The Last Jihad

by Joel C. Rosenberg

  “I want you to make GSX the financial industry’s equivalent of the CIA,” insisted MacPherson at their seal-the-deal luncheon at Ruth’s Chris Steak House in LoDo.

  “You’d better hope I do a hell of a lot better than the boys at Langley,” Iverson laughed. “They thought the Soviet Union was an economic superpower. Until the day it went out of business.”

  In fact, it was Iverson—not the CIA—who had accurately predicted the Soviet Union’s imminent demise during the 1980s, and, as ambassador, fed Langley remarkably accurate forecasts of the economic and political upheavals that were on the way. Unfortunately, no one listened to him quite as carefully as they should have.

  His instincts telling him both MacPherson and his two companies were poised for dramatic growth, Ambassador Iverson took the job. In turn, Iverson hired young Jon Bennett and assigned him to work for MacPherson. Bennett’s father, Sol, had been the New York Times bureau chief in Moscow during the 1970s when he met Iverson, who was then serving as an economic attaché at the U.S. Embassy in Moscow. It was all just further proof to Bennett that Sun Tzu was right. Success is as much who you know as what you know.

  In early 1992, Bennett found himself in a private meeting with the CEO he had come to admire and even like. He’d been summoned into the inner sanctum, MacPherson’s private corner office. Two walls of floor-to-ceiling windows, each with breathtaking views of the snow-capped Rocky Mountains. A sparse desk sporting a state-of-the-art laptop computer. Big leather couches. A grainy photo of MacPherson in his F-4 flight gear on the deck of an aircraft carrier, somewhere off the coast of South Vietnam. A huge chunk of the Berlin Wall in a Plexiglas case, next to a photo of MacPherson at the White House, with President Reagan on one side and British Prime Minister Margaret Thatcher on the other.

  On this bright, blue, dazzling morning, MacPherson wanted to know whether he should make a major investment in interactive, high-definition TV, which, rumor had it, was going to be big. He tasked Bennett to get the answer. Bennett’s voraciousness and high energy made a big impression. He sunk his teeth into the project, crunched the numbers and talked to everyone he could find, including the secretaries, drivers, and associates at a slew of major high-tech venture capital firms. He also quickly and very ambitiously commissioned focus groups at a dozen junior high schools across the country to see if interactive TV had a future. Bennett concluded it didn’t. It would cost too much and take too long. More to the point, kids didn’t want it.

  On a weird hunch, however, Bennett began sniffing down another trail. In doing his focus groups at all those junior high schools, he met not only with students but also with their moms, who came to pick them up after school. Time after time one mom after another brought with them bottles of spring water and sipped them casually during the focus groups. Curious, he asked them why they weren’t drinking soda. Too much sugar. Too much caffeine. Slows me down. Makes me fat. And so on. What about the cost, he would ask. I’m doing this for me, to be healthy, to lose weight, to clear my system, to be natural, he heard over and over again. Unbelievable, thought Bennett. These middle-class suburban homemakers were paying nearly two bucks a bottle for water—during a recession. He did the math and almost choked on his Big Mac. That’s nearly eight bucks a gallon—which at that time was nearly seven times the cost of gasoline.

  Working feverishly for the next several days while his boss was speaking at an economic conference in London, Bennett concluded that aging, weight-and health-conscious Baby Boomers—beginning with women—were beginning to shift from soda to bottled water in the U.S. and Europe. That gave the two bottled-water industry leaders—Perrier and Evian—huge upside potential. Both were French-owned, both were fast-growing, and both were ripe for takeovers by companies with much larger distribution networks. Bennett concluded the two major U.S. soft drink companies—Coke and Pepsi—would soon wake up to this phenomenon, and either buy these French brands, or launch their own. This could dramatically boost their profitability, even as U.S. soft drink sales were slowly beginning to flatten.

  The day MacPherson returned from London, Bennett presented his case: Forget interactive TV. Buy major positions in bottled-water companies—and buy now before anyone else realizes that they’re cash cows-to-be.

  MacPherson nearly choked on his Big Mac. What kind of idiot had Iverson hired? He nearly fired Bennett on the spot—and invested heavily in interactive TV anyway. Bad move. Interactive TV went nowhere. A few months later, however, Nestle stunned the markets by buying Perrier. Its stock shot through the roof.

