Deadlock

24 A Question of Policy

I was sick by the side of the road as soon as I got to the end of the drive. Terri rode up on her bicycle, a Peugeot ten-speed, I noticed as I wiped my mouth with a Kleenex. Boom Boom, you did not die in vain if you preserved a French racing bicycle for that girl.

I walked slowly down the road to the Omega and sat in it for a long time without starting the engine. My shoulder ached from grabbing Jeannine and lifting her up.

I had found out about Boom Boom’s death. Or proved to myself what I had suspected for several days, at any rate. I felt a sharp pain across my diaphragm, as though someone had inserted a little needle behind it which jabbed me every time I breathed. That’s what people mean when they say their hearts ache. They really mean their diaphragms. My face felt wet. I passed a hand across my eyes, expecting to find blood. I was crying.

After a while I looked at my watch. It was one o’clock. I looked at my face in the rearview mirror. It had gone very pale and my gray eyes stood out darkly in contrast. There were days when I’d looked better, but that couldn’t be helped. I switched on the engine and slowly turned the car around on the narrow pavement. My arms felt leaden, so heavy I could scarcely lift them to the steering wheel. It would be nice to follow Bobby’s advice and go someplace warm for a few weeks. Instead I drove up the road past the Phillips house to the Grafalks’.

The garage was behind the house to the left; I couldn’t see the cars to tell if anyone was home. I climbed up the shallow wide step to the front porch and rang the bell. A minute or two passed; I was going to ring again when the thickset maid, Karen, answered. She looked at me grudgingly. She remembered my vulgar interest in Mr. Grafalk’s movements last week.

I gave her my card. “Is Mrs. Grafalk in, please?”

“Is she expecting you?”

“No. I’m a detective. I want to talk to her about Clayton Phillips.”

She seemed undecided about whether or not she was going to take my card back. I was too worn out from my encounter with Jeannine to put up much of a fight. As we stood there at an impasse, a high, clipped voice demanded of Karen who it was.

The maid turned around. “It’s a detective, Mrs. Grafalk. She says she wants to talk to you about Mr. Phillips.”

Mrs. Grafalk came into the hall. Her graying black hair was styled to emphasize her high cheekbones, which she had further accentuated with a dark rouge. She was dressed to go out, in a salmon silk suit with a ballet skirt and a flared, ruched jacket. Her eyes were sharp but not unfriendly. She took the card from Karen, who positioned herself protectively between us.

“Miss Warshawski? I’m afraid I don’t have much time. I’m on my way to a Ravinia planning meeting. What did you want to talk about?”

“Clayton and Jeannine Phillips.”

An expression of distaste crossed her face. “There’s not a lot I can tell you about them. Clayton is-was, I should say-a business associate of my husband’s. For reasons I have never understood, Niels insisted we entertain them, even sponsor them at the Maritime Club. I tried to interest Jeannine in some of the work that I do, particularly with the poor immigrant community in Waukegan. I’m afraid it’s hard to get her to think of anything but her clothes.”

She spoke rapidly, scarcely pausing for breath between sentences.

“Excuse me, Mrs. Grafalk, but Mr. Grafalk implied that Jeannine was a protégée of yours and that you wanted to get her into the Maritime Club.”

She raised her black, painted eyebrows and opened her eyes very wide. “Why did Niels say that? I wonder. Clayton obliged him on some business deal and Niels sponsored him in the club to show his appreciation. I’m perfectly sure that was the way it happened. Niels keeps what he does with Grafalk Steamship to himself, so I’ve never known what the arrangement was-in fact I can’t imagine being interested in it. I’m sorry Clayton’s dead, but he was an insufferable climber and Jeannine is no better… Does that answer your questions? I’m afraid I must go now.” She started for the door, buttoning on a pair of pale salmon gloves. I didn’t know anyone wore gloves anymore. She walked outside the door with me, moving at a good clip on needle-pointed shoes. A woman with less force of personality would have looked absurd in that outfit. Mrs. Grafalk seemed elegant.

As I got into the Omega, someone drove the Bentley up for her. A thin, sandy-haired man got out, helped her into the car, and headed back to the garage behind the house.

