by Susan Wolfe
“So, can I ask some stuff?” She rolled her head on its cushioned headrest away from the blue bay to look at him. “What’s a distributor, and why do we care what they say about side deals?”
“Distributor’s a middleman,” The Bug explained, watching the traffic. “Sort of like Fry’s, only without the storefront. The disti just gives us the name of his end customer, and then we sell him the software at a discount. That way we get a bigger sales force without having to cope with their ludicrous, vulgar shenanigans.”
“And what are we hoping to get from these distributors—
disti’s—today?”
“We want them to admit they lied to us about having the right to return the software.”
She frowned. “Is that likely?”
“Not very,” he admitted cheerfully. “They’ll probably say our sales guy promised them they could return the product if they couldn’t find an end user. If they say that, then we’re cynically hoping they have no proof. And if they do have proof, then at least we’re hoping they’ll tell us that these are the only three deals they’ve ever done with no end user and a side deal.”
“I see. Our job is to contain the toxic spill before we clean it up.”
“Exactly. With a whole set of progressively less optimistic containment rings.”
Georgia made quick notes on the yellow notepad that was propped on her knees. “Okay. But why would we even care whether they have an end customer, if they don’t have the right to return the software? Isn’t that just their problem?”
“Sadly, it is not,” he sighed. “It’s also our nasty problem, called channel-stuffing,” He nosed ahead of a Camry onto the exit, and the Camry honked. “If a distributor buys more software than he needs, and we won’t let him sell it back to us, then he’ll stop buying until he uses up what he has. So that inflates the sales number in one quarter, and tricks the public into thinking we’re selling software at a faster rate than we really are. Channel stuffing. Which makes our public reports misleading, which can take our whole company down in flames. Can you see, is that a garage entrance on our right?”
“And why exactly would our sales guy stuff the channel by getting disti’s to buy product they don’t need?” she asked as Zack locked the car.
“Why do sales guys do everything? They’re coin-operated. They get crazy at quarter-end if it looks like their commissions aren’t gonna be big enough. And there might be pressure from the boss, who’s also coin-operated. So occasionally, one of them does a side deal—knowing they’ll get fired if we find it—just to pull future revenue into the present quarter. Here we are. I think they’re on the fourteenth floor.”
“So do all salespeople engage in ludicrous, vulgar shenanigans?” she asked as the elevator began to ascend.
“Certainly not. Our licensing lawyers work with a number of perfectly sensible professionals.” He removed his bug glasses and slid them into his inner suit pocket.
“So, we have no reason to think these disti’s are out of control.”
“Well, that’s not entirely true . . .” He grinned slyly. “They wanted me to hold this meeting at the Wanton Wendy Club.”
“At nine in the morning?”
“They asked me to wait until ten.” Was he teasing her?
“So, why aren’t we there?” she asked suspiciously.
“I said the tassels make me dizzy before I’ve had my coffee.” He looked straight ahead as the elevator doors opened into the plush reception area of Chipotle Software Solutions.
The receptionist seated them in a conference room, and a moment later two virtually identical men with professionally mussed hair entered, their narrow-waisted, ‘sharp’ suits differentiated only by their red-and-yellow versus blue-and-maroon striped ties. Their cufflinks caught the light as they each firmly shook Zack’s hand.
“Good, I see you found the coffee,” Ron Davis said with a wink. “I heard it’s your morning beverage of choice.” Reference to Wanton Wendy? “So how can we help?”
“Well,” Zack began, “I wanted to better understand your right to return software in those three deals you called us about. By the way, are those all the deals that you view as issues between us?”
“At the moment, yes,” Mr. Davis said. “We ran a check, and the other deals like this have all sold through.”
‘The other deals . . .’ So much for only three.
Zack’s demeanor was deadpan. “When you say ‘deals like this,’ can you say what exactly you mean by that?”
“Sure. From time to time one of your sales guys asks us to ‘pull forward’ a deal that would logically occur later on. Either we don’t have an end user, or the end user isn’t ready for the software. We always go along if we can, because it helps Lumina and we know we won’t be stuck with the product if we can’t sell it.” Boom. Channel-stuffing.
