Policy Review Banner

Safety Inc.

Thursday, June 1, 1995

Every day, hundreds of travelers and visitors to New York City arrive at 42nd Street, across from Grand Central Station, after a disorienting bus trip from Kennedy or LaGuardia airports. Most of the passengers stepping out onto the sidewalk have a single goal: to find a taxicab. Meanwhile, beside each idling bus awaits another group, equally intent on their own mission: to steal from the disembarking travelers.

These are Grand Central's "bag hustlers," the muggers, swindlers, and con men drawn to the area by the steady stream of bus passengers, as well as by the half-million or so commuters who pass through Grand Central each day. To these men, a confused tourist is like a limping gazelle: slow, defenseless, and tasty.

Early one afternoon, a middle-aged visitor from Austria arrives at 42nd Street. Bags in hand, he scans the street for a cab. Before his eyes can even adjust to the light, he is approached by a bag hustler. The hustler, a stocky man in his late 30s, is confident, aggressive, and talks quickly. He offers to carry the man's bags and find a cab. His $20 fee, he explains, will cover the cost of the ride to the man's hotel. The man assents, unaware that the hustler has no intention of paying for the cab with the $20. Instead, he plans to take the money—and perhaps the man's entire wallet—and run into the crowd.

As the two walk together to the curb, a third man appears, dressed in what looks like a policeman's uniform. "Excuse me," he says to the tourist, pointing to the hustler, "do you know this man?" The tourist, looking confused, shrugs. "Then why is he carrying your bags? He's a thief." Soon, other tourists are looking on, and the policeman repeats his charge to the crowd. "This man is a thief," he says in a loud voice, "stay away from him." The hustler drops the bags, and the cop escorts the now thoroughly confused but grateful tourist to a legitimate taxi stand down the block. In less than a minute, and with little fuss, the policeman has saved the tourist from one of New York's oldest scams.

Except the man in uniform is not a policeman. He is a private security guard, hired by local property owners, and possessing no legal powers beyond those of an ordinary citizen. He is a member of a security detail employed by an organization called the Grand Central Partnership. In less than 10 years, this man and several dozen of his colleagues have helped transform the area around the train station from a chaotic maze of threatening streets into one of the safest sections of Manhattan. They have done it without wholesale arrests—and without the use of public money.

Traditionally, security guards have been employed almost exclusively by businesses: either companies whose assets are so valuable that they require extra protection, such as banks and jewelry stores, or those whose size or physical structure renders police patrols ineffective against crime, like hospitals and railroads. But the role of private security is expanding. Increasingly, civilian guards are providing protection in places where only sworn police officers have walked beats: in public parks, central cities, and residential neighborhoods. And increasingly, the salaries of these guards are being paid not by businesses to protect goods, but by citizens hoping to protect their families and neighborhoods.

The history of private security may be nearly as old as crime itself. The earliest security guards may have been the temple priests in the ziggurat at Ur, enlisted by wary Sumerian moneychangers in the third millennium B.C. to protect their lucrative banking operations. In the United States, where businesses have always assumed a large degree of responsibility for protecting themselves, private security guards predate police departments by more than 200 years. Allan Pinkerton, a Scottish immigrant and barrelmaker-turned-detective, started the country's first guard-for-hire service in 1860. His first job: dispatching uniformed civilians to protect meat-packing plants in Chicago. Pinkerton's company, which by the 1990s had revenues of more than $600 million, now shares the market with about 57,000 other private security firms in the United States.

Private security is among the fastest-growing industries in the country. During the 1980s, security companies expanded at twice the rate of public law enforcement, and received 70 percent more funds. There are now two security guards employed in the United States for every federal, state, and local police officer. Civilian guards protect everything from nuclear-power plants to theme parks to government buildings, and their role in public life is growing larger.

Private security companies can never take the place of police officers, and most do not want to. Security guards lack the moral authority that only government can give law enforcement. They also are hobbled by law. Civilian guards have only limited powers of arrest. In most states, citizens may make arrests only when a crime is committed in their presence; suspicion that a crime has taken place is not enough. And in some states, citizens may only make arrests for felonies, and then must immediately turn the suspect over to a police officer. Even those guards who do see felonies in progress are advised to arrest with caution. Unlike police officers, civilians who accidentally take innocent suspects into custody are liable for false arrest.

