Cryptonomicon

Chapter 31 DILIGENCE

Maps of Southeast Asia are up on the walls, and even covering the windows, lending a bunkerlike ambience to Avi's hotel room. Epiphyte Corp. has assembled for its first full-on shareholder's meeting in two months. Avi Halaby, Randy Waterhouse, Tom Howard, Eberhard Föhr, John Cantrell, and Beryl Hagen crowd into the room and pillage the minibar for snacks and soft drinks. Some of them sit on the bed. Eberhard sits barefoot and crosslegged on the floor with his laptop up on a footstool. Avi remains standing. He crosses his arms and leans back, eyes closed, against the endangered-mahogany doors of his entertainment center. He is wearing a brilliantly laundered white shirt, so freshly and heavily starched that it still cracks when he moves. Until fifteen minutes ago he was wearing a t-shirt he hadn't taken off his body for forty-eight hours.

Randy thinks for a minute that Avi may have fallen asleep in the unorthodox standing position. But “Look at that map,” Avi says suddenly, in a quiet voice. He opens his eyes and swivels them in their sockets towards same, not wasting precious energy by turning his head. “Singapore, the southern tip of Taiwan, and the northernmost point of Australia form a triangle.”

“Avi,” says Eb solemnly, “any three points form a triangle.” Generally they don't look to Eberhard to leaven the proceedings with humor, but a chuckle passes around the room, and Avi grins—not so much because it's funny as because it's evidence of good morale.

“What's in the middle of the triangle?”

Everyone looks again. The correct answer is a point in the middle of the Sulu Sea, but it's clear what Avi is getting at. “We are,” Randy says.

“That's correct,” Avi says. “Kinakuta is ideally situated to act as an electronic crossroads. The perfect place to put big routers.”

“You're talking shareholderese,” Randy warns.

Avi ignores him. “Really it makes a lot more sense this way.”

“What way?” Eb asks sharply.

“I've become aware that there are other cable people here. There is a group from Singapore and a consortium from Australia and New Zealand. In other words: we used to be the sole carriers into the Crypt. As of later today, I suspect we will be one of three.”

Tom Howard grins triumphantly: he works in the Crypt, he probably knew before anyone. Randy and John Cantrell exchange a look.

Eb sits up stiffly. “How long have you known about this?” he asks, Randy sees a look of annoyance flash across Beryl's face. She does not like being probed.

“Would the rest of you excuse Eb and me for a minute?” Randy says, getting to his feet.

Dr. Eberhard Föhr looks startled, then gets up and follows Randy out of the room. “Where are we going?”

“Leave your laptop,” Randy says, escorting him out into the hallway. “We're just going here.”

“Why?”

“It's like this,” Randy says, pulling the door closed but not letting it lock. “People like Avi and Beryl, who have been in business a lot, have this noticeable preference for two-person conversations—like the one you and I are having right now. Not only that, they rarely write things down.”

“Explain.”

“It's kind of an information theory thing. See, if worse comes to worst, and there is some kind of legal action—”

“Legal action? What are you talking about?”

Eb came from a small city near the border with Denmark. His father was a high school mathematics teacher, his mother an English teacher. His appearance would probably make him an outcast in his home town, but like many of the people who still live there, he believes that things should be done in a plain, open, and logical fashion.

“I don't mean to alarm you,” Randy says, “I'm not implying that any such thing is happening, or about to. But America being the way it is right now, you'd be amazed how often business ventures lead to lawsuits. When that happens, any and all documents are disclosable. So people like Avi and Beryl never write anything down that they wouldn't want to see in open court. Furthermore, anyone can be asked, under oath, to testify about what happened. That's why two-person conversations, like this one, are best.”

“One person's word against another. I understand this.”

“I know you do.”

“We should anyway have been discreetly told.”

“The reason that Avi and Beryl didn't tell us about this until now was that they wanted to work out the problem face-to-face, in two-person conversations. In other words, they did it to protect us—not to hide anything from us. Now they are formally presenting us with the news.”

Eberhard is no longer suspicious. Now he is irked, which is worse. Like a lot of techies, he can become obstreperous when he decides that others are not being logical. Randy holds up his hands, palms out, in surrender.

“I stipulate that this does not make sense,” Randy says.

Eb glares into the distance, not mollified.

“Will you agree with me that the world is full of irrational people, and crazy situations?”

“Jaaaa—” Eb says guardedly.

“If you and I are going to hack and get paid for it, people have to hire us, right?”

Eb considers it carefully. “Yes.”

“That means dealing with those people, at some level, unpleasant as it may be. And accepting a whole lot of other nonsense, like lawyers and PR people and marketroids. And if you or I tried to deal with them, we would go out of our minds. True?”

“Most likely, yes.”

