporate investigators are being used to obtain information. This is a concern voiced in the literature as well (see, e.g., Hoogenboom, 2006). The case law leaves room for the use of illegally obtained evidence: illegally obtained evidence may be used, as long as police and prosecution have not been involved in the gathering thereof.25 Regardless of the admissibility in court, many law enforcement professionals feel uneasy when they have no insight into how the evidence is gathered, leading them to either dismiss the information from corporate investigators or to reproduce it ‘the right way’. ‘Sometimes I get a private dossier, you know when a case has been investigated by a private investigator, and we will see what they have done. Often we need to repeat the entire investigation to give it the proper legal grounds’ (Respondent 22—police investigator). In general, it is not necessary for law enforcement officers to repeat the entire investigations, although some additional action is usually necessary.26 The repetition of actions will take a lot of time and in many cases, it is not necessary. Because many corporate investigators are quite pessimistic regarding police expertise when it comes to white-collar crime, corporate investigators often feel it is a waste of time and resources. This, adding the fact that the case, once reported, is out of their hands makes for an uneasy relationship between public and private in many cases.
Interestingly, one of the assets valued most by clients when used by corporate investigators, the use of discretion, is a source of frustration for corporate investigators and clients when used by law enforcement professionals. Information sharing is often a rather awkward process and the direction is one-sided: from private to public. Corporate investigators and clients complain that once a case is being handled within the criminal justice system, it will become public knowledge—the criminal justice system is seen to suffer from a discretion deficit (Williams, 2005). However, in public-private information sharing, corporate investigators complain that law enforcement professionals are too discrete in the sense that the information sharing from public to private is often minimal to non-existent. This focus on discretion on both sides complicates public-private relationships further.
What I don’t want them to do is to qualify the behaviour for me. They might think the case is about falsifying documents but I might want to charge the suspect with something else. So I’d say stick to what you know, you see that this person has wrongfully taken money, let me worry about what crime it is. (Respondent 51—prosecutor)
When all documents provided by corporate investigators contain an (erroneous) legal qualification of the conduct, this may present the prosecutor with problems in court as the defence may use this against the prosecution, respondents suggest.
When they themselves report, they’ll cooperate because they want the case to be investigated soundly. But if we stumble upon something, for example in another investigation, their interests might be different and information ‘might get lost’. They might not want to report the case to us officially and then it gets more difficult to get your information from them. (Respondent 21—police investigator)
What we volunteer to the outside world is not necessarily the full story of course. It also depends on in which country it all takes place, on the reach of legal privilege etc. Part of our strategy is answering the following questions: what should the role of our lawyers be and when should we use them and what exactly is protected? That doesn’t mean that in certain countries you may not be forced to hand everything over anyway. And of course you don’t want to write down any nonsense but you also don’t want to for example involve people who were only at the side-lines in all of this and get them into trouble. (Respondent 37—client)
The distance and misunderstandings between law enforcement actors and corporate investigators hampers cooperation, as much relies on trust and familiarity. Pre-existing contacts are important, not just to get information from one another but also to ‘get things done’. Knowing the right people in the police and prosecution organisations means for corporate investigators that they may find a capable person who is willing to take on their case. For law enforcement officials it means that they are more ready to trust the information provided to them. Additionally, relationships of mutual trust help to cut red tape on both sides of the fence. Of course, the danger of moving into a grey area or even outright abuse of (informal) networks is a real possibility in this context. However, only anecdotal information about such abuses can be found. Respondents do indicate that they sometimes move into the grey area (‘with good intentions’) and that they are sure some illegal information sharing exists. None of the respondents could point out a specific example of this though.27
A conclusion of this chapter is thus that even in those instances where public and private meet on an ad hoc basis, the prevailing situation is that of coexistence rather than cooperation: once a report has been made, that does not necessarily mean that cooperation will occur. Many instances of what respondents call ‘cooperation’ are more accurately defined as private actors handing over information to public actors (‘type A’ discussed in Sect. 4 of this chapter). The pilots discussed earlier come to the same conclusion: ‘in practice there is no cooperation. (…) Specifically, the “cooperation” is about investigative reports being handed over by private investigation firms to the police’ (Friperson et al., 2013: 48). Cooperation in the sense of coordination of actions and mutually sharing substantial information remains the exception. First, it is made rather difficult by law on the public side, and by law and by codes of conduct on the private side. Additionally, the forms of information that might potentially be shared may practically be usable only within the context in which they were generated. Finally, contradictory time-orientations and attitudes to ensuing publicity of on the one hand corporate investigations as defined by clients (valuing a quick resolution and limiting publicity and potential reputational damage) and of public law enforcement on the other (wanting a watertight case and quite tolerant of publicity, for reasons including deterrence) limit the opportunities for working in tandem (Gill, 2013). The reluctance of law enforcement officials to share information with corporate investigators (while sharing the case with the general public in the end through a public court case) further hampers cooperation.
