Crude Deception

by Gordon Zuckerman

“A two-stage financial commitment?” said David.

  “Let’s suppose you, for whatever reason, wanted to make a deal with a qualified independent oil company. Would it bother you to provide two financial commitments? The first would finance the exploration and drilling of new wells and whatever else was necessary to reliably determine the productivity of the new oil field. Once the production was proven, the second commitment would fund the remaining costs of all the capital improvements necessary to transport, refine, and bring the oil to market.”

  “Well,” David replied, “two financial commitments would be fine, as long as we were convinced that we had an enforceable contract, subject only to our demonstrating that the productivity of the wells exceeds a prenegotiated minimum requirement. But, even so, who is going to provide you with those kinds of commitments?”

  Claudine sat back and let David’s question remain momentarily unanswered. Finally, when she thought his curiosity was going to boil over, she said, “From a fifteen-billion-dollar pool of U.S. government–guaranteed debt we are planning to create and fund from private investment sources.”

  David looked shocked, but after a moment of thinking nodded approvingly. “That is a remarkable, simple, and obvious solution,” he said. “I think it might just work. It’s been right in front of us all this time and nobody could see it. Do you mind telling me how you came up with that idea? And why do you think the American government is prepared to cooperate and provide the necessary credit support?”

  “It’s not so original,” Claudine replied nonchalantly. “When you think about it, it’s the same concept that we used in developing the gold bearer bond. All I did was substitute proven oil-well production for the ‘gold in the vault’ for collateralization purposes. Other than that the oil bond is interest-bearing, the two financial instruments are the same. Also, plans are under way in the United States for mortgage-backed securities to be used to fund the capital required to finance the exploding demand for single-family homes. We’re simply adapting that plan to our needs and expanding the funding to include the international investment community.”

  “What makes you believe that the U.S. government will cooperate?” David asked. “If memory serves, the American government would have to be willing to create a special agency to create and issue the bonds and provide the guarantees. Both actions would require legislative action. Normally, passing those kinds of regulations would be considered very difficult. In this instance, in which you are going to incur the wrath of the oil companies, their commercial banks, and their investment bankers, you will be making your job exponentially more difficult.”

  “Well,” said Claudine, “Jacques believes there is a high level of White House motivation to make this happen. According to Fed Chairman Malone, the President is prepared to lend the behind-the-scenes support of the White House to the ‘right people with the right plan.’”

  David sat back in his chair, crossing his arms over his chest. “Bravo! I thought you were going to run a few ideas by me, but it seems that you’ve come up with a solution already. What can I say?”

  “You can say that you would like to be a part of our team, that you’ll help us accomplish the trust we need to develop in the Middle East and raise all that money.”

  “Claudine, why don’t we discuss it over a couple of drinks at the French Club? There’s an old friend of yours who would love to see you.”

  Maggie, the famous wartime proprietress of the French Club, was waiting to greet them when they walked through the front door. Claudine stood to the side as Maggie gave out a warning whoop and embraced Sir David Marcus, kissing him on the lips. After giving her best imitation of a polite curtsy, the five-foot-ten woman with broad shoulders and enormous breasts said, “Welcome back, Miss Demaureux. You’ve been gone far too long!”

  “Is that the best you can do, Maggie?” said Claudine. “I don’t know about the kiss, but I think I do deserve at least one whoop and a hug!”

  Beaming, Maggie stepped forward and, after giving Claudine her best hug, picked her up from under the shoulders and turned her around so the other patrons could see her. “Look who’s here, everyone! I’m sure you remember Claudine Demaureux, Jacques Roth’s girlfriend.”

  “Actually,” Claudine said, addressing the familiar crowd of regulars, “I’m not Jacques’s girlfriend anymore, I’m his wife. We were married in January at a ski resort in Idaho.” Claudine watched as Maggie glanced at David for a confirming nod.

  “Well, I’ll be damned,” Maggie said. “The old buck finally met his match. This deserves a celebration.”

