The Truth Machine

by James L. Halperin

  Barely able to hide his glee, Pete asked Boschnak to allow him a few minutes to consult privately with his team. Tilly calmed him down. Option two seemed the better choice, but option one was still quite acceptable. Since they had been offered a week to decide, they all agreed to take the full week.

  When Boschnak returned, Pete shook his hand and told him, “The deal’s yours. We’ll let you know one week from today whether we’ve chosen option one or two. In the meantime, maybe you could call Mr. Scoggins and ask him to join us in Dallas tomorrow.”

  Unknown to the ATI team, Scoggins would be a major shareholder regardless of which option they chose. Scoggins had convinced Boschnak that ATI was the firm to bet on. “Armstrong’s talent is way beyond Bonhert’s and mine,” he had explained, “and as far as I can tell, nobody other than the three of us even has a shot at it.” Boschnak, performing his own investigation, soon learned that Scoggins was telling the truth.

  Scoggins later told him, rather disingenuously, “Leo, if I’d known Armstrong was going to do this, I would have tried to join his company instead of coming to you. But now it’s too late for me; he’s already put together his core team. The only way I can get into ATI is through you.” On that pretext, he had refused to release Merrill from the provision of non-competition in the March 15 letter of intent, unless he somehow received at least two percent of ATI’s stock, or four percent if he included his services.

  Naturally Boschnak’s offers to ATI took Merrill Lynch & Schwab’s predicament into account.

  It is doubtful that Scoggins had ever planned to operate RLG as an independent entity; he had apparently constructed RLG’s standard employment contracts for the eventuality of selling the company. Once sold, RLG had no legal obligation to its executives, except to pay proportionate shares of the sales price, and then only to stock option holders who were refused employment by the buyer—ATI. Scoggins would retain over 90 percent of the $15 million for himself, not to mention up to four percent of ATI.

  CHAPTER 16

  THE TROJAN HORSE

  Dallas, Texas

  November 20, 2006—French scientists, using a patented technique, revive a mouse frozen in liquid nitrogen two weeks ago. The first mammal ever successfully frozen and revived, the rodent sustains only minor brain damage and frostbite, and otherwise appears healthy. The scientists speculate that their process could work equally well on healthy humans and should be refined into a viable medical alternative within 15 years. President Hall immediately asks Congress to authorize funding to study potential economic and sociological effects of large-scale cryonic suspended animation should such a process become legalized for terminally ill United States citizens. He also requests a separate study on the possible effects of allowing cryonic suspension for healthy Americans wishing to postpone their present lives to dwell in the future.—Eastman Kodak announces plans to market a new 360-degree digital video camera less than five millimeters at its longest dimension and weighing under half an ounce. The new cameras can be incorporated into watch-sized voice-activated personal computers, allowing users to record any event and instantly store the images off-site. The cameras will initially sell for $1,100 each, but the price should drop approximately 50 percent per year until 2009. Then, at about $140 per unit, analysts predict at least 25-percent penetration into the worldwide watch-sized computer market, or approximately 400 million units per year. Kodak’s stock price soars.

  “I assure you I have no such conceits. We’d be foolish to change the name from Armstrong Technologies,” Charles Scoggins said.

  It was obvious to David that Scoggins did not want any members of the team to feel threatened by his presence.

  The day was sunny and, at 58 degrees, not especially cold. The conference room’s single picture window overlooked Market Street’s restaurants, theaters, and shopping arcades. Construction had just begun on the monorail system that would connect downtown Dallas to Las Colinas, a high-tech office and residential community about nine miles away, and eventually to the Dallas/Fort Worth International Airport. The roadwork was noisy, but the six men and two women seated around the table focused on the interview.

  “$110 million’s a lot of money,” Scoggins continued, “but not nearly enough to cover the development costs for this project. Unless we can successfully create and market other products, we’ll be bankrupt long before we have a working Truth Machine. Pete already has a godlike reputation in the software community. Our products will simply sell better if we market under the Armstrong name.”

