Bloomberg Businessweek - USA (2019-10-14)

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BloombergBusinessweek

Quintillion’ssupposedmegadeals,butPiercecameup

withreasonstodelaytheprocess,likelytokeepherforgeries

frombeingdiscovered.MatanuskaTelephone,shesaid,might

breakitspurchaseobligationsforinternetcapacityontheir

landcable.Accordingtocourtdocuments,PierceadvisedCIP

toavoidlitigationbecauseit mightjeopardizea largersales

agreementsheclaimedtohavestruckwithMatanuskafor

underwatercableusage.Shevowedtosupplementthedis-

appearingrevenueandcontinuedtorepeatthisprocessasa

similarpatternplayedoutwithanothercustomer.

Bymid-2017,Piercehadrunoutofexcusestodelaysend-

ingoutinvoices.Shecouldnolongerhideherschemeafter

customerssawtheirbills.Berberich,who’dretiredtwoyears

earlierasMatanuska’sCEO,saidthehundredsofmillionsof

dollarshedidn’tremembercommittingtoQuintillionwould

bankrupthisoldcompany.(AMatanuskaspokesmansays

it’stakenthenecessarystepstosafeguarditsstakeholders.)

LawyersforQuintillion’scustomersdisputedtheinvoices,

andonetelecomcompanycontactedCIP.Disconcerted,a

CIPemployeeloggedintotheGoogleaccountPierceshared.

Allthecontractfileswerenowmissing.Twodaysearlier,

onJuly14,theGooglelogread,“ElizabethPiercemoved 78

itemstothetrash.”

Aweeklater,a CIPlawyerquestionedPierce,who’d

broughtherownpersonallawyer.Shesaidshewasunable

torecallthecircumstancesofeverycontractsignature.After

30 minutesshelefttheinterview,sayingtheinquiriesfeltso

outoftheblue.Theyrescheduledforthenextday.Hours

beforethatmeeting,herattorneycanceledandthefollow-

ingdaysubmittedPierce’sresignation.

Murphyscrambledtofinda successor,especiallybecause

QuintillionhadshipsgoingbacktoworknearAlaskatocom-

pletethefiber-opticnetwork.CIPrecruitedTronsrue,a sea-

sonedtelecomexecutiveandArmyveteran,whojoinedin

earlyAugust.TronsruefocusedonQuintillion’soperations

aboardtheIledeBatz, where,overthecourseof 15 days,

AlcatelSubmarineNetworksrepairedthe55-tonplowand

finishedthesubseacableasicesheetsbumpedtheirboats.

Meanwhile,Quintillionsays,it reportedPierce’sactionsto

federalauthoritiesinlateSeptember.

Throughout2017,Piercebehavedasifnothing were

awry.Shehelda ribbon-cuttinginAprilwithAlaskaSenator

LisaMurkowskiata cable-landingsiteintheoiltownof

Deadhorseandcalmlydeliveredkeynotesatconferences

intothesummer,evenafterherscamshadbeenuncovered.

“Elizabethis a dreamer,aninnovator,anda personwhojust

likestogetthingsdone,”saidthehostata Mayeventatthe

UniversityofAlaskaatFairbanks.A grinningPiercequipped,

“Obviously,I didn’twritethatbio.”

Inearly2018,shemetwithBlair,theformerQuintillion

workerwhoinvested$40,000.Overcoffeetheychitchatted

about family. Pierce said she’d left Quintillion to spend

more time at home. But, she said, there might be a problem

honoring Blair’s shares in Quintillion. (In truth, the shares

didn’t exist.) There was good news, though: She’d decided

tomakeBlaira beneficiaryinher

lifeinsurance.“Whywouldyou

dothat?”Blairasked,confused.

Pierce responded cryptically: “You

never know what can happen.”

In April 2018, the Department

of Justice announced Pierce’s

arrest. Shortly after, public

records indicate, her family sold

her Anchorage residence for

$415,000 and purchased a home

in Texas near Austin, which was

put in Bill’s name. (Prosecutors

argued this was an attempt to

shield assets from forfeiture. Bill

Pierce couldn’t be reached for

comment.) Near the time of her

arrest, Pierce phoned a longtime

friendwhowasobliviousofher

misdeeds;thecallwenttovoice-

mail.“‘Thingsareabouttoget

crazy—we’lltalklater,’” she said, according to this friend.

“That’s the last time I ever heard from her.”

On a freezing May afternoon, Tronsrue and Kerschbaum, the

Quintillion engineer, are smashing along in a white van on

theicyoutskirtsofUtqiagvik,thenorthernmostcommunity

intheU.S.Kerschbaumsteersthroughashensnowdrifts,and

20 minutes outside town, we stop at a nexus of Quintillion’s

network,demarcatedbypostspokingoutofsnowbanks.

Tolinkthesubseacabletoitslandfiber,Quintillionhad

todrilla mile-longchannel 80 feet underground, from this

snow-buried manhole to the ocean, and splice the cables.

At a nearby cable-landing station, they show me the wires

where data enters and exits through its underwater and ter-

restrial cables to Alaska customers.

Tronsrue, who has silvery hair and a Jeff Bridges drawl,

tells me he spent months after the unraveling of Pierce’s

scandal salvaging Quintillion’s relationships with customers.

He was able to recover some agreements; others fell apart.

In a sign of progress, Jens Laipenieks, CEO of Arctic Slope

Telephone, joins us at the cable station to praise Quintillion.

“We were at dial-up speeds years ago, but now our subscrib-

ers can do things like stream Netflix, play Xbox online, and

process Square payments,” he says.

Ultimately, Alaska got its subsea cable network, stretch-

ing around the tips of its coast. Quintillion estimates it’s con-

necting some 10,000 residents, in addition to local schools,

hospitals, and other business customers, to a usable con-

temporary internet. Crawford Patkotak, a whaleboat cap-

tain and chairman of the Arctic Slope Regional Corp., a

native-owned business group and a minority shareholder in

Quintillion, similarly credits the cable company with bring-

ing Utqiagvik into the digital age. “There’s even ocean ser-

vice now,” he says over reindeer Bolognese at the Top of the

A snow-buried

Quintillion beach

manhole near downtown

Utqiagvik