Business and Terrorism : Does Safety or Principle Come First?

At Dutton’s Books in North Hollywood, owner Davis Dutton had his full-time workers vote a few days ago to decide whether “The Satanic Verses” should be swept from the shelves.

Without hesitation, they voted unanimously to thumb their noses at the Ayatollah Ruhollah Khomeini and his fundamentalist Islamic followers in Iran who have threatened to kill author Salman Rushdie and anyone associated with the publication of the book. The book, when copies were available, would be for sale at Dutton’s.

“They were most adamant in their espousal of free speech and First Amendment rights,” Dutton said. “I was somewhat taken aback by the vehemence of their reaction.”

Unprecedented Challenge

Just as the U.S. government has insisted--with notable deviations--on a policy of rejecting the demands of terrorists, Dutton and many independent booksellers across the country have stood on principle in the wake of the unprecedented challenge against Rushdie’s book.

But for most large companies, the balance between taking a stand and defending their workers’ safety in the modern age of terrorism is far more ambiguous.

In fact, security experts say it actually is the much-criticized reaction of the large bookstore chains, which cited fears for employee safety and initially rushed to pull Rushdie’s novel from their shelves, that better typifies American business’ response to terrorist threats.

At the root of their wariness is not the fear of huge court verdicts if they fail to take precautions, experts say; attacks on employees by the world’s growing supply of extremists are covered by, of all things, the workers’ compensation system.

Rather, concern for a firm’s public image and its employees’ morale has prompted employers to put security first and principle second when compromise can preserve the safety of the work force, even if that invites more threats.

Not incidentally, most want to be seen as taking a morally responsible stance.

“The safety of the individual is paramount,” said Robert R. Kierce, a London-based security official for Trans World Airlines who is chairman of the terrorism committee of the American Society for Industrial Security, a national group of corporate security and safety officials.

Some threats are shrugged off, usually without consequence. One study, Kierce said, found that of 50,000 threats against airliners, none was genuine.

But if a threat materializes and those hurt or endangered can argue that all possible precautions were not taken, the impact on a business can be huge.

Witness the debate over whether employees and passengers on Pan American World Airways Flight 103, blown up Dec. 21 over Scotland, should have been notified of threats aimed at flights from Frankfurt, West Germany, to the United States.

Survivors of some of the 270 people killed after the plane exploded have argued that the airline or the U.S. government should have let all passengers--not just workers in one or two American embassies--know of the potential risks of taking such flights. Government and airline officials responded that the threat was too vague to justify broad notice.

Similarly, no company would want to find itself in the position of Hipercor, a store in downtown Barcelona, Spain. More than 30 people were hurt when a bomb exploded one afternoon in June, 1987. Employees said a warning had been called to the store two hours earlier, but managers decided to ignore it because many previous threats had gone unrealized.

So most large firms, aided by costly consultants and armed with expansive contingency plans, adopt a policy of proceeding with an abundance of caution in the face of threatened bombings, kidnapings, assassinations or sabotage, specialists say.

Responsible to Employees

“We have responsibilities to our employees,” said Alan M. Nutes, a Wall Street stock brokerage security chief who heads the industrial security society’s disaster management committee.

Nutes said he would prefer to shut down his firm’s trading floor and “take the hit of a client not being able to do some buys and trades, rather than having one of my employees killed by something going off.”

Legally, the company’s exposure is not so great, attorneys say. If an employee is blown up on the job by a terrorist bomb, his survivors’ only recourse is to the relatively limited pay outs of the workers’ compensation system, just as if he’d lost his hand to a drill press or died in a ditch cave-in.

Thus, passengers on an airplane subjected to attack can pursue civil lawsuits against an air carrier that may not have taken every step to prevent a hijacking, but the pilots and flight attendants cannot, said Matthew Finucane, director of air safety for the Assn. of Flight Attendants.

“In terms of an employer failing to take the proper precautions during the course of a flight, whether you’re dealing with the weather or with a terrorist, you would be hard-pressed to get around workers’ comp,” Finucane said.

But many other considerations beyond the potential for huge lawsuits must be weighed as a company considers its response to a fanatic or criminal threat.

Will ignoring a threat from Islamic extremists spur boycotts of the firm’s products in Arab markets? Will shareholders back home rebel if a giant ransom is paid to free a captive executive? Will an employee ever again accept a foreign posting if the ransom isn’t paid? What is the company’s civic responsibility in the face of a threat? And what will the consuming public think, whichever course is taken?

“There’s always a balancing act,” said Richard T. Guilmette, director of corporate security and safety for Prime Computer Inc. in Natick, Mass.

Many large companies have sought to minimize their chances of facing an extremist challenge by quietly developing plans to protect top executives.

David L. Berger, a Los Angeles security consultant, said it is not unusual for executives based in the United States to be driven to work in bulletproof cars by chauffeurs trained in escape techniques. Their children may be escorted to and from school. Their homes may include a steel-lined “safe area” filled with food and communications gear that can serve as a haven against attack.

“Every day in the lives of these executives is somehow pre-planned by these protective services,” Berger said. “It’s like having your own Secret Service. Then, when they go overseas, it gets worse.”

Meanwhile, access to large companies’ facilities has been tightened. High-tech devices check employees’ fingerprints, shoot light beams into their eyes or listen to their voice patterns to keep intruders out.

Smaller firms may not have considered the risks as carefully, experts note. At his North Hollywood bookstore, for instance, Dutton has only begun thinking about whether security needs to be tightened in the wake of his workers’ decision to sell “The Satanic Verses.”

“I guess we should be prepared for some kind of an incident,” he sighed. “I’m just hoping nothing will happen.”

(The B. Dalton and Barnes & Noble chains reversed themselves Wednesday and said they will restock the novel, but Waldenbooks said it would sell it to customers only on request.)

When all the precautions have proven inadequate, however, one of the toughest decisions a company must make is deciding whether to invite further threats by responding to a terrorist demand, experts say.

Government policy is clear (if not always followed, as the Iran-Contra affair underscored): No negotiations with terrorists, because to do so simply encourages more threats.

“Governments say, ‘We have to protect our sovereignty and we can’t be pushed around by gunmen waving Kalashnikovs,” said Peter Cheney, vice president for North American operations of Control Risks Ltd., a London-based security consulting firm.

Private industry, however, tends to place the safe resolution of an immediate threat first, leaving the longer-term ramifications to be dealt with later, Cheney and other experts agreed.

Thus, many large multinational companies keep funds on hand to ransom overseas executives. Airlines try to talk hijackers off planes. Employers evacuate buildings in response to even vague bomb threats. And consumer product firms recall huge batches of goods at the hint of tampering.

The decision is never easy. “If you evacuate every time you have a bomb threat, the chances are you will have more bomb threats,” said John D. Case, a security consultant in San Diego. “If you don’t evacuate, you always have the problem of somebody actually doing something, and you have to live with that threat hanging over your head.”

Nutes knows well the pitfalls. When he was in the military, one of the installations at which he was responsible for security fell victim to 152 bomb threats in a single month. Over and over he ordered evacuations. But no bomb ever exploded.

“It turned out it was a 9-year-old girl who didn’t want to go to school,” Nutes recalled. “By reacting the way the person wanted us to, it just enhanced their will to do it more.”