What do water boarding and Wall Street have in common? No, Goldman Sachs is not water boarding executives to get insider information. The CIA is involved with both, only your taxpayer dollars are paying for one of the activities.

While water boarding will be shrouded in mystery and political arguments, what will not be is the CIA’s program that allows some of its intelligence specialists to moonlight on Wall Street.

Every quarter the executives from publicly traded companies must release earnings reports in which they say how much the company made. They hold conference calls in which investors in their company can listen in as they discuss the quarter in greater detail. There is also time at the end for Q&A. On top of that potential investors will meet with management privately to get a better picture of the company’s health. As it turns out, these managers don’t always tell the truth! Sometimes it’s half-truth, sometimes it’s sugar coating, sometimes it’s just withholding one piece of information, and sometimes it’s just an outright lie (though this is less common than you would expect, since it’s illegal). Investors could lose a lot of money if they make the wrong bet, so they look to the CIA for help.

No, as I said they are no water boarding executives. But man, if we could… Okay let’s stop thinking about that. However the CIA has other tools at their disposal than buckets of Dasani. A select group of individuals have been trained in lie detection. This goes above and beyond polygraphs. They call it Tactical Behavior Assessment (TBA). They look at verbal cues, body language, and other patterns to identify when people aren’t telling the truth. From a theoretically standpoint it’s easy to tell when someone is lying. Humans aren’t built to lie, and when we do, we show it in subtle ways. The CIA is trained to detect it.

They use these techniques during interrogations of terrorists and other enemies of state. It’s an invaluable skill that has probably saved lives and millions of dollars in expensive operations. This skill is in demand by companies that can afford to pay the CIA agents much more than their relatively modest government salary. So how does the CIA keep these people on staff after investing so much money into developing the talent? They don’t do it by convincing the agents to work for the love of their country. The CIA is smarter than that.

The CIA actually allows these agents to moonlight on Wall Street. The agents are employed on temporary and contract bases by corporations and investment funds to detect lying in partners, clients, and employees. Why would the CIA allow such a practice? The reasons are two-fold. The first is what I just talked about above. These agents are in such high demand that the only way the CIA can keep them on staff is to simply allow them to do some work outside of Langley. Of course the CIA controls what they are and are not allowed to do. You probably aren’t going to see them doing anything that would create a conflict of interest for the agents.

The second reason is perhaps more brilliant than the first. While these skills are amazing to witness (I’m guessing), the agents don’t have a backlog of terrorists and prisoners to just sit around and test their skills on. By loaning out the agents to corporations and investment funds, the CIA allows the agents to stay sharp, test themselves, and develop new skills.

But the CIA can’t keep these guys forever. Eventually they do leave the CIA. Many of them end up at the BIA. BIA stands for Business Intelligence Advisors, and they’re a group of former CIA agents that now do this kind of lie detection for the highest bidder.

I found this story to be quite fascinating. Be sure to read the full article as it includes a selected “success” story of how this lie detection stuff works.

By The Weakonomist

The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice.

categories: business, government, investing