The Tainted Trust

  Mike glanced at his watch. It was nine fifteen. “I’m glad you called, Terry. Go ahead and get a replacement, but call me if Phillip shows up.”

  “I hope you weren’t talking about Phillip,” Karen said as she entered the room.

  “Unfortunately we were,” Mike replied with a disappointed frown. “He was a no-show this morning. The second he shows up here, we’re going to have a nice little chat, and this time I’ll take the gloves off. I’m going to get through to that kid, one way or another.”

  Mike approached Phillip when he returned to the apartment at six P. M. “Hard day at work?” he asked.

  Using his foot to remove his shoes while they were still tied, Phillip nodded. “Yup,” he said, deliberately avoiding eye contact.

  Mike placed his hands on his hips and glared at Phillip. “What did you work at? Terry Morgan called at nine-fifteen this morning. He said you weren’t there.”

  “I was late.”

  “I asked him to call me when you showed up. He didn’t call. Now don’t lie to me again. Where were you today?”

  Phillip hung his head. “Hangin’ out with my friends,” he admitted.

  “Where?”

  “At the mall, mostly.”

  Mike struggled to restrain his anger. He knew venting it would help him, but not Phillip. “Put your shoes back on,” he demanded. “You and I are going for a walk.”

  Annoyed, Phillip wiggled both feet into his shoes, then reluctantly followed Mike to the sidewalk.

  “Let’s go,” Mike said, then turned and began to walk at a brisk pace. Phillip was forced to trot to keep up. When he did catch up, Mike began to run and continued to run until Phillip stumbled and fell to the pavement, exhausted and unable to run further. “What’s the problem, son?” Mike chided. “Can’t keep up with an old man?”

  Phillip’s face was beet red and contorted with anger and frustration as he jumped to his feet and continued to run. Mike quickly outdistanced him, but when he noticed Phillip had quit the race, he turned and hurried back. “I wanted you to run this little race for a reason,” he said, placing his hands on Phillip’s shoulders. “I want you to understand that you’re living in a very competitive world. If you don’t prepare yourself to compete in it, you’ll never make it. I have to assume you want to be more than a shiftless mall-rat.” Mike turned and walked away.

  “I promise I’ll work,” Phillip shouted when Mike had distanced himself by fifty feet.

  “Talk’s cheep, son. Show me,” Mike said, continuing his walk.

  Phillip nodded. “But I really don’t like school.”

  Mike stopped and turned to face Phillip, encouraged that he might be making some progress. “I didn’t like it either, until I discovered the more I put into it, the more I got out of it. So far you’ve put very little into it. It’s no wonder you don’t like it.”

  CHAPTER 17

  Aurora, Ontario. Six months later.

  Mike sat at one end of the long mahogany table in the center of the St. Edwards School staff-room, adjacent to the headmaster’s office. He had arranged through the school’s secretary to have Phillip excused from class and sent to the staff room. The door opened and Phillip entered. Sloppily dressed in a navy blue blazer, white shirt, blue and yellow school tie, and gray flannel trousers, he shuffled to the far end of the table, then slumped in a chair, his face contorted to express his annoyance. He said nothing.

  “I bet you’re wondering why I’m here,” Mike said, leaning forward and glaring at his adopted son.

  Phillip looked away and slumped further in his chair. “I know why you’re here,” he muttered, as if bored. “The secretary told me. It’s because my marks aren’t very good.”

  “That’s only one of the reasons. I want to know why you’re misbehaving. Is it because you’re unhappy here?”

  Phillip reached for the heavy cut-glass ashtray in front of him and began to twirl it on the surface of the table with his index finger. He said nothing, avoided eye contact.

  Mike waited patiently for an answer, then stood. “I guess you’re too important for this school. I’m going to make arrangements to have you removed. Then you can decide what you’re going to do with the rest of your life.”

  “I’ll try to do better,” Phillip said, his voice barely audible.

  “That’s not good enough!” Mike shouted. “You will do better and there will be no more meetings like this! Is that understood?”

  Phillip nodded in silence.

  “Dammit, Phillip! Give me more than a casual nod. Convince me you’re serious. I’m at the end of my rope with you, son. If I don’t see positive results, and soon, I’m going to pull you out of this school so fast it’ll make your head spin.”

  Phillip sat erect and stared directly at Mike, his eyes glazed with contempt. “Okay, I promise I’ll work harder.”

  CHAPTER 18

  New York. Friday, April 17, 1987.

  The flashing green light on Visconti’s telephone console indicated his secretary was calling. He pressed the speaker-button. “Yes, Sue.”

  “Mister Raza’s here. Would you like me to show him in?”

  “Give me sixty seconds,” he requested, then terminated the call. He was about to entertain Assif Raza, an extremely wealthy investor from Kuwait City. Visconti hurried to the full length mirror behind the door to his lavish private washroom, anxious to ensure that every aspect of his appearance was perfect. He stared at perfection: the three thousand dollar dark blue suit, the yellow silk tie, the custom made black Italian leather shoes, the fifty dollar haircut, the complete package.

