Thames Estuary’s SPAC had been filing its paperwork. If you weren’t paying close attention, you’d think that they were coloring inside the lines. Certainly, the average schmucks who staked it with the collateral for its Wall Street loans probably thought that everything was fine. If you bought ten ten-dollar shares then and now they’re trading at twenty dollars, you’re going to be smug and happy about your extra hundred dollars, but not so obsessed that you’re going to pore over those boring-ass SEC forms in its shareholder portal.
Just in case you were curious, the fact that the disclosures were all broken up into about a hundred files might deter you. Not me: I know the magic of wget, a decades-old Unix utility that can crawl a page and download everything linked off it. Took about a minute and then I had a hundred PDFs on my desktop and I was opening them quickly, categorizing them and saving them into subfolders.
Whoever had constructed those files was a good sleight-of-hand artist. The material disclosures were buried in extremely long, flowery, overwrought narrative statements about the company’s probity and vision, running to multiple pages.
I found the intelligence that the Mississippi Department of Corrections contract was the subject of a lawsuit in a single sentence on page 11 of one such document, sandwiched between a disclosure of the “risk” that crime rates were falling in Maine and that the contract they’d inherited did not have a minimum-head-count guarantee and the “risk” that grain futures were trending high and that this might shave sixteen basis points off the projected profits from their food-preparation division.
Not that these weren’t interesting disclosures. The caveat about the lack of a Maine head-count guarantee implied that they did have a minimum-occupancy guarantee in other states—that is, they would get paid the same whether their cells were full or empty, meaning that the state had a perverse incentive to arrest and imprison more people. After all, they were going to pay for those incarcerations no matter what.
The news about wheat futures tying in to their profit projections was also interesting, but only insofar as it confirmed that the whole enterprise was being steered by stone finance freaks, the kind of people who were more interested in placing bets on crop yields than rehabilitating the army of captive human beings who were utterly at their mercy.
But that lawsuit was more interesting still. I handed over my credit card to PACER, the federal court records site, and paid ten cents a page to download all the filings. Fifty bucks later, I was reading about all the ways that the Mississippi contract was deficient, including the fact that it came with a nondisclosure agreement, meaning that the people of the Great State of Mississippi couldn’t actually find out how deficient it was.
Fortunately for those people, a blundering state senator on the Corrections Committee had posted the contract to his Facebook page, thinking that he’d marked it private to a friend, along with an exhortation to buy stock in Thames Estuary and dump stock in its main rival, Corrections Corporation of America. No one told Senator Kris Tac that the file was hanging out there for all to read until Biloxi Bill, the anonymous blogger behind the Biloxi Times, published a scathing, scatological analysis of the contract, which got picked up by The Clarion-Ledger in Jacksonville, whence the senator hailed.
The senator quickly deleted the Facebook post, but the file was still live on biloxitimes.blogspot.com. The senator sent a copyright complaint to Google, which owned Blogspot, and the file came down, but just as quickly it went back up, accompanied by an outraged article from Biloxi Bill. That prompted the senator to contact the Mississippi Bureau of Investigation, insisting that they uncover Biloxi Bill’s true identity on the grounds that he was engaged in “espionage.”
Unfortunately for Senator Tac, this demand was also inadvertently posted to his Facebook wall rather than being privately relayed to the head of the MBI Executive Protection Division. Once again, the leak was published on the Biloxi Times, and once again, the senator sent a takedown notice to Google, which once again caved—but not before the Internet Archive got a snapshot of the page for its Wayback Machine.
I found the takedown Senator Tac sent to the Internet Archive in the Lumen database, as well as the stiffly worded reply the Internet Archive’s general counsel sent back to the senator, reminding him that DMCA 512(f) provided for “damages, including costs and attorney’s fees,” when takedown notices were “knowingly and materially” misrepresentations. The Lumen database didn’t have a follow-up notice from the senator, so I guess he got the message.