  Drink after drink, story after story—it didn’t take long before any thought of serious conversation was long forgotten. Claudine welcomed the chance to relax and forget the details of oil refineries and high finance as she and her friends talked and drank into the evening. It had been one hell of a day.

  Chapter 8

  SAVING PEREZ

  Mike arrived at the office of Señor Juan Pablo Perez just before noon on June 16, 1946. The office was in a remodeled older building that served as the headquarters of Venezuela’s oil ministry. Located on the main plaza in the center of the commercial district of Caracas, the building contrasted with the newer and taller modern buildings that housed the executive offices of the American and British oil companies.

  At the time appointed for the meeting, Mike crossed the busy street and entered the dark, musty lobby of the oil ministry. The guard, waiting behind a small desk, rose and approached him, asking for identification, the name of the official he was meeting, and the purpose of his visit. Satisfied with Mike’s credentials, the guard picked up the phone on his desk, dialed a two-digit number, and waited for someone to answer.

  “Minister Perez is expecting you,” the guard said to Mike after a brief phone conversation. “You will find his office on the third floor. Turn left out of the elevator; his office is the second door on the right.”

  Compared to the sleek machines in New York’s downtown office towers, this building’s elevator was truly an antiquated relic. For a brief moment Mike considered taking the stairs, but he decided against it and stepped onto the platform. The young operator closed the outer door and then pulled the expandable metal inner door closed before turning the circular handle that raised and lowered the car. When they reached the third floor, the young man jiggled the handle back and forth until the elevator floor lined up within a few inches of the hallway floor. Mike exited and walked left down the hall. Knocking first, he opened the door to the office of Venezuela’s minister of oil. Inside, fans attached to the high ceiling were slowly spinning in an attempt to cool the warm, humid room. The windows were open. Dust-covered piles of folders were stacked everywhere. Clerks were busy studying the documents, sorting them into new piles. The room was poorly lit, and the soft whirring of the fans and the shuffling of paper were the only sounds. A pretty young secretary dressed in a brightly colored dress contrasted sharply with the rest of the room.

  “Good morning, Mr. Stone,” she said with a heavy accent. “Minister Perez is expecting you. May I show you to his office?”

  As Mike entered the room, Señor Juan Pablo Perez, already standing, moved toward him and extended his hand. “Please be seated, Mr. Stone,” he said in perfect English. “I’ve been looking forward to your visit.”

  After exchanging some preliminary pleasantries, Mike was about to ask his first serious question when the minister put his finger to his lips, signaling for Mike to remain silent. Before Mike could react, the minister asked, “Do you like our local cooking? Why don’t we walk across the plaza to one of my favorite restaurants? They know me well and make an extra effort to prepare local, same-day fish in some very unusual ways.”

  Mike agreed, and they walked down the three flights of stairs and exited the building. Perez led Mike across a busy street and into a flowered park, where a band of six musicians was playing in one of the gazebos. People everywhere were smiling and talking. Stopping to light a cigaret
te, the minister turned and looked behind him. Noticing the look of concern on Perez’s face, Mike turned around as well. Two men following close behind them immediately turned away, as if trying to look as inconspicuous as possible. They were the same two he had seen near his hotel earlier that morning. He couldn’t help but wonder, Could I have added to Señor Perez’s problems by calling on him?

  The park was about a quarter of a mile across. Walking slowly, Perez said, “We won’t be able to talk over lunch. I never know who is sitting next to me, but out here in the park, it’s safe to talk. We’ve got no more than ten minutes. While we walk we need to discuss what I hope is the real purpose of your visit.”

  Encouraged by Mike’s nod, Perez continued. “I have in my possession documents that contain a lot of information on the transactions between my country and our oil partners. If we can find a way to organize all the bits and pieces, we may be able to prove the oil companies have been dealing in bad faith with the Venezuelan government. I have hidden the evidence in a safe place, and the files will fit into a set of suitcases. Everything is ready to go. My family and I are prepared to leave Caracas at any time.”

