Midas

20

“So why don’t you start to tell me about EGenco.”

Justin was anxious to get down to business. The first thirty minutes that his father had been inside his house made him feel as if he were sixteen years old again. Jonathan Westwood didn’t say anything about Justin’s East End house. Nothing complimentary, nothing derogatory. He looked around, took it all in, raised an eyebrow and said, “How far away is the ocean?” When Justin told him it was a ten- or fifteen-minute drive over toward East Hampton and that the bay was just a five-minute walk in the other direction, his father went, “Ahh.” Justin didn’t offer to show the upstairs of the house and his father never asked to see it.

They spent half an hour in small talk. Justin said that he’d take him to the police station later in the day, if he wanted, and Jonathan nodded stiffly. Justin said he’d show off the town, they could go for a short drive, and Jonathan smiled noncommittally. Justin studied his father’s clothes while they sat and had coffee. And his demeanor. Jonathan was dressed casually, beige pants and a light green sweater, and yet somehow gave the impression that he was wearing a three-piece suit. His posture was relaxed and confident and yet he never slouched, never looked awkward in any way. In comparison, Justin felt grubby. He knew he gave off the faint whiff of scotch. And he probably should have shaved. His jeans weren’t pressed, his sweatshirt was expensive but still a sweatshirt.

Yup. Sixteen years old.

Justin realized that a lot of things were making him feel sixteen again these days. The combination of Reggie Bokkenheuser and alcohol, for one. He quickly shoved that thought away. And he shoved hard. There was too much at stake to allow any distractions. Not parental, not sexual, not romantic.

A bit more self-insight, Justin thought. He definitely believed in alternatives. He just didn’t believe in distractions. So he decided to get a big distraction out of the way as quickly and easily as he could.

“Look,” he said to his father. “I know this is hard for you. It’s different seeing me here than when I’m up in Providence. But this is the way I’ve chosen to live and this is what I do. I know it’s not what you’d choose for me but the choice has been made. And it was made a long time ago.”

“I understand,” Jonathan Westwood said.

“I know you do. I just thought it needed saying. And I also want you to know I appreciate your coming here. I think it’s going to turn out to be very important.”

“There’s nothing to appreciate,” his father said. “You asked and I came.”

It was as intimate an exchange as the two had had in years. And it was followed by an awkward silence that lasted until Justin turned to the third man in the room, a man who was blushing furiously and looking in every possible direction but at the two Westwood men, and said, “Sorry, Roger. Family shit. But now it’s out of the way. So why don’t you start to tell me about EGenco.”

His father had flown in with Roger Mallone, at Justin’s request. Mallone was one of the elder Westwood’s key financial advisers and had been extremely helpful to Justin in the past. Roger wasn’t a redhead but he looked as if he should be, with his ruddy complexion and tousled hair. He had the aura of someone who’d once been a terrific high school athlete but hadn’t done much in the thirteen or fourteen years since other than pick up a tennis racket for an easy game of doubles. Softer than he should be, with a self-mocking demeanor that recognized his own lack of strength, Roger was no hero, he was a numbers man with superb connections in the business world, great insight into that world, and tremendous access to information. Right now, all of that was more important to Justin than heroism.

“The last time you were asking me for information,” Roger Mallone said, “you were pointing a gun at me.”

“Slightly different circumstances,” Justin said.

“No one’s trying to arrest you now, I assume.”

“That’s right.”

“Or kill you either.” Mallone smiled. But the smile faded quickly when Justin didn’t answer.

“Jay?” Roger said, looking to prompt an answer with a raised eyebrow. And when Justin just gave a little shrug, Mallone said, “Shit,” and then, quietly and grimly, “You lead a very interesting life.”

“Yes, interesting,” Jonathan said.

“I just hope I don’t have to be around it too much longer,” Mallone muttered.

“EGenco,” Justin prompted. “What can you give me?”

“I can give you days and days. You see the suitcase I brought? That ain’t clothes, pal. It’s filled with financial reports, corporate histories, Wall Street analyses, depositions, reports on various lawsuits. It’ll help if you can narrow things down. The company’s all over the globe and has twenty different divisions that are larger than most companies you’ve ever heard of.”

“Start simple. How about a general overview if you can? And remember, I’ve been out of the financial world a few years.”