  Scoggins used the pronoun “we” a lot when explaining his vision of the company to the team. He already included himself in that vision. Considering ATI’s two options from Merrill, it was a safe assumption. Still, he rarely offered controversial opinions.

  “Do you have ideas for other projects, Charles?” Whatley asked.

  “I have a few, but I can’t say they’re original. I consider myself more problem solver and facilitator than idea man. I could help you evaluate and prioritize projects and I have hundreds of valuable contacts in government and in other high-tech companies.”

  Pete, who did not enjoy the networking aspects of business, thought Scoggins’s skills in that arena would be particularly valuable.

  “Charles,” David asked, “if you really believed you had a shot at the big prize, why give it up for just four percent of ATI?”

  Scoggins shrugged. “I really didn’t have much of a chance on my own. It’s important to know one’s limitations. I have certain skills, but Pete’s in a different league entirely. In a one-on-one race, I’d lose. Pete Armstrong’s software talent is simply too big an edge for another company to overcome.”

  An honest answer, David thought. Still, he pressed on. “Back at Harvard, you were dead-set against the Truth Machine concept. You considered it an invasion of privacy. Why do you think it’s a good idea now?”

  “It’s only a matter of time before the Truth Machine’s developed and used; since it’s going to be built, I want ATI to build it. At least we’re an ethical company and maybe we can help ensure it won’t be misused. Whether or not I believe the machine itself is a good thing is irrelevant.”

  Later that day, David met privately with Pete in his office. “When I was a kid,” he said, “my dad used to take me with him to poker games. Of course everybody there wanted to win, but there was always at least one shark—someone out for blood. The shark would act real friendly. He’d pretend that, like the other guys, he was there to be with his pals. But he was really only there to make money. If it wasn’t for the card game, he wouldn’t have given those guys the time of day. The shark was the most patient fellow in the room. Usually he’d wait to be dealt a ‘mortal lock’ before he’d bet any real money. And he almost always won.”

  Pete knew David was insinuating that Scoggins was like the neighborhood poker shark; personable, patient, selfish, and deadly. “But this isn’t a neighborhood poker game,” he answered, “and we all know we’re not here to socialize. Everybody at ATI is part of the same team.”

  He also considered telling David something about the ATI stock, but decided that revelation should wait. After all, timing is critical in matters where friendship and money intersect. “If we choose option one, the market is valuing Carl Whatley’s one-percent stake at $15 or $16 million. If we choose option two and include Scoggins, suddenly Carl’s stake is worth $25 million. How do I tell my teammate I decided to go with the option that costs him $9 million?”

  “I’m not telling you what to do. Just watch your back. Scoggins has his own agenda and he’s never going to put ATI’s interest ahead of his own.”

  “I’ll remember.” Then deciding the time was right, Pete broke into a wide grin. “By the way, whatever you do, don’t sell any of your ATI stock until you talk to me.”

  “What are you talking about? I don’t own any stock.”

  “Yes, you do. When we filed the corporate papers three months ago, I had Leslie issue one percent of the stock t
o you. I would’ve given you more if I thought you’d accept it, but you have to admit one percent’s cheap for all you’ve contributed. Consider it a royalty for the idea, or payment for personnel and legal advice. Hell, if you’d prefer, we can call it an early wedding present for you and Diana. The stock wasn’t worth much when I gave it to you, but now it’s worth $25 million. Just promise me you won’t sell any of it.”

  David hugged him. “Thanks, buddy. I’ll have to talk this over with Diana and we still might decide not to accept. But if we do, we’ll never sell any of it.”

  David called Diana later that afternoon. “Pete just gave us one percent of ATI. Should we keep it?”

  “As a gift?” She could barely believe it.

  “He said I should either consider it a royalty for the idea and all my advice, or else we could accept it as a wedding present. Diana, it’s worth 25 million dollars!”

