Payne removed the bottle of aspirin from his desk drawer and just as he popped two in his mouth his office door opened and Maggie Powers stepped in. “How was your trip?”
Payne choked down the pills. “Sorry,” he said. “Something stuck in my throat. You’ll have my report by the end of the week.”
Payne’s trip to inspect Chinese manufacturing plants had sprung from public outrage over a series of product recalls and reports of serious deficiencies in the Chinese manufacturing facilities that more and more American businesses favored. Public outrage had led to the predictable congressional grandstanding, which led to inquiries about what the PSA would do about the problem, which was nothing, given the agency’s skeletal staff.
Powers stuck her reading glasses on top of her head, using the frame to keep her shoulder length, auburn-tinted hair out of her face. “Don’t be so official all the time, Albert. I saw you earlier and you looked like you got some sun. I was hoping it meant you allowed yourself a little play time.”
Payne forced a smile, not about to tell Powers his red glow was a rash. “They kept me pretty busy,” he said.
“I wish I could have gone.” Dressed in a cream-colored pants suit, open-toe shoes, and a strand of pearls, Powers looked very much like the wife of a successful McLean, Virginia, attorney. “But a son only gets engaged once.” She rolled her eyes. “Hopefully. From the looks of the in-laws, I wouldn’t put a lot of money down on this one going the distance.”
Payne didn’t know how to respond. He and Powers had never discussed their personal lives, and the two were not exactly close, given that Powers was the primary reason Payne had so much free time. The former president’s appointment of Powers as a director of the agency had been a further step in that administration’s persistent efforts to deregulate American business. Powers, once a lobbyist for the Toy Manufacturer’s Association, had somehow managed to survive a contentious Senate hearing, and her arrival at the agency had been like the first domino in a falling line. One of the remaining two directors, Harvey Schoenstein, promptly resigned in protest, and the other, Larry Triplett, threatened to do so until certain members of Congress convinced him to be the good soldier and remain. Agency action could not be taken without majority approval. With Schoenstein’s resignation leaving an empty chair, Triplett could at least block Powers’s actions. Of course Powers could also block the initiation of enforcement actions against manufacturers. Until the new president replaced Schoenstein they were at a stalemate, and things were not about to change overnight. Any new appointee, whenever appointed, couldn’t rush in with a regulation sledgehammer, not with American retailers continuing to suffer in a down economy and American manufacturers already shipping much of their work overseas to reduce costs.
Powers sat and crossed her legs. “So, what’s your initial assessment?”
Just when Payne thought he might get a nice quiet summer, the reports of significant injuries and fatalities from products manufactured in China began to surface throughout the nation. What was now referred to as the “summer of recalls” would culminate in a congressional inquiry to be led by California Senator Morgan Tovey, chairman of the Senate subcommittee with jurisdiction over the agency. Tovey had subpoenaed Powers to report on Chinese manufacturers’ compliance with U.S. regulatory standards, as well as to educate the committee on emerging technology that could potentially be dangerous to American consumers. Indiana Senator Joe Wallace had joined Tovey to coauthor a bill that would dramatically increase fines on manufacturers who put defective products on the market, toughen reporting requirements, and provide the agency with a much-needed budget boost to hire more investigators. Wallace had then worked behind the scenes to ensure Payne was part of the delegation to China.
“There are always a few problem areas, but for the most part it appears the Chinese have really cleaned up their act,” Payne said, trying to sound convincing.
“You see?” Powers smiled. “That’s exactly what the threat of losing billions of dollars in business will do. It just proves that the best regulator is the market itself. Wallace and Tovey need to understand that we can’t effectively dictate to Chinese manufacturers any more than we can dictate to American manufacturers. No matter how many regulations we put in place we can’t effectively enforce them. They have to police themselves.”
“I’ll have my report to you a week before the Senate hearing,” Payne said.
“Thanks for the reminder.” Powers grinned. “Actually, I’m starting to look forward to it now. I just love proving other people wrong.”
