by Diane Kelly
The oldest boy pointed his army man at his dad, a grin on his face, too. “You’re a pain in the butt, Daddy!”
Doug stood, putting his hands on his hips and narrowing his eyes at his son in feigned fury. “Do you need a whooping?”
His son stood, too, likewise putting his hands on his hips. “I’d like to see you try.”
Doug hurled himself toward his son, scooping the child up in his arms and spinning around, the boy squealing with glee all the while. Clearly, the interaction was a ritual for the two.
While I pulled a legal pad from my briefcase to take notes, Katie retrieved a slightly bent manila folder from a tote bag. She laid the folder on the table between us and stared at me, still chewing her lip. Doug returned to the table, slipping back into his seat.
Katie leaned back, as if afraid to get too close to me. “Everything I tell you is confidential, right?”
I didn’t want to scare her off, but I didn’t want to lie, either. “At this point, yes. But depending on how things go, you could be asked to provide an affidavit or testify in court.” Honest but nonthreatening. No sense throwing out the word subpoena or she might clam up.
She bit her lip again. “I’m afraid I could lose my job for talking to you. Doug works for Palo Pinto Energy, too, as a roughneck. If we both end up out of work…”
She didn’t finish her sentence, but she didn’t have to. The fearful glance she sent her sons’ way finished it for her. There wasn’t much in the way of industry out here in the sticks. If she and her husband both lost their jobs, they’d be unable to provide for their three young sons.
I reached across the table and put a reassuring hand on her arm. “I’ll do my best to make sure your family doesn’t suffer any repercussions.”
Katie and Doug exchanged glances. He nodded for her to continue.
Scooting her chair closer to the table, she opened the folder and pulled out copies of bank statements for PPE’s operating account. She laid the documents in front of me. “See the entries I’ve circled?”
I looked through the paperwork. The circled entries showed a $7,500 cash withdrawal made from the account each Friday. The first had taken place seven months ago, in July of the preceding year. My mind quickly did the math. The accumulated withdrawals totaled over two hundred large so far.
When I looked back up, Katie continued. “My boss, Larry Burkett, has me make a cash withdrawal every Friday. When he first asked me to do it, I asked him what the money was for. He said he got a special cash-only deal on drill bits from a new supplier.”
I didn’t know squat about the oil and gas industry, but in many lines of business cash discounts were common. “Did the arrangement seem strange to you?”
“Yes,” she replied. “If Mr. Burkett was supposedly getting such a great deal on bits from the new company, why did he continue to order from Hughley-Baker, our existing supplier?”
Good question. “Had drilling activity picked up?”
Doug provided the response to that question. “No. If anything it had slowed down by that point.”
“Interesting.” I turned my attention back to Katie. “Tell me more about the cash. Does someone from the supplier pick it up when the bits are delivered?”
“Supposedly,” Katie said, “but I’ve never actually seen the cash change hands. I work Monday through Friday, but the deliveries from the new supplier always take place on the weekends. Mr. Burkett has me lock the cash in the safe. When I get to work the following Monday the cash is gone.”
“What’s the name of the company that sells the discounted bits?”
“My boss claimed it was a company called Ector Oilfield Supply out of Odessa, but when I tried to look them up on the Internet nothing came up. No Web site. No address. No phone number. Nothing.”
“Wasn’t the contact information printed on the shipping receipts?”
“Mr. Burkett never gave me any shipping documents. That’s part of the reason why I’m worried. I don’t have any documentation in the file to prove where the money went.”
“Nothing?” I asked. “Not a purchase order or an e-mail confirmation or anything?”
She shook her head. “Mr. Burkett said he placed the orders by phone. He claimed the company was a small outfit that operated on handshakes and trust.”
Not entirely implausible, especially in a good ol’ boy business like oil and gas. Despite the fact that it was an enormous industry, the number of key players was surprisingly small and tight-knit. Heck, back in 1934 a group of oilmen founded the Dallas Petroleum Club, a private club exclusively for oil and gas executives. The club continued to thrive today, providing a place for oil execs to network. Forth Worth, Houston, Midland, San Antonio, and other major cities had their own Petroleum Clubs, as well.
