March 2008

Andrews International Experiences
Rapid Growth in 2007

LOS ANGELES, Calif. (March 4, 2008) – Andrews International, one of the ten largest private security providers in the United States, has experienced substantial growth in 2007. Thirty percent of the firm’s growth is attributed to the acquisition of security firms in New Jersey, Texas and California. 

Randy Andrews, CEO and chairman of Andrews International, expressed, "The security function continues to play an integral role in supporting company services and business processes. We are looking forward to fostering partnerships with these new customers to assist in accomplishing their unique needs, strategies and goals."  

In 2007, Andrews International signed five major national or regional contracts with premier entertainment, shopping center, banking, and technology clients. The contracts, totaling over $16 million in revenue and 11,500 hours per week, resulted in an additional 20% plus growth for the year.

"These new contracts support Andrews International’s organic growth strategies. Combined, they focus on continued service quality and higher levels of expertise across various vertical markets and geographic regions," said Ty Richmond, Co-president and Chief Operating Officer, Andrews International.

"Our business philosophy remains focused on customer support," said Jim Wood, Co-President and Chief Operating Officer, Andrews International, "Our growth has resulted in the further decentralization of our account management structure, empowering local management to make decisions affecting their local accounts, with the continued support of executive leadership."

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Simon Properties Contracts with Andrews International to Protect Malls

Los Angeles, Calif. (March 4, 2008) – Andrews International, which protects many of the most visible, high-end malls in the country, recently signed a multi-year, multi-million dollar regional contract for uniformed security services for Simon Property Group, Inc., the largest public U.S. real estate company. Andrews International will provide security services for four regional malls in California and Nevada, including Del Amo Fashion Center, Hilltop Mall, Meadowood Mall and Stoneridge Shopping Center.

"This is an opportunity for Simon Properties and Andrews International to work together to create an environment for public safety at our centers," said John Petruzzi, Vice President, Corporate Security and Emergency Managment for Simon Property Group.

Andrews International’s responsibilities include the development, training, scheduling and coordination of a security officer program and the provision of the necessary management and security personnel.

"We are very proud to have been competitively selected for these four significant contracts," said Andrews International’s Co-President and COO, Ty Richmond, CPP. "As a leader in securing malls and public access environments, Andrews International has continued to build our vertical market in this sector and enhance our programs and services to the industry. Simon is an important strategic partner, who, as a leader in this market, has set a bar of excellence that will keep Andrews International focused on executing the Simon vision for security and enterprise risk management."

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Due Diligence: Vital Element in Business Decision-Making and Critical to Compliance

By Anton Bommersbach, Vice President, Midwest Operations, Consulting & Investigations, Andrews International

Significant business decisions require significant investment in the decision-making process. Conducting due diligence before entering business transaction makes good sense and is critical to making sound business decisions about potential partners, acquisition or investment. While conducting due diligence does not eliminate risk, it is an important element in recognizing and managing risk and can be used as a legal defense in compliance with relevant U.S. legislation and regulations; or its European equivalent, including:

• Foreign Corrupt Practice Act (FCPA) / OECD Guidelines - By screening all business partners for links to Politically Exposed Persons (PEP), their associates and their "front" companies.
• Sarbanes - Oxley Act - by introducing a systematic and auditable process for fraud prevention.
• USA PATRIOT Act / Office of Foreign Asset Control (OFAC) – by ensuring none of the business partners or their principals are included on any U.S. or other government prohibited entity lists.
• Customs - Trade Partnership against Terror (C-TPAT) - by securing   the supply chain in a systematic and auditable manner.
  
  

Due diligence assists in the decision-making process for mergers and acquisitions, acquisition of real property, intellectual property or securities, as well as financials and the search for regulatory corporate skeletons. These reports may focus on analyses of foreign regulatory environments, international supply and distribution networks, industry-specific market conditions, litigation exposure, corporate reputation, pension and benefit funding, loan performance and virtually any other business, legal or financial issue that can affect a business transaction.