  “I’ll say this as diplomatically as I possibly can.” She paused for effect. “Are you out of your mind? You can’t be serious about turning it down!”

  David laughed. “I guess maybe I got a little carried away with myself.”

  “Thank God. For a moment I thought I’d fallen in love with an idiot!”

  Later that evening they both called Pete to thank him again.

  On January 5, 2007, Armstrong Technologies, Inc. became a public company. Leslie Williams received the $110 million bank wire and invested it in liquid, shortterm financial instruments as recommended by Pete’s computer models. Merrill Lynch & Schwab wired another $15 million directly to Charles Scoggins. Merrill announced it would retain half the offering, 250,000 shares, for its own account, those shares to be held indefinitely. Perhaps on the basis of that show of confidence, ATI stock rose 56 percent to $390 per share.

  A 20-year-old Princeton journalism major, Jennifer Finley, whose romantic overtures Pete had spurned six years earlier at Middlesex, kept a cash management account at Merrill. She invested $58,500, almost her entire trust fund, acquiring 150 shares of ATI stock. Pete himself purchased 500 shares for about $200,000 and sent gifts of 50 shares each to Harvard University, Middlesex School, Howard Gaddis, Maximilian Honeycutt, and six other individuals and teachers he felt had helped him along the way.

  The company was now valued at nearly $4 billion and Pete, who had generously relinquished Scoggins’s fourpercent stake entirely from his own share, still held 79-½ percent of it. Barely 17 years of age, he was already one of the 100 wealthiest individuals in America.

  CHAPTER 17

  FIRST RELEASE

  Dallas, Texas

  December 6, 2007—Travis Hall registers an astonishing 71-percent approval rating as his team prepares for the coming reelection campaign. Hall’s Swift and Sure Anti-Crime Program has reduced violent crime rates by over 55 percent since inception. Total executions for the year 2007 are now projected at 16,000, close to original estimates. More significantly, for the first time in over a decade, Americans say they feel safe.—The United States formally establishes diplomatic relations and open trade with the government of United Korea after a long series of negotiations between Premier Kim and U.S. Secretary of State Jonathan Winer. Establishing ties with Kim’s government is sharply criticized by Senator Lewis Crenshaw (D.OK) as “the final betrayal of our former South Korean allies and abandonment of America’s credibility as defender of democracy.” President Hall defends the move as “pragmatic and humane.”

  * * *

  Pete strode down the hall, greeting everyone he saw by name. “Hello there, Cliff. How’s your wife?”

  “Could be any day, Pete.”

  “Get some sleep now—before your son’s born. Art Rossman’s wife just had twins. Now whenever anyone mentions the word ‘sleep’ he gets a lump in his throat.”

  Cliff Garret, ATI’s chief of shipping, laughed and walked to the shipping room with a bounce in his step. It was nice that the boss remembered he was about to become a dad.

  Then Pete saw Alec McCarthy, the staff art designer, turning the hall corner.

  “How’s the new packaging on the airline reservation software?”

  “I think you’ll really like it. I have the sketches in my office.”

  “Let’s go take a look. By the way, Alec, happy birthday. I know it’s tomorrow, but in case I don’t see you. . . .”

  Pete was changing. Among his colleagues at ATI, he took on an entirely different personality and demeanor. He felt comfortable and secure with his coworkers; holding meetings and interacting with them wasn’t quite like being in the zone, but pretty close. They were all part of the same team now, working toward common goals. He relished the camaraderie.

  Having memorized dozens of books on business and personnel motivation, Pete’s self-confidence with staff was apparent. Although painfully shy with outsiders, he felt at ease inside ATI’s walls. It was his fortress, his sustenance, his comfort, his true home. He looked forward to every day at work and dreaded the weekends, when almost all ATI employees were home with their families.

  Marjorie Ann Tilly, with every reason for self-satisfaction, addressed about 200 members of the press.

