The Capitol Game

7

To his credit, Jack was not smirking when he reentered the room, fell into his seat, and crossed his legs. “Well?” he asked, watching their faces.

Jackson, trying to match Jack’s poised air, said, “Let me start by assuring you, Jack, that nobody in this room had a thing to do with the break-in. Apparently somebody in the LBO section got a little carried away. You know how that can happen.”

“Do I?”

“Hear me out, Jack. One of our junior executives, a man known for being a little overeager, well… just say he encouraged TFAC to pressure you. He’ll be taken care of first thing in the morning. We don’t abide with that kind of behavior. As for that picture of Mitch… uh, Mitch went there to tell them to back off and leave you alone.”

They watched his face and waited for the reaction. There was no reaction. Not a snicker, not a frown. “Let’s talk about the deal,” Jack said.

“The deal, yes, good idea. We’re willing to meet your conditions, all of them. Including the twenty-five percent.” Jackson paused, then scrunched his lips together. “Subject, of course, to reviewing your plan, assuring ourselves it will work, and is worth our efforts.”

Jack sat quietly and took that in. Finally he asked, “Are you willing to sign a contract to that effect?”

Arguing that Jack should simply trust their word or seal their agreement with a gentlemanly handshake seemed like a waste of time at this point. “Sure,” Walters answered quickly for all of them. “Of course, it will take us a little time to prepare one.”

Jack reached into his dreaded suitcase again, withdrew three copies of a draft contract, and casually tossed them on the table. For a moment, the four heads from CG ogled them in disbelief. They were incredulous-he already had contracts drawn up-what nerve! Then three sets of hands immediately snatched them. Nobody spoke. The CG boys dove into the conditions; predictably, all of the stipulations Jack had just laid down were there, in black and white. The office, the twenty million finder’s bonus, twenty-five percent ownership in what the contract termed a limited liability partnership.

The partnership would be incorporated in Delaware, a business-friendly state with wonderfully hospitable corporate laws, one where any problems could be speedily and fairly adjudicated. But CG’s usual preference regarding partnerships was to park them offshore, where taxes were nil and oversight wonderfully lax.

On the other hand, Jack’s stipulation made good sense: for such a high-profile defense contract, it was undoubtedly best to have a U.S. imprimatur on the partnership. Red-white-and-blue all the way.

Jack crossed his arms, sat quietly, and watched them read. His face was expressionless, his body motionless. He looked neither angry nor jubilant. If anything, he looked slightly bored, even a little disconnected.

He looked, in fact, very much like a man with at least two perfectly good offers already in his pocket. Go ahead and object, his posture seemed to say; it’ll cost you billions and I’ll laugh all the way to the bank.

Jackson, the lawyer, was first to speak. “Legally speaking, the contract appears acceptable.”

Jack nodded. The signature at the bottom was for Mitch Walters. Jack slid him a pen. “You first,” he said. Walters had to fight back a smile as he slipped on his reading glasses and scrawled his name three times. He pushed down so hard he nearly slashed through the paper. What a relief.

Jack’s turn, and he methodically attached his own signature to the bottom of all three copies. He slid one copy across the table to Walters, then neatly tucked the other two back inside his lethal suitcase.

“Before we get started with the details,” Bellweather said, “why, after this break-in, did you choose us?”

“Aside from your willingness to give me twenty-five percent?”

“Yes, that’s what I mean.”

Jack uncrossed his arms and leaned forward. “To tell the truth, your attempt was the tipping point. It was stupid and clumsy. That part didn’t impress me in the least.”

“I don’t understand.”

“You cared enough to go the extra mile, Dan.”

“You’re serious?”

Jack nodded. “This takeover is going to take a little of the right kind of elbow grease. It won’t be totally clean. I need a partner that doesn’t sweat the small stuff.”

“I see.”

“You’ll see better in a moment,” Jack promised.

Walters reached across the table and handed Jack a flute of champagne. “Congratulations, partner,” he offered rather pathetically.

Jack raised his glass and took a short sip. Bellweather planted his elbows on the table and said, “Now convince us it’s a deal worth pursuing.”

Jack took another sip, and they all watched him and held their breaths. At last, after nine days of chasing and wooing him, after raking through his past, trying to frame him and get their hands on this gold mine, they were about to hear the particulars.

Jack put down his flute. “The name of the company is Arvan Chemicals. Named after its founder and CEO, Perry Arvan. It’s located in Trenton, New Jersey.”

Blank expressions all around. This name did not register with any of the men.

