The combination of a few beers, the boastful talk, and Dan’s impending payday made it impossible for me to keep my mouth shut. I looked around and said, “Guys—you wouldn’t believe what happened to me today.”
I started to tell the story, but before continuing, I said, “You guys have got to promise to keep this to yourselves.” Heads nodded around the table, and I went through the day’s drama. My banking friends were transfixed. Bonuses are the only thing that investment bankers care about, and the idea of getting a check and then not being able to cash it is an investment banker’s worst nightmare.
The game finished shortly after midnight—Dan never did make his money back—and everyone went home. Even though I had finished the game £250 down, I was satisfied, knowing that I had told the best story of the night.
I continued to go to work that week as if everything were fine, but things were seriously unraveling at Maxwell. Then, two days after poker night as I walked to the Hampstead Tube stop, I picked up the Wall Street Journal. Just above the fold was the headline “The Bouncing Czech.” The byline: Tony Horwitz, the reporter I’d played poker with.
I bought the paper and opened it up. There, in black and white, was the exact story I’d told around my kitchen table.
That son of a bitch.
I got on the Tube and reread the piece, mortified by what I had done. I thought this reporter was going to keep this to himself, but he had completely screwed me. No matter what kind of crisis the company was going through, there was no way I could talk my way out of this monumental fuckup.
When I got to work I stared straight ahead, avoiding the eyes of my co-workers. I was desperate to come up with a plausible explanation for my actions, but I couldn’t. George arrived a few minutes later, completely oblivious to my indiscretion. Before I had a chance to explain to him that I would probably be getting fired that day, I glanced through our office’s glass partition and noticed a strange group of men assembling in the reception area. They were so out of place that I pointed them out to George. He rolled his chair over to my desk and we watched them together—and for a moment I forgot about the Wall Street Journal article.
Unlike the parade of dark-suited bankers from before, these men wore ill-fitting blazers and raincoats and looked completely uncomfortable. They huddled briefly before fanning out across our floor. A young man, not more than twenty-five years old, walked into our room. “ ’Morning, gents,” he said in a thick cockney accent. “You probably don’t know why we’re here. My name is PC2 Jones. And this”—he waved his arm in a grand gesture—“is now a crime scene.”
For a brief moment I was relieved that this wasn’t about my Wall Street Journal stupidity. But that feeling was short-lived as I started to appreciate the gravity of the situation.
PC Jones took our details and, as George and I watched, started placing white evidence tape over our desks, computer screens, and briefcases. He then asked us to leave.
“When can we come back?” I asked nervously.
“I’m afraid I don’t know that, sir. All I know is you have to go. Now.”
“Can I take my briefcase?”
“No. That’s part of the investigation.”
George and I looked at each other, grabbed our coats, and quickly left the building. As soon as we got outside, we were met by a swarm of reporters at the building’s entrance.
“Were you part of the fraud?” one shouted, thrusting his microphone into my face.
“Where’s the pensioners’ money?” another demanded, a camera rolling over his shoulder.
“What did you do for Maxwell?” a third one yelled.
I could barely think as we pushed our way free of the reporters. Several of them trailed us for a half a block before giving up. We didn’t know what to do, so we walked briskly toward Lincoln’s Inn Fields and ducked into Sir John Soane’s Museum. As soon as we were safe, George started to laugh. He thought that the whole thing was a big joke. I, on the other hand, was in shock. How could I have been so stupid not to listen to everyone’s advice about Maxwell?
When I got home that afternoon, I turned on the news and the lead story on every channel was the £460 million hole that had been discovered in MCC’s pension fund. Maxwell had looted the firm’s pension fund in an attempt to prop up the company’s sagging share price, and now thirty-two thousand pensioners had lost their life savings. On the BBC I saw the melee at the entrance of our building and even caught a glimpse of myself fighting through the crowd. Later that night, the BBC reported that Maxwell’s was the biggest fraud in British history.
