Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice (6 page)

“That’s the share price.”

“And this one?”

“The profit from last year.”

“How about that one?”

“The number of shares being offered.”

I did some quick math. The share price valued this company at $80 million, while the company’s profits for the previous year were $160 million, which meant that the Polish government was selling this company for one-half of the previous year’s earnings! I was stunned. In simple terms, this meant that if you invested in this company and it stayed in business for six months, you would effectively make your money back.

I asked my questions again just to make sure that I wasn’t missing anything—and I wasn’t. This was
extremely
interesting. We went through the same exercise for some of the other companies in the newspaper, and the results were roughly the same.

I’d never bought a single share in my life, but as I lay in bed that night, I couldn’t stop thinking about the Polish privatizations. I thought,
I need to do this. Isn’t this exactly what I went to business school for?

My net worth at the time was a total of $2,000. After confirming with John Lindquist that there were no rules against my buying the shares, I decided to invest all my money in these privatizations. I had the cash wired to me in Poland, then asked Leschek if he could help me. During our lunch break, we went to the local savings bank and stood in line to convert my money to Polish zloty, then walked to the post office to fill out the subscription forms for the privatizations. The process was complicated and required Leschek to make four trips to the teller window to ask questions about how to fill out the detailed forms. But in the end, I successfully subscribed to the very first privatizations in Eastern Europe.

In mid-December, I returned to London to prepare BCG’s final presentation to Autosan and the World Bank, which we would make after the holidays. I was completely conflicted. My analysis showed that the company should fire a good part of the workforce if it wanted to stay in business. But after spending so much time with these people, I knew that mass layoffs would decimate them. I didn’t know how some would survive. I thought about Leschek and his extended family, and I pictured the hardships they were already forced to endure. I had to recommend layoffs, but I wanted to soften the blow. I decided to couch the whole idea of firings as just one of the possible “strategic options” in our report, hoping the government would ultimately consider the other option: continuing to subsidize Autosan.

But when I showed this “softened” presentation to Wolfgang in London, he was furious.

“What is this shit?”

“These are their options.”

“What are you, stupid? They don’t have any fucking options. They have to fire everybody, Browder.” He was being a complete bastard, but at least he got my name right.

Wolfgang forced me to delete all the other strategic options, then had me pass the presentation off to another consultant to fix the analysis. BCG wound up recommending that Autosan fire the vast majority of its employees.

We returned to Sanok, and Wolfgang insisted I take the lead in presenting our findings. BCG, the World Bank, and Autosan’s entire senior management gathered in the company’s largest conference hall. The lights were dimmed and I started up the projector, my transparencies ready to go. First, I put out the summary slide about the overall level of firings. The gasps were audible. I then described the layoff recommendations department by department. Leschek nervously translated all of it. With every new slide the shock diminished and the anger increased, and people started challenging me at every turn. The World Bank representatives looked at John and Wolfgang, hoping that they would intervene, but both avoided our clients’ gazes
and didn’t say a word. When I was done, every person in the room glared at me. The general manager was notably quiet, eyeing me with a look of profound disappointment.

I was supposed to have been Autosan’s knight in shining armor, but instead I was a traitor. I was filled with a mixture of anger, self-doubt, and humiliation. Maybe Eastern Europe wasn’t the place for me after all.

I left Poland knowing one thing for certain, though: I hated consulting.

Over the following months I thought a lot about Autosan, wondering what had happened and if I could have done anything differently. Communication with them was almost impossible, but later I got word that the Polish government had completely ignored BCG’s recommendations and continued to subsidize Autosan. Normally consultants hope that their advice is followed, but in this case I was thrilled that it hadn’t been.

My only remaining connection to Poland was my little stock portfolio, which I regularly checked. After leaving Sanok, they rose steadily. With every percentage point increase I became more and more convinced that I had found my calling.

What I really wanted to do was become an investor in the privatizations of Eastern Europe.

