“Large fines, bad publicity, and a lot of internal embarrassment, plus building the perception in New York that we’re losing it.”
She nodded and looked out the window in thought. The effects of such things on the financial markets could be seismic. If she had to refinance …
She turned back to him suddenly.
“Ron, a month ago, flying in from Tokyo, you told me the previous CFO had misled you and the board about the new loan agreements. What exactly did you mean?”
He had been waiting for the question—dreading it, in fact. It took a half hour to tell her the story of how the previous financial officer, William Hayes, had effectively been seduced by the promise of a doubled credit line for less interest in exchange for sale and lease-back of the fleet.
“Essentially, we—the board and me—let ourselves be talked into accepting a risky agreement. As long as we were doing fine in the public eye, it really didn’t bother me. But now we’re getting pressure.”
Elizabeth leaned forward, impatient with the vague references. “What, Ron? What’s risky about the loans?”
He sat back and looked her in the eye in silence before replying, his mouth screwed up with distaste as if he’d bitten into a lemon.
“We gave the lenders—the consortium of banks and institutions who financed the package—what amounts to the right to call the loan if they ever felt threatened.”
“You what?” Her words echoed like a rifle shot around the office.
“We sold the fleet at the same time, and figured we’d always have enough cash in reserve so that it wouldn’t be a problem. The provision limits their rights to calling the loan only if all consortium members agree that we have insufficient profits or assets to justify their continued trust that we can repay the loan, so we do have some control.”
He handed over a copy of the loan agreement, a several-hundred-page legal tome that had been opened and a particular paragraph marked with a paper clip. Elizabeth balanced it on her lap and began reading rapidly, going back and forth several times and following references to other sections before looking up again, completely shocked.
“Ron, what did your general counsel say?”
Ron Lamb looked down at his desk again. “Jack Rawly begged us not to sign this because he felt we were giving them the sole right to determine what constitutes profits and sufficient assets.”
“I agree with Rawly. This is dangerous as hell!”
Lamb’s hand went up, palm out. “Now, mind you, I don’t for a minute think this consortium would ever hurt us, because they’d be hurting their own investment if they did.”
“But they’re already threatening, aren’t they?” she asked.
Lamb looked sick and stunned, the memory of yesterday’s acrimonious conversation with a representative of the lead bank still ringing in his ears.
He nodded slowly. “Yes. They’re worried about the media rumors.”
“Okay.” Elizabeth was on her feet and moving toward the window. “We’ve got to get this paid off and get back to a normal loan agreement. The line I got you was for two hundred fifty million. This one’s for five hundred million. How much have you borrowed on this?”
“Four hundred thirty million.”
Elizabeth felt her stomach sinking through the floor as she turned to face him, trying not to let her shoulders slump.
“Already?”
Lamb nodded sadly. “This time of year, you know, that’s when we need it, with traffic light.”
“How about the equipment financing? Where did that money go?”
“That, too, has been a disaster. Hayes convinced us to sell the fleet of aircraft and lease them back, giving us considerable additional capital, but vast monthly payments. The capital should have been used in place of the revolving credit, and separate municipal bond issues sold to finance the Moses Lake operation. We felt we didn’t have time, and there were political problems in issuing the bonds.”
“You paid cash for the Moses Lake facility?” she asked.
He nodded.
“With the money from selling the fleet?”
Again he nodded, his eyes cast downward to the desk. “Most of it. We acquired a lot of land in the deal, too, but it would be difficult to sell it rapidly. That was a long-term investment. You know. As we grow, the Moses Lake area becomes a boomtown, and our land value goes through the roof.”
A few hours ago, Elizabeth thought, I worried that I was in over my head. Now I find out I’m working with people who are in way over theirs! No way would I have made such a mistake!
“Ron, I’m … I’m flabbergasted. You’ve snatched financial disaster from the jaws of solvency. I had this set up so your payments were low, your security was high, and you could ride out three years with heavy losses.”
