CHAPTER 4 - THE OTHER FAMILY BUSINESS
The Other Family Business
An eye for an eye,
A heart for a heart,
A debt for a debt,
Just a droplet to start.
One droplet now ten,
Ten thousand times more,
Old walls closing in,
Crushing all. Such is war.
In the years immediately following the conclusion of World War II, Austria was in a wretched state of depression. The dogs of war had run wild over her beautiful hills and valleys, and laid waste to the romantic charm of her towns and cities. What was to be done with Austria going forward? What should be done to her or for her? What of her people? Some argued that Austria deserved the bed of devastation in which she lay, since she was technically part of Germany after being annexed by the Nazis in 1938. They argued that she should be allowed to rot and wallow in her misery as punishment for her part in the war. Others saw Austria as more of a helpless victim who had no choice but to join Germany when faced with the possibility of invasion by the Nazi war machine. Eventually, the victorious Allied governments of WWII agreed most with the latter and decided that Austria was essentially the first victim of Hitler’s aggression. They declared at a conference in Moscow that she should be rebuilt and allowed to be free and independent once more. Something had to be done, and the people could not be abandoned.
As is their tendency, the world’s Politicians fell over themselves to decide and pronounce what was best for Austria and her people. Talks were had, meetings were held, and eventually the land inside her boundaries was split and divided into four Allied occupied zones: American, British, Soviet, and French. Even the capital city of Vienna was subdivided accordingly, much like Berlin would be split inside of East and West Germany. As one can easily imagine, this was a less-than ideal solution for Austria and her peoples. If the presence of one government can be cumbersome and frustrating, try and empathize the weight of four competitive provisional governments vying to rule and rejuvenate a depressed people and economy that had just been through seven years of devastating war, bombings, and raids. Austrians were not naïve to the fact that the quartet of Allied Occupiers had the best interests of their own nations at heart, and for ten years the Austrian people were the rope upon which their occupiers played tug of war.
Widespread hunger and famine were particularly severe crises during this postwar time in the Western Allied zones of Austria, due to the fact that the Soviet zone controlled roughly 65% of the food production. The Soviets, not known now or then for their cooperative or sharing spirit towards the West, were in no great hurry to alleviate their capitalist counterparts. For these reasons and many others, the people of Austria desperately sought to be politically and economically independent. The world’s leaders did not think she was stable enough to be free just yet.
Something better was needed to get things moving towards economic stability, and on June 3, 1948, The Marshall Plan, or by it’s formal name, the European Reconstruction Plan (ERP) was set into motion by the United States. This legendary measure would be a key catalyst for what would eventually be known in the historical record as the Wirtschaftswunder or “Economic Miracle” of the 1960’s in Austria and West Germany. This postwar economic boom, this so-called “Golden Age of Capitalism,” was also well documented in the economies of Belgium, Sweden, Greece, Italy, France, and in many other nations across the world. The US-engineered ERP also made it easier for Austria to break the heavy chains of Soviet influence, and gave her socioeconomic policies a decidedly Western lean for decades to come.
Ten years after the war had ended, the promises of the Moscow Declaration on Austria were kept at long last. On May 12, 1955, Austria became free and sovereign for the first time since the annexation of Hitler’s Nazi Germany on March 12, 1938. The seventeen years of occupation that saw both the Anschluss (Annexation of Austria by Germany) and four-way Allied governance were finally over. Austria and her citizens stood proud as a sovereign state once more. Independence gave the recovering economy serious momentum, and many savvy businessmen and opportunists capitalized on the huge influx of aid and support from the ERP and other international revitalization measures.
Where there exists such an influx of funds and economic growth, there will most assuredly coexist men and women with a knack for spending and investing this money. Through both well-intentioned and nefarious means, untold amounts of ERP money earmarked for the revitalization of Austria found its way into the pockets, bank accounts, and safety deposit boxes of such persons. Persons like William Ernst. The Ernst family grew as the city of Vienna grew around them. Reputations and influence were rebuilt as surely as houses, monuments, and buildings. The swelling tide of rejuvenation lifted the Ernst family higher and higher. Through one means or another, William Ernst and his business partners rode this wave of economic prosperity as long as they could. They clawed and grabbed and worked and scraped, building their legacies and staking their claims. Everybody wanted a piece of the action.
