In his early days, he hadn’t shown much discretion. At InterNorth, in the eighties, he had been pretty wild. But that had been a crazy time all around. The only person in Baton Rouge who knew him from that period was Stan Murdoch, and he never let Stan see him gambling now. With age and responsibility, Mike Wilson had learned to be discreet. He didn’t shake the polite society of Baton Rouge. The people closest to him, both in business and in his personal life, would have been shocked to discover what he did when he was away. It was amazing what you could do when you had a corporate jet at your disposal and apparent reasons to visit just about any continent on the globe. He hadn’t been to Vegas in years. He played away from home. Hungary, Poland, the Czech Republic. Mike Wilson loved the casinos of Eastern Europe, raw, crude, vulgar. And South America. You could just about chart the electricity plants he had acquired against a map of the casinos of the world.
They were gambles as well, the plants in the old Communist bloc. The truth was, the entire business model of Louisiana Light was one huge bet. It had been his own theory, buy up old Communist plants and turn the operations around. Turned the old theory on its head, which was that dirty old Communist plants could never be efficient. The point was, you didn’t need to be efficient, just more efficient, to make a heap of money. That was what he said, anyway, and the banks bought the story. Mike Wilson had sold it to them so many times he almost began to believe it himself. It had a nice contrarian ring to it, just the right tone in the years before the crunch when credit was easy and banks couldn’t wait to give it away. Long after the credit bubble burst, the market still wanted to believe in the miracle that was Louisiana Light. They’d listened to him sweet-talk them so long they just kept listening. Even after the writedown in January, he’d managed to snow them with the strength of his conviction. There was a lot you could do with a brazen show of bullishness in front of an audience that stood to lose a shitload of the money it had lent you and still wanted to believe that it wouldn’t. But there were limits even to that. There was only so long you could keep going before the facts began to show through from behind the tinsel.
Everyone wanted to believe the bets would pay off. For a long time now, Mike Wilson had known they weren’t going to. The analysts could have worked it out for themselves, all those analysts who thought they were so smart, if they had bothered to go find out the tariffs Louisiana Light was able to charge in those countries and if they had taken a stab at calculating the cost of production. It wasn’t too hard. They might have been smart, but they were lazy. Turned out the old theory was right. It was hard to get money out of those plants. Efficiencies came slowly. The contract terms that he had had to agree to just to get the right to pay top dollar for those plants were extortionate. Not to mention the personal considerations. Millions, sometimes tens of millions. Mike Wilson had had a gutful of corrupt bureaucrats in godforsaken towns in the boondocks of godforsaken countries whose only aim in life was to extract as much graft as they could from the windfalls that came their way. Lyall Gelb’s financial wizardry had kept the Louisiana Light growth story going a long way past when it should have ground to a messy, nasty halt. Somehow Lyall had gotten them through the credit crunch when better companies were going down around them. Perversely, the mere fact that they hadn’t gone down—not even suffered a serious scare—made them seem all the stronger to the so-smart analysts who tracked them. But even Lyall’s wizardry of concealment could only go so far. There was only so long you could keep hiding the truth. And the more you did to hide it, the uglier the truth became.
Wilson was at the end game now. Winner take all. If he pulled off this deal, the elaborate, fraudulent structure that was Louisiana Light, grafted onto BritEnergy’s solid foundations, might just hold up long enough to be quietly rebuilt. Wouldn’t that be something? Like any gambler, Mike Wilson couldn’t resist the idea of the one last, almost miraculous bet that wins against the odds and brings you back from the brink. This was it. It would be like out-bluffing a full house with your last chip on the table and nothing but a pair of deuces in your hand. It would be that good.
And he personally would have twenty-four million dollars at his disposal, the bonus he’d negotiated with the board for executing a major deal in Europe. No one could quibble with that arrangement. It was a little on the generous side, perhaps, but within the range of bonuses that CEOs of major corporations were offered when tasked with doing a major deal. Fortunately, when it came to executive pay, the Obama age of austerity hadn’t extended beyond the banks the government had bailed out, and even there it hadn’t lasted long. Twelve million would come to him in the form of options, which he wouldn’t be able to sell right away. But twelve would come in cash, which would solve his biggest problem.
