No Accident (27 page)

Brad insisted on holding Luke’s deposition in his own office, rather than the comfortable, modern skyscraper where Boswell & Baker did business. Brad was used to suffering for hours at a stretch in the windowless, low-ceilinged chamber that served as his conference room. He knew Luke and Alan Matthews were not.

Brad had been talking up Luke’s deposition to Cindy, and she asked Brad to contrive a way for her to watch. Could she pretend to be his paralegal? Brad kept putting her off. But once the legal stenographer arrived with her equipment, there wasn’t space for any spectators in the little room anyway. And after Luke greeted Cindy by barking a demand for coffee, she no longer seemed as keen to join the proceedings.

The judge decreed that Brad could depose Luke for eight hours. After seven and a half hours, Luke and Alan both looked worn. With the two of them, the stenographer and Brad gathered close around a small table, the room had grown warm and uncomfortable, but neither Luke nor Alan would give Brad the satisfaction of loosening their ties. Brad felt stifled, too, but was willing to suffer for the cause.

“Mr. Hubbard, last December, didn’t you have a motivation to increase Liberty’s earnings?” Brad said. He had spent the last ten minutes effectively asking the same question in different forms, covering the same ground that Grant Steele had questioned Luke about in the secret grand jury transcript.

“What does any of this have to do with the divorce?” Luke said. “Wake up, Alan.”

Alan twisted his head lethargically toward Brad. “Objection as to relevance.”

“Answer the question please, Mr. Hubbard,” Brad said.

“My attorney has just objected. I’m not going to answer.”

“Off the record,” Brad said to the stenographer, and she stopped typing. “Fine,” Brad said to Luke and Alan, “in that case, I’ll have the court compel you to answer and we’ll meet back here another day and do this all over again.”

Alan rose and squirmed between the wall and the table to get to where Brad sat. He motioned for Brad to join him outside, and the two of them stepped out into the hall.

“What the hell’s going on here?” Alan said. “Are you litigating a divorce case or auditioning for district attorney?”

“It’s all relevant, Alan. It goes to the value of his Liberty stock.”

“Isn’t that why we have a stock market?”

“But the market price fluctuates every day. What does
Luke
think the stock’s worth?” Brad knew his rationale didn’t really make sense, but being a lawyer sometimes meant arguing the point.

Alan scrutinized Brad’s face, looking for a tell. Finally he shrugged. “You want to waste your last few minutes with Luke going down a rabbit hole, that’s fine with me.”

Brad swept back into the little conference room with Alan in tow. “Back on the record,” Brad said to the stenographer. Brad asked his next question immediately, even before he was fully seated. “Mr. Hubbard, last December, didn’t you have a motivation to increase Liberty’s earnings to meet analysts’ expectations and keep Liberty’s stock price from plunging?”

Luke cast a disgusted look toward Alan. “These questions are all silly,” he said. “But since you won’t let it go, the answer is no. I hold my stock in Liberty for the long term, so the periodic rises and falls aren’t important to my personal calculations.”

“Not at all?”

“Look, if I worried about short-term fluctuations, I would sell the stock whenever I thought the price was high.”

“So, if you had been worried in late December about missing the analysts’ earnings estimates and a drop in your stock price, you would have sold stock then?”

“Exactly.”

That was how Luke had answered the same question before the grand jury. That was how Brad was hoping Luke would answer now. Brad opened one of several file folders he had laid out on the table in front of him and pulled out a several-page document.

“Mr. Hubbard, I’m looking at Liberty Industries’ stock trading policy for its executives. Pretty standard policy for a public company, as I understand it, to make sure executives aren’t trading on inside information. According to this, the company prohibits executives like you from selling Liberty stock during the last month of any fiscal quarter. So wouldn’t that policy prevent you from selling stock during December?”

“I guess so.”

“You guess? Are you unfamiliar with your company’s own trading policy?”

“I’m familiar with it. I just don’t spend much time thinking about it, because—if I have to tell you twenty times, I’ll tell you twenty times—I don’t sell just because the stock price is high. I’ve never sold a share.”

“Let’s move this along, Mr. Pitcher,” Alan said. “He didn’t sell, and he’s told you why.”

“Fine,” Brad said to Alan. Turning back to Luke, he said, “You have an expensive lifestyle, don’t you?”

Luke looked at his watch. The deposition was almost over. “Compared to most people, I’m sure that’s true.”

“How much did you spend last year?”

“I’d have to check with my accountant.”

“Surely you have a rough idea. Was it more than a million dollars?”

“Certainly,” Luke said.

“More than two million?”

“I don’t know, maybe. A lot of that
spending is Sheila’s, y’know . . . clothing, jewelry, spa dates, who knows?”

“And a lot is for your mistress, as well?”

Alan’s lurched from his seat and coughed out a vehement objection. Brad and Luke stared at each other coolly, oblivious to Alan.

“Less for her than for Sheila,” Luke said.

“And what was your salary last year?” Brad said.

“One million dollars exactly, just as it’s been for several years.”

“Not enough to pay for your lifestyle, then, especially after taking out taxes.”

“Is that a question?”

