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Disconnected

Jim Edwards quickly built a long-distance-dialing empire. But he couldn't keep the distress calls on hold. Then the line went dead.

The company's astonishing expansion left the employees feeling giddy, in part because they shared the spoils. Edwards liked to reward his people, who received better-than-average salaries and Cadillac benefits that included full health coverage, a generous leave policy, free parking and cheap long-distance rates. Quarterly bonuses extended to the lowest levels. When BCI reached a new sales milestone, Edwards would call everyone into a meeting room and break out bottles of Dom Perignon. "I really felt like the Lord was blessing the company," says Susie Taylor, a devout Christian.

Employees had another reason to feel good about their employer: BCI's stated mission included contributing generously to worthy causes. That commitment was set in stone; a clause in BCI's bylaws guaranteed that 2 percent of gross revenues would go to charity. "I thought, wow, this is an interesting company -- they're actually giving back to the community," says former administrator Barbara Harris. During her initial interview, she was impressed by a giant photo mounted on the office wall that showed Edwards presenting a $25,000 check to Barbara Bush for the Houston READ Commission.

Edwards again gleaned the idea from Heartline, which had an identical pledge to charity, designed to help business by creating a positive public profile (Heartline apparently fell far short of actually donating the 2 percent). Under public-relations director Steve Long, BCI handed out sizable grants to adult literacy, environmental and child abuse-prevention programs across the country.

Locally the company donated $58,000 to help renovate the Houston Fire Museum, funded the 1997 cleanup of Buffalo Bayou, underwrote the 20th anniversary celebration of the Houston Area Women's Center and sponsored the city's youth baseball program to the tune of $350,000. "They were very community-oriented," says city parks department spokeswoman Susan Christian, recalling that Edwards was personally involved in the sponsorships. "You truly couldn't have asked for a more enthusiastic fellow."

The prime beneficiaries of BCI's largess, however, were the three principal shareholders. Each received hefty salaries -- Edwards, $350,000; Evans and Driscoll, $250,000 -- and periodic five-figure bonuses. BCI leased the top-of-the-line Mercedes for Edwards; Evans got a BMW 750i, which lists for more than $90,000. For their offices, both Evans and Edwards chose ornate, hand-carved Prince of Wales desks -- two of the only three in the world -- that cost $21,500 apiece.

Driscoll, whose official title was "of counsel," collected his paychecks despite being a rare presence at 600 Jefferson. Barely able to meet his governmental duties due to an increasingly difficult battle with Parkinson's disease, he had little time or energy to spend on BCI matters and would show up only once a week to have lunch with Edwards. "I didn't do a lot," he admits. Driscoll nonetheless maintained an office there stuffed with $30,000 worth of furniture and antiques, courtesy of BCI. (The former county attorney denies he pulled in more than $125,000 in salary and says he can't remember any bonuses. But several employees who had access to payroll information confirmed the figures.)

The company spent extravagantly on other indulgences: The conference room featured a custom-designed table in the shape of the BCI flame logo made from three different hardwoods, surrounded by cushy leather chairs with the company name stitched on the back. Limousines were the preferred mode of travel; when employees attended a Houston Parkinson fund-raising gala featuring Muhammad Ali in January 1997, BCI hired two limos to transport them all of six blocks. Minority shareholders received 1996 dividend checks that doubled their investment. The company threw lavish parties, handed out American Express cards like souvenir pens and pumped cash into several spinoff ventures that appeared to be bottomless pits (see "Bad Cash Investments").

Most symbolic of BCI's high flying were the planes. Edwards signed a contract with Aviex Jet for the use of three executive aircraft, one of which came with its own flight attendant. The cost: $80,000 per month.

A few employees had reservations about the exorbitant outlays, but most just went along for the ride, racking up huge AMEX and cell-phone bills, buying unnecessary office accessories and generally living beyond their means. "Money was no object," says Susie Taylor. "It was almost like everybody thought they had a free license to spend, because the company would pay for it."

When Steve Long had to pick a place to award a Mustang to a lucky customer in California, he chose the Beverly Hills Hotel -- on Oscar night. "Why did I pick the Beverly Hills Hotel?" Long says with a laugh. "Because I wanted to see it."

Much of the waste was of the nickel-and-dime variety. Billy Stewart, a computer network administrator who worked at BCI for 16 months, says he installed at least 15 infrared remote-control CD-ROMs in computers at about $100 each. "There was no point," Stewart says. "It was just something neat to have."

Stewart also bought and loaded computer game software for Edwards, who was so taken by one particular multiuser adventure game that he ordered it set up for all the executives.

The name of the game: Doom.

The collapse began in February 1997, when monthly billing unexpectedly shrank by half. For a long-distance reseller to maintain a healthy checkbook balance requires a complex, delicate balancing of numerous creditors. These include the wholesaler, the billing company that handles the accounts and local phone companies such as Southwestern Bell that piggyback charges to the customers in their monthly statements and make the collections. Because these other companies often must be paid before the customers actually write their checks, another company must "factor" the bills, that is, essentially loan the reseller the money up front to pay the debts, then siphon off a portion of the revenues as they come in.

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