Kidnap-for-Profit Cases an Epidemic in Some Countries

Kidnapping for ransom dates to at least 94 B.C., when a descendant of the king of Armenia Major was released after a payment of 70 valleys of his kingdom. Fast forward to the present: The threat of kidnapping of foreigners doing business overseas has surged recently.

Colombia is the undisputed world leader of kidnappings for profit, with 3,000-plus nonpolitical kidnappings likely this year, according to Pinkerton Global Intelligence Services. Kidnappings also are widespread in Mexico and Brazil. El Diario de Yucatan reported in August that a ransom kidnapping occurs in Mexico every three hours. In Brazil, 50 ransom kidnappings occur each month in Rio de Janeiro and Sao Paulo alone, according to the Political Risk Services Group of East Syracuse, N.Y.

While most kidnap-for-ransom victims tend to be wealthy nationals, foreigners are increasingly targeted. Recent incidents included:

* The kidnapping this month in Ecuador of one American and seven Canadian oil workers, and three Spanish and one Canadian aid workers. All 12 people were abducted by about 30 armed men believed to be Colombian rebels.

* In Colombia, in the first five months of this year, more than a dozen U.S. citizens--all there on business--were kidnapped. At least three of the Americans have been executed by their kidnappers, according to CNN.

* The beheading in Chechnya of three Britons and a New Zealander who worked for a British telecommunications company. Other foreigners, including two Polish female scientists kidnapped in August, are still being held.

* The Jan. 4 abduction and torture of American businessman Tony Hsiao in China. Hsiao was freed by local police using intelligence gathered by the FBI, after kidnappers demanded $200,000 from his brother in Los Angeles.

Ransom kidnappings pose a minimal threat in most countries. But in countries where ransom kidnappings have proved lucrative, experts say, the activity has taken on epidemic proportions. In addition to Colombia, Mexico and Brazil, the U.S. State Department advises Americans to avoid parts of Peru, Ecuador and Guatemala due to the risk of abduction.

Generally, those foreigners kidnapped are businesspeople working for companies that carry kidnap-and-ransom insurance, and most of the time the insurance firms pay up, experts say. Confidentiality clauses prevent corporate policyholders from divulging the details of a kidnapping, so few ransom kidnappings involving foreigners receive media attention. Yet, experts say, kidnappings involving foreigners working overseas occur routinely.

By far the greatest danger of kidnapping to nationals and foreigners lurks in Colombia, where rebels control 40% of the countryside--and where many foreigners, most in mining industries, earn their livelihood. Throughout the country, police at tollbooths hand out pamphlets advising people to avoid appearing wealthy.

The kidnap situation is also out of control in Mexico, where kidnap victims have included a former Interior minister and Domingo Tassinari, who directed Mexico City’s anti-kidnapping squad at the time, and his deputy. They were abducted in late 1997. All three eventually were released.

Mexico is also notorious for “express” kidnappings, in which assailants force victims into cars, beat them and take them to various ATM machines until their cards reach their limits, according to private security experts. In recent months, criminals in Mexico have modified express kidnappings to create what experts call “virtual” kidnappings, in which the kidnappers will, after running their victim from one ATM machine to another, force him or her to call a loved one to demand a ransom, says former FBI Special Agent Dick McCormick, who heads Pinkerton’s crisis-management division in McLean, Va.

While ransom demands vary, kidnappers “always demand into the millions for foreigners,” says David A. Samuel, vice president of the Specialty Products & Services division of ACE USA in New York, which issues kidnapping and ransom insurance. But kidnappers “generally settle for 10% to 15% of the original demand.”

The often enormous ransoms sought by kidnappers is one of several reasons that many companies now carry insurance. “If the process is negotiated properly and certain procedures are followed, that enhances the victim’s chances of getting released safely,” says Joe Reyes, who heads the FBI’s kidnap-response team in Latin America. “If you don’t have the professional guidance, you may . . . hurt your chances of getting the victim released,” such as paying a ransom too soon, he says.

“If you pay a full amount too quickly, there’s an assumption [by] the kidnappers that they didn’t ask for enough. . . . So they say, ‘Thank you very much for the first ransom; now pay us again.’ ” But if a ransom is paid, “95% of the time you’re going to get your victim back alive,” says John T. Horn, who heads the corporate security division of Kroll Associates, a New York-based business investigations firm.

According to McCormick, who says he has handled 97 overseas kidnap releases without a fatality, “90% of ransom kidnaps don’t have to happen.” He stressed the importance of foreigners changing their routine in places plagued by kidnappers. “If somebody’s waiting for you outside your house to get a feel for what time you leave, if you can vary that time 45 minutes to an hour every day, you will throw a surveillance into the dumps. Why? Because most of these people have limited resources,” McCormick said.

McCormick encourages business travelers to Mexico City and other urban hot spots to stay in the fancier hotels because of better security.

Bodyguard services have sprung up in Mexico City and elsewhere, but neither Reyes of the FBI nor Bob Hoffmann, operations director of Control Risks Group, the London-based business risk consultancy, place much faith in them. “If you’ve got a group of bodyguards around, it stands out,” Hoffmann says.

Maintaining a low profile, staying in at night, using hotel taxis, varying departure times and routes--in general, becoming unpredictable and blending in as much as possible--are your best safeguards against being kidnapped, experts say.

“Many times when a victim comes back, we’ll interview them and you’d be amazed the number of times people tell us, ‘I thought I was being followed.’ That’s tragic because if they’d only done something, they could have prevented their abduction,” McCormick said.

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Kidnapping Insurance

Where to get it: Kidnap-and-ransom insurance is offered by many insurers, including ACE USA, AIG, Cigna and Chubb. A typical policy should be valid worldwide, cover kidnap-management experts from reputable security firms, pay costs totaling $10 million or more and require no deductible.

What it covers: In addition to ransom payments, K&R; insurance generally covers in-transit, consulting, legal and medical costs; death and dismemberment benefits; lost wages and personal finance losses; and losses due to proprietary-information extortion.

What it costs: The price of this specialty insurance can range from hundreds of dollars to hundreds of thousand dollars, depending on the applicant’s situation and measures begin taken to reduce kidnapping risk.