PIONEER SQUARE
DEE’S HOUSE OF TOYS
THE BELL ABOVE the door jingled as Sloane stepped onto a landing and looked down a staircase upon a winter wonderland. Ornate white handrails bordered the three steps leading to a burgundy carpet and seven-foot candy canes with green street signs directing shoppers to aisles stocked with action figures, dolls, stuffed animals, trains and cars, and books. Toy soldiers stood sentry at archways, and overhead, kites and toy models hung from fishing line, as if suspended from a blue sky. A plane flew in circles, its propeller humming.
As he made his way to the counter, Sloane wondered what it would be like to see his own son’s or daughter’s eyes light up when they walked through the door. An attractive brunette rang up a sale on an old-fashioned cash register, though Sloane also noticed a laptop computer below the counter. Apparently even Santa was now online.
After the customer departed, the woman turned to Sloane. “Can I help you?”
“I’m looking for the owner; I’m assuming that would be Dee?”
The woman smiled. “You’d be correct.” She offered a hand. “Dee Stroud.”
The name Dee had caused Sloane to envision a matronly aunt with an apron, not the woman in blue jeans with a figure an aerobics instructor would envy.
“David Sloane,” he said.
Her eyes narrowed. “The attorney? I saw you on TV.”
Sloane cringed, but Stroud explained that she had recently seen Sloane providing legal commentary on a local news station. “What can I do for you, Mr. Sloane?”
“I’d like to talk to you about Kyle Horgan.”
Her eyes widened. “You know Kyle?” She sounded as skeptical as the building manager.
“Is there a place we could sit and talk?”
“Is Kyle okay?”
Sloane did not want to alarm her. “He came to talk to me the other day. I was just hoping to ask you a few questions about him.”
Stroud smiled. “I was just craving a mocha latte. Let me get my assistant to cover the front. Do you drink coffee?”
STROUD COVERED HER ears as an odd-looking vehicle that carried tourists and could apparently travel on land and water drove past, the driver’s amplified voice blasting from a speaker.
“I hate that thing,” she said. “It goes right past the store all summer.”
Sloane and Stroud walked among a throng of tourists dressed in T-shirts and shorts, the maple trees and three-story brick buildings shading the Pioneer Square sidewalk from the bright summer sun. “How long have you owned your store?”
“Sixteen years. I opened when my daughter was five. People thought I was nuts.”
“Why?”
“Because at the time most toy stores were closing, not opening. The chains were taking over, and they can buy in volume and sell at prices independents can’t touch. Most of my friends thought failure was inevitable.”
“But you opened a store anyway.”
Stroud flashed an impish grin. “I have a hard head.” She knocked on it twice and then fingered a gold chain around her neck as they walked. “The simple answer is I needed to make a living after my divorce, and toys are really all I’ve ever known. My father owned a toy store in Michigan, and I had always envisioned taking it over, but then I got married and my husband’s job moved us out here. Eventually Wal-Mart and Toys “R” Us drove my dad and just about everyone else out of business.”
“Well,
it looks like you’ve succeeded.”
She stopped, this time to knock on a tree trunk. “Don’t jinx me. I’m surviving. Like all retail at the moment, the toy industry is in a slump. Kids don’t know how to play like they used to. They all want the video games and cell phones and iPods.”
Stroud stepped into an establishment called Kahili Coffee. “My friend Kelly owns it,” she explained. “He’s got a second store in downtown Kirkland near where I live; I like to support him when I can. Coffee companies have their own struggles, especially in this city.”
Sloane treated her to a mocha latte and ordered himself a cup of black tea. They agreed to share a blueberry scone and took a table along plate glass windows. The walls and floor were painted a burnt orange and tastefully covered with prints of coffee plants and leaves.
“What is it about Kyle you wanted to talk about?”
Remembering the building manager’s surprised reaction, Sloane asked, “That strikes you as odd, doesn’t it, that Kyle would come to see me?”
“Curious is a better word. Kyle doesn’t talk to many people.”