  Mike was surprised by the directness of the minister’s statements, but he tried his best not to react.

  Continuing to look straight ahead and listen as if they were conducting a normal conversation, Mike continued to match Perez’s leisurely pace as they slowly made their way across the park.

  Mike’s call from his hotel room in Caracas to his home in San Francisco took several minutes to be put through. “Cecelia,” he said when she picked up, “I’m leaving Venezuela tomorrow morning and should be in San Francisco late the following night. Don’t worry about picking me up. I’ll take a cab.”

  As soon as he hung up the phone, he felt awful. It was the first time he had lied to the woman he loved. I know she’ll be worried when I don’t show up in San Francisco, but what choice do I have? I have to believe my phone has been tapped and that the content of any cables or telegrams I send would be checked.

  Understanding the importance of Samson’s believing the official purpose of his visit was as reported, Mike had followed the same routine he’d followed on his prior trip. The first day he had met with representatives of the oil companies. The second day he had called on certain high government officials, and finally, on the third day, he had lunched with Señor Perez. Mike hadn’t veered from his schedule in any way.

  Early in the morning on the fourth day of his trip, Mike checked out of his hotel, took a taxi to the main terminal of Caracas International Airport, and checked in at the Pan American ticket counter. His ticket in hand, Mike walked toward the designated gate. About halfway down the long corridor, he abruptly turned right and exited the terminal through an unmarked side door. He was met by a uniformed American customs official and transported by jeep a short distance to a clearly marked United States customs DC-6 aircraft. Its engines were running and the wheel blocks had already been removed. Mike quickly ascended the stairs and entered the plane.

  Greeting him with warm smiles were Señor Perez, his wife, and their two sons. Their luggage, along with the suitcases containing the files, had been neatly stowed in the rear of the plane.

  As soon as the door was closed, the plane began to taxi toward the main runway. Once airborne, the plane adjusted course to a northwesterly direction. Their route would take them across Central America to Mexico City, and after refueling there, they would continue on to Douglas, Arizona, a small town located on the Mexican border.

  Bill Dean, the owner of the Castle Dome Ranch, and Mike’s employer at Dean Securities, was waiting to meet them as they disembarked into the dry, warm, windy desert air of southern Arizona. “Welcome to Arizona, Mr. and Mrs. Perez,” he said, clasping their hands enthusiastically as they stood on the tarmac. “I’m William Dean, owner of the Castle Dome Ranch. It’s such a privilege to have you as my guests. Everything has been arranged for your comfort and safety. You and your family are welcome to stay as long as you like.”

  The drive from Douglas, Arizona, to Castle Dome Ranch was long, hot, and dusty. To the outsider, Arizona’s high desert seemed like a remote, gently undulating, endless, arid land of dry streambeds and strange-looking bushes, trees, and exotic plants.

  To make the time pass more quickly, Bill pointed out interesting features of the landscape as he drove. “The ecological balance in our high desert country is very different from other areas,” he said at one point. “Certain types of plants grow only at specific elevations. In fact, it is said that an educated botanist can look at the vegetation and determine the elevation of where he is standing to within five hundred feet.”

  Señor Perez and his family listened politely but were more interested in watching the passing desert.

  At last Bill proudly announced, “See that high archway? It marks the entrance to our ranch. In the distance beyond it you can make out our headquarters. And see that steep red mountain with the rounded top in the background? We call it Castle Dome; that’s where the ranch’s name comes from.”

  As they traveled closer they could see a small group of buildings clustered on the mountain’s dome-like surface. Mike asked Bill to explain to the Perez family what they were seeing.

  “The dome is an extinct volcano,” said Bill. “If you look closely, you can see one of the lava tubes at the base. It’s one of three that connect to a large cone-shaped hole inside that leads up to the top, about six hundred feet high. The only way you can get up there is by following one of those tubes into the center and then hiking up a spiral path that’s been carved out of the inside walls. One of the tubes leads into Mexico and the other two can be entered from the American side.