For these reasons, security guards cannot routinely respond to violent crime. They cannot interrogate suspects or solve murders or negotiate the release of hostages. But they can augment police efforts, helping to maintain order in places where police forces are absent or spread thinly. And they can encourage citizens to follow community standards in a way police officers often cannot.

Security guards can perform these tasks more cheaply than most police departments. Unlike police officers, guards spend nearly all of their time on the job. Since they seldom make arrests, they have little paperwork, and rarely have to testify in court. They are free to walk their beats, and—of great importance to employers—they accrue little overtime.

Perhaps most important, security guards are flexible. Because they are not required to respond to calls for emergency service, they can go wherever they are needed to deter crime—and stay there. A business owner who fears robberies cannot force a police officer to stand outside the door of his business. But hired security guards can do just that. Private security gives citizens more control over their own safety. Used intelligently, security guards can be as efficient as any police department at keeping public order.

Law and Disorder

By the mid-1980s, the streets of midtown Manhattan seemed to be sliding into chaos. Aggressive beggars clogged filthy sidewalks. Crimes of all kinds were on the rise. Local business owners became increasingly frustrated with the city's apparent inability to clean up the area. Some companies left Manhattan for good. A cluster of midtown property owners decided to stay, and to restore their neighborhood without the help of City Hall.

In 1985, a group of planners led by real-estate developer Peter Malkin formed a "business-improvement district," a primitive form of quasi-government charged with keeping streets safe and clean. The group carved out a 50-square-block area surrounding Grand Central Station and on the cusp of Times Square. They called it the Grand Central Partnership. The owners of the 220 commercial properties within the district got to vote on the plan, and a majority agreed to join. Soon after, the New York City Council approved the plan. Although the area was not physically vast—about 80 acres of streets—it was in the center of one of the densest commercial districts in the country. Once its boundaries were set, the Grand Central Partnership contained more than 6,000 businesses, comprising a total of some 51 million square feet of commercial space, about the same as in all of downtown Los Angeles.

To raise money for improvements, the property owners began taxing themselves, first at the rate of a little more than 11 cents per square foot of space, later at about 12.5 cents. For small businesses, the levy worked out to a couple of hundred dollars in extra taxes per year. For large properties, such as the PanAm building, the tax could add up to $300,000 annually. Collecting the revenue was easy. A state law passed in 1981 allowed the city of New York to gather the money along with municipal property taxes each year. The city then sent the money back to the partnership. The city threatened property owners who refused to pay with foreclosure.

By 1994, the Grand Central Partnership was raising $6.3 million a year in property taxes. Most of the money went to visible projects. The partnership hired more than 30 street sweepers and trash collectors to pick up after the thousands of litterers who walk through midtown each day. It purchased new garbage cans, street lights and flower boxes, and built new sidewalks and gleaming granite curbs.

To help foreign tourists find their way, the partnership hired multilingual guides and placed them outside of the train station. To make catching a cab easier, it built two taxi stands and stationed a guard in each to direct traffic. To make the neighborhood more inviting to pedestrians, the partnership spent $3 million to install 136 high-power halogen floodlights, which illuminate the Grand Central terminal at night. When more money was needed for capital improvements, the group issued $35 million in bonds, the interest on which was paid for by the property tax.

Vacating the Vagrants

Completed in 1913, Grand Central Station was crumbling by the 1980s, and had become a magnet for every kind of social affliction. City police seemed unable or unwilling to restore order. In 1987, the New York Times described the area outside the train station as "chaotic and forbidding, often filthy and sometimes dangerous." Much of the chaos and filth, as well as much of the danger, could be traced to the nearly 500 vagrants living in the building.

Since it had no jurisdiction within the train station, the partnership could not make the vagrants leave the terminal. Instead, it decided to lure them away. For years, hundreds of homeless men and women had gathered on Vanderbilt Avenue outside Grand Central to receive food handed out by volunteers. Starting in 1989, the partnership opened a "drop-in center" for the homeless in an old Catholic boys' school a couple of blocks away. Soon, the center was serving meals to hundreds of the same people who had once queued up outside Grand Central.