  The CEO called Bennett back into his office and got right to the point.

  “I may be dumb, but I’m not stupid. Let’s buy water.”

  He immediately bought huge blocks of shares in the Danone Group, owner of Evian, and took major positions in Coca-Cola and Pepsi-Cola. Sure enough, the rebounding U.S. economy and rapidly expanding foreign markets boosted the stock of all three companies dramatically. Even more interesting, in December of 1995, Pepsi entered the bottled water market with its Aquafina brand. It quickly became the number-one bottled-water retailer in U.S. convenience stores and gas stations. In 1996, Coke launched its own bottled-water brand, Dasani, also gobbling up a huge market share. By 1999, when MacPherson finally sold a boatload of holdings to begin financing his political ambitions, the value of his Pepsi stock had doubled. The value of his Evian stock had nearly doubled (to $191 a share). And the value of his Coca-cola stock had nearly tripled.

  But Bennett’s career, however, wasn’t built on bottled water. It was built on MacPherson’s growing confidence that this young whippersnapper was developing a real strategic vision, great sources, and great instincts. Bennett’s friendship with a young programmer at Netscape led him to advise the Joshua Fund to buy into the Web browser company’s IPO at $20 and sell at $160 five years later. Likewise, Bennett advised the Joshua Fund to buy Microsoft at $20 in the early 1990s and sell at $100 when his friends in the Clinton Justice Department convinced him over lunch at the Willard that their antitrust case could be a company-killer. It wasn’t, but the tip helped the Joshua Fund sell high and not get burned during the tech crash to follow.

  During the summer of 1997, a college friend of Bennett’s called collect from a short-term missions trip in Chiang Mai, Thailand. The local currency, the Thai baht, was beginning to crash and a whiff of panic was in the air. Bennett sensed this might be big. He jumped on the next plane from Denver to Bangkok and confirmed the extent of the currency troubles. Bennett immediately called Iverson—skiing in the Swiss Alps—on his satellite phone and suggested Iverson and MacPherson dump all of the Joshua Fund’s Asian holdings. This was a full-blown currency crisis, the young analyst insisted, and it was going to get worse. It would spread through Asia like the economic equivalent of Ebola. Iverson was skeptical. The Thai baht? Dump all their holdings in Asia? This kid was working too hard. He needed a vacation. At 14,053 feet, sweating in his ski garb, Iverson put the phone down for a moment, looked out over a breathtaking Alpine mountain range, took a swig of Evian—and swallowed hard. Suddenly, he hung up with Bennett, speed-dialed his team back in Denver, and issued the command: dump all of our Asian holdings—immediately. By October, sure enough, the Thai currency troubles had erupted into a full-blown Asian economic crisis that swept the globe and for a while put a number of U.S. companies at severe risk. The Dow dropped more than five hundred points in one day. But the Joshua Fund didn’t lose a dime.

  Jonathan Meyers Bennett’s mission in life was to read the tea leaves—then tell James Michael MacPherson and Stuart Morris Iverson when to buy the tea company. As a result, MacPherson and Iverson had become very rich, very happy men.

  Bennett wasn’t doing too badly himself. Now Global Strategix’s senior vice president and chief investment strategist, Bennett ran the company’s New York office from the thirty-eighth floor of a skyscraper overlooking Central Park. It wasn’t exactly Colorado’s Front Range, but it would do. For now. Six months before, Iverson had b
een nominated to be the next U.S. Treasury Secretary and subsequently confirmed by the Senate by a vote of ninety-eight to nothing, with two Senators absent. Iverson was now in Washington and Bennett would soon be moving back to Denver to assume control of GSX. The gorgeous office looking out at the magnificent Rocky Mountains was about to be his.

  Bennett’s parents were retired now and living just outside of Orlando.

  Sol and his wife Ruth still didn’t exactly understand what their son did every day. Sol had never earned more than $60,000 a year as a reporter, and for most of his career much, much less. They’d never worried about money, but they’d never sought it, either. Sol preferred tracking the CIA to CNBC, covering the IRA to opening an IRA, and reporting the fall of the Berlin Wall to reporting the rise of Wall Street.

