The Billion Dollar Sure Thing

by Paul E. Erdman

  Initially, Radazan had not mentioned the investment bank in New York which was handling the account, but after he pulled out the sheet listing the cats and dogs in the portfolio, Stanley had identified it immediately. Their record had been piss-poor for years. But they still lived well on their reputation, and the reputations of ex-Cabinet members, generals, and even admirals which they regularly bought in competition with other banks, aero-space companies, and management consultants in the true spirit of free enterprise. Unlike baseball, a systematic draft system had not yet evolved. But back to money and the mysterious Oriental.

  Rosen had been very, very leery in the beginning. He had had enough experience in international finance to know two things. First, Arab money is 99 percent myth, or perhaps 99.999 percent. He had never met anyone who had ever really seen a major chunk of it. Second, whenever strange people start talking in terms of tens of millions of dollars, not to speak of a hundred million, the chances are a thousand to one that it’s a complete waste of time—no, a million to one.

  At this point Harry Stahl had interrupted. “So why didn’t you kick him out of the office?”

  “I’ll tell you why. Because he offered to arrange immediately for first-class fare to Beirut, and $10,000 prepaid expenses. With no commitment on either side.”

  This even stopped Harry. “Well, I’ll be damned! But Arabs! Don’t they know you’re Jewish?”

  “He didn’t ask. But what the hell, If those fellows make such an offer, they must have checked up pretty carefully beforehand.”

  “Do you want to work for a bunch of crazy Arabs, Stanley?”

  “That’s just it. I would. I mean, if those guys have somehow developed enough interest in me to make such an approach, well, dammit, I think that’s pretty good. I get tired of lining up broads for most of those schmucks we’ve got now as clients. And tired of listening to them tell me for the hundredth time how hard their family had to work to make all that money—and to be careful with it, or else. This would be something new.”

  “But Stanley, how in hell are you going to communicate with these guys? Most of the people in New York can’t even understand you.”

  The conversation had then eased into the usual kidding session. After lunch Stanley called Mr. Radazan at the Regency. They had agreed upon the arrangements. And here he was. In Lebanon, for God’s sake.

  Stanley decided to take a shower and then a nap. About four hours later the phone rang. It was Radazan. He suggested dinner together, but Rosen declined. They agreed that Stanley would get some more rest that night, and that Radazan would pick him up at the hotel at ten. Stanley went back to sleep.

  The following morning, Tuesday October 21, Rosen had breakfast on the terrace outside of his hotel living room. The weather was absolutely superb and the view of the Mediterranean magnificent. The similarity to the French Riviera was unmistakable.

  Radazan arrived at ten on the dot, with Cadillac and chauffeur, and within twenty minutes they were in his office, in what appeared to be a spanking new twelve-story building, of which the Beirut branch of the Commercial Bank of the Trucial States had one floor. There was absolutely no activity on the premises.

  Radazan introduced Rosen to a man who was apparently his brother, or cousin, or some such thing, who did not speak a word of English and appeared to mumble a few words in French. Rosen’s French was so bad that he could not really tell. The cousin had the function of chief coffee bringer. Thick, not very hot, syrupy—ugh! The only saving grace was the large glass of water that came with it. As Stanley found out, it was useless to try to gulp it down, and get the whole damn thing over with. A few seconds after you put your cup down, old cousin appeared like magic with a fresh one, ready to go for the second round. And so forth.

  “Mr. Rosen,” began Radazan, “first I would like to tell you how very much I appreciate your coming all this way to talk to us. We feel honoured.”

  “I’m really the one who should feel honoured, Mr. Radazan,” replied Rosen. “Tell me, what prompted you to contact me in the first place?”

  Stanley’s thoughts in New York proved correct. They had investigated him from top to bottom. They were essentially interested in what Mr. Radazan termed his track record. Lebanese.

  “Frankly, Mr. Rosen, we are not interested in your Panamanian corporations or Liechtenstein Anstalten. We don’t need that sort of thing. We have no tax problems here. What my client seeks is performance, and we have not been getting it so far in New York.”

  “Something puzzles me, Mr. Radazan. I have had zero experience in this part of the world. But still, I do get around a bit. And I know that ‘performance’ was never really important here. I’ve been told on many different occasions that most of the investment funds coming out of here are put either into property or into bank time deposits. Period. And that one is even very fussy about the banks, with the result that such money placements are restricted more or less to the top fifty banks in the world—and that the British banks have always gotten the lion’s share. So pardon me if I sound just slightly suspicious. I don’t want to waste your time, and I hope you won’t waste mine. I’m not a property specialist, and I don’t work for Barclays.”

  Radazan did not appear at all upset at this show of bluntness. Quite the contrary. “Mr. Rosen, your analysis of the situation here is quite correct—or should I say, was correct until a few years ago. Also here in the Near East things change. A new generation has come into key positions, not just in Egypt or Libya but also in other countries and even sheikdoms. These younger people have, for the most part, been well educated in England or France and have quite an able understanding of investment procedures and markets. To be sure, they are by no means in charge. But they are seeking to promote a middle way between the ultraconservatism of their fathers and grandfathers and the legitimate objective of capital gains in the modern sense.”

