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Answering to whom?

24Seppm1812

I have worked a number of diverse jobs in my life, including a number in which I learned the dignity of labor. In my second to last job I was the General Counsel for a company that engineered a very large piece of high temperature, high pressure equipment, the components of which were built by diverse subcontractors around the world and those components were shipped to a location remote from our offices and installed by other entities under contract to third parties. The average contract price for one unit was in the $23mm range and some contracts were for four units, many for two.

I had been there for a decade, hired by the Dutch board of directors for the in house position after I got them more than I promised in a law suit I filed in Federal Court against one of the biggest EPC contractors in the world, for a project delivered and installed in Chile. Yes, you cannot make that up, but that is just the start of this story. Here is the end of the story, the middle to follow. The Op Ed article by a Trump insider published by the NY Times raised a flood of memories of a room I walked through after I had been GC for about a decade.

Because of the insolvency of the corporate shareholder of the Dutch company, filed in Germany, all of the US entities in the group were sold in a fire sale to a group of venture capitalists in America. Our company had been making money and that income had been being offset (tax wise) by losses from the others. As the result of the insolvency action our ability to get bonding or other security (Letters of Credit) prevented us from getting new jobs. Eventually, the president of that time period resigned and moved on, but retaining his stock in the new conglomeration. The new president struggled to get new work, but eventually landed a four unit job that saved our division. That project, however, ran into a problem pretty early on.

A subcontractor who had a US base had agreed to produce certain critical parts. However, in a contract that was negotiated exclusive of my participation, our company contracted with an entity in Thailand, that was separate and distinct from the US entity with which the negotiation took place. The US entity had been relied upon for decades for the work, the one in Thailand was not prepared or experienced and fell behind quickly. We had significant liquidated damages if they failed and that caused us to fail to timely deliver the goods that their equipment was to be installed in by another entity in Thailand. Long story short, we shipped the raw materials to China, had the work performed and made delivery to Florida on time.

I filed an Arbitration against both the Thai and US entities and we were proceeding toward a hearing, but settled on a Saturday, a week and two days before the start of the hearing. My expert witness for the matter, retained by outside counsel, was a personal friend of the new president and that was how I got to know him. About a year later, the new president got bumped up to be CEO of the parent company and the expert witness became the newest president, hereafter “President”. I trusted him at the start, but over about a year and a half I began to feel a certain queasiness about some of what he did, without really articulating that to myself, just an intuitive reaction.

By then, we had a letter of intent or limited notice to proceed that he had rushed to get on the books by the end of our fiscal year of September 30. However, the actual contract was not put in to effect until July of the following summer, with a customer headquartered in Europe, project to be installed in a country in southeast Asia. When it finally was officially begun, the Engineering demand was too much for the manpower and overtime was necessary. In addition, the technical specs from that customer were new to both Sales and Engineering and the review was not intensive or fully carried out. It was clear later that the president did not care about any of the particulars of performing the contract, merely landing it on the books so he could get more recognition and/or money based upon those books.

Almost from the start, a series of problems attached to the contract. Twice I flew to Europe to sit down with the customer and try to stop our bleeding. Once the shit hit the fan, the president brought in a consultant he had used before, an expert witness if you will, who put claims together. Here’s the thing, I tried cases for 18 years before I came in house. I knew claims well, as I knew forensic accounting and forensic contract application. I told him that it was false for us to make a claim because we were not in a solid contract place for that. However, he was sure the bluster would result in a better resolution. (This is a classic move that Trump and many others employ, but when you are dealing with a European company and the work is on the ground in another country, that perceived leverage is of no use, and can be like tonsils that have gone bad – they actually start working against you.) Oh, by the way, the consultant had a “ranch” in Colorado or Wyoming upon which he entertained customers, etc. by taking them “hunting” (really, just shooting from a perch), and the President and others up the chain had been there.

When the on-the-ground worker for the consultant showed up we had about a 1.5 hour meeting in which Sales, Engineering and Project Management participated, as did I. He came to my office at the end of the meeting, before settling down to review documents and talk to others ad hoc, and asked me, “Why am I here?”. After I felt him out a bit, I told him my background, my analysis and my take on the falsity of what the President wanted their company to create. He agreed and suggested his report would accurately reflect the numbers, and would also emphasis the philosophy that was obvious.

Later, the President and I would have discussion regarding the steps we were taking, to the point where he raised his voice 3 separate times, the last in my office. I was getting up to close my door, as I was about to give him the response that was appropriate and my voice was going to carry more than did his. Problem was, he was standing at the door and he thought I was going to physically assault him. I did not recognize it at the time, but the look in his eyes, which I replayed later, was last seen by me as a 7 year old, in the face of a friend who thought he was about to die as the result of what was going on at the moment. (Probably involving gun powder, bb guns or spears with points carved to stick in trees.)