“I see. So you say ‘we go along.’ Have you been asked to go along very often?”
Ron Davis shrugged. “Dale, did you bring the chart? We thought you might be curious, so we did a little research.”
Georgia glanced at the two-page chart. Eight customers were listed down the left-hand column.
“Thank you,” Zack said. “Very helpful. So, on the three deals you called us about, I see that Bill Barrows is listed as the rep. He’s the guy that just left the company.
“Right.”
“And in the same column where Bill Barrow’s name appears, I see other names. Are those the names of other Lumina salespeople?”
“Dora Hickox and Danny Villus, yeah. Those are the only three that ever approach us directly. And we know how it is. We have quotas too. So we help Charlie out if we can.”
“Charlie?”
“Yeah. You know. Reebuck.”
“Ah. Charlie Reebuck, the head of our western region,” Zack said pleasantly.
Excellent poker face, thought Georgia. Must be from his days as a litigator. He often came across as good-natured and slightly obtuse. Looking at his cheerful smile, you’d never know bad news registered with him at all.
“But Charlie’s name isn’t on here,” Zack continued. “Have you spoken to him about these deals?”
“Dale, have you?” Ron Davis asked. “No, we never spoke to Charlie directly about this, but your sales reps always emphasize that the request is from Charlie—you know, to help him get across the finish line for the quarter.”
“I see. So with any of these deals, how would you document the agreement with Lumina?”
“Well, it looks like we haven’t been too careful about that. We found one email on the Ramco deal.” Burt handed Zack and Georgia a copy. “I think that lays it out pretty clearly.” So much for no proof. The disti’s score! “To tell you the truth we didn’t feel we needed to document anything. Lumina always makes good on its promises.”
“When you say ‘we make good,’ do you mean we’ve refunded money to you?”
“Well, it was never that direct. We understood the situation. We just quietly returned the product, and then we got a good discount on product in a subsequent deal. Charlie’s very fair. It’s just, you know, with Barrows gone all of a sudden, we got a little skittish about these three.”
“I see. So this is a complete list of all the deals that were done in this way?” The toxic spill was now leaking into the biggest containment facility.
“We think so, yeah.” He shrugged. “We don’t like to do them too often, because it creates a few accounting issues of our own, if you know what I mean.”
Zack leaned toward Ron Davis. “Mr. Davis, I plan to do everything in my power to make sure we don’t ask Chipotle to do this for us again. Ever. If anybody does approach you with another request, we’d prefer that you stall him and call me. You’ve got my number on the card.”
Mr. Davis picked up the card and glanced at it. “Sounds great.” He tossed it back onto the table. “So I assume we’re free to ship back the product? Glad we got that behind us by,”—he glanced at his watch—“9:35 in the morn
ing. If only we had some entertainment to help us celebrate.” He winked. “Next time let’s find a better meeting place.” The wink was her answer.
“Absolutely. Next time we will. Thanks, guys.”
Zack said nothing on the way down in the elevator. As soon as they were safely enclosed in his Lexus, he dropped his head onto the steering wheel and bellowed, “Holy shit!” Georgia glanced quickly out the window to see who else had heard. “And those other two sales guys are probably still with the company, cranking out side deals faster than Krispy Kreme cranks out donuts.” He sat up and smacked the steering wheel, hard, with his open hand.
Probably not a good time to ask how his optimism was holding up.
“So that’s what we know,” Zack concluded a couple of hours later to Ken, Quan, Georgia, and Cliff Tanco, the Don Juan of finance. “Are you all suitably aghast?”
“I’m not sure ‘aghast’ really covers it,” Ken said. “If this means we have to publicly restate our earnings for the past year, then we can practically guarantee a hit to our stock price.”
“I know,” Zack said, “when we’ve already got the patent lawsuit and that toxic Futuresoft deal. Sorry to drop this on you as well.”
“Hardly your fault. That’s why we have jobs. So let’s list what needs to be done.”
