Matters of Honor

by Louis Begley

  Hah! he said when he called back, what’s going on is that Monsieur le comte and his Figaro Blondet want to stop the French state in its tracks. They want to derail the nationalization of l’Occident. So they have asked—or, to be more precise, ordered—me to figure out how to do it, and one or the other is on the telephone just about every hour to check on my progress. I wonder what dreadful punishment awaits me if there is no solution or if I can’t find it. There are things that were done in Rome to slaves if the dominus caught them screwing up: mutilation for a broken plate, whipping for spilled wine, etc., etc. Perhaps there is a similar custom handed down by the Sainte-Terres from father to son since the Crusades that applies to clerks in their service.

  But do you think there is no solution? I asked.

  Of course there is one, he said, I have it. It came to me a couple of days ago, on the way home from the office. I was turning the problem over in my mind as I walked, and bingo, I had it. I am quite sure it works. There’s even a nice tax angle that looks very promising.

  And have you told them?

  Not yet. I want to put the scheme out of my head for a few days and then look at it again with a cold eye. And there is another reason: I think they will love my idea, but, even if it works as well as I believe, it’s political poison. So I also have to figure out how to show them that I have found what they wanted while counseling them that for the sake of their own self-interest they must abstain from using it.

  Afterward, as we were talking about politics in France and at home, he asked abruptly whether I would come to Paris. He wanted to have a real friend at his side at this time as he faced the most difficult legal and moral issues of his career. There had been occasions in the past when I thought I had abandoned him in a moment of need, each of which I later regretted. I didn’t want to repeat the mistake. I was hard at work on a novel, but it seemed to me that if I opened my apartment I would be able to work in Paris. I told him that I’d be over in a couple of days. First thing in the morning, I called George at the office and told him what I was doing.

  HENRY AND I had dinner the day I arrived, and right away he said, I am now sure that I know how to do it, and I am equally sure that I can’t let it be done. The only unknown is how the firm will feel about my taking that position—telling a client like Hubert that you know how to solve his problem but don’t want to use the solution—and how on earth I am going to get Hubert and that madman Blondet to stay put. Blondet, you know, has been squealing like a stuck pig all over town, as though anyone gave a damn about what he thinks. He’s a polytechnicien, like a lot of the top guys in the government, and they all say tu to each other if they’re not in the least intimate, like dukes in Balzac. Anyway, he’s been to see the important bureaucrats to lay out his case, and they’ve all told him to stuff it—or whatever one French fonctionnaire says to another. What do you think I should do about my problem?

  I said that for the moment I didn’t know enough to have an opinion. I wasn’t even sure I understood why he was in a quandary. Fair enough, Henry said. I was hoping to spare you the arcana; I couldn’t make them comprehensible without a blackboard anyway. The essential facts. One: most of the value of l’Occident is in the non-French businesses, which, with a couple of negligible exceptions, are owned by a Dutch company owned by the French bank, and not by the French bank directly. I’ll call that Dutch company Dutch Occident. Two: Hubert de Sainte-Terre personally or through the Banque de Sainte-Terre, of which he is the majority shareholder, owns fifty-five percent of Banque de l’Occident. He has been buying additional shares as rapidly as market conditions permitted. Three: the French government has announced a price for the purpose of the nationalization, that is to say the price at which the shareholders of l’Occident will be forced to sell their shares to the state, that is much too low, no more than one-half to two-thirds of the real value. He paused and asked whether I was following him so far.

  I nodded. All right, he said, now he was moving to the basic legal rules. One: under the nationalization law, the French state has the power to force all shareholders, including foreign shareholders, to sell at the price it set, subject, of course, to litigation of fair value before French courts. Two: there is a loophole. The state didn’t make it illegal for a French company on the nationalization list to sell its assets and, in particular, its foreign assets just ahead of the nationalization.

  Here I want to open parentheses, Henry said. Only an imbecile would buy the French business—that is to say, the French bank and all its French assets including shares in its foreign businesses—he’d be throwing money out of the window because once he came to own the French bank he’d be in the same mess as the current shareholders. The state would be able to force him to sell the bank. He would have gotten exactly nowhere.

