Kerri was uncomfortable, off balance. Everything had moved too fast and was accelerating. “I don’t know what I would say,” she replied, desperately trying to think of what her answer would be if Visconti demanded one.
“You don’t have to say anything. I just want you to think about it.”
CHAPTER 73
Visconti received an urgent call from Zurich at nine the following morning. “Good news. I’ve found a man who’s perfect for our requirements,” Schnieder announced.
“Who?” Visconti asked.
“His name is Olaf Leutweiler. He’s the president of Weisscredit Bankhaus in Geneva. He has agreed to work with us and to provide Mike King with all the necessary assurances.”
“Wonderful. How much is he going to cost us?”
“Five million.”
“Ouch! Alfred, that’s a ton of money!”
“It is but you must understand that he is a crucial link in the procedure. What we are asking him to do involves great personal risk. It is a serious crime for bankers to behave in a fraudulent manner in this country.”
“Can we trust him?”
“Implicitly. He’s been a banker in Switzerland for most of his life, and a friend of mine for almost as long. Here, bankers learn quickly that their survival is proportional to their ability to keep secrets and to honor commitments. He has survived for a long time.”
“Okay, so we’ll give him his pound of flesh,” Visconti conceded.
“Has King contacted you?”
“No. Has he called you?”
“No, and it’s beginning to concern me. Why do you think he’s delaying? He sounded quite anxious when he called and asked me to help him dispose of the money. Perhaps I should call him and tell him how I propose to do it.”
“Good idea. While you’re at it, ask him if he’s called me and let me know how he responds.”
Schnieder called Mike at his Toronto office. “Good morning, Mike. It’s Alfred Schnieder. I called to inform you that I have developed a plan to achieve all of your objectives, cleanly. I presume you know what I mean. Would you like to hear it?”
“Sure.”
“We’ll work through a friend of mine. His name is Olaf Leutweiler. He’s the president of Weisscredit Bankhaus, a well respected bank in Geneva. He has assured me that the entire exercise can be completed with the utmost secrecy. It will never be necessary for him, or anyone else to know the source of the funds. He suggested that the confirmation can be done by means of a prearranged code into a designated answering machine… How do you like the plan?”
Mike gave no response, his mind far from the conversation.
“Are you still there?”
“Sorry. I was thinking… I like the plan. Thanks for letting me know.”
“When would you like to proceed?”
“I’m not sure. I’ll let you know.”
“Have you made Louis Visconti aware of your plan?”
“Not yet. I just haven’t had the time. I’ve been really busy with a number of other matters,” Mike said, reluctant to alarm or trust Schnieder with the knowledge of Phillip’s threat.
“I don’t mean to impose unwelcome pressure on you, Mike, but Olaf may not be available if we delay too long.”
“I understand what you’re saying, Alfred. I’ll get back to you as soon as I can.”
“I’ll await your call.”
Mike hung up, agonizing over the growing pressure of the vise into which Phillip had placed him. “Damn that kid!” he shouted, thumping his desk with his right fist.
Schnieder again called Visconti. “The good news is that King likes the plan. The bad news is that something is definitely causing him to delay.”
“Did he say what it is?” Visconti asked.
“No.”
“Can you speculate?”
“I haven’t the slightest idea.”
“Then call me the minute you hear from him.”
“I will, and would be grateful if you did the same.”
CHAPTER 74
Glen Cove. Friday, April 20. 7:00 P.M.
With tear-filled hugs and kisses Kerri thanked Miles and Andrea for their kindness and consideration during an extremely trying time of her life. After one last emotional wave, she climbed into the front seat of Visconti’s Mercedes, anxious to begin a new life with the man she loved, to share the joy of the intensely physical and passionate phase of a new relationship, to experience the endless fun-filled nights and yawn-filled days.
Dark threatening clouds were gathering beyond the horizon. History had lit the fuse.
