Broker, Trader, Lawyer, Spy (19 page)

It’s more than just a personnel matter. If, as the government official says, the moonlighting program is in place to keep serving officers from jumping to the private sector for higher pay—during a time of war, no less—it’s an indication of the pressure that the rising private intelligence industry is placing on government. There’s no way the federal pay scale can keep pace with the sums available at large corporations, hedge funds, and the like. Some keen observers of the intelligence community say the brain drain to the private sector is chipping away at U.S. national security, as people whose training was financed by the taxpayers quit the government to sell those skills to private businesses.

The presence of so many current and former CIA personnel on the payroll at BIA causes confusion as to whether the intelligence firm is actually an extension of the agency itself. As a result, BIA places a disclaimer in some of its corporate marketing materials to clarify that it is not, in fact, controlled by Langley.

BIA
WAS FOUNDED
by a small group of CIA veterans, including Phil Houston, one of the CIA’s top interrogators. According to a former CEO of the company, the founding group left the CIA with a feeling of disgust over the Bush administration’s policy on torture after 9/11. The group of CIA veterans (some of whom had been with the CIA for more than 20 years) felt that the administration’s so-called “enhanced interrogation techniques” betrayed everything they stood for as officers—not because torture was morally wrong, they told this former CEO, but because it produced bad intelligence. For a CIA officer who’s proud of his work, there’s nothing worse than an inferior product.

It seemed like a good time to start a private company designed to train law enforcement agencies in the CIA’s state-of-the-art techniques of detecting deception—the science of telling when someone is lying. Using advanced techniques, psychological research, and years of trial and error, Houston had developed a system—in the private sector he called it “tactical behavior assessment” (TBA)—that he maintained was a nearly foolproof way to spot a liar. Unlike polygraph machines, the TBA technique allows examiners to work without hooking up their subject to a series of wires. The subject never knows he’s being scrutinized.

Polygraph machines work by measuring a person’s physical responses, such as heart rate, that indicate stress. Analysts using the machine need to sit with their subject for a long time. They have to establish a person’s physiological baseline, so they begin with a “control” conversation about neutral topics, before they can begin grilling the subject. Conducting an interview and doing a thorough analysis of polygraph results can take hours.

TBA focuses on the verbal and nonverbal cues that people convey when they aren’t telling the truth.
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Psychologists familiar with the method say it works because human beings just aren’t
hardwired to lie well. Holding two opposing ideas in your brain at the same time—as you have to do in order to tell a lie—causes a phenomenon they term “cognitive dissonance,” which creates actual physical discomfort. And when people are uncomfortable, they squirm. They fidget ever so slightly, they pick lint off their clothes, they shift their bodily positions. Without even realizing it, they reach for ways to avoid the physical discomfort. They reach for every way to tell the literal truth while still misleading the questioner.

A CIA veteran trained in the TBA technique will begin any session by getting himself into what BIA calls “L squared mode,” which means “look and listen.” Agents look for the physical indicators of lying. They watch for a person shifting anchor points. If the person is leaning forward on one elbow, does he switch to the other one? If the person is seated, does he shift his center of gravity? Interrogators watch for grooming gestures such as adjusting clothes, hair, or eyeglasses. They look to see if the person picks at his fingernails or scratches himself. They watch for the person to clean his surroundings—does he straighten the paper clips on the table, or line up the pens? If he does, he could be lying.

To obtain verbal clues, agents listen for several kinds of statements. They’ll listen for qualifying answers, phrases that begin with words like “honestly,” “frankly,” or “basically.” Those are generally an indicator that the person is trying too hard to convince his audience of what he’s saying, and they’re a red flag for agents trained in TBA. The agents will be listening for detour phrases like “as I said before…” They’ll want to hear if the person invokes religion—“I swear to God”—or attacks the questioner: “How dare you ask me something like that?” These can be unconscious tactics to avoid actually lying to the questioner.

Other red flags: Complaints—“How long is this going to take?” Selective memory—“To the best of my knowledge.” Overly courteous responses—“Yes, sir.” In each case, analysts trained by the
CIA see a pattern. And if they spot enough red flags, they know they’ve caught a liar.

The tricky part of TBA is that any one of these indicators alone doesn’t mean much. Maybe the guy just has an itch and needs to scratch. That’s why agents trained in TBA watch carefully. They’re looking for clusters: indicators that come all at once. If the subject shifts his anchor points, grumbles about how long this is going to take, and then takes off his glasses while scratching his nose, he’s probably a liar. BIA’s trainers teach clients how to take shorthand notes as an interview progresses. They tell trainees to note down a number for each question asked in the interview, and then mark a dot next to that number for every indicator they spot during the answer. The advantage of this note-taking system is that you don’t have to look down at your page very often, since you’re only making dots, not writing down in words what the person says. You can keep your eyes off your notebook and on your subject.

And it doesn’t take long to put all this together. Houston tells colleagues that the crucial instant comes within the first five seconds after a question is asked. That’s when a person can’t keep himself or herself from exhibiting the signs of a lie. BIA training, in fact, teaches agents to ignore any events that come more than ten seconds after a question. It’s in the first moment that a liar reveals everything to a trained observer.

Once they spot a lie, agents shift into what they call “elicitation” mode, which is the art of getting someone to confess something even if it is against his own best interest. Mike Floyd, a veteran of the CIA and a colleague of Phil Houston, was known for his extensive preparation before conducting an interview with a suspect. Typically, he’d bring in another expert to help with the interview, so one person could ask the questions and keep the conversation flowing while the other just focused on the suspect, watching for indicators of dishonesty.