In this chapter, we have seen that efforts to cooperate in a structural manner are scarce when it comes to internal norm violations. Additionally, those efforts that do exist seem to be quite unsuccessful. The reasons for this may be found in structural and cultural characteristics of the corporate investigation market. Most notably, the fragmented nature of the corporate investigation market, the diffuseness of interests involved and the fact that, in the end, it is the client who decides about involving the authorities make long-term cooperation very difficult. The commercial market for corporate investigations thrives by the grace of its use of flexibility in the framing of economic crime ; secrecy, discretion and control ; and legal flexibility and responsiveness to clients’ needs (Meerts & Dorn, 2009; Williams, 2005). The market exists because of the possibility of separation from and coexistence with (and sometimes strategic use of) law enforcement. Indeed, corporate investigators consider the criminal justice system to be unable to provide solutions to the problems at hand: bringing in law enforcement serves a purpose (from a private point of view) only when a client feels that it has been so much hurt that there is a need for retribution, over and above the (otherwise more efficient) corporate settlements available. Additionally, in some cases there are strategic advantages which make a report to the authorities an appealing option. Generally speaking however, respondents do not seem to have high hopes with regard to the criminal justice system. As shown in Chapters 3 and 4, this is one of the reasons for the existence of a corporate investigation sector: providers of corporate investigative services can coexist with law enforcement agencies because the market services which only partly overlap with the criminal justice system.
Law enforcement respondents have indicated they would like more cooperation. At the same time, they are generally pleased with the work of corporate investigators and the existence of the sector. Although most would like to be informed, this does not have to be shaped as a formal report. A well-substantiated corporate investigation report may make police investigations significantly easier, especially in cases involving complicated financial matters. Nonetheless, certain actions based on their powers of investigation remain necessary for law enforcement actors—for example to interrogate the suspect within a formal interrogation setting. Formal, long-term cooperation with corporate investigators would provide considerably additional work for a police (and prosecution) organisation not very well equipped to deal with the kinds of norm violations corporate investigators deal with, without necessarily yielding successful results.28
To conclude, both the public and the private security sectors seem to put much emphasis on ‘cooperation’ but contacts generally remain at the level of coexistence.29 Although this was not a specific focus of this research, interviews with public and private sector respondents seem to point towards a certain ambivalence in this regard. Following the train of thought of Thumala et al. (2011), one might put this in the context of a search for legitimacy. Although the authors are writing about the private security sector more generally, some of their observations might hold true for corporate investigations as well. In their search for legitimacy, corporate investigators use ‘symbolical borrowing as a (self) legitimating device’ (ibid.: 295). The authors furthermore state that ‘the importance of this [public-private] partnership narrative lies in its implication that all members of the extended police family share similar values and can draw on the same reservoir of public support. The fact that the industry offers post-retirement employment to many ex-police officers reinforces this idea’ (ibid.: 294). Interestingly, many corporate investigators try to steer clear of any analogies with the public police, as we have seen in Chapter 3. This mechanism might therefore be less pronounced than in the wider private security sector.30 However, when it comes to public-private relations it is striking that the public-private partnership narrative seems on the one hand quite tenacious but on the other does not yield any tangible ‘results’.