Background Investigations

Failing Successfully

It’s not something that we like to do very often, but we fail more often than we would like to admit.

Nobody likes to admit to defeat. But it happens.

In a business with so many independent variables, there are no guarantees. We can’t promise that we will be able to dig up some salacious information about a key witness if nothing really exists. And we can’t promise that we will find your long lost Uncle Louie who skipped town 30 years ago if he is living off the grid in Thailand.

The best we can do is to lay out all the information, give an honest assessment about our capabilities and the amount of time and resources that it could take, and provide a client with our best course of action.

But even the best laid plans can go down the tubes.

Finding Jane’s Father

Last month, we were retained by Jane (not her real name), who was looking for her father. She didn’t even know her father existed until five years ago, when her estranged mother called her out of the blue. After she spent five years gathering details about her father, the only things she had to go on were his first name, the town where he was born in Eastern Europe and his approximate age. She also believed that he had immigrated to the United States in the late 1970s and lived somewhere in the Midwest. She thought she also knew the first initial of his last name.

Jane had spent more than five years looking for her father and had incredibly detailed notes of her encounters with everyone who knew him. She had spoken to every member of the family whom she knew, had done her own digging around, and had called and ruled out a number of possibilities.

But she was stuck.

Right from the beginning I knew that this would be a tough case. The only factors that made this even a remote possibility were that her father’s first name had an unusual spelling and that she had a pretty good sense of his age.

I explained the challenges at the outset, and after some internal discussions we laid out a plan to help her. We knew it would not be easy and would take quite a few man-hours and resources. We could provide absolutely no guarantees.

Aware of the risks, Jane asked us to go forward.

Even the Best Laid Plans Can Go to Sh*t

In the end, after a few weeks of painstaking research and calls to individuals who fit the description of her father, we delivered our report.

In a call with Jane, I explained the process that we went through to get to the point we had reached.

We didn’t find her father. We had done everything we could.

It’s never easy to tell someone that you failed. We both knew the risks, but that doesn’t make it any easier.

A few days later, we sent her a routine follow-up to see how satisfied she was with our services and how likely she was to recommend us.

Who would blame her if she gave us a less-than-perfect score?

But she didn’t; she gave us perfect 10s.

How to Fail Successfully

We followed some of our own tenets for handling client expectations: we communicated often; we were completely transparent in what we were doing; and we gave a (brutally) honest assessment of the probability of finding her father.

In the end, we had eliminated everyone in the United States who matched the information she gave us for first name, first initial of the last name and age in the general age range.

Failure is inevitable in this business. Although we didn’t “succeed” in this case, we did have a client who was more than satisfied about what we did to find her father.

You can’t always predict results. But you can approach each case with honesty, openness, transparency and a healthy dose of communication.

July 15, 2014/7 Comments/by Brian Willingham

Background Investigations

Lessons From the Uber Background Check Gaff

A few months ago, PandoDaily broke a story that a driver for Uber, the popular ride-sharing service, assaulted a passenger, called him a “dirty Mexican faggot,” and then struck him. PandoDaily later reported that the driver had an extensive criminal history, including felony and misdemeanor charges and at least one felony conviction that resulted in prison time.

(Frankly, it probably would not have been news if not for it’s explosive growth, controversial surge pricing and skyrocketing value of Uber, reportedly worth more than $3.4 billion in a few short years.)

Nevertheless, the question became, how did Uber, which claimed to do background checks on all its drivers, miss this?

My response, when contacted by PandoDaily, was that either they weren’t doing background checks at all or “they’re doing such shitty background checks that it won’t come up.” It’s one of the worst quotes ever, I know. (Note to self – don’t say things to a reporter that you don’t want to be quoted on.) But it would have fit pretty nicely into our blog post a few months ago discussing how Criminal Record Checks are Mostly C**P.

Then, just last week, the Chicago Tribune found that a Chicago driver had a felony conviction for a residential burglary and had also been convicted of at least two misdemeanors.

In response to these background check gaffs, Uber released its new policy on their “expanded background checks,” in which they said that they now use a “Multi-State Criminal Database” to conduct criminal background checks. They go on to say that “some counties do not participate in this reporting” and that “relying on the Multi-State Criminal Database may miss records.” Under their new expanded program, drivers “will undergo federal and county background checks on top of the existing Multi-State Criminal Database check.”

