1 Introduction
The purpose of this research is twofold. First, it aims to take the corporate investigation sector out of its state of relative invisibility by describing its day-to-day activities, the rules regulating corporate investigators’ professional behaviour and the composition of the field. Second, the research focuses on public-private relations . In doing so, it provides an alternative to the state-centric discourse used in most criminological literature by focusing on the semi-autonomous role of the corporate investigation sector. The research brings extensive qualitative empirical material into confrontation with a number of theoretical perspectives that have been articulated within criminology about private security—most notably, junior partner theory , loss prevention theory , nodal theory and the anchored pluralism perspective—and finds the closest ‘fit’ to be with what Canadian criminologist James Williams (inter alia 2005) has described as the commodification of the dark number of economic crime (Williams’ ‘juridification thesis’). Underlying all those criminological streams of work, we can discern both a focus on the state as the (implicit) point of theoretical departure and a common commitment to democracy and transparency. Although the former is not part of the perspective used in this research, the latter is. This research advances those values by interrogating the practices and values of the corporate investigation industry, making recommendations for reform. The corporate investigation sector acts with a high degree of flexibility within the semi-autonomous social field, both in relation to investigative activities and in relation to other actors. In this context, the state remains a key player, by adding a normative (‘retribution’) dimension to corporate settlement solutions and as the source of democratic control over the market. My perspective may, then, be regarded to be a reconsideration of the state-centric discourse, one that takes the semi-autonomous position of corporate investigators as the point of departure, while also being sensitive to the role of the state.
From the descriptions based on the research data, some cross-cutting themes emerge. This concluding chapter takes a closer look at these, while answering the research questions. Additionally, this chapter explores some directions future research on corporate investigations and corporate settlement might take. Section 2 of this chapter focuses on answering the research questions. In doing so, this chapter starts with summarising the most important findings of the research as related to the research questions. From this discussion of the research questions, some themes emerge which deserve some special attention. These cross-cutting themes emerging from the research are discussed in Sects. 3–8. Section 3 starts with an reflection on the (semi-)autonomous role corporate investigators may take in their investigations and (assistance with) settlements. Section 4 goes on to focus more in-depth on the importance of forum shopping in the context of the corporate investigation market. The issue of limited control over the activities of corporate investigators and their clients is the subject of Sect. 5. Section 6 moves beyond the semi-autonomous social field of corporate investigators, to reflect upon public-private relations. The way in which corporate investigators deal with different interests , guided by normative and pragmatic considerations, is discussed in Sect. 7. It is argued that in the commercial context of corporate investigations, there is some room for non-contractual moral agency. Section 8, then, takes this argument and discusses the issues of legitimacy and the role of the common good in the face of private interests .
From the discussion of the answers to the research questions in Sect. 2 and the cross-cutting themes presented in Sects. 3–8, policy implications emerge. Section 9.1 discusses the implications this research may have for attempts to govern the corporate investigation market . Section 9.2 specifically focuses on the more theoretical implications of the research, by arguing that public-private relations within the setting of the investigation of internal norm violations in organisations are more correctly seen as coexistence, rather than cooperation. It is expected that a focus on cooperation by policy makers will not be effective in producing the desired results. Section 10, finally, suggests some possible strains of future research, following from the research.
2 The Research Questions
2.1 The Modus Vivendi of the Corporate Investigation Market
The corporate investigation sector exists of four main groups of investigators—in-house security departments , private investigation firms , forensic accountants and forensic legal investigators . Although the market is fragmented based on professional background and legal frameworks, fieldwork suggests that corporate investigation units tend to diversify their employees, thus combining the expertise of multiple professional groups to meet the demands of clients. Corporate investigators do not have access to the same information as law enforcement authorities, because corporate investigators lack formal powers of investigation . Within the limits of what is allowed, corporate investigators may act efficiently and swiftly to gather a considerable amount of information through the investigation of internal documentation , internal systems , open sources and personal communications. Acting as an extension of an organisations’ management, corporate investigators have access to much information regarding employees. Although corporate investigators cannot enforce cooperation and may thus be said to be reliant on voluntary cooperation, the client can enforce cooperation by using its status as an employer. The voluntary nature of employee cooperation should therefore be assessed critically. The raison d’être of the corporate investigation sector lies primarily in the fact that a customised solution to internal norm violations is provided to clients, which is designed to provide an efficient solution without causing additional harm and which takes client interests as a central point of reference. Because of the possibility to work across jurisdictions, corporate investigators can be flexible with regard to the types of behaviour they investigate (which is not necessarily criminal), the investigative methods they employ and in the solutions towards which they work.
2.2 Legality: The Legal Frameworks
In general terms, no corporate investigator is allowed to break the law. In addition, the law regulating the use of personal data General Data Protection Regulation (GDPR) applies to all investigations . Specific legal frameworks, however, differ from investigator to investigator. Interestingly, an overview of the legal frameworks applicable to the different corporate investigators reveals that the legal context does not align with the tendency of corporate investigation units to simultaneously specialise and generalise their services. While most corporate investigator respondents indicate that they work with corporate investigators with different professional backgrounds, the regulations remain dispersed and unclear to most of the people involved. The fact that only private investigation firms are obliged to get a permit by the Wpbr (the law regulating private security companies and private investigation firms) is seen as peculiar by many respondents. In practice, corporate investigators with different professional backgrounds seem to broadly follow the rules defined by the privacy code of conduct for private investigators, either by applying it directly to their investigations, or by following the broader principles of law which are codified in the privacy code of conduct. In this way, corporate investigators broadly follow the same norms, in spite of the absence of generally applicable rules. Respondents stress the importance of principles of law such as proportionality , subsidiarity and fair play as guiding norms for their investigations. There are little indications of corporate investigators breaking the rules or the normative guidelines they use; however, respondents indicate that they assume that laws and (self-)regulations are occasionally broken (by others). The differences in legal frameworks furthermore create room for forum shopping —also making it redundant to break or bend the rules, because of the room created by the differences in the legal contexts.
2.3 Autonomy and Strategic Tasking
Within the private legal sphere, corporate investigators enjoy a high degree of autonomy . Corporate investigations are guided by an assignment from a client, and within that assignment (and the limits of—mostly—privacy regulation), investigators may use the methods they deem fit. When searching for a solution to the norm violation, corporate investigators and clients draw upon multiple jurisdictions. By forum shopping among public and private legal systems, optimal solutions may be provided to clients. Solutions may be found in criminal law (a report to the authorities), private law (a civil suit based on tort or a settlement agreement ), labour law (termination of the labour contract ) and internal regulations of the employing organisation (multiple forms of internal disciplinary action). In many instances, the choice for a corporate settlement may be made autonomously by a client, with the aid of corporate investigators. In some cases, there is not much room for such a choice, for example because authorities are already involved. In other instances, the choice whether or not to report does remain in the private field and pragmatic and normative considerations may compel an organisation to report the case to law enforcement authorities. By presenting the case in a certain manner to the authorities, corporate investigators may be able to give some direction to the criminal justice investigations and (possible) prosecution. The decision what to investigate and prosecute lies with law enforcement authorities; however, corporate investigators may sway these decisions in a certain direction. In many cases, law enforcement authorities are reliant in part on corporate investigators (without a report, law enforcement authorities often remain unaware of the norm violation and corporate investigators are specialised investigators with regard to complicated financial investigations). Therefore, there is a considerable sphere of discretion for corporate investigators and clients to either act alone or to involve law enforcement authorities. A criminal justice solution may be deemed desirable to supplement a corporate settlement solution (which reasoning essentially reverses the argument of the junior partner theory of Kakalik and Wildhorn).
