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Text File | 1992-10-19 | 16.1 KB | 327 lines

                                                                                BUSINESS, Page 44

SPECIAL REPORT

Thugs in Uniform


Underscreened, underpaid and undertrained, private security
guards are too often victimizing those they are hired to protect

By RICHARD BEHAR


    Still on probation for two separate weapon and cocaine
possession convictions in 1990, John Padilla, 20, was hired last
July by the HSC Security company as a guard at Carle Place High
School on New York's Long Island. Now he is accused of firing
16 shots from a 9-mm gun, killing two young men and critically
wounding three others as they sat in a parked Cadillac outside
the school. HSC, which has since shut its operations, was
required by law to submit Padilla's fingerprints to the state
within 24 hours. Instead, the company waited more than seven
weeks. According to Padilla's parents, their son is "mentally
unstable."

    Members of his family say Michael Huston, 41, had been
mentally disabled since the Vietnam War, which may explain why
he blames "another person inside" him for setting a 1990 blaze
that caused $25 million in damage to movie sets and property at
Hollywood's Universal Studios. In January, Huston admitted in
a Los Angeles courtroom that he had tossed a cigarette lighter
into a trash can full of papers at Universal, then reported the
fire to a superior, apparently hoping to earn praise. Wearing
the ubiquitous uniform of Burns International Security Services,
the nation's largest, Huston had been "guarding" the studio
barely a month.

    Marita Juse, 48, of Burbank, Calif., will be sentenced
later this month for embezzling more than $1 million from
Pinkerton's, the oldest and second largest U.S. security firm.
A fugitive on tax-fraud charges, Juse used an alias when
Pinkerton's accounting division hired her. Obtaining computer
codes, she made wire transfers of cash from the company's bank
account. Juse faces up to 30 years in prison. Meanwhile,
Pinkerton's, the company that once stalked Jesse James, Butch
Cassidy and the Sundance Kid, is pitching a job-applicant
screening service to its clients, which include half the Fortune
500.

    For companies that rely on the $15 billion security
industry, "problems" like Padilla, Huston and Juse are all too
common. While the majority of the estimated 1.1 million security
guards in America do honest and capable work, a TIME
investigation indicates that the industry, which has grown
spectacularly in the past two decades, has become a virtual
dumping ground for the unstable, the dishonest and the violent.
Many use drugs or have criminal records. Many are hired off the
street, given uniforms and assigned to posts within a day. The
industry is fragmented, intensely competitive and unwilling to
police itself adequately, yet it is governed by weak laws that
are often ignored. Add mismanagement and inadequate pay to the
mix, and crime thrives. "Our industry needs leadership," says
Robert McCrie, a professor at the John Jay College of Criminal
Justice in New York City. "There's a steady stream of horror
stories."

    In 1971 a Rand Corp. report described the average security
guard as an aging white male who was underscreened,
undertrained, undersupervised, underpaid and underregulated. The
only significant change in that profile, according to Hallcrest
Systems of McLean, Va., which closely monitors the industry, is
that today's private guard is more likely to be much younger and
black or Hispanic.

    Few industries have expanded as rapidly. The number of
security guards has grown since 1980 to nearly twice the size
of the U.S. public law-enforcement community. Today there are
10,000 security companies in America, the vast majority
operating on a shoestring and paying their guards $5 to $7 an
hour. "The little mom-and-pops are often undercapitalized,
cutting corners all over the place, opening and closing
regularly under new names, even providing payoffs in exchange
for work," says Richard Rockwell, who runs Professional Security
Bureau, a midsize guard company with offices stretching from
Boston to Miami. Says industry consultant Francis Hamit:
"Clients often don't want to pay for training, and the security
companies cannot really afford to. I've seen accounts lost to
lowball bidders for 5 cents per man-hour."

    The industry's largest companies all claim to screen and
train their applicants rigorously. Yet just since last fall,
guards for Burns, the industry leader, with more than $650
million in revenues, have been arrested for everything from
setting fire to an abandoned building in Colorado (it took 42
fire fighters to put it out) to vacuuming thousands of dollars
in change from public bus boxes in San Francisco, to stealing
$13,000 in computer equipment from a client in Syracuse. After
a five-month probe at New Jersey's Meadowlands arena, a grand
jury documented 20 cases in which Burns guards beat or otherwise
abused patrons between 1987 and 1990. Burns has since been
fired, and the grand jury has accused the arena's management of
a "gross error in judgment" for renewing a contract with the
security firm in 1989.