Justin could see his father nod firmly at his last statement, as if to add some sort of emphasis.

“All right,” Roger said. “Let’s start with a little history. I’ll work my way forward, and, at some point, if I go off track you lead me back so I can try to focus on the areas you need to understand.”

“Perfect.”

“EGenco was founded in 1922. The founder was a Texan named James Merriwell. .”

The story Roger Mallone proceeded to tell was one of picture-

perfect American capitalism. As he listened, Justin tried to relate the story to anything in his own experience, realized that was an impossibility. EGenco’s past was one that paralleled and exemplified the country’s history: it was a tale of dedication to constant and obsessive expansion. Justin’s life was, he realized, the longer it went on, becoming one of gradual retraction. The boundaries of his existence had, for quite a few years, narrowed and gotten smaller. Something that could never be said of the business that started as an entrepreneurial Oklahoma-based company with the overly grand and self-important name of the Merriwell 20th Century Ultimate Oil Well Cementing Company. As the firm’s reputation grew, it was referred to simply as Merriwell.

For the first thirty-five years or so, James Merriwell was content to carefully expand from building to buying wells and making investments in wildcatters. As his fortune rose, so did his ambitions-or, at least, so did the ambitions of his third, and much younger, wife, Laylene. She pushed her husband, as he was approaching his sixty-fifth birthday, to broaden his business interests, which in turn would broaden their social, cultural, and political circles. Merriwell was only too glad to appease the latest Mrs. Merriwell, who could be rather sharp-tongued when she didn’t get her way. So, in the mid-1950s, Merriwell-as the company was now officially named, and of which Laylene had been given a hefty piece-acquired Green amp; Duggin, an engineering and construction company. G amp;D, as it was called, had been formed in 1918. After its acquisition by Merriwell, it was renowned as a road construction company, a general contractor, and builder of the world’s first offshore platform in 1947. In the mid-1970s, not long before James Merriwell’s ninetieth birthday, Merriwell GD, as it was now called, bought Windmer Industries, a project management company for the oil industry. Windmer had also prospered during the first half of the century. The founder, an inventor named Horatio Windmer, began the company during the country’s first oil boom at the end of the nineteenth century. In 1880, Windmer’s position in the oilfield products manufacturing business had been launched when he patented a cylindrical packer that revolutionized the industry.

The three giants of this industry, Green, Duggin, and Windmer, were all dead by 1960. James Merriwell finally died in 1978, leaving Laylene as one of the richest women in America. Within two years of her husband’s death, she had bought a professional football team, built an opera house in her small Montana hometown and paid Pavarotti a one-million-dollar fee to sing at the opening night ceremony, married a man thirty-two years her junior, with a prenup agreement that gave him thirty-five million dollars upon her death unless he didn’t fulfill his end of the bargain, which was to fuck her a minimum of three times every week, and she’d taken Merriwell public, earning several hundred million dollars more, and changing its name to EGenco. The E was for energy. The Gen was for Genevieve, the daughter she’d had with old man James. Six months after the company went public Genny was killed in a car accident. Laylene was driving but was unhurt. Rumors were that she was drunk as a skunk, but this was Texas so money changed hands, lips were sealed, and no charges were ever brought.

Justin interrupted Roger at this point in the narration to ask him how the hell he knew all these little details. Particularly the one about Laylene’s husband having to fornicate thrice weekly. Roger just raised one eyebrow and said, “When I do an investigation for your father, I make sure I’m thorough.” Then he went back to telling his tale.

In the late eighties the new management team of EGenco took over a corporation called F.X. Springs, an acquisition that expanded them into petroleum refining and petrochemical processing. Francis Xavier Springs had begun his business in 1902. Initially they were pipe fabricators; eventually he created technology that altered petroleum refining and petrochemical processing and, with the money that rolled in after that, he built his own facilities based on those techniques. When they were merged into EGenco, they formed the next-to-last piece of what the corporate report called “vertical and horizontal energy integration.” The final piece was a relatively new company called LecTro, a midsize utility company that was acquired in 1991. There were now five divisions that formed the base of EGenco’s production attributes: Merriwell, Green amp; Duggin, Windmer, F.X. Springs, and LecTro. Together, they offered an enormous array of products, services, and integrated solutions for oil and gas exploration, development, and production. And when they officially outgrossed their biggest rival, Halliburton, the company was able to rightfully call themselves the largest and broadest unified oil and gas services company in the world.