Mike Wilson’s lifestyle was a facade. The truth was, he had nothing. Less than nothing. For months now, he had been gambling on credit, if that was what you could call the debt he owed to people like the Prinzi brothers. That debt was the only thing he could truly call his own. The jet, the house in Baton Rouge, the chalet in Aspen, the apartment in Manhattan, and just about everything else were on the company account. Take Mike Wilson away from Louisiana Light and he had nothing but the clothes he stood up in. And most of those had been bought with company money. That was fine, he knew, as long as Louisiana Light continued its apparently inexorable rise. No one was going to look too hard at where the petty cash was going. But if that came to an end, he knew he would be on his own. No one was going to stand up and defend him. Especially not from the Prinzis.
He had told the Prinzis he was going to do a deal by the end of the year and a large sum of money would be coming his way. He had no idea what they would do to him if he couldn’t pay. Tony Prinzi made jokes about breaking his legs. His brother, Nick Prinzi, a big man with a reputation for violence, apparently looked after that side of their activities. Would they really do that? Most of what Wilson knew about mobsters came out of B-grade movies. Sleep with the fishes? Mario Puzo made up the stuff in The Godfather, didn’t he? Did they really do that kind of thing? Surely they wouldn’t do it to him, the CEO of a major American company?
That made him shiver, when he thought that. He knew it was wrong. He sensed that people like the Prinzis had no respect for reputation or position. He’d have no immunity from them.
And in the meantime, they kept lending to him on the strength of the money that was supposedly coming to him. And he kept taking it, building up the debt, building up the pain that lay in store, which only this deal could take away.
Mike Wilson was on the edge, at a place where someone like Lyall Gelb had never been, couldn’t even imagine. All his chips were on the table. The last card in this particular game, which might be the ace he needed—and might not—was already leaving the dealer’s hand, sliding facedown over the table toward him. And yet, despite the horror of what lay in store for him if he failed, Wilson still felt that familiar thrill of pleasure, that sense of desperate, almost unbearable anticipation as you wait for the card to reveal its secret. When you think your nerve is going to fail you. When fear itself makes the thrill almost too intense to bear. When you know you cannot, cannot afford to lose. And yet you might.
He closed his eyes, imagining it. Imagining the unknown card coming toward him across the table. Seeing it.
For a moment, he froze the image and held it in his head.
Then he opened his eyes.
Dyson Whitney, he thought.
Mike Wilson went to his desk and picked up the phone. He hoped Pete Stanzy was quaking in his miserable banker’s boots.
19
The Herald lay open on a desk. The offending article was like a tense, reddened abscess, throbbing with pain.
Phil Menendez had been in first thing and chewed them out thoroughly. Then he had to go to a meeting with Louisiana Light’s lawyers and accountants to coordinate the due diligence that was supposed to start in London on Monday, and when he came back he chewed them out some more.
Th
en Pete Stanzy arrived.
That morning, Stanzy had been in Cincinnati, taking part in a pitch to the board of a gas turbine manufacturer that had decided it wanted to go public. They were talking to just about every Wall Street bank that could be bothered going to Cincinatti for the sake of a $300 million listing. The first Pete had heard of the Herald article was in a message from Phil Menendez on his cell phone. It wasn’t until he got back to New York that he saw the paper for himself.
He looked carefully in turn at Sammy, Cynthia, and Rob.
“I’ve just gotten off the phone with Mike Wilson,” he said.
The atmosphere in the room got tenser, if that was possible.
“He’d like to know how this happened.” Stanzy glanced at the article on the desk, then looked back at them. “So would I.”
There was silence.
“A lot of people would like to know,” said Stanzy.
Silence again. Phil Menendez stood a foot behind Stanzy, arms crossed, glaring belligerently.