  A gentle knock on Visconti’s office door was a signal for him to return to his office and stand in the center of the expensive multicolored Persian rug adorning the floor. “Come,” he commanded.

  Sue entered with Visconti’s visitor. Smiling and with graceful and professional hand movements, she performed the introduction. “Mister Raza, please meet Louis Visconti.”

  Visconti displayed his triple-A commercial smile, then stepped forward and used both hands to clasp the extended hand of his visitor. “Very pleased to meet you, Assif. Welcome to New York and to my office.”

  “A pleasure to be here and to meet you, Louis,” Raza replied, stone faced. Raza, a fine featured but plump Kuwaiti wearing a black suit and tie, appeared to be in his mid-forties. His skin was light brown, his black hair thinning on top and graying slightly on the sides of his head. His brown eyes were beady, his nose hawkish.

  Visconti gave a barely perceptible nod to Sue, giving her the cue to leave.

  “I’ll leave you two alone, now,” Sue said. “Please call if you need anything.” She turned and left the office, closing the door behind her.

  Visconti pointed to two large green leather covered couches near the windowed corner of his office. They faced each other and were separated by an elegant glass topped coffee-table. “Assif, please join me over there. We can talk in comfort.”

  When they had moved to the couches and were seated facing each other, Visconti leaned forward. “Would you like something to drink, Assif? Coffee maybe?”

  Raza crossed his legs and relaxed against the back of the couch. “No thank you. I’ve just finished a rather large breakfast.”

  “Then perhaps we can discuss business. I’m sure you’re a very busy man and would rather not waste time with small talk.”

  Raza nodded.

  “You mentioned a large amount of money in our telephone conversation.” Visconti prompted, then stared at his guest, anxiously anticipating a positive response, hoping his approach would not be considered too bold.

  Raza smirked. “I like that,” he said, holding his hands in front of his chin and placing the tips of his fingers against one another. “You Americans don’t beat around the bush.”

  Relieved, Visconti leaned backward and relaxed. “Thank you. That’s exactly what I wanted to hear. Maybe you could begin by telling me what I can do for you.”

  “Certainly. I represent a
group of wealthy Kuwaiti investors. I am one of them. Having my own skin in the game creates a higher level of comfort among the members. The group has given me a mandate to diversify, both in terms of investment vehicles and geographic allocation.”

  “Is there a specific reason for the decision to diversify in that fashion?”

  Raza nodded. “There’s growing concern among my clients over the level of unrest in the Middle East. Consequently, they would like to move as much money as possible out of the area and place it in safer, more politically hospitable havens. As you know, the United States falls nicely into that category.”

  “I’m curious to know why you called me.”

  “The news of your investment success is well known, Mister Visconti. In addition, a mutual friend has recommended you.”

  “And who might that be?”

  “Alfred Schnieder.”

  Visconti grinned. “So once again I’m indebted to Alfred. How is he?”

  “Alive and well and living in Zurich. He sends his very best wishes.”

  “Please convey mine to him… Assif, you mentioned unrest in the Middle East. What, specifically is concerning your clients?”

  “It’s no secret the area is a tinderbox. A match could be lit at the wrong time or in the wrong place, and start a fire which would burn for a long time and prove very difficult to extinguish. Additionally, we worry that oil may not continue to be the goose which lays golden eggs.”

  “That sounds absurd. Everyone knows that Kuwait is virtually floating on an ocean of oil.”

  “That’s precisely the problem. Too much oil is chasing too few customers. Everyone is overproducing in an effort to capture incremental revenue. Most of the producing countries are desperate for cash, and are pushing as much oil into the market as they can. Much more than it will accept. The consequences of that are painfully obvious to us. With the conservation ethic taking hold throughout the world, we can no longer count on the phenomenal growth in demand we once considered our birthright.”

  “If the consequences are obvious to you, why aren’t they obvious to the whole world?”

  “Good question. Most people overestimate the strength of OPEC. Believe it or not, even the most successful cartel in the history of the world has vulnerabilities. Its greatest is weakness of demand, or stupid greed. I’m not sure which.”

  “Then what consequences are obvious to you?” Visconti asked, thoroughly fascinated by Raza’s story, thrilled to be entertaining an insider in one of the largest and most lucrative trading markets in the world.

  “The price of oil is too high. It must come down. We fully expect it will drop a long way, soon.”

  “How far?”

  “To five dollars a barrel. Perhaps further.”

  “That’s absolutely incredible! It’s over twenty-two right now.”

  “Correct. Perhaps now you can see why I’m here, and why my clients would like to diversify their investments. Even though they are perfectly aware the world will continue to use oil for generations to come, they would like to ensure that there is life beyond it. They wish to preserve their wealth and incomes by investing in areas and assets which are less sensitive to oil prices.”

  “If you’re so sure the price of oil’s going to crash, why don’t you short it?”

  “Some of my partners have already done so, however anything they’ve done in that connection is on a small and very discrete scale. Shorting the price of a commodity which has been their lifeblood for generations, is totally alien to them, tantamount to treason. More importantly, they’re prudent and very conservative people. They’re not looking for, nor interested in high risk, fast dollar schemes.”

