Monday, December 24, 2007
security pariah tries a comeback
He was the perfect villain. That's the way Frank A. Argenbright Jr. — starched, coiffed and rich – saw it then, and it's the way he sees it now.
Firefighters were digging through the rubble of Ground Zero and a terrorized nation was demanding an accounting when the focus turned to Argenbright Security, the gigantic airport company the Atlanta businessman founded.
Six years ago, Argenbright was a pariah. Two of the four hijacking teams passed through screening stations manned by Argenbright Security. U.S. Attorney Gen. John Ashcroft later called a press conference to condemn the company for "an astonishing pattern of crimes that could have directly jeopardized public safety."
The company was an easy answer to the big How? It let the terrorists and their box cutters through. Or at least that was the clear implication. Argenbright Security became a symbol of pre-9/11 complacency and failure.
"There's a certain perception of a rich person: Bad guy," said Argenbright. "There's no sympathy if you're said to be worth $300 million."
That smooth and unflappable veneer shields the interior of an intensely proud, sensitive man who agonized over every slight. He remembers one e-mail that summed up a common opinion: "You should burn in hell."
The following months saw Argenbright facing bankruptcy and even pondering suicide. It would be a way — falling out of a boat — his family would believe was an accident.
Sitting recently in his Buckhead office overlooking Lenox Mall, Argenbright is in a far different place than he was during those traumatic days of late 2001, early 2002.
With a few strokes of a pen last week, the 59-year-old Argenbright completed a business deal that repaid several friends who rescued a man teetering on ruin. Repaying those who buoyed him was a key moment in his relentless struggle to reclaim a devastated reputation.
About the time he was at his lowest, in 2002, Argenbright started digging out from the rubble of his own life. He sold his palatial Atlanta home, sold his lake house and rented out his Sea Island mansion to tourists. He borrowed about $7 million from several business friends and started two new companies — Air Serv, an aviation outsourcing firm, and SecurAmerica, a security company, growing them, respectively, to nearly 6,000 employees and 1,500.
The two fields, security and air travel, almost ruined him. But, he said, that's what he knows. That's what he's good at. Once again, he's aiming high.
"I want to be the biggest commercial security company in the U.S.," Argenbright said. "You get beat down but you want to come back to show people you can."
The purpose of his 18-hour work days is to build these new companies. But there is something much more going on.
"Forget the money. I've made a lot of money over the years," he said, pausing. "People will say, 'Argenbright. There's something bad about that name. Something bad.' "
Stephen Franklin, a finance expert and former business professor, said Argenbright's aim is simple: "He wants to prove he can do it again. Maybe to the naysayers, but more to himself."
Several people, both friends and foes, said Argenbright was unfairly tarred from the start. His company was part of a ferociously competitive system of contractors bidding for business from increasingly tight-fisted airlines. Argenbright, a workaholic and dynamic salesman, flourished in that environment and his company was the biggest in the field, performing 40 percent of the nation's airport security.
Argenbright Security was as good or better than most, observers said, and they point out he no longer owned the company on Sept. 11. He had sold it to a British firm nine months earlier and was being kept on as a management consultant.
"He was made the face of all that went wrong that day. ... They needed a scapegoat," said Don Migliori, an attorney who is representing families of victims killed in the attacks. The suit includes two airlines and two security companies, including Argenbright Security. "That was the design. There had to be a face on it. We as a culture need that."
Argenbright's journey to scapegoat, financial ruin and his current rebound has been a long, circuitous road for the one-time learning disabled kid, who in 1979 started a polygraph business with $500 in a cramped office in a hotel near Hartsfield International Airport.
He was ambitious and flew by the seat of his pants. He heard Delta Airlines needed bus drivers, so he bid on the contract. Then they needed guards. Then they needed screeners. Argenbright kept promising and delivering.
In the early 1980s, his business model was so opportunistic and optimistic that Franklin, then a business professor at Emory University, brought the entrepreneur into his class as a walking textbook example.
