THE TAINTED TRUST (Volume 2 of The King Trilogy)

CHAPTER 23

         New York. Thursday, December 24, 1987.

The final days of 1987 were nightmarish for Visconti. Shortly following the last day of December, the annual report for the King's trust was due, and would have to be mailed to Mike King. In it, Visconti would be compelled to reveal that by virtually any standard, he had failed miserably. For weeks he had struggled with the possibility of including a covering letter with the report. It would be carefully crafted to cushion the blow, but in the end it was brutally obvious that words were totally inadequate. A letter, irrespective of how well written, could not possibly obscure the enormity of the disaster.

When King cast his eyes on the report, he would be furious. In addition to showing no increase in the trust's value after seven years of Visconti's management, the report would reveal Visconti's failure to do the minimum he had promised: to preserve the purchasing power of the trust's original capital.

Clearly, Visconti had run out of options. To salvage the respect he had once enjoyed, there was only one solution. King would have to read a fraudulent report. Instead of sending a document containing the potential to ruin him, Visconti elected to falsify it, merely by adding an extra line indicating a cash reserve of two hundred and fifty million in the trust. In addition to satisfying King, the fictitious amount would buy the time Visconti needed to recover the money lost in the stock market. No one would ever have to know. He was always the last to see the report before it left the office, and the Kings would be the only humans reading it.

Fully aware of the risk he was taking, Visconti took it willingly. Even though the action was patently fraudulent and flagrantly illegal, it was by far his best option.

Mike received the contrived report in early January. He studied it carefully, as he did all of Visconti's quarterly reports. "I'm surprised it's done so well," he said, then handed it to Karen. "I expected the October crash would have hit it harder. I guess Visconti was smart enough to have a lot of cash at the time it hit."

Karen briefly scanned the report, then frowned. "Where are we going with this? What are we doing with this money?"

For some time Mike had asked himself the same questions, but pride had prevented him from talking about it, and memories of the harsh treatment the Feds had given both of them had prevented him from doing anything about it. "I'm torn, Babe," he admitted. "Half of me wants to keep it forever, and the other half wants to get rid of it. All my life I've been an honest man. I can't even tell a lie without breaking out into hives, but this one's different. As long as I live I'll remember how those sons of bitches treated us like numbers. I'll never spend a dime of that money, but I'd rather die than give it back to them."

The stock market continued its gradual recovery in 1988. Capital gains were slow and difficult to achieve, however. Even worse, the price of crude oil had continued to sag, never once coming close to twenty dollars a barrel. Each time it showed any sign of strength, Visconti called Dennis, anxious to get his blessings to proceed with his planned short sale. Each time Dennis advised him to wait, his advice driving Visconti to unchartered levels of desperation.

The spot price of West Texas Intermediate had dropped to fifteen dollars a barrel by the end of May, and Visconti's hopes had plunged with it. Convinced he had missed his seat on the boat intended to deliver him from his nightmare, it was apparent that he would have to falsify a third cosecutive quarterly report to Mike King. Deeply discouraged, he telephoned Assif Raza in Kuwait City. After an agonizing delay of more than twenty minutes, Raza finally answered, "Sorry to keep you waiting, Louis. To what do I owe the pleasure of your call?"

"I need some information, Assif. It's extremely important...When we first met over a year ago, you told me that you and your fellow investors expected the price of crude oil to drop a long way. Do you still think it will?"

"Nothing has happened to change our opinion. There is no factor, with the exception of the Saudis, which we think is capable of providing sustained support to the price of crude oil."

"If that's true, what's keeping it up?"

Raza chuckled. "Forgive me, Louis. I have difficulty understanding your question. We haven't seen the price as low as fifteen dollars for a long time."

"That's true," Visconti conceded. "But you said it would drop to five, didn't you?"

"Yes, and we still believe it will, because we don't think the Saudis can continue to carry the full weight of world crude prices on their shoulders for ever."

"How soon? Can you give me an informed opinion?"

"I can only assure you that we believe in the inevitability of a crash. The longer the price of crude oil defies gravity, the further and faster it will drop."

Raza's words were sweet music to Visconti's ears, nourishment for his obsession.