For the first thirty-five years or so, James Merriwell was content to carefully expand from building to buying wells and making investments in wildcatters. As his fortune rose, so did his ambitions-or, at least, so did the ambitions of his third, and much younger, wife, Laylene. She pushed her husband, as he was approaching his sixty-fifth birthday, to broaden his business interests, which in turn would broaden their social, cultural, and political circles. Merriwell was only too glad to appease the latest Mrs. Merriwell, who could be rather sharp-tongued when she didn’t get her way. So, in the mid-1950s, Merriwell-as the company was now officially named, and of which Laylene had been given a hefty piece-acquired Green amp; Duggin, an engineering and construction company. G amp;D, as it was called, had been formed in 1918. After its acquisition by Merriwell, it was renowned as a road construction company, a general contractor, and builder of the world’s first offshore platform in 1947. In the mid-1970s, not long before James Merriwell’s ninetieth birthday, Merriwell GD, as it was now called, bought Windmer Industries, a project management company for the oil industry. Windmer had also prospered during the first half of the century. The founder, an inventor named Horatio Windmer, began the company during the country’s first oil boom at the end of the nineteenth century. In 1880, Windmer’s position in the oilfield products manufacturing business had been launched when he patented a cylindrical packer that revolutionized the industry.
The three giants of this industry, Green, Duggin, and Windmer, were all dead by 1960. James Merriwell finally died in 1978, leaving Laylene as one of the richest women in America. Within two years of her husband’s death, she had bought a professional football team, built an opera house in her small Montana hometown and paid Pavarotti a one-million-dollar fee to sing at the opening night ceremony, married a man thirty-two years her junior, with a prenup agreement that gave him thirty-five million dollars upon her death unless he didn’t fulfill his end of the bargain, which was to fuck her a minimum of three times every week, and she’d taken Merriwell public, earning several hundred million dollars more, and changing its name to EGenco. The E was for energy. The Gen was for Genevieve, the daughter she’d had with old man James. Six months after the company went public Genny was killed in a car accident. Laylene was driving but was unhurt. Rumors were that she was drunk as a skunk, but this was Texas so money changed hands, lips were sealed, and no charges were ever brought.
Justin interrupted Roger at this point in the narration to ask him how the hell he knew all these little details. Particularly the one about Laylene’s husband having to fornicate thrice weekly. Roger just raised one eyebrow and said, “When I do an investigation for your father, I make sure I’m thorough.” Then he went back to telling his tale.
In the late eighties the new management team of EGenco took over a corporation called F.X. Springs, an acquisition that expanded them into petroleum refining and petrochemical processing. Francis Xavier Springs had begun his business in 1902. Initially they were pipe fabricators; eventually he created technology that altered petroleum refining and petrochemical processing and, with the money that rolled in after that, he built his own facilities based on those techniques. When they were merged into EGenco, they formed the next-to-last piece of what the corporate report called “vertical and horizontal energy integration.” The final piece was a relatively new company called LecTro, a midsize utility company that was acquired in 1991. There were now five divisions that formed the base of EGenco’s production attributes: Merriwell, Green amp; Duggin, Windmer, F.X. Springs, and LecTro. Together, they offered an enormous array of products, services, and integrated solutions for oil and gas exploration, development, and production. And when they officially outgrossed their biggest rival, Halliburton, the company was able to rightfully call themselves the largest and broadest unified oil and gas services company in the world.
By 1997, EGenco’s worldwide revenues were somewhere around nineteen billion dollars. Then, according to Roger Mallone, they got greedy.
“Can we go back a minute?” Justin asked.
“We can do anything you want,” Roger said.
“A unified oil and gas services company. Put that in English.”
“It’s simple. There is literally nothing in the finding, development, and processing of oil and gas that they don’t have their hand in. They explore and develop, they produce, they handle maintenance for other producers, they convert and refine. They run plants and oil wells, build plants and wells, manufacture everything from drill bits to subsea pumps. And with LecTro, they actually even supply and sell electricity. So they literally are capable of controlling every aspect of the energy business.”
“Is that legal?”
“It’s legal if the government decides it’s legal. Would it have been twenty years ago? Well, let’s say pre-Reagan? Probably not. Today? Well. . would you want to be the government prosecutor that downsizes them and runs the risk of costing people tens of thousands of jobs?”
“The numbers are that big?”
“Sure. They probably employ a hundred thousand people, maybe even more, full-time.”
“Worldwide?”
“Christ yes, worldwide. They’ve got bases in a hundred and twenty, hundred and thirty countries. I’d be willing to bet they’re in every country you can name and a hell of a lot you can’t. Over the years they’ve expanded both internally and through major acquisition. They’re sharks. They’ve bought engineering and construction companies, petrochemical processing plants, you name it and they’ve built it, managed it, or devoured it.”
“You said ‘the base of their production attributes.’ What other attributes are there?”
“This is where it gets a little complicated. And it’s where they got greedy, as I said. And my guess is, it’s also the root of their current problem.”
“The government investigation.”
“Investigations, plural. Right.” He glanced at Jonathan Westwood. “Do you agree with that?”
Jonathan nodded, so Roger went back to his dissertation.
“What happened is, about seven, maybe eight years ago, they were huge and successful. Particularly after they bought LecTro. And when they bought it, that company was a money machine. The energy business was being deregulated-the rate of returns, the caps-so cash was just flowing in. They decided to take advantage of that and began trading electricity.”
“Electricity trading? Is this remotely as complicated as NBA salary cap stuff?”
Jonathan Westwood groaned. Roger Mallone just shook his head and said, “Actually, no. It’s a lot simpler. Especially with deregulation. Think of electricity as something physical. A plant somewhere has excess supply and someone somewhere else doesn’t have enough. They need electricity-California power plants, for instance, a few years ago. At first, our guys just sold. No problem. Then they saw the profit margin and began brokering. If they didn’t have enough, they went elsewhere and acted as the agent. For both sides. They negotiated the selling and the buying price.”
“That can’t be legal.”
“Welcome to the twenty-first century and a government that’ll let big business do just about anything they want.” Roger snuck a glance at Jonathan Westwood and added, “Thank God.”
“Keep going,” Justin said.
“Electricity is traded very actively-because it’s unevenly used. So the geniuses over at EGenco decided they didn’t want to just broker. They wanted more. So they decided to buy, not just represent. They brought in a bunch of Masters of the Universe types who looked around and saw what was happening on Wall Street-remember, this is when the economy was at a record high-so they thought they couldn’t lose. And now what they were doing was buying from plants, holding on to the electricity, and then selling what they owned to other plants. The problem was they bought high. Very high. They bought everything at the top, and suddenly, as things began to turn, they were selling all of it at huge losses.”