The group briskly agreed to restore eighteen months of email for the two still-employed sales reps, and hire eight outside lawyers to start reviewing the email for evidence of more side deals.
“Great.” Zack actually sounded upbeat half an hour later, as he dropped his pen onto his yellow pad. “I think that covers it for now.”
“I tell you,” Ken said, touching his bow tie, “I’m scared to death we’ll find out Reebuck was involved in this, because it could spread beyond the San Francisco office.”
“But we have no evidence that he was involved,” Zack reassured him. “Just speculation from a couple of ludicrous . . . sales guys.” He shot a conspiratorial smile at Georgia.
“What happens if we miss the deadline for filing the 10-Q this quarter?” Quan asked.
“We can’t let that happen,” Ken stated flatly. “It’s even worse than a restatement, because the investors know something is wrong, but they can’t size the problem. Tell you what, let’s get Reebuck’s email restored now, just in case, and hope to hell we never need to read it.”
“Boy,” Quan remarked. “Six weeks to file the Q suddenly doesn’t seem like much time.”
Had it occurred to Ken that even Reebuck might not be the worst of it, Georgia wondered as she hurried back to her cube. What if this was what Terkes had been so worried about the day they told him about the Flipper? If Glen was involved, would they have to look at email for the whole world?
Those puny little half-empty side deal binders suddenly seemed ridiculous, like hummingbird wings on a moose.
Although Georgia shared her father’s love of the adrenalin pump, she had more patience for routine than he did. That was why she could get her college degree when her father never did. It was the reason she could manage a desk job (with maybe one or two little embellishments). But Georgia did have limits. After spending several hours meticulously arranging the tracking system for side deal evidence, she needed a break.
Why not go on the Internet and check out that prescription medication Glen Terkes used? Cordarone. Hm. Heart stuff. Interesting. Looked like it might be serious heart stuff. She was deciphering an article from the Journal of American Medicine when her phone rang.
“Georgia, it’s Jim Prizine. I’m standing on the steps of the International Trade Commission.”
“Oh my God! Hold on a minute, okay?”
A moment later she and Ken and Zack were standing expectantly around Ken’s conference table, and Ken called into his speakerphone, “Jim? Tell us what’s happening.”
“Well, I’m standing on the steps of the International Trade Commission here in our capital, with a copy of your ITC lawsuit, which was file-stamped exactly seven minutes ago.”
“I have goosebumps,” Zack said. “Like I’m talking to Neil Armstrong on the moon.” They all cheered with giddy delight.
Georgia cut out the headline from the Wall Street Journal the next morning and stuck it up in her cube: “Plucky Lumina Software Fires ITC Salvo at German Giant SAP.” By the end of the day, Lumina stock was trading up five points.
CHAPTER 15
“I’m having a second thought or two about this, Nikki,” Georgia warned as she followed Nikki’s bobbing ponytail along the wooden dock. The bright sunshine was warm on Georgia’s back as she tied her windbreaker around her waist. “I’m a little bit of a chicken in certain ways.”
Nikki spoke over her shoulder without breaking her stride. “Legal people always are. Professional hazard. But there’s no risk to this, as long as the two of us stick together. Just don’t let the fat guy get you alone.”
“That’s not really the risk I’m worried about, Nikki, though now I know why you invited me.”
Nikki flashed a grin over her shoulder. “Now, that’s not fair. It was maybe one little reason. Roy has to sail the boat, which means he’s up on deck the whole time, and I couldn’t really take a chance on getting stuck alone in the cabin with Large Romeo. But I could have asked a dozen different people to join me, and I chose you because it’ll be the most fun for me.”
“What if I get seasick? What if the boat tips over?”
“Those would make it less fun,” Nikki acknowledged, “but they’re not gonna happen. Catered food, gorgeous weather, fine wine. And we’ll get all your documents signed.” She patted her messenger bag.
“Who is the fat guy, anyway, and why do you think he’d come on to you?
