by Alan Hruska
“He’s a blood relative, for God’s sake.”
Harvey jerks his large head side to side. “And how do you think that cuts with this man, Sarah? Where money is concerned.”
“So what follows?” Sarah says, shaken, but trying hard not to show it. “Are you planning on having someone following me to school every day? Standing guard in the street? Trailing me wherever I go? Protecting this building at night? Watching every building I’m in? Sitting next to me in the movies? I mean, this is ridiculous.” She turns to Tino on the sofa. “Don’t you agree?”
He obviously doesn’t. “What Harvey just said—it’s horrible, but it’s true. It could happen.”
Harvey says grimly, “It has happened. More than once. We’d like to see it doesn’t happen to you, Sarah.”
“So how long will this go on?” Sarah asks.
Everyone again looks to Alec.
“I don’t know,” he says. “The alternative is to meet with the man. Give him reason to back off. But I doubt that would work. Now. For Sal, this is likely a game. Sick, scary, but not to him. It’s what he does, and probably enjoys. He’ll regard our putting a watch on you as a move in the game. Let’s see how he reacts before we make another move.”
Sarah looks too depressed to say anything.
Tino says, “How do you know my uncle so well?”
“I don’t. I’m guessing. But that’s based on someone who was probably very much like him.”
“You mean Phil,” Sarah says.
“Yes,” he says softly, and it quiets the room. He stands and puts on a smile. “So let’s all go and eat that stew.”
“As if one could eat anything,” Sarah says as everyone else rises.
“Sarah!” Alec snaps. “Listen to me!” Everyone does, and he softens his tone. “I will not let Sal Angiapello hurt you.”
TWENTY-TWO
Alec lands at Cleveland Hopkins International Airport at 3:27 p.m. He had offered to arrive in the morning. “Trust me, Larry,” he said to Rilesman on the phone. “There’s nothing on Bob Curtis’s plate more important than getting ready for this meeting.” Rilesman said, “All necessary preparation will be done by the Allis-Benoit Law Department. Come at four, if you’d like, but not earlier.”
The flight is smooth; there’s little traffic to the corporate headquarters downtown. Alec is shown to Rilesman’s empty office by his secretary, the same middle-aged woman Alec previously met, although he now notices her dyed brown hair and dark-framed glasses and is a bit surprised by her stern look. She asks, “Is there anything you need while you wait?”
“He’s still in with Mr. Curtis?” Alec asks.
“He is,” she says, “and he suggests you’ll be comfortable here.” If there’s irony in her tone, she shows nothing in her expression.
Alec says, “Might you tell me where Mr. Curtis’s office is?”
“Certainly,” she says. “Down the corridor behind you, turn right, and go to the end.” Not a blink.
“Thank you,” Alec says and heads toward it.
As he walks into the CEO suite, two secretaries rise to protest. He opens the inner door anyway. Larry Rilesman and two young men, presumably his assistant counsel, stand before an obviously irate chief executive, who is in the process of flinging sheets of paper into the air. “Goddamn worthless hogwash!” he says, fine vellum still fluttering to the floor. “I asked for a white paper to read. I can’t read this.” He picks up the stack he hasn’t yet thrown. “It’s sixty-five goddamn pages. It’s not simply unpersuasive. It’s unintelligible. It’s gobbledygook. I’d look like an idiot trying to read it, because an idiot plainly wrote it.” He then hurls the stack directly at Rilesman, and the pages cascade to his cordovans.
Bob Curtis is known as a man of great dignity who is normally kind, almost avuncular. He had risen through the ranks of his company with grace and ease. At this moment, however, he is literally shaking with rage.
“Perhaps I’ve come at a bad time,” Alec says.
“Why weren’t you here three hours ago?” Curtis says. “I leave in ten minutes. We’re opening the opera tonight, my wife is the chairperson, and we’re hosting a dinner. I simply do not have the time to rewrite this crap.”
