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Eugene Linden

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Posted Thursday, June 28, 2001, at 9:00 PM ET

Resigned to make the best of it, I get up early to prepare some remarks for the late morning session on migration and crime. Armed with statistics, case studies, and some notes on the forces that will likely produce a great surge in the migration of young men—the talent pool for mafias and terrorists—I trudge off to the conference center, leaving Gillian with instructions to shop for a dress to wear to a wedding dance we are to attend in the Scottish highlands tomorrow night. When I get to the meetings, however, I'm greeted by wonderful news. The two sessions on migration have been merged, and my services won't be needed. Despite my preparations I am not in the slightest disappointed. Unlike the keynote speech where I felt I was delivering something original, I know this topic is wrong for me.

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Liberated, I take the opportunity to talk with some of the delegates I haven't yet met. One of these is John Chase, an easygoing, trim man, now with a company called IS Global, where he works on protecting company brands from counterfeiting. I tell him I'm interested in speaking with someone in the K&R (kidnapping and ransom) business, and he mentions that before joining IS, he spent 5 years negotiating kidnappings for Lloyd's of London. (Before that, Chase had spent 12 years in Latin America, where he worked as a "rogue" agent for the CIA, meaning that he did not have official cover.)

The picture of kidnappings Chase presents is a far cry from the heroics of Russell Crowe in the film Proof of Life. The closest the negotiator ever comes to the kidnapper, says Chase, is the occasional money drop from a helicopter. Indeed, at least in Latin America, kidnapping has evolved into a business. Chase estimates that there are about 6,000 kidnappings a year worldwide that might get the attention of K&R specialists, a good deal of them in Latin America, where Brazil may be displacing Mexico as the kidnapping capital of the world.

In Latin America, the kidnappers almost never harm the victims (it's cheap to feed them, and they can outwait the families). They simply install the unfortunate businessman in some well-concealed and well-guarded place, perhaps in the jungle, and begin the two year process of negotiating with the family. Usually, says Chase, demands start at about $5 million and then come down to a final figure between $500,000 and $1 million. Once the kidnappers have a secure hide-out, kidnapping gangs can simply add rooms and grow the business to achieve economies of scale. Chase's description of this no-nonsense focus on the bottom line makes it sound as though some of the veteran kidnapping gangs might soon be shopping for investment bankers to take their enterprise public.

Rich families buy insurance from companies like Lloyd's, usually policies that cover the patriarch as well as various members of his family who might be snatched for ransom. (Note to potential heirs: One advance indicator of whether you will be in the will is whether you are covered by the policy.) Typically, premiums might run $100,000 a year. I do a rough calculation comparing this premium with the average payoff and realize that Lloyd's is estimating that over a 10-year period there is close to a 100 percent chance that some covered member of a wealthy family will be kidnapped. Given the trauma that kidnapping inflicts on families, even if the victim is returned safely, this statistic is the best argument against conspicuous wealth I've yet encountered.

Chase says that Chinese and Asian gangs are getting into this game, which is lucrative for kidnappers, kidnap negotiators, insurance companies, corrupt police, and almost everyone but the family (and the nation, because investors will ultimately pull out of an unsafe environment). Because the Russians are new at it, they are much more dangerous, he notes. The gangs there often overreact, harming or killing their hostage even when the ransom has been paid.

After talking with Chase, I have a brief conversation with Robert Fahlman, an assistant director of Interpol and head of its criminal intelligence subdirectorate. He's an expert on corruption, and I decide to get his opinion on a thought I have been toying with. Having spent time in some of the most corrupt nations on earth, I've been trying to think of some way to measure the tax that corruption places on a society.

One simple indicator might be the time horizon during which ordinary expatriate businessmen (as opposed to those who bring their own armies or buy high government officials) are willing to put their money at risk. For instance, in Kinshasa during the Mobutu era, an expatriate told me that no one in their right mind would invest in the country unless they could get their money back in about two years. The need for that kind of return rules out almost all investments that would develop the nation and funnels the entrepreneur toward importing items that can be steeply marked up and sold quickly, with a minimum of investment and logistics. My index would need to be adjusted for exogenous events, government incompetence, and insurgencies that affect such time frames, but my guess is that those countries in which businessmen demand the quickest return on a buck would match up nicely with the lists of the most corrupt nations developed by organizations like Transparency International.

Fahlman is either being polite, or he is intrigued by the idea. I resolve to develop it further. It's the barest bones of an idea though, and interested readers are invited to shoot holes in this concept.

I head back to the Balmoral Hotel to pick up Gillian and then head for the train to Aberdeen. There it turns out that I still need a translator for Scottish. As he prepares my bill, the hotel clerk asks, "Did you enjoy your stay?" I hear this as "Did you have any charges today?" My response—"One telephone call"—leaves him looking befuddled and reduces my daughter to helpless laughter.