“Good. I like that,” a composed Baldwin weighs in.
The meeting goes on for hours. It is clear that there was not intentional disregard for maintenance, but rather embarrassment at the incompetence that had let something so important fall off the radar. There is endless discussion involving how accurate the testing information was and more about the specifics of the pipe design, who knew what and what decisions had been made and by whom, what insurance covered and what it did not. Baldwin insisted that all copies of the LEAR and related emails be deleted immediately. So for certain, now, I have the only one.
“What do we do now?” Bennet asks at around hour three.
“The way I see it,” begins the general counsel, “if this thing turns out to be related to a maintenance issue, we’ll have sizable liability. No question about that. The damages will likely exceed our insurance, and they are difficult to quantify this early. The casualties are people with the means to tie us up in court for a good deal of time. But what I do know is that if you cover this thing up, Bennet, you run the risk that it leaks out, and then that really is the end for all of us. If fraud is established, the insurance companies could yell foul and not pay, the Justice Department would be here shutting you down, and we’ll be sharing a cell with Jeff Skilling. Remember Enron?”
“I did not spend the last thirty years of my life building all this up to be taken down by some incompetent nitwit in my environmental group!” This sounds like Baldwin, and the nitwit he means is probably Sullivan. This is finally getting good.
More discussion about what needs to be deleted and what should be kept continues for a while and then winds down to silence. The general counsel gets nowhere when he cautions the group not to destroy anything, as subpoenas have been received from the DOT, EPA, and several other agencies already. Both Baldwin and Bennet are adamant that any documentation illuminating the fact that they knew about corrosion in the Houston pipeline system should be gone.
“Thank you for your time, gentlemen.” And I hear the scrape of chairs as the non-Bishops leave the meeting.
Next, I hear a few minutes of dead air, and I envision the two brothers staring at each other.
“What worries me most about all of this, Baldwin, is our credit tightening.”
My mouth drops open in my cube, and I quickly close it. Oh my God. I haven’t even thought of that. I really am stale. All this time the conversation has been about fines, when the true risk to the Bishop Group is the impact on their trading operation.
While some of Bishop’s revenue comes from fees for storing or moving product, a more significant slice is from their trading and marketing arm. In the simplest of terms, it is gambling on the price of commodities. I make a deal to sell you a barrel of oil next month for $100. If the price on the open market next month is $95, then I make $5; if the price next month is $105, then I lose $5. Extend those deals out for years and for huge volumes, and the profits and losses become enormous. While there is certainly risk involved, the potential profits are hard to resist.
The best returns in trading operations are derived from companies with exceptional credit ratings—in other words, companies to whom lenders extend a large credit line and who aren’t required to post margin or give a cash deposit as a guarantee that they will make good on a bad bet. It is like a poker game. The casinos extend credit to people with adequate net worth to cover their debts. When credit gets tight or a company falls in their credit rating, their trading partners can immediately reduce the credit line and demand payment for any outstanding amount over that reduced limit and require them to post margin, which can consume cash quickly and leave them without enough to fund their operations. Lawsuits can drag on for years, but credit tightening in an energy-trading arena can topple a huge company overnight.
Right now, Bishop has an exceptional credit rating. If news of their complicity in the pipeline is revealed, that could change.
“The banks just aren’t lending right now,” Bennet says. “The last thing we need is a credit squeeze. First one guy wants us to post margin, then the others find out and want it too. Pretty soon it dominoes and we have no cash at all.”
“Bennet, are you telling me we are over our heads on the trading floor?” Baldwin sounds nervous. Since Baldwin is the Chief Operating Officer, his focus is on the mundane tasks of making the plants run and the pipelines flow—the physical business. He might not have much visibility into the less tangible side of trading derivatives.
“No no,” says Bennet. “I’m saying that this Houston catastrophe could be more than just jury awards, fines, and court fees. It could affect our credit, which has enormous impact on the marketing and trading operations. If not handled correctly, it could kill us. We really need to make sure that bad press is minimized and judgments are contained.”