2.4 Public-Private Relations and the Interests Involved
Private and public interests are both involved in corporate investigations, and they are both considered in a decision to involve law enforcement authorities. Private interests of the client are leading and considerations such as efficiency and damage control often lead to a solution outside the criminal justice system. However, pragmatic considerations, such as the need for powers of investigation and a wish to avoid harsher punishment elsewhere, may lead to an official report to law enforcement authorities based on private interests . Although a commercial actor, corporate investigators also take public interests into account. Normative considerations , such as a sense of responsibility towards society or towards the market and a perceived need for retribution, may lead corporate investigators and clients to report a case to the authorities. In more general terms, public interests are taken into account in purely private solutions as well. Procedural rights of the involved person are less pronounced in corporate investigations, but the normative considerations corporate investigators use as a guide for the investigations do lead them to focus on principles of law such as proportionality , subsidiarity and fair play. Corporate investigators also indicate they are wary of being used for indecent purposes by a client.
When public-private relations occur in a case, this is done on an ad hoc basis. Although many informal contacts exist between corporate investigators and law enforcement professionals, cooperation efforts aimed at the longer-term have proven to be unsuccessful with regard to internal norm violations. A typology of coexistence—ranging from private to public information transfer , through (minor) mutual information sharing , to coordination—can be used to accurately describe public-private coexistence. Only in the case of coordination, one may legitimately speak of cooperation. However, respondents indicate that coordination is rare. Coexistence usually does not surpass the level of information transfer from corporate investigators to the criminal justice system.
2.5 Theoretical and Practical Consequences of Public-Private Coexistence
Practical consequences of the considerable autonomy of corporate investigators and of their relative distance to the criminal justice system may fall upon clients, involved individuals and society. Using corporate investigative services, organisations may solve their norm violations efficiently in multiple ways, through multiple legal venues, without having to cede control or risk much openness. The corporate investigation market may provide organisations with both investigative services and assistance in settlements. From discovery to solution, a norm violation may thus remain entirely out of sight of the criminal justice system. Strategic use of public resources may furthermore lead to a higher probability of getting a case investigated and prosecuted by the criminal justice system if that is desired. Another practical consequence, which may be of more relevance to the involved individuals and society in general, is that there is very little insight into and control over the corporate investigation sector by law enforcement agencies. This may have practical consequences for the involved person, as his procedural protection is rather limited in a setting of corporate investigations and settlements. From a rule-of-law point of view, such a situation may be seen as problematic. Corporate investigators display some measure of non-contractual moral behaviour and tend to apply general principles of law (thus protecting the involved person this way). However, this is based on the normative considerations of individual corporate investigators and clients, and even though there are possibilities to enforce compliance with rules and guidelines, this relies for a large part on the active stance of the parties involved (the involved person, the client and the corporate investigator). Another practical consequence is that the criminal justice system is not clogged by cases it would most likely dismiss anyway because of a lack of capacity and a shortage of specific expertise.
Conceptually, consequences fall on the way we view public-private relationships. The high level of autonomy and the active use of the criminal justice system by corporate investigators make the state-centric discourse (whether it is used by claiming a dominant or a diminishing state) a bad fit with the corporate investigation market. Instead of trying to fit the social reality of the corporate investigation sector into the state-centric discourse, it might be better to try to fit conceptual notions of public-private relations into the social reality by emphasising the flexibility of corporate investigations within the semi-autonomous social field. Within the corporate investigation market, private actors are acting for a large part independently from the state, generally not involving the criminal justice system. Much of the investigations of and reactions to internal norm violations thus remains entirely out of sight of the criminal justice system. When law enforcement actors are involved, this is usually because they are actively sought after by corporate investigators and their clients.
2.6 Central Research Question
To summarise, the corporate investigation sector is a commercial provider of investigative services, involved in the investigation and settlement of internal norm violations. The sector largely acts as a semi-autonomous social field with a high level of discretion, flexibility and autonomy. Public-private relationships are largely ad hoc and occur when corporate investigators or their clients feel the need to involve the criminal justice apparatus. Cooperation is fairly rare, public-private relationships being better conceptualised as coexistence, with public and private actors meeting only on an ad hoc basis. This means that the state has little insight into what happens in the corporate investigation sector. Consequently, the private sector tends to fend for itself in instances of internal norm violations. While this has the benefit for society that the criminal justice system is spared the trouble and costs of investigating and prosecuting these matters, it also means there is little to no democratic control over the corporate investigation sector.
Cutting across the research questions, a number of themes emerge from the research. These deserve some additional attention, which will be granted in the following sections of this chapter.
3 Corporate Investigations as a Semi-autonomous Social Field Within a Private Legal Order
As many scholars have indicated, private investigations, and corporate investigations more specifically, happen in a field of mystery (see, e.g., Hoogenboom, 1994). Chapters 3 and 4 describe that many of the activities of corporate investigators indeed stay within the private sphere: investigations are done by private actors, and solutions are sought in private remedies (private law or, more specifically, labour law ). As an extension of the employer, corporate investigators have many sources of information at their disposal. The lack of formal legal powers is not necessarily a restriction for corporate investigators. Because corporate investigators are able to use the access to information the organisation has as an employer, their practical access may even exceed that of law enforcement. Although law enforcement agencies may formally claim any information (unless protected by legal privilege), this formal power may not prove extremely useful when law enforcement does not know ‘where to look’ or how to interpret the findings. Modern organisations have grown so complex that even for people inside the organisation, some of its processes are difficult to understand. It may therefore prove impossible for outsiders, who are rarely trained specifically for fraud investigations, or familiar with the commercial world, to interpret the information they may gather through formal powers. Even if all relevant data would be handed over by the organisation (which, as respondents suggest, is not necessarily the case),1 it takes skilled eyes to reconstruct what happened. Corporate investigators are in a better position to efficiently gather, interpret and use information from inside the organisation. In-house investigators may be in the best position in this respect; however, external corporate investigators generally also get the access (and cooperation) necessary for the investigations. Employers have quite an extensive right to information regarding their employees, and they may also order their employees to cooperate with the investigations. Furthermore, automated processes leave traces. Much information which is at corporate investigators’ disposal is therefore ‘private information’. Although there certainly are instances in which the involvement of law enforcement agencies is desired, in many cases the step to involve law enforcement agencies in an investigation is therefore not a necessary one.
There are many reasons for organisations to prefer a private solution over a criminal justice procedure and keep matters within the private legal order. These are described in Chapters 3 and 4. Much specialised expertise is available in this diverse field. As noted in Chapter 2, many corporate investigation units (whether they are internal to an organisation or contracted-in) now employ investigators of all four professional groups discussed as being part of the corporate investigation sector in this research. They therefore often have a high level of expertise and much experience with regard to the types of non-conformities that organisations are faced with (and the corresponding methods of investigation). Both investigations and settlements may be tailor-made to the organisation, disrupting normal organisational processes to a limited extent and providing swift and efficient solutions. Within the private legal sphere, corporate investigators may act with considerable flexibility with regard to investigative methods and solutions. Furthermore, the orientation on the private troubles of clients rather than on criminal offences ensures an organisation that the problem is addressed, whether it may be defined within the limits of criminal law or not. Additionally, the possibility to retain information in the private sphere (giving the organisation the chance to do damage control) and to have some measure of control over the process through an assignment agreement is highly valued by organisations. Law enforcement, conversely, is seen as slow, inefficient and causing much additional harm by its focus on openness. The information collected in this research suggests that a criminal prosecution, when sought after by organisations and corporate investigators, is hardly ever the only resolution. Rather, it is seen as an additional step that may be taken, over and above a private corporate settlement. Respondents indicate that they do not expect the criminal justice system to provide a solution to their problem: corporate settlements are used for that. Thus, in providing investigative results and solutions to clients, corporate investigators largely remain within their semi-autonomous social field.