“Nor do you have to. If you have a secretary here who can take dictation, and a driver, I will have your white paper waiting for you at home when you return from the opera tonight.”
Curtis says, “Larry, I think your secretary fits that bill.”
“But I’ll need her,” Rilesman says. “To produce a shorter version of my draft—so you can see an alternative—or riders on Alec’s.”
Curtis makes a face of derision. “Go home, Larry. Change for the opera as we planned. I think we can trust Alec to know what’s required.”
Alec says, “I’ll need several minutes of your time, Bob. There’s something I need you to say tomorrow that we haven’t had a chance to discuss.”
“Let’s talk about it in the plane tomorrow morning.”
“It’s too big. You’ll want to sleep on it. Maybe talk to others on your board.”
Curtis gives him a long hard look of appraisal. “All right, you come with me now. We’ll talk in the car.”
Rilesman says, “Be ready in a sec.”
“You stay, Larry. Arrange for the secretarial help and driver.” Curtis goes for his coat and beckons Alec to follow him. Leaving, Alec casts Rilesman an apologetic glance and receives back a look of pure hatred.
On the morning flight to Washington on the company jet, Curtis says to Alec, “You’re absolutely certain we have to take this extreme position?”
“See it from Stapleton’s eyes,” Alec says. “He’s new to the job. His staff wants blood. He needs to make a splash, and this looks easy. In effect, the Antitrust Division is being upstaged by Mid-Atlantic’s private lawsuit. Big upside if Stapleton sues—politically, and in the media; bad downside if he doesn’t.”
“He could lose the case.”
“Years later. By which time someone else will be head of the division.”
Curtis turns to face Larry Rilesman.
“I think it’s insane,” Rilesman says.
Curtis turns back to Alec, who says, “We have no other leverage, Bob. This is the one thing that will scare them.”
Bob smiles. “At least you’ve whittled my speech down to one page.”
Heads of government departments are given offices designed to impress. The assistant attorney general in charge of the Antitrust Division operates from such an office. It’s about fifty feet long, twenty feet wide, and reeks of history. Many famous occupants have wielded power here, from Thurman Arnold on down—smashing monopolies, blocking mergers, punishing conspirators—and the furniture, which is plain, bears the scars.
Alec and his small band are ushered into seats in front of an eight-foot-long desk, behind which sits Eric Stapleton, large nosed, balding, professorial in dress and manner. As he rises slightly in greeting, lowering the papers he’d been reading, Alec notices more particularly his receding chin, covered with a small goatee. Stapleton is flanked on either side by rows of younger staffers.
Introductions are brief. Pleasantries are dispensed with. It’s a working room meant for the conduct of momentous business, and Alec is invited to get on with it.
“We have basically three things to tell you,” Alec begins. “First, if you sue us, you will lose, for reasons you don’t know, because your staff”—Alec rivets each row of suits with a stare—“hasn’t bothered to find the facts from the documents we’ve given you. The second is, if you sue us, we will shut down our plants, discharge our workers, and stop manufacturing and selling heavy electrical equipment. In other words, we will go out of the business, leaving Edison Electric with a domestic monopoly.”
If it’s possible for silence to become quieter, that’s what happens in that room. Bedlam would have been less startling. Stapleton says quietly, “That’s a bombshell decision. You ask me to believe your client has already mad
e it?”
“When we finish here this morning, you will not only believe that decision’s been made, you will understand why there is no choice but to carry it out. So… third point, which is one you might actually like. If you were to sue us and win, all you’d get, in addition to an injunctive decree, would be a judgment collaterally estopping us from defending ourselves against others on the price-fixing charge. Obviously, if you sue, everyone sues—every public utility in the United States. And if we’re collaterally estopped from defending ourselves—that would put us in bankruptcy. If we’re already out of the business, you probably wouldn’t care, but I can’t see why you’d affirmatively want that. So we will give you the only thing you really do want. The decree. We will sign any decree you write. We don’t even have to read it. On only one condition: you get Edison Electric to sign the same decree.”