By 1997, EGenco’s worldwide revenues were somewhere around nineteen billion dollars. Then, according to Roger Mallone, they got greedy.

“Can we go back a minute?” Justin asked.

“We can do anything you want,” Roger said.

“A unified oil and gas services company. Put that in English.”

“It’s simple. There is literally nothing in the finding, development, and processing of oil and gas that they don’t have their hand in. They explore and develop, they produce, they handle maintenance for other producers, they convert and refine. They run plants and oil wells, build plants and wells, manufacture everything from drill bits to subsea pumps. And with LecTro, they actually even supply and sell electricity. So they literally are capable of controlling every aspect of the energy business.”

“Is that legal?”

“It’s legal if the government decides it’s legal. Would it have been twenty years ago? Well, let’s say pre-Reagan? Probably not. Today? Well. . would you want to be the government prosecutor that downsizes them and runs the risk of costing people tens of thousands of jobs?”

“The numbers are that big?”

“Sure. They probably employ a hundred thousand people, maybe even more, full-time.”

“Worldwide?”

“Christ yes, worldwide. They’ve got bases in a hundred and twenty, hundred and thirty countries. I’d be willing to bet they’re in every country you can name and a hell of a lot you can’t. Over the years they’ve expanded both internally and through major acquisition. They’re sharks. They’ve bought engineering and construction companies, petrochemical processing plants, you name it and they’ve built it, managed it, or devoured it.”

“You said ‘the base of their production attributes.’ What other attributes are there?”

“This is where it gets a little complicated. And it’s where they got greedy, as I said. And my guess is, it’s also the root of their current problem.”

“The government investigation.”

“Investigations, plural. Right.” He glanced at Jonathan Westwood. “Do you agree with that?”

Jonathan nodded, so Roger went back to his dissertation.

“What happened is, about seven, maybe eight years ago, they were huge and successful. Particularly after they bought LecTro. And when they bought it, that company was a money machine. The energy business was being deregulated-the rate of returns, the caps-so cash was just flowing in. They decided to take advantage of that and began trading electricity.”

“Electricity trading? Is this remotely as complicated as NBA salary cap stuff?”

Jonathan Westwood groaned. Roger Mallone just shook his head and said, “Actually, no. It’s a lot simpler. Especially with deregulation. Think of electricity as something physical. A plant somewhere has excess supply and someone somewhere else doesn’t have enough. They need electricity-California power plants, for instance, a few years ago. At first, our guys just sold. No problem. Then they saw the profit margin and began brokering. If they didn’t have enough, they went elsewhere and acted as the agent. For both sides. They negotiated the selling and the buying price.”

“That can’t be legal.”

“Welcome to the twenty-first century and a government that’ll let big business do just about anything they want.” Roger snuck a glance at Jonathan Westwood and added, “Thank God.”

“Keep going,” Justin said.

“Electricity is traded very actively-because it’s unevenly used. So the geniuses over at EGenco decided they didn’t want to just broker. They wanted more. So they decided to buy, not just represent. They brought in a bunch of Masters of the Universe types who looked around and saw what was happening on Wall Street-remember, this is when the economy was at a record high-so they thought they couldn’t lose. And now what they were doing was buying from plants, holding on to the electricity, and then selling what they owned to other plants. The problem was they bought high. Very high. They bought everything at the top, and suddenly, as things began to turn, they were selling all of it at huge losses.”

“How huge?”

“EGenco probably wasn’t going to go under, if that’s what you’re asking. They had too many other assets. But from what I hear-and, again, all this is conjecture-LecTro was a fiasco. If I’m right, we’re talking billions of dollars of losses. If that’s true, I suppose it’s possible it might have sunk the whole thing.”

“So what happened?”

“Well, that’s the question. That’s what’s being investigated.”

“What do you think happened?”

“Look-at a certain level, you get so big, you have so many fixed assets, it’s almost impossible for anyone to know exactly what you’re doing. Again, if the losses are as great as I suspect, my guess is that EGenco management decided to hide a huge amount of debt. In essence, keep the stock high, fool the public and Wall Street, and hope they could keep things hidden until they figured out a way to right the sinking ship.”

“How?”