The next morning I couldn’t decide: should I go to work or not? After deliberating for an hour, I decided to go. I left my peaceful cottage, got on the Tube, and once again fought my way through the scrum of reporters at the front entrance of Maxwell House. When I got to the eighth floor, I was greeted in the reception area by a new group of strangers. This time, they were the bankruptcy administrators. One stopped me before I could go into my office and said, “Go to the auditorium. There’s about to be an important announcement.”
I followed his instructions and found an empty seat next to George. About half an hour later, a middle-aged man carrying a clipboard appeared. His sleeves were rolled up, he had no tie, and his hair was mussed, as if he had nervously been running his fingers through it over and over. He took the podium and started reading from a prepared statement.
“Good morning, everyone. I’m David Solent from Arthur Andersen. Last night, Maxwell Communications Corporation and all of its subsidiaries were put into administration. The court has appointed Arthur Andersen as bankruptcy administrators to wind up the company. Following standard procedures, our first course of action is to announce redundancies.” He then began to read names, in alphabetical order, of all the people who were being fired. Here and there, secretaries started weeping. One man stood and shouted obscenities. This man tried to get close to the stage, but was stopped by a pair of security guards and escorted away. Then George’s name was called, along with that of Robert Maxwell’s son Kevin, and just about everybody else I knew at the company.
Amazingly, my name wasn’t called. Of all the things I had been warned about before taking the job, the one thing that was sure to happen—my being fired—didn’t happen. I soon learned that the administrators had kept me on because they had no idea what to do with the investments in Eastern Europe. They needed someone around to help them sort it out.
I grabbed onto this little victory, thinking that it would make it easier for me to find a new job when everything was over. Unfortunately, I could not have been more wrong. I was no golden boy anymore. Having Maxwell on my résumé was as toxic as it could get, and I soon discovered that nobody in London would touch me.
* * *
1 Pub manager.
2 Police constable.
6
The Murmansk Trawler Fleet
Nobody, except for one firm: Salomon Brothers.
In 1991, just as Maxwell had generated a huge scandal in Britain, Salomon Bothers had done the same in the United States. In the previous autumn, the Securities and Exchange Commission (SEC) caught some top Salomon traders trying to manipulate the US Treasury bond market. It was unclear how hard the SEC would pursue its case or even whether Salomon would survive. A similar thing happened a year before at another firm, Drexel Burnham Lambert, and it went bankrupt, leaving many people unemployed. Fearing a similar fate at Salomon, many of the good employees had jumped ship and found new work elsewhere.
This left gaping holes at Salomon that needed to be filled, and I was desperate for a job. In better times, Salomon might have shunned me, but they were as desperate as I was, and after an intense round of interviews, they offered me a position as an associate on the East European investment-banking team in London. It wasn’t exactly what I wanted. My dream was to be an investor—the person deciding what shares to buy—not an investment banker, the guy organizing the sale of shares. Moreover, the title wasn’t as
good as my title at Maxwell, and it came with a significant pay cut. But beggars can’t be choosers, so I gratefully took the offer. I was determined to put my head down and do whatever was necessary to get my career back on track.
Unfortunately, Salomon was probably the most unnatural place to do that. If you’ve ever read Liar’s Poker, then you know that Salomon Brothers was one of the most dog-eat-dog firms on Wall Street. To say that I was nervous on my first day would be a gross understatement.
I arrived at Salomon’s offices above Victoria Station on Buckingham Palace Road in June 1992. It was an unusually warm and sunny day, and I walked through a large set of wrought-iron gates and took the long escalator up three flights to the main reception area. I was met by a well-dressed vice president a few years older than me. He was curt and impatient and seemed annoyed at having been tasked with greeting me. We walked across the atrium and through some glass doors to the investment bank. He showed me to my desk and pointed to a box of business cards. “Listen, things are pretty simple around here. You generate five times your salary in the next twelve months and things will be fine. Otherwise, you’re sacked. Clear?”