Dig Deeper: 5 Reasons Why Background Investigations Fail

”Multi-State Criminal Databases” Are Mostly Hot Air

Many employment firms, investigative firms, databases, etc. tout a national criminal database, or in this case a “Multi-State Criminal Database.” Effectively, these may include records from various sources such as sex offender records, prison records and arrest records, adding up to what they describe as a national or “multi-state” criminal check.

But the problem is that these databases are not comprehensive or reliable. They do not cover every state, county, or local offense. So, for instance, if this “multi-state criminal check” did not have data from the county that the person you are searching for information about lived in, it’s pretty much a pointless search.

The driver with the extensive criminal history was arrested and charged in San Francisco County, where he worked. The other was charged in Cook County (Chicago), where he worked. Clearly, the multi-state criminal check did not cover either San Francisco or Chicago, otherwise this mess would have never happened. In fact, I am not aware of any online database source that covers San Francisco County or Cook County (Chicago) criminal records, other than going directly to the court.

So while Hirease, a company that conducts background checks, says that its multi-state criminal search covers “40 states plus DC,” it does not cover every offense or every county within those states. In fairness, Hirease recommends that the multi-state criminal search service should be used “in conjunction with a county-level criminal search.” But I guess that’s not always the case.

County Criminal Checks Are Essential

Uber acknowledged that “relying on the Multi-State Criminal Database may miss records” so under their new “expanded background check,” drivers “will undergo federal and county background checks on top of the existing Multi-State Criminal Database check.”

As we described above, multi-state criminal databases do not include every case in those jurisdictions. It’s not even close.

Since state-level criminal records (which encompass the most common criminal offenses) are filed in the court of the county where the person was arrested, wouldn’t it make sense to search those specific records where the person currently or previously lived or worked?

A “county background check” does that. It includes specifically checking the criminal court record in those counties. So in addition to utilizing a multi-state criminal database, which encompasses a wide area but is not complete and “may miss records,” conducting a criminal search in the specific county that they live or work is essential.

Dig Deeper: How to Conduct a Criminal Background Check Like an Expert

In the case of Uber, if they had completed a countywide criminal check in San Francisco and Chicago by physically searching the records at the courthouse (which is the only way I am aware of doing a criminal check in those jurisdictions), they would have never gotten into this mess.

A Disservice to the Industry

Personally, I think employment-screening firms are doing a complete disservice offering a “multi-state criminal search” and not requiring a county-level criminal search. It doesn’t do anyone any good when serious criminal convictions in major metropolitan areas are not uncovered in the “multi-state criminal” search.

I get it. Most clients probably don’t want to pay for more comprehensive services and are merely doing the most minimal check possible to cover their asses.

But what good is it when everyone looks bad?

Photo Courtesy of Carolyn Coles / Creative Commons

February 18, 2014/1 Comment/by Brian Willingham

Background Investigations

5 Reasons Why Background Investigations Fail

The Wall Street Journal published an article the other day about why red flags were missed in background checks on a number of high-profile cases in which an employee’s “prior transgression or act of concealment embarrasses a well-known company or university.”

The article highlights a number of recent episodes in which executives at Yahoo, Veritas Software, and the U.S. Department of Homeland Security as well as a number of university administrators and coaches have been fired or forced to resign because they misrepresented their credentials.

The article also discusses Matthew Martoma, who was expelled from Harvard Law School for forging a transcript. Martoma changed his name, received an MBA from Stanford University, and went on to be a hedge fund manager at SAC Capital, then one of the most prestigious hedge funds in the world. He was convicted Thursday for his participation in the most lucrative insider trading case ever.

And it’s not just embarrassing misrepresentations. The Washington Navy Yard shooter, Aaron Alexis, who in September killed 12 people, was arrested on several occasions, but nonetheless held onto his security clearance.

So why did background investigations fail?

1There is no one-stop shop

Conducting a background investigation is not as simple as throwing a name into a computer that then spits out the data. For one thing, there are still quite a number of manual processes that need to be completed. But also, there are hundreds of sources of information and hundreds of data points that need to be researched and analyzed. Some firms rely on a single-source database for their background investigations, but the fact of the matter is that there is no single source that captures all the data.

2Technology gives false confidence

A lawyer once joked that private investigators are just an expensive Google search. You ask other people, and they think Google has all the answers. It certainly may be able to help lead you to the all the answers, but until Google indexes all the world’s information (which Google has said will take 300 more years), it’s not even close.

3Low-budget background checks

The cost of a proper background investigation is something that most firms are reluctant to pay. The best and most specialized proprietary databases are expensive. What’s more, a significant amount of extremely valuable information, such as court records, is not available online and may require an in-person visit. Most firms aren’t willing to pay the expense of conducting a background check properly, which involves visiting courthouses or personally retrieving records.