"It was a classical American entrepreneurial startup: Borrow money, start at the ground with a dream and a 7/24 work ethic," Franklin said. "He always had big, big goals and contagious enthusiasm. ... He's an incredible marketer, an incredible salesman. He could make the sale before he had an idea how he could get it done."
Argenbright's umbrella company, AHL Services, expanded to a wide range of businesses outside of his core of security and airline support. Those businesses included a European staffing operation and a marketing firm that erected signs for retailers.
The security company was tenacious in pulling in business.
Charlie LeBlanc, who worked for a competitor, was shocked in the early 1990s when his team bidding for contracts at the new Denver International Airport got beat out by Argenbright.
"They had a good reputation in an industry going gangbusters," said LeBlanc. "If you create a perception you're up to the job, you'll get offers and you'll grow. They kept saying 'Yes' when the airlines asked, 'Can you do ...?' "
By July, 1998, Argenbright was heading a conglomerate with 52,000 employees. His stake surpassed $330 million.
The screeners at many of the companies looked professional in their blazers and dress slacks, but LeBlanc said there was a fundamental problem — airport security companies were low bidders with small profit margins and employees who were low paid and transient.
"They were minimum wage. They were constantly looking for other jobs. McDonald's would give them 5 cents an hour more and they'd be gone," said LeBlanc, who is now the president of ASI, a travel security consulting firm. "There were a lot of different ways to point fingers, but you couldn't get around the fact that the first line of defense [the screeners] was a really weak point."
Argenbright argues his screeners were frequently subjected to tests, with investigators trying to sneak items through the kiosks. Screeners were rewarded when they found test items.
But in 2000, its parent company, AHL, pleaded guilty to allowing untrained employees, some with criminal backgrounds, to operate checkpoints at Philadelphia International Airport from 1995 to 1998. It paid a $1.2 million fine.
By 2000, AHL was an unwieldy public company made up of many disparate parts and that stock — once at $42 a share — had free fallen into single digits. In December, 2000, Argenbright Security was purchased by a British company, Securicor. Argenbright was kept on as an executive.
Argenbright Security's past came to haunt the company after 9/11. Ashcroft and other government officials repeatedly brought up the Philadelphia case as part of a successful move to federalize screeners and create the Transportation Security Administration, which now performs screening at American airports.
Argenbright called the illegal hiring of people with criminal backgrounds the actions of a rogue manager. LeBlanc said he was not surprised by the Philadelphia manager's actions. He said airport security managers throughout the industry were spurred by the unending pressure of needing new workers.
How the 9/11 hijackers got weapons onto the airlines was never answered. It is not known if the weapons were placed on the planes beforehand by others, were sneaked through the checkpoints or were carried in open view because small knife blades were allowed.
Only one checkpoint entered by hijackers had a videotape — the one at Dulles International in Washington, D.C., operated by Argenbright. Two hijackers set off the metal detectors and were hand wanded. The federal 9/11 commission report called the screener's efforts "marginal at best" because he did not properly "resolve" what set off the beeper.
After 9/11, Argenbright said he was told by the new owners to remain quiet, even though it was his name that was continually being battered. He said speaking would have violated the terms of the agreement he negotiated when selling Argenbright Security. It also would have cost his remaining company, AHL, and its investors millions of dollars, he said.
Holding his tongue was wrenching.
"If the attorney general says you're bad, you must be bad," he said.
The following year, he started to do the only thing he knows to regain his good name — build companies.
At the time, Argenbright said he was "virtually bankrupt" and needed the help of some deep-pocketed friends to help him bounce back.
One of those benefactors was Joe Rogers Jr., CEO and chairman of Waffle House. Rogers said Argenbright's business this time is more focused and streamlined.
"Last time, he put all these different companies, and their cultures, in one company
," Rogers said. "When a business gets too big, it's hard to keep an entrepreneurial spirit. I think Frank's style works best in a medium-sized company. His presence needs to be felt."
Backing Argenbright was a no-brainer, Rogers added.
"This was a second chance to catch him on the way up," Rogers said. "You bet on talent. We were betting that he'd do it again."
Aviation Security: An Interesting History