Crude Deception

by Gordon Zuckerman

  For two more days the debate continued. Arguments were thrown back and forth, everyone frustrated by being so near the conclusion without being able to reach it. Then, late on the second day, Cecelia spoke up, giving her idea as if it were an afterthought. “Why not create some sort of draconian measure that could be exercised if the new government fails to fulfill its side of the bargain?”

  Unprepared for the introduction of such a good idea from a woman, particularly one who had no previous experience in the oil industry, the Dutch were caught by surprise. Acting as if he were annoyed by the question, the oil company negotiator asked, “Such as what?”

  Responding immediately, Cecelia said, “In the event of a breach, why not require the Indonesian government to transfer the title to any remaining undeveloped oil fields?”

  A final dinner was prepared for the night following the execution of all the necessary agreements. Cecelia, who was sitting at one end of the long table, was unusually quiet. She offered no stories about her tour, no explanation of where she came up with the idea of the Indonesian government forfeiting future oil development rights if it failed to live up to the agreement.

  Finally, the lead Dutch negotiator said, “Miss Chang, you seem preoccupied! May I inquire why you don’t appear to share our excitement at achieving such a breakthrough agreement?”

  When she looked back on it later, Cecelia would never be certain what prompted her answer—the wine, her fatigue, or her irritation over the idea that she, David, and the rest of the Sentinels were making it possible for the Dutch to achieve the control they sought over their historical petroleum interests. The new Indonesian government would become the future recipient of millions, if not billions, of dollars of oil revenues, and the threat to Indonesia’s new government had been eliminated. Despite all that, no one had paid attention to funding of the International Energy Development Fund.

  “What good will the new agreement accomplish if the energy development fund doesn’t become a reality?” Cecelia said, her eyes darting around to each face at the table. “Rather than celebrating, I’m sure that I and a lot of other people would be a lot more comfortable if we were discussing how we are going to complete its funding!

  “With all the wealth that has been created, and with the need for a civil war eliminated, why hasn’t there been one word said about completing the funding of our plan! Without funding, all our hard work will go up in smoke!”

  Shaken by the veracity of her statement, the lead negotiator asked, “Just what is it you would have us do?”

  “Somebody should be figuring out how to purchase some of our bonds!”

  Chapter 48

  HENRI DEMAUREUX

  Claudine couldn’t wait to inform the other Sentinels that Jacques was well enough to resume traveling. The news couldn’t have come at a better time. All of the Sentinels had been performing their own calculations. Although none of them wanted to say it, they understood the American shortfall was placing an even greater burden on all of them. They were being polite about the matter; none of them wanted to make Mike feel any worse.

  For Claudine, the added pressure made the hard work of traveling from meeting to meeting seem even more difficult. One morning, watching Jacques add to his lists and draw his diagrams, she heard him say, “I’ll be damned if I’m going to allow those oil companies to defeat what we’re doing! There must be something happening we don’t see.”

  Despite the seriousness of their assignment, working and traveling together brought back fond memories and made their task seem a little less onerous. How long had it been since Jacques first came back to Europe to help me sell my gold bearer bond concept? thought Claudine. Six years? I wonder how different our lives might have been had we not been so afraid of ruining a good friendship and working relationship? What would have happened had either of us yielded to our secret affection for each other?

  Between engagements, they would sit on the trains and dissect their previous meeting, make notes, and then prepare for the next. During these quiet times, Claudine would study Jacques very carefully. If she saw any signs of trouble, she was prepared to stop their tour and return to Chamonix. Jacques’s health and recovery were much more important than any of the meetings.

  But rather than showing signs of fatigue, Jacques seemed to be improving. Hesitant to bring the subject up with her husband, Claudine privately wondered what accounted for his marked improvement.

  Claudine and Jacques toured the financial capitals of Western Europe one by one and met with the owners and executive managers of each of the larger banks, insurance companies, and private investment houses. After each meeting they would each write down a range of numbers, estimating how much money the bankers might contribute. The disappointments of one meeting were offset by pleasant surprises of another. Although their estimations would vary from meeting to meeting, their totals always seemed to agree, staying at right around two billion dollars. Although it seemed like a lot of money, they suspected it still wouldn’t be enough.

  Following their meeting with the last company they had on their A-list, Claudine and Jacques were sitting quietly in the comfort of the private compartment of the train that was returning them to France. Both of them were lost in thought, making their own tabulations of how much money they thought they had raised.

  Jacques was the first to speak. “No matter how I count it, I’m reluctant to think we have succeeded in raising more than two and a half billion dollars. Even though that total is equivalent to our original quota, I’m worried that it’s not enough to overcome the difficulties Mike appears to be having in the United States.”

  “I’ve been making some calculations of my own,” said Claudine. “For the sake of argument, let’s assume Cecelia’s report from China is accurate and she has raised two billion dollars. Let’s also assume Natalie and David get lucky and raise another billion. When I add those numbers to your estimate of two and a half billion dollars and Mike’s current total of three billion dollars, I arrive at a grand total of eight and a half billion dollars. That’s a hell of a long way from the fourteen billion dollars.”

