by Susan Wolfe
Ken and Quan hurried into the office together. “Okay, everybody,” Ken said. “Thanks for showing up on short notice. We’re here to consider the SEC’s somewhat surprising request for testimony under oath, which came up in Quan’s meeting with them yesterday. Quan, fill us in?”
Quan adjusted his rimless glasses. “I was there with Marcus Baker from the finance department, because they had asked me to make him available for what we thought was a wrap-up meeting. You recall they have now reviewed thousands of documents we made available here in our document room. Despite their irritation that we asked them to come here instead of providing them with copies, they made it clear last week that they viewed the dual books complaint as baseless.
“So we marched cheerfully into the wrap-up meeting, but unfortunately they didn’t wrap up. Instead, they started asking Marcus a lot of questions about backlog.”
“Backlog?” Zack’s hands dropped from the top of his head onto the table.
“Yes. Backlog.”
“What’s backlog got to do with anything?”
“Exactly,” Ken nodded. “As you can imagine, we were quite disturbed.”
Georgia raised her hand just above her head. “I’m probably the only one here who’s never heard of backlog.”
“As you know,” Ken explained, “we have to ship our product to the customer before we can count the revenue. Backlog is when we have unshipped orders at the end of the quarter, meaning we don’t count the sales revenue until the following quarter. This builds up a reservoir of guaranteed revenue at the start of each new quarter, which is what we call backlog. Completely unrelated to dual books.” He nodded to Quan to continue.
“So Marcus answered their questions, and then I ran down to my car and called Jill. Apparently the SEC has been complaining for a while now that companies can arbitrarily build up backlog and then ship it all out in a bad quarter, to prevent investors from realizing that the business is in trouble. Jill thinks they’re looking for a test case, and now we fear the test case will be us.”
“Well, great.” Sally let her crossed arms drop heavily against her neon orange midriff to emphasize her disgusted sigh. “I told Roy it was stupid to antagonize them by being cheap about the copies. I wonder how he’ll like living with the consequences.”
Ken raised his eyebrows. “I’m surprised to hear you say that, Sally. I thought saving money on copies was your idea.”
“Don’t be ridiculous,” Sally snapped. “I was just the messenger carrying another witless message.”
Roy was now witless. Excellent.
Zack texted Georgia: bware. aliens hve abductd Sally nd snt us ths impostr.
Georgia texted back: mayb hr suckg muscles jst wore out.
“And then,” Quan was saying, “they made this alarming request to have Marcus testify under oath. Isn’t that quite unusual for an informal investigation?”
“Unusual and dangerous,” Ken confirmed. “Have they asked us for anything in the way of documents?”
“Not yet, but I feel confident the request is coming. I’m just wondering what we should do about it.”
“The only thing we can do is recognize the danger and prepare,” Ken replied. “Their request for documents will again be ‘voluntary,’ and we’ll smile and cooperate. Same with Marcus’s testimony. If we don’t cooperate, they’ll just serve a subpoena on us to make it formal, and then we’ll have to comply and disclose it to boot.”
“I don’t seem to know what our backlog policy is,” Zack confessed, glancing around the room. “Does anybody else?”
“All I know so far,” Quan responded, “is that we use it, apparently like everybody else in Silicon Valley.”
“Okay,” Ken said. “Here’s what I’d do. Get Cliff and Jill to give us a briefing on backlog tomorrow morning. Ask Jill to bring that young lawyer—Fallon?—to join us. Maybe he can start pulling together a list of documents, if not the documents themselves.”
“Pull the documents now,” Sally directed. “Let’s try to cooperate promptly for once.” She ignored the incredulous stares.
Fallon, Georgia thought. Eddie must have done something smart to show up on Ken’s radar screen. What would it be like to run into him again? Probably forgotten all about her by now.
“Could I have prevented this problem from developing?” Quan asked, raking his black hair back from his face. “For example, should I have prevented Marcus from answering their questions?”