They’d ask “bait” questions, such as, “Is there any reason why
we might find your fingerprints at the scene of the crime?” They’d phrase the touchiest questions in a neutral way. So they wouldn’t ask, “Did you embezzle the money?” Instead they’d say something like, “Tell me what happened to the money.” They’d ask “presumptive questions” in which they showed the suspect they already knew something about what happened. So they wouldn’t say, “You’re guilty, aren’t you?” They’d ask something like, “Weren’t you worried that the SEC might be able to trace the funds?” That question assumes that both the interviewer and the suspect know the suspect is the perpetrator, and this conversation is simply clearing up some small details.

That kind of questioning is based on the assumption that people want to confess their crimes. Somewhere deep in their souls, they can’t stand holding on to a secret. And if they’re questioned in a careful, nonconfrontational way, they’ll spill everything.

BIA’s training begins with an introduction to Phil Houston’s techniques, followed by a series of videos of executives being interviewed on CNBC. The goal is to learn how to separate the truth tellers from the liars. Then come so-called red-letter drills, in which staff volunteers are organized into a team. One of the volunteers is told to steal a pre-placed red letter from an office. The “thief” and a group of innocent volunteers are brought into the conference room, where the trainees put their new skills into practice. They grill the volunteers to find which one is lying about the theft and is therefore guilty.

Trainees are taught how to position themselves in a room during an interview. Don’t sit across a table from the subject; sit on the same side of the conference table. If you’re sitting at a corner, push your chair back from the table until you can spot movements of the subject’s legs.

One person familiar with the sessions says many of the students can spot the liar after just a day or two of training. But often, it is the students in the back of the room who identify the liar first, not the student designated to ask the questions. For a
beginner in these techniques, it can be tough to both quiz a suspect and watch for clusters of indicators.

At many of their stops, BIA trainers distribute laminated cards with deception-detection tips for trainees to remember after the session. The cards, headed “Tactical Behavior Assessment and Strategic Interviewing Pocket Guide,” urge students to “Be in L2 Mode—Look and Listen.” Over time, BIA’s clients have included several hedge funds and investment banks.

P
HIL
H
OUSTON WAS
convinced that there was nothing anyone could do to defeat his system. That is, even if an agent was trained in the TBA method, and knew what another trained observer would be looking for, he still couldn’t lie without getting caught. Houston and his colleagues from the CIA had tapped into something deep within the human psyche, and they knew it was powerful stuff. People trained in TBA often make terrible liars themselves. Once you’re convinced that lying is always transparent, it becomes almost impossible for you to carry off a successful lie.
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Phil Houston and his colleagues thought that selling this timeless TBA training to law enforcement agencies across the country might be a good business. At first, it was. After 9/11, local police forces realized they needed to beef up their interrogation techniques on the front lines against terrorism. Police officers signed up for the training, and Houston and his colleagues traveled the country evangelizing about TBA. But although Houston is a brilliant interrogator, his colleagues say he’s not a brilliant businessman. His company kept bleeding money. Police forces were late paying their bills. Houston and his colleagues were more interested in delivering the training than in following up on invoices.

Soon, the struggling little firm faced an impasse. It needed a buyer to inject business discipline and make it thrive. That’s when Houston met Liam Donohue, a venture capitalist based in Boston who was then running an investment fund called Arcadia Partners.
TBA and the CIA’s “elicitation” techniques captivated Donohue, and he saw a wide-open new market for them: corporate America.

Arcadia bought a large percentage of Houston’s firm, and the CIA veterans retained a significant equity share in the reconstituted new company, which was now called Business Intelligence Advisors, or BIA. The acronym was a deliberate reference to the CIA.

Officers of BIA declined to be interviewed during the writing of the book. But the firm describes itself, succinctly, in a document distributed to clients and signed by its current president, Cheryl Cook:

Liam Donohue eventually became chairman of the board of the new company. Under his leadership it began to thrive. As an MBA from Dartmouth’s famous Amos Tuck School of Business Administration, he brought in a series of managers who shared his background. He reoriented BIA from an enterprise primarily focused on law enforcement to a business focused on generating corporate clients. He hired a CEO, Don Carlson, who was a lawyer and had
been with the investment banking firm Goldman Sachs. By 2005, Carlson says, BIA was generating between $10 million and $11 million in annual revenue.

Donohue is extremely secretive about BIA, and the firm has opened up to the press about its services only once, for an astonishing article in
Barron’s
by Jonathan R. Laing, “Is Your CEO Lying?”
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The article laid out BIA’s deception-detection techniques and set off a flurry of interest in CIA-style interrogation within the hedge fund community.

The CIA didn’t invent these techniques. Although it spent years working on tactics based on the best information modern science has to offer, at most it was just reinventing something that had been developed more than 100 years ago by the first private eye, Allan Pinkerton. All the biographies of Pinkerton mention his ability to get criminals to confess. In the 1850s Pinkerton wrote that there was a reason for this astonishing success: “Criminals must eventually reveal their secrets,” he noted. “And a detective must have the necessary experience and judgment of human nature to know the criminal in his weakest moment and force from him, through sympathy and confidence, the secret which devours him.”

Allan Pinkerton and Phil Houston, separated by more than a century, came to remarkably similar conclusions about the human condition.

Pinkerton said that his technique was based on judgment of human nature, and that is also true of the TBA technique. Pinkerton noted that detectives should use “sympathy,” which is what “elicitors” trained in TBA do as well. And Pinkerton talked about using “confidence,” just as the CIA’s elicitation method uses presumptive questions, in which the interrogator projects confidence that he already knows something crucial. Finally, Houston and Pinkerton agree on the most important point: the secret devours the criminal. Criminals all want to confess. The interrogator is just helping them along.