Don Brown - The Malacca Conspiracy

A man, whose salt-and-pepper hair was only visible from the back, but who sat at the end of the table closest to Robert, stood and turned around.

“Welcome to the White House, Lieutenant Molster.” The president of the United States, Mack Williams, speaking with the native twang of his beloved Kansas homeland, extended his hand. “Sorry to interrupt whatever you were doing up there in the Big City.”

The commander in chief’s grip was firm, and he exuded charisma. In a blue pinstripe suit and red tie, President Williams seemed more imposing in person than on television.

“Not a problem, Mr. President,” Robert heard himself saying. “I’m a native Virginian, and I’m always grateful for a free trip back home.”

The president released his hand and gestured him to his seat. “Always happy to accommodate the members of our armed forces, and especially the navy,” the president said as he settled back into his chair. “Secretary Lopez over here has to call me down for playing favorites. Claims my navy roots come to the surface too often.”

“Yes, sir,” Robert said, surprised at the sudden ease with which he was conversing with the most powerful man in the world.

“So, Lieutenant.” The president sipped from a glass of ice water. “We understand you had an eventful morning.”

“That’s right, sir.”

“Well, you’re here because you’re the one intelligence officer in the navy with an expertise in the area of oil futures. Word has it that you’re concerned about a possible linkage between these limit moves that you’ve observed and some terrorist activity going on right now in Southeast Asia.”

“Last night, I grew concerned about several rapid spikes in the price of crude oil futures. We had three limit moves during the night. I felt there was a connection as soon as I became aware of this terrorist activity going on in Singapore and the Malacca Straits. At first, all I knew was that someone was making billions from these limit moves. Then I learned of the attacks on the tankers, and it hit me like a ton of bricks. I voiced my concern to Admiral Jones.” Robert’s eyes met with the chairman of the Joint Chiefs, whose poker face returned a hard stare. Robert looked back at the president. “I think there may be a linkage, sir.”

“You do, do you?”

I’m sticking my neck out with an unproven theory. Suppose I’m wrong? The end of my career, for sure. “Yes, sir, Mr. President. I can’t say for sure, but I have a strong feeling this may be the case, sir.”

The president looked around the room. “All right, Lieutenant. Let’s get down to business. Tell us why you suspect this.”

He took a deep breath. “I cannot say for certain that the events are related. But two factors here give us reason to pause. The first is volume. The second, and closely related to volume, is timing.

“First, volume. Up until the last twenty-four hours, ladies and gentlemen, the greatest daily volume in light, sweet crude contracts was 800,731. And that occurred on November 1, 2007.

“In the twenty-four hours before the first limit move, light, sweet crude experienced just over a million trades. That’s a record of over two hundred thousand more trades than was ever experienced in any twenty-four-hour period since we started keeping statistics. About two-thirds of those trades were buys. In other words, the buys mean that someone is expecting the prices to jump. Now, all that buying occurred just before these attacks in Singapore and again in the Malaccan Strait. I believe Commander Murray has a timeline chart to illustrate. Commander?”

Beth Murray nodded her head and clicked a switch. The timeline that he had not yet seen himself illuminated from a PowerPoint projector onto the screen just behind his seat.

Timeline

Oil Futures and Malacca Strait Attacks

Note: 12-Hour Time Difference Between Washington and Singapore

1. Massive trading activity leading up to limit moves and attacks. 1,000,051 trades of light, sweet crude contracts in 24 hours before 1 A.M. EST [1 P.M. Singapore] [702,289 buy orders “long” position].

2. 1 A.M. EST [1 P.M. Singapore] Trading halted first time because of limit move to $110.

3. 1:20 A.M. EST [1:20 P.M. Singapore] Market resumed; immediate limit move to $120 a barrel. Trading halted second time.

4. Trading resumed at 1:30 A.M. EST [1:30 P.M. Singapore].

Terrorist Attacks in Singapore and Malacca Straits

Between 1:30 A.M. and 3 A.M. EST.

(Between 1:30 P.M. and 3 P.M. Singapore time).

Attempted attack on tanker SeaRiver Baytown; foiled by USS Reuben James.

Attack on Rasa Sentosa Resort, Singapore [shortly before British Prime Minister John Suddath’s advance team scheduled to visit].

Attack on Belgian Tanker Hellespont Alhambra [Singapore Strait].

Attack on Belgian Tanker Hellespont Tara [Singapore Strait].

Attack on Chevron tanker Altair Voyager [Andaman Sea, near northwestern entrance to the Malacca Straits].

5. 3 A.M. EST [3 P.M. Singapore] Price Soars to $140 per barrel. Limit move at 3 A.M. halts trading. Trading halted third time.

6. 3:15 A.M. EST [3:15 P.M. Singapore] Trading Resumes. Price rises and stabilizes at $148 per barrel.

“Thank you, Commander,” Bob said, taking a moment to study the PowerPoint slide for the first time. Beth Murray had done her homework. The timeline, the prices, all seemed on mark.

“As you can see, Mr. President and distinguished members of the council, we start with a massive run on light, sweet crude oil contracts, breaking the record by two hundred thousand, and then at one o’clock this morning, we have our first trading halt. Almost immediately, twenty minutes later, as soon as the market opens, it shuts down again from a second move.

“The market reopens at one-thirty, after having risen twenty dollars per barrel in a period of half an hour.

“Then, in the period between of ninety minutes, between one-thirty and three o’clock Eastern time, which is the afternoon in Singapore and along the Malaccan Straits, we see five attacks in the region. Four of the five attacks are successfully carried out. Four of the five are against supertankers carrying crude oil. Thanks to the US Navy, one attack against the oil tankers is foiled, but three are deadly effective. I’m told that we’ve got an environmental disaster in the Strait of Singapore right now, and there’s no telling what kind of environmental problems might arise from the Andaman Sea attack.

“Now going back to your question, Mr. President.” Robert turned and looked at the NSC members, still studying the PowerPoint chart. “While we don’t have direct proof that someone out there was actually buying futures contracts based upon some type of foreknowledge that these attacks would occur, I suppose my answer is this: as an intelligence officer, given the rapid sequence of events within this timeframe, I would definitely be concerned.”

There was silence.

“I have a question,” National Security Advisor Cynthia Hewitt spoke up.

“Yes, ma’am,” Robert said.

“Lieutenant, how much money was made on all this last night?”

“Goodness.” He rubbed his chin. “The profits are staggering.”

“How so?” Hewitt asked.

“Well, let’s say, for example, that someone purchased one hundred thousand contracts just before the beginning of the run. If you bought one contract just before the run, and sold when crude leveled out at one hundred and forty-eight dollars this morning, you would make a gross profit of forty thousand dollars on one contract. Now remember, more than one million contracts were traded in the period.

“But for the sake of being conservative, I’m just giving an example of a hundred thousand contracts, on the assumption that some terrorist organization could have swung a purchase of this amount.” He looked at Beth Murray. “Commander, could you please switch back to the overhead?”