In February 2023 Forbidden Stories, a non-profit run by international investigative journalists, published the findings of a multi-year investigation into what the network has termed “the disinformation industry”. Story Killers, as the project has been named, has sought to shed light on private firms offering services that include perpetuating false narratives and claims, or conversely, erasing compromising online content about their clients.
Control Risks’ business intelligence unit regularly grapples with both scenarios – false information and no information – when advising clients on the risks associated with prospective commercial third parties. In this article we explore the art of investigations when meaningful online commentary is absent.
Compliance-driven counterparty assessments have traditionally prioritised the collation of negative references and their subsequent analysis. This makes sense from a regulatory risk management perspective, with organisations typically requiring a base level of understanding of their third-party exposure to financial crimes and increasingly material ESG factors. This approach has been developed not just with regulators in mind but through the prism of the “newspaper test” – how will this third-party relationship be viewed by the press and general public?
There are a host of new technologies that can aid this due diligence process, not least ChatGPT, a new AI chatbot that can identify and summarise media reports on a subject in the space of seconds. It would be short-sighted for investigators not to acknowledge the benefits that can be extracted from these new solutions. However, as Forbidden Stories shows, actors are increasingly able to manipulate the public domain through the dissemination of falsehoods or the removal of negative content.
Ultimately, it should remain the job of experienced investigators to form reputational assessments in this fragmented and complex landscape. We often identify risk issues that are not directly attributed to the subject of the investigation but manifest themselves in the associates of the subject or their outside business interests. We also place as much importance on what is not in the public domain as what is, by maintaining a healthy dose of scepticism: why can we not find any employees for the firm in one of its supposed key markets? Why is the executive not listed as a director of companies they claim to have held management positions at?
No news, not good news
Control Risks has over the past 12 months seen an increase in the need for this sort of critical thinking. One driver of this has been rising interest rates, which have squeezed debt financing options and left companies struggling with liquidity, leading businesses to resort to lesser-known firms offering attractive financing solutions or investment opportunities. For example, we recently prevented a client from engaging with a European project financing platform that had sought to conceal the involvement of one of its founders, whose other venture stood accused of a cryptocurrency scam. The founder had changed their name across social media accounts and had eliminated any references to the project financing platform – we were able to gather this deleted information.
Nascent industries within the technology and energy sectors have also presented new challenges. Entrepreneurs are typically younger and without the body of experience expected from executives in more traditional sectors. These individuals can in some cases provide plausible justifications as to why there is an absence of information on them in the media or social media. The same cannot be said for corporate records: to be an entrepreneur you must have owned or managed businesses. In a case recently, we found a young self-proclaimed energy entrepreneur to have little in the way of a corporate footprint, globally, beyond a handful of suspected shell companies.
Context and experience
When faced with an absence of meaningful information, institutional experience and risk awareness are crucial tools in helping our clients to understand risk areas tied to a prospective partner or opportunity. Our teams have collectively accumulated decades of investigative know-how, backed by compounding specialisms in specific jurisdictions and sectors that allow us to highlight risks and issues that rarely reach the public domain.
This institutional experience facilitates crucial discoveries, even in jurisdictions perceived as investment safe havens with well-regulated public record domains. In a recent engagement in a GCC country, a client was considering engaging with a seemingly uncontroversial shipping company. The company’s registered owners were Indian nationals and, as a newly established entity, it had a negligible and neutral online footprint. Despite this, a colleague – who had experience of sanctions and financial crime risks associated with the maritime sector – flagged inconsistent data points and areas for further due diligence scrutiny. This ultimately led us to uncover the shipping company’s role as a front company for a business group owned by a prominent Iranian businessman, used to evade US sanctions on Iran’s oil and gas sector.
Equally, our track record and permanent presence in operationally and regulatorily complex jurisdictions such as Iraq, Libya, Nigeria or Guyana provides a valuable resource when helping our clients to navigate potential investment pitfalls. In these jurisdictions, investment opportunities can be lucrative, the public record domain unreliable and the media landscapes convoluted by unsubstantiated allegations and personal and political interests. We recently supported a client considering a business relationship with a prominent Iraqi businessman who had generated his wealth through his proximity to influential figures in Iraq’s political administration. While our desktop research yielded sporadic adverse media coverage of the businessman, it was far outweighed by articles praising his abilities and status and refuting any suggestion of engagement in integrity issues. However, on-the-ground conversations with human sources in Iraq provided an alternative assessment: the businessman’s connections within the government – and his indirect ownership stakes in several Iraqi and regional media outlets – had served to counter, and in some cases pressure retraction of, media coverage of his alleged involvement in public procurement corruption and engagement with sanctioned Iraqi militia groups.
In another recent incident, a client was approached for investment by a third party that claimed to be registered at and located in the same commercial building as one of Control Risks’ international offices. The third party’s online footprint was limited to a corporate website and self-reported LinkedIn profiles, and a handful of complimentary local media articles which were likely to have been published under a pay-for-content arrangement between the third party and the media outlets. Such media arrangements are common practice in the jurisdiction in question. The proposed investment was framed to our client as lucrative, time-sensitive and requiring a substantial downpayment. Through swift access of official corporate information and a visit to the address at which the third party claimed to be registered and located we confirmed that the information provided to our client by the third-party was inaccurate and helped our client to avoid an expensive fraud-sting.
When faced with patchy or non-existent public domain information, specific intelligence-gathering is required to minimise the underlying risks of a seemingly golden opportunity. In such cases, enhanced investigation – moving beyond automated screening or media-only reviews – allows us to draw on several key resources and methodologies. In many jurisdictions, the permanency of corporate registration details or legal filings can preserve data points absent from the online domain. Where information published online has been altered or removed, archiving tools now allow for the discovery of original content.
Crucially, where the public record is lacking, discussions with human sources consistently allow us to shine light on the obscure or ambiguous. Even in our digital age, it can often be through direct conversation alone that crucial information is gleaned relating to commercial viability, reputation or political exposure. There is a time and place for automated screening tools and media-only reviews. However, when business futures can be so severely hampered by a misjudged investment or partnership – and as we continue to navigate an unreliable digital and media landscape – an enhanced assessment can be the only option.