Enjoy this free chapter from Not a Penny More, Not a Penny Less:
MAKING A MILLION legally has always been difficult. Making a million illegally has always been a little easier. Keeping a million when you have made it is perhaps the most difficult of all. Henryk Metelski was one of those rare men who had managed all three. Even if the million he had made legally came after the million he had made illegally, Metelski was still a yard ahead of the others: he had managed to keep it all.
Henryk Metelski was born on the Lower East Side of New York on May 17th, 1909, in a small room that already slept four children. He grew up through the Depression, believing in God and one meal a day. His parents were from Warsaw and had emigrated from Poland at the turn of the century. Henryk’s father was a baker by trade and had soon found a job in New York, where immigrant Poles specialised in baking black rye bread and running small restaurants for their countrymen. Both parents would have liked Henryk to be an academic success, but he was never destined to become an outstanding pupil at his high school. His natural gifts lay elsewhere. A cunning, smart little boy, he was far more interested in the control of the underground school market in cigarettes and liquor than in stirring tales of the American Revolution and the Liberty Bell. Little Henryk never believed for one moment that the best things in life were free, and the pursuit of money and power came as naturally to him as the pursuit of a mouse to a cat.
When Henryk was a pimply and flourishing fourteen-year-old, his father died of what we now know to be cancer. His mother outlived her husband by no more than a few months, leaving the five children to fend for themselves. Henryk, like the other four, should have gone into the district orphanage for destitute children, but in the mid-1920s it was not hard for a boy to disappear in New York – though it was harder to survive. Henryk became a master of survival, a schooling which was to prove very useful to him in later life.
He knocked around the Lower East Side with his belt tightened and his eyes open, shining shoes here, washing dishes there, always looking for an entrance to the maze at the heart of which lay wealth and prestige. His first chance came when his room-mate Jan Pelnik, a messenger boy on the New York Stock Exchange, put himself temporarily out of action with a sausage garnished with salmonella. Henryk, deputed to report his friend’s mishap to the Chief Messenger, upgraded food-poisoning to tuberculosis, and talked himself into the ensuing vacancy. He then changed his room, donned a new uniform, lost a friend, and gained a job.
Most of the messages Henryk delivered during the early twenties read ‘Buy’. Many of them were quickly acted upon, for this was a boom era. He watched men of little ability make fortunes while he remained nothing more than an observer. His instincts directed him towards those individuals who made more money in a week on the Stock Exchange than he could hope to make in a lifetime on his salary.
He set about learning how to master the way the Stock Exchange operated, he listened to private conversations, opened sealed messages and found out which closed company reports to study. By the age of eighteen he had four years’ experience of Wall Street: four years which most messenger boys would have spent simply walking across crowded floors, delivering little pink pieces of paper; four years which to Henryk Metelski were the equivalent of a Master’s Degree from the Harvard Business School. He was not to know that one day he would lecture to that august body.
One morning in July 1927 he was delivering a message from Halgarten & Co, a well-established brokerage house, making his usual detour via the washroom. He had perfected a system whereby he could lock himself into a cubicle, study the message he was carrying, decide whether the information was of any value to him and, if it was, immediately telephone Witold Gronowich, an old Pole who managed a small insurance firm for his fellow countrymen. Henryk reckoned to pick up an extra $20 to $25 a week for the inside knowledge he supplied. Gronowich, in no position to place large sums on the market; never let any of the leaks lead back to his young informant.
Sitting on the lavatory seat, Henryk began to realise that this time he was reading a message of considerable importance. The Governor of Texas was about to grant the Standard Oil Company permission to complete a pipeline from Chicago to Mexico, all other public bodies involved having already agreed to the proposal. The market was aware that the company had been trying to obtain this final permission for nearly a year, but the general view was that the Governor would turn it down. The message was to be passed direct to John D. Rockefeller’s broker, Tucker Anthony, immediately. The granting of this permission to build a pipeline would open up the entire North to a ready supply of oil, and that could only mean increased profits. It was obvious to Henryk that Standard Oil stock must rise steadily on the market once the news had broken, especially as Standard Oil already controlled 90 per cent of the oil refineries in America.
