All professional investigators feel they have an advantage over other types of investigators – and they do. The strength of one type of investigator is the weakness of the other – which is something that each type of investigator exploits as part of its own niche within the niche. When it comes to in-house departments, the great advantage for the ‘client’ organisation is their familiarity with the organisation in which the investigations take place. Although all types of corporate investigators have more access and find their way within organisations more easily than law enforcement investigators, it is inevitable that external investigators have less
knowledge with regard to the particular organisation than those who belong to it. In- house investigators are the specialists with regard to that particular organisation, they know how the processes work and have multiple contacts within the organisation. This makes for easy access.
One of the reasons why we are so good at this, is that we understand the company better than an investigation firm would. Look, if you want to find deviations, you’re going to have to know normalcy first. And once you understand the normal process, then you may start to see deviations. We know this company, we know our way around and we understand its culture. [Respondent 39 – corporate investigator]
Not only do in-house investigators know the organisation subject to the investigations well, they also know the organisation’s (commercial) background. Details of investigations may differ between a bank, a telecommunications company or an industrial plant. External investigators usually have so many different clients, with different commercial backgrounds, that it would be impossible for them to know all of these in-depth. Often, people working in in-house departments have been formerly employed by law enforcement agencies (however, some are ‘regular’ employees of the organisation who have been placed with the security department because of personal interests etc.). This means that they usually have experience with police-like investigations and investigative methods such as interviewing, but much less so when it comes to administrative investigations, IT-investigations (although usually the IT- department of the organisation can help out with this) or the legal implications of the investigations (for which the HR and/or legal department may step in).
Observation Company 2 is the security department of a large Dutch company. The security department doing the investigations consists of eleven people who had some role in the investigations, with three full-time investigators and three desk researchers. Throughout the larger organisation there are also security officers located, one for every specific field in which the company is active. These security officers may assist in investigations when their segment is involved. In addition, specific IT questions (for example, when electronic data is needed) are asked from the IT department, which will then provide support. Compliance matters are left to the compliance department and Legal and HR may assist as well. In this way, the security department is the specialist on the investigations and has easy access to additional expertise from inside the company. As the manager said: ‘You see what kind of specialist knowledge is necessary, my guys have this knowledge about the specific electronics we as a company use and all of that. It’s useless to get someone from the outside to look into it, it’s impossible for him to understand all our systems and have the specialist
knowledge necessary to investigate these matters. [If you don’t understand the way this company operates and the systems and tools needed for that you will draw the wrong conclusion]’ [Excerpt from observation 2]
Because of their background in law enforcement most in-house investigators have experience with making a report to law enforcement authorities, which they often handle when the company decides on this course of action. Their law enforcement background is very helpful as it enhances the chance that a reported norm violation will be investigated by the authorities.
If I report to the authorities and I have made my own case [the private investigative report], my chances of the report being taken up are much larger because it saves them some trouble but also because they know that it’s something serious. My advantage is that I know what they need. It’s just faster that way. A normal citizen who doesn’t have much experience with reporting to the police will find it difficult to find his way into the organisation. [Respondent 15 – corporate investigator]
This advantage of having many people with a police background is not unique to in-house departments. Just like in-house departments, private investigation firms often also have many former police officers (or prosecutors) working for them. All the advantages of having experienced interviewers who are accustomed to the process of investigations are therefore present within private investigation firms. This police- like image may be useful and it is often advertised as an asset on the websites of commercial investigation firms but it may also work against a firm. Competitors with an accounting or legal background tend to depreciate the police background of many investigation firms, claiming they are under-qualified ‘rent-a-cops’.
The camera aimed at the cashier, doing a little stake-out and taking some pictures… They [private investigation firms] are not equipped to do quality work when it comes to fraud of course. Fraud, that’s being done by people at the top of the tree, it’s about a lot of money and they are being advised by expensive lawyers and tax experts from fancy firms. There is a lot of intellect hidden in a fraud. You’re not going to solve that with a camera and someone with a police background. [Respondent 32 – forensic legal investigator/client]
Especially forensic accountant-respondents seem to want to distance themselves from the image of being a private detective. An often-heard remark is that private investigation firms, seen as dominated by former police officers, are good for the more straightforward investigations but fall short when it comes to complicated fraud schemes.