Corporate investigators thus largely operate in a private legal sphere in which they market corporate investigations and corporate justice. However, the research also reveals that claiming that organisations fully stay within the private legal sphere for their solutions to internal norm violations would be a too narrow view of social reality. Apart from those instances where no choice is available (law enforcement agencies are already involved ex officio), pragmatic and normative considerations may open the door to law enforcement involvement in a case. A criminal justice procedure adds a normative dimension to the corporate investigations: when punishment and moral disapproval is felt to be necessary, a criminal justice procedure is deemed much more suited than a private solution. In addition, the criminal justice system may be used strategically—when information is necessary that may only be obtained by using formal powers of investigation , a report to law enforcement authorities may be made as well.
4 Forum Shopping Within and Across a Private Legal Sphere
The semi-autonomous social field of corporate investigations may on the one hand be considered ‘closed’ in the sense that it mostly stays within the private sphere, however, on the other hand it is quite open: different legal venues are used to provide an optimal solution to a client. This flexibility may just as well lead to a public law solution as one based on internal regulations, depending on the details of the case. One of the key features of the corporate investigation sector is its ability to engage in forum shopping (Williams, 2006a). Forum shopping occurs in multiple ways and is used by multiple actors to get to the best result in a specific situation.
First, the fragmented nature of the professional market for corporate investigations creates room for clients to shop for the investigator who is best suited to meet their investigational needs. Every professional group of corporate investigators has unique selling points compared to the others because of professional background, expertise and the legal framework within which the investigations take place. Although the different players in the market tend to diversify the background of their employees so to be better able to meet the investigational demands clients might have, they do market themselves along the lines of these professional advantages. Second, investigators try to find the investigative methods which will deliver the best results in a certain case, taking the principles of law of proportionality and subsidiarity into account as well. While some investigative methods and information sources are used in most investigations (such as the interview with the involved person), some cases provide additional sources of information or warrant a different approach. For example, a track-and-trace device may be useful when multiple high-end items go missing in a short period of time, but for a case of construction fraud, a site visit may be more suitable. Third, the options of corporate settlement provide the backdrop of much forum shopping. The mere fact that corporate investigators and clients may work towards and choose from multiple legal venues for a settlement of the norm violation creates a high level of flexibility. Within the different legal venues (public or private law or internal regulations), there are more choices to be made. Within the private law system for example, recourse to a civil court may be made based on tort or based on breach of the labour contract. The private law system furthermore provides the option of an out-of-court solution through a settlement agreement . Corporate settlements may be combined, making the choices for different forums even wider.
When it comes to the decision whether or not to involve law enforcement authorities, multiple pragmatic and normative considerations may come into play. The need for investigative powers may be one pragmatic consideration, and another may be that the organisation runs the risk that it will be prosecuted in a harsher national jurisdiction than the Dutch. Although the principle of law of double jeopardy is not internationally recognised, chances of severe punishment for the organisation are reduced by such an action because even if prosecuted again, the prosecutor (and judges) in the second jurisdiction are likely to take the prior punishment into account. The extensive use of forum shopping thus means that while most of corporate investigators’ activities remain within the private legal sphere, moving towards the public legal environment may provide an optimal solution in certain cases as well.
The above should make clear that stating that the corporate investigation sector is a semi-autonomous social field should not be taken as a statement that it is a homogenous field: it is indeed highly fragmented and fluid, both in its composition and in its service provision. The fragmentation of the field (many different corporate investigators, working for many different clients, with many different interests) makes it furthermore difficult to get comprehensive insight into or exert effective control over corporate investigators’ activities. The different rules applicable to the different actors make for a field which is ‘fragmented, almost chaotic even’ (Hoogenboom, 1994: 263). Adding to this that most of the activities never reach the criminal justice system, it is not surprising that there is no clear view within law enforcement agencies of what ‘the market for corporate investigations’ actually is in practice. In many cases, forum shopping options make it rather easy for corporate investigators and clients to keep law enforcement authorities at bay.
5 Control and Accountability in the Context of a Semi-autonomous Corporate Investigation Sector
Those who argue that the public police are highly accountable and the private police hardly accountable at all, usually arrive at this conclusion because they only consider the kinds of accountability to which public officials are subject and, not surprisingly, find that private police are nowhere near as accountable in these ways as are the public police. (…). They frequently overstate the effective public accountability of the public police by focusing on the ways in which they are theoretically accountable while not paying sufficient attention to the very real (and well documented) limitations of the effective accountability which is able to be accomplished through these mechanisms in practice.
The research that provides the foundation for this book did not focus on police accountability and neither will this concluding chapter. It is important, though, while discussing the limited amount of public control over the corporate investigation sector, to keep in mind that democratic control over police organisations does not automatically lead to effective accountability either. In addition, the lack of public control does not mean there is no legal framework in place or that no control is exercised over corporate investigators’ activities. Many (informal/self) regulations are guiding corporate investigators’ actions. The nature of these frameworks is often not that of a legally binding rule, rather they are used as guidelines. Respondents suggest that they are generally guided by the principles of law behind the guidelines—all corporate investigators who have been interviewed or observed in this research (claim to) abide by certain leading principles of law—most notably proportionality , subsidiarity and fair play. Additionally, civil (or even criminal) liability serves as a fall-back option for those who are wronged by the activities of corporate investigators.
Whether or not ‘problematic’, control over corporate investigators by the state is limited. Just as is the case with most investigations and settlements, most safeguards and controls also stay within the private (legal) sphere. Only private investigation firms are obligated to get a licence from the Ministry of Justice and Security, and as we have seen in Chapter 2 the control over the licences is purely administrative. The scattered nature of regulations (different investigators having to comply with different legal frameworks) furthermore creates a rather ambiguous legal context. There are three interesting circumstances that may be noted in this regard. The first is formed by the confusion about the applicability of the permit system of the Wpbr: some forensic accountant -respondents do have a permit and some do not. Forensic accountants are not obliged by law to get a Wpbr-permit. Secondly, there is a pervasive fallacy in the corporate investigation profession that forensic accountants are the investigators who are most strictly regulated. As Chapter 2 shows, this is not the case as forensic accountancy rules are based on (non-binding) guidelines and principles of law (which are, however, used in disciplinary proceedings). Another pervasive fallacy around regulation is that of the (im)possibilities of public-private information sharing: many (mostly public sector) respondents are not aware of the opportunities for information sharing which are provided by legislation. The legal context of corporate investigations is thus not entirely clear to the professionals working in it. Because much of corporate investigators’ activities stay within the private legal sphere, the criminal justice system is furthermore not in a position to exert much control. All of this adds to the state’s lack of insight into and knowledge about the corporate investigation sector. The control over corporate investigators’ activities is thus largely located in the private legal sphere as well.