  Visconti sensed the time was right. He sat upright and locked his deep set gray eyes on those of his visitor. “How may I help you?” he asked.

  “I would like you to handle our investments in the United States. If you agree, we’ll start on a small scale. As time and circumstances permit, we’ll increase our commitment.”

  “How small?” Visconti asked, struggling to hide his disappointment. Small was not the word he had expected Raza to use.

  Raza gave Visconti a barely perceptible smirk. “Would a hundred million be too small?’

  “No sir,” Visconti answered, stunned by Raza’s overture. “I think we can work with that,” he said, sensing a mild erection.

  “Fine. Then let’s discuss your fees and the other arrangements.”

  While they talked about fees, investment criteria, banking and reporting procedures, Visconti had difficulty containing his excitement. In addition to the acquisition of another extremely large client, once again he had been privy to inside information. Raza had told him the price of crude oil was about to drop to five dollars a barrel, soon. He remembered the last time he had been given inside information, and how much he had profited from it. Seven years earlier, Alfred Schnieder’s warning about the direction of interest rates had proven to be correct. He mentally calculated the enormous profits involved in a sizable crude oil short sale. If the price dropped from twenty-two dollars a barrel to five, the reward would be gigantic.

  CHAPTER 19

  Within seconds of Raza’s departure, Visconti telephoned Miles Dennis, a friend and senior account executive with Iacardi & Sons, Commodity Brokers.

  Dennis, a fifty-three year old high school dropout, had defied the odds in the financial world. He had not only succeeded beyond his wildest dreams, he had been instrumental to the continued success of Iacardi & Sons. Hired in 1947 as an office boy, he began to study the commodities business by night and any free moment he could steal. He was promoted to floor trader in 1951. In 1960, he became an account executive. With street smarts, an infectious personality and a wonderful sales ability, he had established himself as the number one producer in the company. “Why would the Crown Prince of Wall Street be calling a peasant like me?” Dennis asked. “Is he seeking new worlds to conquer?”

  “Cut the bull-shit, Miles,” Visconti retorted. “This is a business call. I need to know what your research people think of the price of crude oil. Where’s it going?”

  “Probably nowhere exciting. Why are you asking?”

  “I just had a meeting with a big hitter from Kuwait. He told me crude oil was about to go south, big time. His name is Assif Raza. You ever heard of him?”

  “I certainly have. He’s one of the founding fathers of Q8.”

  “What’s Q8?”

  “The Kuwaiti national oil company.”

  “So he’s for real?”

  “That’s putting it mildly… How far south?”

  “He thinks it’s going to five bucks. Maybe lower. He’s prepared to put a ton of money where his mouth is.”

  “He’s shorting crude?”

  “No. He’s diversifying out of it.”

  “So why are you calling me?”

  “I want to short crude.”

  “Why does that not surprise me? How high do you want to fly?”

  “A thousand July contracts.”

  “At the market?”

  “Sure. Let’s not quibble over nickels and dimes.”

  July 31, 1987.

  Primarily as a result of Visconti’s astute stock picks, the value of the King’s trust had grown by astounding proportions, now exceeding eight hundred million dollars. Save and except for the money used for the margin deposit on the crude oil short, every nickel of the trust was committed to the purchase of stocks.

  Visconti was once again a big winner when the spot price of West Texas Intermediate crude oil dropped to seventeen dollars and ten cents a barrel. The thousand July contracts he had shorted at twenty-two dollars and fifteen cents, now showed a paper profit of slightly over four million. The most spectacular aspect of the transaction was the return on his original investment. He had come close to doubling the margin deposit in the space of three months. As an encore, Visconti promptly shorted a thousand October contracts at seventeen dollars and twenty-five cents a barrel.

&
nbsp; CHAPTER 20

  New York. Thursday. October 15, 1987.

  A large and persistent low pressure cell over the Atlantic Ocean continued to pump cold damp air into the city. Dense gray clouds had enveloped the area and an on and off drizzle had enhanced the atmosphere for five consecutive days.

  Visconti shifted his position to stare at the now cold coffee on his desk. Depressed, and tired of the relentless constancy of his life and his business, he needed a change, to be out of touch, unavailable, to go away. It didn’t matter where, his only stipulation was that the destination had to be devoid of telephones and any other modern communication device.

  That evening he left his office without advising anyone of his destination, or the identity of his companion. He merely told his partners of his desperate need for a break, and that he would return on Tuesday of the following week.

  He and Marilyn Daring, a young and well painted blond bimbette he had recently charmed and romanced at a chic Manhattan piano bar, boarded a chartered executive Lear at La Guardia Airport. “She’s short on gray matter but she has a body that never stops,” he had recently said, bragging about his conquest to Jerry Mara.

  Visconti smirked as he buckled his seat belt, satisfied that he was about to disappear, and at long last experience freedom from the merciless invasion of telephones, television and newspapers.

  The jet whisked the two to Puerto Rico. From there, a yellow twin-Otter carried them to Anegada Island in the British Virgins, where they planned to spend four relaxing days at an expensive, yet primitive hotel.

  The timing of Visconti’s brief sabbatical could not have been worse.

  CHAPTER 21