The worse the U.S. economy fares and the bigger the income inequality gap grows, the better business seems to get for Paul Viollis and Douglas Kane. Their New York City-based company, Risk Control Strategies, has doubled its revenues this year by providing security services to the affluent.
Viollis, who formerly ran one of the nation's largest police academies and a counterterrorism assault team, met Kane, who served in the FBI as a SWAT team supervisor, in 2003, on a job assessing a large bank that was a possible target for attack. "We clicked," Viollis says. "Two weeks later, we sat in a bar in lower Boston until about 4 in the morning and, on a stack of bar napkins, wrote up a business plan."
They agreed the wealthy would face increasing risks to their lives and therefore require more security. That idea came years before the collapse of Wall Street, the recession and Occupy Wall Street. Viollis acknowledges the indelicacy of their serendipitous success, and explains why he's proud of their mission to protect the 1 percent.
How did Occupy Wall Street and the economy in general benefit your business?
People generally think, "I'm okay, I live under the radar," and don't recognize risk, but whenever you see a major event, that's when our business spikes. Forensically, back in the fourth quarter of 2008, we had the implosion of Wall Street, the AIG collapse, the whole Paulson thing with the banks -- that’s really where we had the growth spurt, and we’ve been in critical mass since. The really frightening part is where are we now. It's what I refer to as a perfect storm of risk: the financial implosion and the banking crisis, the decline of the world economy, the failure of the super committee to effectively strategize a debt solution, unemployment, the Occupy Wall Street movement and the global increase of violent crime against Americans when they travel.
What types of clients do you serve?
Senior level, C suite execs and entrepreneurs, people who have had significant liquidity events and are now retired investors, and on the institutional side, single and multi-family offices and the advisor community. The majority of our clients are wealthy families, a significant amount are corporations in the financial, manufacturing, technology, pharmaceutical, entertainment sectors -- just about every industry across the board.
Do you get a sense from these clients that there is a growing culture of fear?
No question. Several clients have opted to secure an alternative residence outside the country. Two have actually bought islands. There's an apprehension right now among the high net-worth community as to are we really safe from terrorism, and where are we economically, as in, are we going to become the next Greece or Italy? There's a huge vote of no confidence among our clients as far as where the country is headed. And that's why so many of them are trying to protect themselves. We had a couple of Occupy Wall Street protesters show up at one of our client's homes in Connecticut, protesting outside while his kids were being brought to school. So you’ve got that, which is not going away. We have this risk that’s circling us right now, and you can only navigate in those waters so long before you either find a solution or have an explosion.
Do you attribute the fact that you almost doubled revenue this year to Occupy Wall Street?
Yes. People want to make sure they're preemptively addressing certain risks. It doesn't help when you have clients getting emails from strangers saying, "I know you have lunch at the Starbucks on Williams and John," or "That's a nice house you have in Greenwich." That kind of spooks you a little bit. It's not a threat -- you can’t charge anybody -- but it's enough to make people stop and say, "Am I really safe or do I now have to look over my shoulder?"
Part of our job is to temper that fear, to make sure people aren't running around terrified unjustly. For us to look at the human race with a jaundiced eye is inaccurate, unfair and unrealistic. For example, someone who's uneasy might not have to pay me for bodyguards. I take a look at his or her schedule and see how some lifestyle changes might be modified to bring peace of mind. Throwing money at the problem doesn’t necessarily solve it.
Do you deal with a lot of paranoia from clients?
Part of the job is to hand-hold the client. I spend a lot of time visiting with clients all over the country. If someone is anxious, it helps to look someone in the face rather than communicating over email. And education is key. Maybe they should have better security at their house or have a driver in Dubai rather than catching a cab, but should they spend tens of thousands of dollars on protection detail? The security deliverable must be validated by the probable risk.
What's the oddest request you've gotten from a client?
The past three to four months, we've been inundated with calls from folks who want to get together an Armaggedon plan -- in the event of a nuclear attack, terrorist attack, biological test, wanting to get off, say, the island [of Manhattan] to a safe house. That's not going to happen. What will happen is New York will be shut down. The police department, military, FBI will take over, and you’re not going anywhere. [Some affluent clients] have been told [by security companies], "We have submarines that will take you out -- we’ll airlift you," and charge a truckload of money, for what -- to have helicopters on call? That's distasteful to me -- it's playing off someone’s fear. We cannot accept money from a client for things we cannot do.
What type of requests do you more commonly deal with?
The main ones are detail background investigations -- not background checks -- on house staff. Another growth spurt has been our technical surveillance counter measure practice, because of the desire of companies such as hedge funds to verify that eavesdropping devices are not in their offices. Our cyber security practice has grown for building small servers and putting them in people’s homes so they can communicate safely over the Internet. Security architecture for residences is huge. The system we aspire to is a tiered system vs. reactive system. The reactive system is designed to tell you when someone is in your home. But you have an average of 12 seconds from when a person gets in the house to face to face contact. Our system that we design and install ourselves will tell you when someone steps on the property. We have not had one intruder on the property ever proceed to the house.
The technology we use at the outer perimeter of the property is body heat-, mass- and weight-sensitive, but you can’t detect or disarm it. So the moment someone steps on the property, lights come on and there's a prerecorded message saying, "You’re trespassing, you're being recorded on videotape, the police have been called." We use high pixel cameras with Infrared illuminators that give you an image at 3 in the morning that looks like 3 in the afternoon. So God forbid, if you do have an intruder, we take a snapshot and send a crystal clear picture to the police department and say" this guy is on the property."
But it's not like Occupy Wall Street protesters pose this level of threat.
I agree with you. The vast majority of people are there because they're exercising their constitutional right. And they're entitled to do that as long as they abide by the law. But in any movement in history, peaceful or not, you have your share of zealots. It only takes one to start doing something violent, and all hell’s going to break loose. So when crowds of people by the thousands or ten thousands start blaming certain groups of people for their lot in life, eventually it becomes violent.
By guarding the "bad guys," are you seen as a bad guy yourself?
I am -- I have no doubt by the feedback I’ve gotten in emails after TV appearances or on articles I've been quoted in. But that comes with it. For me, it's nothing personal. I clearly understand I'm viewed as a guy who's "protecting the establishment." Listen, our responsibility is to protect human life. On our website is the Latin phrase "Servare Vitas," which means to save lives. That’s our job. If protecting people means the majority views me in a bad light, then it is what is. I certainly understand that.
Have you had to increase your own personal security as well?
I have, yeah. Unfortunately, we field a number of concerning calls and deal with people making threats. I've gotten calls from people who are irate, asking, "Why would you protect these people? We thought you were a good guy." But that's okay. When you do what we do, you have to feel blessed every day. It's a good feeling to know that we're in a position to be able to help as many people as we can.
Name: Paul Viollis and Douglas Kane
Company: Risk Control Strategies
Age: 50, 60
Location: New York City, with offices in Los Angeles; Palm Beach, Florida; Houston, and Nevada
Founded: 2004
Employees: More than 80
Revenue: Not disclosed. Revenues projected to double in 2011 and increase by 70 percent in 2012
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