Ken shook his head. “Heck no. That would only have made them twice as suspicious. You did exactly the right thing, Quan, and now you’re doing everything possible just by getting out in front of it.”
“Maybe before we congratulate ourselves,” Sally suggested, “we should try getting something right.”
“Any news on attrition?” Zack inquired cheerfully.
“Here you are,” Nikki said, handing a folder across her desk to Georgia, who stood just inside her doorway. Nikki’s dark hair was swept into a ponytail that revealed her little square earrings with tiny diamonds in the center. “He’s still in a meeting with one of the finalists for the worldwide sales role, but everything he signed should be in here. I don’t think there was anything . . .” She looked past Georgia into the doorway behind her. “Hi, Sally, did you need something?”
“I need to stop this nightmare renovation,” Sally responded, sighing dramatically and passing her hand over her eyes as she pushed past Georgia into the little office. “But if you can’t offer that, I’ll settle for an appointment with the genius who started it.”
Nikki frowned. “Sally, did you just imply that Roy is stupid?”
“I don’t need to explain . . .”
“Because here’s the deal.” Nikki’s ponytail bobbed emphatically. “Even if Roy were a moron, he also happens to be my boss, and I don’t care to listen to his subordinates being disrespectful. What if a customer heard you?”
“All I said was . . .”
“I know what you said. Don’t say it again in front of me. Now, you wanted an appointment with Mr. Zisko?”
She signaled for Georgia to shut the door the instant Sally was gone. “Did you hear that? What was that even about? She usually acts like this renovation is the greatest thing since the invention of sex.”
Georgia shrugged. “Don’t know, but she’s been criticizing Roy about other stuff, too. Did they have a big argument or something?”
Nikki frowned, considering. “Boy, not that I’m aware of. She still just sails in and out of his office like she owns the place. Ugh! The only thing worse than a suck-up is a back-stabbing suck-up.”
“You never know,” Georgia said. “Maybe there’s something even worse we haven’t seen yet.” Nikki glared silently at her desk, and Georgia decided to seize her opening. “You think you should, you know, warn Roy or something?”
“If this keeps up I’ll have to. It’s just so weird. Anyway, you got all your signatures? Let me know if you see her do that again, okay? It’s just so fucking weird.”
Georgia was unlocking her car in the dark parking lot at midnight when a voice whispered “Georgia!”
She suppressed a scream.
“Georgia!” The voice was urgent. “In here!”
She whirled around to see Charlie Reebuck, bent over and looking up at her from the driver’s seat of the car next to her. “God, Charlie. You scared me a little.”
“Need to talk to you.”
“Great. Why are you whispering?”
He reached across and popped open the passenger door. After the slightest hesitation, she got in and closed the door.
“What’s up?” she asked cheerfully.
“I think we killed him.” Did Charlie Reebuck actually have a conscience? You couldn’t count on anything in this world.
“Sorry?’’
“Okay. Okay. You could say it was me, mostly . . .”
“Who are you talking about? Glen?”
“Somebody else dead? Listen. Can they, you know, put me in ja
il?”
Georgia cocked her head, frowning. “For what? I heard he had a heart condition.”
“I know. I know. But you don’t think the blue . . .”
Georgia held up her hand. “Do not tell me anything you don’t want me to testify to in court. Or anybody else, for that matter. You understand me?”
He nodded.
“Did you know Glen had a heart condition?”
“No! I swear! I’d never . . .”
“Well, that’s just it. He’s the one who knew. You didn’t make him pair off with that stripper, if . . .” she held up her hand again “. . . he did happen to pair off with a stripper. Or a dozen strippers, for that matter. All you did—possibly—at most—is slip him a little recreational enhancement.”
“I did it for Buck! He . . .”
She held up her hand again and emphasized each word. “Glen chose poorly.”
“I warned him that girl was dangerous. Not because of the heart problem—who knew? But just because she was jail bait, you know?”
