Betsy Blumenthal is the Senior Managing Director and San Francisco Office Head of Kroll Advisory Solutions.  Kroll’s clients include Fortune 500 companies, financial institutions, law firms, non-profits, academic institutions, and local, state and federal government agencies.


Q: When a client is proposing an international investment or transaction, what is the scope of your due diligence on their behalf?

Betsy Blumenthal (BB): Typically, a client retains Kroll to assist with pre-transaction research with a focus on information that falls outside of the scope of accountants, bankers and lawyers: the backgrounds of management and other key executives, potential business issues such as Foreign Corrupt Practices Act (FCPA) exposure, or an independent read on key customers. We also help clients who are contemplating new market entry and need to understand local laws and customs in order to assess the potential for bribery and corruption risk.

Q: Same question, but with respect to their existing investments.

BB: When Kroll is asked to look at existing investments, it is usually because a potential issue has been brought to the attention of our client.  For instance, we may be asked to help a client understand the risk associated with a large volume of vendor relationships. We also offer programmatic diligence and compliance products that allow our clients to understand the risk profiles of their third party relationships and identify those that may require some level of due diligence. Or it could be that new legislation puts the spot light on certain issues such as FCPA and the client needs to look at existing investments.

Q: Beyond what underwriters’ typically insure against, what are some “political risks” that you try to focus investors’ attention on?

BB: Human capital, labor unrest, corruption in general.

Q: Are there some political risks that investors going overseas tend to neglect, or to put it differently, that often don’t get sufficient attention?

BB: If the client is not worldly, they will make assumptions about the business practices that should not be made. These may pertain to taxes, workers conditions and labor.

Q: Do you work for clients in “developing” countries investing in the United States or Europe? What are their major concerns?  

BB: In the last 2 years we have noticed that we have an increased number of clients in China and India retaining us to look at westerners. The issues remain the same and I think the feeling is that while the culture, for instance, in the US is not notoriously corrupt, there are many corrupt business people and politicians.

Q: What can you do to help investors keep clear of FCPA problems in countries where corruption is endemic, or at least prevalent in their industries? Do you suggest specific ways for an investor to comply with the FCPA and still operate successfully in corrupt environments?  For example?

BB: We do suggest that clients have robust, unambiguous compliance programs in place which include some level of due diligence on vendors. Practically speaking it is not reasonable to expect corporations to pay thousands of dollars to look at each vendor; however, it is reasonable to expect them to have given some thought to the risk and to do some level of research on the riskiest vendors/agents.

Q: Other than blatant misdeeds, what are some indicators that a prospective partner or counterparty may be unreliable or undesirable?

BB: If family members are employed by the company, if they change auditing firms often and if the firm is questionable. And if there is a lot of turnover in personnel.

Q:High performance goals can sometimes lead to employees cutting corners, lying, or worse, with adverse consequences for the company. Do you have advice for managers about setting goals for their overseas projects without inviting these kinds of problems?

BB: I would say the same applies to domestic US companies as to non-US companies, and that is to not set unreasonable goals and set people up for being dishonest.

Q: You help companies when they suspect wrongdoing within their own ranks. Do you also advise them how to avoid such situations, other than vetting hires from the outset?

BB: Yes, we do. The advice ranges from making sure that when employees are brought on they sign documents acknowledging the company’s privacy policy to regular training and setting up a whistleblower hot line.

Q: Just how “hands-on” are you prepared to be in helping clients with threats to their facilities and personnel?

BB: We are 24/7 and are very responsive.

Q: Have there been cases where the security situation is so severe that you advised a client to close down operations and flee?

BB: Yes, recently in Mexico and Afghanistan.


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Our team is a unique, market-leading mix of investigators, investigative accountants, and cyber experts with experiences drawn from the law, law enforcement, intelligence, cyber security and journalism.  Through offices in the world’s major centers, Kroll provides dedicated resources needed to address even the most complicated, multi-jurisdictional information-gathering issue. We assist clients in making strategic decisions by uncovering facts and activities, past and present, that are critical to the success of a deal or the ongoing operations of a business.