Jim Metcalf Moves to Boston
We arrived in Boston a few days later and checked into a motel on a busy street. The van was parked next to our motel door and it had a quality alarm system. There was no alarm, but the next morning we saw that the door lock was broken. My computer hard drive and all the data discs were missing. The police considered that this was a real pro job, and because of my involvement with the Russians they strongly suggested that it could be the CIA.
On the 1st of April 1989 we moved into a high rise apartment building with a one bedroom apartment on the 17th floor facing the Charles River. I drove to Portsmouth to meet with the President and Sales Manager of FMI. The subject was Commerce controls and my future intent to sell them carbon products from the USSR. I gave them samples of carbon fibers and products.
I did have great enthusiasm for starting a business in Russia at that time. I wanted Royce to pick up the carbon-carbon story again with the cute twist that the Russians were selling the Pentagon carbon-carbon.
The Royal Bank of Scotland never sent my final credit card statement and their income tax people did not figure out how much I owed. The total amount of both of these would have exceeded one hundred thousand dollars. I did not need England that much. I just wanted them to admit that I was not a national security risk.
On the 12th of April 1989 we departed Boston to pick up Vera's hairdresser friend, Doll, and husband who where visiting the USA. We began the trip at 5AM in New York and were able to spend a little time sight seeing in Washington. Just before nightfall we found a cabin on the Blue Ridge Parkway with a big fireplace. We arrived at my sister's house late in the afternoon and Doll became the hairdresser for Betty. I picked up the Macintosh Plus and printer to use in the place of the Macintosh II which was stolen. Thank goodness most of my software was in the memory. Only some portions that I typed during the period 18 to 25 March 1989 of the Chronology, accounting data, and the current file of correspondence were gone. With big Mac gone the job was assigned to little Mac. All the old stuff produced on the early Apples had to be converted. It was a pain in the neck because the old software recorded each sentence as a paragraph. Conversion of the old stuff caused many errors that still remain on this web space.
After a timeshare week in Daytona we drove back to Boston. Attached is a photograph of the van I used as my transportation and travelling office for four years.
While we were in Daytona my brother, Hal, called me with a hot business lead. He told me that John Donovan was looking for a person to escort him to Russia to purchase some equipment for his explosive hardening applications. Arrangements were made to meet him in Danvers, Illinois.
Donovan Demolitions had several operations that included bring down buildings and cleaning the walls of the levies on the Mississippi River. His main problem at the time was that neighbors were complaining about the noise and vibrations from blasts on his farm used to harden railroad track switching parts. Placing high explosive material and then exploding it on the correct place on these cast parts increased the life dramatically. His open pit operation and the fact that he was limited to daylight by OSHA meant he could not keep up with demand.
Before travelling to Danvers I did a little homework by talking with the explosive experts at DuPont and already had an explosive chamber design in my mind but Donovan had his mind set on going to Russia to look at their equipment.
I spent the night at Donavan's home and learned some of the private side of his life.
On the 3rd May 1989 Vera flew to London with a British visa in her passport. She was pleased when the immigration officer returned with permission for her to stay in the United Kingdom for up to three months. From the very beginning they have stated that in no way do they consider her to be a security risk. Thatcher wanted to keep her skirts clean with the new Russian government.
Vera had a task to perform when she arrived at her friend's apartment in the center of London, next door to the apartment where she had previously wanted to live the rest of her life. She had to call Moscow with the news that her husband was escorting two American businessmen to Novosibirsk to look at some equipment and a new technology they wanted to buy from Russia. It was a simple matter to dial direct to Russia from Europe, but for some political reasoning between the Americans and Russians we could not dial them. For two weeks we had not been able to reach the long distance operator during the working day in Moscow. After the call, Vera realized that it was still the same old Russia, because as the sellers they still had to have names and passport numbers so they could support a visa to visit them. Donovan was featured in an article it Soldier of Fortune magazine during that time period and perhaps something in that article or something the KGB knew about his activities that delayed his visa.
I had to travel through Washington to pick up my visa for Russia. I met with Peter Stockton, a leading staffer of the Congressional Committee on Oversight and Investigations, for seventeen minutes on May 12, 1989 in the lobby of his offices. Beville may have been there but she did not sit in on the meeting. I wanted to give the full facts but there was no time. Two very interesting facts were discussed. One was that Perle reported that this sale was among the five most valuable losses of technology ever sustained. The second was that the CIA discovered the facts of this case in the Soviet Union through their spies. Both facts may be false. I gave Congress the first draft of my book.