Inside the old school, the homeless could sit down to eat. And unlike the street in front of the station, the drop-in center was safe, protected by a metal detector and security guards. As additional enticements, the center offered hot showers and job-training classes. Employees of the partnership began to help vagrants living in the train station find more permanent housing, relocating scores of them to shelter at YMCAs and even in city housing. Before long, Grand Central was nearly free of vagrants.

The Shock Troops

As the partnership's social-service arm enjoyed success with the area's homeless population, its security division worked to assemble a guard force. By the winter of 1988, the security force was ready. Using $1.4 million of its annual revenues, the partnership put 18 uniformed security guards on the street around Grand Central each day, working overlapping shifts from 6 a.m. to 11 p.m., seven days a week.

Gerard Panza is a retired detective who runs the day-to-day operations of the partnership's security force. From his office in a building next to the train station, he plots the movement of crime through the district. On one wall hangs a map of midtown, with colored push pins marking the locations of recent crimes. Though the map is riddled with holes, few pins remain, testament to the success of the partnership's strategy for fighting crime.

At times security guards have tackled serious, violent crime. Guards have disarmed a gunman and also foiled an armed robbery. But as Panza explains, the partnership's most important task is keeping the streets orderly. Security guards, he says, have set out to shove even the pettiest of criminals out of the partnership's domain. No public violation of law or exhibition of disorder is too small to merit the attention of security guards. As a result, Panza says, the incidence of crime of all kinds has fallen.

The New York City Police Department agrees. According to the department's statisticians, within two years after the guards arrived, reports of crime within the Grand Central Partnership had dropped by 20 percent. The decline was even more precipitous in the area immediately surrounding the rail terminal. On the western part of Vanderbilt Avenue outside Grand Central Station, a street long famous for muggers and drug dealers, reported crimes dropped 83 percent (from 2,140 in 1988 to 367 in 1990). After three years, reports of crime in the district had dropped 36 percent, an achievement the city's assistant chief of police called "phenomenal." By the spring of 1994, more than five years after security patrol started, reported crime in the Grand Central Partnership had decreased by nearly 53 percent.

A Few Good Men

The group's directors understood that the guards they hired would do much to shape the partnership's public image. It was a challenging task, because the public perception of private security has never been good. A 1971 Rand report described the "average security guard" as an "underscreened, undertrained, undersupervised, and underpaid" ne'er-do-well with "little education beyond the ninth grade." To this unflattering portrait, the Rand scholars might have added "uncontrollably aggressive" and "psychologically unstable." It is widely believed in the private-security industry that the mentally unbalanced are drawn to guard work. A number of recent, highly publicized incidents in which current and former security guards have committed crimes or gone unaccountably berserk have only seemed to confirm the stereotype.

In order to screen out maladjusted candidates, the Grand Central Partnership advertises the jobs in relatively upscale publications like the New York Times and takes referrals from the John Jay College of Criminal Justice in Manhattan. Although no federal laws regulate the hiring practices of private security companies, most states require guards to be at least 18 years old, and to be reasonably upstanding, sober citizens with no recent felony charges. In addition to these requirements, the partnership hires only applicants with a high-school diploma, and gives preference to those with military service. Each recruit is required to take a psychological exam and a drug test. Once they meet these standards, rookie guards are trained for seven days, mostly in the specifics of New York law.

There are no explicit physical requirements for the job, but Richard P. Dillon, who runs the security operation for the partnership, says he likes to hire guards who are "as smart and as big and fast as we can get." In at least one category, it is clear he has succeeded. The partnership's guards—most of whom are men—tend to be physically imposing. Some are huge. The guards do not carry weapons, so physical size can be an important source of authority during an altercation.

Successful applicants are paid well by industry standards. Salaries start at $10 an hour, rising to about $13 with seniority and good service. Benefits include health and life insurance, and two weeks' paid vacation. Once on the force, discipline is strict. Absenteeism and lateness are not tolerated, nor is sloppy dress, smoking in public, or even minor violations of the organization's many rules. Guards must use good manners, including courtesy titles, in their dealings with the public. Their uniforms, which bear a distinct and intentional resemblance to those of the city's police department, are crisp and clean. Under them, guards wear bullet-proof vests.

Tight Supervision

Though they have succeeded in forming a largely professional force, the partnership's directors are under no illusions about the quality of person drawn to guard work, or about what could happen if the guards were managed poorly. Direct and quick communication between guards and supervisors is crucial to ensuring that guards are effective and stay within the bounds of the law. Guards are linked to their supervisors at all times by radios routed through the partnership's dispatching center on 34th Street. As they walk their rounds, guards talk frequently with their overseers, checking in over the radio and seeking approval for any consequential decisions.

