Revenge of the Cube Dweller (19 page)

“Tanzie! Good to see you!” Lucy squeals as she gets in the passenger seat. She lives in jeans and has carried only a backpack for her two-night stay.

“You’ve put on some weight, Tanzie. You really need to come stay with me. I’ll get you in shape!”

“Thanks, Lucy. I know.”

“You don’t look bad. It is just sort of shocking, that’s all. You’ll always be my beautiful little sister. You know that.”

“Would you like to go get something to eat?”

“No thanks. I had a three-hour layover in Houston and was surprised at some of the eating choices available. I ate at a little organic place in Terminal E.” No, Lucy would never think of sneaking into the airport lounge like her devious sister.

“Tired?”

“Yeah. I am. I had to get up really early to drive through San Francisco to catch the flight.”

I tell Lucy about the meeting and she roars with laughter. “You, the society dame, a janitor? I can’t believe it. Now I see where Lulu gets her acting talent!”

“Well, it worked.”

“I love it Tanzie. I told you this would be an adventure. Who will you be next time? A security guard?”

“That’s an idea. Maybe.”

We head back to my condo and I uncork a bottle of red wine from a winery founded by a couple of Lucy’s friends in Yountville.

“Oh, how thoughtful, Tanzie, thank you.”

“I’m excited you’re here, Lucy.” We clink our glasses and I fill Lucy in on the fraud, Frank, my hopeless career, and the layoffs. Lucy stifles a yawn, and I can tell she can hardly keep her eyes open.

“I really should be depressed, but somehow I’m relieved,” I say. “I’m really happy. Tonight was a blast. It really was.”

“Let’s listen to the tape, Tanzie, or go through the files. Let’s get going on this,” Lucy suggests, trying to muster a second wind.

“Okay.”

I refill our glasses and walk over to retrieve my purse from the bedroom. I take a moment to change into my jammies and get more comfortable. When I return to the living room, Lucy is asleep. I don’t have the heart to wake her, so I take off her glasses, cover her with a blanket, and prop a down pillow next to her head. I kiss my sister on the forehead and turn out the light, relieved that now I can also rest. It has been an exhausting day.

I try to be quiet when I get up to make the coffee, but Lucy, who is still asleep on the sofa, stirs and puts on her glasses.

“Good morning.”

“Hi. How did you sleep?”

“Fine, actually. This couch is pretty comfortable for an old gal like me.”

“You look great, Lucy. I swear you never age. Coffee?” I know she doesn’t drink coffee, but thought I’d ask her anyway.

“I like wheat grass. Got any? Or maybe some herbal tea?”

Knowing Lucy was coming, I had shopped for her type of eats: organic kale, free-range eggs, and yes, herbal tea, but no wheat grass.

“Chamomile okay? Or I have something here called Red Zinger.”

“Ooooh. Red Zinger, please.”

I don’t want Lucy to know I smoke, so I had decided not to while she is staying with me. I know it’s lame, but I’m private about my character flaws. I put the kettle on and head to my room to get dressed and leave the bathroom for Lucy.

“That’s a cute outfit, Tanzie,” she says about the slacks and blazer I’d bought in Houston.

“Thanks.”

Sometime in the night, Lucy had changed into a nightshirt made from green cotton she had grown, spun, and then woven herself. It did not do her beauty justice, but that is so Lucy. She never gives her looks a second thought. She is consumed with saving the planet and takes every single tiny decision she makes in a day very seriously, mindful of its impact on the earth’s sustainability. I hand her the mug of bright red hibiscus tea.

“Are you going in to work today?” she asks.

“Yeah. But not all day. I should be home a little after noon or so. The flash drive with the files I took from Baldwin’s secretary is on my computer. Maybe you could take a look at them while I’m gone. I’m thinking we should divide and conquer to make maximum use of our time.”

“So you used your phone? Clever. I didn’t know you could do that with an iPhone. Is it an app?”

