Shadow Account (19 page)

Hammond hung up. “You’re all set, Conner. You’re seeing Glen Frolling. Glen’s the treasurer of Global Components. He can take a first look at what you’ve got, then report to the senior guys.”

“Thanks, Vic. I really appreciate you setting this up.”

“Don’t forget that I did,” Hammond warned. “When the guys on our consulting side try to get their hands on this thing, you tell them to pound salt, you hear me? You keep dealing with me. I want the fee for my group.”

“Of course. By the way, who were the other people you were trying to hook me up with?”

“Jim Hatcher is Global Component’s chief financial officer. He’s the person I really wanted you to see because he’s the ultimate decision maker. The other one is Terry Adams. He’s head of corporate development. But don’t worry, Glen will be helpful. He reports directly to Jim.” Hammond laughed. “Glen doesn’t have much personality, but don’t be put off. It’s nothing personal, just the way he is.” Hammond stood up once more. “Now, I really do have to get out of here.”

“Where are you going today?” Conner asked, standing up, too.

Hammond reached across the desk to shake hands. “Minneapolis.”

Minneapolis. Again, Conner thought back to the e-mail. Suddenly he needed an excuse to come back. His eyes drifted to his briefcase. “Well, thanks for everything, Vic, and have a safe trip,” he called over his shoulder, heading quickly for the door.

An hour later, Conner signed the Global Components visitor register at the front desk and was escorted to the third floor. Then down a long hall to the lobby of the senior executive offices.

“Wait here,” the woman instructed, pointing at a comfortable looking couch. “Someone will be with you in a few minutes.”

“Thanks.”

Conner sat down and glanced over at a woman sitting outside a door marked
JIM HATCHER
in bold black letters. She was young and extremely attractive. On her desk was a nameplate,
JENNIFER HUGHES
inscribed on it. She was on the phone, giggling as she squeezed the receiver between her ear and shoulder while she filed her nails. She didn’t seem busy. And, from what Conner could see, she was provocatively dressed. Her chest was all but spilling out of her top.

Conner’s eyes shifted left. Beside Jenny was Terry Adams’s assistant, and it was the same story here. Young, beautiful, and not busy.

He glanced around the large lobby. It was filled with artwork, and the furniture was all leather. On the wall to his right were three flat-screen televisions—turned to CNN, ESPN, and the Weather Channel. The volumes were off, but words scrolled across the bottom of the screens. On a table to the right he spotted a Bloomberg terminal, so he got up and checked Global Component’s share price while he waited. It was up to sixty-seven.

“Mr. Ashby?”

Conner looked up from the terminal. This woman was older. In her fifties, Conner guessed. “That’s me.”

“I’m Mr. Frolling’s assistant. He’ll see you now.”

“That’s quite a crew back there,” Conner said quietly, following Frolling’s assistant into a hallway that led out of the senior executive lobby.

“Yes, we call that the ‘stable,’ ” the woman replied icily. “All full of fillies.” She took an exasperated breath. “Some of us wonder exactly what it is they do all day. We end up doing most of their work.”

The hallway opened up to another lobby, but this one wasn’t as plush as the one they had just left. Decorations here were scant and the office doors around the perimeter were much closer together. These guys were subordinate to the alpha dogs. No doubt about it.

“Go on in,” the woman said, stopping at one of the doors and gesturing. “Would you like anything to drink?”

“No thanks,” said Conner. A stout man with gray hair and glasses sat at a small table in one corner of the office, studying a report. “Mr. Frolling?”

“Yes,” the man responded, not taking his eyes off the report. He nodded at a chair on the other side of the table. “Have a seat,” he said gruffly. “Close the door, Alice.”

“Yes, sir.”

As Vic Hammond had warned, Frolling wasn’t going to win any congeniality contests.

“I’m Conner Ashby.”

“Yeah, sure.” Frolling stared at the report a few more moments, then turned it over. “What do you want?” he asked, finally looking up. He had the alcoholic look. Blue spider veins ran through his red cheeks and his large nose.

“As Vic explained on the phone, I’m with Phenix Capital,” Conner began. “We’re a mergers and acquisitions advisory firm based in New York City. We’re representing a company for sale that manufactures precision machine components for a wide variety of industries,” Conner explained. “It would make a nice fit for Global. Vic thought that, since I happened to be in the area, it would make sense for me to sit down with someone at Global to start a dialogue. That turned out to be you.”

