Murder Saves Face

by Haughton Murphy

  “Oh, God, I suppose so. But that nixes the chance of talking about Bill.”

  “We can do that later in the day.”

  “This is becoming a full-time occupation,” Parkes grumbled, before saying good night.

  The Tuesday group met in Parkes’ dining room again Wednesday morning, this time with Richardson and Heyworth in attendance.

  “Welcome to Parkes’ restaurant,” Charlie said ruefully, before outlining the newest perplexity.

  “So we don’t go off half-cocked, I think we ought to find out exactly what happened in this On-Line deal last Thursday and Friday,” Ron Crutcher said.

  Richardson and Heyworth together reconstructed the details, Richardson leading off by repeating what he had already told Frost and Parkes the day before. Then Heyworth picked up the story.

  “When Bill called me Friday morning, I had to play some pretty fast catch-up ball. Luckily for me, Merriman had prepared a good closing memo, so we could proceed in a fairly orderly way even without her.

  “We had the fax of the consent in hand. It had been sent out at 9 A.M. Tokyo time on Friday. That meant it got to our shop at seven Thursday night. Alan Lovett, our client, filled me in on the conference call to Tokyo they’d had Thursday night, and said we were supposed to get word from Vincent Ames when he had taken delivery of the consent. While we were talking, our paralegal, Beth Locke, came in with a phone message she’d picked up off Merriman’s desk. Ames had called at the crack of dawn Friday, before anybody was in. By the time I got the message, it was night in Tokyo, but the Fiduciary woman at the closing had his home number and we were able to reach him. That’s when he reported that Mr. Hiseo of Machikin had left on their Friday for the long weekend without delivering the original consent to Schoonmaker or anyone else.

  “That led to lots of finger-pointing around the table and it became clear that Rawson was the person we had to talk to. His assistant, a big fat guy named Lewis, was no help at all, so everybody screamed that we had to get Rawson over to the closing. Lewis finally tracked him down and he joined us around eleven o’clock. He was very subdued and said that he’d talked with Wesray in Tokyo and there had been a screw-up. Mr. Hiseo, the VP at Machikin, had misunderstood his instructions and thought that all he had to do was put a signed copy of the document on the fax machine to us. Rawson was very apologetic and said he realized the great difficulty this had caused, but he hoped we could still go ahead and complete the merger on the strength of the fax.”

  “Do you have a copy of the phony document?” Reuben asked.

  Heyworth took his attaché case from beside his chair, opened it and pulled out a xerox copy. He handed it over to Frost, who examined its two pages carefully. The cover simply read “To Juliana Merriman, Chase & Ward, Clinton Plaza, New York, NY 10019,” with a second line below that saying “From A. Hiseo, Machikin Bank, 5th Floor, Machikin Building, Tokyo 100.” Otherwise the page was blank, except for an identifying line at the top which gave the date, the hour sent (“0905”) and what was presumably the fax number of the sender (“03-945-8402”). The second page was short and sweet:

  The undersigned, Machikin Bank (the “Bank”), HEREBY CONSENTS to the merger of On-Line Distribution Corporation (“On-Line”) with and into Applications Unlimited, Inc. (“Applications”) and HEREBY WAIVES the terms, covenants and provisions of the outstanding Credit Agreement between the Bank and On-Line to the extent, and only to the extent, required to effect said merger.

  MACHIKIN BANK

  A. Hiseo

  “Anything unusual, Reuben?” Parkes asked.

  “It looks to me like the bankers cobbled this up. Or maybe it’s pidgin English written by the Japanese.”

  The discussion came to a halt when the Parkeses’ maid came in to announce that Bill Richardson had a phone call.

  “That’ll be Glenn Wylie,” he said. “I’ve been trying to get him since last night. Brian, you’d better come with me.” Each of them grabbed legal pads from their attaché cases and left the room.

  “Gentlemen, I don’t want to confuse you so early in the morning,” Parkes said, “but while Bill and Brian are out of the room, I’d like Reuben to report on what happened yesterday. If they come back, we’ll have to cut it off and resume later down at Fort Bliss. But go ahead, Reuben, maybe there’s time.”

