Deceived (17 page)

"I
am."

"In fact
your office delivered copies to the members of this subcommittee earlier this
morning in anticipation of the hearing."

Nick glanced at
Meg; she nodded "That's correct," Nick confirmed.

"You have
a copy in front of you?"

Meg slid him a
copy.

"I
do."

"Could you
turn to page three."

Nick did.

"I draw
you attention to item seven, entertainment and travel expense. Could you read
the figure printed there?"

Nick felt off
balance. Was this a feint, or was the senator on to something. "Nine
hundred and seventy-six thousand dollars."

"Which
represents what?"

"Entertainment
expenses we have documented as inappropriate."

"Now I go
to Appendix F. These are the itemized entries that underlie the nine hundred
and seventy-six thousand dollars, correct?"

"Correct."

The senator pulled
off his reading glasses, scratched his cheek with one of the stems. "In my
over forty years in the Senate, I've relied on figures provided by the GAO
countless times, never once doubted their accuracy
…
until today. This
morning I felt compelled to do something which for me was unprecedented
—
I
had my staff verify the figures. Add each of the couple of thousand entries. Check
it and recheck it.
…
They found something rather peculiar, Mr. Ford. Your
figures don't add up."

Nick looked
down at the status report, as if the error Whitford alluded to might jump out
of the page at him. "There must be some mistake," he muttered.

"I assure
you there is, but it was not made on our part."

Nick guessed
just the opposite. Senate staff members? With calculators? A recipe for
disaster. "Excuse me, senator, but an error is highly unlikely. All
entries are entered into a spread sheet
…
they're automatically tallied by
the computer."

"Shortly
before the commencement of today's hearing, one of the big five accounting
firms was kind enough to double check my staff's calculations. I repeat, the
error is not on our part."

Nick's
confidence flagged. "I'll recheck the tally, senator. If there has been a
mistake, I'll issue an amended report along with my apologies."

"You might
want to check a number of tallies while you're at it, Mr. Ford," Senator
Whitford said stiffly, "because this wasn't the only problem my staff
identified. They located over a half-dozen instances which call into question
the GAO's skill in arithmetic."

Nick looked to
Meg
—
production of the status report had been her responsibility. She
appeared flustered as she scanned the numbers. "That's very hard to
believe," Nick stammered.

"I agree. Almost
as hard to believe as the pattern they identified. If the mistakes were random,
one would expect some tallies to be low, some high. Odd thing was, all of the
incorrect tallies identified by my staff were high. All
over
-stated
improper billings. Do you have an explanation for that, Mr. Ford?"

Nick shook his
head.

"Could it
be that you have
purposefully
overstated figures, Mr. Ford?"

Nick turned to
Chairman Callahan. "I object, strenuously, to the senator assailing my
motives."

Senator
Whitford leaned into his microphone. "Either your motives or your
competence, I can't help assailing one or the other. Need I repeat the question
a second time, Mr. Ford?"

"That
comment was out of line," Senator Raine objected.

Chairman
Callahan ignored the objection. "Mr. Ford, if you will answer the
question, we can move on."

"I did
not
purposefully overstate any figures," Nick emphasized each word with a
pointed finger.

Senator
Whitford seemed to mull the answer over for a moment before proceeding. "
…
You
originally made the decision to audit the Yünnan Project?"

"Yes
…
after
evidence of billing irregularities was brought to my attention."

"And after
you pointed out these billing irregularities to Smith Pettit, they arranged a
meeting with you, correct?"

"Yes."

"They
admitted to some inadvertent errors, and offered a reasonable settlement, did
they not?"

Nick shook his
head. "They offered a settlement, but no, it was not reasonable."

"In
your
opinion."
"And that of my staff."

A quick
exchange; Nick hadn't faltered. Senator Whitford paused, hands in the position
of prayer, elbows on the bench, index fingers supporting his forehead. After a
moment, he lifted his head. "Subsequently Smith Pettit raised their
settlement offer a number of times, as I understand it to avoid the expense and
bad publicity that would accompany an audit and hearing. Is that correct?"