I nodded and he left. That was it. No training program, no mentors, no orientation. Just do it or get fired.
I tried to settle into my chair in the bullpen, the open area where all junior employees sat, unsure of what to do next. As I leafed through the Salomon Brothers employee handbook, I noticed a secretary sitting nearby speaking loudly into the phone about flights to Hungary. When she put down the receiver, I walked over. “Sorry to eavesdrop, but I’m a new associate and couldn’t help hearing you talking about Hungary. Do you know what the firm’s doing over there?”
“Oh, that’s okay,” she said reassuringly. “We all listen to each other’s conversations. I was making reservations for the Malev privatization team to go to Budapest next week.”
“Who’s working on that?”
“You can see for yourself.” She pointed toward a group of men sitting in one of the glass-windowed conference rooms just off the bullpen. While I’d been there for only a few hours, I knew that if I was going to succeed, I needed to take some initiative. I thanked the secretary and marched over to the conference room. As I opened the door, the six people on the Malev team stopped talking, turned toward me, and stared.
“Hi, I’m Bill Browder,” I said, trying to mask my awkwardness. “I’m new on the East European team. I was hoping you guys could use some help on your deal.” The uncomfortable silence was broken by two younger team members, who giggled under their breath. The team leader then politely said, “Thanks for stopping by, Bill, but I’m afraid we’re fully staffed.”
That was a little embarrassing, but I didn’t let it affect me. I kept my eyes open and asked around and found another opportunity several days later. The Polish telecom privatization team was having a meeting to discuss the next phase of their project. I knew they were getting a much bigger fee than the Malev team, so I figured they might not be so resistant to having another person around.
When I showed up to their meeting, the man in charge was much less polite than the Malev team leader. “Who told you to come here?” he demanded. “We don’t need you on this or any other deal we’re doing in Poland!”
Nobody wanted to share their revenue with me because they were all struggling with the same “five times” formula that I was; everybody was simply fighting to protect their turf in Eastern Europe. For several weeks I racked my brain trying to figure out how I was going to survive at Salomon. But then I noticed something interesting. Nobody was doing anything in Russia, meaning there was no one to fight me over it. I decided to take a chance. I declared myself the investment banker in charge of Russia, held my breath, and waited to see if anyone would object. Nobody did.
From that moment on, Russia was my territory.
But there was a good reason why no one cared about Russia: there was no paid investment-banking work to do there. While Russia may have been politically free, it was still Soviet in every respect, including their use of investment bankers. I stubbornly ignored this fact and set out to find whatever business I could. I tirelessly went to conferences, meetings, luncheons, and networking events all around London, hoping some business would fall into my lap.
Three months in, I still hadn’t made a single penny for Salomon and my prospects were not looking good. But then, a lawyer whom I’d met at a networking event told me about an advisory assignment for the Murmansk Trawler Fleet, a Russian fishing operation two hundred miles north of the Arctic Circle. The fleet had put out a tender for a privatization adviser. I didn’t know the first thing about fishing, but I’d learned how to make an excellent proposal at BCG, and I set to work.
I searched Salomon’s deal database, looking for anything to do with trawlers or fishing. Remarkably, fifteen years earlier the Tokyo office had been involved in several transactions involving Japanese fishing companies. Fifteen years seemed like a long time, and these were debt deals, not privatizations, but what the hell? I stuck all the Japanese experience in the proposal, tidied it up, and sent it off to Murmansk.
A few weeks later, the phone rang. A woman named Irina was calling on behalf of the Murmansk Trawler Fleet’s president.
“Mr. Browder,” she said in a thick Russian accent, “we would like to inform you that we have accepted your proposal.” I briefly wondered if they had even received any others. “When can you come to Murmansk to begin the assignment?” she asked awkwardly. It sounded as if this was the first time she had ever spoken to a Western investment banker.