What we often hear is ‘oh so you are private detectives’. I wouldn’t say is a derogatory term but... it’s a different category of work. They are often very perpetrator-oriented. That’s not really our focus, who is ‘guilty’. It is the conclusion to our investigations but not our main focus. We focus on analysing facts. And usually these facts are complex and require intelligent background research, complex accounting, to get the full picture. [Respondent 40 – corporate investigator]
This view of corporate investigators working for private investigation firms as being incapable of complex investigations into fraud comes in part from the general opinion in the sector that police officers are not skilled enough for this type of work. Former police officers in this view would then also lack the skills and knowledge. Furthermore, the (many) courses given about private investigations (some of which are accredited) are below academic level (Klerks, Van Meurs & Scholtes, 2001). Many respondents feel the educational standards for private investigators are too low. “I would suggest that the educational standards and the representative organisation should focus more on the specialised work. Now my investigators have had to follow a course which is practically useless to them” [Respondent 13 – corporate investigator]. Private investigations do indeed require more than merely a police background and private investigators are ‘not just a private form of public police’, as many private investigation firms themselves acknowledge. Consequently, private investigation firms tend to also hire forensic accountants, IT-specialists and other useful specialists to fill the gap in experience with administrative or IT-investigations and other specific skills. The combination of these people from different backgrounds makes that investigation firms are often able to cater to many investigative needs of clients.
You know, an investigation has different dimensions, you have a financial part, a technical part, an operational part. And sometimes you need one investigator because he is better at that particular part than others because of his background and experience. [Respondent 13 – corporate investigator]
As chapter 3 shows, respondents tend to stay clear of ‘law enforcement language’. Respondents from investigation firms (just as other respondents) tend to distance themselves from an image of being private police and market their firm as being the best of both worlds: the advantages of private investigations more generally apply (see chapters 1 and 3) but in addition, they have inside knowledge of the workings of the criminal justice process. Private investigation firms tend to be generalists compared to other corporate investigators (or, conversely focus on one specific niche of investigations).
Observation Company 1 is a small investigation company, known for specialised knowledge on different subjects. As one of the owners stated: ‘We’re trying to deliver a high quality product’. Because of the law enforcement background of one of the owners and another investigator, the company has a large network in both law enforcement and the commercial sector. Many assignments originate from this network or are based on positive word of mouth among organisations. The private investigation firm prides itself on its reputation of being a high-end and independent investigation firm. [Excerpt from observation 1]
Depending on the client’s wishes, private investigation firms may thus give advice about how to settle the matter at hand. This advice may or may not be included in the report (see also chapter 3). When the client wants to report the norm violation to the authorities, private investigation firms often provide help with this process.
When our assignment comes directly from the organisation, with no lawyers involved, we will also take on an advisory role for the client and we may then also report to the authorities for the client. The question is then, how will you go about this. You could go to the local police station but our experience is that that’s a dead end. It might help to go directly to the chief public prosecutor, send him a letter with appendices – meaning our investigative report. [Respondent 2 – corporate investigator]
Not having a police background, forensic accountants conversely, have the reputation of being the experts on investigations into financial administration.32 They have been academically trained to produce and audit financial administration but the ‘forensic’ part is more learning on the job. Many forensic accountants who have years of work experience are also skilled interviewers. However, according to many respondents this is not their strong suit. “What we see is that forensic accountants are very good at forensic accounting but that doesn’t mean they are good at thinking about systems of fraud or what makes people tick.” [Respondent 32 – forensic legal investigator/ client]
When it comes to interviewing people, you might not want to leave that up the financial investigator who has looked into the administration. It might be best to let someone with a police background do the interview, because he might not have the know-how with regard to the content but he knows how to interview. He can assess how someone behaves, he understands that kind of stuff much better than the competent accountant who knows very well what the administration says but is
32 However, some forensic accountants have worked for either police, prosecution or specialised investigative services such as the FIOD (the investigative service of the Dutch revenue authority) in the past.
