Memoirs of a child of the past century - 20. Chapter 20 (1985 to 1993) Per Angusta at Augusta

As I said in the Chapter 19, at the end of 1984 I got an unexpected proposal that made me completely change my plans.

I was invited to take control of a Swiss shipping company with headquarters in Zurich, and offices in Genoa, Italy. This proposal came from Georges P., the investor who had already helped me by financing several films acquired by Ideal Film.

I always had an excellent contact with my friend Georges. Our friendship went back to our childhood years during WWII... We first met in 1942 at the school where we were classmates. His family did not have many resources and he often suffered from hunger. We became very close friends and I invited him to eat at home. He remembered that time till today and in recognition of the past, he came to my rescue. So I shared with him my difficulties concerning Ideal Film.

Among his many activities, he managed various Swiss companies, owned by one of his many customers in Italy ,and used mainly to escape the Italian tax authorities. One of them, Orconsult Shipping ltd, owned several cargo (freighters) sailing under the Panamanian flag and carrying goods between ports in Italy and in the Middle East. These freighters were sailing through the Suez Canal and in the Persian Gulf, a dangerous area, given the conflict between Israel and the Gulf countries.

His clients, the ‘real' ship owners, needed a Swiss director who could play the role of the responsible owner. They needed someone whose profile corresponded to this function: with leadership skills, training in both technical and commercial areas, proficiency in Italian and English, and especially with military knowledge to be able to recognize the dangers faced by the freighters.

According to Georges, my profile corresponded exactly to that sought by his customers. I also had two additional advantages: I enjoyed the full confidence of Georges and I was immediately available. We went to Genoa and the interview with his Italian customers was quite positive. As my knowledge of Italian was not perfect, Georges put at my disposal one of his employees who took care of all the paperwork and had an additional task to teach me Italian.

My job was to follow the movements of the freighters directly through radio contacts, to receive daily reports from the captains and to intervene if necessary via a shipping agent company located in the port of Genoa.

Neither the ships’ crews, nor the shipping agents were to know the identity of the Italian owners. I frequently had to go to Genoa to monitor the shipping agent and to inspect the freighters whenever one of them anchored in its home port.

So I had to split my time between Zurich and Genoa. George put at my disposal a studio in Zurich. However, I returned every weekend to Lausanne to help Yvette, who continued to take care of Ideal Film and the management of Edi Stöckli's cinemas

My activity as director of Orconsult Shipping in Zurich did not occupy me full time. During part of the time I was working on my own, working as a trainer, lecturing and conducting workshops about management (I'll talk about later).

I was also undertaking other activities for Georges. During a first period from 1985 to 1990, I became his 'shadow man', responsible for all kinds of confidential business for him and his clients, often straddling the borders of legality.

One example among many was of one of his Italian customers, who had a big personal problem. He suspected his wife to be unfaithful and cheating on him with an unknown lover, but dared not intervene directly.

His income came mainly from his wife’s fortune and he was most afraid of a divorce that would have left him penniless. So he called Georges for help. Georges asked me to clarify the ambiguous situation of husband and wife and to organize the phone tapping of her calls in Rome, as discreetly as possible ! I discovered in me detective skills that I hadn’t known existed.

Georges’s main activity was to invest money in a discreet manner for his Italian, French and Russian clients through offshore companies, thus enabling them to escape taxation in their own country. His clients gave him great freedom in the choice of investments. They asked him only that their investments should be safe and that the long-term financial performance should be the highest possible. In fact, George was responsible for choosing the best companies in which they invested their money.

I was responsible for the supervision of these companies. I had to check the activity of their managers and their financial situation, intervening if necessary on site. I thus had the opportunity to travel several times in France, Italy and the Soviet Union. Each of these trips was in itself an adventure, whose story could fill an entire chapter.

George had a complicated love life. Early in his career, he had married Hildegard, a wealthy heiress whose father had made a big fortune years ago. His wife was from a small town on the Rhine She had a 'provincial' mentality and always refused to leave her hometown. Georges’ offices were in Zurich, about 100 km away, and during the first years of their marriage, he returned home each weekend.

As time passed he made the acquaintance of Nives, a businesswoman, who ran her own company, active in the international trade of plastics. George and Nives both had a 'winners' mentality of Not only did they become partners in business but more importantly they soon formed a couple and Georges began to live a double life On the one hand, he remained the husband of Hildegard, returning occasionally to Schaffhausen, but had only a 'platonic' relationship with his wife. He saw her primarily in the interests of children and to help her to manage her fortune. On the other hand, he had bought a large house on the shores of the lake of Zurich, had settled there with Nives and shared with her his love life as well as his professional life.