As William Ernst and his associates would discover, rising waters are difficult to control and a nightmare to navigate. Without the proper infrastructure in place, turbulent streams rush right over the dams and down into the valleys, sweeping away the rich and the poor in equal measure.
November 8, 1962 – Vienna, Austria - Evening
William Ernst felt a mixture of relief and anxiety as he hurried home from the Shop. Things went just about as he thought they might go, but it pained him to see his father in such agony. He wasn’t proud of what he had just done, but what else could he do? Where else could he turn? Things were getting increasingly worse for him and he didn’t see another way. Time and money were both running out. His relationship with his wife was strained. Sophie could sense something was wrong, and her usually limitless patience was wearing thin. A wife just knows when something is off with her husband, and Sophie was tiring of William’s constant reassurances.
Over the past several months he had been in and out of the house at all hours running to business meetings with his partners and investment team. For years, William Ernst had had his eye on a large piece of property in the city’s Ottakring district. The time was right, and he was finally gaining some momentum on the project. He had plans for an opulent hotel that would cater to the growing crowd of wealthier European and American tourists seeking a revitalized Viennese neighborhood to explore. There would be fine accommodations, wonderful food, and most importantly, a casino that would be the crown jewel of the hotel. The location was absolutely perfect for a casino. Chunk by chunk he would develop the rest of the district into a trendy neighborhood complete with luxury apartments, restaurants, and maybe even a concert hall. He would give the wealthy tourists something to remember, and plenty of places to spend their cash. He pictured grand concerts and performances drawing in crowds from across Europe. William had a gift for envisioning what could be, and then willing those dreams into reality. He also was a risk taker. William had lately been on the downside of this particular venture, and the vast expanse of money he had initially acquired was starting to shrink. In the years since the war, he had made more than he thought possible capitalizing on revitalization contracts and capital from investors outside of Austria. He had saved enough of that money so that his family had not suffered yet, but he spent most of the rest on the next big project. As always, William had an ambitious plan, but he needed capital, and lots of it. This project was going to require much more than what would normally be spent on a new apartment building or shopping area. William had needed to attract new faces with deeper pockets. There would be significantly more risk involved, but if he could win this bet, he would be set for life. The Ernst family name would become legendary in industry, known for something else other than violins and an old Shop.
And so, at an evening meeting exactly three months back, William had treated his business partners and investor prospects to an elegant steak dinner and laid out his plans. There were many new faces at the table. When they were well into their meal and the men were draining their glasses, William took his fork and gently tapped his glass with a ‘Clink, Clink.’ The men quieted down quickly, and William surveyed the room. By the mood of the room the wheels appeared effectively greased, and he pushed back his chair and began to preach.
“My friends, we have a duty,” he said with a touch for the melodramatic, “to make Vienna the prime jewel of Europe once more. We have helped her rise from the ashes of wartime. We have guided her gently to a place of peace. We love her dearly, and she has loved us very well in return.” He paused here to see nodding heads and smiles. Vienna, which in some ways had been a barren wasteland immediately after the war, had made them all various levels of wealthy through her rebirth. “She will become a cultural beacon for the discerning traveler, and an opulent, safe, and comfortable homestead for those wishing to live out their days and raise their children here.” He took a deep breath, looked each of his partners in the eye, and continued. “I have shared with you my vision, because I trust each of you. You all care about the future of our great city. You all also care about the bottom line and good returns!”
“Here, Here!” a couple of the men shouted out. They were locked and loaded now, and William pulled the trigger.
“This task will not be easy. It will require long hours, hard work, and of course, significant financial resources. There are hurdles to be cleared and many walls to be knocked down.” He was rolling now and full of confidence. “There is but one piece of property left to acquire, and albeit a large purchase, I can assure you that the tenants are willing and ready to sell. I have personally seen to that.”