    A management-led leveraged buyout in 1987 by Borg-Warner
has put tremendous pressure on Burns' middle managers to
produce revenue. Former employees say president Rodger
Comstock's intimidating management style and the firm's alleged
habit of breaking bonus promises have contributed to an exodus
of managers, forcing Burns to recruit and train new ones,
sometimes at the expense of clients' needs.

    "A guard service is really only as good as the supervision
it provides," says Michael Anesta, the director of personnel
for Steinway & Sons, which stopped using Burns two years ago at
its Queens, N.Y., piano-manufacturing plant. Former Burns
official Gary Slodowski quit in 1990 after winning the company's
manager-of-the-year award. "With the LBO, the company started
to deteriorate," he says. "They've got away from the building
blocks, such as service and visiting clients every day.
Collecting cash became the main thing. With no one to pay
attention to the other details, you're going to have smoking
guns like the Meadowlands."

    Such criticism is vigorously disputed by Charles
Schneider, head of Borg-Warner's Baker Industries, which
controls Burns as well as fourth-ranked Wells Fargo. He calls
Baker "the best security-guard company in the world." Burns does
provide high-quality service at roughly one-third of the
nation's nuclear power plants, where government screening and
training standards are extremely rigorous. But the company's
basic, lower-paid guard forces are another story.

    A former Burns vice president says that when he quit in
1990, the firm was shooting for only "95% compliance" on its own
internal screening rules, and that "this was broadly ignored,
or only followed on a cursory basis." Burns' managers, for
example, are required to mail three requests for written
references for each guard applicant. "As long as you had copies
of those requests in the file, no one cared whether you actually
got them back," he says. "It was documentation for the sake of
compliance, as opposed to trying to really get at something."

    Van Nuys, Calif.-based Pinkerton's (1991 revenues: $640
million) has also suffered from turnover and service problems
following a leveraged merger four years ago with a firm called
California Plant Protection (CPP). Mark Savage, a former
award-winning Pinkerton's manager, says he quit the company in
1990 in part because its management "was cutting corners and
pushing people to their limits." In terms of clients, he adds,
"companies like Burns and Pinkerton's always take for granted
that they will lose business and that if they sell more than
they lose, they're still growing. They're not as
quality-conscious."

    Pinkerton's has found it easier to grow by voraciously
gobbling up smaller security firms -- 14 in 1991 alone. But
along the way, the company has also lost some big contracts.
Wall Street's Kidder, Peabody dropped the firm because "when
Pinkerton's was bought out by CPP, the service started falling
apart," says John Poppe, Kidder's director of security. "There
was constant turnover of guards." In January, Smith Barney gave
Pinkerton's the pink slip as well. "Big security companies
become apathetic," complains an executive at the brokerage.
"We've had guards who were unable to write, unable to answer
phones."

    Pinkerton's was involved in litigation in the 1980s that
drove home the need for industry standards. A Pinkerton's guard
at Welsh Manufacturing, a former division of Textron in Rhode
Island, admitted he took the job specifically to arrange the
theft of gold he was supposed to be protecting. As a result,
Welsh won punitive damages. The case, which led to an appellate
decision in 1984, exposed Pinkerton's inadequate screening and
supervision of its employee. Management never bothered to
contact any of the three character references the guard
provided. And while Pinkerton's contacted his former employers,
it received no information on his honesty and trustworthiness.

    A guard company's failure to thoroughly screen applicants
can often prove deadly. In the case of John Padilla (accused in
the Carle Place killings), HSC Security was clearly not up to
the task. Padilla actually tried to apply for a new job, with
OCS Security, just two weeks before the Long Island
bloodletting. "Obviously, it's worth spending all the money we
do on screening and training, because we nixed John right away,"
says Brian Church, an official at OCS. "He was a job-jumper. He
wasn't an attractive job applicant. That's probably the nicest
way of putting it." Moreover, Padilla was not licensed to carry a
firearm.

    Twenty years ago, according to the Rand report, half the
nation's private guards bore arms on the job. Today, 10% or
fewer do so. But that still leaves 100,000 gun-toting guards --
more than the combined police forces of the country's 30
largest cities. Yet weapons training for this army is generally
skimpy. A recent survey found that eight hours was about
average, and that a large part of the training consists of the
mechanics of shooting rather than preparation for the real-life
situations guards are likely to encounter. The survey also found
that 40% of armed guards claim to be self-taught in the use of
their weapons.