Nives and I quickly became friends and I was often invited to dinner in the evening in the house she shared with George. We three, with Georges, formed a very effective team.

But working with George and Nives was not an easy task. They both had a huge ego and the best way to be on good terms with both was to keep a "low profile" and "stay in their shadow." I was a kind of an assistant to both with an unclear position in the hierarchy. Each of them had their own team and their offices were adjacent on one floor

Staff attitude towards me was ambiguous. The entire staff, about 30 people, was divided into well-defined groups, the group of asset managers, the logistics, the pool of secretaries, the trade group for plastics, the accounting group. I didn't belong to any of these groups. The employees were suspicious of me. Either they snubbed me or they behaved like flattering courtesans. In fact, I was a group myself, with special tasks, often confidential, and I actually answered only to Georges.

This had the huge advantage of allowing me to enter all offices, to interrogate every employee and to consult without limit all files and folders. Very quickly, I learned to know the ins and outs of the two companies, Georges' and Nives'.

We were in 1985. The office automation was in its beginning. I found in one of the offices a 5150 IBM PC, which nobody knew how to use and that George had just bought to show his clients that he was following the 'office fashion'. In fact, the offices were still working as in 1970, with ‘antediluvian’ typewriters and calculators.

So I proposed to fully computerize its business. Very quickly, I set up an internal network with a PC at each workstation Secretaries abandoned their typewriter and worked directly on Word and Excel. Today, it seems obvious, but in 1985, it was a real innovation.

George had accounts in several banks. Thanks to my computer system and linkages with these banks, all employees could consult live all accounts. A direct link to the stock exchanges also allowed the asset managers to monitor in real time the stock movements and to increase their efficiency by accelerating their market operations. For Georges, to consult at any time the stock exchanges became a real game.

I set up a central server that controlled all the inputs and outputs of the data to the telephone network (cable and optical networks did not exist yet). Phone calls from the cells of the employees could also be controlled. . Nives, who complained all the time that her employees spent too much time talking in private conversations, did not fail to use this system and asked me to establish an oversight of these private conversations. I had to install an automatic listening system. 'Big Brother' was not far! This did not please me much but this was the price of my relationships with her!

I spent most of my time at work staying in Zurich or traveling in France and Italy. My only time to see my wife and my children was practically reduced to the weekends.. However, when I was away for a longer period, I had the opportunity to take my wife with me and we could sometimes go around as tourists in the south of France.

I also took advantage of my drive each Monday from Lausanne (where my family lived) to my office in Zurich, to stop at the banks of the Lake of Neuchâtel. It was a protected natural area, with deserted beaches and fields of reeds, a meeting place for naturists, gay or not. I had a great time there, often too short, either alone to enjoy the sun or with friends, meeting for other pleasures.

Throughout this period, I had the opportunity to take advantage of my experiences and I could exercise my talents in all sorts of areas.

Here are some examples:

Nives and George were at the head of a trading company in the south of France, buying and selling of plastic waste. Its business was to retrieve waste from scrap industry or landfills, to sort and resell them as recycled raw material.

In 1990, Nives had the idea to approach the USSR and asked George to help explore this market. They discovered the existence of a huge mass of plastic waste scattered in many landfills across the country.

Their intention was to find a way to buy this plastic waste as cheaply as possible, to take them out of the USSR, to recuperate the plastic and to convert it in commercially valuable objects, such as garbage bags. Their investigations were quickly successful. This is how the ‘Operation Plastic’ began. For those who don't know what is 'plastic', a plastic material is any of a wide range of synthetic or semi-synthetic organic solids that are moldable.

To understand the mounting of this operation, it is necessary to remember the situation in the USSR in the early 90s.

In 1989, Gorbachev came to power in the USSR. Gorbachev brought perestroika to the Soviet Union's foreign economic sector with measures that Soviet economists considered bold at that time.

His program virtually eliminated the monopoly that the Ministry of Foreign Trade had once held on most trade operations. It permitted the ministries of the various industrial and agricultural branches to conduct foreign trade in sectors under their responsibility rather than having to operate indirectly through the bureaucracy of trade ministry organizations. In addition, regional and local organizations and individual state enterprises were permitted to conduct foreign trade.

This change was an attempt to redress a major imperfection in the Soviet foreign trade regime: the lack of contact between Soviet end users and suppliers and their foreign partners. He permitted the ministries of the various industrial and agricultural branches to conduct foreign trade in sectors under their responsibility. Gorbachev's reforms allowed also foreigners to invest in the Soviet Union in the form of joint ventures with Soviet ministries, state enterprises, and cooperatives.