As it turned out, I couldn’t have been more right. Over the course of the following year my investments would double, and then double again. Ultimately, they went up almost ten times. For those who don’t know, the sensation of finding a “ten bagger” is the financial equivalent of smoking crack cocaine. Once you’ve done it, you want to repeat it over and over and over as many times as you can.

1
 The Polish national airline.

I now knew exactly what I wanted to do with my life—only it was in a field that barely existed. Although the Iron Curtain had been lifted, nobody was investing any money in Eastern Europe. I knew that would eventually change, but in the meantime my best option was to simply stay at BCG—assuming they would let me.

After returning from the fiasco in Sanok, I kept my head down, praying that Wolfgang hadn’t submitted a recommendation to fire me. To my great relief, he was either too distracted or had forgotten, because nobody came to my office with a pink slip. I finally knew I was in the clear in late January 1991 when John Lindquist suggested that he and I write an article together. If I were going to be fired, why would one of the top partners in the firm want to write an article with me?

The piece he had in mind was about investing in Eastern Europe, which we would submit to a trade magazine called
Mergers & Acquisitions Europe
. I looked into
M&A Europe
and it appeared to have an almost nonexistent circulation, but I didn’t care. I was ready to exploit any avenue that would help me establish myself as an expert on investing in the region.

To write the article, I studied everything I could get my hands on. I read a stack of more than two hundred news stories and quickly learned that fewer than twenty deals had ever been done in the former Soviet Bloc in the previous decade. The most prolific investor was Robert Maxwell, a maverick 350-pound British billionaire who was originally from Czechoslovakia, and who had done three of the twenty deals.

I figured I would impress John if I could get an interview with someone in Maxwell’s organization, so I called Maxwell’s press office, mentioning the article. They must not have done any homework on
M&A Europe
, because amazingly I was offered a meeting with the deputy chairman of Maxwell Communications Corporation (MCC), Jean-Pierre Anselmini.

The following week I showed up at Maxwell House, a modern building halfway between Mayfair and the neighborhood known as the City of London. I met Anselmini, a suave, English-speaking Frenchman in his late fifties, and he welcomed me into his plush office.

As we made small talk, I arranged my paperwork neatly between us. But just as I started to ask my first question, Anselmini pointed at one of my spreadsheets and asked, “What’s that?”

“That’s my Eastern European deal list,” I said, happy that I had come so well prepared.

“May I have a look at it?”

“Of course.” I pushed the spreadsheet across the table.

He examined it and tensed up. “Mr. Browder, what kind of journalist makes an M-and-A deal list?” It had never occurred to me that I might be
too
well prepared for this meeting. “Could you tell me a bit more about this magazine you work for?”

“Well, I—I don’t exactly work for a magazine. I’m actually with the Boston Consulting Group. I’m doing this article freelance because I’m fascinated by investing in Eastern Europe.”

He leaned back and gave me a thoughtful frown. “Why are you so interested in Eastern Europe?”

I then told him the story of how excited I was to be an investor in the very first privatizations in Poland, and about Autosan, and my career ambition of investing in the Eastern Bloc.

When it became clear to him that I wasn’t there to spy on Maxwell or his company, Anselmini started to relax. “You know, your coming here today might actually be very fortuitous.” He stroked his chin. “We’re in the process of setting up an investment fund called
the Maxwell Central and East European Partnership. You strike me as just the type of person we’d like to hire. Would you be interested?”

Of course I would. I tried to conceal my eagerness, but I couldn’t, and by the time I left, I had a job interview scheduled in my calendar.

To prepare for it I spent the next two weeks tracking down anyone who knew what it was like to work for Robert Maxwell. He owned the
Daily Mirror
in London, a local tabloid, and was regarded as not merely eccentric but imperious, testy, and impossible to deal with—so I had my concerns.

I found an ex-BCG consultant named Sylvia Greene who had once worked for him. I got her on the phone and asked for her advice.

After a long silence, she said, “Listen, Bill, forgive me if I’m being blunt—but in my opinion you’d be totally out of your mind going to work for Maxwell.”

“Why’s that?”

“Robert Maxwell is a monster. He fires everybody all the time,” Sylvia said with feeling, making me wonder if she’d been one of the people he’d fired.

