“Morris Networks has a partnership with a Bermudan company called Grand Vistas. The partnership was formed two years ago.”
“I’ve been to Bermuda,” I replied helpfully.
“Then surely you know it’s a very popular place for these partnerships.” She adjusted her glasses, warming to the topic. “Liberal accounting policies, friendly banks, and no taxes make it an ideal business nexus.”
“That’s exactly why I vacationed there.”
She was shaking her head. “Your firm did the legal work for this partnership with Grand Vistas. It’s a joint investment vehicle.”
“Of course it is. Now you know why we put it together.” She looked impressed, until I asked, “What the hell does that mean?”
“It means that Morris Networks and Grand Vistas swap.”
“Oh… right. I tried to swap spit with those German girls. From there, we could, you know, try some organ donation… but you’re not really interested in this, are you?”
She rolled her eyes. “I’m referring to the swapping of shares and network capacities. Under the Generally Accepted Accounting Principles, capacity exchanges allow both companies to treat swaps as sales and book immediate revenues.”
“And this is legal?”
“Yes… That’s what I said.”
“Oh…”
“Grand Vistas is apparently a holding company that has interests in several overseas telecommunications enterprises. Under a capacity swap, the two companies agree to exchange utilization of each other’s networks.”
“And the relevance of this is…?”
“It’s a very important relationship for Morris Networks. Last year, Morris booked three hundred million in revenue from Grand Vistas.”
Well, this was very fascinating, but my mind had already drifted back to how Tiffany might look unencumbered by all those silly clothes they made her wear around the office. “Does this lecture last much longer?”
Martha shuffled her feet. “Morris Networks booked roughly eighty million in swaps with Grand Vistas the first quarter of this fiscal period. We’re assuming the partnership remains in effect.”
“Yes?”
“We need to know the expected duration. Your law firm prepared the contracts.”
Well, this was annoying. It being Sunday, depending on their bent, the other members of the firm were probably off hitting the back nine at their country clubs, or sneaking into peep shows off Dupont Circle. I asked, “Can’t this wait till tomorrow?”
“If you’re willing to give us a two-day extension. Obviously, we can’t complete the projected revenues unless we know the duration of the contract.”
Well, obviously. I shook my head and walked to the bank of phones in the corner. My briefcase contained a list of the firm’s home numbers and I dialed Barry’s shiny house in the shiny suburb.
A woman’s voice answered, “Jessica Bosworth. May I help you?” Her accent was northeastern preppy, a little whiny in my view, suggesting she was suicidally depressed about her lousy marriage and the fact her husband was a short-dicked bed wetter. But I sometimes read too much into things. Kids were hollering in the background. Who could blame them, considering who their father was.
I introduced myself and informed her that I needed to speak with her husband. It took nearly two minutes before Barry came on. He explained that he and his wife were hosting a kid’s birthday party, and my timing was really lousy, and could we get this over with quickly. I said sure, explained what the accountants wanted, and he replied, “No problem. I prepared those contracts and negotiated the deal. I’m intimately familiar with the whole thing.”
“I knew you were the man, Barry.” I asked him, “So what’s the nature of the contract?”
“Cross-investment, and they swap network utilization.”
“Duration?”
“Four years, renewable. Since it was signed two years ago, it has at least two more years to run.”
“Under what conditions can either party back out?”
“No conditions. There’s no provisions for that in the contract.”
“No conditions… isn’t that unusual?”
A kid’s voice was still hollering in the background. Barry reminded me, “Drummond, I’m in a hurry here.” I heard an impatient sigh. “What are you, an expert in commercial contracts now?”
I just love having my own ignorance rubbed in my face. I replied, “I asked, isn’t that unusual?”
“Both…” The kid’s squeal got loud enough that Barry had to raise his voice to be heard. “Uh… look, both companies are very happy with the arrangement. Don’t worry about it, all right?”
I wasn’t worried about it. In fact, I didn’t give a rat’s ass about the contract. But it was Sunday afternoon and I was stuck in this room, with these people, because Barry put me here. And his kid probably had a stinky, barn- sized load of crap in his diapers, and was pulling frantically on his father’s pants leg. With a little effort I can be a real pain in the ass. Actually, without effort. I said, “Right, so I’ll just tell everybody to go home till tomorrow, when it’s more convenient for you to answer my questions.”
“Fuck off.”
Boy, was this getting fun. A woman’s increasingly indignant voice was screaming, “Barry… Barry…!”
“Hey, guess what?” I told Barry. “I just thought of a bunch more questions I need answered immediately. For starters-”
“Goddamn it, Drummond! Don’t fuck with that contract. You understand? You don’t know what in the hell you’re getting into.”
“I don’t?”
“Uh…” The kid was now wailing and his wife was screaming at the top of her lungs, too.
He tried speaking over them, “It’s perfectly legal. Bo-” He screamed, “Would you shut up!”
Back to me, he said, “Both parties agreed to the conditions. That’s all you or the accountants need to know.”
“What did you mean the contract’s legal?”
“No. I, uh, I just meant the partnership is… ah, fuck…” He took a deep breath, then chuckled. “Hey, Sean… buddy, I’m trying to be helpful here.” He paused again as the kid’s voice moved up another couple of notches, and Barry must’ve slapped his hand over the mouthpiece, but not well enough, because I distinctly heard a loud slap and his muffled voice scream, “Shut the fuck up, you little monster!”
Geez. Time to reconsider the Daddy of the Year award I had planned to put Barry in for. A woman’s voice began barking and I could hear Barry bark back, losing not a single point on the nastiness factor. I distinctly heard the words “bitch” and “asshole” before a door slammed in the background.
Silence.
Barry then said to me, “Nobody held a gun to anybody’s head, Drummond. Everything’s fucking legal, all right? Morris Networks reports the partnership in a footnote with its annual filings to the SEC. You got all that? Now, you tell the accountants to book the fucking projections.”
I had never expressed the slightest doubt about the legality of the partnership. Barry raised that issue all by himself.
I said, “Hey, have a nice day.”
The phone went dead.
So, this was interesting. Barry hadn’t really confessed anything. In fact, he’d denied everything. The problem was he hadn’t been asked to deny anything.
You have to wonder why. And while you’re at it, recall that the pristine name of Sean Drummond would be scribbled on the blame line for this audit. If any part of it later proved false or misrepresentative, the SEC and American Bar Association would come trolling for moi’s ass. Could it be that Barry wanted me overseeing this audit precisely because of my incompetence?
Well, this was a great deal to surmise, and Barry had been under considerable stress and pressure, and, as I
