“How huge?”
“EGenco probably wasn’t going to go under, if that’s what you’re asking. They had too many other assets. But from what I hear-and, again, all this is conjecture-LecTro was a fiasco. If I’m right, we’re talking billions of dollars of losses. If that’s true, I suppose it’s possible it might have sunk the whole thing.”
“So what happened?”
“Well, that’s the question. That’s what’s being investigated.”
“What do you think happened?”
“Look-at a certain level, you get so big, you have so many fixed assets, it’s almost impossible for anyone to know exactly what you’re doing. Again, if the losses are as great as I suspect, my guess is that EGenco management decided to hide a huge amount of debt. In essence, keep the stock high, fool the public and Wall Street, and hope they could keep things hidden until they figured out a way to right the sinking ship.”
“How?”
“How’d they cover up? Again, this is just a guess, but I’d say they’ve been screwing around with retirement funds, IRAs, and pension plans, a lot like Enron did. If that’s true, there are going to be a lot of angry, broke people. It’ll make the Enron thing look like small potatoes. I’ve also been hearing rumors about SPEs gone wild.”
Justin forced himself to think back to his business school days. SPE. . Special Something Something. . Special Purpose. . Entities! That was it. A way for corporations to hide money. They’d create a company within a company, make someone the CEO with signing power, and, like magic, you had a financial structure that could work outside of any corporate rules. That CEO could authorize salaries-including his own-and designate payments for board members. Without anyone else even knowing about it. Big business was a world where rules were something to be bent or broken. Another reason why Justin liked being a cop: you could play around with the rules but ultimately there were limits. Once you exceeded those, you had to pay the price.
“Special Purpose Entities?” Justin said now. “Good way to make sure someone’s taking out a lot of cash if the company’s going down the drain.”
Jonathan spoke up, a touch of relief in his voice. “I’m glad to see that Princeton wasn’t a total waste of time and money.”
“SPEs are a great way to hide a lot of crooked things,” Mallone said. “And to buy a lot of favors, which EGenco has certainly done. I mean, look at their presence in Iraq and other parts of the Middle East. They don’t get there unless they’re paying a lot of people a lot of money. It doesn’t just happen that they get no-bid government contracts for billions of bucks to reconstruct an entire country.”
“You said something about lawsuits,” Justin said. “What’s that all about?”
Mallone tapped the suitcase. “You’ll have your reading cut out for you. There are several hundred pages of those babies in here. The two most interesting ones are from STE and New York.”
“Okay, you’ve lost me.”
“STE-Save the Earth. The ecological group. They had the suit that the Supreme Court just rejected.”
“Oh, right. About the energy policy, right?”
“About the meeting that set the energy policy. It got a ton of publicity and it’s all in the suitcase.”
“What’d you mean about New York being the other interesting suit?”
“I’m not a legal expert. You’re better off reading the filings. I also downloaded a bunch of articles off the Net that’ll help give everything some perspective. The thing you have to understand is that this country’s so politically divided, it’s hard to know what’s valid or not. I mean, half the people hate our vice president so much, they’ll do anything to harass him. And the other half will do anything to validate his actions. I can’t say if these suits are valid or if they’re politically motivated.”
“When was Dandridge involved with EGenco?”
“Involved? He was more than involved, Jay. He was their CEO from. . ohhh. . I’d say for about eight years, right up until he ran for VP. When he got the nomination, he resigned.”
“And ended his connection?”
“Hardly. I can’t tell you how much stock he still owns, but I guarantee it’s a hell of a lot.”
“It’s all in a blind trust,” Jonathan Westwood added. “Common practice for elected officials.”
“That’s his financial connection. And he certainly didn’t end his personal connections. Or his political connections, for that matter. Brad Collins probably raised more money for Anderson and Dandridge than anyone in the country. EGenco loaned them their private jets during the campaign, supplied a fortune to PAC groups under the guise of organizing nonprofit organizations, whatever they could do.”
“All this stuff. . the things that are being investigated. . the business irregularities. . happened under Dandridge’s watch.”
“That’s the question. Very little has been made public.”
“And the lawsuit about the energy policy. .”
“Same answer. These guys are so damn secretive. And no one’s been able to force Dandridge to reveal a thing. Thus the lawsuits.”
“But what’s being thrown around as an accusation. .”
“What’s being thrown around is that Dandridge, soon after he and Anderson were elected, called a meeting of some of the top energy experts in the country. And that’s where they set the administration’s energy policies. Which were, obviously, extraordinarily favorable to the energy industry. The only irregularity, the only bump in the policy, was when they shocked everyone and went against the oil companies to protect that land up in Alaska.”
“The National Petroleum Reserve,” Jonathan put in. “It’s several million acres.”
“Yeah,” Justin said. “I read about that. Why do you think they did that?”
“Why do they do anything?” Jonathan’s dad answered. “Political expediency. They feel confident they’ve got big business and energy support no matter what they do. So I assume this was a nod to environmentalists, a way to stave off criticism that they’re in anyone’s pockets. Pretty effective, too.”
“So who was at the big energy policy meeting?” Justin asked.
Mallone shrugged. “No one knows. That’s part of what they’re refusing to release. All I’ve got are rumors.”
Now Jonathan Westwood shook his head and said, “Christ, everyone knows who was there. It was Dandridge’s cronies from EGenco and a few of the Saudis.”
“Why would they include the Saudis?” Justin asked his father.
“Why would they tell the Saudis about attacking Iraq before they tell their own secretary of state? Because the relationships between Dandridge and Anderson and the Saudis go way beyond anything political. They’ve all made each other rich. The Saudis don’t do anything that’ll piss us off-at least not when it comes to oil supplies and prices-and we don’t do anything to piss them off. We keep them in power-we’ve got military forces over there to make sure no one rises up against them-and they make guys like Dandridge and Anderson even richer. And you wonder why no one trusts politicians.”
Justin took a deep breath. What the hell was he doing? He was supposed to be investigating a rigged plane crash. Now he was talking about Saudi royalty and the vice president of the United States and oil prices and SPEs. He wanted a nice little shot glass of scotch. Maybe even two. Or, now that he thought about it, three. Instead, he gulped from a plastic bottle of Fiji Water and listened as his father took over the conversation, explaining what he knew-either personally or secondhand-about the past and present personalities that ran EGenco. Justin absorbed a crash course in big-money backroom political relationships and financial kickbacks and government contracts and the cost of money. And he’d never been so glad in his entire life to hear a knock at his front door because his head was spinning and he was overwhelmed at how all he’d meant to do was open a door just a crack and what he’d really done was let in a cyclone.