Some recent news stories got me musing about the following purely fictional series of events:

When he was at college, it was pleasant at first for Steve Carey to be thought a rich kid by his peers.  It was true that his family was better off than most.  He was labeled rich his second year because he had a car.  It wasn’t new and it wasn’t luxurious, but it marked him as someone who came from money.

As the source of his family’s wealth became more widely known, first among the students and later among the professors, he realized that there were different types of wealth, each with its own badge and rank.  His father owned a water bottling business, not the biggest in the country, not a household name outside of its home region, but big enough.  The problem wasn’t the size of the firm but the business it was in.  That his dad sold anything at retail put Steve toward the bottom of the wealth status rankings.  Add the fact that the firm sold a natural resource, essential to life itself, and Steve felt lucky not to be an outcast by the time he graduated.

After graduation, he worked for his dad at the Mineral Spring Vista Water Company for a few years while he decided what to do with his life.  Or, rather, he waited for a decision to come to him.  He had allowed five years for that sudden illumination to appear, but the decision was forced on him six months short of the scheduled date when one Friday afternoon his father keeled over from a massive heart attack.  They found him slumped over his desk with drafts of the recently ended quarter’s financial statements spread in front of him.  The numbers looked pretty good, so that wasn’t what killed him.

Steve had to make a decision and quickly.  Should he step into his father’s shoes, or sell the business?  His mother said she wanted him to do what he thought best, but hoped he would continue.  The minority shareholders, aging relatives and a few friends of his dad’s, did not favor a sale but were in no position to make a demand one way or the other.  His mom and dad, now his mom alone, had the controlling interest in the company.

He didn’t want to let her down and he did not like to disappoint his relatives and his dad’s friends.  He thought about the 700 or so employees of the firm.  What would happen to them if his mom sold out to one of the big national soft drink bottlers?  He decided to stay and run the business.

That had been three years ago and he realized that what he had inherited had been not a business but a never ending stream of problems.  There was not a moment in the day or a day of the week or a week in the year when there wasn’t a brace of crises that required solution.  Get too many wrong and you were out of business.  The tension and the pressure were unlike anything he had ever experienced.

There had been a strike at one of the bottling plants.  That went on for almost six months before the two sides settled, hurting sales every day it continued.  A few weeks later sales fell because of a Listeria scare.  A competitor’s product had gotten contaminated but bottled water sales from every company took a hit.  The national firms could absorb that kind of jolt better than the smaller guys like Mineral Spring Vista.  In fact, the national firms lobbied for an expensive new testing protocol to prevent future outbreaks.  You can’t argue against safety, but Steve did wonder at times if the bigger firms might favor costly testing as part of their competitive strategy.  Had someone in some nameless office at one of the big guys left a memo to that effect lying around?  He would have loved to get his hands on it.

Then there was that woman from India – he had forgotten her name and was not about to aggravate himself by looking it up and reminding himself – who had gone around the country lecturing about the evils of bottled water.  He had invested with a couple of other regional bottlers in a joint venture in India that had the goal of bringing fresh water to Indian villages.  The project actually penciled out financially and he was proud that he could help improve the lives of people who were desperately poor.  He had read that many Indian children, mostly girls, are kept out of school because their families need them to walk miles to the nearest source of fresh water.  They carry empty containers to the water source and then carry the filled containers home.  The kids, he read, had to do this several times a day to keep their families supplied.  Steve and his co-investors figured they could solve this problem and make a few bucks in the process.

The Indian woman – he could still see her, throwing the edge of her sari across her shoulder, a superior smirk on her face as she lectured – criticized the water business in general but his effort in particular because it undermined traditional Indian culture.  Folkways that had endured for centuries were being destroyed by an unscrupulous pursuit of profit!  And audiences across America had applauded her.  She had become quite a pet of certain segments of the academy.  The backlash from consumers was so strong, he and his partners ended up dropping the project.  He thought about those folkways – illiterate girls being kept out of school so they could spend their days hauling water in unsanitary containers – and it made him angry that such waste of human potential was being tolerated, even applauded, when an alternative was available.

The strength of his feeling led him to write his thoughts out in a semi-organized fashion.  It was the only time in his life he had written an Op-Ed piece, this one for the local paper.  It produced a few comments on the paper’s website and for a couple of days there was a small tempest as the locals used the comments feature to trade uninformed opinions on the benefits and the evils of the water business.  Then he forgot about it and went back to his daily battles, fighting for shelf space in supermarkets, arguing about broker’s commissions, negotiating with plastic bottle vendors, and generally working himself to exhaustion.

