Pipeline (10 page)

So Luis Matta allowed his orderly mind to slowly return to neutral under the large mango tree that shaded the house’s entrance. The leaves and the hanging fruit swayed slowly—the mangos would be ripe for eating in less than a month—as the Pacific wind accelerated its chilly, humid, nightly encroachment on the city. Standing very still outside the house, Luis Matta could literally feel the tree’s limbs groaning, in and out of the streetlight, as their shadows crossed his face.

Matta disdained disorder of any type. Physical disarray was enervating, but mental confusion was unforgivable. He breathed slowly and forced the pieces back into order. If what Schutz said was true, losing the Humboldt export market to Bolivia would signify forsaking a decade of development in Peru. It automatically meant reduced investments and fewer jobs, schools, hospitals, and social services.

And, let’s be honest, it would also be the end of “Mr. Humboldt’s” political career, he thought.

His slow, analytical dissection of Ludwig Schutz’s news came to a screeching stop when a shriek from inside the house pierced the quiet creaks of the straining mango tree.

Matta had been caught. Outed. Found, in front of the house, by the dual cascade of living and breathing chaos that was his personal creation.

His two daughters.

“Papi is home!” the renewed yell again surged from inside the house and pierced the night. Matta couldn’t help a big smile from crossing his face as he threw the mango tree a farewell glance, half expecting it to topple over from the force of the fast-expanding, high-decibel shock waves. Everything else, including Ludwig Schutz, would have to wait.

The large wooden doors opened and out poured two rushing nine-year-old girls, giggling mercilessly. Their radar was locked on his elegantly dressed clothes. Laura and Sara were fraternal twins—Matta always insisted on being specific about this because one neither looked nor behaved anything like the other. Most people refused to believe they were twins at all.

“Papi”—Sara’s body hit the senator first—“I have to tell you something.”

This phrase was used indiscriminately to introduce both the gravest as well as the silliest of monologues. It was a universal attention-getting statement. Matta leaned over and listened intently.

“I went to Carlota’s house after school today,” Sara said, in total rapture, referring to the new girl in her class. “And I have to tell you something.”

“Yes, I know you do.” There was no use reminding her that she had just said that; he asked the gods of patience for their blessing.

“She is boring,” Sara declared. “Boring,” she repeated, in case her father had not understood.

Matta had ceased long ago to be shocked by the capacity of little girls to emit vast declarative statements that completely contradicted vast declarative statements emitted just twenty-four hours earlier.

“But, Sara, yesterday you told me that Carlota was ‘incredibly nice’ and that you wanted to invite her to your birthday party.”

“Papi!” she groaned. “Papi!” Laura joined in in a plaintive tone.

Both were instantaneously irritated by his confusion. Nine-year-old girls did not believe that consistency was a requirement for interesting conversation. Yesterday Carlota was all right. Today she was boring. What was important was why Sara found her boring, not the fact itself. And the senator was ruining the story by asking stupid questions. What was his problem?

“You know why she’s boring?” asked Sara. “Because she wanted to do homework rather than play. Can you believe that?”

He couldn’t. Sara was right. Carlota was boring.

The three of them walked in the door, still being held open by one of the retinue of housekeepers employed by his wife, Alicia. She was new; Matta couldn’t remember her name. Father and daughters were all raveled up in each other’s arms and they had to disentangle to fit in the doorway. Matta smiled at the nameless woman at the entrance.

Alicia was sitting alone in the living room. The public rooms of the old Spanish-colonial house were huge. There were a total of five sofas and three coffee tables assembled decoratively around Alicia. The color scheme was a sedate green-gray—just how teak looks right before the sun bleaches it irretrievably. Large Persian carpets padded the room in tranquility.

She sat barefoot, in the corner of one of the sofas, legs curled under her, drenched in the light of a Roche-Bobois chrome standing lamp that swiveled over her and then pointed its impeccable silver light downward. She was reading
Architectural Digest.