The partnership's supervisors are well-equipped to offer guidance. Each is a retired New York City police officer, with a minimum of 20 years on the force. The head of the group's security force, Richard Dillon, was a cop for 32 years before retiring in 1988 as assistant chief of the department. Most other supervisors retired as detectives or inspectors.

Veteran supervisors are the partnership's insurance policy against mishaps. In addition to their superior equipment—each carries a concealed pistol and a radio with a direct line to the police department—supervisors bring a solid knowledge of the penal code. While guards, many of whom aspire to be police officers, are apt to swagger and overstep their authority, supervisors remain cool. William O'Connor, a retired detective who keeps watch over seven guards, says he struggles every day to keep his men within their legal bounds. "They're loaded with enthusiasm, and they would want to do more than private citizens can do." But, as O'Connor reminds his guards repeatedly, they are nothing more than civilians in uniforms.

The distinction is vital. Nothing could destroy Grand Central Partnership's security force more quickly than a guard who assumes police powers and abuses citizens. It has happened before. In the late-1980s, members of the Nation of Islam began providing security to public-housing projects in several cities, including Washington, New York, and Los Angeles. With grants from the Department of Housing and Urban Development, the sect's security firm sent guards into projects to clear out drug dealers. For a time, the group restored a measure of order to the projects. In the process, however, the security guards intimidated not only the drug dealers but residents as well. In a number of housing complexes, police had to intervene to keep the guards under control. In one case, the group lost its contract with a housing project in Los Angeles after being charged with negligence.

In order to avoid similar mistakes, the partnership drills its guards on the limitations on the use of force. Physical force may be used, the guards learn again and again, only as a final resort, in self-defense, or to protect the life of another person. The partnership's security handbook, which explains the limits of civilian authority, is referred to as "the Bible"; guards take refresher courses on it every Thursday afternoon. To further protect themselves from liability suits, guards are required to call their supervisors the moment a problem arises. If the guards make an arrest or become involved in an altercation with a citizen, supervisors routinely interview bystanders as potential witnesses. In the event of a lawsuit, the statements they take may be used to protect the guard. So far, the precaution has not been necessary. The partnership's security force has been sued only once, by a bystander who was injured by a guard chasing a suspect.

The supervisors' broad experience allows them to fill another role as well, that of ambassadors to the city's police. A working partnership between the two groups is vital to the success of the security force, but relations did not come easily. Like most police officers, New York cops are naturally suspicious of security guards, or "square badges," as they are unaffectionately known. In the eyes of police, guards seem to occupy a confusing gray area between public official and private citizen that many cops find disconcerting.

To the surprise of no one, the partnership's guards received a chilly welcome from police when they first arrived in midtown. Due partly to the presence of retired cops in its ranks, however, the guards ultimately developed an amiable relationship with local cops. The two groups now share a substation across from the train terminal, and meet monthly to discuss crime trends.

A Cop's Best Friend

Over the years, police have adopted a laissez-faire view of minor lawbreakers around Grand Central, including baggage hustlers, aggressive panhandlers, and small-time marijuana salesmen. "The police are involved with other matters," explains Panza, who spent more than 30 years on the force. "They cannot concentrate on the quality-of-life crimes when they have major crimes. They must first reduce homicides, robberies, assaults."

For police officers, the priorities make good sense. When a cop makes an arrest for disorderly conduct, for instance, he is likely to spend the rest of his shift at the station house filling out forms.

In the meantime, his post out on the streets may remain unfilled, creating opportunities for additional, perhaps more serious crimes to be committed. "That's where we come in," says Panza. "We are the eyes and the ears of the police department. They appreciate our work because we try to solve some problems ourselves, without police intervention."

Guards often go to great lengths to avoid summoning police unnecessarily to the scene of a disturbance. When a knot of marijuana dealers proved especially hard to dislodge, for instance, security guards simply took photographs of the sellers and handed them over to police. Most of the dealers quickly found new retail locations. As in the vast majority of cases handled by the partnership's guards, police never became directly involved.