In normal circumstances Henryk would have sent on this information direct to Mr Gronowich, and was about to do so when he noticed a rather overweight man, who was also leaving the washroom, drop a piece of paper. As there was no one else about at the time, Henryk picked it up and retreated back into his private cubicle, thinking that at best it would reveal another piece of information. In fact, it was a cheque for $50,000 made out to cash from a Mrs Rose Rennick.
Henryk thought quickly, and not on his feet. He left the washroom at speed and was soon standing outside on Wall Street itself. He made his way to a small coffee-shop on Rector Street and sat there pretending to drink a Coca-Cola while he carefully worked out his plan. He then proceeded to act on it.
First, he cashed the cheque at a branch of the Morgan Bank on the south-west side of Wall Street, knowing that in his smart uniform as a messenger at the Exchange he would easily pass as a carrier for some distinguished firm. He then returned to the Exchange and acquired from a floor broker 2,500 Standard Oil shares at $19 7/8, leaving himself $126.61 change after brokerage charges. He placed the $126.61 in a Checking Account with the Morgan Bank. Then, waiting in tense anticipation for an announcement from the Governor’s office, he put himself through the motions of a normal day’s work, too preoccupied with Standard Oil even to make a detour via the washroom with the messages he carried.
No announcement came. Henryk could not know that the news was being held up until the Exchange had officially closed at 3 pm in order to allow the Governor himself to buy shares anywhere and everywhere he could lay his grubby hands on them. Henryk went home that night petrified that he had made a disastrous mistake. He had visions of losing his job and everything he had built up over the past four years. Perhaps he would even end up in jail.
He was unable to sleep that night and became steadily more restless in his small open-windowed but airless room. At 1 am he could stand the uncertainty no longer, so he jumped out of bed, shaved, dressed and took a subway to Grand Central Station. From there he walked to Times Square where with trembling hands he bought the first edition of the Wall Street Journal. For a moment he couldn’t take in the news, although it was shrieking at him in banner headlines:
GOVERNOR GRANTS OIL PIPELINE RIGHTS TO ROCKEFELLER
and a secondary headline:
HEAVY TRADING EXPECTED IN STANDARD OIL SHARES
Dazed, Henryk walked to the nearest all-night café, on West 42nd Street, and ordered a large hamburger and French fries, which he covered in ketchup and nibbled at like a man eating his last breakfast before facing the electric chair, rather than his first on the way to fortune. He read the full details of Rockefeller’s coup on page one, which spread over to page fourteen, and by 4 am he had bought the first three editions of the New York Times and the first two editions of the Herald Tribune. The lead story was the same in each. Henryk hurried home, giddy and elated, and changed into his uniform. He arrived at the Stock Exchange at 8 am and went through the motions of a day’s work, thinking only of how to carry out the second part of his plan.
When the Stock Exchange opened officially, Henryk went over to the Morgan Bank and requested a loan of $50,000 against the security of his 2,500 Standard Oil shares, which had opened that morning at $21¼. He placed the loan in his Checking Account and instructed the bank to issue him a draft for the $50,000 to be made out to Mrs Rose Rennick. He left the bank and looked up the address and telephone number of his unwitting benefactor.
Mrs Rennick, a widow who lived off the investments left by her late husband, lived in a small apartment on 62nd Street, which Henryk knew to be one of the most fashionable parts of New York. The call from a Henryk Metelski, asking to see her on an urgent private matter, came as something of a surprise to her, but a final mention of Halgarten & Co. gave her a little more confidence and she agreed to see him at the Waldorf-Astoria at 4 pm that afteroon.
Henryk had never been inside the Waldorf-Astoria, but after four years on the Stock Exchange there were few prominent hotels or restaurants he had not heard mentioned in other people’s conversations. He realised that Mrs Rennick was more likely to have tea with him there than to see a man with a name like Henryk Metelski in her own apartment, especially as his Polish accent was more pronounced over the telephone than it was face to face.