“Were you able to verify whether the bits had actually been delivered?” I asked.
“No,” Katie said. “Mr. Burkett or one of the foremen always takes care of the deliveries. There’s all different types of bits, diamond bits and roller cones and a bunch of others. Doug could tell you about them, but I wouldn’t know one from another.”
Diamonds, huh? Given their strength, I supposed it made sense to put them on drill bits. Still, it seemed a shame to waste a precious stone on digging a hole when it could just as easily have graced my finger or ears imbedded in a nice gold setting. I made a note on my pad. “Where are the bits stored?”
“All of the equipment and tools are kept in a locked warehouse behind the office until they’re needed on the drilling sites.”
“Can you access the warehouse?”
She paused a moment as she seemed to consider my question. “Mr. Burkett’s never given me authority to go into the warehouse. The equipment is worth a lot of money so he’s real picky about who goes back there. He only issues keys to the foremen.”
Nothing she’d told me so far sounded necessarily unusual. It wasn’t uncommon for employees to steal supplies or equipment from their employers, so nobody could blame the man for taking precautions.
Katie continued. “But he did give me a spare set of keys to all the buildings and the locks at the drilling sites. You know, just in case he or one of the foremen loses theirs. I keep them locked in the safe in my office.”
Interesting … “You said Mr. Burkett never gave you permission to go into the warehouse,” I said, “but did he ever give you explicit instructions not to go in there?”
She chewed her lip again. “Well, no. Not exactly.”
A potential loophole. I wondered if I could exploit it. “Did you tell your boss you couldn’t find any information on Ector Oilfield Supply?”
“Yes,” Katie said. “He told me that sometimes companies have divisions or subsidiaries that operate under different names and there was no need for me to worry myself over it.”
Again, his explanation could make sense. Then again, it could have been complete and utter bullshit.
“To be honest,” Katie said, “I was afraid to push the issue. Mr. Burkett’s been on edge lately, what with the lawsuit and all.”
“Lawsuit?”
Doug jumped in now. “It’s a big ’un. One of them class action things. Bunch of ranchers from all over north Texas claiming that fracking has polluted their water wells and caused cancer and all sorts of other bad stuff.”
I eyed Doug. “You think there’s any truth to that?”
He looked away, as if not wanting to face the fact that he might have played an inadvertent part in contaminating the environment and making things rough for area ranchers. After a moment, he turned back to me and shrugged. “Hell if I know. I’m not a scientist.” He paused a moment, took a deep breath and, in a softer voice, went on. “That said, I wouldn’t be at all surprised. Oil and gas is dirty, dangerous business.”
A dirty, dangerous business that paid for the roof over their heads and put food on their table. I had to admire the Dunnes for coming forward, especially when it wasn’t entirely clear that anything wrong had taken place.
Still, I’d learned to listen to my gut and apparently Katie had, too. The situation hadn’t sat right with her and my gut was telling me she might have reason to feel uneasy. Nonetheless, I had to know her motives. A good informant could be critical to an investigation. On the other hand, a disgruntled employee with a vendetta could use the IRS as an unwitting weapon, siccing us on their employers, wasting our valuable time and making us look like overeager witch hunters for going after an innocent party.
“Please don’t take this the wrong way, Katie,” I said. “But what’s in this for you? Why tell the IRS? And why now instead of when the cash transactions started last summer?”
She looked taken aback, which told me her motives were pure. Cheaters and con artists didn’t offend so easily.
Katie swallowed hard. “What finally got me to call was when Mr. Burkett made me responsible for the tax returns PPE filed this year. He hires a CPA to prepare the returns based on the records we provide, but I was the one who had to sign the form stating that the return was accurate to the best of my knowledge. That made me nervous. I don’t know much about taxes. How was I supposed to know whether the return was computed right or not? And I can’t really say what happened to the cash I left in the safe, whether it was really spent on drill bits or not. I didn’t want to end up getting in trouble myself.” She glanced over at her boys, tears filling her eyes. “I don’t want to end up in jail.”