He told me to leave the building, which I did immediately. Within a day, I had picked up my computer in order to work from home and within 3 days, I was back at the office. However, it was decided that I had to leave that office and work for a sister company in LA, traveling there every other week. Three to four months later, just before that was to go into effect, but after they had interviewed for my replacement, I  was out of town for a negotiation of a big contract and got a call early in the morning. It was the CFO, the CEO of the parent company and the HR person. Wow, my first thought was, I am going to be fired over the phone. No, instead it was relayed to me that the President had told them he was leaving, that he tried to take two other executives with him and those on the phone were suspicious that the president had collected a lot of proprietary information about the company that we was not entitled to. They asked me about the negotiation and told me they really needed the contract and that they were going to keep the President on board until we signed that contract. It was for a new customer for us, but one for which I had negotiated a contract for a different sister company about 5 years earlier, because their multiple counsel were all busy.

Worked through the terms of the contract 4 days later, in their offices, but nothing signed yet. Went back to the office and a week and a half later we signed the deal. They walked the President out at 7 that same night, even arranging to take his trophy deer and other animal heads down for him.

I would be remiss if I did not tell you about the internal meeting that took place between me being told to leave and the President leaving, as that is the telling point for me on the whole issue. The CEO of the parent had called most of our company executive suite and other management over to his wing of the office for discussion. It did not go anywhere, and he said that the President needed to have a meeting back in our wing with all the staff and get this worked out. By that time, others had walked into the room I was in (figuratively) and it was apparent that the relationship of the President with everyone had been stretched if not broken. So, he convened the meeting and I sat about 5 seats down from him a table that could hold 15 people easy. He stated that he called the meeting because he was told to, then it was quiet. After a moment or two, I blurted out that he had told the CEO that he would fire half of his staff if he had his choice, so maybe he should convey to that half what lead to that statement.

He got to me third and told me that his problem with me is that I did not do what he told me to do. Without thinking (which is my real skill set, especially in court and negotiation) I told him that I did not answer to him, but to the board of directors and until they told me otherwise, my judgement on legal issues was going to control my behavior. As that settled in, I then blurted out that my dad had run an Ingot Mold Foundry when I was growing up and that I picked up a lot at the foundry and over the dinner table, and that I learned that sometimes you just had to ignore certain people. Yes, I indirectly told him, somewhat directly, that I ignored him.

Eventually, I was brought back to the company from the LA assignment, abruptly, to take up my old job. It was too late, though, and I can now tell everyone why. The President whom I learned to ignore conveyed by his behavior and body language, if not direct talk, that he did not trust anyone. As it turned out, that was because he didn’t trust himself. (I learned this slowly as I saw him in action and as he relayed to me some of the things he had done in past management positions.) Ultimately, the entire office of almost 200 people, learned not to trust those above them because even the ones that were trustworthy were being circumvented by what was taking place. When I came back, even though there was a new president, the trust level had not been dramatically improved and I could not restore it before being fired for real this time. (One year later, that president was fired. Also, since I left, they are on their 4th counsel in that position.)

All of that was triggered by the Op-Ed piece published by the NY Times by a Resistor within the White House. If it had been me, I would not have published anything, but I am pretty sure that I could get the “death look” in Trump’s eyes just before he told me to leave – and that would be worth all the ramifications!

Here is the bottom line for what I believe should be the measure of the utility of decisions made in business, government and in life in general. I set out above that I answered to the Board of Directors, which was utterly appropriate. Senators and Representatives suggest that they answer to those that elect them. In fact, a great group of “Republicans” that are selling out their principles because of the votes that would be sacrificed are bowing to getting elected in contravention to what I think their real board of directors should be: The Constitution. There is a bigger story there, but that is the bottom line. Do members of the government serve the Constitution or the president or the electorate? If it is the Constitution, the answer is clear as to what decisions and actions must be taken.

For me, I did not choose to behave a certain way. If I were to have behaved in any other manner, I would have had to choose not to follow my instinct. I know very few care, but I had to let it out of me. Others at the table saw things as did I, but no one was as direct with the President himself, but discussed it with the CEO at his request. Those above me did not appreciate the service I had done of calling the President out. They retained what “trust” they had for the President, without much looking at the record of our relationship relative to my relationship with the corporation for more than a decade. So, in congress, expect the leaders to practice the “stay the course” adage, as that is the simple answer to the issues, but not the best. The regular elected officials will begin to talk, not because they choose to, but because of questions asked, they will have to.

If anyone out there gets a hint of what I set out, please drop me a line.

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