The system of safeguards in place for corporate investigators’ actions has a different rationale than the one in place for the criminal justice system. Where the safeguards within the criminal justice system are mostly focused on protection of the (relatively powerless) citizen against (abuse of power by) the state (representing vertical relationships), the private law-rationale of the Civil Code implies a certain level of equality between parties (representing horizontal relationships). Authors such as Meershoek and Hoogenboom (2012: 20) remark that ‘as long as citizens have access to a judge and non-judiciary institutions of appeal, elementary civil liberties are guarded’. Although this is true, such a view glosses over the differences in ability to effectuate these possibilities for control. If you have been harmed by corporate investigators’ actions, there are private law remedies available to you—but these require an active stance from involved individuals. Furthermore, the equality of parties argument can be considered unhelpful in this context. In the case of corporate investigations and corporate settlements, a definite power imbalance may be discerned between the organisation (the employer), corporate investigators and legal counsel on the one hand and the involved person(s), possibly with legal representation, on the other (Piret, 2005). The commercial interests and professionalism of corporate investigators protect against gross abuses of power in most cases according to respondents (see also Berndtsson, 2012). There are, however, concerns about the protection of the involved person and the power imbalances within the private legal sphere. These are fair concerns. Private organisations and corporate investigators attempt to counter these issues by taking general principles of law into account and by prescribing procedural guarantees in the investigations and settlements, however, the possibility of abuse still remains.2 In addition, the market for corporate investigations and corporate settlements exists by virtue of the mobilisation of symbolic capital. This means that the reputation of the sector as providing a legitimate professional service, convening authority, is essential to its professional existence. For the sector to be successful in its commercial endeavours, it is thus vital that it is viewed as a legitimate actor beyond the private legal sphere in which it mostly operates (see also below). It is therefore important to note that the private legal sphere exists by virtue of ‘the legitimacy afforded by the public sphere and the ability of industry practitioners to mobilize formal legal sensibilities, rights and obligations and to invoke public modes of recourse in circumstances in which they are warranted’ (Williams, 2006b: 219).
6 The Myth of Public-Private Turf Wars—The Matter of Competition Versus Separation
Above, the activities of corporate investigators were placed within a semi-autonomous social field. This contradicts the state-centric discourse commonly used for crime control (van der Lugt, 2001). A thought-provoking observation by Hoogenboom (1994) in this light is that private investigations affect the exclusive position of the state on crime reduction. This is a reasonable argument, which follows from the idea that the state is the leading actor when it comes to crime control and that involvement of other actors serves as an impeachment of said monopoly (van der Lugt, 2001). This is the starting point of most theoretical arguments about public-private relations within the security field. The junior partner theory claims that private actors are junior partners to the state, advancing the state’s objectives by their actions and acting as a fall-back option for the services the state cannot (fully) provide. When defined in this way, Hoogenboom (1994) argues, the private sector is no threat to the legitimacy of the law enforcement system as it serves as a supplement to this system. The activities of the private sector are thus considered to be different from those of the police.
Interestingly, public sector respondents interviewed in this research have voiced no significant concerns with regard to the argument of breach of, or threat to, the monopoly on crime control (White, 2014). In 2001, van der Lugt already expressed his wonder about the lack of concern by law enforcement professionals with regard to the role of private investigators, compared to the uneasiness they feel when it comes to the role of private security guards. This is in line with the argument of (in)visibility that White uses to explain why the most visible forms of private security are regulated in the UK, while other types of private security that are less visible are not. Those private security actors who move in a private sphere are not regarded as posing a threat to the repression monopoly held by the state, in the same way that parents may discipline their offspring without posing such a threat. Interestingly, corporate investigations may move out of the private legal sphere into the public sphere but even then, public and private may still be regarded as functionally separate. The failed pilot projects discussed in Chapter 5, aiming to streamline the use of information gathered through corporate investigations in criminal justice proceedings, may be regarded as an indicator that the rationale within corporate and criminal justice investigations is too different to streamline in one go.
One might argue, then, that the public-private separation (in Williams’ [2005] words, ‘bifurcation’) which has often been renounced by scholars focusing on private security remains a relevant concept for the corporate investigation sector. Instead of a blurring between public and private into some kind of hybrid entity, as is so often argued to happen in other forms of private security (see Johnston, 1992), there are boundaries between public and private, with corporate investigators mostly remaining within the private legal sphere. This separation is based on multiple characteristics of the public and private sectors. Firstly, the cases corporate investigators deal with are not necessarily the same as those that end up in the criminal justice system. For one, not all cases investigated by corporate investigators involve criminal behaviour. These are breaches of internal regulations, business standards or other norms. In those cases, there is no functional overlap between corporate investigations and criminal justice investigations. There is, however, also a large category of norm violations that may be defined as criminal (as they are criminalised in the penal code) but are not defined as such for various reasons (see Chapter 4).
Secondly, it can be argued that there is a difference in rationale between corporate investigations and criminal justice investigations—and not just in the sense that commercial parties are focused on loss prevention and state actors are focused on crime reduction (Hoogenboom, 1994). The fact that most of corporate investigators’ activities are within a commercial context, within the private law system, makes the cases they investigate, and the legal frameworks that are used for those investigations, follow the rationale of the private sector. Within the private law system equality of parties is generally assumed, as is the agreement on ‘facts’ (unless contested). Although elements of criminal justice (such as the adherence to procedural justice) are inserted in corporate investigations and corporate settlements, the dominant rationale is that of the private law system. Problems are solved as efficiently as possible, defined as a business or labour conflict and dealt with accordingly. Whether or not the behaviour is (also) criminal is often an afterthought. In this sense, the separation between corporate investigators and law enforcement agencies also occurs on a symbolic level: in logic/rationale but also in the language used (see Chapter 3), there is a distinct difference between public and private.
Thirdly, different interests are served by private and public sector investigations. Although questions may be asked about the (absolute) validity of such a claim, state-led investigations essentially serve public interests (Loader & White, 2017). The Dutch criminal justice system defines crime primarily as a dispute between the offender and the state: the (legal) person affected by the norm violation is no party to this dispute.3 As such, there is little room for the inclusion of his private interests.4 Conversely, corporate investigators focus mostly on the private interests of clients, keeping them central to all their proceedings (while also taking public interests into account when possible). This leads to a difference in approach to both the investigations and the solutions provided.
While there seems to be a tendency to ‘cooperation talk’ in both the public and the private sector, not much seems to come of it. As described, the nature of the sector (fragmented) and of the activities (focused on private interests) and the high level of autonomy within the private legal sphere, together with a difference in rationale and focus between the public and private sectors are likely to make any form of structural, long-term cooperation between law enforcement and corporate investigators very difficult. But, although the cooperation narrative is pervasive, very few (public and private sector) respondents seem to have an issue with this tendency to separation. Many respondents indicate that they feel corporate investigators are fully capable of providing their clients with the kinds of results the criminal justice system does not offer. As shown in this book, the services of corporate investigators go beyond criminally defined behaviour. Additionally, there is a focus and client-centeredness in the work of corporate investigators, which makes corporate investigators and settlements—although at times overlapping—essentially different from criminal justice investigations and procedures. One of the findings of the research is thus that there is no competition between public and private in the sense of nodal theory (see inter alia Wood & Shearing, 2007; more on this below). The competition-argument implies, as does the loss prevention theory mentioned by Hoogenboom (1994), that police and private investigators’ activities are similar and that in such a sense, public and private are basically interchangeable. Although the activities in themselves may be regarded as similar,5 the context in which they are executed (the private or the criminal justice sphere) ensures a continuation of the public-private bifurcation. This is not a rigid or unchangeable separation—indeed, as we have seen, there are many possible forms of overlap—however, it is the ‘default position’ of the sector.
