Chapter 5: Organization and Hierarchy

The next day Cassie met with the attorney from Washington, Captain Gifford, O'Keefe, Smyth, and SSgt Schultz. They used the large den downstairs which had more room than her office upstairs.

"I see we are all here, June get the housekeeper in here. Have the maid bring coffee, tea, cream and sugar. Have her throw in some light pastry to nibble on."

"Before we get into depth on what needs to be covered let me give you my sudden insight on my problem. I have thirty or more people who are contracted directly to me. That means if any of these people do anything, acting on my orders, then I can be directly liable for their action, am I right sir?"

Cassie nodded at the attorney setting at one end of a large conference table. "I believe that is correct unless the specific action is forbidden in their contracts."

"What if their contract was through an LLC and I was also contracted through that same LLC, as their supervisor?"

"In that case all liability falls on the LLC who has hired you to act as supervisor and them to act for the LLC. There are some incidents that you would be personally liable but that is rare."

"So then, where the majority of my personal employees carry firearms and may be in situations where they will be called on to fire them it would be much better if they were employed by a LLC instead of by me personally?"

"Without a doubt, every layer between you and them will help to reduce your own personal liability."

"So that is your first order of business; create a Security Consulting Firm whose goals are to contract out law enforcement, investigations, security and housing. That makes a good cover for prison and jail operations, fugitive search and apprehension, criminal investigations and bodyguards. It should also do research, testing and development of equipment for those purposes."

"Next a corporation to act as a holding company to own, invests in, and operates companies for the share holders of the said corporation. Give it the name of CHH Holdings. It will hold the main shares of CHH Security, the LLC for here."

"The three primary share holders of CHH holding will be Cassandra Howly Howard, George Howard, and Sarah Howly Howard. The percentage of ownership will be 75%, 20% and 5%, their titles will be CEO and Chairman of the Board, CFO and Assistant Chairman and Treasurer, and Secretary of the Board. Put a survivor clause in that all shares revert back to the company on death. The company should have first right of purchase of all shares, the boards as a whole has second rights and then individual members of the board have third rights."

"I will sell my shares in "We Find It!" to CHH Holding for $1.00 a share with payment deferred for six months. By the way, whose attorney are you, mine, my father's, or one of his companies?"

"I am a partner in a law firm that is contracted to "We Find It!" So I know that CHH Holding will start off life as big as one of the old Forbes top 500 companies in the USA."

"Your firm did a really good job for us! If we start getting into area's that your firm does not specialize in or find iffy then find us a firm that is trustworthy and can do the job."

"There is no problem. Our firm is the one that advised the Federal Judge of the Western District of Texas on how to handle your problem and got you your badge. We have kept our ear to the ground on that situation and we think we can get you something even better."

Cassie picked up her cup of coffee and took a sip; every time she drank coffee from her Moka pot she could not help thinking it was the best coffee in the world. She watched as the Attorney picked up his cup to sip it. His eyes widened and he looked down at the cup in his hand. He took a bigger second sip.

"Ms Howard, your parents must make a purchase arrangement also or it will show up as a differential in payment for assets, and that's something that the IRS will note really quickly and figure it's a method of shuffling assets around without paying estate taxes later."

"Point, one moment." She took her blackberry out of a fanny pouch and pressed a speed dial button. Then she put it on speaker phone and laid it down on the table.

"Hello Cassie" Her father voice came out of the speaker.

"Dad, got you on speaker here at my end. I got a few people listening in. Primarily this is a business meeting. I am forming two companies. One is a CHH Security, an LLC that will be a security company and all my security personnel will be contracted through it. I also will have a contract through it. The primary share holder will be a holding company of which I will own 75% and be CEO, I want you to have 20% and be CFO and mom to hold 5% and be Secretary of the Board. As CFO you will also be Treasurer and Asst Chairman of the Board. The Operation contract a President and a staff. I am buying my 75% by selling the company my holding in "We Find It!" for the six month deferred payment of $1.00 a share. The Attorney from Washington says that you and mom have to make a similar purchase for your share or the IRS will think there's something rotten in the state of Denmark."

"OH MY GOD, he ha he ha he ha..."

"Dad what wrong?"

"Oh my, yeah the IRS would be all over that. Who is the attorney there?"

"It's me George, Oliver Green."

"Hello Oliver! We just got an offer the other day for our share of "We Find It!" I owned 5% and Sarah owns 2.5%. That's 7.5% of over One Hundred Million shares or 7.5 million shares. Cassie owns 35 million shares so at $1.00 a share that's only $35 million dollars. The offer we got two days ago was $2,500 dollars per share. You see why I was laughing. The company voted to pay a dividend of $5.00 dollars a share today. I sitting here looking at a check to me of 37.5 million dollars. Cassie, your dividend check which will be directly deposited to your account was for 175 million dollars"

"Yeah Cassie, Tiny is all upset, he has no crews. They all retired, half of them bought land up there in Idaho and are building homes. The other half came back down here to Sonora and is doing the same. Tell you what we will sell you 1 million shares at $1 a share from each of us. On paper it not an insignificant amount till you knows just how much those shares are worth. You can adjust the percentage of ownership to reflect that. It should be about four percent each for your mom and me."