  Parkes had spoken very quietly and Frost did likewise, telling the increasingly disturbed group about the harassment complaint in Merriman’s PC and summarizing their session with Richardson. He also told them about Merriman’s insurance policy and will, and the suspicion that Genakis was the “friend” with the drug problem that Merriman had asked the Carson psychologist about.

  “As Reuben said yesterday, there seem to be two roads we’re going down, with Bill at the end of one and Genakis at the end of the other,” Parkes said, when Reuben had finished.

  “I’m afraid we’re going to have to amend that,” Frost added. “It seems to me there’re now three roads, with this fellow Rawson at the end of the third one.”

  “This is getting too rich for my blood,” Keith Merritt said. “What did we do to deserve this?”

  “Let me ask a question about this consent,” Ron Crutcher said; like the others, he was too nervous to discuss Richardson, who might return at any moment. “I take it there’s nothing about that fax that should have tipped off Brian and Bill that something was wrong. I’m a litigator and the last closing I went to was on my house in Greenwich. But there’s nothing there that should have alerted an experienced corporate lawyer?”

  “Let me go back a little bit,” Frost said. “Bill didn’t get a chance to tell you that he had proposed Friday morning that Schoonmaker stand behind the fax, that they guarantee its validity. That idea apparently went over like a lead balloon and our client, Lovett, was told that it was the fax or nothing, as far as Machikin was concerned. He and Bill and Brian apparently talked it over and he decided to take the risk.

  “Now, was that reasonable? Did Bill and Brian lead him down the garden path? The document is pretty half-baked. But we’ve all seen half-baked documents before—and we’ve all swallowed hard and accepted them to get a deal done. Should they have uncovered the fraud? I don’t see how, Ron, even in hindsight. There’s nothing on the face of that fax to indicate it’s a fake. And at the time, what happened in Tokyo seemed plausible, I believe. Look at the situation. Inscrutable Japanese banker who probably didn’t understand the timing of the merger. Wesray, who probably didn’t understand the deal, either. Ames, who’d been dragged in at the last minute. And all of them antsy to get away for the holiday. And I don’t just say that because we’ve—you’ve—got to stick with your partners. I’d say they both acted perfectly responsibly.”

  “I only hope when the laundry’s been washed we find that Bill acted ‘perfectly responsibly’ down in Dallas, too,” Merritt added. “Oh, oh, here they come.”

  “If Glenn Wylie knew about this, he’s a pretty good actor,” Richardson told the group, once he was back at the table. “I thought he was going to have apoplexy when I told him what had happened. He had nothing new to add. Schoonmaker was supposed to engineer the whole negotiation with the Bank.”

  “Let me interrupt right there,” Simon Isaacs said. “From what was said earlier, I gather that keeping the Machikin loan in place was crucial to our client’s view of the deal. So the Wylie brothers had to know that a consent from the Japanese was important. You mean to tell me that even though their company, On-Line, was the borrower, they never talked to their lender themselves?”

  “It was amateur night in Morris County, Simon,” Richardson said. “The Wylie brothers and their lawyer were over their heads—I could see that in the meetings I attended—and had never been involved in anything as complicated as the merger with Applications. Hell, Lovett told me they’d been in the embalming fluid business, for Christ’s sake, before they discovered computer software. The Wylie brothers are not the first, and certainly not the last, self-made millionaires
to be rubes when it comes to the niceties of finance—like telling your bankers you’re about to merge your company out of existence.”

  “Amen,” Parkes said.

  “So, for better or worse, the brothers left the whole matter of getting a consent up to Schoonmaker,” Richardson concluded.

  “Who, like take-charge investment bankers, promised they’d handle everything,” Isaacs said.

  “I’m sure that’s exactly right,” Richardson agreed.

  “Another thing, if Merriman was playing it so carefully, why didn’t she instruct Ames to go directly to Machikin?” Crutcher asked.

  “It appears that the only contact was through Schoonmaker. I suspect getting the piece of paper indirectly from Schoonmaker was the best she could do,” Richardson said.

  “What about our client?” Parkes asked. “What does he have to say?”

  Heyworth explained that he had called Lovett the previous night and that he was coming in on the first flight from L.A. that morning.