Fundamentally, a conceptual shift needs to be made from a public sector oriented gaze (or state-centric discourse) to one that recognises the autonomy of corporate investigators. Hoogenboom has long argued for such a shift in criminology (e.g. 2007). As we have seen, there is simultaneously an overlap between and a difference in the activities of the public and the private sector. Crucially, the difference is not the one as described in the junior partner theory —in most cases, it is not a question of the corporate investigations industry being supplementary (or ‘junior partner’) to law enforcement activities. Rather, fieldwork suggests that the criminal justice system is seen as the supplement to corporate settlement solutions. Whether or not an internal norm violation is reported as a crime to the criminal justice authorities is in most instances an afterthought for the organisation involved. Chapter 4 has shown that even in cases where a report to the authorities is made, this is mostly done in addition to a private solution. There may be normative or pragmatic considerations for such a decision (see Chapter 4), but it is often seen as the extra step, not the main solution. All of this makes the hierarchical view of crime control as a state-mandated activity or alternatively as a ‘common regulatory enterprise’ within a networked reality (with all actors having the same implicit interests, goals and objectives) one that is hard to maintain (Williams, 2006b: 212). Rather, one should recognise the multitude of actors, interests and professional backgrounds influencing the investigative and settlement activities within the private legal order (ibid.).
Throughout this book, relations between corporate investigators and law enforcement actors have been presented as the exception rather than the rule. In Chapter 5, the term ‘coexistence’ is introduced as a better-suited term than ‘cooperation’ and a typology of coexistence is presented, ranging from a more or less one-sided action from private actors (type A—‘private-public information transfer’), through more or less mutual but limited information sharing (type B—‘(minor) mutual information sharing’) to what one may label actual cooperation (type C—‘coordination of actions ’). In most cases in which criminal justice actors get involved, private to public information sharing occurs (type A). Often, as respondents indicate, the information received from corporate investigators is thoroughly checked by (mostly) full-blown criminal justice investigations to make it fit into the rationale of the criminal justice system. As a bare minimum, the suspect will be interrogated by the police with all the procedural cautions but fieldwork shows that in most instances police will ‘re-do’ the investigations entirely.
7 Normativity and Pragmatism in Corporate Investigations and Settlements—A Case of Non-contractual Moral Agency?
Above, the different foci of rationale in corporate investigations and criminal justice investigations were discussed. This is not to say that there is no room for ‘the rationale of the criminal justice system’ within corporate justice. Many corporate investigators have a criminal justice background and their way of approaching their work incorporates some parts of the criminal justice rationale. This manifests itself in multiple ways and is aptly termed ‘non-contractual moral agency’ in a wider context by Loader and White (2017): the actions of corporate investigators which cannot be said to be contractually mandatory but are done because they are ‘right’. Some of these are made contractually mandatory—because corporate investigators have inserted them into their code of conduct—others are not. Non-contractual moral behaviour that is made mandatory for part of the sector is the use of certain principles of law. In the privacy code of conduct, which is binding to private investigation firms , the most important of these principles of law are codified. The same goes for the guidelines used by forensic accountants . Other investigators tend to also use these principles of law, in an effort to ensure due process. Moreover, more stringent rules and additional principles of law may be inserted in the individual codes of conduct of corporate investigation units. The use of these principles of law—most notably proportionality , subsidiarity and fair play—is meant as a safeguard to counter the power imbalance between employer and employee and to strengthen the formal position of the latter. The use of said principles of law and broader normative considerations works to enhance the legitimacy of corporate investigations as well. In this sense, it is a reputational matter for corporate investigation units. The interviews and observations in this research indicate that in addition to this commercial incentive to ‘play fair’ (which is more a practical, strategic consideration than a normative one), many corporate investigators also do so out of normative considerations. They are aware of the power they represent in the investigations, and although they make use of that power (by putting pressure on an involved person to cooperate, by demanding information, etc.), they seem to try to do so ‘responsibly’ (see Chapter 4).
Non-contractual moral agency may be most apparent in situations in which the moral behaviour goes against commercial interests . This may be the case when corporate investigators hand back an assignment because they believe they are being used by a client in an illegitimate way or because the investigations are in danger of not being independent and objective. This is a loss of income on the short term and will most likely lead the involved client to take his business elsewhere in future.6 Another manifestation of non-contractual moral agency is the pro bono work some respondents do. Corporate investigators do not get paid for these cases (or they might use a heavily reduced rate). Pro bono work is reserved for cases in which corporate investigative services are very welcome but the client is not able to pay for them (e.g. when a norm violation is discovered in a small-business environment).
The general principles of law many corporate investigators claim to take into account constrain them in general terms from using illegitimate means of investigations. However, it may under circumstances lead to behaviour which is considered ‘right’ even though it is not allowed. The instances which were mentioned by respondents concerned minor (privacy) violations which benefited the person whose privacy was violated (see Chapter 5). Additionally, corporate investigators and clients may find themselves in a grey area by acting in a way which they think is right towards other market players. An example of this is one employer giving another employer a warning sign about a (future) employee. Although the examples that are provided in this book of the use of principles of law to justify behaviour which is not allowed concern relatively minor infractions, more serious violations of (privacy) law might possibly occur as well.
In advising clients whether or not to report a norm violation to the authorities, corporate investigators may insert normative considerations as well. When the norm violation is deemed too severe (mostly cases involving physical harm), or when a need for retribution is felt by the client, corporate investigators may advise the client to report to the authorities. Indicative of this is that respondents with a background in corporate investigations, as well as the clients who were interviewed in this research, point out that they do not expect much from a report to the authorities: they often do so because they believe it is the right thing to do.
Thus, the focus on normative considerations and principles of law as guidelines for corporate investigators’ activities fits within the non-contractual moral agency Loader and White (2017) would like to introduce into private security more generally. As we have seen in Chapters 2–4, corporate investigators tend to place great value on principles of law as guidelines for their professional action. Additionally, their (and their clients’) introduction of normative considerations into the processes of investigating and settling may be said to go beyond what is needed in their contractual relationship with clients. In this way, the non-contractual moral agency of corporate investigators may ensure the (partial) inclusion of public interests into the setting of private corporate investigations and settlements. However, as long as the adherence to these principles of law and inclusion of other than strictly private interests is based on voluntary action, the potential problem of non-compliance remains present.
8 Legitimacy and the Common Good
The legitimacy of private security has been a recurrent theme in literature. In their article about the private security sector more generally, Thumala, Goold, and Loader (2011) suggest that there is a moral ambivalence in this sector about the industry’s condition and legitimacy . Although many of the claims made by the authors do not necessarily fit with the fieldwork reported upon in this book, the authors do raise some interesting points.7 With regard to the need for justification of the market for private security, the authors state: ‘the industry may exist to make money. But making money selling security does not seem like justification enough’. Like my respondents, the professionals interviewed by Thumala et al. ‘crave a wider worth and credibility, long to be well-regarded and thought of as an activity which is socially valuable’ (2011: 297). When asked about their general opinion about the existence of a corporate investigation market, many public sector respondents indicated that they felt somewhat conflicted: on the one hand, they seemed to agree with the widely held (but often implicit) opinion in criminology that crime should be dealt with by the state (which may be said to be a normative stance). On the other, they express the opinion that corporate investigators are generally better equipped to deal with these specific matters without public sector involvement (which is a more pragmatic approach).
Interestingly, corporate investigator respondents tend to not just point to arguments based on the market while justifying their work—such as that there is a demand for their services and that it is a legitimate business (Hoogenboom, 1994). Instead, respondents stress their role in the provision of a service which serves not merely the private interests of clients, but also adds to the common good (e.g. by correcting the lack of interest by police and the justice department and by providing a customised service). When talking to corporate investigators, a frequent comment is that the criminal justice system is not focused on the types of crimes organisations are concerned with. A consequence is that on the one hand reports to the authorities are not very often made, and on the other, that many cases which are reported are not prioritised by law enforcement agencies and thus either investigated at a late point in time or not at all. Additionally, the position of the (legal) person affected by the crime is rather peripheral in Dutch criminal law. A crime is primarily seen as a crime against society. This means that the way a crime is investigated and handled in the criminal justice system does not fit very well with the interests of those directly involved: police and prosecution often only investigate what they need for a conviction, while the organisation needs the complete picture. Furthermore, the criminal justice process is very slow and no ‘solution’ is provided to the problem at hand (see Chapter 4).