Slowly driving back to Chicago, I thought about Mrs. Grafalk’s remarks. The business deal must have been connected with the Eudora shipping invoices. What if Phillips had split the difference in the bills with Grafalk? Say he got ninety thousand dollars extra over the price registered on the computer for the shipment and gave forty-five thousand to Grafalk. That didn’t make sense, though. Grafalk was the biggest carrier on the lakes. What did he need with penny-ante stuff like that? If Grafalk were involved, the payoff had to be more impressive. Of course, Grafalk operated all those older ships. It cost him more to carry cargo. The amount in the invoices was probably the true price of what it cost Grafalk to carry the stuff. If that was the case, Phillips was really stealing from Eudora Grain-not just pocketing the difference between how much he logged into the contract and the ultimate invoice, but losing money for Eudora on every shipment he recorded when Grafalk was the carrier. What Grafalk got out of it was more shipments in a depressed market in which he had a hard time competing because of his older, inefficient fleet.

Suddenly I saw the whole thing. Or most of it, anyway. I felt as though the truth had been hammered in at me from the day I walked into Percy MacKelvy’s office at Grafalk Steamship down at the Port. I remembered listening to him trying to place orders on the phone, and my frustration while we were talking. Grafalk’s reaction to Bledsoe at lunch. The times in the last two weeks I’d heard how much more efficient the thousand-footers were to operate. I even had an idea where Clayton Phillips had been murdered and how his body had been carried onto the Gertrude Ruttan without anyone seeing it.

A seventy-ton semi blared its horn behind me. I jumped in my seat and realized I had brought the Omega almost to a standstill in the second lane of the Kennedy. No need for anyone to arrange subtle accidents for me-I could kill myself without help. I accelerated quickly and drove on into the Loop. I needed to talk to the Lloyds man.

It was three in the afternoon and I hadn’t eaten. After leaving the car in the Grant Park underground garage, I went into the Spot, a little bar and grill behind Ajax, for a turkey sandwich. In honor of the occasion I also had a plate of french fries and a Coke. My favorite soft drink, but I usually avoid it because of the calories.

I marched across Adams to the Ajax Building, singing, “ ‘Things go better with Coca-Cola,’ ” under my breath. I told the guard I wanted to see Roger Ferrant-the Lloyds man-up in the Special Risks office. After some delay-they couldn’t figure out the Special Risk phone number-they got through to Ferrant. He would be happy to see me.

With my visitor’s ID clipped to my lapel, I rode to the fifty-third floor. Ferrant came out of the walnut office to meet me. A shock of lanky brown hair flopped in his eyes and he was straightening his tie as he came.

“You’ve got some news for us, have you?” he asked eagerly.

“I’m afraid not yet. I have some more questions I didn’t think to ask yesterday.”

His face fell, but he said cheerfully, “Shouldn’t expect miracles, I guess. And why should you succeed where the FBI, the U. S. Coast Guard, and the Army Corps of Engineers have failed?” He ushered me courteously back into the office, which was more cluttered than it had been the night before. “I’m staying in town through the formal inquiry at the Soo next Monday, then back to London. Think you’ll crack the problem by then?”

He was speaking facetiously, but I said, “I should have the answer in another twenty-four hours. I don’t think you’re going to like it, though.”

He saw the seriousness in my face. Whether he believed me or not, he stopped laughing and asked what he could do to help.

“Hogarth said yesterday you were the most knowledgeable person in the world on Great Lakes shipping. I want to know what’s happening to it with this lock blown up.”

“Could you explain what you mean, please?”

“The accident to the lock must be having quite an impact, right? Or can ships still get through?”

“Oh-well, shipping hasn’t come to a complete standstill. They closed the MacArthur and the Davis locks for several days while they cleaned debris out of them and tested them, but they can still use the Sabin Lock-that’s the one in Canadian waters. Of course, the biggest ships are shut off from the upper lakes for a year-or however long it takes them to fix the Poe-the Poe was the only lock that could handle the thousand-footers.”

“And how serious is that? Does it have much of a financial impact?”

He pushed the hair out of his eyes and loosened his tie again. “Most of the shipping is between Duluth and Thunder Bay and ports lower down. Sixty percent of the grain in North America goes out of those two ports on freighters. That’s a hell of a lot of grain, you know, when you think of everything that’s produced in Manitoba as well as the upper Midwest-maybe eighteen billion bushels. Then there’s all that taconite in Duluth.” He pursed his lips in thought. “The Soo locks handle more cargo every year than Panama and Suez combined, and they’re only open for nine months instead of year-round like those two. So there is some financial impact.”