As Henryk stood in the thickly carpeted lobby of the Waldorf, he blushed at his sartorial naïveté. Imagining that everybody was staring at him, he buried his short, amply-covered frame in an elegant chair in the Jefferson Room. Some of the other patrons of the Waldorf were amply covered too, but Henryk felt that Pommes de Terre Maître d’Hôtel were more likely to have caused their obesity than French fries. Vainly wishing he had put a little less grease on his black wavy hair and a little more on his down-at-heel shoes, he scratched nervously at an irritating pustule on the side of his mouth and waited. His suit, in which he felt so assured and prosperous among his friends, was shiny, skimpy, cheap and loud. He did not blend in with the décor, still less with the patrons of the hotel, and, feeling inadequate for the first time in his life, he picked up a copy of the New Yorker, hid behind it, and prayed for his guest to arrive quickly. Waiters fluttered deferentially with instinctive superciliousness. One, he noticed, did nothing more than circle the tearoom delicately proffering lump sugar from silver tongs in a white-gloved hand: Henryk was enormously impressed.
Rose Rennick arrived a few minutes after four, accompanied by two small dogs and wearing an outrageously large hat. Henryk thought she looked over sixty, overweight, overmade-up and overdressed, but she had a warm smile and appeared to know everyone, as she moved from table to table, chatting to the regular Waldorf-Astoria set. Eventually reaching what she had rightly assumed to be Henryk’s table, she was rather taken aback, not only to find him so strangely dressed, but also looking even younger than his eighteen years.
Mrs Rennick ordered tea while Henryk recited his well-rehearsed story: there had been an unfortunate mistake with her cheque, which had been wrongly credited to his firm at the Stock Exchange on the previous day; his boss had instructed him to return the cheque immediately and to say how much they regretted the unfortunate error. Henryk then passed over the draft for $50,000, and added that he would lose his job if she insisted on taking the matter any further, as he had been entirely responsible for the mistake. Mrs Rennick had, in fact, only been informed of the missing cheque that morning and did not realise that it had been cashed, as it would have taken a few days to clear her account. Henryk’s perfectly genuine anxiety as he stumbled through his tale would have convinced a far more critical observer of human nature than Mrs Rennick. Readily she agreed to let the matter drop, only too pleased to have her money returned; as it was in the form of a draft from the Morgan Bank, she had lost nothing. Henryk breathed a sigh of relief and for the first time that day began to relax and enjoy himself. He even called for the waiter with the sugar and silver tongs.
After a respectable period of time had passed, Henryk explained that he must return to work, thanked Mrs Rennick for her co-operation, paid the bill and left. Outside on the street he whistled with relief. His new shirt was soaked in sweat (Mrs Rennick would have called it perspiration), but he was out in the open and could breathe freely again. His first major operation had been a success.
He stood on Park Avenue, amused that the venue for his confrontation with Mrs Rennick had been the Waldorf, the very hotel where John D. Rockefeller, the President of Standard Oil, had a suite. Henryk had arrived on foot and used the main entrance, while Mr Rockefeller had earlier arrived by subway and taken his private lift to the Waldorf Towers. Although few New Yorkers were aware of it, Rockefeller had had his own private station built fifty feet below the Waldorf-Astoria to save him travelling the eight blocks to Grand Central Station, there being no stop between there and 125th Street. (The station remains to this day, but as no Rockefellers live at the Waldorf-Astoria, the train never stops there.) While Henryk had been discussing his $50,000 with Mrs Rennick, Rockefeller had been considering an investment of $5,000,000 with Andrew W. Mellon, President Coolidge’s Secretary of the Treasury, fifty-seven floors above him.
The next morning Henryk returned to work as usual. He knew he had only five days’ grace to sell the shares and clear his debt with the Morgan Bank and the stockbroker, as an account on the New York Stock Exchange runs for five business days or seven calendar days. On the last day of the account the shares were standing at $23¼. He sold at $23 1/8, and cleared his overdraft of $49,625 and, after expenses, realised a profit of $7,490 which he left deposited with the Morgan Bank.