“When he came to my building to see me the other day I was in a hurry and didn’t have much time to talk to him. He seemed very concerned about something.” Sloane decided to leave the specifics vague. “I just went to his apartment, but he wasn’t there.” Again, Sloane chose to leave out the details. “The building manager indicated Kyle sold some of his toys to you. I was hoping you could tell me more about him.”
“I really adore Kyle,” Stroud said. “He’s a sweet young man with an incredible imagination, and he can design just about anything.” She shook her head, her look becoming compassionate. “But he’s also a social misfit, probably manic. He can’t hold down a regular job. I feel sorry for him. I think he’s starting to drink. The last time he was in I smelled it on his breath.”
“Are his designs any good?” Sloane asked.
“He’s brought me several things over the years. I usually buy them because they’re different, not what you’re going to find in the big retailers. And they sell. But he also shows me designs that are just too far beyond what I’m capable of doing.”
“What do you mean?”
“He’s into action figures. He’s probably a genius. But he needs to have them mass-produced to make them affordable.”
Sloane stirred a packet of sugar into his cup. “When was the last time you saw Kyle?”
She crossed her blue jeans and thought for a moment. “He came to the store to show me a design for an action figure that he said a child could build from plastic pieces, but that would also change into different shapes on its own. He tried to explain it to me, but I told him I couldn’t afford to have it manufactured. He needed a bigger toy company with more resources to finance him.”
Sloane opened the file and showed her one of Horgan’s drawings.
Stroud didn’t take long to consider it. “That’s it. He was very excited about it. I told him to get himself an agent and take it to Kendall. Maybe that wasn’t the best advice.”
“Why do you say that?”
“Sebastian Kendall recently had to step down with cancer, and Kendall’s profits have nose-dived. It was just in the paper.” She sat up straighter, as if struck by an idea. “Maybe Kyle wants you to represent him.”
“Represent him?”
“As his agent.”
“There is such a thing?”
“Don’t scoff. It can be lucrative.” Stroud chuckled, revealing perfect white teeth. “You wouldn’t think so, would you? I mean we’re talking about toys here, right? Then again, people spend five billion dollars a year on their pets. Well, the toy industry does about five times that amount.”
“And these toy companies buy designs from people like Kyle?”
Stroud explained that independent toy designers like Horgan were becoming as rare as the independent toy shops. “There’s less opportunity. The big companies buy the smaller ones, and many have their own design departments. It’s cheaper to pay them a straight salary than to pay a commission and royalties. Maybe cheaper isn’t the right word. There’s less risk.”
“Risk of what?” Sloane popped a piece of scone into his mouth and sipped tea.
“Having a toy bomb. Even with market research, nothing is certain. Kids are fickle; nobody really knows what is going to sell big and what’s going to tank. It’s a crapshoot. Do you remember Beanie Babies?”
“Vaguely,” Sloane said.
Stroud advised that the inventor of Beanie Babies, H. Ty Warner, couldn’t get a toy company to even consider the stuffed animals, then kids went crazy for them, and Warner shot into the Forbes list of the World’s Richest People.
“But how often does that happen?” Sloane asked, skeptical.
“Not often. But the toy industry is like the lottery. Everyone thinks, Why not me? Why not my toy? No one thought a purple dinosaur would sell, but Barney did, big time. And you probably don’t remember Cabbage Patch Kids, but they were initially rejected as being too ugly. Then they generated more than a billion dollars in revenues for Coleco in two years.”
Sloane considered the information. “And the risk is that a company could pay a designer a lot of money and have the toy flop?”
“That, and there’s always the possibility of another manufacturer putting out a knockoff before the toy even reaches the market.”
“They just steal the idea?”
“Hey, if you’re not stealing someone’s ideas in this business, you’re not trying.”
Sloane thought of Kyle Horgan and his ransacked apartment. The building manager said he hadn’t seen him in a week.