“The cargoes will still come out, but the smaller ships will have an advantage?” I persisted.

He smiled. “Just until they get the Poe Lock back under operation. Actually, there’s been a lot of disarray, both in the grain markets and among the Great Lakes shippers since the lock blew up. They’ll settle down in a few weeks when they realize that most traffic won’t be impaired.”

“Except for the carriers who’ve converted primarily to thousand-foot ships.”

“Yes, but there aren’t too many of those. Of course, grain concerns like Eudora are scrambling to get all their cargoes onto the smaller fleets, even bypassing the 740-foot ships. Grafalk’s is picking up a number of orders. They aren’t jacking up their rates, though, the way some of their less scrupulous brethren are.”

“How profitable is Grafalk’s, in general?”

He looked at me in surprise. “They are the biggest carrier on the lakes.”

I smiled. “I know-I keep being told that. But do they make money? I understand that these smaller ships are unprofitable and they make up his whole fleet.”

Ferrant shrugged. “All we do is insure the hulls. I can’t tell you how much freight they’re carrying. Remember, though, profitability is relative. Grafalk may not make as much as a firm like American Marine, but that doesn’t mean they’re unprofitable.”

Hogarth had come in while we were talking. “Why do you want to know, Miss Warshawski?”

“It’s not just idle curiosity. You know, no one’s come forward claiming responsibility for the bombing-the PLO or the FALN or the Armenians. If it wasn’t a random act of terrorism, there had to be a reason for it. I’m trying to find out if that reason included switching cargo from the big freighters to small vessels like the ones in Grafalk’s fleet.”

Hogarth looked annoyed. “Not Grafalk, I assure you, Miss Warshawski. Niels Grafalk comes from a very old shipping family. He’s devoted to his fleet, to his business-and he’s a gentleman.”

“That’s a fine testimonial,” I said. “It does a lot of credit to your heart. But a fifty-million-dollar ship has been blown up, the North American shipping industry has been thrown into disarray, however temporary, and a lot of business interrupted. I don’t know how the courts interpret such a thing, but someone is gong to have to pay for that business interruption. Grafalk stands to gain a lot by this accident. I want to know what shape his business is in. If it’s doing well, there’s less of a motive.”

Ferrant looked amused. “You certainly look for the less pleasant side of human nature… Jack, you have some idea of the state of the business, don’t you? Just look at your records, see how much cargo coverage he’s got and what his workers compensation insurance is like.”

Hogarth said mulishly that he had a meeting to get to and he thought it was a waste of time.

“Then I’ll do it,” Ferrant said. “You just show me where the files are, Jack, and I’ll have a look-through for Miss Warshawski here… No, really, I think she’s got a good point. We ought to follow up on it.”

Hogarth finally called his secretary on the intercom and asked her to bring him five years of Grafalk Steamship files. “Just don’t ever let the old boy know you did this. He’s very touchy where his family name is concerned.”

Hogarth left for his next meeting and Ferrant made some phone calls while I watched the boats out on Lake Michigan. Monroe Harbor was filling up rapidly with its summer fleet of sailboats. A lot of people were taking advantage of the beautiful weather; the near horizon was filled with white sails.

After some twenty minutes a middle-aged woman in a severely tailored suit came into the office pushing a large wire cart full of files. “These are the Grafalk Steamship files Mr. Hogarth asked for,” she said, leaving the cart in the middle of the room.

Ferrant was enthusiastic. “Now we’ll see what shape the business is in. You can’t tell that just from the hull insurance, which is all I do for Grafalk.”

Five years of Grafalk history was a substantial amount of paper. We had workers’ compensation policies, which went on for about a hundred pages a year, showing classes of employees, states covered, Longshoremen’s Act exclusions, and premium audits. There was a business interruption policy for each year, cargo coverage, which was written on a per-shipment basis, and inland marine, to cover Grafalk’s liability for cargo once it was unloaded from his ships.

Ferrant sorted through the mass with an experienced eye. “You know, the cargo and the compensation are going to tell us the most. We’ll just see the value of the freight he’s carrying and how many people he’s employing to do it. You tot up those workers’ compensation policies-look at the final audited statements and that’ll tell you how many people he’s got sailing for him every year. I’ll go through these cargo policies.”