Over the next three years, Henryk stopped ringing Mr Gronowich, and started dealing for himself, in small amounts to begin with, but growing larger as he gained in experience and confidence. Times were still good, and while he didn’t always make a profit, he had learnt to master the occasional bear market as well as the more common bull. His system in the bear market was to sell short – not a practice considered to be entirely ethical in business. He soon mastered the art of selling shares he didn’t own in expectation of a subsequent fall in their price. His instinct for market trends refined as rapidly as did his taste for clothes, and the guile learnt in the backstreets of the Lower East Side always stood him in good stead. Henryk soon discovered that the whole world was a jungle – sometimes the lions and tigers wore suits.
When the stock market collapsed in 1929 Henryk had turned his $7,490 into $51,000 of liquid assets, having sold on every share he possessed the day after the Chairman of Halgarten & Co jumped out of one of the Stock Exchange windows. Henryk had got the message. With his newly acquired income he had moved into a smart apartment in Brooklyn and started driving a rather ostentatious red Stutz. Henryk realised at an early age that he had come into the world with three main disadvantages – his name, background and impecunity. The money problem was solving itself, and now the time had come to expunge the other two. To that end, he had made an application to change his name by court order to Harvey David Metcalfe. When the application was granted, he ceased all further contact with his friends from the Polish community, and in May 1930 he came of age with a new name, new background, and very new money.
It was later that year at a football game that he first met Roger Sharpley and discovered that the rich have their problems too. Sharpley, a young man from Boston, had inherited his father’s company, which specialised in the import of whisky and the export of furs. Educated at Choate and later in Dartmouth College, Sharpley had all the assurance and charm of the Boston set, so often envied by his fellow countrymen. He was tall and fair, looked as if he came from Viking stock, and with his air of the gifted amateur, found most things came easily to him – especially women. He was in every way a total contrast to Harvey. Although they were poles apart, the contrast acted like a magnet and attracted the one to the other.
Roger’s only ambition in life was to become an officer in the Navy, but after graduating from Dartmouth he had had to return to the family business because of his father’s ill-health. He had only been with the firm a few months when his father died. Roger would have liked to have sold Sharpley & Son to the first bidder, but his father had made a codicil to his will to the effect that if the firm were sold before Roger’s fortieth birthday (that being the last day one can enlist for the US Navy), the money gained from the sale would be divided equally among his other relatives.
Harvey gave Roger’s problem considerable thought, and after two lengthy sessions with a skilful New York lawyer, suggested a course of action to Roger: Harvey would purchase 49 per cent of Sharpley & Son for $100,000 and the first $20,000 profit each year. At the age of forty, Roger could relinquish the remaining 51 per cent for a further $100,000. The Board would consist of three voting members – Harvey, Roger and one nominated by Harvey, giving him overall control. As far as Harvey was concerned, Roger could join the Navy and need only attend the annual shareholders’ meeting.
Roger could not believe his luck. He did not even consult anyone at Sharpley & Son, knowing only too well that they would try to talk him out of it. Harvey had counted on this and had assessed his quarry accurately. Roger gave the proposition only a few days’ consideration before allowing the legal papers to be drawn up in New York, far enough away from Boston to be sure the firm did not learn what was going on. Meanwhile, Harvey returned to the Morgan Bank, where he was now looked upon as a man with a future. Since banks deal in futures, the manager agreed to help him in his new enterprise with a loan of $50,000 to add to his own $50,000, enabling Harvey to acquire 49 per cent of Sharpley & Son, and become its fifth President. The legal documents were signed in New York on October 28th, 1930.
Roger left speedily for Newport, Rhode Island, to commence his Officers Training programme in the US Navy. Harvey left for Grand Central Station to catch the train for Boston. His days as a messenger boy on the New York Stock Exchange were over. He was twenty-one years of age and the President of his own company.
