Since starting as a two-person operation about 30 months ago, a West Palm Beach business-intelligence firm says it has steadily increased its client list and soon will be adding its eighth employee.

     And earlier this year it struck a deal with a large New York security and investigations firm to share information.

     Founded in fall 1992 by Frederick W. Rustmann Jr., CTC International Group Inc. concentrates on gathering intelligence for U.S. companies considering overseas expansion. It also does some private investigation work.

     Since starting with an $80,000 stake from two Palm Beach investors, Rustmann has been building a staff that’s tailored to his background. Retired from the CIA in November 1990, Rustmann says he has so far hired only ex-agency employees with international experience.

     “No one is better trained than ex-CIA people for the type of work they do,” says attorney Robert Sanders, one of Rustmann’s two original investors.

     Rustmann and Sanders, a deputy city attorney for West Palm Beach, would not identify the other investor, but did say the seed money was repaid with interest in January 1994. Rustmann says he used $30,000 from CTC’s revenues, with the remainder coming from a Barnett Bank small-business loan. “I wanted autonomy as soon as I could get it,” says Rustmann, 55.

     CTC serves its clients, which Rustmann says have grown from 40 in its first year to about 125 now, with an array of databases and with human intelligence from a network of about 50 former CIA officers and thousands of informants around the world, including six former KGB officers, Rustmann says.

     Rustmann’s first employee was Brad Robinson, a former CIA officer in Eastern Europe who now is vice president of operations. The three new employees - all of whom joined CTC in 1994 - are Teri R. Rustmann, (Fred’s wife), Lisa M.R. Moses, and Robert Allena.

     The company does not make contact with anyone at the Langley, Va.-based agency. “We do not ever go to CIA people,” says Rustmann, the company’s president.

     In the beginning, CTC charged about $900 a day. Since then, Rustmann says, the company has become more selective and has increased its daily rates to $1,200. Besides international work, Rustmann says CTC fills in time doing private investigation work for several local and New York law firms. That work, he says, is billed at $75 an hour.

     Last year, Rustmann says CTC’s revenues were about $500,000. He’s expecting 1995 figures to reach $750,000.

     In January, CTC entered into an alliance with Unitel, an 18-year-old New York company. William P. Callahan, founder of Unitel and a former federal prosecutor, says he knew of some of the CTC employees in the 1970s when he was a liaison between the Justice Department and the CIA.

     Early last year, Callahan was contacted by Rustmann and began negotiating an alliance between the two firms, which primarily involves sharing information and contacts, “It was a very good fit,” Callahan says.

     Callahan sees a need for CTC’s services.

     “If a company wants to open a business in Zaire. Who the hell do you turn to?” says Callahan. He says CTC can answer such questions as: Is the country safe to operate in? What’s the labor force like? Where are the hospitals and other services? And, where will the country be economically 10 years from now?

     CTC can also arrange introductions with business, political or military leaders. It also has experience in finding internal leaks within companies and tracking foreign counterfeiters of patented U.S. products.

     Rustmann sees providing due diligence on companies or individuals with whom U.S. clients may be seeking joint ventures as an area of great potential.

     “It is smart business and becoming a niche for us,” says Rustmann. He views CTC’s role more specifically as performing “reverse due diligence.”

     “It guarantees you will find the best company in that country before you even open your mouth,” he says. CTC so far has done three reverse due diligence jobs, with another pending completion.

     For instance, Rustmann says he was contacted last spring by the president of a New York-based Fortune 500 company involved in the manufacturing and distribution of chemicals and photographic processes. The company, whose name Rustmann would not disclose, was seeking a joint-venture partner in Mexico. CTC, he says, was asked to provide a report describing potential candidates.

     From its databases, CTC initially compiled a list of 125 companies that met the corporate profile. Then, after two rounds of eliminating companies by means of the firm’s contacts, the list was narrowed to six. Next, CTC employees arranged interviews with company officials with the understanding that they represented a U.S. company interested in a partnership. CTC then ranked the potential partners and arranged a meeting between officials from the New York and Mexican companies. Last summer, the two companies entered into a partnership.

     CTC mostly has attracted new business by word of mouth. Last month, however, it started a newsletter, ‘The International Intelligence Digest” which is mailed to CTC clients and to potential customers.

     Looking ahead, Rustmann believes CTC’s greatest asset may be its proximity to and experience in Latin America. Most of his employees speak Spanish, and some have been stationed in various Latin America capitals during their CIA careers.

     “We have a specialty in that area and many companies are looking for emerging markets to sell their products,” said Teri Rustmann.