With time to kill waiting for Donovan's visa and a flight already booked to Frankfort (The last of my frequent flyers miles trips.) I decided to tour Austria. The only timeshare exchange available was on the border with Hungary so I booked a flight from Frankfort to Moscow with a stopover in Vienna. Upon arrival in Frankfort I called Alex in Kiev and he told me that Donovan's visa had been delayed for something to do with Afghanistan but it was approved. I called John and set the scheduled arrival in Moscow.
From Vienna I drove a rental car to the resort but became totally lost in this backwoods country. I finally stopped at a police station where we used broken English, a little German and some Russian to determine that I was twenty miles inside Hungary. Austria and Hungary were the first to take down the fences of the Iron Curtain. The resort was nice but not spectacular. The only memory of this place was the very large wind rabbits that were featured on the restaurant menu.
I arrived in Moscow on the 21st of May 1989 using my newly issues multiple entry visa. (One of very few issued to American businessmen.)
Vera had a difficult time finding hotel rooms because the new rules demanded dollars from foreigners and she was dead set on using rubles as a Russian. Several meetings were held with businessmen seeking to sell to the West but nothing useful was found until Alex Shibaev (My Kiev contact.) introduced me to a group from the Ukraine that really were in the carbon business that seeking foreign investment.
Vera told me that our newfound friend Yuri told her to expect Donovan to be watched during his visit. Yuri was running a new business that was formed during this time of reform but was in charge of the group that recorded every move that Vera and I made over the years.
I met John Donovan and his engineer at the Moscow Airport on the 28th of May 1989. After a little rest Vera and her friend, Tanya, escorted John and his engineer on a taxi tour of the Moscow region. In the evening the four of us had dinner on the top floor of the Rossia Hotel. Tanya and the engineer left early to go to one of the private nightclubs that had recently opened in Moscow. I had to make a quick trip to pick up papers for the trip to Siberia so Vera invited John to the house where we were staying. Just after John was inside there was a knock on the door and a man wanted to speak to John. Vera closed the door and asked John if he wanted to meet this man. A call was made to Alex with the message to have the KGB lay off because he was there for buying not spying.
The next day John told me that he scaled down from the third floor using his Special Forces skills before running into what he thought was an alley. This was actually a small army post and John had a nice time talking soldier to soldier before quietly returning to his hotel.
At midnight the following evening we departed on Aeroflot for the three-hour ride to Novosibirsk in central Siberia. This is the town where Stalin ordered his top nuclear scientist to move to build the atomic bomb. Over the years it became a center of science in several scientific fields including the use of explosives.
The spring and summer season for this place lasted 91 days and came like clockwork. When we arrived there was still ice but it disappeared and turned into shirtsleeve weather in a single day. Farmers were busy putting seeds in the very fertile earth that could be ready for harvest within the ninety days.
We toured the explosive hardening facility and noted that a separate chamber was required for each size and shape. (This would have cost John a fortune.)
We spent the evening at the home of one of the research engineers and held some very enlightening discussions.
The Soviet government was holding the first meeting of an elected Parliament during my two-week visit. It had not been a pure choice of the people because in many races only the member selected by the party ran. The delegates selected Gorbachev as president without a negative vote, but he was the people's choice. Eyes were glued to the television and ears to the radio as individual delegates spoke in support of and protest against the leaders they were selecting. The party had the vote when they needed it, but Gorbachev was very fair to factions and minorities as he often offered compromises during the heated debates. Several years earlier a Russian academic had told me that the Soviet people were not intelligent enough to select their leaders and that I would never understand the Russian people. He was wrong on both statements. The system was changing.
We were given a tour of the area. The whole city and what it did was most revealing. We visited a museum that had a tepee and other artifacts just like those used by American Indians.
The engineer in charge of the chamber design escorted up to the airport. In a special departure room for foreigners I sketched my plan for a simple chamber with vent pipes and a honeycomb structure filled with sand. The engineer agreed this would work very well and HE LOST A SALE.
We arrived in Moscow after midnight and there were no taxis. I found a gypsy taxi that took us to the hotel for fifty dollars. Prices were rising in Russia. The hotel did not have reservations under the name Donovan or the firm that supported his visa. After I showed them my visa they remembered the support letter of the foreign trade group that supported me. Donovan thought I had a very special visa.
Donovan left Moscow after a conflict with the floor lady at the hotel. He told us that without our help he would have been lost in Russia. Vera and I decided that visiting Americans to Russia and visiting Russians to America both need help and this could be an attractive business for her.
After Donovan departed Moscow I visited the city of Dnepropetrovsk. I met with city commercial and engineering people. They were not producers but the layer of people that Gorbachev was attempting to put to work in industry. Good open discussions on the political and economic situation continued until one in the morning. I was the first American businessman to visit their city.