I was elated—I had brought in my first piece of real business—but the tender didn’t say how much they would pay. Since I hadn’t made any progress toward the goal of making five times my salary, I was hoping for something significant. In a deliberate and formal voice that I thought would make me sound older and more credible, I said, “I’m very honored you’ve chosen our firm. Could I inquire how much you intend to pay for this assignment?”
Irina spoke in Russian with someone in the background, then said, “Mr. Browder, we have budget of fifty thousand dollars for two months for this assignment. This is acceptable for you?”
My heart sank. It’s hard to describe how small $50,000 is to an investment banker. Linda Evangelista, a supermodel from the 1980s and 1990s, once famously declared, “I don’t get out of bed for less than ten thousand dollars a day.” For an investment banker, that number is more like $1 million. But here I was having earned nothing for Salomon, and $50,000 was that much more than zero, so I agreed.
A week later, I set off for Murmansk. The first leg of the trip was a 9:30 a.m. British Airways flight to Saint Petersburg. It took four and a half hours, and with the three-hour time difference, I arrived in the late afternoon at Saint Petersburg’s Pulkovo Airport. I stared out of my window as the plane taxied to the terminal and was astonished to see the burned-out carcass of an Aeroflot passenger plane lying on the side of the runway. I had no idea how it had gotten there. Apparently it was too much of a bother for the airport authorities to have it moved.
Welcome to Russia.
Since Aeroflot scheduled lots of its regional flights in the middle of the night, I had to sit in the airport for another ten hours until 3:30 a.m. to make the connection to Murmansk. Waiting all that time would have been painful in any airport, but it was particularly so at Pulkovo. There was no air-conditioning, and even though it was so far north, the air was hot and stuffy. Everyone was smoking and sweating. I tried to get away from the bodies and cigarettes, but even after I’d found a row of empty seats, a large stranger plopped down next to me. He didn’t say a word, but he pushed my arm off the armrest between our seats and promptly lit a cigarette, taking pains to blow the smoke in my direction.
I got up and moved.
I finally boarded an old Aeroflot Tupolev 134 just before 3:30 a.m. Its seats were threadbare and sunken. The cabin smelled of tobacco and old age. I settled into a window seat, but it wo
uldn’t lock into position and every time I leaned back, it would fall into the person’s lap behind me, so I didn’t lean back.
The cabin door closed and we moved out to the runway without the slightest hint of a safety announcement. We took off and were treated to a short but exceedingly bumpy flight. When the plane neared Murmansk, the pilot announced something in Russian. Another passenger who spoke English explained that we had been diverted to a military airport an hour-and-a-half drive from Murmansk because of a problem at the municipal airport.
I was relieved when the plane finally came in to land, but my relief was short-lived. The runway was so potholed and crooked, and the landing so violent, that I thought the wheels were going to be torn off the plane.
When I finally disembarked at 5:30 a.m., I was completely exhausted. Because I was so far north, the late-summer sun was low in the sky and had barely set. There was no terminal at the military airport—just a small warehouse-like building and a parking lot—but I was happy to see that the trawler fleet’s president, Yuri Prutkov, had made the trip to greet me. Irina, an unsmiling and leggy blonde with too much makeup, was there too. Prutkov was almost a carbon copy of the general manager of Autosan—late fifties, large, and with a handshake like a vise. He and I sat in the back of the company car while Irina sat in the passenger seat, twisting around to translate. The driver took off across a desolate tundra landscape that looked like the moon. Ninety minutes later, we arrived in Murmansk.
I was dropped off at Murmansk’s best hotel, the Arctic. I checked in and went to my room. The bathroom smelled like urine, there was no toilet seat, and large chunks of porcelain were missing from the sink. The room’s window screen was broken, allowing mosquitoes the size of golf balls to fly in and out freely. There were no curtains to blot out the barely setting sun and the mattress was lumpy and sunken in the middle, as if it hadn’t been changed in twenty-five years. I didn’t even unpack. My only thought was How soon can I get the hell out of here?