    While most national firms say they provide about eight
hours of basic training (mostly showing films) for unarmed
guards, Wackenhut, the third largest guard vendor, boasts that
its minimum has been 16 hours since the 1970s. Yet two former
executives who recently left the firm insist that the real
figure was far lower. "Four hours was pretty much it," says
Frank Bisogno, who ran Wackenhut's New York City office until
he left in 1989. "If you were required by the customer, you
would do more. But if the manager could avoid expending a
nonbillable cost such as that, he would avoid it."

    Unfortunately, weak and piecemeal legislation enables many
dubious practices to thrive. Only 17 states require guard
companies to carry general liability insurance, and only 14
require any training for unarmed guards. Eighteen states have
absolutely no training requirements -- even for those who carry
guns -- and an astonishing 18 states allow convicted felons to
be hired.

    Some states restrict the access of guard companies to
official criminal records, while others require fingerprint
checks. In California nearly 20% of the applications for guard
licenses are rejected each year because checks disclose prior
criminal convictions. Yet even that kind of screening helps only
to a degree. A 1989 study by the New York State Senate
Committee on Crime and Correction found that 16% of guards were
still hired despite such criminal backgrounds.

    One key reason for the abundance of uniformed thugs is the
inexcusable length of time it takes most states to check the
fingerprints and report back to the security firms. Arizona and
Arkansas, for example, can tell a company in less than two weeks
whether it has just hired a Hillside Strangler (who,
incidentally, worked for several private security firms after
he had been rejected by some police departments). In Alaska and
Oklahoma it can take six months for the same information. In
states that do not scan the FBI's national data bank, such as
New York, it is impossible to know whether a guard applicant
committed a crime elsewhere.

    To eliminate long lag times, some of the industry's better
citizens are calling for direct access to FBI data banks. One
major hurdle: California Congressman Don Edwards, the tough
chairman of the House Civil and Constitutional Rights
Subcommittee (and a former FBI agent himself), who vigorously
opposes such access on privacy grounds. "It's a Catch-22,"
argues a top industry lawyer, Clifford Ingber. "Security is
either going to be a meaningless service, or you have got to
give companies greater latitude, as you do law enforcement, to
allow them to screen their people."

    Outspoken in his efforts to win information sharing from
the Federal Government is Ira Lipman, president of
Memphis-based Guardsmark, which many security experts consider
the best national firm in the business. While the industry's
trade group, the Committee of National Security Companies
(CONSCO), supports Lipman's call for access, some of his
competitors have effectively blocked legislation that might
upgrade overall industry standards but would also increase costs
and thus threaten profits. A bill they especially detest,
recently introduced by Tennessee Senator Albert Gore Jr., would
require minimum levels of screening and training for all guards
hired by the Federal Government, as well as criminal-records
checks and psychological testing. "Why the hell do we need the
Federal Government in here?" explodes Pinkerton's president
Albert Berger. "It's an invasion of what the states should be
doing. Just because Lipman [like Gore] is in Tennessee [the
state Gore represents] is the only reason why the bill exists."

    In New York, where even beauticians and real estate
brokers are licensed, more than a dozen bills have been floated
since 1976 to license or regulate security guards. Industry
lobbyists helped kill them all. Last year the industry finally
supported a watered-down bill, which died amid political
infighting over how to spend the measly $3 million raised from
application fees. "The reason there's been no legislation is
that no one's been willing to continually fight for it," says
state senator Christopher Mega, the bill's sponsor. "If they
[CONSCO] are not easy to get along with, that's their problem.
It's going to have to be done. It's 15 years overdue."

    The disturbing aspect of the uneven regulation and
management of the industry is the rate at which private firms
are taking over responsibilities once assigned to police forces
-- ambulance services, parking regulations, neighborhood
patrols, even background investigations for federal job
applicants. In Kansas City the chief of police says he would
like to contract with private firms to perform 22 tasks
currently being done by the cops -- at an estimated 37% savings
in cost. These tasks include transporting prisoners, assisting
stranded motorists and guarding crime scenes. Similarly, to save
money, armed Wackenhut guards have replaced sheriff's deputies
on commuter trains in Miami and Palm Beach, Fla.

    The risks in this trend are considerable: unlike sworn
officers, most security guards are not required to inform
suspects of their Miranda rights or to obey the Fourth
Amendment's restraint on searches. Moreover, the trend toward
privatization raises important public-policy issues. "What ever
happened to equal protection for all?" asks Harvard
criminologist Mark Moore. "If public policing can be bought,
then the rich will receive more than the poor. In the end, the
public force will erode into a poor people's force." And unless
the industry cleans up its own procedures, even rich clients may
find themselves the victims of those they have hired to protect
them.