4Finding “red flags” takes skill and analysis

Of course, anyone who misrepresents their credentials should be easy to spot by even the most basic of background investigations. But in the case of Martoma, his expulsion, his name change (he changed his name after leaving Harvard), and his reported litigation came up only in a comprehensive background investigation by a skilled investigator digging through mounds of records.

5False sense of security

A large Midwestern investment firm recently contacted us about conducting comprehensive background investigations on their senior executives. Their new chief executive officer had just been fired, after five months on the job, when it was discovered that he had been involved in sexual relationships with at least four people in the office. The $15 background check they had done had given them false confidence that he was the right guy for the job, somehow missing the fact that he was a complete loser. Between salary, fees, moving costs, and everything else, the situation cost them about $100,000. It was only when they lost all that money that they decided to do anything about it, though.

In closing …

I gave a presentation to a local business owners a few years ago and asked the group if they conducted background checks on new employees. Several raised their hands and said that they “Googled” job candidates, or that they used one of the various online services and paid less than $50. One even said that they hired people from other big firms and relied on the background investigation that would have been done previously.

The fact is that the “Google” background investigation and the “background investigation that the other firm did” are not really background investigations at all. Neither are those $15 online “background checks.”

Which is why they fail.

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February 7, 2014/1 Comment/by Brian Willingham

Background Investigations

Criminal Record Checks Are Mostly C**p

Criminal record checks are mostly crap.

There.

I said it.

That might be a little harsh. They are still an important piece of conducting a background check, but they are mostly done poorly and give people a false sense of security.

Previously, I’ve explained how commercially available criminal record check sites don’t work anyway.

Also, we’ve talked about how to conduct a comprehensive criminal record check, where you’ve got to jump through a lot of hoops. A step that most people won’t take, mostly because it costs too much.

But a few recent experiences have produced even more examples why criminal background checks are mostly crap.

Experience #1

A recent article in the Telegram (Worcester, Massachusetts) discusses how the town of Brookfield has agreed to conduct criminal background checks on town employees and volunteers through the Criminal Offender Record Information (CORI) database, the state-run criminal record database.

While I applaud them for making the effort to try to weed criminals out of their local government, the only problem is that it may all be fruitless.

You see, CORI only covers state criminal offenses that occurred within the borders of Massachusetts. So, let’s say someone happened to be an axe murderer in neighboring New Hampshire. Guess what. You would never find that person listed in the database.

Or if he or she had committed ANY criminal offense in any of the other 49 states in the union, records of those offenses would not be found either. Likewise, if they committed some federal criminal offense, CORI would not pick that up either.

And if anyone applies for a position in Worcester knowing that they have a criminal record in Massachusetts, he or she should never get the job anyway.

Is Brookfield wasting $1,500 per year conducting these criminal checks? Of course not.

But it’s only giving them a false sense of security.

Experience #2

In most pre-employment matters, background checks are conducted going back seven to 10 years. The reason? In some cases, states limit the time you can look back into a person’s past, but in the majority of cases, it comes down to cost. The farther you look back into someone’s past, the more costly it gets.

Take, for example, Mr. Martin. We just finished conducting a comprehensive background investigation on him during the course of litigation. Mr. Martin is a licensed CPA and has had several high-profile positions with a high-profile accounting firm and another high-profile company.

Not only has he filed for bankruptcy and had numerous lawsuits filed against him for various matters, but he was charged with stalking a 17-year-old when he was 35.

Problem is, it happened 12 years and three states ago; 99.9% of typical background checks wouldn’t pick this up.

Would you hire someone to be your financial accounting manager who has had serious financial problems and was charged with stalking a 17-year-old?

I wouldn’t.

Experience #3

A lot has been made of the failed background checks on Edward Snowden (the former NSA contractor) and Aaron Alexis (the Navy Yard shooter) conducted by USIS, the federal contractor that missed some critical information.

Regarding Alexis, according to published reports, USIS investigators knew that he had been charged with “criminal mischief” in 2004, but when asked about the incident, Alexis told them that he had “deflated the tires on a construction worker’s vehicle.” Turns out that he had “deflated the tires” with a .45-caliber pistol.

How did they miss it?

They didn’t bother pulling the police report. Another step that most people don’t do.

As far as Snowden goes, the New York Times reported that he tried to break into classified files and that the background check failed to verify past security violations or probe his trip to India that he failed to report.