“It is good, then, that people like Avi and Beryl have come into existence, because they are our interface.” An image from the Cold War comes into Randy's head. He reaches out with both hands and gropes in the air. “Like those glove boxes that they use to handle plutonium. See?”

Eberhard nods. An encouraging sign.

“But that doesn't mean that it's going to be like programming computers. They can only filter and soften the irrational nature of the world beyond, so Avi and Beryl may still do things that seem a little crazy.”

Eb has been getting a more and more faraway look in his eyes. “It would be interesting to approach this as a problem in information theory,” he announces. “How can data flow back and forth between nodes in an internal network”—Randy knows that by this Eb means people in a small corporation—“but not exist to a person outside?”

“What do you mean, not exist?”

“How could a court subpoena a document if, from their reference frame, it had never existed?”

“Are you talking about encrypting it?”

Eb looks slightly pained by Randy's simple-mindedness. “We are already doing that. But someone could still prove that a document, of a certain size, had been sent out at a certain time, to a certain mailbox.”

“Traffic analysis.”

“Yes. But what if one jams it? Why couldn't I fill my hard drive with random bytes, so that individual files would not be discernible? Their very existence would be hidden in the noise, like a striped tiger in tall grass. And we could continually stream random noise back and forth to each other.”

“That would be expensive.”

Eberhard waves his hand dismissively. “Bandwidth is cheap.”

“That is more an article of faith than a statement of fact,” Randy says, “but it might be true in the future.”

“But the rest of our lives will happen in the future, Randy, so we might as well get with the program now.”

“Well,” Randy says, “could we continue this discussion later?”

“Of course.”

They go back into the room. Tom, who has spent the most time here, is saying: “The five-footers with yellowish-brown spots on an aqua background are harmless and make great pets. The six-footers with brownish-yellow spots on a turquoise background kill you with a single bite, in ten minutes, unless you commit suicide in the meantime to escape the intolerable pain.”

This is all a way of letting Randy and Eb know that the others have not been discussing business while they were out of the room.

“Okay,” Avi says, “the upshot is that the Crypt is going to be potentially much bigger than we thought at first, so this is good news. But there is one thing that we have to deal with.” Avi has known Randy forever, and knows that Randy won't really be bothered by what is to come.

All eyes turn towards Randy, and Beryl picks up the thread. She has arrogated to herself the role of worrying about people's feelings, since the other people in the company are so manifestly unqualified, and she speaks regretfully. “The work Randy's been doing in the Philippines, which is very fine work, is no longer a critical part of this corporation's activities.”

“I accept that,” Randy says. “Hey, at least I got my first tan in ten years.”

Everyone seems immediately relieved that Randy is not pissed off.

Tom, typically, gets right to brass tacks: “Can we pull out of our relationship with the Dentist? Just make a clean break?”

The rhythm of the conversation is abruptly lost. It's like a power failure in a discotheque.

“Unknown,” Avi finally says. “We looked at the contracts. But they were written by the Dentist's lawyers.”

“Aren't some of his partners lawyers?” Cantrell asks.

Avi shrugs impatiently, as if that's not the half of it. “His partners. His investors. His neighbors, friends, golfing buddies. His plumber is probably a lawyer.”

“The point being that he is famously litigious,” Randy says.

“The other potential problem,” Beryl says, “is that, if we did find a way to extract ourselves from the deal with AVCLA, we would then lose the short-term cash flow that we were counting on from the Philippines network. The ramifications of that turn out to be uglier than we had expected.”

“Damn!” Randy says, “I was afraid of that.”

“What are the ramifications?” Tom says, hewing as ever to the bottom line.

“We would have to raise some more money to cover the shortfall,” Avi says. “Diluting our stock.”

“Diluting it how much?” John asks.

“Below fifty percent.”

This magic figure touches off an epidemic of sighing, groaning and shifting around among the officers of Epiphyte Corp., who collectively hold over fifty percent of the company's stock. As they work through the ramifications in their heads, they begin to look significantly at Randy.

Finally Randy stands, and holds out his hands as if warding them off. “Okay, okay, okay,” he says. “Where does this take us? The business plan states, over and over, that the Philippines network makes sense in and of itself—that it could be spun off into an independent business at any time and still make money. As far as we know, that's still true, right?”

Avi thinks this over before issuing the carefully engineered statement:

“It is as true as it ever was.”

This elicits a titter, and a bit of sarcastic applause, from the others. Clever Avi! Where would we be without him?

“Okay,” Randy says. “So if we stick with the Dentist—even though his project is now irrelevant to us—we hopefully make enough money that we don't need to sell any more stock. We can retain control over the company. On the other hand, if we break our relationship with AVCLA, the Dentist's partners start to hammer us with lawsuits—which they can do at virtually no cost, or risk. We get mired in court in L.A. We have to fly back there and testify and give depositions. We spend a ton of money on lawyers.”