Alicia was dressed in a light blue blouse and tight blue jeans. Her pair of suede ankle-length boots was neatly arranged on the floor, next to the sofa. At forty, Alicia’s body was still thin and tight
from daily exercise with a trainer who came every morning at 8:00
A.M.
Seeing her husband, she swished away a strand of shoulder-length sandy brown hair that had fallen over her slightly elongated, almond-shaped Incan eyes. Matta rarely tired of seeing her strange mix of European and Indian features. Often the mix of blood fell short. In Alicia, the races merged to perfection.

“You’re late,” she chided.

Good God, thought Matta. More criticism. This day will never end.

LIMA
AUGUST 1, 11:00 P.M.
THE MIRAFLORES PARK PLAZA

Just a few hours after Senator Luis Matta sat down to dinner with his family, an international conference-call operator was connecting three countries. It was 7:00
A.M.
in Frankfurt and 8:00
A.M.
in Moscow.

“The board will come to order,” ordered a high-pitched voice with a clear German clip. Pieter Schmidt was Anfang Energie’s CEO and chairman. His grandfather, Wilhelm Schmidt, had founded the company six decades ago.

“Thank you for your punctuality,” Schmidt continued. “As usual, the board will speak in English to facilitate communication. We continue to prefer no interpreters or any other outsiders on the call.

“We expect a quick agenda today—I am sure that is a relief to our colleagues in Lima where it is the middle of the night.” The nasal voice allowed some humor to drift into his ordered speech. “First there will be a discussion as to the final disposition of our purchase. Then there will be a report from our Latin American operations. I do not expect us to go for more than an hour.

“I give the floor to Professor Alfred Weiss, our corporate chief legal counsel.”

“Thank you, Mr. Chairman, and thank you, gentlemen, for participating,” began the lawyer. Like any good lawyer, his delivery was in a monotone. No highs. No flats. No emotion.

“I have ended my research and consultation on the question put to me at the last meeting of the board a week ago,” continued the lawyer. “Under German law, we are a private company. Thus we are not bound by the regulatory constraints faced by public companies traded on the Frankfurt stock exchange. As you know, public companies must report all ‘significant events’ that could affect the share price of the stock. Technically, we do not face the same requirements.”

A deep baritone interrupted the professor. The accent was Russian, unmistakably that of the chairman of the board of Volga Gaz. “Good, this is as I thought. And this is the way it must be.”

“Mr. Zhironovsky, with your permission, allow me to finish the report,” Professor Weiss retorted quickly. Anybody who had had anything to do with Professor Alfred Weiss knew how much he disliked interruptions. But everyone on the call noticed that, behind the lawyerly tones of the attorney’s disdainful certainty, the pitch of his voice rose by a few octaves. He was clearly nervous.

“I said previously that we were not technically obligated to report the sale of Anfang Energie. I use the word ‘technically’ because there are clear precedents in German law that, when the purchaser is a foreign entity, disclosure is a far more preferable and transparent route. There are a number of regulatory entities—the German Federal Trade Commission and the Parliament’s Energy Committee have been particularly activist in their approach to the sale of German energy entities to foreigners—that could initiate an embarrassing and unwanted investigation after the fact.”

There was a split second of silence. The tinkling of ice in a glass resonated loudly into the conference call. Professor Weiss was taking a sip of water. He cleared his throat and continued.

“Even if you believe that regulators would not have sufficient legal arguments to review our transaction, there are political reasons that might spur scrutiny from the German government. Clearly, recent events in Russia, particularly in the energy sector, have caused some worldwide concern. Obviously, I am referring to the events in Ukraine less than two years ago. Rightly or wrongly, these experiences have raised the level of caution of Western governments and investors about doing business with Russia. The last thing we want is to have our politicians debating whether the Russian government is extending its reach into Germany through the purchase of our company.”

“Professor Weiss, we have your opinion. Thank you. It is enough,” snarled the Russian voice.

“One last thing,” Weiss tried, but he could not finish.