"That will work George, all shares revert to the company on death. The company has first right to buy, the board second rights and individual board member third rights. Hey George was that the first year dividends?" Attorney Green asked.

"No, that was the first quarter dividend; the mine is taking out nearly 50 million dollars worth of gold a week. You know you guys have the mine claims stretching all the way to the Canadian border. That's over 15 miles long. The other side of the border looks like a heavy equipment display yard. They are plotting on our centerline using satellites and airplanes, trying to pinpoint the vein flow."

"Dad, you got any friends over there?" Cassie had leaned down to ask.

"Sure got a couple over there. Why?"

"You might tell one of them that the vein makes a sharp turn to the east just before it cross over the border, runs about a mile then slowly drifts back north. On the north side it parallels the border for nearly 40 miles but only about a mile north of it. I did not look further than that because it was getting thinner all the way."

"Thanks girl! That will make some real good friends. Oliver, send me the paper work. We will need to set up an office there in Washington, so you need to find some people to man it for us. Cassie is going to be one of those absentee CEOs. I am not going to be much better. Set up corporate headquarter for the holding company here and the Security firm in Washington."

"Okay Dad that should get us going, I'll get back with you later. Tell Mom I love her."

"I will, you know she loves you."

"Click"

Cassie picked up her phone and put it away. Everybody at the table except the attorney was staring at her with mouths gaping open. Cassie moved her face from one to the other around the table. "What?"

"You are rich!" SSgt Schultz whispered."

"Yeah, that and $2.50 gets me a cup of coffee at Starbucks."

"Okay, now we know we can do the legal parts to get this on a professional basis. How soon can we let contracts?"

"I should have the corporate papers filed by Friday. Monday I can get your taxpayer number issued and then open banking accounts. Tuesday I will find lease space in Washington and open accounts here locally. By Wednesday I will assign you a legal officer for on site. He will execute your contracts for you. I take it you are not planning hourly wage employees?"

"No! Juanita, I want to convert all of the domestics to salaried position. Now all of your people, including you Juanita, are not my employees, so I want to contract them directly through my new company. First, benefits and wages must be negotiated. Second, our liability to their current employers must be compensated. Does our contract forbid us hiring them away from the company they now work at? There is also the question of health benefits, pension and profit sharing. We need all of these for all of our employees. Oliver?"

"On it, we have a junior partner that has worked with other clients on employees benefit packages. I will get them out here tomorrow."

"Good, Captain Gifford, do you have something to say? How will our people feel about this?"

"I'm not sure about them but, for myself, it gives me a feeling of security. I mean you as our primary meant that if you went down we had nobody. I have been worrying since Locust Grove that we have no contact except Clint in Idaho. What if we lose contact with him and you at the same time. So yeah, I like the idea of a Corporation holding the contract. That is almost as good as working for the government."

"Betty, what are your feelings?"

"I'm for it; it gives us a more organizational feel. Also, it gives us more stability and makes us more versatile. Right now each and every one of us has to wonder what happens if we get injured. I am paying my own health care now. I got an automatic transferred to a Roth IRA plan. But most of our personnel have not done this. I think it should be a requirement"

"No health care? You are not covered by me? Damn! See, that's just one more thing I did not know about these contracts. Juanita, how about your people? Does the company we are using supply you with health care and pension?"

"It's an option but most don't take it as it costs a chunk out of their pay. I have worked for the company for more than twenty years. I am not sure what I would get if I quit them."

"Mr. Green, can you set up something to help them to make the best decision they can?"

"The person I am sending out in the morning can. They will need to see the contracts for all your personal employees as well as the contracts the domestics have with their employer and the contract you have with the employer."

"Anybody got any questions or something we missed that needs to be looked at?"

"Have you thought out the rank structure and pay scale yet?" SSgt Schultz asked.

"Yes, I have we will get together later and let you type it up."

"Rank and pay scale?" Betty asked.

"Yes, I'm going to add specials ranks but not really. We need both combat and non-combat personnel. Take SSgt Schultz here. She was never deployed. The other day on campus is the first confrontation she has ever been in after 20 years of military service, so being military is not enough. We need to separate the combat vet from the non-combat."

"Schultz is now SSgt. Schultz and will not be in charge of any detail with combat potential. She is my office security and assistant aide; she is in charge of getting my security detail assigned and ready for deployment."

"The combat vet E-5 will be called Gunnery Sgt or GSgt, E-6 is MSSgt and MGSgt E-7 is First Sgt. and E8-9 is Sgt Major"

"Captain, Cpl. Charles Townsend is to be promoted to E-4 Sgt in charge of my school detail unless you know some reason not to promote him. With major recruitment we are going to need more senior enlisted personnel so look for those who can step up. We are going to need more combat officers so look for recommendations. At the present time, we need to concentrate on new officer who have commanded in combat."

"If nothing else we are dismissed."

Cassie sat there for awhile thinking. Finally she began to get up and noted that SSgt Schultz was still in the room. "SSgt Schultz?"

"Just waiting for you Ma'am"

"Did you make enough notes?"

"Yes Ma'am."

"Take a note, check into finding us a doctor or doctors. We need general and surgical. Also we need to set up a full clinic, almost a surgical ward."