“There’s more, Elizabeth.”
How could there be! she thought. I’ve already been nuked! She had wanted him to level with her. Now she was almost sorry he had.
“What else?”
“If we’re ever declared in default, the aircraft leases can be canceled.”
She sat down quietly, feeling sick to her stomach.
Ron Lamb held out his hand, palm up. “You, uh, see why I need you?”
Elizabeth searched Ron Lamb’s eyes and saw a combination of desperation and contrition. He had most of his money in the company, and all of his reputation. He had made one gigantic mistake in trusting the wrong man as CFO, and now he wanted her to wave a magic wand and make it all better. Two years of work shot to hell! Two years of wheedling and massaging and arranging, and they blow it all away. I should walk out of here. Fraud, deception, misrepresentation … no one could repair this!
Only once before in her life had she felt so much like running. She had tried to teach an English class in a vocational school in Boston for extra money while working on her MBA. She had walked in planning on enjoying the attention and being a bit of a performer—and found instead a roomful of hopeful people who barely spoke the language and were looking for a miracle so they could be employable. She was to be the miracle worker, and she had run in fright from the awesome responsibility, resigning the first evening in an embarrassed rush of meaningless apologies. That memory was bitter. Never again, she had sworn, would she run from a frightening task. But this—
Ron’s voice cut into her thoughts.
“Elizabeth, I … know … this is a gargantuan task. I know I made it seem rosier than it was. There are nearly two thousand people carrying our ID cards now, many of them people who have been tossed aside by aviation, yet were the best of the best. They’ve left other jobs and moved their families and pinned their hopes on us. That’s why I need you. We need you! Please don’t run.”
Her eyes flashed toward his at the use of the word run, and she found herself nodding, and taking a deep, ragged breath. Her lips were as dry as a bone, and she wet them before replying.
“Okay, Ron. The first task is refinancing, and it’s going to be a bear.”
8
Thursday, March 9, 7:00 P.M.
Seatac Airport
Elizabeth started to leave the ladies’ room, then stopped once more and turned toward the mirror, adjusting her blouse and carefully coaxing a stray lock of hair back into place. She had spent more time deciding what to wear to greet Brian than she’d spent picking an outfit for her first day on the job—and Kelly had needled her unmercifully about it.
Kelly loved Brian. Plain and simple. Some of her earliest memories were intertwined with the warmth and humor and strength that the six-foot-one, square-jawed Irishman from Boston had brought to their tiny flat in Cambridge when she was just a baby and her newly widowed mother was falling in love with the ex–Air Force pilot. Elizabeth and Brian were both struggling MBA candidates almost clinging to each other, and Brian had accepted responsibilities for Kelly that bespoke a much deeper commitment. Elizabeth had tried to suppress the realization that her daughter considered Brian her father, yet Brian was the only father figur
e Kelly had ever known. They never agreed to marry, but when Brian followed Elizabeth to New York, then later decided to divorce the Big Apple and join an upstart airline in Phoenix as a line pilot, the sudden loss of his daily companionship was tough to take. It saddened Elizabeth, but her self-protective mechanisms for coping simply recategorized the separation as temporary and rejected all attempts to review the truth of that lovely myth.
But to Kelly, then age eight, Brian’s departure had been the end of life as she knew it, and nothing short of a divorce. When her strong-willed mother had refused to chuck her Wall Street career and follow Brian to Phoenix, an inconsolable Kelly had blamed that mother—a wound that had never completely healed.
Brian was attentive over the years as best he could be from so far away, more so even to Kelly than to Elizabeth. After a year in Phoenix, he began dating a Spanish teacher—a woman who eventually moved in with him, but left five years later when all her hopes for marriage to Brian seemed to dead-end in his endless delaying tactics. He knew he should have been upset and distraught at her departure, but the only thing that bothered him was that losing her seemed inconsequential. Even then he didn’t dare admit that the root cause of his inability to make a marriage commitment was his deep-seated, dormant love for Elizabeth.
