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  1. Law
November 1, 2006

Up for Grabs

By Spear's

Nigel West on how kidnapping became big business – and what those at risk can do to plan against it

Imagine you’re in the centre of Mexico City opposite one of the leading hotels, and you find you need some local currency. You approach a convenient ATM and, after you’ve completed the transaction, your life changes forever.

You have been pulled into a van with a sliding door or bundled into the trunk of a car and a hood has been rammed over your head. That’s the last thing you see for 48 hours. Your pockets have been searched, and you immediately surrender your credit card PIN to your unseen captors.

You are released from captivity and make way back to your hotel, your family, or your employers. Your bank account will have suffered the maximum withdrawals allowed from ATMs in the two days of your abduction. Life will never be the same again, but your experience is shared by approximately 40,000 others each year.

For the past ten to 15 years, kidnap has been a growing industry and if you are lucky you were snatched by what are known in the trade as express or ATM kidnappers. They are usually small-time street thugs, not so much professional as violent and fearless.

In a place like Mexico City there are many such street gangs, operating independently and hanging around outside nightclubs, theatres, up-scale restaurants and other likely locations where potential targets gather. They are largely immune to capture and are concentrated in the large cities of Central and South America, such as Mexico, Caracas, Bogota, as well as in South-East Asia, Russia and the Eastern bloc and Eastern Europe. Their favourite environment depends on three factors: economic inequality, political instability and police inefficiency. The latter criterion is significant, for kidnap is a crime where the perpetrator is rarely caught.

Your express kidnappers may have roughed you up a little, or even kept you in a car boot for the entire time you were in their control. But the worst that can happen is that they discover or realise that you personally have a value; you are a manager working for a multi-national, you have your own business, or you are from a wealthy or prominent family.

In those circumstances, the express kidnappers may sell you on to one of the professional kidnap gangs, of which there are about 16 operating in Mexico City. You have now become a commodity, bought and sold now for ransom, not a person. In the weeks, usually months, ahead you may be passed to a sub-contracting gang that specialises in holding victims, while still other specialist sub-contractors contact your company or relatives and begin the protracted ransom negotiations for your release.

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To avoid a next time, you may be tempted to take out insurance, a policy dressed up in many guises, few of which call themselves ‘kidnap and ransom’, although that is big business for some, including the market leaders in Lloyds, the Hiscox Group. Your policy will contain several conditions, including confidentiality and perhaps a requirement to report an incident to a designated consultant, though not the local police.

The policy makes available a specialised consultant like Control Risks who function as advisors. If you decline to take their advice and hire some other company, you have to pay for them independently. The advisors will develop a strategy on how to handle the inevitable ransom demands, which may not come immediately, and, in many cases, the first demand will not come for several weeks, even months – a deliberate tactic to raise anxiety intended to encourage prompt payment.

International kidnap is an industry and the annual statistics are hard to research because many incidents are not reported officially, but the best estimates suggest $800 million is paid in ransoms annually, with 75-80 per cent of it occurring in Latin America. The crime is so prevalent in Mexico that, last year, 30,000 people gathered to demonstrate against police inaction. However, the precise scale of the problem is difficult to gauge because the crime often goes unreported to the authorities, and most tourist boards find the topic unappealing.

In reality, the low reporting is partially the result of police corruption, where either the local police are indirectly or directly involved, and there have been cases of retired police officers being implicated, or the police have simply stolen the ransom they agreed to deliver. Another factor is the widespread perception, often correct, that the law enforcement agencies may be more interested in prosecuting the kidnappers than gaining a victim’s freedom.

Even the FBI, supposedly skilled in hostage negotiation, actually has a good reputation for talking bungling bank robbers into releasing innocent bystanders, but has little experience or legal jurisdiction in handling individual abductions. Special Agent Oscar Taheter, on whom the movie Proof of Life was based, resigned from the Bureau, to start his own consultancy business in South America precisely because there was so little knowledge and expertise on the subject.

Often, consultants will advise against reporting a kidnap to the police because they know the most dangerous moment for any hostage is the moment when a law enforcement agency attempts a rescue. They only work in the movies whereas, in real life, the hostage usually dies. In Mindinao, a bungled rescue by Philippines special forces resulted in a captive missionary, Martin Burnham, and his wife, Gracia, being shot.

There is a ransom league table, topped by Colombia, closely followed by Iraq, Mexico, Brazil and the Philippines, but there have been some significant individual cases recently in Sweden and Holland, countries that hardly conform to the usual criteria.

The problem in Latin America was exacerbated over a decade ago by the seizure of Japanese businessmen as they expanded their interests into Latin America. Their companies handed over ransoms instantly; a quick $2 million payment in Tijuana in 1996 for the release of a middle-ranking executive skewed the market dramatically.

The Japanese learned that if the full sum is paid too rapidly, it simply becomes an initial down payment and a further amount is demanded. Of course, other employees are put in danger by an instant reaction, as the employer is perceived as an easy company to deal with. Similarly, wealthy Chinese investing in South-East Asia have also become lucrative targets, their companies meeting almost any demand, apparently oblivious of the consequences.

The professional hostage negotiators acknowledge that too fast a payment can prove counter-productive, and will only achieve a further demand. Too slow, and a body part may be provided to regain attention.

So how has this situation developed? There are four types of kidnapping, of which the express abductions and economic kidnappings have grown the fastest. There remain ten to 15 big dollar ransoms each year in Mexico, and the record was set some years ago by $33 million paid for a Mexican banker, but the market has expanded as the gangs have targeted the less obviously wealthy.

Whereas, in the past, the victims were often wealthy individuals from prominent families and employees of multi-nationals, there has been a shift towards small-business owners, mostly nationals from moderately wealthy families, as soft targets.