Jail bait.
She tilted her head and asked thoughtfully, “What exactly do you mean by jail bait, Charlie?”
“She looked like a kid playing dress-up, far as I could see. You know, wearing her mother’s lipstick? Couldn’t possibly have been more than fourteen. Not what she told him, apparently, so what could I do about it? But I bet that’s why she ran away instead of telling us. Maybe if we’d found him sooner . . .” He was gripping his steering wheel with both hands and looking through the windshield into the dark lot.
So Glen Terkes really was a full-blown pedophile.
“She came with the other strippers?”
He shrugged. “I thought so, but then they couldn’t find her after . . .” He shook the steering wheel with both hands, still staring forward.
“Look,” Georgia said, “It’s very, very unfortunate, and you might consider other ways to liven up your parties from now on. But I don’t think you need to worry about criminal liability here, especially if you keep your mouth shut. Now, if you did start talking . . .”
“I won’t! Jesus, are you kidding?” He was quiet for a good five seconds, his hands still locked on the wheel. “You know what? I think you’re right. He chose poorly. Yeah. I was just trying to help Buck, you know? You’re definitely right.” He let go of the wheel and sighed. “Good to talk about this. I was getting a little excited. You ever want a job in sales you’ve got it, no further discussion, okay?” He glanced away from the windshield just long enough to make eye contact and then back again. Still inviting her to join the fun sales team, but his heart definitely wasn’t in it.
“That’s great, Charlie. I really appreciate it. You know what you can do for me in the meantime?”
He looked at her warily. “What’s that?”
“Stop with the phony deals.”
“What phony deals?”
“Charlie.”
“All right. All right. Sorry.”
“Stop doing those phony deals with distributors, okay? The auditors are totally onto it now, and you’re gonna take the whole company down. Tell your buddies, too. No more phony deals.”
“Well, they aren’t phony, actually, they’re just . . .”
“Charlie.”
“All right! I’ll do it. I will. No more pull-forward deals. I’ll tell ’em. And if we can’t make the quarter, well . . .” His eyes sort of bulged as he imagined it.
“I’d be very disappointed if another one of those pull-forward deals comes through.”
“I know. I got it covered.” He paused. “Glen chose poorly. He chose poorly.” He pulled his key out of his pocket and stuck it in the ignition. “Tell you what, let’s have a drink sometime.”
“Great. One of these days I’d love to have a drink.” She opened her car door, and then surprised herself by turning back. “Look, can I say this once more before we never talk about it again? If you didn’t know about his heart condition, then it was not your fault. It couldn’t be your fault. You understand me?” She stood next to the car and lifted her palm in farewell as he started his engine and backed out.
Jail bait, indeed. Where had that kid come from? Could B. Rotkin be an alias for somebody inside Lumina?
She hoped Charlie wouldn’t be upset for long. Waste of good conscience, really, and he didn’t have much to spare. He should redirect his newfound scruples toward those phony deals. Which, sadly, he would never do.
Ah, well, she thought as she turned out of the parking lot. The auditors would find the next bad deal, and then, without Glen to protect him, Charlie would be gone for good. Stopping the side deals cold would have been pure gravy. She could accomplish quite a bit sometimes, but trying to persuade Charlie to think more than four seconds into the future was about as effective as a screen door on a submarine.
CHAPTER 25
Georgia was idly listening to Nikki’s half of a phone conversation while she waited to get a signature from Roy. “Roy’s finishing up with Jonathan Bascom now,” Nikki reported into the phone, her plastic bracelets clacking as she used her other hand to flip through files in the bottom drawer of her desk. “If they’re not done in another minute, I’ll stick my head in.”
Bascom, Georgia thought. Bascom. She’d heard that name before, and had some vague, negative feeling about it. She was about to question Nikki when Roy’s office door opened and Jonathan Bascom emerged.