Georges already had many contacts with the USSR. Thanks to the revival of the economy caused by perestroika, many Russians had won a lot of money and several of them had entrusted him to invest their money outside the Soviet Union.

One of the Russian customers of Georges was a high party official close to Gorbachev. He was very interested in the 'Operation Plastic '. It would allow him to easily transfer funds abroad and to camouflage a commercial transaction, transforming it into a promotion of ideas supported by the new administration.

This official put us in contact with the 'Gossnab', an important body of the Soviet government. It was the 'state committee for technical material supply in the Soviet Union' . It was charged with the primary responsibility for the allocation of producer goods to businesses, a critical state function in the lack of markets.

Within the framework of perestroika, Gorbachev decided to transform the Gossnab into a wholesale trade system, based on direct contracts between suppliers and users. Gossnab leaders had in fact no knowledge of the operation of a free market and asked George to help transform the Gossnab in an organization subject to the rules of the market, in particular able to find and buy waste plastic scattered throughout the USSR and sell abroad, of course to the French company managed by Nives.

To avoid confusion between the financial activities of Georges in the USSR and the establishment of Operation Plastic, George instructed me to put in place a group of French, Swiss and Belgian experts, to give this group an international reputation and to entrust it with a mission of training the Gossnab to work applying the principles of liberal economy.

Thanks to Georges' contacts in Belgium and France and my own contacts in Switzerland with the business community and the press and Medias, it was easy to recruit experts in these three countries, offering them comfortable fees and expenses of mission at the costs of the Soviet administration and especially Gossnab.

I also contacted a Swiss ‘lobbyist’, who helped me to organize an information campaign in the press, the Medias and the government circles. By informing the European public about that training mission of the Gossnab gave her an international importance, which was much appreciated by the Soviet politics. This also contributed to the quality and warmth of the welcome in the USSR.

At that time, the business community of Western Europe was very interested to be introduced in the USSR and I have no difficulty in organizing a 'study trip' for a couple of experts. The most important of them was a friend of mine, a retired professor, Professor Schaller, a renowned economist and former director of the Swiss National Bank. His presence and his title impressed a lot the leaders of the Gossnab. This friend was known as a very conservative political personality, opposed to any socialist ideology. All the Swiss political class was very surprised to see him participate in a mission in favor of the USSR!

The journey in the USSR was organized entirely by the Gossnab. It was a curious mixture of activities and contacts relevant to the mission and sightseeing tours to the delight of the participants.

A highlight of the mission was a forum held in the great hall of the Soviet parliament.   See the picture in my gallery !

The floor was occupied by nearly 500 executives of the Gossnab, from all regions of the USSR. At the tribune, the director of the Gossnab and a representative of the Soviet government presided. The group of experts was placed just under the tribune on the bench normally occupied by the ministers.

Professor Schaller was responsible for introducing the forum with a presentation on the economic system of the West, its differences with the Soviet system and the opportunities (and challenges!!) of its introduction in the East.

It was a masterly lecture.. I still remember a characteristic detail:

To demonstrate a significant difference between the two systems, Schaller took from his pocket a tablespoon (he had previously purchased it in a collective shop near the hotel) and read one of the inscriptions on the handle of the spoon, its price: 50 kopeks. It was easy for him to demonstrate that in the Western world, the price was variable, depending on where and when the spoon was put up for sale, while in the East the price was fixed once and for all by the system, regardless the real costs of production and distribution of the spoon..

Participants asked many questions to the experts, in the form of fact sheets written in Russian, sent to translators sitting in the front row that wrote a translation into French and then transmitted it to the expert best qualified to answer. It was a very complicated back and forth of questions and answers, a characteristic image of the prevailing bureaucracy in the USSR !

But at the reception that followed at the premises of the parliament restaurant, all participants expressed their satisfaction that the direction of the Gossnab apparently had a genuine desire of opening up to the market economy.

The plant tours and excursions that followed allowed me to discover some features of life in the USSR in this period. The standard of living was much lower than in the West, but the Russians knew how to receive their guests with panache, but with a curious mixture of openness and hints of Soviet autocracy.

They showed us a factory producing toilet paper for entire USSR. Huge machinery churned huge rolls of paper weighing several tons each, which were then cut manually to make the same rolls that are found in all the toilets in the West.

For the packaging of these rollers, the Russians had bought sophisticated machines manufactured by a Swiss company (Bobst Ltd) worldwide leader of the pack. The director of the factory, a party apparatchik, was too proud to call to Bobst for the start of these machines that were now rusting, useless, in a corner of the hall. The only technical head of the factory, a Jewish engineer and therefore not member of the party (!), spoke a little English and told me the whole story, an excellent example of the difficulties caused by the Perestroika in relations between political and technical staff.