“That’s not very comforting.”

She paused again. “No, it isn’t. There are lots of stories I could tell you, but there’s a dramatic one that’s been making the rounds. About six months ago, Maxwell was on his private jet in Tampa, Florida. The plane was taxiing toward the runway and he asked his assistant for a pen to sign some documents. When she handed him a Biro ballpoint instead of his usual Montblanc, he became furious. He demanded to know how she could be so stupid not to have the right pen. She didn’t have a good answer and he fired her on the spot. She was literally deposited right onto the tarmac. This poor little twenty-six-year-old secretary from Essex had to find her way back to London all on her own.”

I found three more ex-Maxwell employees and got three equally outrageous and colorful anecdotes, all with one common denominator: everyone was getting fired. One banker, a friend at Goldman Sachs, said to me, “The probability of you lasting a year there is zero, Bill.”

I considered these stories carefully as the interview drew nearer, but they never succeeded in scaring me off. So what if I got fired? I had a Stanford MBA and BCG on my résumé. Surely I could find another job if I needed to.

I did the interview, then two more. Within days of the last one I was offered the position.

Against all the warnings, I accepted it.

I started my new job in March 1991. With my higher salary, I moved into my own place, a nice little cottage in Hampstead, North West London. From there I walked down a narrow road and got on the Northern Line to Chancery Lane, where I made my way to Maxwell House. Robert Maxwell had purchased this building in part because it was one of only two in all of London that allowed helicopters to land on the roof. This enabled Maxwell to commute from his home at Headington Hill Hall in Oxford to his office by helicopter, avoiding the traffic.

The idea of the boss arriving in such style sounded impressive until I experienced it for the first time. With windows open on a warm spring day, I heard the staccato whirl of a helicopter approaching. As it got closer, the sound became more intense. By the time it was directly overhead, papers in the office started to fly everywhere. All telephone conversations had to stop because of the noise. Things returned to normal only when the helicopter had safely landed and the rotors were switched off. The whole ordeal lasted four minutes.

On my first day of work I was told that I could pick up a copy of my employment contract from Maxwell’s secretary. I headed up to the tenth floor and waited in the reception area for his secretary to get around to dealing with me. As I flipped through an annual report, Maxwell himself burst out of his office. His face was red and the underarms of his shirt were soaked through with dark circles of sweat.

“Why have you not yet got me Sir John Morgan on the telephone!” he shouted at his assistant, an unflappable blond woman in a dark skirt who was neither surprised nor offended by this outburst.

“You didn’t tell me that you wanted to speak to him, sir,” she said calmly over the top of her glasses.

Maxwell barked, “Look, missus, I haven’t got time to tell you everything. If you do not learn to take the initiative, you and I are going to fall out.”

I slunk into my chair and tried not to be noticed, and as quickly as Maxwell appeared, he lumbered back into his office. The assistant finished what she was doing and then handed me an envelope with a knowing look. I grabbed it and made my way back to the eighth floor.

Later that day, I mentioned the incident to one of the secretaries near my desk. “That’s nothing,” she huffed. “A few weeks ago he shouted so loudly at someone from his Hungarian newspaper, the poor man had a heart attack.”

I went back to my desk, my contract suddenly heavy in my hands. That evening, as if to confirm what everyone really thought of Maxwell, as soon as the
whomp-whomp
of his helicopter could be heard, indicating that he was leaving, loud cheers rose across the office floor. I couldn’t help but wonder,
Have I made a big mistake by coming here?

On the Monday of my second week, I arrived in my office and found a new addition, a fair-haired Englishman a few years older than me, sitting at the spare desk. He stood and offered his hand. “Hello, I’m George. George Ireland. I’m going to be sharing this office with you.” His English accent was so upper-crust and pronounced that at first I thought he was faking it. George wore a dark, three-piece suit and had a copy of the
Daily Telegraph
on his desk. A tightly furled, black umbrella leaned against his filing cabinet. He struck me as a caricature of the perfect English gentleman.