Of the 6,916 incidents to which the partnership's guards responded in 1994, only 624 required police assistance, and 122 resulted in arrests. That year, guards came across 31 people smoking marijuana in public. In each case, the guards told the smokers to move along, and in each case the smokers did. In cases of narcotics dealing, police were called just 6 percent of the time; in bag-hustling cases, 2 percent; in illegal panhandling cases, 1 percent; and disorderly conduct cases, 9 percent.

In January 1993, security guards told 141 unlicensed peddlers to leave the area. One hundred and thirty-five obeyed the guards without incident. Police were called to handle only six of those cases; only two peddlers were belligerent enough to get arrested.

Most of the time, guards convince violators to comply by explaining which laws they have broken, then politely asking them to leave the area. Most accede. Some do not.

Three-card monte dealers, in particular, have a reputation for ferocity, and only the largest security guards are sent to ask them to vacate the sidewalk. When they are challenged, however, it isn't physical strength most security guards are likely to rely upon, but the power to arrest.

Like all citizens, guards can make arrests when they see crimes committed, hold suspects until the police arrive, and act as complainants in the case against the arrestee. The difference between security guards and most civilians, however, is that guards will, when pushed, actually make an arrest. Most lawbreakers in the area know the guards aren't bluffing.

The threat of even a citizen's arrest is apt to get a wrongdoer's attention. As security chief Richard Dillon puts it, "Criminals, even in New York, where they know they're not going to stay in jail very long, still don't want to be arrested." And, according to Dillon, security guards will make a genuine effort to arrest some criminals. "Our guys chase them five or ten blocks."

When the victims of crime are tourists, security guards make an additional effort to see that the perpetrators are locked up. Visitors from out of town make appealing marks partly because criminals know that even if they are caught, their victims will most likely never return to testify against them in court. The charges will be dropped. To encourage tourists to testify, the partnership authorizes its guards to offer to pay victims' airfare back to New York for the court date. The guards believe this policy makes criminals more inclined to plea-bargain.

Deterring Petty Thieves

The partnership's guards look strikingly like New York City cops. The resemblance is deliberate. Says Panza, "We want people to think from a distance that it may be a police officer. That is a deterrent. By the time they ascertain that the guy is not a police officer, maybe the opportunity to commit the crime has disappeared." When they are not putting the hustle on bag hustlers, the guards spend their days doing what New York's police department no longer has much time to do: walking a beat and deterring thieves with their uniformed presence.

Coconuts, a music store next to the train station, has lost large amounts of merchandise to theft. Professional shoplifters carry double-walled "booster bags" lined with aluminum to neutralize the store's electronic security system, and they routinely load up with free compact discs and cassette tapes. Store employees, knowing police would be slow to respond, could do little. But the security guards, says Edwin Ortiz, the store's manager, have helped cut down on the thievery. "I call them and they come running and hold the shoplifter till the police come."

Joel Oks, owner of Portabella, a men's clothing store on Vanderbilt Avenue, also had a problem with shoplifters. Now, he says, the thieves have moved on to other areas, along with the drug dealers who used to stand outside his store. The criminals, he claims, have been frightened away by the security guards. "Wouldn't you be scared of this guy?" asks Oks, pointing to Jimmy Mena, a guard the size of a rhinoceros. "We don't have security problems any more. I give them all the credit."

Oks may give the guards credit, but he has no idea how much he gives them in taxes. Like every store owner I surveyed, Oks did not know what he pays each year to the Grand Central Partnership. And like the rest of the owners, he does not seem to care. Whatever the amount, he says, the protection he receives is "well worth it."

Alan Maleh, owner of Goldrush Fine Jewelry at the corner of 42nd Street and Madison Avenue, agrees. "I haven't seen a uniformed policeman around here in years." The guards, by contrast, "are there all the time. If we give a call, they come running over." Before the security guards, he says, "there were no cops." Muggers "would snatch a purse right in front of the store and they would be laughing, not even running away, walking away. They can't do that now. So they go somewhere else." Without guards, he says, "it's like a jungle out there."

Store owners take comfort in the fact they can reach guards at any time on their portable radios and expect an immediate response. Toni Klein, who owns Cohen's Fashion Optical on 42nd Street, says she does not wait for a crime to occur before calling for help. The moment menacing-looking people enter her store, she requests a guard, who invariably arrives in moments. Like many citizens, Klein might feel foolish calling the police to deter crimes before they are committed. But the money she pays to the partnership—even though she is unsure of its amount—makes her feel entitled to preventive police protection.