“My lucky day.” Frolling rubbed his wide forehead. Acting as if this was the last thing he wanted to do right now. “I know most of the companies in the industry. Which one is it?”

“I can’t say. We’d need you to execute a confidentiality agreement first.”

“Then why are you wasting my—?”

“I’d just like to ask you a few questions. That’ll help me determine whether or not the company I’m representing really would fit into Global as well as I believe it would.”

Frolling shrugged, obviously irritated. “We’re publicly held. There’s lots of information available about us from lots of different sources.”

“I’ve been through all the public stuff,” Conner assured him. “Your annual reports for the last few years and the SEC docs.”

“I’ll answer what I can,” Frolling said. “But there are rules about what I can and can’t say.”

“I know,” Conner agreed. “Okay. Global has a facility in Miami, correct?”

“Yeah.”

“What kind of facility? I couldn’t tell from the 10-K.”

“An import office. We have several plants in Central and South America and we bring a lot of that stuff in through Miami. Mostly work-in-process inventory. But some finished goods, too. It helps to have a local office, if you know what I mean. It’s good to have people on the ground if there are paperwork problems at the docks.”

“How many people in that office?”

“Twenty.”

“How many employees total at Global Components?”

Frolling thought for a moment. “Two hundred and fifty thousand.”

A small import office staffed by twenty people and the company’s chief financial officer had visited the facility three times this month when he had almost a quarter of a million other people to worry about. That didn’t make sense.

“Why do you want to know about Miami?” Frolling asked.

“The company we’re representing has a facility down there, too, but it’s a manufacturing plant. I was thinking that if you acquired our company, you might be able to save money folding that operation into yours. But I guess not.”

“No.”

“How long has Jim Hatcher been the CFO?”

“Seven years, and that information is definitely in the 10-K.”

“Right.” Now for the money question. “I understand from a friend that Global Components has an operation in Minneapolis. But I couldn’t find any mention of it anywhere. Not in the company’s annual report, the 10-K, or any news articles I pulled up. I was hoping you could tell me what that Minneapolis operation does. The company I’m representing also has a plant in the Twin Cities, and again I was thinking that there might be some synergy opportunities available if Global made the acquisition.”

Frolling stared intently at Conner for several moments before answering. “Global Components has
no
operations in Minneapolis,” he finally said. “Whoever told you that we do has no idea what he’s talking about. You got that?”

Conner stared back. “Sure,” he said slowly.

“Now, you’ll have to excuse me. I’ve got work to do.” Frolling snorted. “Somebody around here has to.”

Conner stood up. Frolling wasn’t going to be as helpful as Vic Hammond had promised, but maybe that didn’t matter. Maybe he’d already gotten what he needed. “One more question, Mr. Frolling,” Conner said when he reached the doorway.

“What is it?” snapped the other man.

“I believe one of the SEC reports lists you as secretary of Global Component’s board of directors.”

“That’s right, I am.”

“Do you attend all board meetings?”

“Yes.”

“But you aren’t actually a
member
of the board.”

“No.”

“How long have you been the board’s secretary?”

“Eleven years.”

“And in that capacity, are you responsible for taking and keeping the minutes of the meetings?”

“I am.”

“Do you take extensive minutes when you’re in those board meetings, Mr. Frolling?”

“
Very
extensive.”

Conner nodded. “Yes, I’ll bet you do.”

Frolling’s eyes narrowed. “Why do you ask?”

“Here you go.” Vic Hammond’s executive assistant handed Conner the briefcase.

“Thanks,” he said, trying to laugh self-consciously. “I’m such an idiot.” He was on his way back to Union Station. “I was almost to the train station when I realized I’d forgotten this thing.” He’d mussed up his hair and pulled his tie way down, trying to look as pitiful as possible. “I apologize for the inconvenience.”

“No problem.” She smiled, as if she felt sorry for him.

“Well, see you later,” Conner said, heading for the elevators. He’d seen the compassionate smile. “My cab is waiting.”

“Have a safe trip,” she called.

Conner snapped his fingers. “Oh, one more thing.”

“What?”

She seemed eager to help. He wasn’t getting the cold shoulder he’d gotten this morning. Perhaps because Hammond was gone, or because the pitiful routine was working. “Vic mentioned that he works with a young person here at Baker Mahaffey named Rusty. Vic said that if I had any questions about what we’re working on, I could call him. But I spoke to someone at the front desk, and they don’t have a record of anyone named Rusty.”