Stapleton laughs. “The decree that we hand you? You’ll sign, sight unseen?”
“Whatever it says. Your economists believe they know better than we how this industry should be run. Fine. Let them make the new rules; we’ll follow them. Because now we’re number two in the market, and far behind. Can’t do much worse. With your rules, maybe we’ll do a bit better. Although,” Alec says, and pauses a moment, “on that, we could offer you the assistance of our economics expert witness, George Stigler.”
“You have Stigler?” Stapleton says, not even trying to hide his surprise.
“Yes. Recently joined us. I know he’s never testified before. But he believes your case is so antagonistic to the public interest; he feels obligated to help defeat it.”
Stapleton touches his goatee reflexively, as if launching a thought. “You say you don’t want us to file a complaint. To get a consent decree ‘so ordered’ by a court, we need a case pending in court, which we don’t get unless we file a complaint.”
“You have a consent decree we signed during the troubles of ’62—when there actually was a price-fixing conspiracy. All we need to do now is to amend that decree.”
One of Stapleton’s young staffers speaks up. Ralph Woodson. Already known to the antitrust bar as a near-fanatical enforcer. “What’s your supposedly exonerating evidence? The facts we allegedly missed?”
“I didn’t say you missed them,” Alec reminds him. “They’re sitting in your office. I said you never took the trouble to read them. The transaction files—hundreds of them. Has anyone in this room but me ever studied those files?” Big smile. “Let’s see it, shall we? Show of hands.” Alec looks around. “No one? What I thought. And yet the whole case is in there. Absolute and irrefutable proof we never conspired to fix prices with anyone. Because they show that we cut prices on virtually every deal we made—that’s how we got whatever business we got—and offered price cuts on many deals we lost. And the reason I know you guys haven’t read these documents is because, had you read them, we wouldn’t be sitting here. You wouldn’t be so damn eager to sue us.”
Stapleton looks like a man who would smoke a pipe. And now he pulls one out of a desk drawer, along with a pouch and other implements. “I’d like to hear from Mr. Curtis on this”—he stuffs his pipe, lights it, and draws—“I guess you’d call it a ‘threat’ to leave the turbine generator business.”
“Not a threat,” Curtis says. “The inevitable consequence of your filing a complaint. And let me tell you why.” He unfolds a slip of paper, rests it on Stapleton’s desk, and starts reading what Alec had written.
“Heavy electrical equipment is not a wonderful business. The risks and capital expenditures are extraordinarily high, profits low and uncertain. In the last ten years, we didn’t lose money, but we would have made a great deal more investing in municipal bonds. We have stayed in business because it’s in the national interest, especially during the current energy crisis, and because putting tens of thousands of people out of work would be a human tragedy.
“If we are to continue in business, and remain competitive, we must invest, short-term, nearly half a billion dollars in R&D, and more than that in plant and equipment. We also face a potential liability of several billions in the coal-requirements contract litigation that I’m sure you know about. So this is what would happen if, on top of those problems, you added the filing of a government complaint.
“Mid-Atlantic Power & Light has been prosecuting the same claim against us, but the financial industry has not taken it that seriously, apparently regarding it—accurately—as a power play by Donald Strand. Were you to sue, those charges would be taken very seriously indeed, and produce these immediate effects.
“First, it would render us utterly and completely unfinanceable. We’ve already been advised by our investment bankers that we are teetering on that edge. Your complaint would push us over it. Without access to the capital market, we could not exist.
“Second would be the impact on sales and on the cash flow of the progress payments we receive when we make sales. Turbine generators are enormously expensive and require extensive servicing through the years. No one will buy them if they fear that the manufacturer will be out of business when those machines need service and replacement parts. The publicity given our problems by the filing of a government action would substantiate precisely that fear, drying up or totally eliminating our sales volume.
“Third, your complaint would trigger suits by the entire public utility industry. Right now they are waiting in the wings, shielded from the statute of limitations by a tolling and standstill agreement. You sue, they’ll be free to sue, and every one of them will. All the problems I’ve mentioned will be compounded exponentially.
