The Beast Within
James is not the man you think he is when you first see or meet him. Some people show you who they are with their cultivated look. I think Donald J. Trump announces to the world who he is with one glance. Warren Buffet looks exactly like what you would expect The Sage from Omaha to look like. Mark Zuckerberg and Jeff Bezos may be otherwise ordinary in their appearance, but I think they too give off the vibe of people who are supremely self-confident, technically-skilled and meant to be tech champions. But James has the look of a simple accountant. He wears a white button-down shirt, has a bit of a crew cut and has that whippet-thin look of a guy who parses his eating habits as carefully as he parses his words.
James has lived his whole life in the Bronx. I’ve never lived in the Bronx, but I do not imagine it to be a bucolic and easy place to live. I imagine it to be a work-a-day and rugged place to live where every decision you make affects you one way or the other. I’m not sure I can explain this, but I always sensed that the Bronx was the right place for James to be from. I know kind and gentle people who grew up in the Bronx, but they moved on. James has stayed and made his life on that bit of sedimentary rock, the Fordham Gneiss as it is called in geological circles. It is 1.1 billion years old and the Bronx has 42 square miles of terrain. James is as tough as anything you find in the Bronx.
Many accountants spend their time pondering the theories of revenue recognition, but not James. He is a pragmatic accountant. His clients were mostly those people who didn’t really want their books and records kept, but had no choice compliments of the Internal Revenue Service. To him it was all about cash flow and cash flow is all about collecting receivables and postponing or not paying payables. It’s very simple when looked at that way.
I had the pleasure of sitting in a cubicle next to James when we launched our private equity fund. He was the CFO, Controller, bookkeeper and Father Confessor of the business. I could sort of tell that he found the whole exercise rather strange. We gathered up about $40 million in cash money and put it in the bank to invest. This alone was strange to James. He hadn’t worked on a business that had so much cash on hand and while he learned the ropes quickly, some of the old habits die hard.
James could have been a study in science of split personalities. If he was dealing with receivables it was all about the single-minded purpose of getting the money we were owed. If he was dealing with payables, it was playing impoverished and begging for more time to pay or not pay at all. James was a working capital artist. His canvas was the cash flow of the company and his brushes were the dollars he squeezed out of debtors and the pennies he eked out to creditors. Hearing him on the phone working one side of the equation or the other for two years was a lesson in business I will never forget.
James was always polite and respectful of the other person at the end of the phone. I came to suspect that this was a big part of the secret to his success. If you can keep your respectfulness about you when others are losing theirs, it pays amazing dividends. It is hard to yell at someone being respectful who tells you he cannot pay you. It is even harder to refuse to pay someone who is quietly respectful but diligently unyielding in his need to have you pay him what he says he is owed. No matter what the counterparty said, James just kept repeating his request over and over as though he had never said it and the counterparty had never heard it before. In other words, James was a master at wearing the other people down. I’m convinced some of them relented just so they would not have to talk to James any more. But it always worked.
I like looking at life through James’ eyes. We once had a young CEO who we had invested in and who was more than a little erratic in his behavior. Brilliant yet, dependable no. One day James discovered that the account at his company was depleted when it should have had $800,000 remaining. We monitored these companies since we were the major investor in most. We quickly discovered that the CEO had moved the money to a casino in Atlantic City. I was the Chairman of the company so I called the CEO for an explanation, fearing the worst. The CEO said he was trying to win an account from a major casino company and moved the money there to show that we were well funded. It made no sense. Upon further investigation, James learned that the money had been gambled away in a flailing attempt to generate enough added cash to support the company for the longer ramp needed to get to profitability.
This was fraud, pure and simple, and we reported it to the Manhattan District Attorney. At that time (2003) there was a certain degree of interest in having some internet white-collar criminals brought to justice and the DA took up the cause with fervor. We tracked down the CEO to a psychiatric hospital in New Jersey where he was “hiding out” for a few days thinking he could avoid being found. It was quite the opposite as all those patients were readily visible to the local law enforcement officials. When the CEO checked himself out, the Manhattan DA and NYPD were there to greet him. I was on the phone with him when he saw them coming and all he could say was “Uh-oh.”
James followed the case for the following months as it was clear that we had to shut the company down and I was busy trying to make sure that other companies in our stable did not suffer similar fates. James worked the books like the beast he was. He gathered every penny the company was owed, he pushed off and ducked every penny the company owed others, and he attended every minute of the trial. He literally put the company into a cardboard box and idled its state registration. He was even there when the CEO’s mother came in with a $9,700 check from her cashed-out insurance policy and gave it to James in hopes that it might help her son avoid prison. Nothing stops the wheels of the law once they begin. The CEO went to jail for a three-year sentence (one year served and pardoned for good behavior) and was hauled out of the courtroom by the bailiffs despite his weeping mother. James witnessed the entire drama and dispassionately reported back to us.
Years later, long after the young CEO had been released, I got a call from the Manhattan DA office. Some new rookie Assistant DA was trying another case of fraud against the same CEO. He had not learned from his prior incarceration and was off doing it all over again. I was asked to testify that our old company was long since dead and that his comments to the new victims that he had sold his stake in our company for a fortune were pure fabrication. I told them about James’ cardboard box.
I shared all of this with James and he was not surprised. His life is spent in the trenches, where fame and glory rarely are in evidence. He lives in the real world of bills due and bills paid or unpaid. He knew that lines that couldn’t be crossed and had little sympathy for those who crossed them. No matter how many people think I am a warrior because of my years on Wall Street, I know that the real warrior, the real beast, lives within James.