  “Fine. But why come all the way to New York for professional money management? You’ve got enough much closer—right here in Beirut, or in any case in London, or Amsterdam, or Geneva.”

  “Well, I cannot answer in general; most of the money from this area does go to Europe. But in this specific case my friend tried Europe but did not get results, or at least the results he had hoped for with his ‘new’ approach. He then came to me for advice. I am a simple commercial banker and not able to run investment funds of this size. So I contacted some friends in New York who I thought would be ideal. You saw the portfolio that resulted. Within the last twelve months they have managed to drop almost $10 million. And this was an improvement over what happened in Europe.”

  There was a familiar ring to all this for Stanley Rosen. Investors jumping from the frying pan into the fire and then back into a fresh frying pan, mistaking motion for action.

  “So I’m supposed to pick up the pieces,” stated Stanley.

  “Quite,” replied Radazan. “The fee we are discussing is .5 of one percent per annum based on the assets under management, plus 10 percent of the annual gains achieved—if any. The exact formula can be worked out to your satisfaction, I’m sure, when we reach that point.”

  “Are you in a position to make the commitment?” asked Rosen.

  “No,” replied Radazan. “I think that I should make it quite clear that I am just what I believe you call an errand boy for my friend. Actually, he’s my uncle on my mother’s side. He’s in Beirut and is expecting to see us right about now.”

  “What does he expect to hear from me?”

  “Not just blah blah. If you have something very specific in mind that you could propose, I think it would be advantageous for all of us.”

  “I do.”

  “Fine. Then I would suggest we move right on.”

  This speed and firmness of decision could not have been more atypical of the Arab way of doing business. The normal pattern involved days, weeks, and months of back and forth and up and down, all with a maximum of ritual and a minimum of concrete proposals. Apparently somebody had done a magni
ficent job of selling Stanley Rosen to Radazan, and Radazan had done an even better job with his client. As Radazan later related to him, the process had already been going on for more than four months.

  They got back into the waiting car and moved off. “Tell me, Mr. Radazan, how did you get so smart?” asked Rosen.

  “You mean my English?” countered Radazan.

  “That and a few other things,” answered Rosen.

  “Essentially from you Americans. I attended the American University here in Beirut—studied law—and a few years following graduation went to the middle management business school at Fontainebleau. They use essentially the Harvard case method, you know.”

  “Oh,” commented Stanley, thinking that he had been right in believing that this new client would be a major step up from those jerks in Vegas and their tin-plated lawyers. This was class!

  The contrast between Stanley’s thoughts and the scenery outside the car window could not have been greater, for he suddenly found himself in the old Arab quarter of Beirut. The streets were crowded and dirty, the traffic a chaotic mixture of carts, donkeys, unbelievably overloaded trucks: the dress of the people was just as exotic. It was smelly. Much to Rosen’s surprise, they stopped right in the middle of one of the crummiest streets of all, and Radazan indicated that they were to get out.

  To enter the building that was apparently their goal, both had to almost climb over a crippled beggar that huddled in the doorway. Stanley suddenly did not like this one little bit.

  Is this just one big fucking put-on? was the elegant thought which struck him as he followed Radazan up two flights of stairs—very rickety stairs.

  The only door on the second floor was immediately opened after Radazan rang the bell. A bearded Arab in full desert dress ushered them in after Radazan and he had exchanged a few words in Arabic. In the large front office, if you wanted to call it that for want of a better term, similar Bedouin types were lounging around. A seventh, dressed in European style, stopped picking away on a typewriter that appeared at least fifty years old to glare at them as they were ushered through into the adjoining office.

  As they entered, an almost grotesque figure arose from behind his desk, and extended his hand to Radazan. Radazan in turn introduced the person to Stanley as Ali ben Fezali, his uncle on his mother’s side. The man appeared to be in his seventies, was hugely fat, dirty—a nomadic version of Sydney Greenstreet. His desk was cluttered with papers in complete disorder, some of them yellow with age or perhaps camel dung; others just plain smeared. The desk was huge, but old—and for some reason, battered. The only other pieces of furniture in the room were two plain straightback chairs, a small coffee table, and a couch—obviously of leather stuffed with horsehair.

  Rosen in his life had dealt with some peculiar principals in the States—to put it mildly—but this took the absolute goddamned cake.

  Radazan took his place on the horsehair couch and motioned to Rosen to join him. Fezali settled once again behind his desk. Simultaneously, the door opened, and another one—also in full robes—entered and presented everybody with the usual small cup of thick coffee. This time without a glass of water.

  Fezali began to speak to Radazan in Arabic, and as he spoke it became apparent, that he was a man of humour. His huge face crinkled often with a smile as he spoke. Stanley started to relax.

  Radazan, in due time, turned to Rosen. “First, Mr. Rosen, my uncle would like to apologize that he does not speak English. When he was a boy it had not been necessary. He would like to thank you for your visit. He apologizes for the lack of better facilities here but explains that he has been using this office in Beirut for the past forty years—and does not intend to change now.”