  The Bennetts were proud of their son, but they were also concerned. Jon had lost a number of his colleagues and associates in the attacks on the World Trade Center. But he refused to talk about any of it. He’d gone back to work the very next day and refused to take any personal time off, except to attend funerals. He’d given his staff flexible leave time to deal with their grieving, but didn’t seem to deal with his own. They weren’t even sure if he was grieving. He must be, but he absolutely refused to entertain the subject when they tried to bring it up.

  Their son was a young man in a hurry. But is that what he really wanted, to move at a million miles an hour while life sped past by him in a gray, murky, colorless blur? Is that what they’d brought him up to do, to be, to cling to? It didn’t seem right. His mother worried that he seemed hollow, distant, and short-tempered.

  But it wasn’t hard to see their son had become successful beyond their dreams. He owned a penthouse apartment in the Village near NYU, for which he had paid cash, though he was rarely home, except to sleep. He had a massive walk-in closet filled with Zegna suits and expensive Italian hand-crafted shoes. He earned a generous six-figure salary, a rapidly growing seven-figure personal portfolio, and an even larger seven-figure retirement portfolio. Not bad. Not bad at all. Now all they needed was a daughter-in-law and some grandchildren.

  Bennett set down his Turkish coffee.

  He glanced at his Rolex, compulsively twisted his cloth napkin, and peered across the table. He needed that signature, and he needed it now. A car would be arriving to pick him up for Ben Gurion International Airport in twelve minutes. He’d be in London by midday and New York by evening. If he was lucky, he might even have time to catch a show by himself and celebrate this incredible deal.

  As Dmitri Galishnikov, the man whose signature he so urgently wanted, pored over the contract’s final page, Bennett found himself intrigued by this riddle wrapped in a mystery surrounded by an enigma. Galishnikov was a careful man, a cautious man and, to be fair, Bennett reminded himself, these were no character flaws. They were traits conceived in persecution, born in suffering, and refined in the gulag. This was a man who had survived three years in Lefortovo, the KGB interrogation prison in Moscow. Some night, late at night, over chai and black bread and beef Stroganoff, he would ask this quiet, careful, cautious man to tell him his story in far greater detail, to describe his journey as a Jewish petroleum engineer from Stalin’s Siberia through a long, dark, lonely night and into the pinkish dawn of a Jerusalem sunrise at the King David Hotel. No doubt it would take more than one night for Galishnikov to do the story justice. No matter. Bennett would stay as long as it took.

  Bennett’s journey to this rare breed of Russian began with a newspaper story.

  On a British Airways red-eye from London to New York many moons before, he’d been restless and unable to sleep. Finished with all the Sunday papers he had with him, he’d begun glancing through the Friday morning New York Times he’d uncharacteristically been too busy to read all weekend. He distinctly remembered the date of that paper—September 15, 2000—because it would change his life forever.

  Bennett began in the back of the Business Section, circling intriguing little stories that caught his eye with a thick, new Mont Blanc pen his dad had given him for his birthday. He always read the Business Section in reverse order, from the last page to the first, believing the good stuff—the precious nuggets for which he panned—were rarely useful once they’d reached the front page for all the world to see.

  It wasn’t, however, until he finished the Business Section, and the A Section, that Bennett came upon a front-page story that stopped him dead in his tracks. “Gas Deposits Off Israel and Gaza Opening Visions of Joint Ventures,” read the headline. Natural gas in the Mediterranean? Bennett felt a surge of adrenaline and read on.

  “Drilling deep below the seas off Israel and the Gaza Strip, foreign energy companies are discovering gas reserves that could lift the Palestinian economy and give Israel its first taste of energy independence,” reporter William A. Orme, Jr. began. “Industry experts, including those on this giant platform, say the Palestinians and Israelis will both profit if they can work together in a high-stakes partnership. They need each other for the efficient development of these offshore reserves, since neither side alone can fully afford the billion-dollar investment in pipelines and pumping facilities that is being sketched out, the experts say.”