The lawsuit didn’t have anything to do with Scott’s commission, but it was a loose end, and I’d learned a lot from pulling on loose ends. The parties to the suit had already exchanged documents and gone through a protracted wrangle over discovery, and PACER duly coughed up a hundred dollars’ worth of internal memos and balance sheets from inside Thames Estuary. These were heavily redacted—there were whole black pages where the only unredacted element was the page number in the top right corner—but I printed them out and hole-punched them and stuck them in a fat binder that I took to the park with a red pen and a box of post-it index tabs.
It was a nice, brisk autumn day, a marked contrast with the mini heat wave we’d experienced the week before. There were cavorting dogs and frisbee players to keep me company, and a couple of panhandlers came and politely inquired about my reading material and could I spare a few dollars. I gave them the money and told them I was doing my homework for an accounting course, a surefire way to head off any further nosy queries.
The litigants were mostly interested in piercing the corporate veil—that is, figuring out who they were suing. Thames Estuary Ltd.—the public company—had a dual-share structure; the majority of voting shares were owned by Thames Estuary Capital LLC, a Bahamas company, and that company’s owners were a secret protected by the legendary Bahamian discretion about the origin and destination of vast capital pools.
But the litigants thought that the real money might be wrapped up in the state senator’s affairs in more ways, and they were hoping to show that these shadowy figures had corrupted Mississippi politics in many high-priced ways, which would give all Mississippi taxpayers standing to sue to recover the additional costs they’d borne in higher taxes and the necessity of paying cash for public services that were never delivered. That would make for a big, fat class-action suit.
The discovery documents were a bureaucratic game of Go Fish: “Give us all your documents related to dealings between the beneficial owners of Thames Estuary LLC and this state agency.” “Go fish.” “How about this agency?” “Go fish.” “What about this senator? This judge? This retired assemblyman?” Go fish, go fish, go fish.
But they were careful, and they’d done the work, cross-referencing every agency and public official in a multitiered, floridly ramified series of requests that had the telltale signs of a giant database merge.
I checked and found that they’d filed an identical set of requests from the other side, using the Mississippi Public Records Act to demand any correspondence by any state agency or official with Thames Estuary.
I liked these litigants. This was stultifyingly dull work, and even with automation tools, it probably cost a fortune just in paralegal fees, hitting each of those agencies and offices through their idiosyncratic portals and procedures.
But they hit pay dirt. The public records requests revealed documents that had been suppressed in discovery, while the discovery documents found the dirty laundry that the state had hoped to keep out of the public eye. The judge was appropriately outraged about the discovery failures, and the state ombudsman refused to be outdone, publicly excoriating the foot-dragging state agencies in fluent Old High Dudgeon.
From what I could see, the plaintiffs were steaming toward a hell of a suit, likely to get certified for their class action, with a big payday for the law firm involved and a bunch of three-dollar checks for every Mississippian. Most of them wouldn’t get cashed, but the law firm’s fees would run to low seven figures. Good for them.
Good for me, too. They’d taken a weed-whacker to the tangled back end of Thames Estuary and made a hell of a lot of loose threads. As noted, loose threads are something of a specialty of mine.
Being able to cross-reference the public docs and the corporate docs was so useful here: both sets were heavily redacted, but each side redacted different passages. I paid some Mechanical Turk workers to compare these matching docs and reverse those redactions. I started with the names and businesses they uncovered, reasoning that anything my target wanted kept secret was something I should look at closely.
Cherrystone Holdings was a Nassau company. Its officers’ names were not a matter of public record, but luckily, one of those officers had signed an email to a Mississippi Department of Corrections accounts payable officer with his name and title: Aldo Jaffe, Chief Operating Officer.
Jaffe was on LinkedIn, and while he didn’t list Cherrystone Holdings in his CV, he did list a half dozen other companies, and I was able to find their boards, which were all nearly identical—only the secretaries differed, and a quick search confirmed that they were contractors who specialized in Bahamian corporate compliance.
One name jumped out from all those boards—Lionel Coleman Jr., who was either the CEO or COO of every single one of them.
Hello, Junior.