“Did we leak this?” demanded Stanzy. “That’s what I want to know.” He picked up the newspaper, held it for a second, then threw it down on the desk. “Huh? Did this come from anyone in this room?”
Stanzy waited.
“Okay, I’m going to ask each one of you individually. Be honest now, because we will find out. Did any of you speak to a journalist and tell them we were working with Leopard? Sammy?”
“No,” said Sammy Weiss.
“Cynthia.”
“No. Definitely not.”
“Rob?”
“No.”
All morning Rob had been searching his memory, replaying the encounter. Did he say anything to that woman? He couldn’t remember telling her anything but his name. Nothing about the client. She was the one who had mentioned Louisiana Light. But had he confirmed it? Maybe she was fishing and something about him had confirmed it. What? Something he said? He refused to comment. The look on his face?
Maybe he should own up about the encounter, he thought. He hadn’t done anything wrong. If anyone had leaked anything, it was the other person the journalist had mentioned. John Williams. He was fairly certain that was the name she had mentioned. But he had already checked the Dyson Whitney directory and found that there was no one at the firm by that name. So what exactly would he be owning up to? Having had a conversation with a journalist who claimed to know about Louisiana Light from a nonexistent person at Dyson Whitney? He glanced at Phil Menendez, who was staring at him suspiciously. From the look in Phil’s eye, Rob didn’t think an admission like that was going to do much to help him.
“Maybe it was someone else here,” said Rob cautiously.
“Like who?” demanded Menendez.
“I don’t know.”
“Then what the fuck are you talking about?”
“It’s just a possibility.”
“They’d have to know about the deal, wouldn’t they? You been telling anybody?”
“Maybe he’s right,” said Stanzy. “Someone else could have leaked. Has anyone here talked about Leopard with anyone else at the bank? Outside this room?”
Once again, Pete Stanzy glanced at each of them in turn.
They shook their heads.
“Think.”
Stanzy knew that if the source was from someone else in the bank, it was a whole different ball game. There were a number of other people at Dyson Whitney who knew the identity of Leopard. The mandates committee, for a start. If one of them had leaked, or gotten someone else to leak, then they were trying to spike the deal. There was no other possible reason for it. That would mean he was fighting someone inside the bank. Pete Stanzy had a pretty good idea who it might be. But it would be a huge risk for that person to take. If anyone was trying to spike a deal this size, and the Captain found out about it, they’d be toast. He didn’t think even John Deeming would take that chance.
“What about girlfriends?” demanded Phil Menendez. “Boyfriends? Huh? Bit of pillow talk?”
Stanzy looked at them expectantly.
No response.
Stanzy and Menendez exchanged a glance. Stanzy nodded.
“Rob,” said Pete Stanzy. “I want to see you in my office. Ten minutes.”
* * *
Rob walked around the edge of the bullpen. He had a horrible feeling in the pit of his stomach. He didn’t know what Stanzy was planning to say to him, but he didn’t think it was going to be good.
Stanzy sat behind his desk. He pointed at a chair.
He paused, after Rob sat down, holding him in his gaze.
“You don’t like this client very much, do you, Rob?” said Stanzy suddenly.
Rob stared at him in confusion.
“Well?”
“I don’t know what you mean. How could I not like them? I’ve never met a single one of them.”
“Oh, I think you know what I mean. I think you know very well.”
“I’m sorry, Pete. I don’t.”
Pete Stanzy sighed, as if this whole thing were very painful. More painful for him than it was going to be for Rob. “You didn’t like what they offered. Am I right? I heard about that. You thought it was a little too high.”
“It was above our range.”
“So you thought it was too high.”
“I thought maybe we should ask some questions.”
“What kind of questions?”
“They’re paying us forty bips. They go above our range. They’ve got this weird writedown in revenue back in January…” Rob shrugged. “I just think, you know, to me, when you put them together, those things look like red flags.”
“So you think we should ask some questions?”
“I guess so.”