  “Well, Brian, I’m going to leave him in your hands. Yours and Bill’s,” Parkes said. “I’ll talk to him if that’s necessary—if he blames us for the mess he’s in. Obviously, we’ve got to help straighten things out with the Japanese. One of you may have to get on a plane to Tokyo with him and get Mr. Hiseo happy.”

  “I nominate Brian,” Richardson said affably. “I’ve got my fiftieth birthday party Saturday night, as you all know, and Nina and I are supposed to go skiing in France next week.”

  The others looked distressed, Heyworth because such an untidy emergency mission to Tokyo did not have much appeal, the rest because sending Heyworth on such an assignment was not very attractive.

  “I’m still confused,” Keith Merritt said. “Let me ask a couple of questions that have been bothering me. First, assuming nobody told Machikin about the merger, why didn’t they find out about it from the newspapers? Surely it must have been announced when the merger agreement was signed?”

  “No, it wasn’t,” Richardson said. “Neither Applications nor On-Line had public stockholders. They were privately held. So there was no requirement to make an advance announcement. The first publicity the merger had was after it was consummated on Friday.”

  “Okay. Then here’s my second question. Why didn’t this man Ames get to Machikin before Wednesday?”

  “The answer seems to be that the Japanese aren’t quite as hardworking as we’ve always been led to think,” Heyworth said. “As I understand it from Ames, it’s customary for the Japanese to stretch out the New Year’s weekend. So our Mr. Hiseo was gone from sometime Friday until Wednesday morning—last night, our time.”

  “Maybe we’ve got something to learn from them after all,” Isaacs said.

  “Look, I think we’ve noodled this thing about as far as we can for the moment,” Parkes said. He was eager to bring the disorderly meeting to a close, since the next steps—whatever they might be—couldn’t really be discussed in front of Richardson. “I think we should tell the police about the consent problem. Reuben, I assume you can take care of that. And we’ll also have to wait and see what Mr. Lovett has to say when he gets here. Meanwhile, let’s get downtown and try to do some useful work.”

  Frost rode to Fort Bliss with Parkes and Simon Isaacs. On the way, Frost asked what either of them knew about Schoonmaker.

  “We do some work for them, you know,” Parkes said. “A few hundred thousand dollars a year. Mostly their mortgage-backed stuff. We’ve never done their regular work, or their underwriting. So they’re not exactly our oldest and dearest client.”

  “What shape are they in?” Frost asked.

  “There are rumors around,” Isaacs said. “They’ve had all the usual problems—M&A way off, their retail business a drain. If I recall correctly, they also reported a big arbitrage loss last quarter. And they’ve announced a pretty big cutback in staff. A couple of thousand, I think was the figure.”

  “So their fee in the On-Line deal could have been important?”

  “I can’t imagine they’re that bad off,” Isaacs replied. “But the Schoonmaker fee may have been helpful to Mr. Rawson. Boosted his good standing if they’ve got the knives out to make cuts. And undoubtedly it counted towards his bonus for last year.”

  “Do you know him?” Parkes asked.

  “I’ve heard of him,” Isaacs said. “One of Schoonmaker’s M&A troops. Which means he’s tough, get-the-deal-done-at-any-price and probably totally without principle.”

  “Would he have murdered to get the merger completed?” Reuben asked. “Sounds pretty extreme to me, even given my high opinion of some of the fellows operating today. But you’ve told me enough to confirm that he had a motive. Close the deal, save his job, get his bonus.”

  “But, Reuben, for the sake of argument, look what he would have had to do,” Isaacs said. “First, fake the whole business of getting the Machikin consent, meanwhile keeping his clients, the Wylies, from ever talking to Machikin—though after what Bill said, that may not have been as improbable as it sounds. Then he had to draw his buddy Wesray into it, all the while hoping that Machikin would go along quietly after the merger was consummated. That’s not exactly the reputation of the Japanese bankers, who can be pretty hard-nosed. And then, when Merriman threw a monkey wrench into his plans by insisting on getting the original, and not a copy, he murdered her. This sure as hell goes beyond anything Mike Milken ever dreamed up.”

  “Simon, I grant you all that,” Frost replied. “Let’s not forget, however, that we’re dealing with two facts that won’t go away—Merriman’s death and a fake document. Maybe there’s no relationship whatsoever between the two. But if there is, I don’t think it looks very good for Mr. Rawson.”