But guess what. He wasn’t a convicted criminal.

Experience #4

A large mid-western investment firm called last week. They wanted to talk about conducting a more comprehensive background investigations on their senior executives.

Why, you ask?

Their new chief executive officer had just been fired after five months on the job after he had sexual relations with at least four people in the office. The $15 criminal background check they did gave them false hope that he was the right guy for the job and somehow missed the fact that he was a complete loser.

The Problem

So here is the problem. Criminal record checks, while they are important, mostly give people a false sense of security.

That volunteer in Brookfield might be a convicted felon in another state.

The next employer of Mr. Martin may not know about his sketchy past.

The next Edward Snowden, who has absolutely no criminal record, might be sitting right in front of you.

And that sexual harassment lawsuit may be staring you right in the face.

Criminal record checks are an important part of the background check process, but they are mostly done poorly, failing to uncover critical information and possibly giving people a false sense of security.

October 31, 2013/6 Comments/by Brian Willingham

Background Investigations

Do Private Investigators Have Access to NCIC Records?

Private investigators do not have access to NCIC records.

The NCIC (National Criminal Information Center) is a computerized index of criminal justice information, such as criminal record history information and lists of fugitives, stolen properties, and missing persons, that is available exclusively to law enforcement agencies and related criminal justice organizations.

The data contained in the NCIC is compiled from records by the FBI; federal, state, local and foreign criminal justice agencies; and authorized courts.

Access to this database is strictly prohibited to the general public, including private investigators and information brokers.

While there has been, unfortunately, a history of abuse of this privileged system, the government has recently cracked down on the abuse by determining who is accessing the NCIC database, including through system audits and investigation of individual usernames and passwords, and instigating federal prosecution against those who inappropriately access the system.

“Private investigators … can—and should—do many things to serve their clients, but bribing law enforcement officials for confidential data is not one of them.”
~Preet Bharara

Meanwhile, there have been questions about the reliability and accuracy of the NCIC database, so even if you did have access to it, it may not be the most comprehensive way to find criminal records.

How do private investigators obtain criminal record information?

Of course, it would be nice to have access to criminal records relating to any person in the entire United States; unfortunately, it is just not possible.

Here are some additional resources to dive in a little deeper:

October 23, 2013/1 Comment/by Brian Willingham

Background Investigations

Identifying a Driver’s License Number for Illinois Driving Records

We were recently working on a case in which we needed to obtain a driving record abstract for an individual in Illinois.

We found out that in order to obtain a driving record abstract, you need a driver’s license number, which we didn’t have.

In many states, private investigators can obtain a driving record abstract with simply a name and date of birth. Depending on the state, an investigator may have direct access to the state Department of Motor Vehicles record database. (In every case, there must be a permissible purpose as per the Drivers Privacy Protection Act.)

Every state is different, however. In Connecticut, the request must be submitted in person with the person’s name, date of birth and most recent address. It takes a few weeks to get the record back.

In New York, however, a driver’s abstract can be searched by name and date of birth, or just by the name.

In other states — Illinois, for example — records can be searched only by driver’s license number.

That’s where the Driver’s License Calculator comes in. Apparently, in certain states, the algorithm used to generate the driver’s license numbers is always the same. By entering details about the person, including name, date of birth and gender, you can determine the unique driver’s license identification number.

We entered all the information on our subject in Illinois and voila! It worked. Within a few minutes, I submitted the request to the investigator in Illinois and had the record in a few hours.

The site has also set up algorithms for Florida, Wisconsin, Maryland, New Hampshire and Washington.

With a permissible purpose, name and date of birth, an investigator can identify a driver’s license number in Illinois … or Florida, Wisconsin, Maryland, New Hampshire or Washington.

July 2, 2013/2 Comments/by Brian Willingham

Background Investigations

Is Checking Business or Employment References a Waste of Time?

We have all done it at one point or another—called references who were supplied by a potential employee, new vendor, or client.

It’s tedious.

You can pretty much predict what they are going to say, but it’s a “normal” course of business and generally, it’s a good practice. It’s certainly better than not calling at all.

The problem is that the information that you get is pretty much what you would expect. I mean, who in their right mind is going to provide the name of someone who would provide anything less than a glowing reference?

And we are not just talking about employment references. An investment fund may provide the name of its best client to a potential investor, or a new executive vice president may provide the name of his or her favorite colleagues.

If you want a truly unvarnished opinion about someone, contact people who are not listed as references.