It was the Op-Ed that brought him to the notice of Global Impact, the charitable foundation with such remarkable international outreach.  One of their recruitment officers, a Valerie Sutcliffe, thought Mineral Spring Vista Water Company might want to make a contribution to Global Impact to re-establish the company’s record of good works.  She called, made an appointment through Michele Small, Steve’s secretary, and was sitting in his office at 2:00 on a Thursday afternoon two weeks later.

She brought a glossy, highly produced book with her that demonstrated the range of Global Impact’s activities.  “You probably know us best for disaster relief.  When a natural disaster hits, an earthquake, hurricane, tsunami, if it’s big enough to make the evening news, we’ll be there.  Our members help us provide temporary shelter, food, medical treatment and supplies, and – something you would be particularly interested in – water.”

Steve immediately saw the benefit of becoming a preferred provider for an outfit like that.  They probably need to have a few hundred thousand bottles of water handy so they can respond to emergencies.  It would be a nice business to be able to supply some part of that.  If a contribution of a couple of thousand dollars would put him on their list, it could be a win for everyone.

He realized later that it might have been smart at this stage to say that he had no interest.  Instead, he asked if Valerie was looking for a contribution.  “We can always use the money, Steve, so I appreciate you asking.”

When he suggested that he thought his company’s budget could stand a contribution of $1,000 or so, Valerie gently pulled her presentation book back toward her and closed it.  “Steve, we deal in numbers bigger than that.  Frankly, for us to accept a contribution less than a million is an accommodation.  The paperwork, the administration, filing with the IRS, it’s all a headache.  If we’re not both thinking along those lines, I may be wasting my time.  But, let me leave you something to read” – she put the presentation book back in her case and took out an eight-page brochure that she left on the table – “and perhaps I can check up with you in a few months.”

——————–

The next Monday, Harriet Hangman was about to begin her week, as she always did, by sipping her first cup of coffee as she reviewed the list of new matters requiring investigation that Sharon Wills, her long-time administrative assistant, had prepared for her.  Harriet thought that being a United States Attorney was the best job she had ever had.  She had her pick of the most interesting cases and was privileged to work with some of the sharpest legal minds in the business.  She got to lock horns with defense counsel every once in a while, and that could be fun, too.

Harriet’s path to this great job had been unconventional.  She began as a criminal defense lawyer and switched to the prosecution side after a fifteen-year career marked by a string of high profile and highly lucrative white collar defenses.  Most criminal lawyers who make a switch go the other way.  She remembered someone saying that defending the guilty was a challenge but the real test for a defense lawyer was how he or she defended the innocent.  Harriet had found that defending the guilty was challenging enough, although she had been open to representing an innocent person if one ever walked through her door.

She became a prosecutor after reading Harvey Silverglate’s “Three Felonies a Day”.  The thesis of the book is that the law in the modern American regulatory state has become so complex that any citizen can be found to have committed at least three felonies every day, just in going about his or her daily business.  A prosecutor who decides to target a seemingly innocent individual can easily find that the citizen, now a defendant, had violated three statutes or regulations without even knowing it.

Harriet chuckled when she read that.  She was sure the true number was closer to eight and proceeded to prove it.  She soon found that the power she enjoyed as a prosecutor was even sweeter than the significant fees she had been raking in as a defense lawyer.  On the whole, she decided, the acquisition of power was preferable to the accumulation of wealth, especially for someone who had already done plenty of accumulating.

The only better job she could think of was Attorney General of the United States and she had very good reason to believe that she would be on the short list for that job if her party won the next presidential election, less than a year away.  One of her goals was to make that list shorter than it already was.

She opened the folder to start evaluating the new matters that had come in at the end of the previous week.  Her practice was to assign the routine matters to her staff but to retain for herself those of particular interest.  Sometimes these were cases of intriguing intellectual complexity but usually they were matters that promised to generate publicity for a tough and incorruptible U.S. Attorney.

Harriet’s instruction to Sharon was that the Monday list was not to exceed five items except for extraordinary circumstances.  At the beginning of their long relationship, Harriet had explained to Sharon in a private meeting, doors closed, no notes or memos, that the “extraordinary circumstances” label was reserved for items that had important political implications, especially those where someone in a position to help or hurt Harriet’s career had expressed an interest.

Therefore, when Harriet noticed that today’s list contained an item numbered 6, her eye went there first: “6.  Possible collusion over pricing and territorial division in the water bottling industry.”

———–

Three weeks later, two FBI agents were standing in front of Michele Small’s desk asking to see Steve.

“I’m sorry, gentlemen.  Do you have an appointment?”  She knew they didn’t.