  “What about the Wylie brothers? Don’t you think they must have known what Rawson was up to?” Parkes asked.

  “In a rational world, one would have thought so,” Frost said. “What I heard this morning was that they’re babes in the woods, so maybe they really didn’t have anything to do with Machikin.”

  “Babes in the woods, Reuben, but prosperous ones,” Parkes said. “They were shrewd enough to get a sweetheart loan from Machikin in the first place. And smart enough to get a fancy price out of our client.”

  “Maybe they knew what was going on,” Reuben said. “It’s possible at least one of them saw how things were going last Thursday and resorted to some self-help. They certainly were in the office that day, and one of them could have hidden out and killed Juliana. And don’t forget, Brian Heyworth told us the youngest one was something of a rough character.”

  “I think that’s wishful thinking, Reuben,” Isaacs said. “Your problem, my problem, everybody’s problem is that we don’t want to face up to the fact that Bill Richardson may have killed Merriman.”

  “Not if his alibi checks out,” Frost said.

  “I leave that to you and that gumshoe you’ve hired,” Isaacs said. “I wouldn’t say this to everybody, but I’ll say it to you two in strictest confidence. Having your roots in Latvia instead of upstate New York—isn’t that where you come from, Reuben?—sometimes gives you a different perspective. God knows I’ve got nothing against Bill, and he certainly’s always carried his weight in the firm, but that golden-boy image has always been almost too much to take. People without any imperfections disturb me.”

  “I’ll file that away, Simon,” Frost replied.

  Once at the office, Reuben got his own copy of the controversial fax. With the help of the chief operator, he determined that the number on the document was not one of those listed for Machikin in Tokyo. He also asked the operator if she could try to find out who the number did belong to. In the confused state of affairs, any hard information would be welcome.

  CHAPTER

  14

  Right and Wrong

  By lunchtime the chief operator had somehow tracked down the number shown on the fax of the Machikin “consent.” It belonged to the improbably named Miki’s Mailbox, with an address on the
Ginza in Tokyo. Frost guessed (correctly, as it turned out) that Miki’s was a facility with a fax machine available for public use; it was assuredly not a part of Machikin Bank. There now seemed no question that the document that had been received was a fraud rigged by Harvey Rawson and his accomplice Wesray in Tokyo, with or without the complicity of the Wylie brothers. He brushed aside for the moment all questions of responsibility for the deception and concentrated on how it may have been a factor in Juliana Merriman’s death. By one o’clock, isolated in his office, he had devised a strategy.

  If Rawson had behaved as he now believed, he thought it essential to confront the top management of Schoonmaker & Co. with the wrongdoing of their subordinate, “top management” in this case meaning Thomas Hanford, the chairman and chief executive officer. A medium-sized investment banking firm on Wall Street, Schoonmaker was owned by its management except for a large minority holding of the Seabrook Life Insurance Company and a 20-percent share held by the public. Whatever the ownership, it was widely recognized as a one-man fiefdom, the unquestioned czar of the business being Hanford.

  Everyone on Wall Street knew about Hanford in at least one of three ways: his link with Schoonmaker, an aggressive firm with power disproportionate to its size; the gossip-column coverage of his perfervid social activities, shared with his second wife, Barbara, a former physiotherapist and the quintessential trophy wife (known unkindly in at least one gossip column as “Ms. Keepsake”); and, more recently, as a peripheral—but so-far untouched—figure in three questionable market manipulations that in two cases had led to indictments (of others, not Hanford). The close scrapes in those manipulations had earned him the sobriquet “Tommy Teflon.”

  Frost had never dealt with Hanford professionally, though he had run into him at countless society benefits, and had heard him hold forth on international economic problems at sessions of the Foreign Affairs Forum. The Hanford social peregrinations had not disturbed Reuben; he had only been quietly amused as the couple had conspicuously self-propelled themselves into the upper spheres of glitterati heaven (assisted by generous contributions from the coffers of Schoonmaker & Co.). He had, however, objected to Hanford’s doomsday pronouncements at the FAF, where he regularly condemned many contemporary business practices as dangers to the world economy. All of which was fine, Reuben had often told himself, except that these very practices had been key elements in the flamboyant profitability of Schoonmaker in the high-flying eighties.