For her part, there was no way Kelly was going to stay home and let her mother greet Brian Sean Murphy alone. And there was no way Kelly was going to be shy about the other major item on her agenda: marriage. Elizabeth was to marry Brian as fast as she could drag him to an altar. That was that. Her mother’s feelings in the matter were immaterial. After all, Kelly had said, as flippantly as possible as they left the condo at 5:45 P.M., “You’re the one who took the job offer. I merely follow as the faithful daughter. So, Mom, you made your bed, now get Brian into it!”
“Kelly!”
The conversation had gone much the same all the way to the airport, Kelly playing the picador, Elizabeth the shocked and somewhat scandalized mother who was secretly proud of the wit and maturity her offspring was displaying.
Elizabeth found Kelly waiting in the concourse outside the restroom, and together they took the underground shuttle to the south satellite terminal and gate S-6. The blue and white 747 had already touched down, and they watched it taxi majestically into the ramp area and turn toward the gate. Elizabeth’s thoughts drifted to Brian’s first visit back to New York after leaving the financial world—and them—to become an airline pilot. He’d spent an entire evening spinning exciting tales of what it was like to complete each flight—each one a self-contained, challenging task that he could leave behind at the gate, a tiny jewel of accomplishment that could stand alone, and a task that would need no call-backs or follow-ups the next morning.
“There he is!” Kelly’s voice interrupted the daydream momentarily. She had spotted Brian in the left seat as the 747 bore in on the gate.
Without warning Elizabeth’s mind replayed again the sights and sounds and trauma of Clipper Ten, less than twenty-four hours ago, and a shiver worked its way up from the small of her back.
Brian had spotted them now, and waved enthusiastically from the cockpit as Kelly threatened to dislocate her shoulder waving back.
It took forever to get the passengers out of the way and the crew up the jetway, but finally Brian was there, calling to Kelly.
“Kelly! C’mere!” Kelly gave him a bear hug, hanging on with not a shred of dignity as he hugged her back. Smiling, Elizabeth moved to embrace him just as she noticed someone else waiting for the captain. She had spotted the man before, but thought nothing of his presence until it was obvious he was waiting for someone on the crew as well.
“Captain Murphy?” The man was younger than Brian by several years, short and stocky, and Brian obviously recognized him. Brian gave Elizabeth a quick hug and held her arm, massaging it lovingly with his thumb, as he turned a friendly expression to the man.
“Scott, what’re you doing out here?”
The man held out a folder. “Mr. Jennings wanted this delivered to you on arrival, sir, and asked you to call him as soon as you could, on his portable or at home.”
They began walking toward the escalator then, Brian with one arm around Kelly, who was pulling his wheeled flight bags, the other around Elizabeth, who was hating every second of the intrusion. She wanted to hold him and kiss him and talk to him, not get blind-sided by more business. Corporate officer or not, tonight she was all too aware that she and Brian were long-separated lovers.
“How did the inspection go?” Brian asked in a breezy fashion.
The man named Scott looked around nervously at Elizabeth and back at Brian, motioning to the folder.
“Captain, you might want to take a look at that right away.”
Brian understood instantly, and introduced Elizabeth as the company’s new CFO.
“So summarize what’s in here, Scott.”
“We’ve got some real problems, sir. There were a lot of records missing.”
The entourage came to a halt as Brian stood stock-still and stared at him for several seconds, nearly causing an elderly couple to fall trying to get around them.
“Our records? Pilot records?”
“Yes, sir. The FAA is quite upset. Your secretary outlined it in a memo in there, and that’s what Mr. Jennings wants to talk about.”
Brian had already pulled his arms away from Elizabeth and Kelly and ripped open the envelope, scanning rapidly over the three-page memo, his features contorting in anger and tension.
At last he looked up at Scott. “Jesus Christ! This is not possible!”
“That’s what we said, sir.”
He stared at the paper again, and then at Scott, before speaking.
“Thanks. I’ll take it from here.”