The balance of my time on this trip was spent locating the raw materials for carbon insulation. Even better, I located a company with the will and equipment to make the insulation for the export market.
I sent all the supporting documents about my future trading possibilities were sent to the Department of Commerce. In order to keep the game fair a copy was sent Department of Trade and Industry in London. Of course a copy was sent to Royce at Newsday.
Vera composed a letter to the Monarch of the Commonwealth, the Queen of England, a letter from the citizens of the USSR to welcome her first visit to the backwoods of barbaric Russia. The letter informed the Queen that a minor protest would be made for a man that had been expelled from the native land of his forefathers.
FMI called me in June. They wanted to meet to discuss future purchases of carbon fiber from the Soviets. We did not discuss their isopress business and carbon-carbon business they had with India at that time. Tom Dick's name also did not come up.
It did not take long for leaks about my new carbon-carbon business to the press to occur. To be fair to the government, Royce of Newsday also had copies of my letters to the US government and could have been the source. A reporter called me from the Guardian newspaper of London on June 27, 1989. He told me he had a pile of documents on the carbon-carbon episode. He said he had obtained them from political figures in the British government.
His statement that I had cost the taxpayers a lot of money made me angry. We purchased a very expensive insurance policy and were paid by the insurance fund not the British taxpayer. He asked if I was sore at the British government. I told him that while it was a pleasure not to live in London, it would be nice to have Thatcher's private invitation to return to visit and take care of my affairs. The reporter was not aware that his paper had run a story written by Royce and Lane in November 1987 on the subject but was aware of the articles by Paul Foot of the Daily Mirror in 1988.
There was no outside income coming in and the rent had to be paid. I sent a fax to IMM to find out what was going on.
To: IHI Master Metals, 26 June 1988
From: James F. Metcalf
Some months ago my telex in Miami was closed but the mailing address for the company remained the same.
I have waited since last July when you promised to send me a formal contract for my past and future services but none was received. Can you tell me if it was mailed or if it will be?
Mr. Henry Rowan, the president of Inductotherm, was very angry with me last week because he thought I had joined forces with Donald Soderstrom and Fuji Industries to build you a furnace.
As an old friend of IMM please fax me a short report on the current situation.
Best regards to all,
I decided to keep Rowan informed of my activities and make a record. I had no one else to write to at that moment. Letter to Rowan is attached:
The next morning a fax from IMM arrived. Yamaguchi had money to start his project and wanted me as the project leader. He offered to pay for all previous work and expenses. I would have given a nickel to have the Rowan letter back because what I said I had not done I was about to do.
I sent a fax to Consarc telling them of my intentions to become a member of the IMM team. I did not want to make the equipment myself and if they worked with me to produce a good offer they might get the business.
I finally had something to do. The attached is my fax to IMM and to Consarc:
On July 4, 1989 I walked around the city of Boston to see the memorial to those things which are celebrated that day. Beautiful fireworks were on display from my seventeenth floor window. We must thank God that we were born Americans.
Dr. Armand Hammer wrote in his book, Witness to History, that the way to become a millionaire was to wait for a revolution in Russia, and then pack your bags. I did not need the millions, but could not remain in retirement with so many business possibilities that were open to me at the young age of fifty-eight. Hammer was fifty-nine when he set up Occidental. My bags were packed and the revolution in the Soviet Union was well under way.
I received a long fax from IMM on July 1, 1989. They would hire me as consultant and maybe as future sales agent in the USA for their products.
I received a fax from Roberts in which he set up an unreasonable position. I did not have a moral or legal contract with him. I replied to Roberts with a faxed letter.
Roberts sent word to Japan that I had a legal and binding contract with Consarc and major legal problems could occur if IMM hired me, I let Yamaguchi know the facts.
To: IMM Yamaguchi
13 July 1989
This is my first test of a new system with my new software at 2400 baud to send as a fax from my computer.
Consarc continues to insist that I am their consultant without payment. This is not true and is not a legal problem for me in any way. I have refused to meet with them to present my new ideas.
My desire is to be the project engineer for the equipment that produces the best quality product in the world at the lowest prices.
My arrival in Japan is 22 July on JAL 9 from Chicago. Please reserve a room at the Ginza Diachi for that night.
My meetings with Consarc on this trip may not be productive. You must decide if we should meet together.
Roberts would not give up. In his mind he thought he had me under contract.
Date: 15 July 1989
Your fax to Yamaguchi that attached a fax that I sent to him was not the best way to solve this complex problem in the best interests of the parties.
