Monahan 02 Artificial Intentions (23 page)

Belinda may look and sound different than most of the people working around me, but she demonstrated a clear understanding of her responsibilities. I was stymied though as to why she hadn’t come forward sooner with this information.

“If you understand your responsibility to the shareholders of this company, then why did you allow this cover up to go on for as long as it did?” I demanded of her. “You should have stepped up right away with this information. You should have gone immediately to someone on the executive team and told them.”

I wasn’t yelling at her, just stating the facts. But then geez Louise, she started bawling again. Through the tears, the drool and the snot, she told me that she had family obligations. I leaned over the desk and pushed the box of tissues toward her. A little hint to dry herself up.

When she had composed herself, again, she told me that she had been threatened. By Nat Scott. All of the team leaders had been threatened with their jobs.

“You remember the first day we met you?” she asked me.

“How could I forget that wonderful, first meeting?” I responded with a large dose of sarcasm thrown in.

“Well, Nat had told all of us before we went into the meeting that if we breathed a word, she would fire us all. The same thing she had told us a week or two earlier when we got the original letter.” Her loud voice dropped to a whisper and I had to lean over to hear her when she spoke next. “I have twin sisters who require round the clock care. I pay for their care. I couldn’t afford to lose my job.”

Son of a bitch. Nat Scott had not only exposed this company to liabilities I didn’t even want to think about, she had ordered a cover-up of potentially material information. Covering up, or not disclosing, material information to our shareholders and the regulators was a big no-no. I swallowed hard.

Was I as afraid of the Ontario Securities Commission as I was of their U.S. counterpart, the Securities & Exchange Commission? The thought of both of those regulatory bodies gave me the willies but if the truth were told, the Ontario Securities Commission had yet to
really
punish anyone for not disclosing material information. That’s because they were more into the typical “let’s embarrass them” style of Canadian securities law enforcement. Unlike their U.S. brethren, who got great joy at throwing the book at crooked executives and its “let’s make an example of them” style.

Our company’s shares traded on the Toronto Stock Exchange and NASDAQ, so we had to abide by the rules of both the OSC and the SEC. The fact that a large customer of ours had cut off all ties with us was considered material information. Why was that material information? Because if I recalled correctly, the total worth of all the contracts in terms of revenue was around $50 million. Contracts we had already announced to the world, and revenue from those contracts that our shareholders were counting on. And that, ladies and gentlemen, is a
material
amount of money. The loss of that amount of revenue would definitely have a negative effect on our bottom line.

And securities laws say that when you are in possession of information that could affect someone’s decision to buy or sell your company’s shares, then you need to disclose that information. Publicly. By press release. As soon as possible after you come into possession of that information.

Fuck, fuck, fuck.

Time to call Cleve Johnston for some advice on two things. What to do about the material information now in my possession. And how to fire that manipulating bitch, Natalie Scott.

chapter thirty-two

Being in charge of damage control is not something I had ever experienced first hand. Behind the scenes support was more my forte. So where to start with the whole mess was a big question mark for me, although I did know we needed to get some people involved who I could trust and who knew what they were doing. “Delegate the duty, assume the responsibility” was something my father had taught me early in life and it stuck with me.

The first person I called was
not
our in-house legal counsel. Experience told me that faced with the type of problems that I was going to throw their way, the first thing they were going to do was call
outside
counsel
, at a very large law firm, who charged at least $500 an hour, and who would provide advice and opinions backed up by huge errors and omissions insurance policies.

Not that this was a problem that couldn’t be fixed eventually, it was the urgency of dealing with it that was important. Bottom line was we needed to come clean with the public and the securities commissions, as soon as possible. But before we got to the bottom line, I knew I was going to have to be patient, and get the best advice for the company that I could.

Russell Freeson’s secretary wasn’t at her desk so I knocked on the open door to his office. Russell and three other people were sitting at his long, rectangular meeting table. Everyone was in shirtsleeves, so I assumed it was an internal meeting. Russell looked surprised to see me and stood up as I tentatively entered his office.

“I’m sorry to interrupt, but I need to speak with you on an urgent matter,” I told him.

“Yes, Kate, come in.” He pulled out an empty chair at the table, inviting me to sit. “We were just finishing up, weren’t we guys?” He addressed the three others, and after a quick introduction to their new CEO, they swiftly gathered up their papers and made an exit.

“Okay,” he said once the office was empty. “What’s up?”

“I think we’ve got a little problem,” I started out tentatively, understating things a tad. “I found out today from one of the team leaders in R and D that Global Devices pulled all of their contracts with us a couple of weeks ago. Were you aware of that?”

Russell paused for a long moment.

“No,” he said. “Hell no. What do you mean when you say they pulled all their contracts?”

“Apparently they told us to cease working on all contracts and return all of their property to them.” I handed him a copy of the letter from Bill Pritchard and he studied it for another long moment.

“I don’t believe this. And we’re just finding out now?” A rhetorical question, of course.

Red blotches were appearing on his long neck and chin and I wondered how he normally functioned under stress. Russell had been with the company since the beginning but he wasn’t more than forty years old. I knew his age from reading his bio but he seriously didn’t look more than thirty. Here’s hoping he’s weathered a few good corporate storms.

“I just found out and came straight down to see you. We need to get the lawyers involved.”

“Of course, but, how did this happen? Have you spoken with Natalie Scott? What’s her explanation for this? Jeez, these contracts are worth millions.”

“Nat Scott isn’t in the office today, so, no, I haven’t spoken to her yet. I think the next time I speak with her, it’ll be through our lawyers. My number one priority, after we figure out when and how we disclose this, is to fire her skinny little ass. I’m pissed Russell. Severely pissed.” Now
I
was getting red blotches on my neck.