One of them said, “No, Miss, we don’t have an appointment.  We can certainly make one if Mr. Carey prefers, but the appointment would be at our headquarters in Washington, D.C.  Up to him.”

Two minutes later they were in Steve’s office.  They declined coffee and water (specialty of the house), assured their host that they were most comfortable, showed him their credentials and handed him their business cards.

He read them: Peter Weston, agent in charge; and Michael Schmidt, special agent.  Steve thought, “Schmidt and Weston.  Someone at the FBI has a sense of humor.”  He was wrong about that.  The joke had never occurred to anyone at the FBI.  No attempt to explain it would have produced a smile.

“How can I help you gentlemen?”

Schmidt began.  “Mr. Carey, did you attend a meeting of the American Water Bottlers Association recently?”

“Yes.  I’m a member, naturally.  That is, the company is a member and I attended the annual convention in San Diego from April 5 through 9.”

“And did you meet with a Mr. Thomas Siemens while at the convention, Mr. Carey?”

“Yes. Tom Siemens is an old friend of my father’s.  He owns Siemens bottling.  They’re in a similar line of business to ours, so we have a certain amount in common even though he’s about twice my age.”

“Did you discuss pricing with Mr. Siemens at any time, Mr. Carey?”

“Pricing?  We talked about how tough it is to make a buck in this business.”

“And did you and Mr. Siemens meet together with a Mr. James Robbins?”

“No, I didn’t meet with those two together.”

“What date did you arrive in San Diego, Mr. Carey?”

Then he remembered.  He had been having a drink with Tom Siemens and was about to leave the bar when Jim Robbins arrived.  They were together for a few minutes.

“Wait, I just remembered something.  Tom and Jim, that is Mr. Siemens and Mr. Robbins and I were in the bar of the hotel together for a few minutes.”

“I’m sorry, Mr. Carey.  Are you changing your answer?”

“Well, you asked me if I met with the two of them.  I was having a drink with Tom and was about to leave when Jim, Mr. Robbins, arrived and the three of us chatted for a few minutes, maybe five minutes.  Then I left.”

“And did you talk about selling water, where they sell, where you sell?”

“Well, in a general sort of way.  We’re all three in the water business, after all.  Look, what’s this about?  Do I need a lawyer?”

Now Weston took over.  “Of course, Mr. Carey, you always have a right to a lawyer.  If you think you need one, just tell us and we’ll stop asking these questions.  It’s something to think about because, well, you know that you don’t have to talk to us and anything you say to the FBI could be used against you in a court of law if for some reason we ended up in a court of law.  From the look of this place, I would guess that you already have lawyers on retainer, maybe not criminal defense lawyers, but lawyers.  But I want to make it clear that if you decide you need a lawyer and you don’t think you can afford one, we would be sure to get one for you.  You understand all of that, I hope, Mr. Carey.”

Steve swallowed hard.  He had seen it done differently on TV, but he was pretty sure that Weston had just read him his rights.

Weston turned to Schmidt.  “I think we’re done for now.  Mr. Carey, thanks for your time.  We’ll be in touch.”

After they left, Steve looked at his hands.  They were shaking slightly and his palms were wet with sweat.  And, he thought, I haven’t done anything illegal!  Imagine how I’d be feeling if I had actually broken the law!

———–

Two months went by.  Steve heard nothing from Schmidt and Weston.  He thought about hiring a lawyer just in case but decided that there was no reason to spend money on a service he wasn’t going to need unless the two agents came back and pursued whatever line of inquiry had brought them to his door in the first place.  Still, he thought about them every day and his worry drained away some of the energy and focus he needed to stay on top of his business.

Then Valerie returned.  She didn’t make an appointment this time; she just showed up.  How she knew he would be available, he never asked, but he agreed to see her when Michele buzzed to say Ms. Sutcliffe was at the front desk.

After the mandatory exchange of pleasantries, Valerie got to the point.  “Steve, have you changed your mind about making a substantial contribution to Global Impact?  Hurricane season is just around the corner.  We could use your help.  And you know, I think you’ll find that making a contribution can help with other problems.”

Steve knew that he was unsophisticated in the ways of politics, but he thought he knew a shakedown when he saw one.

“Valerie, are you talking about the visit that the FBI made here a couple of months ago?”

“You know, Steve, it’s funny you should say that.  Kristal Mason, our director of South American Outreach, made the point to me just yesterday that people sometimes jump to the conclusion that Global Impact has some deep connection to U.S. government agencies.  The two are completely separate.  Sometimes, it may look like there’s a connection because so many people in high positions at Global Impact used to work for the government.  Like Kristal.  Her last job was Assistant Attorney General for Consumer Protection.  And it goes the other way, too.  A lot of people in Justice, Commerce, State, the FTC, the NLRB, you name it, have experience working for Global Impact.  But the two are separate.  Completely separate.  We’re very careful to keep it that way.