What looked like disaster to most, Harvey could always turn into triumph. The American people were still suffering under Prohibition, and although Harvey could export furs, he could no longer import whisky. This had been the main reason for the fall in the company profits over the past decade. But Harvey soon found that with a little bribery, involving the Mayor of Boston, the Chief of Police and the Customs officials on the Canadian border, plus a payment to the Mafia to ensure that his products reached the restaurants and speak-easies, somehow the whisky imports went up rather than down. Sharpley & Son lost its more respectable and long-serving staff, and replaced them with animals better-suited to Harvey Metcalfe’s particular jungle.
From 1930 to 1933 Harvey went from strength to strength, but when Prohibition was finally lifted by President Roosevelt after overwhelming public demand, the excitement went with it, Harvey allowed the company to continue to deal in whisky and furs while he branched out into new fields. In 1933 Sharpley & Son celebrated a hundred years in business. In three years Harvey had lost 97 years of goodwill and doubled the profits. It took him five years to reach his first million and only another four to double the sum again, which was when he decided the time had come for Harvey Metcalfe and Sharpley & Son to part company. In twelve years from 1930 to 1942, he had built up the profits from $30,000 to $910,000. He sold the company in January 1944 for $7,000,000, paying $100,000 to the widow of Captain Roger Sharpley of the US Navy and keeping $6,900,000 for himself.
Harvey celebrated his thirty-fifth birthday by buying at a cost of $4 million a small, ailing bank in Boston called the Lincoln Trust. At the time it boasted a profit of approximately $500,000 a year, a prestigious building in the centre of Boston and an unblemished and somewhat boring reputation. Harvey intended to change both its reputation and its balance sheet. He enjoyed being the President of a bank – but it did nothing to improve his honesty. Every dubious deal in the Boston area seemed to emanate from the Lincoln Trust, and although Harvey increased the bank’s profits to $2 million per annum during the next five years, his personal reputation was never in credit.
Harvey met Arlene Hunter in the winter of 1949. She was the only daughter of the President of the First City Bank of Boston. Until then Harvey had never taken any real interest in women. His driving force had always been making money, and although he considered the opposite sex a useful relaxation in his free time, on balance he found them an inconvenience. But having now reached what the glossy magazines referred to as middle age and having no heir to leave his fortune to, he calculated that it was time to find a wife who would present him with a son. As with everything else that he had wanted in his life, he considered the problem very carefully.
Harvey had first run into Arlene when she was thirty-one: quite literally, when she had backed her car into his new Lincoln. She could not have been a greater contrast to the short, uneducated, overweight Pole. She was nearly six feet tall, slim and although not unattractive, she lacked confidence and was beginning to think that marriage had passed her by. Most of her school friends were already on their second divorces and felt rather sorry for her. Harvey’s extravagant ways came as a welcome change after her parents’ prudish discipline, which she often felt was to blame for her awkwardness with men of her own age. She had only had one affair – a disastrous failure, thanks to her total innocence – and until Harvey arrived, no one had seemed to be willing to give her a second chance. Arlene’s father did not approve of Harvey, and showed it, which only made him more attractive to her. Her father had not approved of any of the men she had associated with, but on this occasion he was right. Harvey on the other hand realised that to marry the First City Bank of Boston with the Lincoln Trust could only be of long-term benefit to him, and with that in mind he set out, as he always did, to conquer. Arlene didn’t put up much of a battle.
Arlene and Harvey were married in 1951 at a wedding more memorable for those who were absent than those who attended. They settled into Harvey’s Lincoln home outside of Boston and very shortly afterwards Arlene announced she was pregnant. She gave Harvey a daughter almost a year to the day after their marriage.
They christened her Rosalie, and she became the centre of Harvey’s attention; his only disappointment came when a prolapse closely followed by a hysterectomy prevented Arlene from bearing him any more children. He sent Rosalie to Bennetts, the most expensive girls’ school in Washington, and from there she was accepted at Vassar to major in English. This even pleased old man Hunter, who had grown to tolerate Harvey and adore hs granddaughter. On gaining her degree, Rosalie continued her education at the Sorbonne, after a fierce disagreement with her father concerning the type of friends she was keeping, particularly the ones with long hair who didn’t want to go to Vietnam – not that Harvey had done much during the Second World War, except to cash in on every shortage. The final crunch came when Rosalie dared to suggest that morals were not to be decided only by length of hair or political views. Harvey missed her, but refused to admit the fact to Arlene.