  Here he announced that he was closing parentheses and would tell me rule three: the directors of the French bank have a duty to act in the best interest of the shareholders. More concretely, if the directors have a choice between two transactions, they must choose the one that gets more money to the shareholders or face having to pay damages. That’s pretty much the same as the American rule, he added, with some important differences that don’t matter here.

  He asked again whether I had followed him, and once more I nodded helplessly.

  This isn’t simple stuff, said Henry, but now I will show you the solution to Hubert’s problem, which I am quite sure the government won’t be able to defeat by any legal measure. Are you sure you want to hear it?

  I said I couldn’t wait.

  Here it is, he said. Banque de Sainte-Terre and Hubert and possibly some friends organize a Dutch company, which we will call Dutch Sainte-Terre—it should be a Dutch company for tax reasons I won’t get into because they’d really bore you. Hubert’s gang gives their Dutch company access to enough cash to buy from Banque de l’Occident its subsidiary Dutch Occident, which I’m sure you remember is the company that owns most of the non-French business of l’Occident. The offer goes before the board of directors of l’Occident. Obviously the directors who were appointed by the Sainte-Terre interests approve it. But the beauty of my scheme is that the independent directors are forced to vote for it too or abstain, once it has been pointed out to them that if they vote against the sale they will be liable for huge damages. Why?

  Why indeed?

  Simple: because Dutch Sainte-Terre will be paying the real value, and not the low-ball share price that can be derived from the government’s offer for all of l’Occident. Beautiful, isn’t it?

  Brilliant! I said, and I really meant it.

  Airtight. It’s a shame that I can’t recommend it to Hubert.

  Now you’ve lost me. Why in heaven’s name can’t you? I asked.

  Because it would be very dangerous. Hubert, the Sainte-Terre bank, Blondet too, not that he matters, would be pariahs in France until the Socialists are voted out of power and who knows when that day will come. The government will use every trick in the book to hound them. Yes, as a legal matter, the Socialists won’t be able to undo the transaction, but, as for doing business in France, or anything else that the current government might have a say in, they can forget it. Theoretically they could tough it out, but only if they aren’t spooked by the government’s antics and if they are resigned to not doing deals in France that require the government’s consent—tacit or official. The truth is that most deals of any size do.

  So what can you do, Henry?

  He said he would like to explain his scheme—and the interesting tax advantages that he hadn’t described to me—to Hubert and, if Hubert wished, to Blondet as well. If they use their heads, Henry said, they will see the dangers and let l’Occident be nationalized. But these guys are greedy. They’ve gotten themselves to believe that they don’t scare easily so they may want to go for it, regardless of the consequences. In that case, I would lay out enough of my reasoning and research to enable them to hire another lawyer—preferably a Dutch lawyer—to take my scheme and car
ry it out. I’ve have done my part, he said. Anyone normally competent can execute the rest.

  If you do that, why not do the rest yourself? I asked. I’m not sure I see the reason.

  It’s the good name of the firm, was his answer.

  He added that, given the prominence of the Paris office, it wouldn’t do for Wiggins & O’Reilly to get tarred with the pitch of this transaction. He was prepared to ask the firm not to charge Hubert and the Sainte-Terre group any fee for the work he had done if Sainte-Terre went forward with counsel from some other firm.

  There is one more thing that has to do with Hubert, he said after a moment. I’m not able to discuss it.

  And what if they listen to you and drop the scheme? I asked.

  Then I would have done my work perfectly, and naturally I should be paid, he answered.

  I could see his logic, but I was still left with one simple question: Wasn’t telling Hubert that there was no way around the nationalization the simplest solution? Who has ever said that all problems can be solved? Was Henry White’s pride preventing his saying that he’d been defeated when in fact he hadn’t?