“Don’t worry, Katie.” I offered what I hoped was a reassuring smile. “With you coming forward like this and cooperating there’s little chance of that happening.” Assuming, of course, that everything she’d told me so far was true, which I suspected it was. Besides, it wasn’t even clear that anything untoward had happened here. Everything Mr. Burkett had told her could be true. Where there’s smoke, there isn’t always fire. Sometimes there’s just a hippie in Jesus sandals and a tie-dyed T-shirt sucking on a bong.
“What kind of accounting training do you have, Katie?”
“I took one bookkeeping course at a trade school several years ago. They taught us how to use the QuickBooks software and some basics about recordkeeping, but that’s the only formal education I’ve got. The woman who had the job at PPE before me trained me for a week before she retired.”
“Do you handle the payroll and payroll taxes?”
“No. We outsource that.”
“Royalty payments?”
“Those are outsourced, too.”
Neither of those facts surprised me. PPE probably had hundreds of oilfield workers on staff and thousands of landowners receiving royalties. Handling those payments would overwhelm a single accounting clerk.
“What about PPE’s bills?” I asked. “Do you decide who gets paid and when?”
“No. Mr. Burkett tells me which bills to pay and when to send the payments. I’m not authorized to issue any payments without getting his okay first.”
“Not even routine bills, like phone and electricity and water?”
She shook her head.
“What about income?”
She explained that PPE’s only source of income came from retail providers who bought gas from PPE to resell to their customers. “The payments to PPE are deposited electronically. I look over the bank records online to make sure the payments have been received and then I update the customers’ accounts in our system, but no payments are run through the office.”
From what Katie had told me I gleaned that she served primarily as a data entry and file clerk, with no real authority over financial matters. In most situations like this, where the in-house accounting staff had only nominal education and served a limited role, the owners of the company were the ones to verify the tax returns. The fact that Burkett had put the responsibility on Katie could be a sign that he was trying to protect himself, to put himself in a position to shift blame should the tax return contain questionable information. Katie could easily become a scapegoat. Then again, Mr. Burkett was undoubtedly a busy guy. Maybe he’d simply delegated the duty to Katie to get the task off his plate. And since she input the numbers into the system and prepared the reports, he might have figured she’d be more in touch with the financial data.
“If Burkett isn’t spending the cash on drill bits,” I said, “what do you suppose he might be spending it on?”
Katie lifted her shoulders. Doug raised his palms. I supposed two young parents who were probably just making ends meet couldn’t imagine what a person with an excess of money would spend it on.
I tossed out some possibilities. “What about gambling?” I asked. “He ever take trips to Vegas? Shreveport? Those Indian casinos up in Oklahoma?”
“Not that I know of,” Katie replied. “He doesn’t take much time off. He’s kind of a workaholic.”
“Any chance he’s got a drug problem?” He could be snorting the cash up his nose or smoking it, maybe popping pills.
“I doubt it,” she said. “I’ve never seen any signs that he might be on drugs.”
“No red eyes?” I asked. “Jittery behavior? Moodiness? Sniffles?”
Katie shook her head. “Not that I’ve noticed. But we don’t interact a lot. When he’s in the office he spends most of his day at his desk with the door closed.”
“What about a secret second family?”
Another shake of the head.
“Maybe he’s a cross-dresser and he spends the cash on Prada shoes and Kate Spade handbags?”
Katie didn’t bother to shake her head this time. She just stared at me as if I were crazy, which maybe I was.
Might as well eliminate as many possibilities as possible. “Could he have a health issue? Had some plastic surgery?” He could’ve gotten a face-lift. After all, if Jerry Jones, the owner of the Dallas Cowboys, could do it, why not other men? Or maybe Burkett had gone for a penis enlargement. We’d seen it all at the IRS. Not much would surprise me.
“I don’t see how,” she said. “He hasn’t taken more than a day or two off from work since last summer.”
“And he’s still as wrinkled as ever,” Doug said.