Jack nodded and continued. “Here’s the story. Arvan makes products that feed into the munitions and automobile industries. Principally chemicals for bombs and supplying adhesives that bind paint to car components. This intimate familiarity with two of the basic workings of this polymer led to the breakthroughs. Perry Arvan is a thermochemist with expertise in chemical explosives. Nitroglycerin, C4, RDX, and HMX are a few of the key products his chemicals go into. Other chemists on his staff specialize in adhesives for metals. They pooled their expertise to create this polymer.”

Walters edged forward in his seat. “You said it took years.”

“It’s a difficult design challenge, Mitch. The biggest roadblock is stability. The beads have to be high-explosive, meaning that heat or force causes them to release all their energy at once, rather than just burn or expunge gas. By necessity, the explosive is nitrogen-based. But nitrogen is inherently unstable, and subsequently the military has very stringent requirements. The explosive has to be able to withstand smaller shocks, high and low temperatures, friction, even sparks. Perry toyed with a thousand variations before he found the perfect product.”

“But it works?”

“Yes, quite well.”

“You know this for a fact?”

“It definitely works,” Jack assured them again, more firmly this time. “Perry worked out a confidential arrangement with a contractor in Iraq. It’s a company that does security work, bodyguarding high-level Iraqi officials for the most part. Ten months ago, Perry coated their vehicles before they were shipped over. Over ninety explosions later, not one contractor or protectee was killed, or even seriously injured. A few nasty concussions from the shock, which is unavoidable, but it certainly beats the alternative. The coating was never penetrated or even fractured. They’ve been hit with everything. IEDs. Rockets. Grenades. Plenty of direct hits, and yet not one vehicle was punctured, much less destroyed.”

“Has this been verified?”

“Glad you asked.” Jack bent down, pulled a thick black notebook from his suitcase, and dropped it on the table. “Perry did the smart thing. He hired an independent outfit to examine the results. Here they are. They’re quite impressive.”

“How impressive?” Haggar asked, eyeing the report.

“After each explosion a technical team examined the vehicle and assessed the impact. A few lessons were learned. For example, two coats work better than one. As you’ll see, the results exceeded the most optimistic expectations.”

Haggar picked up the book and began flipping pages. The laundry lists of highly technical details only confused him, so he flipped to the photographs of vehicles taken post-explosion. After a moment, he whistled.

A few scorch marks; otherwise the vehicles were completely undamaged. Not even dented.

Jackson looked down his long nose at Jack. “How did you get this material?”

“You mean, did I do something illegal?”

“Exactly.”

“Why would you care?”

“As your partner, we have the right to know our level of legal exposure.”

“Relax. At the moment you have no exposure.”

“Let me be the judge of that,” Jackson snapped, tightening his eyes and glaring at Jack.

“I thought a lawyer would know better. Whatever I did occurred before the fact. Only if I tell you now do you become legally culpable or vulnerable.”

Touché. Jackson actually flinched and looked away.

“Does Arvan know you’re interested?” Walters asked, a good question.

“No. I met Perry Arvan once, in New York. I doubt he remembers me.”

Bellweather walked around the table and refilled Jack’s flute with champagne. “What makes you think Arvan’s ripe for a takeover?”

Jack raised his eyebrows and smiled. “There were things Perry Arvan failed to disclose when he visited Cauldron.”

“Like what?”

“Well, for one, Arvan had a revenue of four hundred million, not last year, but the first year of the war. Demand shot through the ceiling. Between Afghanistan and Iraq, the intensity of operations went sky-high. The Army and Marines were blowing up two armies the usual American way, throwing millions of bombs and rockets and artillery shells at everything in sight. High explosives became desperately short, so Perry expanded his factory and almost doubled his workforce. He stocked up on chemicals to get ahead of what he was sure would be demand-driven inflation in the prices.”

“Those sound like good judgments,” Walters noted.

“Except all good things come to an end. And that’s exactly what happened. A year later, both wars sank into low-intensity stalemates. The insurgents still use plenty of high explosives, American military demand, though, has cratered. Last year, Arvan’s net sank to slightly over two hundred million.”

“How bad off is he?” Bellweather asked, almost rubbing his hands together. Arvan’s net was down fifty percent; this sounded so good, so filled with possibilities.

“I haven’t talked to him about it, right? But he’s done his best to avoid bankruptcy, taken the usual steps. Laid off a few dozen workers. Tried to restructure his debt, squeezed his suppliers, all reasonable measures, but in the end, it’s finger-in-the-dike stuff. His only prayer is this polymer.”

“Then it is, in a very real sense, his holy grail,” Walters observed.

“Yes, it’s well named.”

“What are his chances?” asked Bellweather.

“If he can hang on long enough to get a contract and swing into production, he won’t just survive, he and his company will be drowning in profits. He’ll have to hire ten accountants to keep track of the billions. The past two years will be a bad memory.”