She laughed. “That’s because Rusty is his nickname. He’s got kind of a squeaky voice. Like it needs to be oiled or something. So Vic started calling him Rusty a while back. It caught on pretty fast around the office. His real name is Phil Reeves.”

“Is Phil here today?”

“No. He went to Minneapolis with Vic.”

Patiently putting himself in the best position to win while letting others take risks.

Lucas sat in the Rockville office, staring at the bare, gray walls around him, thinking about the mantra that had guided his life. But other than chess matches, what had he ever really won? He felt his face flush with the answer. Nothing. So what good was the damn mantra?

He swallowed hard. Perhaps this was the opportunity he’d been waiting for. The chance to finally make his mark on the world. He shuddered. But it would take so much courage and conviction. Two assets he’d never been long on.

15

It was a few minutes before eight as the Metroliner pulled into New York, creeping the last few hundred yards as it screeched, scraped, and swayed across a maze of switches at the throat of Penn Station’s yard. The train was an hour and a half late. It had broken down between Wilmington and Philadelphia on its way from Washington, giving Conner more time to work on the crossword puzzle he’d started early this morning on his way south from Newark. He pursed his lips, frustrated. He’d done all right for a first try, but there were still a lot of empty squares.

He reread twenty-seven down’s clue for what seemed like the hundredth time.
Egyptian goddess of fertility.
Put that one in the “not happening” category, he thought to himself, dropping the newspaper onto the empty seat next to him as the train finally eased to a stop. He grabbed his briefcase and headed up the aisle toward the door. Jackie was right. He
had
gotten a new perspective. A humbling one. Of course, that had been her intention, he realized, managing a grin.

He pressed his arm to his side, feeling for the cell phone in his jacket pocket. He’d tried calling several times today but hadn’t reached her. They hadn’t spoken since last night, since he’d walked her home, and he missed her. There was that gnawing anxiety, too. The sense that anyone he came into contact with at this point might come under scrutiny—or worse.

And he was finally starting to figure out why. Fortunately, he hadn’t seen any more of the guy who had chased him at the airport this morning. He was constantly looking over his shoulder now.

“Fifty-second and Park,” Conner ordered, climbing into a cab in front of Madison Square Garden.

“Yes, sir.”

Conner removed the phone from his jacket as the cab pulled away from the curb, and tried to reach Jackie. First at her office. Then at her apartment. Then he called her cell number. But there was no answer anywhere. “Dammit!”

“Whatsa matta?” the cabbie asked.

Conner shoved the cell phone back in his pocket. “Ah, I’m having a tough time with a crossword puzzle.”

“Oh yeah? Give me a clue.”

This ought to be interesting. “Egyptian goddess of fertility.”

“Isis.”

“Huh?”

“Yeah, Isis. That’s easy. Give me another one.”

Conner glanced at a bar as the cab barreled past. Suddenly he wanted a drink. A good stiff shot of scotch. “Tell me you do a lot of crosswords.”

“Not really.”

The perspective was becoming even clearer.

Ten minutes later Conner walked into Phenix Capital, dropping his briefcase on a credenza next to his cluttered desk. He was dead tired, but he needed to get started on the Pharmaco valuation. Gavin had pinged him several times today on his BlackBerry, demanding to know where he was. Reiterating the importance of getting started on the transaction immediately. Conner hadn’t responded to any of the messages. Including the last one explaining the old man’s plan to leave the office early this evening to go to East Hampton. But to be back in the office tomorrow morning no later than nine. Which was why Conner needed to get started on the analysis tonight. Showing Gavin some progress in the morning would go a long way toward calming him down.

There was a huge accordion file sitting in the desk chair. It was the file Gavin had asked Pharmaco’s CEO to send over, Conner realized, peering inside. He picked it up, dropped it on the floor, then collapsed into the leather chair. He leaned back and closed his eyes. He needed to relax for a moment.

“So, where’d you go today, pal?”

Conner’s eyes flew open. Gavin stood in the doorway, scowling. He hadn’t gone to East Hampton—not yet, anyway. “I told you. I had personal business.”

Gavin moved into the room and closed the door. “Personal business,” he repeated, like he hated the sound of it.

“Yes.”

“In a suit and tie?”

“Yes, so?”

“You sure you want to stick with that story?”

Gavin felt he was one-up in some important way. Conner recognized the tone. “Why the inquisition?”

“A man named Victor Hammond called me today. He’s a partner at the accounting firm of Baker Mahaffey. Works in their Washington office.”