Call the chief investment officer’s previous employer to ask why he left and if he is capable of running his own portfolio; call the new executive’s former boss (or—better yet—underlings) to see how other people viewed him or her within the company, how they communicated with others, and if they were considered to be a team player; or call one of the new vendor’s other customers to see how quickly they deliver.

You may be thinking to yourself, why would anyone want to talk to you?

We’ve been doing this for quite some time; you would be amazed at what people will say. People generally want to be helpful, and if they have something positive to say, they typically don’t have a problem saying it.

On the other end of the spectrum, you have the people who can’t wait to drag that person or company through the mud, and are willing to say something negative to anyone within shouting distance.

The key getting valuable information, however, is catching someone off guard.

That is when you get the truly unvarnished opinion, unlike that personal reference who’s bound to give you a glowing review.

June 18, 2013/1 Comment/by Brian Willingham

Background Investigations

What Rutgers University Taught Us About Background Investigations

Rutgers University is a mess.

First, their basketball coach Mike Rice was fired for verbally abusing players. To replace Rice, they hired Eddie Jordan, who said he had a degree but never actually graduated. More disturbing, and hard to believe, is that the purported degree was from Rutgers University.

Following the fallout from the coaching abuse scandal, Rutgers hired Julie Hermann as the new athletic director, who turns out to have a history of misconduct and is at the center of a sex discrimination lawsuit from 2008. In hiring Hermann, Rutgers reportedly conducted a “thorough background check conducted by one of the world’s leading private security firms.”

Yesterday, news was released that Parker Executive Search was the firm hired to find Rutgers a new athletic director and provide other support with the hiring process, which included conducting a background investigation.

Most people are asking: How could they have missed all this?

It’s an excellent question, one that can’t fully be answered at this point, but this whole process has taught us a couple of valuable lessons about background investigations.

An executive search firm should NEVER be responsible for conducting a background investigation!

First, they are an executive search firm, not a background investigation firm. You wouldn’t hire a lawyer to do your taxes, especially if the lawyer’s fees are directly related to how much money you get back on your tax return.

Second, by nature, an executive search firm has absolutely no motivation to conduct an in-depth background investigation. Why would they? To dig up dirt on their own candidate whom they spent all this time looking for? It’s a complete clash between the university’s interests and their own.

Even if a search firm hires one of the “world’s leading private security firms” to conduct the background investigation, they have no motivation to dig deep and find the stuff they need to protect their clients. They are interested in protecting themselves.

If you hire a candidate for a very public position that pays $450,000 per year and you are coming off a very public scandal, splurge on a background investigation!

Rutgers paid Parker Executive Search $70,000, which included finding the candidate, providing other services and conducting the background investigation. USA Today and numerous other news outlets ran an outrageously false headline suggesting that Parker paid $70,000 for a background check. They didn’t, I promise you. They were paid a total of $70,000, a portion of which was used for a background investigation.

Pictured above: The “background investigation” outlined in the engagement letter between Parker Executive Search to Rutgers University.

Based on what they described in the engagement letter (see above), the portion set aside for the background investigation was probably no more than a few hundred dollars (not including the reference checks).

In fairness, based on some recently reports, it looks like they went a bit deeper, but the so-called “background investigation” that they describe here is nothing short of a joke.

McDonald’s candidates get a more thorough background check.

Dear employers: Stop checking the box with those background investigations.

Background checks are one of those “check the box” things that employers do. Something to put in the file. It’s not until things like this happen that they really start looking into the process a bit more deeply. The same thing happened when the CEO of Yahoo was found to never have earned a degree.

Granted, not every candidate needs a thorough, in-depth background check, but for executive hires, C-level hires, public positions, board members or companies coming off a major scandal, don’t get a “check the box” background check for the file.

This kind of background investigation is good for the circular file, but that’s about it. Get a real background investigation done.

Oh yeah … don’t count on the executive search firm to do it (properly, at least).

Not all background investigations are created equal.

Parker’s “background investigation” included “criminal, credit and motor vehicle investigations”; confirmation of candidates’ degrees; reviewing derogatory media; and checking the NCAA for infractions, in addition to some reference checks. Oh yeah … they were supposed to have the candidate sign a statement that their bio was accurate (another sick joke).

We’ve talked about this in a previous post, but the terms “background check” and “background investigation” get thrown around quite a bit. As far as I’m concerned, the so-called background investigation that Parker Executive Search promised in the engagement letter for Rutgers is a joke, especially given the level of the position and the scrutiny that Rutgers had already been under. A lot more can and should be done.