“How close is he?”

“We have to move fast,” Jack replied, then paused before he admitted, “frankly, this is why I put this process into overdrive and turned up the heat.”

“Describe fast, Jack,” Walters said, nearly drooling with anticipation.

“Perry is initiating negotiations with a few low-level officials at the Army munitions command at Rock Island.”

Jackson, still licking his wounds from his earlier drubbing, said, “You seem to have unusual inside knowledge, Wiley. Do you have an inside source?”

“None of your business, Phil.”

“You signed the contract, Wiley. It is now.”

“Is it true you cheat on your wife?” Jack asked with a tight smile.

“What?”

“Any extramarital affairs? Share the dirty details, Phil. We’re your partners, tell us about the bimbo. Do you use a hotel? Is she hot, Phil?”

“Watch your mouth, Wiley.”

“And you learn to keep yours shut,” Jack snapped back and the temperature in the room instantly cooled a hundred degrees. “You’re my partner, not my owner.”

Jackson had taken his best shot at intimidation and come up empty. Not many people beat him at his own game, much less mugged him to a bloody pulp. Jack had accomplished this not just once but twice, and in such a resounding fashion. They were even more impressed with Jack, their fifteen-billion-dollar man.

“Why did he go to the guns and bombs people?” Haggar asked, trying to get the discussion back on track. Jack and Jackson were still staring each other down. “The force protection and threat reduction guys, that’s who he should be talking to.”

Jack looked away from Jackson, toward Haggar, and smiled. “Remember, Alan, Perry Arvan is a scientist, not a businessman. Because of the polymer’s qualities he figures the military will categorize it as an explosive. He’s a novice at the military procurement game. Always been a subcontractor, never a direct supplier.”

The CG boys took a moment to absorb all this inside information Jack had just unloaded on them. It sounded so promising. Inside only two years, Arvan had sunk from $400 million in revenue to just over $200 million. What a disaster. They could picture Perry Arvan slapping on Band-Aids, reeling from the shrinkage, trying to stem the bleeding long enough for the big bonanza that would save his hide.

The idea of stealing it all out from under his feet-and at the last minute-was immensely satisfying.

“So what’s your plan?” Bellweather asked, openly admiring Jack for finding such a plump target. Better yet, it was clear that Jack had an incredibly knowledgeable inside source. He was dying to hear the plan; it was bound to be great.

Jack got up and worked his way to the side table laden with food and snacks. He picked up a plate and loaded it with cucumber sandwiches, a few sweet pickles, some chips. “Perry is surviving a day at a time. He borrowed heavily for the expansion and to build his stockpile. He emptied his equity, leveraged himself to the hilt. I understand he owes 150 mil on five-year notes at seven percent. Do the math.”

Walters, only too happy to express the obvious, said, “Any setback at this point will be disastrous.”

“So do you have a plan to squeeze him?” Bellweather quickly asked. He was sure he had a whopper.

Jack selected a pickle and bit down hard. “You’re going to do it.”

“Us?”

“That’s right, and here’s a happy coincidence I think you’ll savor. Perry’s largest account is a munitions company located in Huntsville, Alabama. Globalbang. Perhaps you’ve heard of it.”

Big smiles instantly erupted on the other side of the table. Globalbang, they all knew, happened to be one of the many subsidiaries of the Capitol Group. It produced, among other things, Air Force bombs and Navy missiles and an assortment of other things that go boom in the night. No wonder Jack had set his sights on CG. They spent a brief moment admiring how cleverly Jack had walked them into this, then another moment, leaning forward to hear the details.

After nearly inhaling a sandwich, Jack continued. “Last year, Perry sold seventy million in chemical explosives to Globalbang. You can find out more easily than I, but assume his contracts this year are roughly equivalent.” He paused and let the moment build. “Imagine now if those contracts are canceled.”

“He would sue us,” Jackson snarled, still smarting from his earlier humiliation. It was time to even the score, and he knew how to do it. He worked up a condescending scowl and said, “And you know what, Wiley? He’ll have an excellent case. In fact, he’ll cream us.”

“So what?”

“That’s a stupid question.”

“Let him hire the meanest legal shark he can find. Sue to his heart’s content. It would take at least a year or two for resolution. Perry hasn’t got a prayer of surviving two months, much less two years.”

The light finally came on and Jackson blurted, “And if we take him over-”

“Then why would we sue ourselves?”

Bellweather began gliding around the table, topping off their champagne flutes. They had already toasted the partnership: now it was time to toast a victory that was all but in their laps. They could see it, smell it, taste it. After a moment, he lifted his flute and, smiling broadly, said, “Here’s to Jack and his holy grail.”

“Hear, hear,” they all chanted.