The richest man in the room, Mr. Douglas Carpenter, stood up. He was one of the new investors William had needed to reel in, and he’d been found through some of William’s less-than-conventional connections. He showed up that evening with three men who looked more like bouncers than businessmen. William couldn’t stress it, not now. Douglas Carpenter had plenty of money and William needed him on board. The room grew quiet as the man from New York spoke, “William Ernst, You better be right about that property. If this deal falls through I’ll want every penny back. I will collect interest. Furthermore, if you’re yanking my chain, I will ruin you, son. I’m not in the business of flying to Austria just to seem some romantic idealist throw my money down the toilet and make me look like a fool. Do you understand?”
William worked up his courage and put his professional charm to work, “Thank you, Mr. Carpenter. I would expect nothing less from a wise man of vision like you. In fact, I trust each of you in this room, as I am confident you trust me. This deal is solid as a rock. A mere formality needs to be addressed. On my family’s life, I swear it will be done.” He looked directly at Mr. Carpenter, looking for some sign of approval or agreement.
Mr. Carpenter stared at him for a few moments. He took his time and used his hands to wipe a few crumbs off the front of his dark blue suit. After what felt like an eternity he returned William’s gaze and said, “Dually noted, Ernst. Have someone from your office find me immediately when the paperwork is signed. I leave for New York at the end of the month. If it’s just a formality, then get it done and bring me the proof in writing. Anything short of that, and I’ll take all of my seed money back, plus interest. I’ll take it in cash.” Mr. Carpenter smirked at William, “That shouldn’t be a problem though, right?”
“No sir, none at all. You’ll have it well before your departure back to the States. I will personally deliver the final paperwork on your desk, signed and certified.” It took a significant amount of courage to get this part out, but he needed this evening’s money to move forward. The initial seed money he took in from investors was long gone, and there plenty of bills left to be paid. He took a deep breath and continued, “First the hotel and casino, gentlemen, and then all of Ottakring. We will transform this district from the inside out! Who is willing to follow me in this most honorable endeavor?”
He turned his gaze down to see his three business partners nodding with enthusiasm. He sat down and let them speak. It was their turn to get the rest of the crowd on board.
“We must pursue it.” Dr. Philippe Linden had been the first to step up and support the idea when William first approached him. He was getting on sixty-five years old and was a shrewd old devil. The man had made a bundle stockpiling medical aid supplies from the occupation and had been siphoning off revitalization funds to set up his practice and expand his enterprise. Technically nothing he had done was illegal, but he was good at walking a fine line. Besides being frugal to the point of a cheapskate, his instincts were usually correct. As he spoke, he was scraping every last morsel off his plate and was an obnoxiously loud chewer. In between bites he continued, “I am prepared...to move on this...quickly.” He took a drink of his lager and kept on, “I will put forward one hundred fifty thousand to start.”
Almost before Dr. Linden could finish, the next partner jumped in, “Absolutely, gentlemen, he’s right. There is a need for a new luxury hotel here in Vienna...but I am going to insist we add a spa as well.” Vincent Margot was the big picture man, always painting in broad strokes and seeing what could be. He let others work out the minute details. “I want people lining up for a world-class experience! I will match the one hundred fifty!”
In came the third partner with equal enthusiasm, “A spa and a bar. We need a place for people to drink and dance. Picture it like an oasis of pleasure, my friends. A paradise where people can have the time of their lives, while the bill accumulates quite nicely.” Xavier Muldrow was a 34-year-old banker and bachelor. Women said he was stunning to look at, and he always had a new one on his arm every time William had him over for a party. He helped the group keep a young perspective, and had an excellent eye on what was trending. “I’m in.”
William nodded slowly and addressed the room as he stood back on his feet. He looked genuinely moved by the support of his business partners. “Alright, gentleman. Thank each of you for your generous support. To the rest of my esteemed guests, we are each committed to put forward one hundred fifty thousand to start. This additional investment will see us through the rest of the land purchases and allow us to get construction in full swing. Can we count on each of you for the same?” William had known they would come around, and to a man they did. He shook hands with each of them and glad-handed his way from table to table. He made each one feel as if they were on the ground floor of the opportunity of a lifetime. William believed that it was such an opportunity, and he did not let show how close the deal was to completely collapsing. As the meal finished he stood back up to give a final instruction, “My man Arlo will coordinate the paperwork with each of your representatives this evening. Your funds will be kept in the highest security until dispensed in our endeavors. God bless Vienna!”