  Eager to take advantage of Claudine and Jacques’s sporadic presence in Chamonix, Henri was a frequent guest at the chalet. He had timed his current visit to coincide with their return. He waited until they had finished breakfast on the morning after his arrival to bring up business matters. “Before talking to my friends in Geneva,” said Henri, “I asked myself, if I were in the position of the Oil Club’s banks, what would I fear most? The conclusion I kept coming up with is that the one thing they can’t afford to jeopardize is their ability to participate in the financing of the development of new oil fields.

  “In addition, the oil companies may have a problem of their own. Now that their fraudulent treatment of a sovereign, oil-producing county is becoming known, they are going to have to be a lot more respectful in how they treat their present and future partners. Since their operating in good faith can no longer be assumed, and the grip of the Oil Club will likely be broken by our project, the major oil companies have to face the possibility that oil-rich nations could emerge as dominant players. If their efforts to prevent independent oil companies from competing were to be seen in an improper light, they could suffer some very damaging repercussions.

  “Then there is the question of funding new development. Not even the seven major oil companies have enough money to finance fifteen billion dollars without the cooperation of the U.S. money-center banks and the Federal Reserve. If I were Hardy or any of his fellow oil company executives, I wouldn’t want to test the goodwill of Roger Malone and his board of Federal Reserve governors.”

  “Papa,” said Claudine, “when we last talked at La Garoupe, you mentioned arranging a poker game with your Swiss banking friends in Geneva. With all the excitement, we haven’t had the opportunity to hear about the results.”

  Henri’s facial expression gave no clue as to what he was thinking. Finally, after a sip of coffee, he smiled a
nd said, “Like everything else, my friends believe that our commitment must be based, in part, on a ‘higher issue.’ Your efforts are being received in much the same fashion as when you and Jacques first approached many of the same people in 1940, when you were developing a market for your gold bearer bonds, and again in 1943 with your German funds transfer problem.

  “Interest in warehousing money in non-interest-bearing gold deposits appears to have run its course. Now that the threat of worldwide war is over, there is a growing need for secure, liquid, interest-bearing financial instruments to replace gold. My friends share the opinion that your energy bond fund represents a good early precedent. That is the good news.”

  “And what’s the bad news, Papa?” asked Claudine.

  “Well, while there are large gold deposits in Swiss and American banks, owned by a diverse group of private members of the European financial community, these depositors’ investment involves a wide range of difficult demands. Accordingly, they can be expected to be very careful in how they invest. Although nobody is talking numbers, I would be careful not to raise my expectations too high.

  “But Pierre and I have been talking. Once you finish your tour and know the extent of your subscriptions, it might be a good idea if you come to Paris and talk to us. By that time we will have had an opportunity to discuss your investment proposal with these private investors.”

  Chapter 49

  AUSTRALIA

  David and Natalie were on board their return flight to Sydney, trying to fathom what had just happened in Jakarta. Natalie spoke as she poured hot coffee for both of them from a thermos. “In my line of work, I thought I’d met some surprisingly strong personalities, but never anybody like Cecelia. Could you believe what she said—or more important, how everyone reacted? You wait and see, when the Dutch and the Indonesians figure out what she was suggesting, I’d be very surprised if we don’t see the color of somebody’s money!”

  “Not that I would question anything you have to say,” said David, “but how can you expect the British and the Dutch oil companies to support our bond fund? Have you forgotten that they’re part of the group trying to prevent the fund from happening?”

  “Don’t worry,” she said, “they’ll find a way. This could be one of the first examples of how the fund can work to everyone’s benefit.”

  Once Natalie and David reached Australia, the intensity of the meetings grew with each stop. In Sydney, the bankers asked different questions from the ones asked in Melbourne. In Perth, the bankers were prepared with an entirely new set of questions. When it became apparent that the various bankers never asked the same question twice, Natalie and David speculated that they were sharing their questions and answers with each other.

  In Adelaide, the questions reflected the fact that the biggest coal mines in Australia were located nearby. “How certain are you that the proceeds from your International Energy Development Fund will be available to pay for the development of new coal deposits?” they asked.

  David enjoyed answering the question. “Interestingly enough, your friends at the Royal Bank of Scotland raised the same issue before we left. And I doubt there was a single meeting in Canada when the same question wasn’t raised. We have already discussed the situation with our lead bankers. If you care to take the time, you might want to review paragraph 13.b of the offering memorandum. I think it contains all the protection you need. But if you aren’t completely satisfied with the language, I will obtain a specific opinion for you.”

  Having finished the last of their meetings, David and Natalie were preparing to return to Sydney when they received a call from the chairman of Australia’s biggest bank.

  “David, can you and Natalie stop by the bank one more time before you leave?” he said. “We have something we’d like to discuss with you.”