  “The ranch itself is part of an old Spanish land grant purchased by an earlier generation of my family who settled here. Those were lawless times. Apache Indians roamed freely.

  “The family lived in the ranch compound, except when they could sense trouble approaching. Lookouts on top of the dome could spot anyone coming from a long way away. Can you see the big old bell on the mountaintop from here? Three rings of that bell meant trouble was approaching. Hearing the signal, my ancestors would retreat to the Castle Dome. It served as the family sanctuary from the Indians, Santa Ana and his Mexican troops, and bandits from both sides of the border.

  “We haven’t used the compound up there for years, but knowing that you were coming, we stocked it with fresh water and all the supplies you will need should it become necessary to use it.”

  The family was fascinated by their new surroundings. They had heard stories about the American Southwest, but they never expected to see it, much less be forced to live there.

  “You should be quite comfortable staying in our guesthouse,” Bill continued. “It has all the facilities of a regular home. No one will disturb you, and you are welcome to join us in the main house for meals whenever you wish. Señor Perez, you and your family should be safe here since the ranch is in such an isolated part of the state. Everyone in Douglas knows everyone else. If visitors come through, we will be informed in plenty of time and can make whatever arrangements are necessary. Tomorrow, I’ll take you up to the top of Castle Dome and you’ll be able to see for yourselves how we can protect you from uninvited intruders.”

  “I can’t thank you enough for your hospitality,” said Juan Pablo, his wife smiling in agreement.

  “After you get settled in and finish your unpacking, why don’t you come up to the main house?” said Bill. “We usually gather at about six-thirty for cocktails. Dinner is served at seven-thirty.”

  After dinner on the second night following their arrival, Mike, Bill, and the Perez family were sitting around the big circular oak table when Mike said, “All hell has to have broken loose.” He turned to Señor Perez. “By now the oil companies and Samson must know that you, your family, and I have disappeared, along with the files. I bet we have Samson working overtime.”

  “Samson? What is Samson?” Bill ask
ed.

  Mike glanced at Juan Pablo. All it took was one glance for him to realize that Venezuela’s Oil Minister knew all too well about the organization. Next, he proceeded to explain to Bill how it operated. After listening to what Mike had to say, the rancher responded by describing all the precautions they should be taking. “As long as we’re careful, everybody should be okay,” he said. “Over the course of a century, members of our family have had to defend themselves against far greater threats.”

  Mike looked at Bill, his expression somber. “Bill, I don’t want you to overreact, but Samson might suspect where we are, and they have very drastic ways of going about their business. They were originally organized as a clandestine paramilitary organization to protect British and American oil interests in Venezuela against a military coup in the 1930s. They’ve remained in business as a mercenary ‘security’ organization despite the efforts of the U.S. government to eradicate them.

  “During World War II, when my five friends and I were involved in prohibiting German industrialists from using their private wealth to start a Fourth Reich, we were forced to survive Samson’s threat if we were to complete our mission. Knowing I am involved will alert them to the possibility that the U.S. Secret Service and the rest of the Sentinels are involved. Not only do we need to make the necessary arrangements here, but I need to find some way to alert our friends.”

  “In that case,” said Bill, “there are some additional precautions we should be taking. To be on the safe side, I’ll ask some of the vaqueros to ride the perimeter of the ranch each day. I can also ask Steve Connors, our ranch foreman, to alert the Douglas locals. If anyone suspicious arrives in town asking questions, they’ll let us know.”

  Chapter 9

  CECELIA CHANG

  Cecelia sat at her desk on the executive level of the American West National Bank building, staring out at the San Francisco Bay. A ship was being unloaded at Pier 8 down at the Embarcadero. A large tugboat was gently guiding another ship into its berth at Pier 10, and two more heavily laden ships were headed toward the Golden Gate Bridge. Normally, she would watch the ships and think of life in Hong Kong. Today, her mind was preoccupied with worry over Mike.