“No more!” This time Viktor Zhironovsky was shouting. “Four months ago, Volga Gaz paid eight hundred and ninety-four million euros for Anfang Energie and you were happy. Members of this board all made a lot of money. You are also continuing to make huge salaries to run the company. If there were doubts about the sale, you had a long time to consider those before signing the documents. It’s too late. My decision is not to make public any news about the sale. If any one of you has a problem with that, you can resign now.”

The seven men on the conference call all stared at their speakerphones. Nobody spoke. Anfang Energie, a German family company of sixty-three years, had been sold one hundred and eighteen days ago. The men on the call had, indeed, made millions. But today was the first time they realized—truly understood—that they were no longer in charge.

Pieter Schmidt was not about to allow his board of directors to get into a useless fight with its new owner. He knew what to do. Germans were highly formal and legalistic people. Even if Viktor Zhironovsky was now the final arbiter, he knew his board’s Teutonic sensibilities would be assuaged by some official act. Hopefully, Zhironovsky would not interrupt.

“I put this issue before the board now,” Schmidt intoned. “The motion is to indefinitely postpone any official disclosure of the sale of Anfang Energie after hearing counsel’s opinion that there are no mandatory reporting requirements.

“I vote yes,” he added quickly.

Slowly, one yes after another crawled across the phone line. Pieter Schmidt smiled inwardly. He had hoped Zhironovsky would stay silent. This was not the moment for him to gloat. Schmidt moved the agenda forward quickly.

“Very good. Now we can go on to a report from Latin America.”

Ludwig Schutz cleared his throat.

“We are pleased with our progress, gentlemen. It is our opinion that we will be able to report with some certainty in the next weeks. The decision-making process is in its final stages and culminates with Senate hearings on Humboldt’s phase two in thirty days. Senator Luis Matta is in charge of those hearings. There is considerable press coverage of Humboldt and this will accelerate the public pressure for a quick resolution.”

Schutz was not finished. “The hearings will also be noticed in Bolivia. I spoke to Mr. Uggin, our colleague in charge of Volga Gaz’s negotiations in Bolivia. I understand that he could not be on the phone tonight but he has asked me to tell you that the Bolivians are nervous about Peru’s timing. Like me, he believes that the faster the Peruvians move, the more quickly the Bolivians will be spurred into action. He has assured me that the events in the next days should give them a good reason to speed up their negotiations with Chile.”

Schutz was concluding. “Mr. Uggin and I are in complete agreement. Both sides are unwittingly headed toward a race against each other to approve their respective gas deals. And that, gentlemen, is exactly what we want.”

Ludwig felt that he should be getting some praise from his board of directors at this point in the conference call. None came. He was a little disappointed.

Zhironovsky’s voice interrupted. “Where are the Americans?
What is Constable Oil doing?” The Russian was asking about Anfang Energie’s competitor for the Humboldt contract.

Perfect, thought Schutz. That is exactly the question I want. The call was suddenly looking up.

“Mr. Zhironovsky, we have access to excellent intelligence about what is happening in Senator Matta’s office. This knowledge permits us a real-time understanding about what is going on. There are some risks associated with buying information, and it is, of course, not something we do with pleasure. But the pressures of the business require some—how shall I say—extraordinary actions.

“Already, our investment has yielded information worth gold,” continued Schutz in a steady tone. “We now know that Constable Oil delivered a twenty-year term sheet to the Peruvian government for the export of the liquefied gas. This is less than our offer of twenty-five years. We also heard about their proffers of royalty payments.”

“And?” growled Zhironovsky.

“They are lower than ours, sir.”

“Thank you, Schutz. This was an excellent report. The trap is set,” boomed Zhironovsky’s voice. “If things in Peru go as well as you promise, Volga Gaz will control the principal South American gas fields in thirty days. The Americans are counting on this gas to avoid another California; they won’t know what hit them. In a month’s time, Russia will have the ability to turn the gas flow on and off at will. This power can allow California a sigh of relief or it can spread the shortage to the entire western part of the United States.

“Ah yes, thanks to all this good work, the world will shortly become a very different place in America’s eyes,” Zhironovsky concluded with a chortle.

The accolades were finally coming, thought Ludwig.