  Rosen mumbled the usual reciprocal words, and Radazan passed them on.

  Radazan then once again turned to Rosen. “My uncle has asked me to explain his situation. He is a banker. One of the most famous ones in the entire Near East. In fact, he also owns the bank where I work.”

  Rosen must have shown his disbelief most obviously, for both Fezali and Radazan immediately broke out into laughter.

  “I know that this is most difficult for you to imagine,” Radazan said, “but it is so. Let me explain.”

  The story was not uninteresting. Fezali had already inherited from his father and grandfather a banking system which was in a tradition as old as the sands of the Levant, yet as modern as the drive-in-facilities which California could claim as its only important contribution to the world of finance. The Fezali family—brothers, cousins, nephews—had for generations controlled the money-changing facilities in and around Mecca and Medina. Such facilities consisted of a table and chair, covered from the burning sun, temporarily placed alongside the road or in the streets. The clientele were pilgrims from the world’s Moslem countries, ranging from nearby Egypt to faraway Pakistan and Indonesia. Mecca represented the fulfillment of the most fervent prayers of all Mohammedans—ranging from the very very rich to the very very poor. They often came with what amounted to the better part of their life’s savings in a myriad of forms, ranging from Maria Theresa thalers to napoleons to crumbled dollar bills. The Fezali family acted as their money changer. They conducted this type of banking with a speed and accuracy which had become legend. The logistics of the operations were as complex as the bewildering array of monetary units in which they dealt. Couriers, armed to the teeth and always in pairs, moved the funds in and out of the Mecca area. The ultimate staging point was Beirut. The means of transportation ranged from foot to camel to horse—and today—to fast cars and jet airplanes. The rates of exchange were set daily by the head of the family himself, Ali ben Fezali, and through some mysterious system of communication extended to the last roadside table within hours. Really very little had changed over many generations.

  Then came oil, and immense amounts of money which the ruling class, with the best will in the world, simply could not spend as fast as it came in—with the result that the Fezali family’s ancient talents were suddenly in great demand. Stanley’s new principal explained it; Radazan translated.

  “Suddenly my family had to expand its operations—to Kuwait, to Riad, to Qatar, to the Trucial States, to Abu Dhabi, and even to Oman, that desert pestilence. Iraq is not for us. We do not like those maniacs. Our friends bring much money to us. But we learn slowly. We have very simple operations. We have no organized money or capital markets in most places. Even in Beirut things are very small and limited. So we have no choice but to go abroad with our money. To Lloyds and Barclays, at first. These were the only places we would leave our money, in London, in sterling at 7 percent. We still leave a lot there, but we have been hurt. Two devaluations wiped out years of interest. So we have tried Switzerland. No devaluation, but also no interest. The Swiss feel that we must be thankful that they keep our money for us at zero percent, or maybe 1 percent or 2 percent less never-ending fees and charges and insolence. You know what I mean.”

  Stanley only knew too well.

  “The Dutch? Not bad. But a dull people, and a very crafty people. Born with fraudulent instincts, which, as a result of success, are encouraged as they grow older. The French we have also tried: too complicated. The Germans? Too German. So, with the help of my nephew here, we finally decided to try the United States. As an experiment. You know, I am sure, that it is not that hard to make money. But it is very difficult to preserve it, and dangerous to make money with money. The Koran is most wise on this subject. Money changing—yes, that we can do. But capital investment—that is something we must still leave to the capitalists, until we learn the art ourselves.

  “That is why we came to New York, and that is why we have come to you, Mr. Rosen. Because we have heard that you are very successful with large amounts of capital. And now, I would like to know what you would do with my capital, if you take over a part of it to manage.”

  It was Stanley’s turn. He had given the situation most careful thought during the time which had passed since Radazan’s appr
oach in New York. He had developed an idea which, though daring and unusual, still was completely in keeping with his low-risk philosophy of money management. The only real problem had been timing. And here luck, which Rosen knew was one of the most important factors of all in financial affairs, may have appeared on the scene at just the right moment.

  During Rosen’s weekend stopover in Paris, on route to Beirut from New York, he had taken advantage of an invitation to a cocktail party being thrown by a friend of a friend in that city. As usual, Stanley had once again wound up leaving with the prettiest girl there. A very tall redhead who, it later turned out, had a thing for short men like Stanley. The broad was apparently unbelievably well connected as the conversation during the rather long night had increasingly indicated. One of the most talkative screws he had ever met—but a damn good screw nevertheless, obviously with lots of practice. But what had hit Stanley like a bomb was an anecdote she had told—Stanley would have guessed around four in the morning—about her “steady,” apparently a most important Swiss banker. The poor bastard had not been able to come through the evening before, even though he had come to Paris for that single purpose. As the lengthy redhead had revealed, it was all the fault of the secretary of the treasury of the United States of America, and some other fellow with some international bank in Bâle—she didn’t recall all the details. But she recalled quite enough for Stanley, who, in contrast to his predecessor of the preceding evening, managed to combine business and pleasure very successfully that night.