He reached into his briefcase, pulled out a document, a quarter inch’s worth of stapled pages, and tossed it on the table. “I defy you to read through this as often as you want and find Polton’s name in there,” he said.
I said nothing. This was preaching to the converted.
“Have you got a computer here?” he asked. “You must.”
I booted up the Mac Air I use for work (the other one, the one I write this diary on, was tucked away in a wall safe). From his pocket he produced a flash drive and slotted it in.
“I think you’re going to enjoy this,” he said. “And I know Mankoff will. It’s a recording I made privately. The only people who know it exists are you and I.”
The implication was clear. It seems that Spass had worn a wire on his own people. Talk about Washington being a nest of vipers!
He tapped a couple of keys and a recording began to play.
I could hear four voices: two asking questions, a third answering them, with occasional interruptions from a fourth. The only voice I recognized was the third: Polton.
It took me maybe another thirty seconds to figure out what I was hearing: this was Polton being deposed by the SEC about Protractor.
Or, to put it more precisely, this was Polton ratting out Struthers Strauss about Protractor. Blowing the whistle on his principal coconspirator in return for regulatory immunity, I guessed.
I could see why the SEC thinks its case is a lock. Polton has given them chapter and verse, down to the last penny. And Washington is willing to let Polton go if they can make an example of STST.
After it finished, I unplugged the flash drive and made to return it to Spass, but he waved me off.
“You may not think so, Chauncey, but I still have a vestigial sense of what’s fair, even if it only amounts to honor among thieves. Mankoff and Rosenweis—especially Rosenweis—will be interested in this. It may inspire some thoughts on their part about how to finance the money settlement.”
I took his point. We finished our drinks and he left—but not before leaving a final bonbon on my plate: “One last thing. There’s a rumor that Polton shorted your stock after he made his deal with Washington. I doubt he’s stupid enough to do that. Jimmy Polton may be many things, but stupid he isn’t. Anyway, the Commission’s looking into it.”
This was something Mankoff had to know about—and pronto. I called him on his personal cell phone number, and his wife answered. That had never happened before.
“Is Leon there, Grace? I really need to speak to him.”
“Oh, Chauncey, he went to bed early and I hate to disturb him. He’s had an awful, long day. Can’t it wait?” She sounded tired and sad, almost plaintive.
“Of course,” I replied, “let him sleep. Will he be in the office tomorrow?”
“I expect so. You know Leon. Wild horses …”
“No problem. I’ll call him then.” As I got ready for bed, I found myself thinking about Spass. He must be like any human being with even a speck of decency in him. Sooner or later, there has to come a time when one can no longer stand another minute of this stuff—the lying, the double-dealing, the sheer rapaciousness. There was a hymn we used to sing several times a year at Groton that seems to capture what Spass must be feeling, and what I myself am starting to feel: “Once to ev’ry man and nation / Comes the moment to decide / In the strife ’twixt truth and falsehood / For the good or evil side.”
I thought about that hymn all evening, although when I finally went to bed it was Mankoff I was concerned about. Something’s terribly wrong. I’m sure of it.
MAY 10, 2010
Marina Hochster has a good strong post on a financial blog today. Hard to disagree with.
She writes:
It’s time to put aside the idiotic notion that corporations should be run entirely in the interest of their stockholders, including executives with fat options deals. This disemployment-spawning theory, in aid of which Wall Street has prostituted itself, with Washington as its pimp, has not only grievously damaged the economy but has torn great holes in the nation’s social fabric, as millions of households and tens of thousands of communities have been uprooted for the sake of a notion for which there is little basis in economics, and none at all in decency.
When I read that, I thought, I really would meet this outspoken lady, “TARPworm” or no. I called B in L.A. and asked her to arrange an introduction.
“Should this make me jealous?” she asked.
“Not at all. I just like people who speak their minds. My heart is pledged to thee.” I spoke lightly, but put just enough feeling in my voice to arouse suspicion that I might be serious.
B promised to cook something up when she returns east.
MAY 14, 2010
Mankoff’s secretary called to tell me her boss is in the office and could see me at noon.
