by David Helvarg
March 24, 1998
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President Bill Clinton's use of private investigators—including San Francisco's Palladino & Sutherland, who investigated the 1992 Clinton campaign's "bimbo eruptions," and Washington's IGI, which is accused of digging dirt on Kenneth Starr's lieutenants—has reopened the issue of PIs in politics.
The fact is, gumshoes and politics go way back—all the way back.
Scottish immigrant Allan Pinkerton, America's first private eye (the term is said to have come from his agency's logo, an ever-vigilant open eye), personally guarded President Abraham Lincoln at his inauguration, and went on to become chief spy for the Union Army's counterintelligence task force during the Civil War.
Modern "opposition-research" consultants go back at least to the days of Louisiana Governor Huey Long, whose researchers were said to know more about his opponents than they knew about themselves.
Corporate snoops in politics? General Motors was forced to apologize to consumer activist Ralph Nader in 1966 for hiring a PI to look into his politics, sex life, finances, and ethnic background in an attempt to discredit him before Congress.
That didn't stop the Nixon White House from using PIs James McCord, Bernard Barker, and others (along with ex-FBI and CIA agents) in its bungled Watergate burglary and other "dirty tricks" operations in the early 1970s.
Now we're treated to the public spectacle of gumshoe Jack Palladino hiding out from Paula Jones' legal team (and their PIs) while IGI's chief Terry Lenzner is dragged in front of Ken Starr's star chamber.
Ironically, it's these PIs' involvement in Clinton's political scandals that has a number of today's button-down, white-collar gumshoes worried about increased public scrutiny of their more lucrative private sector work. The use of PIs by global corporations has quietly but dramatically expanded in recent years; maybe it's time for a closer look.
Among the major players in today's world of bluechip private investigation firms:
Kroll Associates -- A pioneer of corporate investigations for Wall Street during the 1980s mergers & acquisitions fad, Jules Kroll recently infused his huge detective agency with $89 million in new capital by merging with Ohio-based armored vehicle manufacturer O'Gara Co. Kroll, a former aide to Sen. Robert Kennedy, has tracked stolen loot for the House Foreign Affairs committee, the Federal Deposit Insurance Corporation, and foreign governments from Port-au-Prince to Moscow. With extensive international resources including 300 licensed PIs and hostage negotiating teams made up of former spooks and army Delta Force commandos, Kroll's managing director has boasted, "We're like a private CIA." He's not wrong.
Investigative Group International (IGI) -- Founded by former Senate Watergate committee investigator Terry Lenzner, IGI maintains elegantly low-key offices just four blocks from the White House—and critics say the detective agency has become Bill Clinton's private CIA. IGI does auditing, intelligence, and security work for major clients including 3M, Lockheed, Sen. Ted Kennedy (D-Mass.), and the Democratic National Committee and President Bill Clinton's legal defense fund—which got Lenzner called before Sen. Fred Thompson's (R-Tenn.) televised hearings on campaign finances last year. Lenzner explained that with donations flowing in so rapidly, the Democrats had asked him to check some of their contributors for shady connections—though for some reason they asked him not to interview chief bagman Yah Lin "Charlie" Trie. Lenzner was also made to explain why he had proposed to investigate Sen. Don Nickles (R-Okla.) and his wife on behalf of an Indian tribe (Nickles opposed the return of tribal lands in Oklahoma).
More recently, IGI has been accused of investigating Ken Starr's lieutenants for Clinton's lawyers, and Lenzner again has been called to explain his snooping—this time before Starr's grand jury. Whether or not the allegation is true, IGI has long been a friend of Bill; Newsday recently uncovered that Lenzner began working for the Clinton campaign as early as 1991. Several ex-IGI agents work in the Clinton administration, and in 1994 the State Department awarded IGI's then-president Raymond Kelly a lucrative no-bid contract to train Haiti's new police force. Kelly now heads U.S. Customs.
Palladino & Sutherland -- Jack Palladino, his wife Sandra Sutherland, and their crew of West Coast operatives work out of a Victorian mansion in San Francisco's Haight-Ashbury district and have worked for clients ranging from Hell's Angels to Black Panthers to international bankers. While investigating American Express in Europe in 1989, Sutherland posed as a journalist to try to develop leads. Palladino recently made himself scarce just in time to avoid a subpoena from Paula Jones' lawyers, who wanted to ask him about his 1992 investigations for the Clinton campaign of Gennifer Flowers and numerous other women who were alleged to have had affairs with Bill.
Congress is now investigating why Teamsters lawyer Charles Ruff—now Clinton's chief White House counsel—paid Palladino $130,000 to snoop for the Teamsters in 1994 during the contested election of Ron Carey as Teamsters president. Neither Ruff nor Palladino, who has a reputation for intimidating the targets of his investigations, have disclosed the nature of the work. Palladino also recently worked for rocker Courtney Love in her efforts to quash rumors that she killed husband Kurt Cobain.
Wackenhut Corp. -- Founded by an ex-FBI man in the 1950s, Wackenhut is one of the nation's biggest private security firms, dealing in corporate espionage, uniformed security service for U.S. military and nuclear facilities, and prisons for profit. In 1990 the Alyeska Pipeline Service Co. (owned by a consortium of oil companies) paid Wackenhut more than $1 million to spy on whistleblowers, environmentalists, public officials, and other critics who were providing congressional investigators with evidence of safety and environmental violations on the trans-Alaska oil pipeline. Before they were exposed, Wackenhut operatives had created a phony environmental group and even discussed mounting a spy operation against Congressman George Miller (D-Calif.), who chaired the investigating committee. After getting burned in the Alyeska case, Wackenhut shut down its Special Investigations Division, where most of its licensed PIs resided.
Pinkerton, Inc. -- Pinkerton has grown into the Wal-Mart of the security industry, with 47,000 employees and 220 offices in the United States, Canada, Mexico, Europe, and Asia. Its contract work includes information security systems as well as physical security and global intelligence for about half of the Fortune 1000. After the Civil War the Pinkerton agency earned a reputation for doing industry's dirty work, using infiltration, provocation, and armed violence to repress the early labor movement. Working in Butte, Montana in 1917, Pinkerton operative and future detective novelist Dashiell Hammett was offered $5,000 by an Anaconda mining company official to kill union organizer Frank Little. Hammett refused; Little was lynched by vigilantes a short time later. In the 1930s armed Pinkerton agents were used against auto, steel, coal, and other union strikers. Even today they continue to offer specialized services designed to help companies identify—and undermine—attempts at union organizing.
David Helvarg is an author, journalist, and licensed private investigator.