You may wonder whether the criminal justice system is always the best way to go to get to the classic goals of the penal system. Internal investigations are often much faster and more effective. The company is corrected and restored, the person is fired, so the legal order is restored. In the end, that’s the most important goal of our legal system, isn’t it? So actually, internal investigations serve a lot of the classically intended purposes of criminal law. (Respondent 28—forensic legal investigator/client)
The above comment may also be interpreted as a legitimising effort of the corporate investigation sector. Both within the sector and across it, legitimising efforts are made by stressing the inability of the criminal justice system to meet the demands and needs of organisations when faced with internal norm violations. In this way, corporate investigators position themselves as professional (and importantly, independent) experts in their field, combining this symbolic capital with a commodification of trust (Williams, 2006b).
Corporate investigators thus see their general role as providing a service to their clients, but at the same time transcending the mere private interests as well. When it comes to the common good and the role corporate investigators may play in its constitution (for the better or the worse), some issues may be identified. Above, the power imbalance between employer and employee has been discussed. Even though corporate investigators indicate that they try to put systems in place to ensure due process, this power imbalance continues to exist within corporate settlements. In those cases that do not reach a court for reasons of private interests (such as efficiency and reputation), the control over the process lies with the investigators and the client. Because their private interests are served with the corporate settlement, there is a real possibility of abuse. In addition, even without breaking any rules or regulations, investigators and others involved may pressure the involved person to cooperate with the investigations and settlement, for example by threatening to report the matter to the police even though they do not intend to do so. In such a case, the values of the rule-of-law in a democratic state may come under pressure. These values tend to be taken into account, but might suffer from their collision with the private interest of the client.
The above represents the question of the role of public interests (or ‘the common good’) within the private legal sphere. Loader and White (2017) discuss models to ensure public interests in private security provision, concluding that it is not enough to cleanse the market from unruly security providers through regulation and quality standards, or to communalise the market by the redistribution of taxpayer money so as to ensure equal access to the private security market. Cleansing and communalising the private security market fall short in ensuring public interests in so far as they leave no room for non-contractual moral agency of security providers. Although both models provide a solution to what they see as the problem with regard to the public interest (respectively ‘cowboys’ and unequal access), they are essentially neo-liberal in their approach in as far as they consider the market as essentially ‘good’ (Loader & White, 2017). According to the authors, public interests are involved in more ways than that. Loader and White therefore propose to ‘civilise the private security market’ by adding to the above-mentioned cleansing and communalising models, the use of principles of law: ‘embedded in these settings, principles invite and mutually orient all actors who make up regulatory space’ (2017: 179). The authors envision an ‘inclusive deliberation’ between stakeholders to ensure social solidarity in the provision of private security. For this, public and private institutions are essential. Police and trade associations are mentioned as obvious choices: ‘in the civilizing model, police forces are viewed not as top-down regulators of private security, but as one side of a public-private partnership, which rests upon, and, therefore deepens the principles of inclusive deliberation and social solidarity’ (2017: 180).
While the focus on principles of law described above fits well with the realities of the corporate investigation market, the proposition of a public-private partnership (in the widest sense of the word) deliberating and putting into action the use of such principles does not. This book has shown the inward focus on the corporate investigation market, only rarely stepping outside its private niche to involve law enforcement actors such as the police. According to Loader and White (2017: 180), private security aspires to be police-like, which provides the police with considerable power to ‘communicate the importance of public values and commitments to the industry’. The statement that corporate investigators mimic law enforcement actors has already been dismissed in several places in this book. Respondents with a corporate investigation background seem, on the contrary, to stress the non-police-like nature of their activities, preferring not to be seen as private police. The distance that exists with public law enforcement—notwithstanding the transfer of personnel and knowledge between the two—makes such a view hard to maintain.
Similarly, the role of trade associations is rather limited within the Dutch corporate investigation sector. Many respondents indicate they are not member of a trade association, and if they are, it is one that is specific to their professional background (e.g. (forensic) accountant). Just as there is no overarching legal framework for all corporate investigators in the Netherlands, there is no overarching trade association (although initiatives have been made in this regard, see Chapter 2). Any role trade associations would play in the advertising of public interests through principles would necessarily remain limited to their members. However, intervention into the market by either police or a trade association would not only seem impractical, but it can be said to be superfluous as well. The next section of this chapter focuses on some alternative options which may provide a more practical solution to the issues of limited control possibilities over the corporate investigation market. The formulation of generally applicable principles of law, as suggested by Loader and White (2017), seems not to be necessary as corporate investigators tend to adhere to the same principles of law already in practice. In doing so, and in their awareness of effects of their work beyond the specific private interests of the client, corporate investigators seem to endeavour to add in a positive way to the constitution of the common good. However, the question may be posed whether such an approach, using normative considerations and principles of law, is solid enough as a legal framework guiding corporate investigators’ activities as the possibilities of control over the sector remain limited in this way.
9 Policy Implications
9.1 Governing Corporate Investigations—Looking Forward
In his 2006 article, James Williams discusses some of the fundamental issues related to regulating the corporate investigation sector (2006a). Some of the key characteristics of the sector produce barriers, not only to structural forms of public-private cooperation, but also to attempts to regulate or govern the sector. The relative invisibility of corporate investigations and settlements, the large potential for forum shopping and strategic use of legal venues, the multiple interests involved and the fragmented nature of the sector in terms of professional actors and legal frameworks all make comprehensive control very difficult. Be that as it may, corporate investigators also share common characteristics. One important commonality is the work itself: although corporate investigations and settlements are tailor-made and client-centred, the investigative activities largely align within the sector. The tendency within the sector to combine the expertise of corporate investigators from multiple professional backgrounds in one corporate investigation unit adds to the common ground between corporate investigators. Furthermore, a common focus on principles of law as guidelines for professional behaviour seems to open up possibilities for regulation.
While there seems to be sufficient common ground for the governance of the sector based on an overarching legal framework, this research shows that such a framework is currently lacking. One might pose the question whether this is problematic. The premium corporate investigators put on principles of law may be a protection against misconduct—however, as long as the application of such principles is based on voluntary action by individual investigators and as long as the legal frameworks are unclear and only limited control is exercised over the sector, the possibility of misconduct and abuse of power still lurks. In this light, a useful analogy might be made with the ‘principles-based’ approach to (financial) regulation that has been applied pre-financial crisis. This Anglo-Saxon term for public control over private self-regulation within a broad public regulation framework (focusing on ‘principles’ rather than on prescriptive rules) in practice came down to de-regulation. Many commentators have linked this form of regulation to the financial crisis of 2008. In hindsight, it has become clear that this type of ‘light-touch regulation’ is vulnerable (Black, 2011). A crisis-trigger such as was available in the financial markets is not available in the context of corporate investigations, and, as mentioned, there are few indications of gross abuses or major problems. However, the analogy with the 2008 credit crunch and the role of regulation in this, does alert us to vulnerabilities of such an approach. The focus on principles of law as guidelines for investigatory activities may be seen as a useful common ground to build upon in regulating the corporate investigation market. In absence of a widely applicable permit system, much relies on the willingness of individual corporate investigators (and clients) to follow these principles of law and act upon a breach of said principles.