Conner’s fingers curled around the arms of the chair as Gavin said the words. “What did he want?”

“He called because he wanted to talk about a company named Global Components.”

“Global Components?”

“Come on, Conner!”

“All right, all right. So I went to see him.”

“How is that ‘personal business’?” Gavin demanded. “Are you interviewing for a job with Global? Can Victor somehow help you with that? Or are you going to Baker Mahaffey?”

“It’s nothing like that.”

“Is this about Paul? Are you that pissed off about what he did to your presentation? Are you thinking about leaving Phenix? After all I’ve done for you? I told you, there’s nothing to worry about. Paul’s just going through a tough time. I told you I’m going to give you
a piece of the firm
, for God’s sake. Just give me a few weeks to work out the details, pal.”

“Going to D.C. had nothing to do with taking a new job,” Conner said flatly. “I’m fine here at Phenix. You know that.”

“I
thought
I did.”

“Well, I am.”

“Then why did you go? What’s so interesting about Victor Hammond and Global Components?”

Gavin was going to dig until he got to the truth. “It has to do with Liz Shaw.”

The old man’s eyes widened. “Really? How?”

“Remember I told you about that e-mail I got the night she was murdered.”

“The e-mail that wasn’t meant for you.”

“Right.”

“So?” Gavin asked impatiently.

“Whoever sent it identified a company that is fraudulently pumping up earnings per share. The company was code-named Project Delphi.”

Gavin nodded. “I remember.”

“I think Project Delphi is code for Global Components,” Conner said quietly.

The old man’s mouth fell open slowly. “You’ve got to be kidding me, pal. Global Components is one of the biggest companies in this country. It has a sterling reputation in the financial markets. Right up there with Procter and Gamble and Coca-Cola.”

“I know.”

“Global is high profile,” Gavin continued. “Consistent earnings with an A-list of very prominent directors. In fact, I think Alan Bryson was on that board at one time. Bryson used to run Morgan Sayers.”

“And now he’s treasury secretary.” Conner had seen Bryson’s name in several SEC reports he’d studied on the way down to Washington this morning. After his first several passes at the crossword puzzle. “A lot of other prominent people have been members of the Global Components board, too.”

“Global must be worth fifty billion dollars.”

“Almost a hundred.” Conner had checked that figure on the Bloomberg terminal in the “stable” while he was waiting for Glen Frolling.

“I can’t believe it,” Gavin muttered.

Conner explained the Parnassus and Delphi connection, and the fact that Global’s headquarters were located on a road by that name very close to Washington. The fact that the e-mail had identified Delphi as having operations in Dallas, Birmingham, and Seattle, and that Global had operations there as well. “The e-mail I got the other night was sent to a person named Victor from someone named Rusty,” he added. “There’s a young guy at Baker Mahaffey whose nickname is Rusty. He works with Vic Hammond.”

“Holy shit,” Gavin whispered.

Conner nodded grimly. “That’s exactly what the stock market will say if what Rusty wrote in his e-mail is true and the company is baking the books in the fraud oven,” he said, recalling the line in the e-mail. “And someone breaks the story.”

“How did you make the connection?”

“Ah, I kind of stumbled onto it.” Conner could tell by Gavin’s expression that he wanted a better answer. But the old man didn’t push.

“I don’t know if what you’ve found is proof positive that Global is the company in the e-mail,” Gavin said. “But the coincidences are compelling, I have to admit.”

Conner had no doubt that what he’d found was proof positive. Especially with the mystery surrounding Minneapolis—the mention of it in the e-mail the other night, Hammond and Rusty flying out there this morning, and Frolling’s adamant denial that Global had
any
operations in the Twin Cities.

“How did you approach Victor Hammond?” the old man asked.

“What do you mean?”

“You didn’t just tell him you’d intercepted a confidential e-mail outlining the fact that Global was defrauding its shareholders, did you, pal?”

“Sure,” Conner said with a half-smile. “It’s always better to hit them right between the eyes with the two-by-four. Isn’t that what you’ve always told me?”

“Come on,” Gavin said angrily. “What was your story?”

Conner glanced down at the Pharmaco file. “Didn’t Hammond tell you?” he asked casually. The old man kept calling the Baker accountant “Victor.”

Gavin blinked. “No. He just told me that you were down there today asking questions about Global Components. He wasn’t specific.”