“Nope. It’s just part of the utility function. Pretty amazing. I wonder how many people know they are being recorded. It’s a pretty common thing to have someone’s phone lying on the table during a meeting. Lucy, I’ll take notes on the meeting and you take notes on the files. We can get together later and debrief each other on what we’ve found.”

“Sounds like a plan, Tanzie.”

“Yep, it’s a plan,” I say, taking a sip of coffee.

“Tanzie, you seem so great. I haven’t seen you like this since we were kids.” She hesitates before continuing. “I don’t want to dwell on painful memories, but I think the divorce has been good for you. You’re like your own person again. Maybe it’s a good thing that your career is going in the toilet. Why would you ever think of settling for a career at Bishop, of all things? You’re so much better than that.”

“I think you may be right, Lucy. I think you may be right.”

I
arrive at my desk and plug in my earbuds after settling with a cup of Best Java coffee. Four hours is going to be a long time to listen, but there doesn’t seem to be much going on in my department at the moment other than speculation about layoffs.

I listen to the beginning of the meeting, and the sound is remarkably clear. It seems like the beginning of most executive meetings. I had some experience with these back in my old career days. Baldwin opens with a “Thank you all for making time for this very crucial topic.” Sullivan brings the group up to speed on LEAR_2008_17_Houston_Gas.

“Best I can tell,” Sullivan says, “the pipeline that ruptured was laid in the early ’30s, made of cast iron before cathodic protection was required to inhibit rust. Back then it was sort of an anything-goes sort of thing. It also appears that a slightly larger
pipe was used for that section rather than the thirty-inch pipe that was used for the rest of the pipeline.”

“Why is that?” asks an unfamiliar voice.

“Well, we don’t know. Probably they ran out of the thirty inch and had some other material lying around. Or maybe there was some pipe they initially rejected but decided to use in a pinch. In the interest of time, they may have used what they had rather than delay the project waiting for a materials shipment. You folks need to understand—it was a different world back then. No regulations or fines. Plus, back then this pipeline was in the middle of nowhere. Nothing but cow pasture and rice fields … Anyway, when we did our routine pigging, the results were not precise for that particular segment. That section had some variability in the wall thickness, but that could have been due to the difference in pipe size or slight corrosion. We just didn’t have very good information at the time. That said, we did notice some corrosion and faulty welds upstream near Lockhart, and we replaced several sections in 2009.”

“So why didn’t we do more testing on the Houston segment?” This must be the insurance executive talking, the salt-and-pepper-haired charmer from last night.

“A few reasons. First of all, that Houston segment had all kinds of improvements on top of it—houses, retail, that sort of thing. Second, we were not entirely sure where the pipeline was.”

“You’re kidding me. How is that possible?” This is Bennet asking the questions now.

“If you recall, Bennet, we didn’t construct this pipeline. It had five different owners before we got it in 1998, and the mapping and right-of-way files were not complete. This is not an
easy thing to do, to figure out where the pipe was laid, and it would have required millions to excavate and lots of time, too. This is a major residential area. Anyway, Wagner Jones was in the process of putting a project together in ’09 to determine the best course of action when he got sick and retired. The whole thing just fell through the cracks, what with the Kansas crude spill when I transferred into the department.”

“So do you think we can be found negligent?”

“The DOT and PHSMA regs are pretty clear about required documentation and maintenance protocol. I think they would find us in violation of their protocols, but whether that means we have been negligent is more of a legal term. I can’t really answer that.”

“So do we have updated casualty figures?” Baldwin asks.

“Right now it’s fifty-three dead and seventy-seven injured, but some of those injured may not make it. The max looks like it’s in the neighborhood of fifty-eight or sixty.” This was the insurance executive talking again.

“Judas Priest, Sullivan! How did you let this happen? All those people dead, families ruined—”

“Do we have damage estimates?” a calmer Bennet interrupts.

“Not exactly, but oil and gas is not a popular industry right now. Add to that the fact that these folks in Houston were wealthy and had long years of earning big money ahead of them. Bill Matheson is handling a few of the cases, and we all know what he’s like.”