  Henry said he had asked himself that same question more than once. But his conscience was clear. Whatever might be the urgings of his amour propre, in his opinion he had a professional duty to tell the client his findings. He couldn’t hide them for the client’s good, because in the end it was for the client to decide where his good lay. It was utterly irrelevant that this result indeed coincided with the urgings of his amour propre. But, he added, I can’t have that talk with Hubert without discussing it first with the firm’s senior committee. He didn’t think that could be done over the telephone. He had decided—in fact while we talked—to go to New York the next morning. It would be just a day trip, and he hoped I would forgive him for running out on me. He’d take the Concorde both ways.

  One day stretched into three. We had dinner as soon as he had cleaned up from his supersonic ride. He was very solemn; the committee had not had an easy time coming to a decision. Wouldn’t Hubert resent Henry’s unwillingness to carry out his own scheme, and how was that going to affect the flow of business from Sainte-Terre? That had been the big question. But, in the end, approval was given, including, if necessary, not charging for the work, although several partners had implored him to get paid something, even if the fee was deeply discounted. All expressed the hope that a generous gesture would placate Hubert. He’d talk to Hubert the next day. As it happened, he was in Paris.

  I was relieved that he didn’t seem to want to go on talking about l’Occident, but I asked whether he had spoken to Margot.

  I can’t just now, he said. She has too many worries of her own. Ever since du Roc found out that Margot’s inheritance was tied up in a trust for the exclusive benefit of her and her children—with no distributions to Jean while she was alive, and nothing coming to him if he survived her—he’s put his mind, possibly to the detriment of his literary production, to using her money to buy major works of art (coals to Newcastle, considering the collection Margot has inherited but plans to leave to the Metropolitan Museum) and more very fancy real estate. He has gotten her to pay for another manor in Normandy and a magnificent town house in Versailles that once belonged to one of the ministers of Louis XIV. The game is painfully transparent: those assets, which are out of the trust, can potentially become his if Margot dies or in case of divorce if he negotiates a rich settlement. Margot’s feelings are hurt; this insult—that’s really what it is—may be the last straw.

  And your hopes? I asked.

  I have no hopes, he answered. Margot may have one though: an American moviemaker she has recently met through Jean, ten years her junior. She’s quite taken with him. I can always tell.

  I told him I was sorry.

  There was a message from Henry on my answering machine when I got home. He thought he should keep the next day open for Hubert. Could we have lunch the day after? I called back, said yes, and wished him luck.

  XXXI

  IT WAS the strangest meeting, Henry said. I’ve already reported to the firm. Yours will be an abbreviated version. I won’t ask you to keep it to yourself; I know you will. The fact that crowds out everything else is that, as soon as I began to explain the scheme to them, their eyes lit up. I thought Hubert was going to get up from the sofa—he’s never behind his desk when he receives you in his office—and dance a little jig. The effect on Jacques was as impressive, except that Jacques being Jacques it seemed more likely that he would merely levitate: remain in a seated position, arms crossed on his chest, floating down occasionally only to be lofted up again by his delight. After I had finished laying out the details, I launched into an impassioned speech about the political realities that dictate consigning my brilliant plan to the dustbin. I hadn’t gotten far before Hubert stopped me. Henry, he said, is the transaction we’ve been hearing about illegal? No, I said. Then Jacques asked: Do you mean that there is no legal risk in it for us if we carry it out? I said that the transaction posed no legal risk of liability for engaging in it and couldn’t be undone by government action on the counts, because it involved no violation of the law. But then I inventoried all the things that the French government could do if the prime minister or the minister of finance got mad enough, or the president expressed to them his displeasure. Of necessity, I repeated some of the points I had made before. Jacques looked bored and tried to shut me up, but Hubert said, Let him finish. They listened, but I knew I’d lost them. And then Hubert said very gently, because he is, after all, my friend and a gentleman: Look Henry, don’t you think that you should leave the assessment of French politics to Jacques, who is French as well as the chief executive of l’Occident? And let me worry about the broader consequences; it’s my money that’s at stake.