Fresh Flowers in the Men's Room

Perhaps no location in midtown Manhattan has benefited more dramatically from the presence of security guards than Bryant Park, a nine-acre patch of grass behind the city's public-research library and adjacent to Times Square. Situated in the center of the city and ringed by office buildings, Bryant Park is a natural place for couples to stroll and office workers to eat lunch. For years, however, few dared enter the area. Until the late-1980s, the park was a dangerous and notorious place: Drug-dealing was rampant, people lived on park benches, and there were murders.

Bryant Park's fortunes began to change when two security guards were assigned to the area. The guards started enforcing some simple rules: no panhandling in the park, no drinking, no drugs, no sleeping on the benches, no feeding the pigeons, and no wading in the fountain. For those who didn't get the message, a sign was hung listing the prohibitions in bold letters. Within a short time, many of the park's seedier tenants left for more hospitable terrain. Soon, law-abiding citizens took the place of vagrants, and the atmosphere began to change.

Bryant Park now hosts concerts during the summer, and free movies on the lawn every Monday night. There is virtually no serious crime. "We're getting so many good folks here doing so many good things," says William O'Connor, who supervises guards in the park." You're an oddball when you're sitting out there being drunk or disorderly."

Nothing illustrates the revival of Bryant Park more powerfully, however, than the condition of its men's room. By their nature, bathrooms are among the most vulnerable of public spaces. In New York, they are often stark symbols of urban decay. Frequently scarred by graffiti, and filled with drug dealers, amorous homosexuals, and vagrants bathing in the sinks, public men's rooms are places most savvy New Yorkers avoid at all costs.

Bryant Park's men's room, however, is different. Its full-time attendant keeps the room tidy and stands guard. As a result of his vigilance, the men's room is as spotless as the lavatory in an upscale restaurant. Next to the sink is a bouquet of fresh flowers, fragrant evidence of the power of private security to enforce order in public spaces.

More communities are certain to follow the example of the Grand Central Partnership. They may have to. Just as rising medical costs have forced hospitals to give more responsibility to nurses, cities may find that sworn police officers—whom they must train, pay relatively well, and sustain on pensions—are too expensive for fighting and deterring certain types of low-level crimes. To maintain basic civic order, rent-a-cops may be a better deal.

Many communities already think so. In 1993, residents of Georgetown, an affluent and historic neighborhood on the western edge of Washington, D.C., hired a security guard from the Wells Fargo Company. Crimes, particularly thefts from cars, had been increasing in the area for years. About 100 neighbors chipped in approximately $160 a year—about 44 cents a day per household—to hire a uniformed guard to patrol their six-block area. From 6 p.m. to 2 a.m., five nights a week, the guard passes each house in the area at least once every hour.

After a year of employing the guard, residents found their streets transformed. Fresh graffiti stopped appearing on buildings. Burglaries within the six-block area decreased by 55 percent, robberies by 50 percent. The security guard also stopped at least two serious crimes. In one instance, he frightened off two men attempting to kidnap a local couple.

The decrease in crime was so dramatic that other parts of Georgetown soon began hiring guards. Within a year and a half, 90 percent of the neighborhood was covered by security guards.

In the mid-1980s, East Hills, New York, a village of 6,700 on Long Island, hired about 30 uniformed security guards to take the place of sworn police officers. The unarmed guards cruise the streets of East Hills 24 hours a day, reporting crimes to county police, and generally acting as guardians of order. Although the service costs residents an extra $360,000 a year in property taxes, it has remained popular. Local politicians credit the program with reducing the town's burglary rate.

Citizens concerned about disorder in their neighborhoods may find that security guards are the most cost-effective way to make their streets safer. "We don't do homicides, we don't do rapes," says O'Connor of the Grand Central Partnership. "But we do other quality-of-life things. Police are not going to come for an illegal peddler when they're up to their necks in gun runs. That's the reason we're here: We do the work the police have trouble getting to because they're so busy." If the results of these private security firms are any indication, this sort of policing can help restore community life—keeping everyone less busy worrying about crime and more busy building families and neighborhoods.

About the Author

More from Policy Review

More from Government Regulation