In 1922, over three years after the First World War, the British convened a conference in Uquair, a Persian Gulf port. They intended to establish permanent boundaries for Saudi Arabia, Kuwait and Iraq. Significantly, Kuwait was not represented at the conference. Kuwait’s boundary with Iraq was moved northward to correspond with a line drawn in 1913 by the Turks and the British. In addition, Iraq was left with a narrow twenty-six mile entrance to the Persian gulf through the shallow Shatt al-Arab waterway. By contrast, Kuwait was given five times as much shoreline, including the enormous natural harbor at Kuwait City, and Bubiyan and Warba Islands, which dominated the approach to Umm Qasr, Iraq’s only port. By establishing the new boundaries, the British succeeded in protecting their strategic interests, but had simultaneously planted the seeds of jealousy and hatred. Those seeds, fertilized by a desperate need for money, would bear fruit in the form of Iraq’s wrath in 1990, sixty-eight years later.
Iraq’s need for money had grown to a critical stage. Crude oil prices were falling and world demand for the precious liquid was declining. Saddam Hussein, Iraq’s angry president, claimed the decline was the result of a U.S. induced recession. In desperation, he sent his deputy prime minister, Saadum Hammadi to each of the Persian Gulf states to press them to cut production. Saddam Hussein understood that the only way to increase prices was to curb production. When Hammadi visited Kuwait he also demanded $27 billion as compensation for oil allegedly stolen by the Kuwaitis from the Rumaila oil field, considered an Iraqi possession.
In rejecting the Iraqi claim, the Kuwaitis gave Saddam the excuse he needed to set forces in motion which could only be stopped by extraordinary means. The forces would trigger a chain reaction of events which would dramatically change many lives, including those of Louis Visconti and others close to him.
The arrival of July, 1990, coincided with the invasion of an intense steamy heat wave in the New York area. As temperatures climbed, so too did the price of crude oil. At an O.P.E.C. planning session in Jidda, Saudi Arabia, Kuwait finally agreed to abide by its production quota. News of the agreement sent the spot price of crude oil up two dollars a barrel.
July 16, 1990.
Tariq Aziz, Iraq’s foreign minister, wrote to the Arab League accusing Kuwait of overproduction and of stealing oil from the Rumaila oil field. A speech delivered by Saddam Hussein contained a thinly veiled threat of military action if the Kuwaitis continued. The wording alarmed the western world. Unable to decide on an appropriate response to Iraq’s threat, the Kuwaiti cabinet made a colossal miscalculation by assuming Saddam was bluffing in an effort to extort money.
July 21, 1990.
The American C.I.A. reported the first Iraqi troop movements near the Kuwait northern border. In an effort to mediate the dispute between Iraq and Kuwait, Egyptian president Hosni Mubarak, King Hussein of Jordan and King Fahd of Saudi Arabia sought and got assurances from Saddam that Iraq would not invade so long as negotiations continued. Not completely appeased by the assurances, investors bid the price of oil up to almost twenty dollars a barrel.
Disturbed and shaken by the unexpected reversal of oil prices, Visconti called Assif Raza at his New York home and quickly dispensed with the pleasantries. “Sorry to bother you, Assif. I need to talk to you about crude oil. Do you mind sparing me a few minutes?” he asked, fidgeting nervously in anticipation of bad news.
“I can give you all the time you nee
d, Louis. Oil is a subject very near and dear to my heart.”
“I get a little nervous when I see the price move up four bucks in one week. I can handle movements of a buck or two, but this is beyond my pain threshold. Is this a trend or just an expensive hiccup?”
“I would suggest you relax, Louis,” Raza replied. “Even if Kuwait sticks to its production quota, the world will still be swimming in oil. Furthermore, to the extent Kuwait reduces production, Iraq will increase its output to replace it. You must understand that Saddam Hussein is desperate for money. He’ll do anything to get it.”
“That’s what I’m afraid of. What the hell is Saddam doing with his troops on the Kuwaiti border?”