“How’d they cover up? Again, this is just a guess, but I’d say they’ve been screwing around with retirement funds, IRAs, and pension plans, a lot like Enron did. If that’s true, there are going to be a lot of angry, broke people. It’ll make the Enron thing look like small potatoes. I’ve also been hearing rumors about SPEs gone wild.”

Justin forced himself to think back to his business school days. SPE. . Special Something Something. . Special Purpose. . Entities! That was it. A way for corporations to hide money. They’d create a company within a company, make someone the CEO with signing power, and, like magic, you had a financial structure that could work outside of any corporate rules. That CEO could authorize salaries-including his own-and designate payments for board members. Without anyone else even knowing about it. Big business was a world where rules were something to be bent or broken. Another reason why Justin liked being a cop: you could play around with the rules but ultimately there were limits. Once you exceeded those, you had to pay the price.

“Special Purpose Entities?” Justin said now. “Good way to make sure someone’s taking out a lot of cash if the company’s going down the drain.”

Jonathan spoke up, a touch of relief in his voice. “I’m glad to see that Princeton wasn’t a total waste of time and money.”

“SPEs are a great way to hide a lot of crooked things,” Mallone said. “And to buy a lot of favors, which EGenco has certainly done. I mean, look at their presence in Iraq and other parts of the Middle East. They don’t get there unless they’re paying a lot of people a lot of money. It doesn’t just happen that they get no-bid government contracts for billions of bucks to reconstruct an entire country.”

“You said something about lawsuits,” Justin said. “What’s that all about?”

Mallone tapped the suitcase. “You’ll have your reading cut out for you. There are several hundred pages of those babies in here. The two most interesting ones are from STE and New York.”

“Okay, you’ve lost me.”

“STE-Save the Earth. The ecological group. They had the suit that the Supreme Court just rejected.”

“Oh, right. About the energy policy, right?”

“About the meeting that set the energy policy. It got a ton of publicity and it’s all in the suitcase.”

“What’d you mean about New York being the other interesting suit?”

“I’m not a legal expert. You’re better off reading the filings. I also downloaded a bunch of articles off the Net that’ll help give everything some perspective. The thing you have to understand is that this country’s so politically divided, it’s hard to know what’s valid or not. I mean, half the people hate our vice president so much, they’ll do anything to harass him. And the other half will do anything to validate his actions. I can’t say if these suits are valid or if they’re politically motivated.”

“When was Dandridge involved with EGenco?”

“Involved? He was more than involved, Jay. He was their CEO from. . ohhh. . I’d say for about eight years, right up until he ran for VP. When he got the nomination, he resigned.”

“And ended his connection?”

“Hardly. I can’t tell you how much stock he still owns, but I guarantee it’s a hell of a lot.”

“It’s all in a blind trust,” Jonathan Westwood added. “Common practice for elected officials.”

“That’s his financial connection. And he certainly didn’t end his personal connections. Or his political connections, for that matter. Brad Collins probably raised more money for Anderson and Dandridge than anyone in the country. EGenco loaned them their private jets during the campaign, supplied a fortune to PAC groups under the guise of organizing nonprofit organizations, whatever they could do.”

“All this stuff. . the things that are being investigated. . the business irregularities. . happened under Dandridge’s watch.”

“That’s the question. Very little has been made public.”

“And the lawsuit about the energy policy. .”

“Same answer. These guys are so damn secretive. And no one’s been able to force Dandridge to reveal a thing. Thus the lawsuits.”

“But what’s being thrown around as an accusation. .”

“What’s being thrown around is that Dandridge, soon after he and Anderson were elected, called a meeting of some of the top energy experts in the country. And that’s where they set the administration’s energy policies. Which were, obviously, extraordinarily favorable to the energy industry. The only irregularity, the only bump in the policy, was when they shocked everyone and went against the oil companies to protect that land up in Alaska.”

“The National Petroleum Reserve,” Jonathan put in. “It’s several million acres.”

“Yeah,” Justin said. “I read about that. Why do you think they did that?”

“Why do they do anything?” Jonathan’s dad answered. “Political expediency. They feel confident they’ve got big business and energy support no matter what they do. So I assume this was a nod to environmentalists, a way to stave off criticism that they’re in anyone’s pockets. Pretty effective, too.”

“So who was at the big energy policy meeting?” Justin asked.