Shouts of “Here! Here!” rumbled across the room. Right on cue, the wait staff came in with bottles of champagne to celebrate. William noticed that Mr. Douglas Carpenter had no visible change of expression and drank nothing further. He bent over and whispered something in his companion’s ear.
As soon as he could, William pulled his right hand man Arlo aside. “Arlo, Let’s move. I want the signed paperwork from this evening back to me by the end of the week. If anyone tries to back out... convince them this is in their best interest. We cannot afford to have even one straggler. Not one! You heard Carpenter. He’ll ruin us if we don’t fix the situation with the Keyser property. He knows something’s up, and I want it taken care of first thing in the morning. Pick me up at 8:30 AM. We can go pay Keyser a visit.”
“On it, boss. I’ll take care the paperwork and see you first thing.” Arlo left his filet mignon steak half-eaten and started to visit the representatives of these powerful men one by one. He was too excited to keep eating, anyway.
William Ernst needed this to work out. This new round of funds would be spent quickly to satisfy the growing list of expenses: materials, contractors, permits, wages, etc. If Keyser didn’t cave he would only have one option left, and who knows if it would even work? The pressure was on.
Arlo Jofre was William’s most trusted employee, partner, and adviser. He was a Spanish gentleman whose family had immigrated to Vienna from Madrid when he was very young. Arlo had learned hard work as a child from selling paella off his father’s street cart. Through years of becoming savvy in the art of leverage, Arlo grew to become William’s right-hand man in his investment and real estate empire. Arlo had scraped and saved to get an education, and had been one of two young people chosen to start an apprenticeship at the William’s business, Ernst Investments. He worked his way up through the ranks by practically living at the office and making the most of every opportunity. Arlo was tough, tenacious, and nasty. He made it his business to know the inside of everyone’s dark closets, and he knew just when to pull out the old skeletons. Arlo Jofre wanted to be richer than rich, and thanks to William Ernst he was closer than ever.
Arlo’s finest accomplishment and breakthrough moment was when he helped Ernst Investments win a bidding war for a revitalization contract against T. Montez Holdings, an American company that had been incredibly profitable in the reconstruction business throughout Europe. What William didn’t know was that Arlo had come to the knowledge that Thomas Montez Sr. had a penchant for being less than faithful to his very jealous wife, and through the years had fathered four illegitimate children with four different women. Arlo masterfully leveraged this information to blackmail Thomas Montez Sr. When T. Montez Holdings suddenly dropped their proposal, that left Ernst Investments as the sole player and winner of the bidding war. This was an ice-cold tactic to be sure, but it proved very effective.
“Arlo, my boy, you are a magician at the negotiating table!” William had told him when the deal was done. They were seated in a cozy restaurant in Prague, celebrating the day’s accomplishments. “We beat out some very prestigious firms for this business!” William was smiling ear to ear. Arlo knew that William was too smart to fail to recognize something else had happened here, and that meant he was too smart to ask any questions he didn’t want answered. “Well done, well done! Waiter! Bring us a bottle of champagne and two Churchill cigars, if you please!”
“Mr. Ernst…” Arlo had to hold in some of his elation, he would never be in a better position to move up than at this moment, and he was prepared to capitalize.
“Call me William, Arlo!” William interjected as he slapped Arlo on the back and gripped his shoulder.
“Yes, of course. William, I couldn’t have done it without your guidance. Here’s to another successful partnership!” Arlo toasted with William and they lit their celebratory cigars. “I’m in now.” He thought.
He was correct. After a few more drinks, William Ernst believed he had found the perfect partner at last. Arlo was promoted to VP of New Business Acquisition and was given a healthy raise upon their return to Vienna.
As Arlo finished gathering the last of the signed contracts from the investor's representatives, his mind was already forming a plan for the next morning. He had a few ideas on how to take care of this Keyser situation. The fun was just beginning.