My fax said that I felt it would be "proper to remain" Consarc's consultant. My conclusion was that IMM should buy the best Consarc has to offer and build as much as he could himself. It was fully understood by you that after the contract between you was signed I would work for IMM only. My last trip to Rancocas was on IMM's account and everyone knew it. Consarc refused to hire me for that trip with the customer.
My only written contract with you was for fourteen days to work on the engineering study for IMM. You will remember that I refused to sign a contract with Consarc companies that would pass title of designs for a simple payment of the days worked.
Please tell the customer that I have no written contract with you except the order for fourteen days and my fax to him. Your letter to IMM appears to extend my conclusions that it was "proper to remain" to a formal contract. The effect of this letter may cause me to lose a contract that could be useful to all the parties.
The following fax was sent to IMM. Yamaguchi was ready to send a strong letter in response to Roberts.
To: Toru Yamaguchi
From: James Metcalf
Date: 15 July 1989
Thanks for your true understanding of my situation. My only obligation to Consarc is to remain an old friend. This is most difficult under the present situation. The fax that I sent to you in February 1988 depended upon my becoming your consultant for a large portion of the job. At that time I felt it was "proper to remain" out of the commercial side because the job was to be ordered soon and the split was to your desires.
The only written agreement was to hire me for fourteen days as consultant to do the engineering job for your study. Consarc paid me from the funds that you paid to them. The final trip was paid for the paper because Marino considered it to be part of the gas purge agreement.
Roberts has not called me, but rather offered for me to again become his consultant for two days to give him all my new thinking. I have refused because this could tie my hands. Roberts was not correct when he wrote you a letter before calling me.
You may send the letter if you wish, but I have no legal obligations to continue as Consarc's consultant. Besides, I would have no power because of the malice and jealously of certain people.
You are the buyer and therefore can do as you wish. My interest is in the project and the materials this furnace can produce.
Radio Canada called for an interview on July 16,1989. They were interested in the Guardian's newspaper story. I doubt they used my story.
I arrived in Tokyo on July 20. I met with Yamaguchi at his office in the afternoon. The purpose was to discuss the new situation in Tokyo. Land prices in this area were in excess of $20,000 per square foot. The Japanese government was going to construct a bridge across the bay to relieve the traffic in the center of Tokyo. IMM had to move, but their parent company could not give them the real value of the property they were vacating. Every new investment had to stand on it's own feet, but I was to learn that Japanese rules on investment for the common good for the future were much better than the "dog eat dog" rules in the States.
Yamaguchi was busy, so I met with his staff to set up the proposed budget for furnace project. A very useful evening was spent in a Spanish restaurant in Tokyo with these gentlemen.
Yamaguchi was busy with his auditors. We met with the staff of IMM to discuss my suggested changes. Consarc, Fuji and Oka were present. It was not a useful meeting. I met with Marino in the evening. He had no problems with my status. He called Roberts a Teflon President because he refused to be up front with the Iraq sale. Marino met with Oka and Fuji in the evening. He attempted to scare them away from the project. He later offered Oka a contract in return for a long term no-compete agreement. Under US law this might be considered restraint of trade. Yamaguchi and I had a late dinner at one of the best clubs on the Ginza. I departed Tokyo on July 28, 1989 for Boston
My previous selling efforts in Moscow had been passed through the system. I really was not ready for this, but it could be a gold mine. The following telex was on my machine on July 27,1989 when I returned to Boston.
ATT: MR. METCALF
THE GENERAL DIRECTOR OF THE ELECTRODE FACTORY IN ZAPOROZHYE IS READY TO ARRANGE A MEETING WITH YOU AFTER 15 TH OF SEPTEMBER FOR SIGNING A PROTOCOL OF INTENTIONS AND BEGINNING NECESSARY MUTUAL ACTIVITY IN THE SPHERE OF THE PRODUCTION AND WORLDWIDE SELLING OF CARBON INSULATING MATERIALS FOR THE HEATING INDUSTRY.
PLEASE CONFIRM THE RECEIPT OF THIS MESSAGE AND INFORM US THE DATE AND DETAILS OF YOUR TRAVEL PLANS.
I answered right away using electronic mail that was in use before the Internet.
28 July 1989:
Your telex received through my electronic mailbox. This method allows me to pick up the message with my secret code number from any telephone in the world providing I have my computer with me.
15 September is reasonable schedule. We must discuss my expenses on this trip.
I was amused while reading the newest carbon-carbon story in the British press. This was the worst of the lot. I sent a long fax to the Guardian on August 1, 1989 with copies to the Boston Globe and Newsday.