Mallone shrugged. “No one knows. That’s part of what they’re refusing to release. All I’ve got are rumors.”

Now Jonathan Westwood shook his head and said, “Christ, everyone knows who was there. It was Dandridge’s cronies from EGenco and a few of the Saudis.”

“Why would they include the Saudis?” Justin asked his father.

“Why would they tell the Saudis about attacking Iraq before they tell their own secretary of state? Because the relationships between Dandridge and Anderson and the Saudis go way beyond anything political. They’ve all made each other rich. The Saudis don’t do anything that’ll piss us off-at least not when it comes to oil supplies and prices-and we don’t do anything to piss them off. We keep them in power-we’ve got military forces over there to make sure no one rises up against them-and they make guys like Dandridge and Anderson even richer. And you wonder why no one trusts politicians.”

Justin took a deep breath. What the hell was he doing? He was supposed to be investigating a rigged plane crash. Now he was talking about Saudi royalty and the vice president of the United States and oil prices and SPEs. He wanted a nice little shot glass of scotch. Maybe even two. Or, now that he thought about it, three. Instead, he gulped from a plastic bottle of Fiji Water and listened as his father took over the conversation, explaining what he knew-either personally or secondhand-about the past and present personalities that ran EGenco. Justin absorbed a crash course in big-money backroom political relationships and financial kickbacks and government contracts and the cost of money. And he’d never been so glad in his entire life to hear a knock at his front door because his head was spinning and he was overwhelmed at how all he’d meant to do was open a door just a crack and what he’d really done was let in a cyclone.

He had to smile when he opened his front door for real. The cyclone analogy was not a terrible one, because standing there was Bruno Pecozzi and a woman Justin thought might be the most beautiful woman he’d ever seen.

“Thought you might like to have some lunch,” Bruno said. “This is Connie Martin. She’s the star of the movie I’m working on. We’re hungry and I told her about you so she thought maybe you’d want to get a sandwich.”

“Nice to meet you,” Justin said to the actress. To Bruno he said, “How’d you find the house?”

“Very difficult,” Bruno told him. “But you know I have, how shall I put this? — contacts. So I made a few calls and asked around and then, ’cause I’m kind of a nut, I looked you up in the fuckin’ phone book. You gonna ask us in or what?”

Justin stepped aside and waved them forward. “We were in the middle of a business meeting, but I think we can use a break.”

“Mr. Westwood.” Bruno recognized Justin’s father, took a step toward Jonathan. “Pleased to meet you.”

“Bruno Pecozzi,” Justin said, as his father’s eyes narrowed and he moved his hand in Bruno’s direction so it could be shaken. “And Connie Martin.”

Justin turned to see that Roger Mallone’s mouth was agape and his jaw had dropped, cartoon-like, as far as a human jaw could stretch. At first Justin thought it was a not uncalled-for response to Connie Martin’s presence. Then he realized that Roger wasn’t paying the slightest bit of attention to the blonde woman in jeans and a midriff-baring T-shirt. He was staring at the huge man who was dominating Justin’s living room.

“Hey,” Bruno said, turning slowly to Mallone, “I know you.”

Roger didn’t say anything or make a motion to shake hands. He just swallowed deeply, and then Bruno said, “Where do I know you from?” When Roger still said nothing, Bruno snapped his fingers and said, “You were on the jury.” He turned to Connie. “Talk about your small world. I was on trial for somethin’. . not a big deal. . and this guy was on the jury.” Turning back to Roger, he said, “Right? I never forget the face of a juror.”

“That’s right,” Mallone said. He spoke as if the words were physically stuck in his throat.

Turning to Connie Martin, Justin added, “It was a little bit more of a deal than Bruno’s making it out to be. He was on trial for loan sharking and extortion, if I recall.”

“Yeah, somethin’ like that,” Bruno said.

“He got off because one juror refused to convict. Seems to me there was a decent amount of talk about jury tampering.”

“You musta been one of the ones voting guilty, huh?” Bruno said to Roger.

The financial adviser, as white as Justin had ever seen him, nodded stiffly.

“Don’t worry about it,” Bruno said. “I don’t hold a grudge. And the whole thing had a happy ending anyway, right? So forget about it.”

Bruno stuck out his hand and, with one more gulp, Roger shook it.

“So we gonna have lunch or what?” Bruno said. “My treat.”