Strategic Moves

SEVENTEEN

Early on Monday morning they flew back to Teterboro, and Stone raised another subject that had been on his mind.

“Adele, are you going to continue to keep your money with Jack Gunn?”

“Yes, since all the hubbub seems to have been cleared up. I trust Jack.”

“Herbie Fisher has suggested that I move some of my money there. I have an unusual amount of cash at the moment.”

“I think that’s fine, if Jack will take you as a client.”

“Herbie says Stephanie can arrange it. I’m sure I would be one of his smaller clients.”

“I think it’s a good idea. I’ve had returns of between eight and twelve percent annually, which is good. It’s not the sort of thing that Bernie Madoff paid, but then his company was a Ponzi scheme, and Jack’s is not.”

“I was a little confused about the story that some of their funds—apparently a billion dollars or so—were somehow inadvertently . . . transferred to some of their foreign accounts. They called it a computer glitch.”

“I don’t understand that stuff,” Adele said. “I only understand that I had a letter from Jack saying that my funds were secure and that I can withdraw any part of my capital anytime I wish.”

“Do you know if many people have taken him up on that offer?”

“I’ve heard there are some, but since nobody lost any money, most of his clients are standing pat.”

“Thanks for your advice,” Stone said.

They landed at Teterboro and drove back into New York. Stone dropped Adele at her apartment building, then drove home. In addition to the morning mail there was a fax of several pages from Mike Freeman, which was the agreement with Lance Cabot. To his surprise, it included all the items Stone had suggested. He called Mike.

“Good morning, Stone,” Freeman said. “Are you back?”

“I’m at my desk, and I’ve read the agreement with Lance that you faxed me.”

“What do you think?”

“I think it looks good,” Stone said. “Lock it in your safe.”

“We’re going to close on the sale of Strategic Air Services in a few days, but our in-house legal department can handle that. Tell me, how would you like to fly to Iraq and back on the C-17?”

“That’s quite an invitation. How long would we be gone?”

“It will be a quick turnaround, so probably a couple of days. It will be an experience that not a lot of civilians have, and the airplane is more comfortable than you might imagine.”

“When would this happen?”

“Perhaps as early as this weekend, perhaps a few days later.”

“Let me think about it,” Stone said. “Ask me again when you know your departure date.”

“Okay, I’ll do that.”

“Mike, what are you doing about your funds that are with Jack Gunn?”

“We’re leaving them with him, and we’re also investing the proceeds of the sale of the aircraft charter business.”

“So you feel comfortable with Gunn’s accountants’ statement about the audit?”

“Our CFO was comfortable with it, so that’s okay with me. Finance is not my strongest suit.”

“I’m thinking of putting the proceeds of the sale of my airplane with Gunn.”

“Why not?” Freeman said. “I’ll call you when we have a launch date for Iraq.”

“Okay,” Stone said, and hung up. He thought for a little while, and then he picked up the phone to call Herbie Fisher. Then he hung up. Herbie was knocking at his door, as he often did, unannounced.

“I hear you had a pleasant weekend,” Herbie said, managing not to leer.

“Yes, I did,” Stone replied. “Herbie, I’ve thought about it, and if Stephanie can arrange for me to invest with Jack Gunn, I’ll give him a million dollars to manage.”

“Is that the million dollars I paid you?” Herbie asked.

“No, that’s been used to pay down my debt, but I sold my airplane, so I have some extra cash for a change.”

“I’ll speak to Stephanie about it and get back to you,” Herbie said.

“Good. Was there something else you wanted to talk about?”

“Yes,” Herbie said. “I was thinking of going into business for myself.”

Stone had a sudden vision of what a disaster that might be. “What sort of business?”

“I was thinking of opening a sports and horse-racing book.”

“Herbie, sit down,” Stone said.

Herbie sat down.

“I want you to listen to me very carefully,” Stone said.

“I’m listening, Stone.”

“You are aware, aren’t you, that taking bets is against the law?”

“Yeah, but everybody does it. Gambles, I mean.”

“Yes, but people who gamble with bookies have only their own bets to lose. A bookie, if he figures the odds wrong on a sports event, could lose everything. For instance, when New Orleans surprised everybody by winning the Super Bowl by two touchdowns over the Colts, a lot of bookies were very unpleasantly surprised. I expect they took a big, big hit on that one.”

“Well, yeah, you’ve got to expect that, but bookies lay their bets off with people who can afford to take the losses.”

“Yes, Herbie, and the people they lay them off with are called the Mafia. You’ve had some experiences with them.”

“I remember.”

“Do you remember that you’re lucky to be alive after those experiences?”

“Yeah, I guess.”

“Herbie, there are all sorts of downsides to running a book; taking big losses and dealing with the Mafia are only two of them. For instance, remember how you were worried about your reputation when Jack Gunn seemed to be in a lot of trouble?”

“Yeah.”

“Well, I think Jack Gunn would be very worried about his reputation if it became known that he had a son-in-law who was a bookie.”

Herbie thought about that for a moment.

“That might make things very uncomfortable for you with your new wife and her family.”

“Maybe I should talk to Stephanie about that,” Herbie said.

“If I were you, I would forget the whole thing and not even mention it to Stephanie. If she starts hearing things like that from you, she’s going to start wondering if she married the right guy.”

“You think?”

“I think,” Stone replied.

Herbie thanked him and left.

Another disaster, hopefully, averted, Stone thought.