“No, Steve, what I meant was that many people tell us that the act of giving is itself beneficial.  It changes your heart, makes you a better person.  The other thing, that other business, not what I’m talking about.  As I said, we’re very careful to keep the two things separate.”

Steve got the point.  The two were connected.  “So, you were talking about a contribution of a million dollars.”

“Well, actually, Steve, I should have said something about that sooner.  We’ve had a change of policy.  I mentioned that there were a lot of complications with administration, record keeping, and so on.  We really can’t consider any contribution of less than two and a half million.”

Steve started to run numbers in his head.  The company made a small profit each year, enough to pay a two and a half percent dividend to the shareholders and a bonus to him as CEO.  Given the number of hours he put in, the bonus came to about forty dollars an hour for the year.  That’s good money per hour if you’re waiting tables, but he expected it was less per hour than Valerie was going to get for her efforts this year.  He could cut the dividend to one and half percent and reduce his bonus by fifty percent and find the rest of the money somewhere else.  Painful, but he did not want another visit from Schmidt and Weston.  It definitely would not make his day.

She saw him hesitate.  “You know, Steve, you could pass the cost on to your customers.”

It had always amazed him that people who knew nothing about business had that reason at the ready when they planned to impose a new cost on a business.  A higher tax, mandatory wage, required employee benefit, the cost of all of it could, in the minds of those imposing the cost, be “passed on”.  Nobody seemed to understand that people like him spent half their time busting a gut trying to sell as much of their product as they could for the best price they could get anyone to pay.  They spent the other half of their time cutting costs anywhere they could.  If you took in more than you paid out, you had “passed on” your costs and could stay in business to try again next year.  If you didn’t, you eventually went out of business.  Those costs didn’t get “passed on”.  If he could raise his price to cover costs, he would have raised them before the cost came along.  No one who bought his product cared what it cost him to make it.

The whole concept was based on a lack of understanding.  The only time a business could pass its costs on to a buyer was when it had a “cost plus” government contract.

At that moment, a bright light went off in his head.  He felt that he could see through the walls of his office, out to the horizon.  In that instant, he saw how Global Impact worked it.  It was brilliant in its simplicity.  He realized he should be flattered that they asked him to join the club, using the time-honored technique of making him an offer he couldn’t refuse.  He signed up right then.  As he was signing, he thought of those uneducated Indian girls and hoped that some of the money he was about to “contribute” would find its way to them.  Valerie agreed that he could make his contribution in monthly installments.  She told him that she expected to be back next year, assuming that things worked out this year to their mutual satisfaction.

—————–

Six weeks later, a Category 4 hurricane made a direct hit on one of those Caribbean islands that seem to generate a magnetic pull on tropical storms.  There was widespread devastation, thousands were homeless, and basic services were out of commission, possibly for months.

Mineral Spring Vista Water Company received a massive order for bottled water from a U.N. agency that Steve had never heard of.  The contract indicated that the agency was acting in coordination with the Federal Emergency Management Agency and the disaster relief command of the United States Navy, although their names did not appear as parties to the contract.  The contract also stated that it was being administered by Global Impact, who would address all inquiries and communications and would handle all billing and payments.  A separate email contained the software needed to print the Global Impact label on all bottles and all containers supplied through the contract.  The supplier’s name was not to appear and the supplier was prohibited from making any public announcement about its involvement in disaster relief.

The contract was the most lucrative one that the company had that year.  The agency, whoever they were, paid more than double the going rate for bottled water and included a shipping allowance that was well in excess of actual cost.  The additional amount was labeled an “expediting fee”.

Steve wanted to celebrate, but didn’t want to start answering questions to friends and relations about how he had managed to land this remarkably profitable contract.  He went to a bar and sat alone, sipping an expensive single malt while he watched disaster relief being reported at the scene by one of the network news programs.  Steve wondered how the reporter, one of the finest looking females he had seen in weeks, found space in all that wreckage to have someone do such a spectacular job with her hair and makeup.

A few minutes later, a fellow solo customer took the stool next to him.  They watched as an aid worker emerged from a tent bearing the label “Global Impact” to speak to the reporter while an ambulance with the same logo on its sides and its back doors rumbled in the background, its roof tilting rhythmically from side to side as the driver negotiated the ruts in the mud-filled roadway.  Steve’s new companion tilted his glass toward the TV screen and said, “They do a lot of good, those people.”