“Can we shift blame somehow? To terrorism, maybe? And what about all those construction crews; they’ve been digging around there for years. How sure are we that they didn’t cause this?”

“The exact cause has not been established yet, but under these circumstances, we may want to discuss some strategies to pull out of our you-know-whats, if and when the time comes.”

I think it’s funny that the salt-and-pepper-haired man is so careful with his language in front of the Bishops, in contrast to his coffee bar vulgarity last night.

“We can file some preemptive motions as early as tomorrow if you like,” begins another unfamiliar voice that I suspect is the general counsel. “I can get Josh working on that over at Schwab & Middleton. We should also see about securing settlements from as many people as we can early on. Even if it is not our fault, you can be sure we will be involved in damage suits. The sooner we can get in front of this, the better.”

“Good. I like that,” a composed Baldwin weighs in.

The meeting goes on for hours. It is clear that there was not intentional disregard for maintenance, but rather embarrassment at the incompetence that had let something so important fall off the radar. There is endless discussion involving how accurate the testing information was and more about the specifics of the pipe design, who knew what and what decisions had been made and by whom, what insurance covered and what it did not. Baldwin insisted that all copies of the LEAR and related emails be deleted immediately. So for certain, now, I have the only one.

“What do we do now?” Bennet asks at around hour three.

“The way I see it,” begins the general counsel, “if this thing turns out to be related to a maintenance issue, we’ll have sizable liability. No question about that. The damages will likely exceed our insurance, and they are difficult to quantify this early. The casualties are people with the means to tie us up in court for a
good deal of time. But what I do know is that if you cover this thing up, Bennet, you run the risk that it leaks out, and then that really is the end for all of us. If fraud is established, the insurance companies could yell foul and not pay, the Justice Department would be here shutting you down, and we’ll be sharing a cell with Jeff Skilling. Remember Enron?”

“I did not spend the last thirty years of my life building all this up to be taken down by some incompetent nitwit in my environmental group!” This sounds like Baldwin, and the nitwit he means is probably Sullivan. This is finally getting good.

More discussion about what needs to be deleted and what should be kept continues for a while and then winds down to silence. The general counsel gets nowhere when he cautions the group not to destroy anything, as subpoenas have been received from the DOT, EPA, and several other agencies already. Both Baldwin and Bennet are adamant that any documentation illuminating the fact that they knew about corrosion in the Houston pipeline system should be gone.

“Thank you for your time, gentlemen.” And I hear the scrape of chairs as the non-Bishops leave the meeting.

Next, I hear a few minutes of dead air, and I envision the two brothers staring at each other.

“What worries me most about all of this, Baldwin, is our credit tightening.”

My mouth drops open in my cube, and I quickly close it
.
Oh my God. I haven’t even thought of that. I really am stale. All this time the conversation has been about fines, when the true risk to the Bishop Group is the impact on their trading operation
.

While some of Bishop’s revenue comes from fees for storing or moving product, a more significant slice is from their trading
and marketing arm. In the simplest of terms, it is gambling on the price of commodities. I make a deal to sell you a barrel of oil next month for $100. If the price on the open market next month is $95, then I make $5; if the price next month is $105, then I lose $5. Extend those deals out for years and for huge volumes, and the profits and losses become enormous. While there is certainly risk involved, the potential profits are hard to resist.

The best returns in trading operations are derived from companies with exceptional credit ratings—in other words, companies to whom lenders extend a large credit line and who aren’t required to post margin or give a cash deposit as a guarantee that they will make good on a bad bet. It is like a poker game. The casinos extend credit to people with adequate net worth to cover their debts. When credit gets tight or a company falls in their credit rating, their trading partners can immediately reduce the credit line and demand payment for any outstanding amount over that reduced limit and require them to post margin, which can consume cash quickly and leave them without enough to fund their operations. Lawsuits can drag on for years, but credit tightening in an energy-trading arena can topple a huge company overnight.