Surely not, Georgia thought. Large Romeo, the world’s fattest sales guy from the yacht? She looked in horror at Nikki, who nodded once, almost imperceptibly, in solemn confirmation.
Roy slapped Mr. Bascom on the shoulder as they shook hands. They were both beaming. Roy waved good-bye, noticed Georgia and reached out for her document folder. “Make this quick. I’m about to announce our new VP of Worldwide Sales.”
This was just downright discouraging.
Jean-Claude called the board meeting to order in the slightly nasal accent that Georgia had begun to eagerly anticipate. Who knew nasal could sound so alluring? One of the few genuinely attractive men in this testosterone-drenched company, and old enough to be her grandfather. Too bad Katie-Ann had interrupted that invitation-in-the-making from gray-eyed Eddie Fallon. Now that had been a man with promise.
Larry was seated next to Jean-Claude, his jet-black hair firmly in place, his red tie pinioned against his silver shirt by a vicious-looking stick pin. Nobody was ever going to accuse Larry of being alluring.
“We have a quorum and should begin,” Jean-Claude called with a smile. “Today we must start with the happy news that the 6.1 is nearly ready for release and will after all achieve compatibility with all thirteen configurations of SAP. Roy, you will please convey our big congratulations to Andrea, who once again has met a very important goal for our company.
“Now Ken will speak about the SEC inquiry, and then Sally will report to us on her efforts to reduce attrition.” Look at that, Sally was wearing her favorite mustard yellow suit jacket with the red embroidered cherries. Something special doing in attrition?
Ken reported that the SEC investigation had now morphed completely into a backlog investigation.
“So why are they pursuing this with us, Ken?” Jared’s navy blazer accentuated his elegant and very white hair. “Do we stand out somehow in our use of backlog, or were we just in the wrong place at the wrong time?”
“As far as I know,” Ken responded, “our backlog practices are consistent with those of every other Silicon Valley company. I just think once they’d assigned somebody to investigate this complaint about dual books, they found it convenient to use the open channel to investigate their new pet project.”
“And to punish us for being uncooperative,” Sally added.
Larry swiveled a frowning gaze onto Sally, his forearms planted firmly on the table. “What was that?”
To Georgia it sounded like a warning to shut up, but Sally apparently heard an invitation.
“Ken and I were directed to cut costs in responding
to the SEC, which forced their staff to come to our offices to review documents instead of getting their own copies as they requested. In retrospect, it does seem unfortunate.” Bold.
If Roy was troubled by Sally’s remark he didn’t reveal it. “The SEC loves nothing better than to waste other people’s money,” he declared. “I don’t know why we should make it easy for them.”
Sally’s smile was tinged with triumph.
“Well,” Ken continued, “however we got here, we have now moved into an area of investigation that is more dangerous than the original one, simply because the rules about backlog are shifting under our feet. The SEC evidently wants to rewrite those rules in the guise of ‘clarifying’ them, and plans to use us as their poster child.”
“Poster victim,” Jared corrected. “Well, the first deposition should tell us more about their theory. Get back to Jean-Claude at that point, will you, Ken?”
Sally smiled ruefully as she stood for the attrition discussion. “I wish I were bringing you good news. Unfortunately, our bleak picture has only gotten bleaker. What I do hope to bring you is insight into the causes of this crisis and a new, more radical plan to meet the attrition goals the board has so wisely mandated.
“Let’s start with the numbers.” A slide with three columns of numbers appeared on the big screen. “We were at 40 percent attrition six weeks ago, and you mandated 28 percent within a year. This shows the quarterly milestones to get us there.
“We ran the numbers in preparation for this meeting. In fact, there has been a change, but it’s been in the wrong direction. It seems we have now gone from 40 percent to 43 percent. This means at current course and speed, almost half of our employees will leave within one year.” She looked directly into Jean-Claude’s eyes for one beat, then Jared’s, then her eyes came to rest on Larry’s.