Speaking of toilet paper, I was surprised by a particularity of the toilets in the bathrooms of Russian restaurants. Beside each toilet was a bucket in which the user was requested to put the sheets in it after use. I always wondered why to keep these sheets. Would they be recovered for reuse?

Our delegation was not staying in a hotel for foreign tourists, but in a first class hotel reserved for senior members of the party staying in the capital. On each floor, an imposing matron of a venerable age, in uniform of the hotel, sat permanently next to the stairs and elevators. She did not care service but spent his time observing the comings and goings of people through the corridors

I made the remark to a member of Gossnab responsible for conveying us from the hotel to the various places of work, which told me that it was a measure 'inherited from' the Brezhnev era. The task of these women was to monitor the good manners and good behavior of executives staying at the hotel and they were paid for it. Since the arrival of Gorbachev to power, their presence was no longer needed. But the inertia of the Soviet system was such that nobody was informed of the need to remove their posts. In addition, as they had no retirement pension, keeping them in function was the only way for them to survive modestly. As what inertia may be the cause of a good deed!

Our stay in the USSR ended in a gargantuan dinner in one of the best restaurants in Moscow. All members of our delegation had great difficulty in returning to the hotel. Vodka and Crimean wines flowed afloat and many toasts that we carried to each other were the cause. We were all more or less drunk! I was told later that my speech was brilliant, but I didn't any memory of my speech, neither indeed of those of the other speakers.

About vodka, I have a special memory of the Russian breakfast . Start the day with a large glass of vodka and a plate of charcuterie with a mass of pickled cucumbers is an interesting experience !

After our first trip, we were in charge, Dr. Schaller and me to prepare two documents for the establishment of a 'new' Gossnab : for him, a text containing the bulk of his speech and his answers to questions asked in the forum, for me, a detailed training cadres Gossnab program. I have these documents in my archives. Needless to say, they were never translated into Russian and that the whole matter ended there .

I recall that, in the minds of senior customer and friend of George, it was only a «sham «operation to disguise trading with misappropriation of funds to secret accounts in banks Western accounts managed naturally by Georges.

Like all other Soviet institutions, the Gossnab disappeared in the turmoil caused by the collapse of the USSR in 1991 and my "participation" in the liberalization of the Soviet economy was quickly forgotten.

The end of Gossnab however didn't bring an end to my activities within the framework of Operation Plastic. While I was having fun in Russia, George and Nives had developed their company in the south of France and had started the exploitation on a large scale of the waste plastics which they imported from all over USSR. They had built a factory producing garbage bags, invested millions in it and entrusted the management of the factory to a French engineer specialist in this production but obviously less skilled in financial management of such a company.

The factory was located in an industrial area near Marseille, for Georges too far from Zurich to closely follow the running of the company. He received regularly financial reports and repeated requests of additional funding to cover the current exploitation losses. This left him in no doubt about the serious financial problems that grew from day to day.

And this is how he charged me at first to go out there and look for the causes of these problems. My analysis was immediate: no one really cared for the general management of the factory. Knowing George, I should have known in advance his answer to my report: «Do it yourself! ".

So I settled down for a few months in a small town near Marseille and took over the financial management of the factory. After having introduced an industrial accounting, negotiated agreements with several banks, reduced overhead costs by cutting waste and finally committed an effective CFO, I returned to Switzerland. Since then, I have never heard anything about the ‘Operation plastic’.

This trip also included pleasant moments. I could spend my weekends for excursions into the creeks east of Marseille, some of which were open to naturists. I profited greatly, swimming in the warm waters of the Mediterranean, alone or with friends met on site.

But everything in life is about balance. At the end of the stay, George asked me to take some vacation at his own expense. My wife joined me for a couple of days which we spent pleasantly at the seaside, in Cassis, enjoying the beach and sun.

Back to Zurich, I regained my activities reordering different companies in which George had placed his clients' money.

Among them was 'Orphée Art SA '. It was a shabby production company of small erotic films which had the chance to produce in 1974 the film 'Emmanuelle'. This was one of the most successful French movies, drawing on French screens nearly nine million viewers and forty five million worldwide. The success was such that a theatre in Paris showed the movie for over ten years, offering even in summer a version with subtitles in English for the American tour.