There are certain corporate activities that require the extra layer of due diligence, especially in light of increased scrutiny and the standards and liability of the Sarbanes-Oxley Act and the Foreign Corrupt Practices Act (FCPA). These federal laws have considerable impact on acquisitions and mergers, due to compliance by all publicly traded companies and that any business, even privately held, is subject to the FCPA.

Sarbanes-Oxley requires the CEO or CFO to certify the controls and accuracy of the relationship by the end of the first quarter in which the transaction was completed. Without substantial due diligence before the business transaction, it is nearly impossible for corporate officers to certify the new entity in this timeframe.

The FCPA seeks to prevent any U.S. business from engaging in corrupt activity in foreign countries. It applies not only to businesses with offices or facilities in foreign countries, but also to those that engage in business activities abroad through independent agents, such as contractors, consultants and sales representatives. Utilization of these overseas agents has increasingly become a common practice, yet these international entities are often engaged to perform a variety of business activities by their US counterparts without a thorough evaluation and understanding of their operations.  Stricter laws are removing the 'voluntary nature' of completing these in depth inquiries by imposing harsh penalties for failure to identify illegal, corrupt or unethical business practices.  In the twenty-first century, doing one’s homework is not only expected, it has become regulated and enforced.Activity by brokers, affiliates, marketers, agents and joint ventures are all included within the accounting and anti-bribery provisions of the FCPA.

Recognizing and avoiding corruption and bribery is not simple, even when the intent of the act is to prevent bribery of government officials for gaining a commercial advantage. In many countries, business practices, culture and determining who is and who isn’t a government official can be difficult. The result is that activities completely legitimate in one country are highly questionable or illegal in another.

When the inherited liability of the FCPA is combined with the self-reporting and certification requirements of Sarbanes-Oxley, it is not surprising that many companies are voluntarily reporting violations discovered during due diligence process. Staggering fines have been imposed even on those self-reporting. In March 2005, Titan Corporation, a defense contractor, agreed to pay penalties totaling $25 million; and more recently, Tyco International agreed to pay fines and penalties exceeding $50 million for violations committed in Brazil and by an affiliate in South Korea. With increasing globalization of markets, FCPA violations will continue to be rigorously pursued by regulators - and uncovered through due diligence.

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Case Study: Due Diligence

A corporate client was in the process of making a large acquisition when Andrews International was asked to conduct a due diligence investigation that would include work in Asia and the United States. Based on the results of the investigation, our Fortune 100 company was able to re-assess the financial considerations on the deal and approach the business transaction with a different strategy. Andrews International discovered litigation and profile information on company management of which our client was previously unaware. The result: the client achieved a tangible return on investment and cost avoidance due to the work of our due diligence team.

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Securing a Retail Environment

By David Levenberg, CPP, Senior Vice President and Retail Security Expert,
Andrews International

Recent violent incidents at shopping malls have created fear among consumers and the companies operating malls and other retail and public access environments nationwide. In fact, a recent survey of retail security and loss prevention professionals identified "homeland security" as the number one issue, especially for disaster planning and response. The following checklist highlights important elements in developing a plan and responding to an incident.

1) Developing a plan requires a threat assessment

a) What are you protecting? – People, property and information
b) Who occupies the property and who visits the mall?
c) Impact of the surrounding environment?
d) What are most likely threats? – man-made, natural
e) Where are your vulnerabilities?

2) Emergency Planning

a) Who will implement the response plan?
b) What training or drills have been conducted?
c) When will the plan be updated?

3) Physical security

a) Protect HVAC and fuel storage
b) Use surveillance
c) Control access and keys– lock doors and patrol
d) Control parking
e) check deliveries

4) Training

a) Reference material from handling mail to chemical/biological
    materials
b) Participate locally with first-responder community
c) Conduct annual live drills involving first-responders, tenants and
    others that will be impacted

5) Communication

a) Broad communications and warning systems, such as public
    address announcements
b) Web site and dedicated phone lines for response and answering
    questions
c) Liaison with first-responders
d) Create and convene a crisis management and response team
e) Participate in industry groups such as International Council of
    Shopping Centers (ICSC) and ASIS International

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