Again there is silence.
“What if we went to one of the Houston sewer contractors and, say, offered them some incentive to admit liability? What’s bankruptcy to them if they come out with a personal $50 million or so? If the city of Houston is involved as a co-litigant, we may be able to save a ton on this,” Baldwin suggests.
“Do you have any contacts down there?”
“Absolutely. I have contacts everywhere, Benny.”
“This may have legs, but let’s just keep that between us, if you know what I mean.”
Their conversation shifts to family stuff and late dinner plans. I look at my watch, and it is past two.
I am just about to call Lucy on my cell when my desk phone rings.
“This is Skip Perkinson, Tanzie. I’m in here with Frank. I’m wondering if you could come to my office on twenty-nine.”
I swallow deeply. “Of course. Do I need to bring anything?” I ask, trying to stay calm. Surely if I am about to be fired, it would not be by the head of HR. More likely a perky junior representative would have that unpleasant task. “Skip, I don’t think I have the right badge to get onto the twenty-ninth floor. It will take me a minute to get a security escort.” I can use my janitor badge, of course, but I’m not about to let him know that.
“I’ll send Carol, my admin, to meet you in the lobby,” Skip says.
This ride up to twenty-nine is nothing like the one with Keith the security guard. Carol is the typical adorable blonde who resides in almost every HR department, with trendy clothes and accessories. She is chatty and I try to remain very calm. Have they discovered that I hacked Baldwin’s computer, or that I broke in last night, or that I dialed into the executive meeting? I take deep breaths and smile at Carol’s inane banter until she delivers me to Skip.
Frank sits at a mahogany conference table with his laptop open and does not get up like Skip does when I enter the room.
“Have a seat, Tanzie.” Skip gestures to a chair next to Frank, who is consumed with his computer screen and doesn’t even make eye contact as I sit down.
“What can I do for you?” I ask Skip as I look at Frank’s screen to get some idea as to why I have been summoned.
“Frank tells me that he has uncovered a rather sophisticated embezzlement ring in our Accounts Payable department, and he indicated that you might be able to put some documentation together for us.” Accounts payable fraud has all the sophistication of a corndog. It’s common stuff, but I suppose Frank has built it up to make himself look like a mastermind.
I take my first full exhale since I picked up the phone. I am so relieved about not being sacked that I forget to be pissed at Frank for once again taking credit for my discovery.
“Frank mentioned that it’s a mother-daughter duo, but he has been unable to give me their names so that we can do an investigation on our end,” Skip continues. I suppress a chuckle. How embarrassing for poor Frank to have met with the head of HR to crow about his discovery, only to realize that he never asked me the names of the employees responsible, and that his computer skills are so poor that he can’t even repeat what I showed him in his office yesterday.
I bring Skip up to spee
d, outlining how the fraud works and giving Mazie’s and Amy’s full names.
“Good work,” Skip says. “Jim is out this week, but I think we need to put together some documentation to put in front of him when he returns on Monday,”
“Why can’t you just fire them?” I ask.
“If only it were that easy, Tanzie. We need to get paperwork in order. Legal will need to weigh in, and we will probably need to get in front of Bennet or Baldwin. And they’re pretty tied up at the moment. We open ourselves up to litigation if we don’t have every i dotted and t crossed on this.”
“I see. So they just continue doing what they do until we can get all the paperwork and approvals in order? That doesn’t seem right.”
I can feel Frank glaring at me. Imagine, questioning the great Skip Perkinson instead of just executing the task I was given!
“Sadly, yes, Tanzie,” Skip continues. “What I need from you and Frank is a write-up in layman’s terms about what has gone on, by whom, and for how long. We’ll also need some sort of estimate as to the amount stolen. Do you think you can have that to me by Monday morning?”