  There was only one answer to that. I conceded as pleasantly as I knew how, adding only that there was another issue, which involved me and my firm. I could not assist in executing a transaction that in my professional judgment was against the long-term interests of my client and would bring down the wrath of the French government on everyone involved in it. As a practical matter, I added, if they wanted to disregard my advice and go ahead, they might engage for that purpose, instead of me, another lawyer—preferably Dutch but certainly not French. Faced with their stony silence I finally said that there would be no fee for the idea I had presented to them. I guess that Jacques had just about had enough of me, because he exclaimed that paying me was out of the question. Hubert jumped in and told him that was his decision to make, and he directed me to send the bill right away. Thereupon, without pause, Hubert and Jacques began discussing how to organize themselves for the transaction with the Banque Sainte-Terre’s usual Belgian lawyer—not a Dutch lawyer, Hubert said, because he wanted someone who would be right there at his side—and as they went on laying their plans I got the peculiar feeling that I had become invisible to them. I had ceased to exist. An odd feeling, don’t you think, for someone who had worked so long and so very hard on a client’s problems and had solved this one, which in my opinion would have defeated ninety-nine percent of lawyers. In any event, I stood up and, wishing them luck, undertook to shake Hubert’s hand. No, don’t leave that way, he cried out, Gilberte is in Paris with me, let’s have dinner at the Grand Véfour, this is an occasion to celebrate. Once we get the hard work behind us I think we’ll be grateful to Mitterrand. I never cared much for the French part of l’Occident. France is an overbanked, sclerotic environment. Then he asked Jacques whether he and his wife would join us, but Jacques said they were dining at his mother-in-law’s. And guess what, said Henry, shaking his head. I had a very pleasant dinner with Hubert and Gilberte. We didn’t talk about business for a moment—something that is unusual for him in any circumstances and made me wonder all at once whether he would ever again discuss with me anything concerning his affairs. When dessert came he gave me a present. A beautifully bound first edition of Les illusions perdues. He knows how much I like that novel
; we’ve talked about it often. It’s a lovely thing to have and to hold in one’s hand, but I would have been even more grateful, since he always thinks this sort of thing through very carefully, if I hadn’t been certain that it was intended to set me to wonder who had lost his illusions: he or I or both of us.

  VERY LATE THAT EVENING the telephone rang. It was Greg Richardson. My mother was dead, of blood poisoning, the consequence of a puncture wound. She had stepped on a rusty nail walking barefoot in the yard where they had some construction going on. The doctors hadn’t realized how serious it was until the night before; he knew he should have called right away. Her wish had been to be cremated, and that was going to be done later in the day, but she had also asked to have the urn placed in the Standish family plot in Lenox. Did I see any obstacle? I said that there wasn’t any I knew. We agreed that I would get in touch with the church in Lenox and arrange for a memorial service in ten days’ time. He said he knew who her friends were and would notify them. I called Jack and May and George and Edie myself, and on the appointed morning followed what was left of my mother to the cemetery. I had been a fool to think that her removal to Hawaii had freed me; having allowed that ghoulish idea, irresponsibly encouraged by Madame Bernard, to take root had merely given me another reason to mourn. Not because I loved her. Probably I had when I was little, before the rancor, and before I had become what I was. No matter how hard I tried, I couldn’t remember, and was no longer certain that I knew, what love for her might have meant. Nor was I sure that Mr. Hibble’s revelation had been more than a shabby pretext for my hostility. I did see, however, that I had failed in one basic duty, the duty to treat with kindness a woman who thought she had a right to rely on me. That the duty had been derived from the legal process of adoption rather than an accident of birth didn’t lessen it. If anything, the bond of duty to her and my father should have been stronger, for hadn’t they given me a life almost certainly far better than the unwanted childhood that I might otherwise have had, stronger than any I would have owed to my natural parents, had I known them, for the poisoned gift of life they had bestowed? If there was a circle in hell reserved for such ingrates, Henry and I belonged there. We would have the company of many of our friends, I supposed.