Harvey had three loves in his life: the first was still Rosalie, the second was his paintings, and the third his orchids. The first had started the moment his daughter was born. The second was a love that had developed over many years and had been kindled in the strangest way. A client of Sharpley & Son was about to go bankrupt while still owing a fairly large sum of money to the company. Harvey got wind of it and went round to confront him, but the rot had already set in and there was no longer any hope of securing cash. Determined not to leave empty-handed, Harvey took with him the man’s only tangible asset – a Renoir valued at $10,000.
Harvey’s intention was to sell the picture quickly before it could be proved that he was a preferred creditor, but he became so entranced with the fine brushwork and the delicate pastel shades that his only desire was to own more. When he realised that pictures were not only a good investment, but that he actually liked them as well, his collection and his love grew hand in hand. By the early 1970s, Harvey had a Manet, two Monets, a Renoir, two Picassos, a Pissarro, a Utrillo, a Cézanne, as well as most of the recognised lesser names, and he had become quite a connoisseur of the Impressionist period. His one remaining desire was to possess a Van Gogh, and only recently he had failed to acquire L’Hôpital de St Paul à St Remy at the Sotheby-Parke Bernet Gallery in New York, when Dr Armand Hammer of Occidental Petroleum had outbid him – $1,200,000 had been just a little too much for Harvey.
Earlier, in 1966, he had failed to acquire Lot 49, Mademoiselle Ravoux, from Christie, Manson & Woods, the London art dealers; although the Rev. Theodore Pitcairn, representing the Lord’s New Church in Bryn Athyn, Pennsylvania, had pushed him over the top, he had only whetted his appetite further. The Lord giveth, and on that occasion the Lord had taken away. Although it was not fully appreciated in Boston, it was already recognised in the art world that Harvey had one of the finest Impressionist collections in the world, almost as widely admired as that of Walter Annenberg, President Nixon’s Ambassador to London who, like Harvey, had been one of the few people to build up a major collection since the Second World War.
Harvey’s third love was his prize collection of orchids, and he had three times been a winner at the New England Spring Flower Show in Boston, twice beating old man Hunter into second place.
Harvey now travelled to Europe once a year. He had established a successful stud in Kentucky and liked to see his horses run at Longchamp and Ascot. He also enjoyed watching Wimbledon, which he considered was still the greatest tennis tournament in the world. It amused him to do a little business in Europe at the same time, giving him the opportunity to make some more money for his Swiss bank account in Zürich. He did not need a Swiss account, but somehow he got a kick out of doing Uncle Sam. Although Harvey had mellowed over the years and cut down on his more dubious deals, he could never resist the chance to take a risk if he thought the reward was likely to be big enough. One such golden opportunity presented itself in 1964 when Her Majesty’s Government invited applications for exploration and production licences in the North Sea. At that time neither the British Government nor the civil servants involved had any idea of the future significance of North Sea oil, or the role it would eventually play in British politics. If the Government had known that in 1978 the Arabs would be holding a pistol to the heads of the rest of the world, and the British House of Commons would have eleven Scottish Nationalist Members of Parliament, it would surely have reacted in a totally different way.
On May 13th, 1964, the Secretary of State for Power laid before Parliament ‘Statutory Instrument – No. 708 – Continental Shelf – Petroteum’. Harvey read this particular document with great interest, thinking that it might well be a means of making an exceptional killing. He was particularly fascinated by Paragraph 4 of the document, which read:
Persons who are citizens of the United Kingdom and Colonies and are resident in the United Kingdom or who are bodies corporate incorporated in the United Kingdom may apply in accordance with these Regulations for:
(a) production licence; or,
(b) an exploration licence.