I sat down at a round wooden table and joined him in stacking the papers covering it down on the floor. “But I thought the whole shipping business was depressed. If he’s not carrying much, how will that tell us anything besides the fact that the industry’s depressed?”

“Good point, good point.” Ferrand placed a stack of workers’ compensation policies in front of me. “We have some industry statistics-the average load carriers are hauling as a percentage of their available tonnage, that sort of thing. We’ll just compare them. I’m afraid it’s a rough approximation. The other thing, though, is that we know about what it costs a day to own one of those old clunkers. Now if it’s not carrying cargo, there’s still overhead-it has to be docked someplace. Unless the ship is in mothballs-which also costs something per diem-you have to have a skeleton crew on board. You need to be able to turn the beast on in a hurry and get to the place where you have a cargo waiting. So we can make a good guess at his costs and then look at these cargoes, here, and see how much he’s earning.”

That seemed like a reasonable approach. I started on my part of the assignment, secretly entertained by Ferrant’s enthusiasm for the project. He didn’t have Hogarth’s personal feeling for the insured.

The first page of the 1977 policy explained that Grafalk Steamship was a closely held corporation, principal address at 132 North La Salle Street in Chicago. The summary of the coverage on the declarations page showed Grafalk with fifteen hundred employees in eight states. These included sailors, secretaries, stevedores, longshoremen, truck drivers, and general office workers. Directors and officers were excluded from coverage. The total premium for 1977 was four million eight hundred thousand dollars. I whistled to myself. A lot of money.

I flipped through the pages of state and class detail to the back where the audit of the premium was attached. This section was completed at the end of the year. It showed how many people had actually worked each day by class of job and how much premium Grafalk in fact owed Ajax for 1977. The reduction was substantial-down to three million dollars. Instead of three million hours of work, Grafalk’s employees had put in under two million for the year ending then.

I showed this result to Ferrant. He nodded and went back to the cargo policies. I finished the compensation ones, scribbling summary results on a sheet of paper. Ferrant handed me a stack of cargo policies. He was tabulating them by date, total value of contract, and vessel used. We’d compare them later to the tonnage figures of the individual ships.

Hogarth came in as we were finishing the masses of paper. I looked at my watch. It was almost six o’clock.

“Any luck?” Hogarth asked.

Ferrant pursed his lips, his long hair falling over his eyes again. “Well, we have to add up what we’ve got. Doesn’t look good, though. I say, Hogarth, be a sport and give us a hand-don’t look so sour. Think of this as an intellectual problem.”

Hogarth shook his head. “Count me out. I told Madeleine I’d be home on time for once tonight and I’m already late. I’m going to catch the six thirty-five.”

He left and Ferrant and I continued our work, tedious and uninspiring. In the end, though, it became clear that Grafalk had been using only forty of his sixty-three vessels for the last five years. In fact he’d sold three ships in the middle of 1979.

“He should have sold more,” Ferrant said gloomily.

“Maybe he tried and there wasn’t a market.”

By eight-thirty we’d completed a sketchy analysis of Grafalk’s finances. His ships cost about two thousand dollars a day to operate when they weren’t sailing, about ten thousand dollars a day when they were. So the total expense to Grafalk each season for running the steamship company was about a hundred twenty million dollars a year. And the total value of the cargoes he was carrying came out to only a hundred million in 1977. Things were a little bit better in ’78 and ’79 but hadn’t improved much the past two years.

“That answers your question all right,” Ferrant said. “The lad is definitely losing money.” He lined up his stacks of notes. “Odd how much cargo he’s been carrying for Eudora Grain the last five years. Almost twenty percent of his total volume.”

“Odd indeed,” I said. “Of course, Eudora’s a big concern… Where’s Grafalk been coming up with the money to cover these losses? They’re pretty staggering.”

“The steamship company isn’t the only thing he owns.” Ferrant was sweeping the policies back into their jackets. “There’s a profitable railway that connects the Port of Buffalo with Baltimore-he can unload there and ship by rail to oceangoing vessels in Baltimore. That does very well for him. His family owns a big block of stock in Hansen Electronic, the computer firm. You’d have to see if you could get his broker to tell you whether he’s been selling off the stock to pay for this. He’s into a number of other things. I think his wife has some money, too. But the steamship company has always been his first love.”

We piled the policies back into the cart and left it in the hallway for someone to take care of in the morning. I yawned and stretched and offered to buy Ferrant a drink.