One policy suggestion resulting from this research then would be to make the Wpbr (Law on Private Security Companies and Private Investigation Firms) and the privacy code of conduct for private investigation firms applicable to all investigators who deal with individuals in their day-to-day business. This implies a shift by making the nature of the activities and the potential for breach of privacy of the subject of investigations the defining measure in asserting the applicability of the law, instead of the position of the investigators in relation to the client (CBP, 2007). This would mean that forensic accountants, forensic legal investigators and in-house investigators would all become required to get a permit . This is not a magic bullet in the sense that problems still remain. For example, the role of legal privilege should be determined, although case law seems to point in the direction of non-applicability for investigative actions (see Chapter 2). Another issue that still remains is the control over the permit holders. In the current system, the control over permits and compliance to the conditions of these permits, is virtually non-existent. One of the reasons for this is that the police cannot spare the resources to provide effective control. This issue will be exacerbated when more investigators would be required to get a permit. I would suggest to both change the conditions of control—re-introducing some form of control on content, for example the yearly report private investigation firms had to submit in the past—and to place the control in the hands of another regulatory body. My suggestion would be the Data Protection Authority as much of the applicable regulation revolves around privacy.
From the standpoint that corporate investigators are not a form of privatised police, placing the control in the hands of the Data Protection Authority makes more sense than the current Dutch situation in which the police organisation is responsible for control. The research shows that police-corporate investigator relations are ad hoc and often rather cumbersome. It would alleviate the pressure on police without being detrimental to their information position, since the current control system is virtually non-existent. Ad hoc relations between corporate investigators and police would continue to exist in cases in which pragmatic or normative considerations bring an incentive to corporate investigators and clients to involve law enforcement authorities in a case. For the Data Protection Authority, such a change would provide a large workload. However, since the Authority is involved with corporate investigators already, in approving the privacy code of conduct and as the authority responsible for breaches of privacy, it would in my opinion be the most efficient and effective solution. Most of the concerns uttered about corporate investigators’ activities are not about criminal acts (the realm of law enforcement) but about breaches of privacy (the realm of the Data Protection Authority). Furthermore, in a 2007 advisory letter to the Dutch government, the Data Protection Authority itself has suggested that it may be involved to a greater extent in the control over the permit system, stating that: ‘the CBP would gladly enhance the current cooperation8 with regard to the permit system by being in charge of the control over compliance with the norms set in the privacy code of conduct, although the CBP is currently lacking the capacity to do so’ (CBP, 2007: 1).9 It would, therefore, be necessary to provide the Data Protection Authority with the additional resources required to act as an efficient regulator for the permit system.
Tightening control over corporate investigations and settlements in this way does produce more administrative work for corporate investigators. This was one of the reasons to exclude in-house corporate investigation units from the permit system (State Secretary of Justice & Minister of the Interior, 2009). In its search for legitimacy, the corporate investigation sector seems to ask for a better system of control—at least the respondents with a corporate investigations background in this research do. In addition, in the current situation, many of those corporate investigators who are not obliged to have a permit either do have a permit or act like a permit holder by using the privacy code of conduct. I would therefore not expect much resistance from the corporate investigation sector—indeed a wider and more effective permit system would be beneficial to the legitimacy of the market. Additionally, from a level playing field perspective, the new situation should benefit the market as a whole.
The above suggestions might mitigate some of the issues identified in this research, and they will not abolish them completely. Much still depends on the willingness of individual corporate investigators and clients to use the principles of law such as protection of the involved persons as part of their non-contractual moral agency (Loader & White, 2017; see also Sect. 7 above and Chapters 4 and 5). The privacy code of conduct is a useful tool but non-compliance to it will not lead to any consequences for the investigator as long as no-one knows about it. The changes in the control system suggested here would not lead to very extensive knowledge of individual cases: a very detailed description of every action in every investigation, or a standard mandatory insight into the investigation reports would be impractical and, I believe, undesirable as well. It would be counterproductive to coerce corporate investigations into a junior partner-like position in relation to law enforcement actors or the Data Protection Authority. The characteristics and rationale of the corporate investigation market oppose such an effort.
As we have seen, the corporate investigation market exists by virtue of its marketing of some strategic advantages (the use of secrecy, discretion and control ; its legal flexibility (forum shopping ) and the way economic crime is framed). If these characteristics cease to exist because of stringent regulation, it is likely that clients would find different solutions, moving away from the professionalised and regulated corporate investigation market. It is not only corporate investigators who engage in forum shopping and strategic use of legal venues—the same may be said about their clients. Forum shopping is not undesirable per se (for the reason that it may just involve a search for an optimal outcome without negative side effects)—but it might lead to a situation in which either investigators or clients look for a specific context in which they are not regulated or accountable, which situation is objectionable from a rule-of-law point of view.
The nature of the professional activities of corporate investigators produces a focus on their private niche, which is not necessarily detrimental to public or private interests but it does lead to a sphere of obscurity. It is essential that a context is provided in which all who are involved may trust the quality of corporate investigations. This goes for the people investigated, for organisations using the services of corporate investigators (clients), for other corporate investigators, for law enforcement authorities and for the judicial system. In those instances in which the criminal justice system is involved, law enforcement actors should be able to rely on the professionalism of corporate investigators. As we have seen, trust is essential to public-private coexistence. Cooperation is possible within the limits of the law; however, the room for manoeuvre that exists is not much used because of trust issues (among other things). Non-compliance with the privacy code of conduct may currently be corrected by legal representatives of the people involved, by law enforcement professionals, by a (civil or criminal) court and by clients. This however depends for a large part on the assertiveness of the involved person and the moral agency of clients. Only for private investigation firms , it may currently lead to loss of livelihood through forfeiture of the permit .
9.2 Revisiting the Cooperation Mantra
Extensive, long-term public-private cooperation is not realistic in the field of corporate investigation because of the structural characteristics of the market, as referred to above. It would therefore be wise to let go of the emphasis on public-private cooperation and focus on the social reality of public-private separation. In doing so, room will be created to value both the criminal justice system and the corporate investigation sector in their own right. The junior partner perspective remains pervasive in public-private cooperation talk, but this research shows that the social reality is much more complicated than that. Efforts to streamline private cooperation in criminal justice procedures have as of yet been unsuccessful—maybe it is time to introduce a new approach.
Letting go of the emphasis on cooperation does not mean that ad hoc coexistence will cease to exist. From the corporate side, normative and pragmatic considerations will continue to lead to ad hoc contacts. From the law enforcement perspective, criminal investigations in which corporate investigators are investigating as well will continue to make ad hoc contact necessary. This research has introduced three general types of ad hoc contacts: private to public information transfer , (minor) mutual information sharing and coordination of actions . Respondents (both private and public sector) indicate that in the ad hoc contacts they have, trust and familiarity are important.
In this context, respondents call for fraud contact points as being beneficial to the value of ad hoc contacts. Interestingly, from 2017 onwards, the Front offices Financial Crime have brought back the central contact point(s) for financial crime within 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). It could therefore prove productive to both communicate more towards corporate investigators and to emphasise the utility if such central points of reference. It would, however, also be necessary to find a uniform format for the Front offices. Preliminary fieldwork by the author indicates that both public and private actors are more satisfied with the Front offices which take a pro-active approach to their task (actively entertaining public-private contacts, explaining processes and facilitating contact on an operational level).