When he had studied the Regulations in their entirety, he had to sit back and think hard. Only a small amount of money was required to secure a production and exploration licence. As Paragraph 6 went on to point out:
(1) With every application for a production licence there shall be paid a fee of two hundred pounds with an additional fee of five pounds for every block after the first ten in respect whereof that application is made.
(2) With every application for an exploration licence there shall be paid a fee of twenty pounds.
Harvey couldn’t believe it. How easy it would be to use such a licence to create an impression of a vast enterprise! For a few hundred dollars he could be alongside such names as Shell, BP, Total, Gulf and Occidental.
Harvey went over the Regulations again and again, hardly believing that the British Government could release such potential for so small an investment. Only the application form, an elaborate and exacting document, now stood in his way. Harvey was not a British subject, none of his companies was British and he realised he would have problems of presentation. He decided that his application must therefore be backed by a British bank and that he would set up a company whose directors would win the confidence of the British Government.
With this in mind, early in 1964, he registered at Companies House in England a firm called Prospecta Oil, using Malcolm, Bottnick and Davis as his solicitors and Barclays Bank, who were already the Lincoln Trust’s representative in Europe, as his bankers. Lord Hunnisett became Chairman of the company and several distinguished public figures joined the Board, including two ex-Members of Parliament who had lost their seats when the Labour Party won the 1964 Election. Prospecta Oil issued 2,000,000 10-pence shares at one pound, which were all taken up for Harvey by nominees. He also deposited $500,000 in the Lombard Street branch of Barclays Bank.
Having thus created the front, Harvey then used Lord Hunnisett to apply for the licence from the British Government. The new Labour Government elected in October 1964 was no more aware of the significance of North Sea oil than the earlier Conservative administration. The Government’s requirements for a licence were a rent of £12,000 a year for the first six years, 12½ per cent revenue tax, and a further Capital Gains tax on profits; but as Harvey’s plan was to reap profits for himself rather than the company that presented no problems.
On May 22nd, 1965, the Minister of Power published in the London Gazette the name of Prospecta Oil among the fifty-two companies granted production licences. On August 3rd, 1965, Statutory Instrument No. 1531 allocated the actual areas. Prospecta Oil’s was 51° 50′ 00″ N: 2° 30′ 20″ E, a site adjacent to one of BP’s holdings.
Then Harvey sat back, waiting for one of the companies which had acquired North Sea sites to strike oil. It was a longish wait but Harvey was in no hurry, and not until June 1970 did BP make a big commercial strike in their Forties Field. BP had already spent over $1 billion in the North Sea and Harvey was determined to be one of the main beneficiaries. He was now on to another winner, and immediately set the second part of his plan in motion.
Early in 1972 he hired an oil rig which, with much flourish and advance publicity, he had towed out to the Prospecta Oil site. Having hired the rig on the basis of being able to renew the contract if he made a successful strike, he engaged the minimum number of workers allowed by the Government Regulations, and then proceeded to drill to 6,000 feet. After this drilling had been completed he released from the company’s employment all those involved, but told Reading & Bates, from whom he had rented the rig, that he would be requiring it again in the near future and therefore would continue to pay the rental.
Harvey then released Prospecta Oil shares on to the market at the rate of a few thousand a day for the next two months, all from his own stock, and whenever the financial journalists of the British Press rang to ask why these shares were steadily rising, the young public relations officer at Prospecta Oil’s city office would say, as briefed, that he had no comment to make at present but there would be a press statement in the near future; some newspapers put two and two together and made about fifteen. The shares climbed steadily from 10 pence to nearly £2 under the guidance of Harvey’s chief executive in Britain, Bernie Silverman, who, with his long experience of this kind of operation, was only too aware of what his boss was up to. Silverman’s main task was to ensure that nobody could show a direct connection between Metcalfe and Prospecta Oil.
In January 1974 the shares stood at £3. It was then that Harvey was ready to move on to the third part of his plan, using Prospecta Oil’s enthusiastic new recruit, a young Harvard graduate called David Kesler, as the fall-guy.