This is how the owners of Orphée Art became millionaires and entrusted the management of their money to Georges. They invested their cash among others in the 'Paradis Latin'. Located on Paris' left bank, the Paradis Latin is the world's oldest French cabaret. Designed by Gustave Eiffel in 1889, it was built at the same time as the Eiffel Tower and in the same metal architecture. Paradis Latin's shows feature stunning costumes, original music, and dance routines 'taking your breath away'. So I came to know the dark side of a cabaret, the side 'backstage' and the problems of managing an unusual staff. For those interested, please see the website of the Paradis Latin at http://www.paradislatin.com/en

I do not have very good memories of the owners of Orpheus Art. Part of the 'Paradis Latin', they invested their money in various film projects which George asked me to follow these and advise. Having analyzed their projects, I realized they had little chance of success and I was frank - and naive - to tell them. They accepted my interventions very badly and asked George to withdraw me from their business, which he did immediately (who pays order!). I later had the satisfaction of seeing that I was right. Not only were none of their projects realized, but they also lost a lot of money and had to sell the 'Paradis Latin'.

During my stay in Paris, I also had the chance to happily complete an old case. As I wrote it in Chapter 16, I was associated in Paris with François de Lannurien , a film producer who made me lose a lot of money. He himself had gone bankrupt and the Commissioner for the liquidation of his company had neglected to include in the list of creditors the claim of Ideal Film.

After the end of its bankruptcy, François de Lannurien rebuilt his fortune with his stable of racehorses. So I tried to recover at least a part of my claim. I could not attack him directly, as the claim was barred. I could, however, go after the commissioner who was convicted of serious negligence in the management of the bankruptcy. His civil liability insurance contacted me and I finally recovered, more than 10 years after the events, the equivalent of nearly $ 100,000.

Now back to my work in Zurich, where I spent most of my time.

As time passed, Orconsult Shipping was disappearing; the Italian owners had sold their boats. Maritime trade was in a crisis of overcapacity and was no longer profitable. I had nothing else to do in this society.

In addition, George had fewer cases to entrust to me. His eldest daughter had finished law school and had joined our team. George asked me to share my experiences with her and training her.. So she became my assistant and she soon replaced me in the management of most of the problems of Georges’ companies.

So it was time for me to return to the program that I outlined at the end of Chapter 19, namely to develop my own business as consultant and business trainer via my company Planorga.

I began to reactivate my contacts from the days of Grossfeld Consulting Engineers SA (see previous chapters) and I spent more and more time in the French part of Switzerland. Among my activities within the JCE, I had acquired a certain experience of 'trainer' by organizing seminars on various topics of management and business organization. These seminars had some success and more experienced business counselors and professional associations contacted me to hold similar seminars.

I had the opportunity to hold several seminars among others for the Federal Military Department (which is in Switzerland the same as the U.S. Department of Defense) for the nursing staff of major Swiss hospitals and for the worldwide group Holderbank, of which the company Holcim is the main subsidiary in Switzerland.

Holcim's core businesses include the manufacture and distribution of cement, and the production, processing and distribution of aggregates (crushed stone, gravel and sand), ready-mix concrete and asphalt. The company also offers consulting, research, trading, engineering and other services.

I used for Holcim's seminars the system of business games. Business game (also called business simulation game) refers to simulation games which are used at an educational tool for teaching business. Business games may be carried out for various business training such as: general management, finance, organizational behavior, human resources, and so on. In those days, computers were very seldom used but found for these seminars a French software allowing to create fictitious companies and making them compete.

The different Holcim plants were located in the French and the German part of Switzerland and their executives spoke either French or Swiss German. So I created two groups of different languages ​​and exploited the differences in mentality to create real competition between groups. The discussions that resulted were very lively and the participants were delighted to be able to fight 'on the paper' against each other.

Today, such business games use sophisticated software with internal computer networks and are part of the management training of most Western companies. I consider myself as a precursor of this form of business education and I am very proud of it...

But I was spending only a part of my time on these activities as 'trainer'. I also shared with my wife her activity as manager of Stoeckli's movie theaters in Geneva, Lausanne and Fribourg (see chapter 19). Stoeckli asked me particularly to take the direction of the main theater of the group, the theater 'Spendid' in Geneva and acquire on his behalf the building in which the theater was located.

At the first floor of this building there were two furnished offices not in use. Edi put them at my disposal and I began to wonder if it was not preferable to move to Geneva.

In Lausanne, the city where we used to live for many years, we had all our family around us. But Geneva was my hometown and the potential for expanding my activities was much more important there.

End of 1993, we decided, my wife and me, to settle down in Geneva, while maintaining close relationships with the rest of my family, my friends and customers in Lausanne.

End of chapter 20