Russell and I spent the next half hour confirming with some of our own people that basically no one knew about the cancellations, except of course the heads of the teams in R and D. The accounting system showed that time was still being tracked against the projects. The current billing cycle was ending in a few days and invoices were scheduled to be issued within seven days of the end of the cycle. Just how many people were involved in perpetuating this continuing myth of having Global Devices as a revenue generating customer remained to be seen. One thing was certain though, all perpetrators would be held accountable. I had only been at the helm of Phoenix Technologies for a short while but I felt as protective of the company as a mother bear. I would track down each and every person involved, and hang them from the yard-arm at noon. Figuratively speaking, of course.

Cleve Johnston said it was good to hear my voice and he sounded genuinely happy to talk to me. Until I explained what was going on. He agreed that we had some major damage control to do and he said that he would feel better if he was in New York, directing the traffic on this.

“I’ll be on the next flight,” he told me. “In the meantime, let me call our New York office and get Barry Golden up to speed. Barry is our expert in all things relating to the Securities and Exchange Commission. He worked there as counsel for fifteen years and joined our New York office about three years ago.”

Law firms were smart like that. They often hired lawyers who worked for government departments or agencies that they dealt with on a regular basis. Having these people on staff gave the law firm the appearance of being on the inside track. It was key though to make sure you were seen to be hiring smart people and not bureaucrats.

“Well, you and Barry can figure out what we need to do with the OSC and the SEC. Who’s your best employment law expert here in New York? We’re going to need them because I believe there’s going to be a wholesale firing of staff in our research and development group.”

“Hold your horses,” Cleve advised me. He sounded like my grandpa,
hold your horses
. “One thing at a time. Don’t go off half-cocked and angry.”

“Angry?” I repeated. “You’re damn right I’m angry.”

“That’s okay, Kate,” Cleve interrupted me. “We just need to keep our heads level here.”

I took a deep breath and decided that now was not a good time to get into a pissing match with Cleve. He was doing exactly what we paid him $500 an hour to do. He was giving me counsel. Advising me, instructing me, coaching me. I should probably shut up and get my money’s worth.

chapter thirty-three

My stomach was sour from the three gallons of coffee I had ingested and the fact that I had not given it any real food since the night before. I was feeling more than a little overwhelmed, and my head was pounding. Sharp pains were stabbing at my skull behind my ears, a tell-tale sign of the combination of caffeine overload and low blood sugar. It was stupid of me to have gone so long without eating.

Today I decided to eat at the sandwich shop rather than take a leisurely walk and find a bench. It was mid-afternoon and downtown Manhattan had a different feel at this time of day as compared to the hustle that happened at lunch time. I took my time eating and sipped a Coke, filling up on sugar and carbs. The combination of food and two extra-strength Tylenol helped quell the sharp pains in my head.

For a while my mind wandered and I deliberately avoided thinking about the crap happening at Phoenix. I thought about other, mundane things. Tasks on my ever-present list of mental notes. Call my parents. Do some laundry. Send my brother a birthday card. Feed Tommy’s fish. Practice my footwork drills and back fist. After a while I realized my headache was gone and the acid in my stomach had disappeared.

I stopped at the small plaza outside my office tower for a cigarette before heading back into the mess and saw Ben Tucker’s wheelchair going through the handicapped entrance of the building.

Son of a bitch. I ground my cigarette out under my shoe and hurried into the building, hoping to catch him. I waved my hand between the closing elevator doors and they magically re-opened for me. Ben was in the elevator with three other people.

“Mr. Tucker,” I said. “Good to see you. I’d like a quick word with you.” I gave him my phoniest smile.

“Good to see you too Kate,” he said back. He gave me one of those smiles that make most women feel fluttery down there but it wasn’t working on me. I stood beside his wheelchair and focused on the electronic display of the floor numbers as the elevator moved quickly up to our offices. The doors opened at our floor and Ben held out his hand and said, “After you, Kate.”

I stepped off the elevator and waited while he wheeled himself out. Once the elevator doors closed and I was sure no one else was in earshot, I said, “My office, Mr. Tucker. Now.”

I turned on my heel and marched down the hall, not waiting for him. When I passed Carrie at her desk, I told her over my shoulder that Mr. Tucker and I were not to be interrupted. With my back still to Ben, who I assumed was keeping up with me, I told him to shut the door. I lit a cigarette, took a drag and got myself worked up to indignant before I turned around to look at him. He had parked his wheelchair between the two guest chairs in front of my desk.

“And just where have you been today, Mr. Tucker?” I demanded.

“Whoa. Kate.” Ben held up his two hands as if he were stopping traffic. He had a big shit-eating grin on his face. “You sound like my sixth grade teacher.” I decided right there that I definitely did
not
like this man.

“I asked you a question,” I said.

“Since when are my absences important enough for the CEO to notice?” Ben asked. The smile was still on his face and his tone was playful and patronizing. “We’ve never been attendance checkers here at Phoenix Kate. We all know what we have to do and we get it done. We don’t punch clocks.”

He sounded like he was trying to sweet talk me. There is nothing that makes my blood boil more than being patronized
and
being talked down to.

I jammed my cigarette into the ashtray, put my hands on the desk and leaned over it towards him. “I repeat, Mr. Tucker. Where have you been today? Your absence was noted by the CEO because you were needed on an urgent matter.” I think I finally got through to him because his smile disappeared.

“If you must know, I was at a medical appointment,” he told me.

“Fine.” I wondered what type of medical appointment kept you away from the office for most of the day.

“What’s the urgent matter?” he asked me.

“Global Devices,” I spit out. “What the fuck is going on?” His face paled and he looked down at his lap for a moment before answering me.

“What do you mean, what’s going on?”