  The article went on to say an Israeli government official estimated his country had “some three to five trillion cubic feet of proven gas reserves,” an astonishing figure that could fuel Israel’s electricity network for a quarter of a century.

  “And there may be more,” the official added.

  Even now, the phrase kept ringing in Bennett’s ears. “There may be more.” Even now he could remember the urgency he had felt to call his GSX colleagues to brainstorm their next move. But it had only been four in the morning in New York, and only two in the morning in Denver, and everyone he knew had been asleep.

  Well, not everyone.

  In Israel, it was eleven o’clock in the morning as Bennett sat in first class at 30,000 feet, staring at his copy of the Times. GSX had an office in Israel—in Tel Aviv, actually. He’d never been there. He couldn’t even remember the name of the director there. But he’d be awake. And now was as good a time as any to get acquainted.

  “Shalom,” said a young secretary, with a thick Israeli accent and a thicker trace of attitude.

  “Shalom, uh, yes, uh, who’s your director there?” Bennett asked, his mind racing.

  “And you would be…?”

  “Yeah, my name is Jon Bennett, I’m…”

  “From New York? That Mr. Bennett?” the young woman asked, suddenly humble, suddenly alert.

  “Yeah. I’m on a flight to New York right now and I’ve got an urgent question for your office but, I’m sorry, I just can’t remember the…”

  “Roni,” came the interruption. “Roni Barshevsky. I’ll put you right through, Mr. Bennett.”

  He was about to say thank you but the line was already ringing in Barshevsky’s office.

  “Mister Bennett?” Barshevsky said with a heavy Russian accent.

  “Please, call me Jon.”

  “OK, Jon. Good to meet you, finally. What can I do you for?”

  “Roni, I need to know everything you know about gas reserves off your coast,” Bennett nearly whispered.

  “Uh, nothing. Why?”

  “Nothing?”

  “Nyet. What’s this about?”

  “Buried treasure, Roni. Go grab your copy of Friday’s Times.”

  “Which Times?”

  “The New York Times, Roni, the New York Times. Grab the paper, Roni. Get the front page. Come back to the phone.”

  “OK, boss.”

  Bennett was tired and wired and ready to unleash on this guy. But with everyone else on the plane around him sleeping like babies, screaming wasn’t exactly an option.

  As he waited on hold, Bennett cursed himself that he hadn’t read the story earlier, hadn’t known about the story days or weeks in advance, that no one in his entire company had the brains to bring it to his attention. This thing was white-
hot, and his Israel director had no idea what he was talking about.

  “Hmm. This is very interesting,” Barshevsky mumbled, coming back on-line. “What do we do?”

  “Who should I talk to? Who can I call to get us into this thing?”

  “Let’s see. Hmm. Ah, yes. I know just the guy. Dmitri Galishnikov. He’s Russian. Runs an amazing company called Medexco. Pipes, drilling, pumping—you name it, he does it. Mostly they work in Central Asia. But he’s probably the one working with these guys. Da, call Dmitri.”

  “I need a number, Roni, and I need it now.”

  “OK, boss. One minute.”

  It actually took two, but to Bennett it felt like an hour.

  “You’re a saint, Roni. Stay alert. I’ll call you soon.”

  Bennett hung up, slid his credit card through the GTE air phone again and dialed Medexco. The number was busy. He tried again. Same thing. Bennett cursed, then thought better of it. Discussing a billion dollars in venture capital sight unseen—on an unsecured line, over the Atlantic Ocean, no less—wasn’t exactly the model of shrewd, stealthy, strategic savvy on which Bennett prided himself, and for which he’d so often been promoted. He’d have to wait until landing at Kennedy, then race back to the office and…and what? What was he really going to try to accomplish over the phone? Who knows how many calls this Galishnikov guy had already received over the weekend, much less in the months leading up to this story? People might already be jetting to Israel to see him. Deals might already be underway. Hell, they might even be done.

  Slow down, Bennett told himself, slow down. Focus. He took a deep breath and reached for the call button above him. He needed a drink, and he needed it now. Even if it was four-thirty in the morning. A flight attendant emerged on cue. He ordered a tiny airplane bottle of Absolut—and some coffee. Then he picked the air phone back up, slid his credit card through again, and called Barshevsky back.