CHAPTER
FOUR
KENDALL TOYS’ CORPORATE HEADQUARTERS
RENTON, WASHINGTON
The proverbial shit had hit the proverbial fan. Following through on her threat, Maxine Bolelli had issued a press release revealing Galaxy’s bid and Kendall’s rejection of that offer. Bolelli had also sent a letter to Fitzgerald and each member of Kendall’s board of directors, berating them for ignoring their fiduciary duty to Kendall’s stockholders. In New York, Wall Street analysts were expressing bewilderment that Kendall would turn down the offer, describing Fitzgerald as stubborn and short-sighted, and opining that the rejection was out of misguided loyalty to the Kendall family heritage—words obviously planted by Galaxy’s media people.
The morning before, Fitzgerald had walked from the conference room with a bounce in his step, confident about Kendall’s future. Now he was back in the same room feeling flat-footed and anything but certain.
“How bad is the fallout?” Barclay Reid asked. Kendall’s outside counsel, Reid was the managing partner of one of Seattle’s largest law firms, Reid, Matheson, and Goetz.
“Half a dozen faxes and e-mails,” Fitzgerald said. “The most polite have called me an idiot.”
“At least two lawsuits have been threatened,” Irwin Dean, Kendall’s president of operations, added. “Including one by Clay Mayfair.”
Everyone in the room knew Clay Mayfair, the infamous New York attorney who made a living suing corporations and their boards for breach of their fiduciary duty to shareholders.
“If Bolelli is serious, her next move will be to buy as much Kendall stock as she can,” Reid said, pacing an area by the windows.
The only time Fitzgerald had ever seen the woman sit was in court. At just a shade over five feet, Barclay Reid was nearly always the shortest person in the room, but after seeing her in front of a jury, Fitzgerald knew height was not an issue. In her late thirties and a type A personality, she was a perpetual ball of energy, always thinking, always moving. Her looks were equally deceiving. At first glance she appeared ordinary—drab brown hair cut in a bob, eyeglasses without frames nearly invisible on an attractive face despite no outward attempt at glamour. She wore no makeup or jewelry but for a cross on a gold chain about her neck. Her dark gray, off-the-rack summer suit and plain white blouse did nothing to accentuate her shap
e, though Fitzgerald had seen her in shorts and a tank top on the golf course and recognized a figure honed by daily workouts. And yet, despite her understated appearance, every eye in the room followed Reid as she paced the floor. She had that intangible ability to command attention by her sheer determination and earnestness in defending her clients. The law’s gain had been some ministry’s loss; Reid would have been dynamic at a pulpit.
“But so long as you and Sebastian maintain your interests, she can’t gain control.”
“She could pressure the hell out of us, though,” Dean said anxiously. “Any alternatives?”
Reid pressed her palms together beneath her chin as she paced. “Kendall could make its own offer, buy back stock from disgruntled shareholders, but that’s risky. The news has already sent the stock up two and a half points. It’s inflated. When it drops, you’ll be stuck.”
“Besides,” John Feinstein, Kendall’s CFO, offered, “we’d have to spend nearly all of what remains of our cash reserves to do it. In this economy, I don’t recommend that.”
Fitzgerald expected as much. Feinstein’s idea of a gamble was eating an unrefrigerated cheese sandwich. He sat forward. “I like the idea. It’s bold. It lets everyone know that Kendall is confident about its future. Let’s get the word out to all of our media contacts. I want the financial world to know that Kendall is preparing for the holidays.”
“This is an all-or-nothing play, Malcolm,” Dean said.
Fitzgerald nodded. “If Bolelli wants to play chicken, let’s play chicken and see who flinches first.”
U.S. HIGHWAY 12
SOUTHERN WASHINGTON
SLOANE GLANCED FROM the road to the manila file on the edge of the passenger seat and wondered if Kyle Horgan had hit upon the next “It” toy. If he had, Horgan’s scribbled drawings could be as valuable as a Rembrandt, according to Stroud. And that changed everything.
Bodily Harm: A Novel Page 5