Skip looks at Frank and Frank looks at me. Actually, I can have it done in an hour, but I see no reason to rush on this since nothing is going to be done until Monday.
“Yes, of course.”
“That won’t be a problem, Skip,” Frank interrupts as he shuts his computer and stands up to shake Skip’s hand. He is taking over once again, but I can tell that Skip knows what is really going on.
Carol escorts Frank and me to the elevators and we ride down in silence. When we arrive back on six, Frank stands by my cube. I wait for an apology, but he never offers one.
“Tanzie, have that documentation to me by Friday morning so I have a chance to review it.”
“Sure thing, Frank.” I know he wants it so he can email it himself to Jim and Skip, hoping against hope that he can then recover from his lapse in front of Skip today. One thing is certain, though: If Frank stays, I will be kept on. It is clear he needs me. It is also a definite possibility that Skip, who surely is responsible for the reorg, has noticed that I am much sharper than Frank and will keep me on board. Suddenly, things are looking up.
CHAPTER FOURTEEN
I call Lucy but she doesn’t pick up, so I spend the next hour or so replaying the tape, making notes on the times at which the most damaging conversations took place. It is that fraud triangle all over again. The extreme pressure of possibly losing their company and the personal humiliation for having let all those people die; the opportunity to make it all go away by greasing the palm of a Houston sewer contracting firm president; and the rationalization that it isn’t really the Bishops’ fault but in fact the nitwit in EH&S who dropped the ball.
This gives me an interesting view into how these guys think. There is no discussion of why EH&S was so thinly staffed in the first place that they could not properly deal with the many issues they had on their plate. I feel bad for poor Sullivan; he is the internal scapegoat here. I suspect that he will meet the same fate as good old Hal, unless they keep him on board just to keep his mouth shut.
It is not uncommon for people caught up in a major problem to make the problem bigger with a cover-up. In this case, if Bishop’s general counsel was correct, the brothers might have to pay out huge damages, maybe even sell off a business unit or two and make some changes to their trading portfolio, but Bishop as a whole could live to fight another day. If they destroyed the paperwork, the Department of Justice could shut them down á la Arthur Andersen. If they bribed a construction firm or sewer contractor in Houston to take the rap, they could go to jail. The cover-up here seemed like a huge mistake; the very hubris that built the Bishop empire could likely serve to destroy it.
There is just something about people who cannot admit mistakes or defeat. Urging them to be reasonable is like trying to teach a pig to sing: They are just incapable.
I once attended a business ethics seminar where it was suggested that when struggling to decide what to do, always imagine your mother or some other loved one is reading about your decision in the newspaper. A company that lets a maintenance project fall through the cracks is just incompetent and possibly criminally negligent. But one that commits fraud by destroying evidence or bribing is in another category. What would Mama Bishop think of these boys now? I wonder.
I prepare a summary of events to help with my debrief after work with Lucy. It is true that Bishop did not maintain the section of pipe under the Galleria area. They also did not have adequate records. Those items would be violations of regulatory requirements. However, the actual cause of the explosion and whether Baldwin would in fact bribe someone to take the fall for Bishop are still unknowns. The impact on Bishop’s credit and how that will affect the operations going forward is another unknown.
My inclination is to lay low and take my time investigating. As long as I continue to be an employee, I have greater access to information than someone on the outside. Lucy, with her activist viewpoint, will probably want to go screaming to the media about the Bishops. It is probably not a good idea for me to let her know about the bribe possibility just yet. Just as with Mazie and Amy, the longer an investigation goes on behind the scenes, the better the quality of the information gathered will be. I don’t like deceiving my sister, but I need to be careful to rein in her enthusiasm for bringing down the Bishops on an uncomfortably accelerated timeline. Lucy might very well be the smarter one, but what I lack in smarts I make up for in strategy and patience.
Walking down the hallway leading to my condo, I am surprised to hear Lucy’s muffled laughter. I haven’t turned the key all the way when Lucy opens the door from the inside.