Raza chuckled. “He’s a good poker player. He’s bluffing. Military action against Kuwait would be lunacy. He knows the United States will protect its interests in the area. They would deal with Iraqi forces like cannon fodder.”
“Should I stay short?”
“Most definitely. In fact, you might want to take this opportunity to increase your position.”
“Not possible. The FTC is watching me like a hawk. I’m classified as a large trader.”
“Then stay where you are and relax. When everyone’s finished posturing and all of the hands have been played, you’ll be a very wealthy man.”
Visconti gazed skyward and breathed a large sigh of relief. “Thanks, Assif. I can’t tell you how much I appreciate your advice.”
“You’re very welcome, Louis. Please call if there’s anything else I can do for you.”
July 31, 1990, 10:30 A.M.
Miles Dennis’s eyes were riveted to the moving electronic tape on the wall outside his office. He read the shocking news with heightened anxiety. “U.S. intelligence sources report a continuing buildup of Iraqi troops on Kuwait’s northern border… King Hussein of Jordan visited Sheik Jabir al-Ahmed al-Sabah, the Emir of Kuwait, to warn him that the meeting of the Arab League, scheduled for tomorrow in Jidda, will be critical.” He called Andrew Tarquanian, Iacardi’s senior oil and gas research analyst.
“Did you see that news flash?” Dennis asked.
“Yup. Why?”
“What do you think Iraq’s going to do?”
“Saddam’s playing bullshit poker. That’s what I think.”
“So you think he’ll back off?”
“Yup. He’d be out of his mind to invade. He knows the U.S. would kick the shit out of him if he did.”
“Is that just your opinion, or is it a consensus?”
“I talked to the boys in Rotterdam this morning. To a man, they agree with me.”
“Do we hold our positions?”
“Stay short, and if crude goes to twenty-five, short the hell out of it.”
“Thanks, Andrew,” Dennis said, then smiled as he hung up. Tarquanian had an uncanny knack of being right, most of the time.
August 1, 1990.
With another miscalculation of horrendous proportions, the Kuwaiti’s underestimated Saddam Hussein’s intentions and once again rejected his claim for compensation. After an intense two hour negotiation session in Jidda, talks between the two nations collapsed.
World tensions heightened.
CHAPTER 75
Kuwait. August 2, 1990.
Kuwaiti border guards were quickly eliminated when Russian made T-72 tanks opened fire on them at short range. Within minutes of the brief but savage engagement, the tanks were racing southward to Kuwait City, while Iraqi Mirages and Migs led the way.
Washington. August 1, 1990, 9:00 P.M.
Brent Scowcroft, George Bush’s national security officer, burst into the president’s living quarters on the second floor of the White House. He broke the news that Iraqi troops had crossed the Kuwait border and were heading south. While the news was a surprise to Bush, he assumed the Iraqis intended only to plunder the country before withdrawing.
The Iraqis claimed they had been invited into Kuwait to restore order by an “interim free government” of Kuwaiti revolutionaries who had overthrown the Sabah dynasty, rulers of the emirate for two and a half centuries.
In clandestine radio and television broadcasts, Sheik Saad al-Abdallah Al Sabah, crown prince and premier of Kuwait, issued a plea for resistance, “Let them taste the chalice of death,” he said. “They have come to kill the sons of Kuwait and its women. We shall fight them everywhere, until we clean up their treachery from our land. The whole world is with us.”
Visions of another financial catastrophe raced through Visconti’s mind during a nail biting wait for Assif Raza to answer his telephone. Beads of sweat bathed his forehead. “Come on, Assif, answer the phone.”
At last Raza picked up.
“Assif, it’s Louis. We need to talk.”
“Please do it quickly. I have much to do. Most of our holdings in this country have been frozen.”
“I’m aware of the freeze. Our office was informed three hour ago. Where do we go from here?”
“I apologize for my oversight in our last conversation, Louis. None of our people had the slightest idea the Iraqis would invade. Believe me, it took all of us by surprise.”