“Here’s the question,” Brad said. He leaned forward and stared straight into Luke’s eyes. “How do you fund your lifestyle?”

*
* *

After leaving Les Frees’ office, Alex returned to the security department, which was abuzz with rumors about what had happened to Frees. Depending on who was doing the talking, Frees either had been stealing from the company or had been plotting some sort of home-grown terrorist act or had found dangerous information about Luke Hubbard. Whatever the cause, he had run. They found him with a suitcase full of disguises. Or maybe they didn’t. He was diabetic and died in a motel room in Santa Monica from an adverse insulin reaction
—that was the only hard fact. Somebody’s brother who was a doctor said accidental overdoses sometimes happen in unfamiliar environments. In a way, they said, Les had won. Whoever was chasing him wouldn’t have the satisfaction of catching him. Imagine what the poor motel cleaning lady must have thought, someone mused, though in her line of work she may have seen worse. At least he didn’t leave a mess, another said. Les could piss people off, but he was a good guy, everyone agreed. People were meeting up after work to have a few drinks in his memory—no wife, no kids, that left his friends to do the honors.

Alex listened to all this with wide-eyed attention, but after hearing what his colleagues had to say, he was more curious than before. One thing the rumors didn’t explain was why Les Frees would want to kill himself or, in the alternative, why he would be so careless in administering an insulin injection that he did every day. But more important, why had Frees been in a motel at all?

Had Frees been running from Alex? That was unlikely, given the way Frees tried to intimidate Alex in his office. Alex listened to his coworkers and asked some questions, but tried not to seem like he cared about the answers too much. After an hour, he knew where he had to go for real answers.

In the cramped conference room, Brad pressed on.

“Mr. Hubbard, you spend more than a million dollars a year, but have a salary of only one million dollars. If you don’t sell stock, how do you fund your lifestyle—the house in the hills, the cars, all the rest of it?”

“Liberty pays me other compensation.”

“How much other compensation did Liberty pay you last year?”

“I’d have to check,” Luke said.

Brad opened another of his folders and passed the papers from inside to Luke. “Here is Liberty’s most recent shareholder proxy statement,” he said. “This lists how much you and the other top executives got paid last year. What does it list as your total compensation last year?”

“Just over twenty million dollars.”

“Is that number accurate?”

“If that’s what the proxy says, I believe it,” Luke said.

“Personally, twenty million is a number that I would have remembered,” Brad said with a smile.

“Objection,” Alan said.

“And of that twenty million, one million was salary. Where did the other nineteen million come from?”

Luke again checked the proxy statement Brad had given him. “Eighteen million from my bonus plan, the rest is attributable to various perks and accounting charges.”

“Did anyone else get bonuses under this plan?”

“No, it’s just for me. It was put in as part of the last employment agreement I negotiated with the company.”

Brad took the proxy statement away and pulled another document from yet another folder. Alan craned his neck to see what it was.

“Is this a copy of your bonus plan?” Brad said.

“Where did you get this?” Luke said.

“This was filed by Liberty Industries with the Securities and Exchange Commission.”

“Alan, do we file this with the SEC?” Luke said.

“Mr. Hubbard’s question is off the record,” Alan said. He took a look at the document and nodded in the affirmative.

“Yes, this is the bonus plan,” Luke said.

“How was your bonus for last year calculated under the plan?” Brad said.

“Well, it wasn’t just for last year. The plan has been in place for three years, but didn’t pay anything out until this year.”

“Fine, a bonus for three years,” Brad said. “How was it calculated?”

“The size of the bonus depended on Liberty’s cumulative earnings over that three-year period.”

“The three-year period ending last December?”

“Correct. Earnings had to be at least three billion dollars over that period.”

“They had to be at least three billion, or else what?”

Luke looked at Brad scornfully, like he thought Brad was feigning stupidity just to annoy him. “Or else I wouldn’t get a bonus under the plan,” Luke said.

“Nothing at all? Not a smaller bonus?”

“Nothing. The bonus was either-or.”

Brad handed Luke some additional documents. A small pile of paper was now gathered in front of the CEO.

“Here are copies of Liberty’s annual reports for those three years,” Brad said. “I’ve circled their earnings for each year. I added up all three years and got three billion, fifty-three thousand dollars. Do you agree with that calculation?”

Luke looked the pages over quickly. “Yup.”

“So in percentage terms,” Brad said, “Liberty met the bonus threshold by just .002%. You just barely earned that twenty million dollar bonus, didn’t you?”

“That’s right. And it was eighteen million, not twenty.”

“So in late December, you must have been pretty nervous about whether you would earn that big bonus, isn’t that right?”

“Not really.”

“Not really? An eighteen million dollar payday wasn’t on your radar screen? Whether or not you earn a bonus that you need to fund your lavish lifestyle is beneath your notice? I remind you that your testimony today is under oath.”

“No need to remind me, Mr. Pitcher. Like I’ve said, my focus is on the long-term health of the business. If the business does well, I’ll do well.”

“You’ll do well. I see. So if you hadn’t earned that bonus last year, you would have had another chance to earn it?”