The second major group are the so-called economic kidnappers who are well organised and may hold a captive for up to three years, In Colombia they are adept at the practice of silencio, a technique designed to instil anxiety where no ransom demand is made for three or four months, reducing the victim’s family to a condition where they will pay anything, instantly. Often the abductee is lifted by FARC or ELN guerrillas, and will be held in a jungle hideout for one to several months before contact is made, with a ransom demand.

The third category includes the political and religious kidnappings now so prevalent in Iraq and the Yemen. These are daily events and although there is a cultural background to these crimes, they often involve foreigners and the amounts of cash involved range from $5,000 to $100,000. Contrary to what is claimed by the parties involved, the vast majority of these victims are released only on payment of a ransom.

Finally, the fourth group concerns emotional and pathological abductions, which can happen anywhere, and are committed by a variety of perpetrators with any number of strange motives.

The international economic kidnapping industry, however, is ‘one that should concern employees of multinationals and even moderately wealthy nationals in those countries with a higher-risk kidnap profile,’ says Daniel J. Mulvenna, a seasoned specialist based in Washington DC who has an impressive record of managing responses.

Mulvenna observes that in some high-risk cities, such as Mexico City, kidnappers have targeted children. Ransoms tend to be paid quicker when infants or women are the victims, and the kidnappers who know this all to well have reacted accordingly.

Although professional criminals, some kidnappers in Mexico have abused and raped their victims, and have sliced off a finger or ear to hasten negotiations. And there is an element of chance about whether a hostage is captured by the guerrillas in the South of the country, who make harder-to-meet political demands, or the narco-trafficers in the North.

One well-known Mexican actress and a woman accompanying her were seized from their car at night by a large criminal kidnap team all, wearing similar black clothes and masks, driving three stolen SUVs and a van with sliding doors, armed with rifles and pistols and carrying walkie-talkies. Both were released separately, weeks later, after ransoms were paid.

Both were mistreated and abused by the kidnappers. Invariably, the professional kidnappers have researched a list of prospective victims and then narrowed it down to a particular target, using surveillance to identify the softest target. Relatively simple precautions, such as the presence of security personnel or unpredictable daily routines may deter them.

A few years ago, the FARC deployed an advance team into Bogota whose sole function was to research prospective targets and develop a stock of ‘off-the-shelf’ candidates. This new, rather more sophisticated technique enabled the victims to be researched, their family’s wealth calculated, and reconnaissance missions undertaken.

You do not have to be married to a Sony board director, or be related to a Dutch brewing family, to endure the trauma of kidnap, and many companies seek professional advice before sending key personnel overseas. Most big multinationals carry ‘K&R’ insurance although, as a policy condition, they must deny the cover exists, and none of the consultants in the field will ever reveal the names of their clients.

This lucrative business was conceived in the 1970s by a Lloyds broker, Julian Ratcliffe, who handled policies for the Cassidy Davies syndicate. However, Ratcliffe made a crucial link, which remains the basis of the business to this day and that was to gather together a group of recently-retired British Army officers, all with counter-insurgency expertise acquired, while working for the elite 22nd Special Air Service regiment.

Thus, the insurers could make a proper assessment of the risk and the policyholder could receive high quality security advice and have the advisors adopt the role of negotiator, if the worst happened.

Of course, the Balkan and Sicilian culture of abduction did indeed spread across Europe and the K&R market thrived. Along the way, three SAS veterans, David Walker, Simon Adams-Dale and Arish Turle, formed Control Risks to respond on behalf of the Lloyds insurers, and their unequalled experience in the field led to plenty of unpublicised success and an unrivalled reputation.

One leading insurer says, ‘when I’m kidnapped I hope Control Risks are on the job.’ Significantly, the responders, as the negotiators are sometimes called, work for the policy-holder’s family, and not the insurers, and are paid a flat fee, never a percentage of the ransom.

Some countries, Italy and Colombia included, have tried to outlaw the payment of ransoms, but the victims’ families were undeterred because they knew that there was only ever one way to gain the release of loved ones. Consultants distinguish between response and actual payment, but really the ransom is the only practical key to a hostage’s freedom, and some of the negotiators are so experienced that they have encountered the same kidnappers more than once.

Patrick Grayson of GPW is a London specialist who advises on the need for K&R, but offers his international clientele a wider service that also assesses business risk, personal security, household protection and due diligence. ‘We study the risk and advise on a broker, based on the response company,’ he explained, stressing the need for organisations that have the necessary linguistic and psychological skills. He knows the players and is not tied to a single insurer, although he thinks highly of Jardine Lloyd Thompson.

The experts are good, and Taheter is better than most, but consultants cannot guarantee safety: one television personality in Mexico has been abducted three times. Dr Thomas Hargrove, the agronomist whose book The Long March to Freedom was made into the movie Proof of Life, spent 344 days in captivity after he was grabbed in 1994.

He was freed after two payments of half a million dollars were made, and then sued his employer and their insurance company for $100 million, a claim that was settled out of court. A Colombian candidate for the country’s vice presidency, Ingrid Betancourt, has been held by FARC guerrillas for the past three years.

However, the consensus is that it is better to be in the hands of the professionals than to be held by western amateurs, and the consultants can distinguish between the hoaxers, the opportunists who call to demand a ransom, and the genuine article. Through experience, they also manage these emergencies more adeptly than most police forces.

With the removal of border controls between much of the Balkans and the rest of Europe, the kidnap business is set to escalate, and an annual premium of £20,000 may turn out to be a very small investment if it saves a valued body part, or maybe even a life.

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