Looked like whatever Burkett was spending the money on was for him to know and me to find out. Part of me hoped it really was drill bits. I had a large caseload and would love to put a quick close to this investigation. Still, another part of me hoped this case would turn into a public scandal. I thrived on action, after all, and after my embarrassing excessive-force trial I could use a big win.
I thanked Katie for the information, stood, and handed her my business card. “I’ll be in touch.”
chapter nine
Drive By
Evening had settled in by the time I left the Dunnes’ home. I found myself grateful to be born in the age of technology, knowing I’d be hopelessly lost out here in the middle of nowhere without my GPS, especially in the dark where landmarks and road signs could easily be overlooked.
Before heading back to Dallas, I decided to take a detour by the headquarters for Palo Pinto Energy. Might as well after driving all this way, huh?
The administrative office was in a small, one-story brick building six miles north of town on Farm to Market Road 4. I drove slowly past, taking things in. Security cameras were mounted on each corner of the building. Behind the brick building was a large prefab warehouse well lit by floodlights. Security cameras were mounted on each corner of the warehouse, too, as well as over each door. Various types of trucks and trailers were parked alongside the warehouse.
The warehouse and truck lot were surrounded by a ten-foot reinforced fence topped with barbed wire. In case thieves weren’t scared off by the sign that read WARNING—ALARM WILL SOUND IF GATE IS OPENED, a trio of Dobermans lay in front of their doghouses in an open pen near the warehouse doors, ready to tear any intruders limb from limb.
PPE’s closest neighbors were an Angus rancher a half mile to the north and a feed store a quarter mile to the south. Though I chose to live in the city now, I’d grown up in a small town in east Texas and could appreciate these wide-open spaces.
The stars were brighter out here, the air cleaner, the nights quieter, the pace slower.
Just for grins, I pulled over at a historical marker a mile south of the PPE complex, cut my engine, and climbed out. Stopping at an unknown place in the dark of night might seem unwise, but it’s not like there would be muggers or serial killers lurking around out here. Of course there could be a rattlesnake or coyote, but with my Glock holstered at my waist I could easily dispatch either should they set their sights on me.
I took a deep breath, filling my lungs with the cold, fresh country air and looked up at the sky. The stars twinkled overhead, along with the lights of a jet bound for the Dallas-Fort Worth airport eighty miles to the east.
Baaaa.
A shriek tore from my throat and instinctively I jumped backward, yanking my gun from its holster. The source of the sound was a black nanny goat in the pasture a few feet away. She’d stepped up to the fence to check me out and had issued the sound in greeting.
I shoved my gun back into the holster, walked over to the fence, and reached over it to scratch her back. “You liked to scare me to death,” I told her. “You’re lucky I didn’t shoot you.”
Three or four other goats wandered over, curious about the woman at the fence and hoping to get their backs scratched, too.
“Hey, y’all.” I reached out with both hands to deliver maximum scratching.
One of the goats nibbled on my sleeve, realized I was neither tasty nor edible, and wandered off, disappointed. Another sampled my shoe with the same result. A third lowered his head and butted another in the ribs, shoving him aside and stealing his place in line for scratching services.
When the herd had been scratched to their satisfaction and left me at the fence, I wandered back to the marker. Curious about the significance of this remote place, I stepped up to the plaque, punching the flashlight app on my cell phone to illuminate the words.
The marker provided a quick history lesson. This land had once been the homestead of a man named George Webb Slaughter, who served as a courier for General Sam Houston in the Texas War for Independence. Slaughter’s claim to fame was that he’d once taken a dispatch to Colonel William B. Travis at the Alamo in San Antonio. Slaughter’s marriage to Sarah Mason in 1836 was the first sanctioned under the laws of the Republic of Texas. The couple went on to have eleven children. I could see why. Didn’t seem like there was much to do out here in the way of entertainment but scratch goats or fornicate. Slaughter later served as both a preacher and a practitioner of saddlebag medicine. His family survived several Indian attacks. No surprise there. With eleven kids they had their own army regiment.