“She’s home,” my sister calls over her shoulder to my elusive neighbors Kim and Dan, who are currently sitting in my living room.
Kim and Dan have the three-bedroom unit next to mine, and just after I moved in they occasionally invited me over for a glass of wine or dinner. Dan writes for the Tulsa World newspaper and considers himself an oracle of liberal intelligence. He told me one time that he hoped his editorials would, over time, infiltrate the Tea Party brains that controlled Tulsa politics. He is short and has that fortyish receding hairline that signals the transition into middle age for some men. Kim is a trust fund kid from old Tulsa money that allows the couple to live in their swank condo in the most prestigious part of town. I’m only renting my unit, but I understood theirs had cost over $1 million, a gigantic sum considering the affordability of most Tulsa real estate.
Kim is something of an artist and spends her days at her loom weaving tapestry pieces or at her downtown glass-blowing studio. She looks younger than Dan, petite with a few gray strands starting to streak her dark curly hair. Her clothes are comfortable yet chic, and except for the gorgeous platinum, art deco diamond ring she wears on her right hand, no one would ever assume she has the kind of money that supports their comfortable lifestyle.
Ours was one of those friendships you make when you first move to a place. They feel sorry for you and try to include you socially, but after a while, there is really no need on their part to perpetuate the friendship, and the relationship remains friendly but never becomes a close one.
Kim and Dan are active members of the Democratic Party, which has zero clout in Tulsa, or in Oklahoma, for that matter. I think they were at first intrigued by my growing up in the San Francisco Bay Area but less endeared by my choice of workplace. Bishop stands for everything they are against, and I suppose I’m guilty by association. So slowly but steadily I stopped getting invited over for dinner, and they never seemed available to accept the invitations I extended.
“You never told me that Lucy O’Leary is your sister,” Kim says as she pours a glass of my zinfandel. “I’ve been ordering yarn from her and following her environmental initiatives for years. She’s my hero.”
I go to pour myself a glass, but the bottle is empty. “I’ll get another,” I say as I walk to the wine rack,
grabbing the Ridge and heading to the kitchen.
“I ran into Lucy as she was walking back from Utica Square this afternoon. I recognized her right away; she’s pretty unmistakable with that hair. I hope it’s okay that we just invited ourselves over.”
I should have known that my neighbors would be Lucy fans.
“Not at all,” I lie through my country club smile. I’m not at all ticked that you pretty much wrote me off after a couple of dinners and now pretend like we’re best friends when my semi-famous sister appears.
I had hoped to spend the evening going through the Bishop files with Lucy, not making small talk with the neighbors. I bring the bottle over to the coffee table and place it next to the empty one.
“You didn’t tell me your neighbor Dan writes for the Tulsa World, Tanzie,” Lucy says and smiles knowingly.
“What’s happening at Bishop?” Dan asks as I scoot a decorative chair over to the conversation area. I don’t really want to squeeze in between Lucy and Kim on the couch.
“I’m not allowed to talk about it.” I look at Lucy, who is biting the interior of her cheek to keep her expression in check. Surely she hasn’t told them what we are up to.
“Well, I’ve had it up to here with these goddamn oil companies and their total disregard for the environment and people,” Kim begins.
“Pipelines are the safest method of transporting natural gas and crude,” I say, sounding like Buster, my talkative friend from the airport. Normally, I take the other side of the argument, but I am still feeling irritated with my neighbors.
“Oh, come on, Tanzie,” Lucy says, rolling her eyes. “You know as well as I do that they cut every corner possible to save money, then say any kind of nonsense when they get caught with their pants down.” Lucy raises an eyebrow, and I wonder if she has been discussing her purpose for visiting Tulsa with reporter Dan. The three nod their collective left-wing heads as I take a sip of wine and glare at Lucy, hoping she will get the message to keep her mouth shut like she promised.
Revenge of the Cube Dweller Page 15