much less equipped to respond to the involved person and read his body language. [Respondent 13 – corporate investigator]
Even though forensic departments of big accountancy firms tend to diversify their services, for example by creating tools for the analysis of big data collections, their expertise lies with the investigation of ‘the books’. Just like private investigation firms try to employ ‘other experts’, forensic accountancy firms or departments also employ former police officers, legal experts and IT-specialists. The service provided does remain centred around forensic accountancy though, and they follow the (rules and) guidelines that apply to accountancy work. One of the implications of this is that forensic accountants tend not to draw conclusions based on their report. It is considered ‘not done’ for an accountant to assign blame because this is considered a subjective qualification and an accountant needs to remain objective.33 “We don’t even have an advisory role in this. I have my opinions but it’s not my decision, the organisation needs to decide for itself whether they [feel this is a crime and] want to report or not” [Respondent 27 – corporate investigator]. This is considered a drawback by clients, who often want to hear the professional opinion of the accountant about how to qualify the incident. “And after all that [a long and expensive investigation] you get a report filled with facts but just having the facts is of no use of course. Because these facts need a social and legal interpretation. Without a legal reading, facts are useless” [Respondent 32 – forensic legal investigator/client]. When a client does decide to report a norm violation to the authorities, most forensic accountants provide some assistance with this.
I can give you examples of investigations which have cost a small fortune but looking at it, you think ‘What on earth did these guys do?’ So you have high rates but also – if you would get a second opinion on what they actually did, it makes no sense from an investigations-perspective. For example the Big Four [accountants], they are reproached now and then for their investigations, that they don’t yield much results and basically just map what the client already knows. That it costs a lot of money but actually yields no results. That they for example won’t find the money that has been defrauded or get it back. [Respondent 13 – corporate investigator]
The ‘weakness’ of forensic accountants is, conversely, the strength of investigators with a legal background. It is exactly the ability to provide a client with a legal qualification of the norm violation which gives forensic legal investigators their advantage over other investigators. Some forensic legal investigators provide a full investigative
33 As discussed, there is some discussion about this though, some accountants feel they are allowed to draw conclusions as long as these are based on the factual results of the investigations.
service, others specialise in the validation of investigations done by others. In the latter case, forensic legal investigators mainly look at whether the investigations are ‘correct’ in procedural terms, but also with reference to the facts that are presented (are the facts, which are necessary to take further steps, clear) and with regard to the legal interpretation of these facts (what does it mean from a legal point of view). Forensic legal investigators have no specific background in either financial administration or police investigations, however many forensic legal investigators have a prosecution background. In this way they are often familiar with the investigation process. The most important forte of forensic legal investigators is their extensive knowledge of the law. They are much better equipped than other investigators to draw conclusions from investigations and give specific advice to the client on how to proceed.
When it comes to an investigation in need of a decent analysis with regard to the facts and the law, and when there is need for an advice regarding corporate governance – I would use a law firm for that. Other investigators say they can do it but in reality they deliver a poor result. [Respondent 28 – forensic legal investigator/client]
Although not specialised in the investigations per se, forensic legal investigators in this sense provide a more encompassing service. Often, other investigators are contracted-in to do specific parts of the investigations resonating with their area of expertise. In this way, a forensic legal investigator may provide its clients with a report spanning both the investigative ‘facts’ and the legal implications that follow from that. And – when the client has chosen a particular settlement – the involved lawyer, or a specialised colleague from his firm may assist with that too.
We assist our clients when incidents occur within their organisation, we will investigate for them, we advise them on what kinds of measures are to be taken and in the event that a regulator or the justice department is to be involved, we will advise them about how to deal with these agencies. [Respondent 30 – forensic legal investigator/client]