“So if you sue, we’re going out of business. I’ve made that decision and will recommend it to my board. I’ve already talked to key members of my board, and they will support me on this. In fact, as I’ve said, we’d have no choice. The devastation of massive unemployment—to the city of Cleveland, the state of Ohio, and other regions—will be a fact.”
Curtis folds up his paper and returns it to the breast pocket of his jacket. There are literally tears in his eyes.
Alec says, “Questions?”
Stapleton says, “We’ll think about what you’ve said.”
TWENTY-THREE
At Kendal, Blake, incoming calls are directed to secretaries who, when their principals are unavailable, record messages on pink slips. Waiting for Alec on his return from Washington is a sheaf of such slips, with the one on top marked conspicuously, “URGENT.” It’s from the chief judge of the United States Court of Appeals for the Second Circuit, Rivington Kane. It reads, “Come to my chambers at once.”
Alec drops his bags, calls Caddy Breen to report quickly on the Stapleton meeting, and heads downstairs to the cab line. He arrives at Foley Square in ten minutes. The chief judge had already eaten his lunch, so a meal in the judges’ lunchroom is not in the offing. But he greets Alec by rising from behind his desk, directing Alec to his customary seat at the conference table, and beginning immediately to pace.
“Your firm represents U.S. Computer Corp. in the government monopolization case, am I right?”
“That’s right, Judge. It’s being tried by my partner Jack Stamper.”
“Right, right, that’s what I thought.” Then, still pacing, “I’ve had an idea,” Kane says, obviously bursting with it. He’s a diminutive man with a small round head and boundless energy, barely contained. He wears his dark gray vest buttoned up and his black hair cut short. “A plan, really,” he continues, “and rather novel, but before revealing it, I should tell you there’s no other lawyer in this circuit to whom I would entrust it.” Turning on Alec a rapturous smile, his face wrinkles into a maze. “How would your people like it if I were to take the U.S. Computer case away from Eustace Ettinger?”
Alec knows, as does most everyone in the federal bar, that in the U.S. Computer Corp. trial, Judge Ettinger is running amok. He grants every government motion and upholds every government objection, while denying every motion and objection made by the defense. He penalizes eve
ry attempt by the defense to call a witness by allowing, months past the discovery deadline, the government’s outrageous new discovery demands. He interrupts every examination by the defense of its own witnesses, and invariably takes over the questioning himself. And he screams tirades daily at anyone connected to the defendant. The reprieve comes after the lunch break, when Judge Ettinger falls asleep. It’s no surprise that the chief judge of the circuit is distressed about the light in which these antics place the judiciary. But while Chief Judge Kane can admonish another judge, he does not have the power independently to remove him.
So Alec wonders what the hell the man is talking about. “Take the case away?” he says.
“Yes,” Kane says, “remove him from it by removing it from him.” The judge blinks with satisfaction, then nestles into the chair next to Alec’s. “The thing could be brought about, you know, but I need your help. You’re friendly with the attorney general?”
Alec says, “He was once my local counsel in New Orleans on Telemarch News libel cases.”
“Ah,” Kane says. “Then this could work.”
“Sorry, Judge, what? What could work?”
“Arbitration!” Kane says, as if pulling a rabbit out of a hat.
“Arbitration?”
“Yes! You get the AG to agree to allow the case to go to arbitration; then I give you—voilà! Walter Mansfield, a great Court of Appeals judge, as the arbitrator! Perfect, right? An expert in the antitrust laws, a highly distinguished jurist, and a brilliant and fair man.”
“All of the foregoing,” Alec agrees, “but Judge—”
“You’re thinking it’s never been done. A federal case ended, so it can be decided by another federal judge sitting as an arbitrator. Well, I had it researched,” Kane says. “It’s not been done before, as far as we could see, but there are no rules against it. None, legal or ethical. And no reason I can think of that should prohibit it. Of course, the parties must consent to it.”