  “This superb software system should achieve 100-percent market penetration of every private prison, boot camp, and mandatory drug rehabilitation center in America within three years. It will be impossible for an operator without RehabTest to compete against companies with it. We’re offering RehabTest risk-free for the first year and they’d be foolish not to take us up on it.”

  Whatley had pushed for the risk-free part that would set the tone for all of ATI’s marketing strategies.

  Scoggins had also argued in favor of the strategy. “Make it tough for them to say no. Once they can’t live without our product, we can raise prices every year. Eventually software becomes the most valuable component of any information- or service-based industry. It’s only a matter of time before our pricing can reflect that.”

  Tilly had set the deadline for ATI’s first release to coincide with Pete’s birthday. RehabTest was a complex project even by ATI standards, but Tilly’s group got it onto the shelves in less than a year, creating revenue and proving that ATI could meet its deadlines. Only 11 months earlier, at an open meeting with most of ATI’s 75 employees, Tilly had publicly assured Pete, “This company will not issue ‘vaporware.’ If I announce a product deadline, we’ll deliver the package by that date. This one’s going to be your eighteenth birthday present.”

  With personnel director Gene Hildegrand’s blessing, Tilly even persuaded Dr. Alphonso Carter to provide initial criteria for RehabTest. Still chief psychologist at Massachusetts State Prison, Carter was comfortable there; he loved his work and did not want to move his family to a new place. She had cajoled, guilted, and finally sweet-talked him. “Dr. Carter, this project can leverage your work. Nothing you could possibly do over the next year will be more important than what we could accomplish here. We need the best criminal psychologist we can find, and that’s you.”

  Carter took an eight-month leave of absence from Massachusetts State Prison, where he had first interviewed Daniel Anthony Reece. Carter mused over the irony that his earlier failure climaxed in his greatest opportunity to advance his field. He may have failed Pete once, but he wouldn’t fail him again.

  For over a month, he dictated every important fact and theory he could think of, every nuance of evaluating prisoners for criminal potential. Knowing the software would automatically test his theories and eventually reject any unsound ones, he postulated, “It seems to me that emotional intelligence is the most important aspect to measure. Most violent crimes are unplanned, stemming from underdeveloped impulse control and lack of self-restraint. A person who understands his or her own feelings can deal with them more successfully and thus refrain from future violence.”

  He reeled off similar concepts, one after the other. “During rehabilitation, measure each convict’s attitude as you would judge that of a student. Is he applying himself to his studies? Does he retain kno
wledge like someone who intends to use it to improve his life, or is he just using short-term, rote memorization to go through the motions?

  “You can never tell if people are cured of their inner rage by appearance or by what they say. But you can often tell by patterns of behavior, especially as parole evaluation nears. We must put less stock in changes and epiphanies that occur in the final few months.”

  Carter dictated 1,807 observations and theories of criminal behavior to an IBM System 5 stenographic unit. He rethought each observation, attempting to quantify its importance and degree of certainty. All were incorporated into an artificial intelligence program. Pete edited it, as he did every ATI project. Criminal records from nearly 100,000 cases were downloaded to test the program’s success rate against the norm. On the first run, it predicted relapses 11 percent more accurately than the best parole boards. Furthermore, Tilly had designed the software to be self-correcting. By its release date, RehabTest was twice as accurate and would continue to improve through feedback from discharged prisoners.

  Scoggins and Tannenbaum understood the profit potential of RehabTest, as did many stock analysts. At the time, private prison operators had leeway in granting paroles. It was a good system; the operators were motivated to select the best possible parole boards, since profits now depended on success rates.

  Scoggins explained in an executive committee meeting, “No private incarceration facility will be able to stay in business for long without it. Their recidivism rates will be too high and they’ll lose operating contracts or their release rates will be too low and they’ll lose money. Therefore, RehabTest’s pricing will be very elastic; we can raise the tariff quickly without losing customers. In a few years, we’ll make more from it than the combined net earnings of the private prisons, boot camps, and rehabilitation centers who use it.”