“And we might even lose,” Avi says.

Everyone laughs.

“So we have to stay in,” Randy concludes. “We have to work with the Dentist whether we want to or not.”

No one says anything.

It's not that they disagree with Randy; on the contrary. It's just that Randy is the guy who's been doing the Philippines stuff, and who is going to end up handling this unfortunate situation. Randy's going to take all the force of this blow personally. It is better that he volunteer than that it be forced on him. He is volunteering now, loudly and publicly, putting on a performance. The other actors in the ensemble are Avi, Beryl, Tom, John, and Eb. The audience consists of Epiphyte Corp.'s minority shareholders, the Dentist, and various yet-to-be-empaneled juries. It is a performance that will never come to light unless someone files a lawsuit against them and brings them all to the witness box to recount it under oath.

John decides to trowel it on a little thicker. “AVCLA's financing the Philippines on spec, right?”

“Correct,” Avi says authoritatively, playing directly to the hypothetical juries-of-the-future. “In the old days, cable-layers would sell capacity first to raise capital. AVCLA's building it with their own capital. When it's finished, they'll own it outright, and they'll sell the capacity to the highest bidder.”

“It's not all AVCLA's money—they're not that rich,” Beryl says. “They got a big wad from NOHGI.”

“Which is?” Eb asks.

“Niigata Overseas Holding Group Inc.,” three people say in unison.

Eb looks baffled.

“NOHGI laid the deep-sea cable from Taiwan to Luzon,” Randy says.

“Anyway,” John says, “my point is that since the Dentist is wiring the Philippines on spec, he is highly exposed. Anything that delays the completion of that system is going to cause him enormous problems. It behooves us to honor our obligations.”

John is saying to the hypothetical jury in Dentist v. Epiphyte Corp.: we carefully observed the terms of our contract with AVCLA.

But this is not necessarily going to look so good to the hypothetical jury in the other hypothetical minority shareholder lawsuit, Springboard Group v. Epiphyte Corp. So Avi hastens to add, “As I think we've established, through a careful discussion of the issues, honoring our obligations to the Dentist is part and parcel of our obligation to our own shareholders. These two goals dovetail.”

Beryl rolls her eyes and heaves a deep sigh of relief.

“Let us therefore go forth and wire the Philippines,” Randy says.

Avi addresses him in formal tones, as if his hand were resting, even now, on a Gideon Bible. “Randy, do you feel that the resources allotted to you are sufficient for you to meet our contractual obligations to the Dentist?”

“We need to have a meeting about that,” Randy says.

“Can it wait until after tomorrow?” Avi says.

“Of course. Why shouldn't it?”

“I have to use the bathroom,” Avi says.

This is a signal that Avi and Randy have used many times in the past. Avi gets up and goes into the bathroom. A moment later, Randy says, “Come to think of it…” and follows him in there.

He is startled to find that Avi is actually pissing. On the spur of the moment, Randy unzips and starts pissing right along with him. It doesn't occur to him how remarkable this is until he's well into it.

“What's up?” Randy asks.

“I went down to the lobby to change money this morning,” Avi says, “and guess who came stalking into the hotel, fresh from the airport?”

“Oh, shit,” Randy says.

“The Dentist himself.”

“No yacht?”

“The yacht's following him.”

“Did he have anyone with him?”

“No, but he might later.”

“Why is he here?”

“He must have heard.”

“God. He's the last guy I want to run into tomorrow.”

“Why? Is there a problem?”

“Nothing I can put my finger on,” Randy says. “Nothing dramatic.”

“Nothing that, if it came to light later, would make you look negligent?”

“I don't think so,” Randy says. “It's just that this Philippines thing is complicated and we need to talk about it.”

“Well, for God's sake,” Avi says, “if you run into the Dentist tomorrow, don't say anything about your work. Keep it social.”

“Got it,” Randy says, and zips up. But what he's really thinking is: why did I waste all those years in academia when I could have been doing great shit like this?

Which then reminds him of something: “Oh, yeah. Got a weird e-mail.”

Avi immediately says “From Andy?”

“How'd you guess?”

“You said it was weird. Did you really get e-mail from him?”

“I don't really know who it was from. Probably not Andy. It wasn't weird in that way.”

“Did you respond to it?”

“No. But dwarf@siblings.net did.”

“Who's that? Siblings.net is the system you used to administer, right?”

“Yeah. I still have some privileges there. I created a new account there, name of dwarf, which can't be traced to me. Sent anonymous e-mail back to this guy telling him that until he proves otherwise, I'm assuming he is an old enemy of mine.”

“Or a new one.”