“Jonathan Bascom. Head of sales for a company called WizBiz. Larry Stockton, our board member, asked Roy to spend a little time with him. Not clear why. As to his manners, just a feeling from when I met him for thirty seconds. Could be totally wrong. Here we are.”
Georgia paused to read the name on the back of the gently bobbing boat. “The ‘Chaucer.’ Now, that’s a surprise.”
“Yeah, that’s the new name. Look where it’s painted over.”
Georgia squinted. “Is that . . . ‘Salt’ . . . ?”
“Yeah. Used to be the ‘Salty Fart,’ but Jean-Francois made him clean it up for customers. Watch your step. Hey, Roy!”
“Guy’s not here,” Roy grumbled, reaching a hand out to steady Nikki as she stepped onto the boat. He offered a steadying hand to Georgia without looking at her.
“Thanks,” Georgia murmured to the side of his head.
“Should be here any minute,” Nikki said. “I gave him directions myself.” She put her cell phone to her ear and gestured for Georgia to carry the messenger bag down a short flight of steep steps into the cabin, a claustrophobic little room with cushioned bench seats, a fold-down table and a twin bed under a low ceiling. Narrow horizontal windows were cranked open to provide a cross breeze, but it was still stuffy. She dropped the bag on the table next to the food and went back up to look around, a light breeze blowing strands of her black hair across her face. Somehow “yacht” sounded a lot bigger than this . . . boat, but what did she know? Beat hell out of a houseboat on Waxahachie Lake.
Roy’s glare had slightly less malice in it here on the boat, and Nikki was still on her cell phone, so Georgia ventured, “Nice boat. You’re a fan of Chaucer?”
“I was a big fan of Chaucer the dog. Named the boat after him.”
“I see. What kind of dog was he?”
“Pit bull. Much better sailing companion than my wife. He sailed out to the Farallons with me every year for twelve years.”
“You must really miss him. Aren’t the Farallons . . . ?”
“Here he is. Johnny!” Nikki pocketed her cell phone and turned to greet the man who stepped heavily onto the bobbing deck. His broad chest sloped out and culminated in a distended belly that left his belt buckle peeking out underneath, exactly like Baby Huey’s diap
er pin. His big head was topped by a tiny baseball cap that accentuated his red, translucent ears. This was a sales guy? Must be big money in the sympathy appeal.
Georgia shook his hand as he said hello to her boobs. He pointed out how much he and Larry appreciated Roy taking the time. They chatted a moment while Nikki poured him some wine, and then Georgia followed her down into the cabin to set up lunch.
“I take your point,” Georgia whispered when they got downstairs. “We can’t let Large Romeo within a million miles of either of us.”
“Absolutely not,” Nikki agreed. “We stick together every minute.” First there was Cliff, the Don Juan of Finance, and now Large Romeo. A regular Who’s Who of sexual pests. Where were the decent guys looking for action in this company?
“Probably a nice enough person,” Georgia conceded, “though he sure has a mouth on him. He says either ‘fuck’ or ‘Larry’ in every other sentence.”
“Boy, I’ll take ‘fuck’ any day. How insecure would you have to be to drop Larry’s name every ten seconds? Let’s get the food ready, then we’ll go rescue Roy.”
But Roy didn’t need rescuing. Within ten minutes he and Large Romeo were howling with laughter about where Chaucer had pooped on the boat while they were sailing. Evidently a match made in the latrines of heaven.
Zack knocked and stuck his head in Ken’s office, where Georgia was helping to prepare for the board meeting. “Buck Gibbons called Human Resources today. He wants help putting Ben Larkin on a PIP.”
“Jesus, Mary and Joseph!” When Ken pushed back from the table and turned to him, Georgia could see out over the parking lot that the gray-green eucalyptuses were deathly still. Today was going to be hot.
“PIP stands for . . . ?’ ” she asked, turning away from the window and flipping to a clean page of her yellow pad.
“Persecute Innocent Person,” Zack responded, pushing his glasses up his nose with his middle finger. Interesting, his eyes didn’t look red any more. Was he keeping those glasses as a prop to express his views about Buck Gibbons?