“I appreciate that, Assif, but that isn’t what I asked you. You have to appreciate that I have a fortune riding on crude oil. I’ve got to know what’s happening. I can’t rely on the crap they’re feeding us on television.”
“One of our investors is extremely close to the Emir. They spoke briefly today. The Emir advised him that once Kuwait accedes to Saddam’s outrageous demands, Iraq will withdraw from the country.”
“Do you think they will?”
“The Kuwaitis will compromise on money, never on territorial integrity.”
“So what do you think? Will Saddam take the money and run?”
“We believe he will, but now that he has had a taste of the land, it’s become more a roll of the dice.”
“What should I do with my crude position?”
“You could liquidate now and cut your losses. If, however, you have nerves of steel and the patience of Job, you could hold and perhaps make a fortune.”
“What would you do if you were in my position?”
“I would never be in your position, Louis. I am an investor, not a speculator.”
“So you’re really telling me to get out.”
“Under the current circumstances, yes.”
“That’s just lovely,” Visconti said, his anxiety exploding into anger. “Last week you told me to short the hell out of crude. Now you’re telling me to bail out.”
“Unless I misunderstand, Louis, you are being paid to be my financial advisor,” Raza countered, clearly irked by Visconti’s tirade. “I strongly doubt you could afford the reverse.”
“I’m sorry. Assif. This thing is doing funny things to my head.”
“You are forgiven. It’s affecting all of us in very peculiar ways.”
After hanging up, Visconti called Miles Dennis. “Miles, it’s Louis. What’s happening?”
“I’m damn glad you called. I’ve been trying to reach you for an hour.”
“Why?”
“I want you to listen very carefully. I don’t have good news. Are you sitting down?”
“Just give it to me, dammit!”
“Spot crude is going crazy right now. God knows where it’ll be at the end of the day. The Merc. is raising margin requirements to fifty percent. That means you’ll have to come up with another seventy-five million at the close of business.”
“Can you get me out?” Visconti asked, continuing his nail biting in earnest.
“I doubt it. Crude’s limit up. I don’t think there’s a human being on the planet who’s willing to sell crude at twenty-five bucks.”
“So I’ve got no choice. Either I come up with seventy-five million, or… What if I don’t.”
“Don’t even think about it. We’ll close out your position and you’ll blow your brains out.”
“That’s just beautiful. Now I have to start carving into other invest
ments just to satisfy a margin call.”
“I thought you had at least two hundred and fifty million in cash in that trust. What happened to it?”
Dennis’s comment brutally reminded Visconti of the fraudulent entries he had made in reporting the financial status of the King’s trust. “I committed it all to the market,” he lied.
“Then tell me what you want me to do with your position.”
“What the hell can you do? Didn’t you just tell me crude was limit up?”
“I did, but I need your instructions. I don’t want to have to wait around for your call if crude comes off the boil.”
“What do you think I should do?”
“You’re into the spot month on the August contracts… I would put a stop at twenty-six on the August, and ride the September contracts.”
“So you’re telling me I would be out of the August contracts at twenty-six?”
“Yup, but I think you’ll be okay with the September contracts.”
Visconti failed to respond for what seemed like an eternity for Dennis.
“I need an answer, Louis,” Dennis prodded.
“Screw it, Miles,” Visconti said, his teeth clenched. “I stepped up to the table to play the game. I’m not going to chicken out the minute the first deuce is dealt. Don’t liquidate a fucking thing!”
Dennis shook his head in disbelief. “Wow! You’re either a genius or a masochist. I’m not sure which.”
CHAPTER 76
Despite frenzied trading in the wake of the invasion of Kuwait, West Texas Intermediate ended the day off the boil. Near record stockpiles of petroleum worldwide had tempered the fears of investors and speculators. Visconti’s margin call, while still large, was reduced to a mere forty-three million. His determination to play the game had been reinforced. The game had blossomed into a personal crusade.
August 3, 1990.