"They
raised their settlement offer, that is correct. I have my own views as to their
motivation."

"As I do
of yours, Mr. Ford, but let's stick to facts for the moment. Plenty of time to
get to your motivations.
…
You rejected each offer?"

My motivations?
Nick took a moment to clear his mind and concentrate on the question. "Each
offer was inadequate," he said finally.

"Their
offer of twenty million dollars was inadequate?"

"Yes."

"Their
offer of twenty-five million dollars was inadequate?"

"Yes."

"And their
offer of
thirty
million dollars, you considered that inadequate as
well?" Senator Whitford asked, incredulously.

"I have
already presented to this committee evidence
—
"

"
Yes or
no
, Mr. Ford?"
"
…
Yes."

"Smith
Pettit's last offer, I believe, was
fifty million dollars
." Whitford
paused, letting the subcommittee ponder the figure, then asked, "That's a
rather large sum, wouldn't you say?"

"We have
already documented almost thirty million dollars of improper billing, and
—
"

Senator
Whitford interrupted. "Yes, yes, we've heard
your
calculations. My
turn now. You rejected the offer, correct?"

"Things
have come to my attention, senator. Revelations of a nature which
—
"

"Mr.
Ford," Senator Whitford thundered. "Answer the question. You rejected
the offer,
correct
?"

"Yes."

"Once
again against the advice of Carolyn Reed, the Comptroller General of the GAO
…
is
that also correct?"

"Yes."

"I see.
…
Do
you know what the profits of Smith Pettit were last year, Mr. Ford?"

A misleading
question. Last year Smith Pettit acquired a French construction company
—
that
had adversely affected profits. The year before, and before that stretching
back a decade and more, the picture looked quite a bit rosier. "Somewhere
in the neighborhood of eighty million, but last year
—
"

"Eighty
million?" Senator Whitford broke in.

"But that
doesn't show the whole
—
" Nick tried again.

"Mr.
Chairman, could you please instruct the witness to answer the question without
delving into the irrelevancies he seems to have such a fondness for."

Chairman
Callahan took orders well. "Mr. Ford," he scolded, "please
listen to the question and answer succinctly; you'll have the chance to make
additional statements later in the hearings."

Nick nodded,
unchastened, and Senator Whitford continued
.

"Eighty
million dollars. And you want Smith Pettit to forfeit what? More than fifty
million, evidently. That leaves a profit of, at a maximum, thirty million
dollars. Now thirty million dollars profit probably sounds like a lot of money
to most of us, but then again everything is relative. What is or is not a lot
of profit depends on the capitalization of Smith Pettit. Do you know what the
value of Smith Pettit is, Mr. Ford, the whole company?"

Nick had a
rough idea. "Approximately a billion dollars," he guessed.

"At
last," Senator Whitford said with mock relief, "a figure you and I
can agree on. A billion dollars, a very large concern. Let's lop off a few
zeros and turn that into something we can all relate to. A billion dollar
company making a thirty million dollar profit would be the same as a
…
oh
…
a
thousand dollar company making a thirty dollar profit. That's something even I
can understand." Again, muffled laughs from the audience. "I've got a
financial planner, a very good one
—
someday, believe it or not, I'm going
to have to retire." The laughs came stronger this time. "If I
invested a thousand dollars in an enterprise which only returned thirty dollars
a year,
a three percent return
, what advice do you think my financial
planner would give me?"

Nick's jaw
muscles tensed. "I wouldn't have any idea."

"I would. He
would tell me in no uncertain terms to sell. My God, Treasuries are paying
almost seven percent, even U.S. Savings Bonds are paying four and one half. Don't
you think, Mr. Ford, pursuing an award against Smith Pettit which would erase
their razor thin profit margin and push them into the red, could drive tens of
thousands of Smith Pettit shareholders to reach the same conclusion my
financial planner would reach? Could drive them to sell their shares?"