Stanzy nodded. “And that means you assume I haven’t. Right?” Pete Stanzy folded his arms. “Don’t you think that’s a little arrogant, Rob? I’ve been in this business fifteen years. Don’t you think it’s a little arrogant for you to come in after … how long exactly?”
“Eight weeks,” murmured Rob.
“Eight weeks. Don’t you think it’s a little arrogant for you to come in after eight weeks and tell me I ought to ask some questions?” Pete Stanzy’s voice rose. “Didn’t it occur to you that I might already have asked those questions? Or did you just assume I wouldn’t have figured it out for myself?” Stanzy stared at Rob with an intense, contemptuous gaze.
Rob looked down. “I’m sorry.” Stanzy was right. He hadn’t stopped to consider that Stanzy might have already checked things out for himself. That was arrogant, just as Stanzy said.
“Damn right you should be sorry! Do you know what happens to a deal when you pull a stunt like this? Do you know what—”
Rob looked up. “I didn’t pull a stunt! Maybe I was wrong to question you, but I didn’t—”
“Didn’t you? Are you seriously telling me you didn’t leak that story? Isn’t it about time you started to tell me the truth?”
“I am—”
“Leopard’s share price was down five-point-two last time I looked. This deal only works if the stock price stays up. Do you understand that? Maybe eight weeks isn’t long enough for you to get a grasp of that, so let me lay it out plain for you, just in case there’s any confusion. Most of the acquisition price is being paid in Leopard stock. Remember? So the thing that holds this deal together is Leopard’s stock price.”
“I know that.”
“Well, if you know that, you can figure out what effect a dip in the stock will have. Mike Wilson is going crazy! Absolutely crazy! And I don’t blame him! You know what, I should put you on the phone and let you deal with him! Now, you tell me what the fuck you were thinking when you spoke to that journalist.”
Rob took a deep breath. “I did not speak to any journalist.”
Pete Stanzy stared at him.
Rob returned his gaze. As steadily as he could. The last notion of owning up to his encounter with the journalist—if he ever really had any notion of it—evaporated.
St
anzy continued to watch him.
“Okay, you listen to me,” said Stanzy eventually. “You may think you know everything after eight weeks, but I’m going to tell you a couple of things. Me, I’m an investment banker. That means my first responsibility is to my client. My only responsibility is to my client. That’s why he pays me—to make sure I’m on his side. One hundred percent. I don’t see why that’s so hard for you to understand. You were a lawyer before you joined us, right? It’s the same. If your client’s a crook, you still do the best you can for him, right? That’s your duty as his lawyer.”
Rob frowned.
Stanzy corrected himself hastily. “I’m not saying Mike Wilson’s a crook. I didn’t mean that, right? Don’t get it out of context. What I meant … what I said is that you do your best for your client, whoever he is. He’s your number-one priority. He’s your only priority.”
“Pete,” said Rob. “You don’t need to say this stuff. I did not leak this story. I didn’t do it.”
“Let’s say he’s done a few things. Like any businessman. Some sail close to the wind, some sail closer. Okay, let’s say Mike Wilson’s sailed closer than most. That’s what it takes sometimes to make a company great. Are we going to punish him for that? What’s wrong if this deal brings them back on an even keel? Say it does. You don’t think that’s ever happened before? You don’t think that’s ever been the reason a deal’s been done? Fundamentally, Louisana Light is still a great business. It’s a great platform. Okay, maybe it needs some shoring up. Do the deal, and you’ve done that. You’ve saved it. You’ve saved a business, you’ve saved jobs, you’ve saved a great American name. Do we need another Enron? Do we need another Stanford Bank right now? Fuck that! That’s for politicians. That’s for slimebag lawyers who wanna make a name for themselves. What the fuck do they care? The economy’s gone to hell in a handbasket and it’s only halfway back. It’s not gonna come back by putting more companies in the fucking doghouse. Do we need any more of that crap right now?”
Due Diligence: A Thriller Page 16