Conner hesitated, giving Gavin time to say more. Hoping that Gavin’s first instinct—like most people’s—would be to fill the dead air. But the old man stayed silent. “I told Hammond we were representing a company for sale that would be a good strategic fit with Global Components,” Conner explained. “He didn’t seem suspicious, and I didn’t give him a name of the company we were supposedly representing. I told him we were under strict instructions to handle the assignment secretly, and that I couldn’t release the name of the company until he’d signed a confidentiality agreement. He understood. In fact, while I was in his office he got me an appointment to meet with one of Global Components’ senior executives. Because I didn’t give him the name of the company, there’s nothing he can check to figure out that we aren’t really representing anybody in the industry.” Conner looked up as a thought crossed his mind. “Unless you told him we weren’t.”

“I didn’t say anything. I wanted to talk to you first.” Gavin paused. “I’ll tell you something, pal, I’m not happy about you lying to this guy,” he said sternly. “Hammond sounds like a pretty senior guy at Baker Mahaffey. We might be able to do a lot of business with him. If he finds out we go around lying about companies we aren’t representing, we won’t have a second chance with him.”

“I’m sorry. I just couldn’t think of any other way to—”

Gavin held up one hand. “Did I hear you say that Hammond arranged for you to meet with someone at Global Components?”

“Yes.”

“Then you didn’t actually meet with anyone at Global today.”

“No, just with Hammond.” Conner was going to play things close to the vest. “I couldn’t. The people Hammond wanted me to see were all down in Miami. So I’m set up to go back down there next week. It’s killing me to wait, but what I can do?”

“Who did Hammond arrange for you to meet with?”

“I forget his name.”

“What’s his title?”

“I really don’t remember. Hammond’s assistant is going to send me an e-mail with all that information.”

“Check and see if she sent it.”

“She didn’t. I already looked.”

“You just sat down. How could you have already looked?”

Why the hell was Gavin was pushing so hard? “I checked my BlackBerry on the way up here in the cab from Penn Station.
It hasn’t come yet.
I told her this morning I wouldn’t be back in the office until tomorrow, so she’ll probably send it then.”

“Oh.”

“Let me follow up on this thing, Gavin. Don’t stop me.”

“What exactly are you going to ask this person from Global when you meet with him?”

Conner shrugged. “I’ll make it up as I go. Like I told you, I don’t know where else to go to figure out what happened to Liz.” Except for his friend at Merrill Lynch who was still checking into why Liz had left the firm so suddenly. But he wasn’t going to tell Gavin about that either.

“I’m disappointed you didn’t feel you could tell me this
before
you went to Washington,” Gavin said, moving to the door. “I told you I’d help as much as I could.”

“This was just something I needed to take care of myself.”

“What you thought was that I might not let you go.”

“Well, maybe,” Conner admitted.

“We had a deal.”

“I know.”

Gavin hesitated at the door. “Keep me informed, pal. I want to know who Victor Hammond is having you meet with at Global as soon as you get that e-mail from his assistant. I’ll have my people check him out. If there’s something fraudulent going on at Global Components, you have no idea how far the execs there might go if they think someone’s closing in on them.”

“I understand.” It was the same warning Jackie had given him.

The old man pointed at the stack of Pharmaco files. “Get to work, pal. I told the CEO we’d be back to him by the end of the week, but I don’t want to wait that long. I want to know by tomorrow afternoon what you believe Pharmaco’s value is so we can assess the European company’s offer.” He chuckled. “And, Conner, I think it would be a good thing if your valuation is a lot higher than the European offer. Don’t come back and tell me that their offer is fair. I’d hate to have to put somebody else on the transaction. Remember, we get paid on a percentage of the deal. The bigger the better.”

“Of course, Gavin.” He’d heard that so many times.

Gavin expression brightened. “By the way, I’m discussing a second engagement with another old CEO friend of mine. This time it’s a buy-side deal. His company is considering a major acquisition. The target is worth several billion dollars, which would mean another fat fee for us. I want you to be my lieutenant on that deal, too, pal.”

“Thanks.”

Gavin smiled. “Looks like it’s going to be a damn good year after all. I can feel it.” He waved and was gone.

Conner stared into the hallway until he heard Gavin go out the front door. Two multibillion-dollar transactions closing before year end, which would translate into at least $30 to $40 million in fees for Phenix Capital. Conner reached for the Pharmaco file. That would take care of the stack of bills he’d seen in Gavin’s kitchen drawer—and leave plenty for seven-figure bonuses.