“Yes, sir.”
They waited until the man had disappeared down the escalator.
“What is it?” Elizabeth coaxed, snaking her arm through his.
He lowered the papers then, and Elizabeth could feel him slump slightly. When he looked up, it was with great fatigue and a long sigh.
“I’ve got to get over to the office. The FAA pulled an inspection of our records this morning.”
“I heard, but—”
“If I can’t find the missing ones, we may have to start grounding pilots instantly all over the system. We’ve got guys flying illegally, according to the FAA.”
“But how?”
Brian looked at the far end of the concourse as a British Airways 747-400 lifted off bound for London, the muffled sound coursing through the terminal.
“I don’t know. I’m a stickler for good records. This has to be an easily explained mistake. Has to be!”
They drove him to the operations center, where he’d left his car, and he got out with a promise to come downtown to the new condo as soon as he was through, whatever the hour. He hugged Kelly again and kissed Elizabeth before turning toward the building, then swiveled back around toward the car.
“I’m … I’m really overjoyed to see you both! I’m sorry about this getting in the way. I’ll get there as quick as I can.”
“Hey,” Elizabeth said, forcing a smile, “we’re on the same team now, kid. I expect you to work your tail off!” She wondered whether he’d thought about her rank in the company, and whether it would bother him. On the corporate ladder, he was chief pilot, but she was three rungs higher.
Brian leaned through the open window of Elizabeth’s rental car and kissed her again, with greater depth and promise this time.
“If I don’t get this straightened out, I’ll be working for the Mrs. Grace L. Ferguson Airline and Storm Door Company instead of Pan Am.”
The ride downtown was melancholy, and even Kelly’s attempt to cheer them up fell flat.
“When he gets there, Mom?”
“Yeah?”
“I’ll stay in my room so you two can, uh, have some privacy.”
“If he gets there at all,” Elizabeth said absently.
Thursday evening, March 9
Anacortes, Washington
Bill Conrad had arranged the meeting while driving the seventy miles north to Anacortes, which was connected by a single bridge to Whidbey Island. Jacob Lovesy, who went by “Jake,” was the investigator in charge of the NTSB “go team” probing Clipper Ten’s close call with oblivion. He had agreed to meet Pan Am’s maintenance chief at a small restaurant in the diminutive harbor town at 9:45 P.M., responding to Conrad’s insistence that it was a matter of substantial urgency. The pleasantries finished and the orders for dinner placed, Bill lowered his voice and leaned closer to the NTSB veteran.
“Jake, let me summarize this, in the interest of time. We have reason to believe our airplane, and number-three engine in particular, was sabotaged the night before, in our Moses Lake hangar, and with some sort of explosive device.”
The NTSB man sat quietly for a moment, probing Bill Conrad’s face. They were a study in contrasts, Lovesy a trim man in his early forties with a full head of sandy hair, a mustache, and a penchant for crisp suits and monogrammed shirts, Conrad a balding veteran approaching sixty, who always looked like he’d been sleeping in his clothes. Lovesy sat back now and cocked his head slightly.
“I know you by reputation, Bill. I know you were with Henson at Midway Airlines and ran a tight ship. I also know a fellow like you doesn’t launch a statement like that without something to back it up.”
Conrad nodded and glanced around, satisfied no one was targeting their conversation. Nevertheless he motioned Lovesy back toward the middle of the table as he leaned in again and related the embarrassing saga of the midnight intruder.
Jake Lovesy sat back again when the story was finished and twirled a swizzle stick in his alcohol-free Bloody Mary. When Bill Conrad had begun to wonder if he was ever going to look up, Lovesy spoke, still contemplating his drink.
“You’ve got an intruder with access, I’ll grant you that. Your intruder was probably professional, and had a toolbox big enough to conceal some sort of device. I’ll grant you that possibility as well. What you lack is motive and hard evidence that anything but internal failure seized and scattered that engine.”
Phoenix Rising Page 9