The suggested changes might bring about a more solid basis for mutual trust, which is less reliant on individuals and which is formalised within the police organisation. They would, however, not solve the problem of different logics guiding the investigations; law enforcement officials may still feel the need to reproduce (part of) the investigations by using their powers of investigation in many cases. However, law enforcement respondents also suggest that in some cases, they (would like to be able to) take only minor efforts before presenting the privately generated information to the court in a criminal justice procedure—if that information is useful and trustworthy. Familiarity between (public and private) investigators and mutual trust may make this more likely.10 Similarly, the information flow from public to private that may ensue in some cases may benefit from the contact points. Currently, few law enforcement professionals seem to be aware of the possibilities for information sharing with corporate investigators. The willingness of individual prosecutors and investigators is currently key to whether or not information sharing and cooperation may develop. Having a formal contact point, specialised in contacts with corporate investigators and clients, would potentially remove some of the hesitation. It provides both public and private sector professionals with a point of entry based on contacts, when they are in need of one in a specific case. Furthermore, a knowledgeable point of reference may be valuable for both public and private sector professionals.
The above should be placed in the context of ad hoc coexistence rather than longer-term cooperation efforts. Corporate investigators and law enforcement professionals largely stay in their own sphere of action but meet on an ad hoc basis. Stating that we need to let go of the cooperation mantra does not mean that no form of cooperation will ensue in specific cases. However, it is not necessarily something to aspire to on a structural level.
10 Reflections—This Research and Beyond
Through this research, I have endeavoured to shed light on the market for corporate investigations and corporate settlements. The research adds to criminological knowledge, both about the market itself and about public-private relations. The methodological approach chosen has allowed me to present a rich description and analysis of the subject, which was the goal of the research. A qualitative research approach, combining different methods through triangulation, has the advantage that it allows the researcher to explore the subject matter in-depth. The approach is also necessarily (and purposively) selective as it focuses on certain parts of the field. Here, the focus has been on the four main groups of corporate investigators—in-house security departments , private investigation firms , forensic accountants and forensic legal investigators . Because their day-to-day business was central to the research, a choice was made to select the majority of respondents from corporate investigators. For future research, it would be interesting to focus more specifically on the upcoming profession of forensic legal investigators . This research has consciously focused on the corporate investigation market in the broad sense of the word. Differences between the corporate investigator groups have been found, but there are enough similarities to claim that they are part of the same professional market and therefore, that they should be answerable to the same legal framework. Future research focusing on investigators with a specific professional background could provide even richer information on the day-to-day activities of corporate investigators. In doing so, one might also focus on specific specialisations such as the ever more relevant corporate cyber investigations.
Furthermore, an emphasis in future research on clients, in the form of HR managers and general management, would be interesting and may provide a deeper understanding of the choices made in corporate settlement procedures. Some practical issues may be attached to such an approach, since it is difficult to find clients of corporate investigative services (not much is publicised in for example the newspapers on corporate investigations), who are also willing to participate in such a research (as corporate investigations are based on discretion). In this research, clients were contacted using the snowball method by asking corporate investigators for contacts. Such an approach may prove effective in future research as well. Another innovative angle for research on corporate justice would be to focus on the involved people who have been subject to corporate investigations and corporate settlements. This is likely to be a hard-to-reach group. First of all, since corporate investigations and settlements are often not publicised, it is difficult to find involved people. Through contacts with corporate investigators and clients, names might be found but the focus on discretion and privacy regulation would make them unlikely to volunteer such information. Second, since there may be little or no linkage between potential respondents snowballing from one such respondent to another would be impractical. Another way to receive information on involved persons would be to use case law of criminal or civil court cases in which internal investigations have (also) been done. This would, however, severely limit the scope of the research, as only a limited amount of cases in which corporate investigations have been done end up in court.
In addition to the new angles suggested above, it would be interesting to supplement the information retrieved through this research by a quantitative study. Although saturation was achieved in this research in the sense that no additional information or respondents resulted from the research after a certain point and this may be taken as an indication that the information gathered is valid and reliable, a quantitative study may provide specific information which cannot be derived from qualitative research methods. Such a study could map the number, skill sets and technical resources of corporate investigators; how many organisations make use of their services; and which cases end up in the criminal justice system. For this, it may be very helpful if the permit system is expanded to all corporate investigators, since that would provide an overview of the scope of the corporate investigation market in the Netherlands.
This research is focused on corporate investigations into and corporate settlement of internal norm violations. Because the norm violations are internal, there are more options to react to the norm violation than in cases in which the norm violation is external to the organisation. In addition, internal norm violations are often claimed (inter alia by respondents) to be more dangerous to an organisation than external threats (which may be reflected in the higher level of reports to the authorities for external crimes, see, e.g., PwC, 2014). It would be interesting to compare the two types of norm violations in future research. In addition, a similar comparison could be made between criminal and non-criminal norm violations: is there a difference in the way organisations react to the different types of norm violations?
For reasons discussed in Chapter 1, the role of regulatory agencies in the field of corporate investigations has not been a subject of this research. The aim of the research—to provide an overview of the Dutch corporate investigation sector—makes the inclusion of all (potentially relevant) regulatory agencies impractical. The fact that corporate investigators are used in a wide variety of (economic) sectors means that in different situations a multitude of regulators may be involved. However, it would be possible (and interesting) to focus more specifically on the relationships between the regulatory agencies and corporate investigators within a specific sector. Especially if control over a renewed permit system would come to be exerted by the Data Protection Authority, therefore making that authority the regulator for the entire corporate investigation sector, it would be very interesting to look at the relations between this regulatory agency and corporate investigators. With regard to the extended role the Data Protection Authority would take in the control over the more elaborate permit system as suggested here, it would be relevant to do an impact study in future, to assess the way in which the changes would affect the different stakeholders.
One last strain of research that would be important to pursue is more international in nature. This is relevant because corporate investigators move across multiple national jurisdictions. The forum shopping activities (as discussed in Chapter 4, Sect. 2.2.1), choosing the most agreeable jurisdiction to be prosecuted (if the organisation itself is to blame), provide an example of the ease with which corporate investigators move across national boundaries (in stark contrast to the difficulties law enforcement agencies have with this). Finally, as noted in Chapter 2 above, it would be useful to deploy a comparative perspective in order to explore to what extent the specific (regulatory) history of the Netherlands has affected the way in which the corporate investigation market has developed.
From both the international and the national perspective, it would be interesting to follow the recent developments in privacy legislation. As of May 2018, the EU-wide GDPR has come into force. This means that privacy regulation is harmonised within the EU. It would be interesting to see what this means for corporate investigators across the EU and for (international/regional) cooperation efforts. The exact effect of the changes in privacy regulation is yet to be determined but informal conversations with corporate investigators and law enforcement professionals in the Netherlands suggest that the new privacy regulation is already impacting public-private relationships. As discussed in Chapter 5, fear to break the more stringent GDPR seems to make both law enforcement professionals and corporate investigators turn away from cooperation and information sharing, rather than towards it. This may, however, be a temporary effect. The GDPR still leaves room for information sharing and cooperation. When the novelty wears off and the dust settles, we can start to investigate the long-term effects of the legal changes.
The strains of future research proposed here may build upon the insights provided in this research. Most importantly, it would be necessary to approach the corporate investigation sector as a semi-autonomous social field, without using the lens of a top-down state-centric discourse. The discourse promoted in this research theoretically assesses corporate investigators as semi-autonomous actors, while also taking into account the role of the state as a key player—one that adds a normative (‘retribution’) dimension to corporate settlement solutions (when involved in that) and one that is the source of democratic control over the market. In further exploring the social realities of the corporate investigation market—and the coexistence of corporate investigators with law enforcement agencies and other state actors within it—it is important to steer clear of stereotypical portrayals of ‘public’ and ‘private’. The non-contractual moral agency of corporate investigators, be that to provide themselves with legitimacy or out of normative concerns, creates space for other than purely commercial considerations. A keyword describing the corporate investigation market is flexibility —it plays a pivotal role in the services provided, the legal frameworks applied, the interests served and in the relationships with public actors. It would be wise to bear this in mind in future work.