Houston, We Have a Problem: Managing a Security Investigation

Author's Note: Simple truths are often best revealed in the telling of a story. The tortoise and the hare come to mind. Following is a story with a few simple truths, not exactly Aesopian, but a story that invites you to get into the shoes of the main...

The whole ball of wax involving Regal, Andriscotti, and Keith-Marwick was handled by Brown personally, and on paper looked lucrative except for a couple of details: Brown overpaid Andriscotti by at least 100 percent, and the cost of configuring the valves was well above the industry norm. FNG paid about $4 million to Andriscotti and a little under $1 million to Keith/Marwick. Rollo scribbles a set of numbers on a paper napkin and says, "When we factor in our costs and profit, Regal has a tab with us for about $8 million."

You interject, "And Regal hasn't paid us a dime."

Rollo affirms. "Not one dime, which leads one to ponder." He conveys the ponderable. "Regal hasn't paid us because there is no Regal, and there is no Keith/Marwick."

Control the "scene." Collect evidence. Interview witnesses.

The following morning when you arrive at FNG's Dallas office you note that Brown is not there, per your request, and you are encouraged by this showing of management support. You meet privately with Brown's three direct reports: the managers of administration, procurement, and sales. When they leave the meeting they understand that every document in the office is under your purview, nothing is to leave the office without your approval, the shredding machine is to be unplugged and locked in a closet, and interviewing of employees is to commence within the hour. You add that a failure to cooperate will be grounds for immediate suspension.

Hold a daily meeting. Commend the work. Don't micromanage.

Your investigative team meets that evening at the Radisson. Each member of the team reports on the day's activities. Kantor has received, logged in, and marked as evidence several hundred pages of documents, plus six audiotapes; three PIs have interviewed 11 employees, all at the lower end of the food chain; and Cowan visited two courthouses where he examined the "doing business as" files and other records relating to Regal Petro and Keith/Marwick. Rollo is present and he briefs as well. You thank the team for making a good start on an important investigation. There is just the slightest temptation to tell Kantor of an evidence accounting method you once found effective. But you resist. "There's more than one way to skin a cat," you remind yourself.

Get expert help. Keep management informed. Deal with the news media.

It's apparent that the investigation will need to put to rest any concerns as to who signed what. You retain the services of a questioned document examiner and put her in touch with Kantor. E-mail to and from Brown may also be a source of evidence. You convince the head of FNG's IT department to provide the necessary expertise. Calling your boss on the phone twice a day is losing impact. You fly back to Houston and do a face-to-face with your boss and the CEO. You show them certain documents and advise that it may become necessary to suspend the procurement manager. Several indicators point in his direction but you want to keep him available for questioning, which you are not quite ready to do. While you're at home base, you visit the corporation's public affairs coordinator and warn him that the news media in Dallas will very likely pick up on the story. "I'll be counting on you to keep them off my back."

Focus on the evidence.

During the daily briefing at the end of the third day, you can see the outlines of a conspiracy. At a frequency of about once per month, Brown signed a purchase order for one valve. He approved payment one or two days after receiving notice from Andriscotti that the valve had reached the Keith/Marwick workover site. Cowan learns that the workover site is a warehouse six blocks from the Andriscotti plant.

Cowan goes there and finds a large crate bearing the Andriscotti logo. The operator of the warehouse says that about once a month a truck would deliver that same crate to the warehouse. He'd sign a receipt and about a week later, a truck would return and take the crate away. That had happened about a dozen times, the operator recalled. "Keith/Marwick, you say? Never heard of the outfit." The warehouse operator thought it strange that the crate was the same one every time. He didn't think it strange, however, that the person leasing the warehouse paid the rent one-year in advance, in cash. The physical description he gave of the lessee did not fit Brown.

Consult with in-house counsel. Protect your team.

FNG's head lawyer stresses three points: restitution, restitution, and restitution. You promise to keep him informed so that you can continue to benefit from his wise counsel.