Nick shrugged. "I
wouldn't know."

Senator
Whitford raised his eyes. "Come now, you're an educated man with an
understanding of economics. If the profits go down dramatically, what is the
likely result?"

"Some
might sell, yes."

"And the
share price of Smith Pettit stock? Wouldn't it fall?"

"I suppose
there would be downward pressure on the stock, yes."

"In fact
Smith Pettit stock has already fallen significantly, hasn't it?"

"I believe
so."

"You
believe so?" Senator Whitford snapped. "How about fifteen percent so
far this year? What I'm wondering is was that more or less than you hoped
for?"

Nick
straightened in his chair, tilted his head slightly. "Excuse me?"

"I said
was that more or less than you expected?"

Nick said
nothing, confused, and Senator Raine broke into the discussion. "Mr.
Chairman," she said, "I'm having trouble establishing the relevance
of the senator's line of questioning."

Senator
Whitford feigned bewilderment. "Then let me make myself clear. What have
we learned so far today? Mr. Ford has doggedly and irrationally pursued Smith
Pettit during this audit. He ignored counsel to withdraw from the audit from
both his direct superior and the head of the GAO. He ignored his own writings,
wherein he recognizes cost overruns as inherent by-products of cost-plus
contracts. He presents figures to this committee which are universally flawed
in a manner prejudicial to Smith Pettit. In direct contravention of his
superiors' wishes he rejects all offers of settlement by Smith Pettit, and as a
result, Smith Pettit's stock price falls precipitously."

"What are
you implying, Senator," Senator Raine asked.

"Not
implying, Senator.
Charging.
I
charge
that Mr. Ford rejected
every
attempt by Smith Pettit to reach a reasonable and palatable settlement because
he did not
want
a settlement. I
charge
that what he wanted was
this hearing
…
a chance to plaster Smith Pettit's name across the
headlines, not for the sake of the taxpayers but for his own selfish reasons,
reasons that may have included pecuniary gain."

Hands covered
microphones as commotion broke out among the senators behind the bench. Dozens
of camera shutters clicked in rapid succession.

Nick attempted
to slow his heart.
Evidence? Of pecuniary gain?
He fought to control his
voice without success. "
Senator Whitford
, as a member of the
senate, in this chamber you are immune from the laws of slander and can
suggest
anything you please
…
but if you
ever
repeat those lies outside
this chamber, rest assured I will direct my lawyer to institute legal
proceedings."

Chairman
Callahan pounded his gavel, his face red. "
Mr. Ford
, I will not
have you threatening a member of this committee."

Nick had
exploded, strategically a blunder, but he couldn't back down now. Besides, he
didn't feel in the mood to give quarter, not on this point. "And
I
will not have lies spread unchallenged."

Senator
Whitford waived the chairman off. "Mr. Ford, within these chambers our
forefathers had the foresight to grant immunity to legislators specifically so
we could speak the truth without fear of reprisal. That is what I have always
done, and what I will always do. You, sir,
shall not
bully me into doing
otherwise."

Senator Raine
added her voice to the mix. "Mr. Chairman, I
object
. For the
senator to make such an inference, protected by immunity or not, seems to be of
the grossest type of negligence. I ask that he produce evidence of his charges
or withdraw them."

"If it
pleases the members of the committee," Senator Whitford said, "I will
be more than glad to do so. Since our last hearing certain abuses
…
alleged
abuses
…
of power have come to my attention.They called into question Mr.
Ford's findings
…
and his integrity. I've investigated those allegations,
and am prepared to share my findings."

More shutters
clicked in what was now an otherwise silent hearing room. All eyes, including
Meg's, bounced between Senator Whitford and Nick, waiting on the senator's next
words. They came after a long pregnant pause.