The phrases “open source” and “public record” are sometimes mistaken for “easy to find.” While it’s true that open source records are largely accessible to anyone, locating the relevant facts can be akin to finding the proverbial needle in a haystack. Many research projects necessitate the services of trained and experienced professionals. This applies especially for research that is investigative, requiring a systematic approach to discovering and exposing hidden facts.
This truth is not always clear. Lawyers, investors, and other white-collar professionals who occasionally conduct research as part of their normal job duties logically consider it one of their strengths.
The temptation to simply “Google it” is understandable.
However, there are serious drawbacks to an informal approach to investigative open source and public records research. Corporate intelligence, due diligence, background investigations, and litigation support require specialized techniques, devoting sufficient time and resources, and working on tight deadlines. In other words, investigative public records research should be treated as a specialized skill and service. Indeed, it is worth remembering the stakes involved in such projects. A mistake, error, or omission can have harmful consequences, such as:
A lawyer being unable to advance winning arguments in court because of incomplete or inaccurate facts, or an insufficient understanding of a party’s past conduct.
An individual with fabricated credentials, a shaky track record, or a history of misconduct being appointed to an executive role, or to a company’s board of directors.
A party to a proxy contest being caught unprepared for an adversary’s public criticism because they did not know about vulnerabilities with their board nominees or executive leadership.
An investor getting the go-ahead for a materially flawed deal because red flags were missed during due diligence.
Or, conversely, a lucrative investment opportunity being needlessly axed because of a supposed “red flag” that was not properly understood and contextualized.
But what really differentiates such a professional’s investigative research process from the more casual approach? The basics can be summed up as follows:
Broad Expertise and Adaptability
A corporate intelligence professional must have an advanced level of knowledge across several subject matter domains, including law, capital markets, finance, fraud prevention, international and domestic politics, real estate, media, and social media. A researcher must likewise be capable of quickly getting up to speed on a wide variety of different regions and industries.
On one recent matter, Forward Risk’s research into a South American businessman found mysterious business links to the sons of a high-level politician, disproving earlier claims that he separates his business life from his political activities. Assessing the issue required a close examination of business and financial records combined with a nuanced understanding of the political environment.
Access to Restricted Data Sources
Common access restrictions include hefty subscription costs, lack of online availability, and limitations on who is allowed to conduct searches. Data access varies tremendously state by state, and country by country. Investigative research specialists are experts in solving data access problems and ensuring that research is as accurate and comprehensive as possible.
For example, a client once asked us about a supposed “criminal” record that someone else had brought to them as a “red flag.” Forward Risk knew the state’s records well and used a subscription-based remote access portal to find out more. The matter turned out to be nothing more than a routine speeding ticket.
A trusted, licensed private investigations agency also has access to certain proprietary databases that must be used very carefully, and only in approved circumstances, because they contain sensitive personal data. These resources are very valuable for investigators.
For example, through the use of such databases, we have found addresses for vacation homes located far from where subjects ever claimed to live or work. With new geographic areas to focus on, we have been able to reorient our searches and uncover litigation and other risk issues that would otherwise have been missed.
Advanced Search Techniques
A simple error on search input, such as a misplaced comma or the lack of a necessary asterisk, can cause an inexperienced researcher to miss the project’s key finding. Failing to identify and account for name variations can ruin any name-based search. And when there are hundreds or thousands of results to sort through, a researcher must work carefully and strategically to home in on the important matters.
During a pre-investment due diligence project, a search on a very common name in California state courts resulted in dozens of “hits,” but few details were online about the cases. With investigative rigor, we narrowed the list of cases down to a handful of the matters most likely to be relevant. We were then able to engage a court runner to retrieve key documents, ultimately uncovering an allegation of violent conduct by the subject of our review.
A casual research approach will usually involve making assumptions about where relevant information is most likely to be found, and focusing all efforts on just those data sources. An effective methodology, however, covers a far wider array of searches, because key findings often show up in the least expected places.
One example is the practice of examining the track record of each company where a person has served on the board of directors. Less experienced researchers often skip this crucial step, or approach it in an insufficiently targeted fashion, thereby failing to develop truly actionable intelligence for clients.
In support of a proxy contest matter, we once found that a certain board nominee had previously been on the audit committee for a company accused of committing serious account fraud. When the proxy battle was settled, this nominee was not included on the board.
Time, Resources, and Experience
Someone who is not a full-time specialist in open source and public records research may waste much time and energy. It can take hours to simply figure out what records are available and how to search them. Investigative professionals have done this legwork already, and they can also leverage their past experience to avoid making costly missteps. Researchers can also brainstorm challenging problems and share best practices with their team or professional network.
Perhaps the most important value-add that a corporate intelligence professional provides is also the hardest to explain: the investigative instinct. Key qualities include curiosity, creativity, diligence, persistence, logical reasoning, and focus. Top-flight researchers know instinctively which leads to pursue (sometimes for hours), and which “rabbit holes” to avoid.
As just one example, a researcher’s meticulous review of county recorder data found a seemingly anodyne “agreement” filing, that upon closer inspection revealed a business executive’s personal financial distress.
These examples illustrate the value-add of a corporate intelligence professional in conducting open-source and public records investigative research. Once fully grasped, the contrast to an informal, casual approach is quite clear. Forward Risk’s professional researchers can save clients time and avoid costly mistakes by leveraging all of the information that open-source records can provide, leaving no stone unturned.
If you have any questions or comments, or would like to suggest a topic for further discussion, please email our Partner Dan Greenberg – dan [at] forwardrisk.com.
Daniel Greenberg is a Partner at Forward Risk and Intelligence Inc., a corporate investigations firm with offices in Washington, DC and New York. More information can be found at www.forwardrisk.com.