  The next twelve hours were among the longest in Natalie and David’s lives. Cautioning themselves not to become excited did absolutely no good. Exhausted, nervous, and hopeful, the pair walked into the bank’s main conference room. The chairman and three other men were waiting to greet them.

  “David, let’s get right down to business,” the chairman said. “Have you received the written confirmation we requested confirming that the proceeds from the fund will apply to alternate forms of energy?”

  Trying not to register any reaction to the question, David reached into his coat and withdrew a plain white envelope that he handed to the chairman. While he was watching the chairman read the contents, he could sense Natalie’s growing frustration. Without reacting, the chairman handed the letter to one of the other bank executives standing near him, saying, “Maybe you should read this.”

  Natalie reached over, gripped David’s arm, and whispered, not altogether quietly, “Do you mind telling me what’s going on?”

  Smiling, the chairman answered for him. “I don’t think that will be necessary. We’ve talked to our friends in Scotland, London, and Canada, and subject to our receiving this confirming cablegram from Roger Malone, we are all in agreement. First, we feel it’s in our best interest to support your program. As you have correctly discerned, we believe it’s important that we try to encourage the creation of a more diverse and competitive energy supply. Second, we are hopeful the success of your program will assist us in making a very clear statement regarding our intentions of becoming independent of British authority and our desire to be regarded accordingly. And finally, we see your plan as the only obstacle to preventing the Oil Club from consolidating an enormous amount of power in a very small number of hands.”

  David and Natalie looked at each other and smiled, almost involuntarily.

  “Your collective efforts,” the chairman went on, “have reminded us that there are problems of great importance that fall beyond government and corporate means. We regard this energy situation as one of those problems. There is absolutely no doubt in our minds that if your effort to break the Oil Club’s grip on the financial resources required to develop our energy supply should fail, we could find ourselves under the influence of seven ruthless and incestuous oil companies.”

  Pausing to reach into the inside pocket of his suit coat to extract a long manila envelope, which he handed to David, the chairman continued. “David, enclosed in this envelope is our collective commitment for two billion dollars. That amount comprises half a billion dollars from the Bank of Scotland, the Roth Bank of London, and the London Bank of Commerce; one billion dollars from your friends in Canada; and a half billion dollars from Australia. You have just received the largest single financial commitment that we have ever made in our collective history. On behalf of all of us, we would like to congratulate you both on a job well done. You’ve made a lot of new friends who truly respect what you’re doing. We wish you and your friends the best of luck with the rest of your endeavor and look forward to working with you on a regular basis.”

  Caught by surprise by the generosity of the commitment, Natalie and David were stunned into temporary silence.

  “Oh, I almost forgot,” said the chairman. “There is just one condition. Should Miss Cummins ever decide to return to the stage, we would appreciate tickets for her opening night performance. David, no disrespect intended, but it’s been a very long time since we met such a beautiful, intelligent, and talented student of the world’s energy industry. Natalie, meeting you has been a wonderful experience for all of us. Judging by your ability to answer all of our questions, we can’t wait to see what you can do on a more familiar stage.”

  It wasn’t until they’d been served their second cocktail after takeoff that the reality of what they’d accomplished hit them. “Natalie, can you imagine a two-billion-dollar commitment? That’s a billion dollars more than our original estimate! Somehow we’ve got to get this good news to the Sentinels straight away.”

  “I can’t wait to tell them!” said Natalie. “I hope everyone else has been able to get such generous commitments.”

  “I really mean it when I say I doubt very
much that I could have made this happen without your help. How can I express my appreciation for all that you’ve done?”

  Sitting there side by side, leaning against each other, Natalie reached for David’s hand and said, “I’m beginning to think I’ve been your research assistant long enough, David. How would you feel about our amending the terms of our travel arrangements? I’ve been told that New Zealand can be a very romantic country.”

  Chapter 50

  NEW OPTIONS

  Each night, sitting in a different hotel room, Mike would write down his best estimate of the money he thought he had attracted that day. He carefully added that number to the previous day’s total, watching with satisfaction as the total began to rise—five million here, ten million there. Slowly the numbers began to add up, inching above the three-billion-dollar mark.

  Knowing Cecelia’s China trip was going to be extended, and despite his growing fatigue, Mike wanted to take advantage of the extra time to call on more community banks. It’s becoming clear that I’m not just raising money, he thought. I’m organizing what could be the first step in developing longer-term relationships with these banks.

  When Mike’s flight landed at San Francisco International Airport, he called the apartment. He was surprised when Cecelia answered the phone and suggested they meet at Perry’s—one of their favorite restaurants in San Francisco—for a late lunch.

  Cecelia was sitting at their usual table when Mike walked through the entrance. One quick glance told Mike he was seeing a different Cecelia. She looked rested, healthy, and excited to see him. Then he thought he saw something else. Something’s changed. She seems even more self-possessed. There’s a quiet confidence in her eyes.