Luke looked surprised at the question. “No, the bonus plan ended last year.”

“So you have another bonus plan in place for this year?”

“Um, no, the board hasn’t approved another bonus plan.”

“Why not?”

“That wasn’t in the terms of my employment agreement.”

“Do you expect the board to approve another bonus plan for you like this one?”

“I have no idea what the board will do,” Luke said, having recovered his accustomed polish.

“My question is about your
expectation
,” Alex said. “Do you
expect
the board to renew the bonus plan?”

“Same answer: I have no idea.”

“OK, has anyone on the board proposed renewing the bonus plan?”

“Not to me.”

“Have
you
discussed renewing the bonus plan with anyone on the board?”

“We talk about compensation in general terms from time to time, so it may have come up, but there was never a proposal.”

“What was the board’s response to the possibility of renewing the bonus plan?”

Luke sighed in frustration at Brad’s persistence. “They said it would depend on what the compensation consultants say.”

“Why is that?”

“The board hires a compensation consulting firm to look at executive pay at similar companies and make sure Liberty’s pay is in line with its peers’. It’s standard procedure.”

“And did the compensation consultant find that your peer companies have bonus plans like the bonus plan of yours that just expired?”

“No.”

“Why not?”

“Bonus plans like that have sort of gone out of fashion.”

“I see. So to sum up, you had a special bonus plan, it wasn’t likely to be renewed and so last year was really your one-time shot at an eighteen million dollar windfall, wasn’t it?”

“I wouldn’t call it a windfall.”

“Just answer yes or n—”

“Yes, yes, already.”

“So, it was pretty convenient for you personally the way things turned out, wasn’t it?” Brad said.

“I’m not sure what you mean,” Luke said.

“I mean the way five of your employees died barely a week before year end and the life insurance proceeds enabled you to get the bonus.”

As soon as the word “died” left Brad’s lips, Alan lurched out of seat, hurling a stream of profane invective that the stenographer either couldn’t keep up with or refused to transcribe. At the end of it, Alan stood panting and hunched, glaring at Brad.

“Off the record?” the stenographer said.

Alan nodded dourly, and Brad and the stenographer both stood and left Luke and Alan alone in the room.

* * *

“We need to stop this,” Alan said to Luke once the door closed. “
I
know you didn’t kill anybody; I’ve known you for twenty years. But the coincidence—your bonus and the accident—it looks really bad. What if this little shit Pitcher helps the media connect the dots on the bonus plan? What if he clues in Grant Steele?”

Luke’s eyes were like burning embers and his voice was calm but firm. “Alan, my view is that you let Pitcher lay a trap. He played you.” Luke stared stonily at his lawyer for several painful seconds. “But we are where we are,” he said. “How do you suggest we fix this?”

“We settle this divorce. We get Sheila to drop the wrongful termination case, and we get a strong confidentiality clause that keeps her and Pitcher quiet.”

Luke’s eyes narrowed. “So, give up. That’s your solution.”

“Luke, when something looks this bad, people have to react. And they
will
react to this. The papers will, Grant Steele sure will. Oh, and your board of directors has about lost patience with all your recent legal troubles. Don’t pretend for a second that they wouldn’t fire you if Liberty had another round of bad press.”

“Come on, they can’t fire me.”

“Oh yes they can. Even you. Even though firing you would be the worst thing they could do to the company.”

Luke sighed and stared at the ceiling. “Losi
ng is bad enough, but like this . . .”

“How much pain has Sheila caused you?” Alan said after a moment. Luke didn’t say anything. “Look at it this way,” Alan said. “Finalizing this divorce will be like removing a canc
er . . . and cutting out a tumor is something to celebrate.” Alan smiled weakly at Luke.
Doesn’t that make sense?
his smile asked.

Luke looked around the room, at the table, at the door, at the clock. “Ten more minutes, and I would have been fine,” he said.

“Luke, you
are
fine. You’ve got a dream job. You’ve now got the son you always wanted. And once we settle this, you’ll be rid of Sheila.”

Luke continued staring blankly at the wall, and Alan said, “When I got divorced
—both times—the day I signed the papers I just felt an overwhelming sense of relief—and even more, of freedom, like I’d turned off a narrow country road onto a ten-lane freeway. But this? This moment here”—Alan pointed at the table where they sat—“I know what it feels like. It’s the worst.”

Luke gave a weak smile himself. It was the baseless, undirected smile that he used when meeting strangers. Twenty years’ worth of memories and emotions churned in Luke’s mind, but that mask kept them private.

Finally, he nodded to Alan. Alan rose and placed a steady hand on his shoulder, then opened the door and called for Brad, who stood with the stenographer a respectful distance away. Cindy peered eagerly over Brad’s shoulder.

Pointing at the stenographer, Alan said, “You can take her off the clock now.”

“You know damn well I’ve got ten more minutes,” Brad said.

“Brad, I mean the deposition is over. We’re ready to talk about a settlement.”

It took a second for the momentous news to sink in, then Cindy clapped her hands and then reached around Brad’s neck and hugged him joyously. Tentatively at first, Brad’s mouth widened into a triumphant smile.