I thought he looked bad. Mankoff never radiates rude good health, but he looked especially pale, and he seemed to have shed a few pounds: his shirt looked baggy on him, its collar a half-size too large.
“You all right?” I asked.
He looked at me suspiciously. “Why? Has someone said something?”
I shook my head. “Just thought you looked a touch under the weather.”
“Actually,” he admitted, “I’m having some kind of intestinal blip the doctors are having difficulty getting a handle on. Nothing serious. So what’s on your mind?”
“I had a surprise visitor the other night,” I began. I told him about Spass coming to see me and suggested he get Rosenweis to join us. When Rich came in, I recapitulated my conversation with Spass. Then I played them the flash drive.
“So, bottom line, it looks to me like Polton’s turned state’s evidence,” I said when it finished. “In any case, Spass tells me that Uncle Sam wants an up-or-down answer on Protractor by July 4: $600 million, service compris.”
Mankoff nodded absently. “July 4,” he murmured. It was as if he’d lost track of the conversation. Then, like a dog shaking off water, he seemed to refocus and told me: “You’re right, what you just said. We should get more than $600 million …”
He broke off. For just a couple of beats, he looked confused, as if his train of thought had derailed. Rosenweis and I looked at each in wild surmise. This isn’t Leon, we were thinking—this isn’t the guy whose powers of concentration when attending to business are only equaled by Jack Nicklaus on the eighteenth hole of a major.
Then he recovered. “Let me mull it over.”
“What I should tell Spass?” I asked.
“Tell Spass to tell his people that they’ll have their answer on time. Leave Polton to us.”
I got up and left. I was bothered. This was all been very unlike Mankoff. At least, the Mankoff I’d known all these years. The Mankoff I thought I knew. Of course, the kind of man he is, maybe I know nothing.
MAY 15, 2010
It turns out I can’t make it to Maine for the Memorial Day weekend with the Longstreths. An important Silicon Valley client is planning a private museum—a billion-dollar project—and he requires my presence for the long weekend, when he and I are to fly all over Europe to look at recently built museums and meet with their architects. Big names. Zaha Hadid, Jean Nouvel, Foster, Rogers.
B sounded unhappy when I told her, but promises to put me on the list for the Labor Day weekend. I’d be a liar if I didn’t say I’m really disappointed, but what can you do?
JUNE 4, 2010
The trip to Europe was worthwhile, but hardly pertinent to these notes. My client showed himself to be perspicacious and informed; at the moment I think he’s leaning toward a young, hip firm based in Oslo, which would also be my choice.
Bianca’s gave me a full report about Memorial Day at her family’s place. As predicted, Hardcastle made a complete asshole of himself at lunch, and all were greatly relieved when he chugged off in his $200,000 Rolls.
“At one point, Uncle Wally referred to our president as ‘a house nigger.’ I thought Claudie w
as going to leap across the table and strangle him!”
“I hardly think of your brother as politically fiery,” I said. “Not as you’ve described him to me.”
“You’d be surprised. In Claudie the revolutionary fires burn deep and hot. You should have seen him at Harvard, especially when he and a bunch of Young Socialists picketed Daddy’s bank.”
“Otherwise, how’d it go?”
“Fair. Daddy was a bit down. He’d just come from his fiftieth reunion at Harvard, which seems to have been a bit of a bummer. Apparently the Class of ’60’s politics have taken a sharp turn to the right. All anyone wanted to talk about was money—even at Porcellian. Daddy feels that he and most of his classmates have spent their lives talking and thinking about money and business and that it’s time now to smell the roses.”
“I can understand that.”
“They’re very keen to meet you.”
That pleased me. I could infer that I’d received a good report card. “And I to meet them,” I said. “Anything else exciting?”
“I spoke to Marina on the phone. She’s on her way to China. We’ll get together when she returns.”
Suddenly, there’s much to look forward to.
JULY 15, 2010
The SEC action on Protractor is a done deal. STST will pay $600 million in fines and penalties; there will be a mild acknowledgement of corporate error, but no individuals will be named.
The critics are pointing out—not unreasonably—that the fine is a pittance for a firm as rich as STST, and Lucia reports that the Street consensus is that STST has cut itself a fantastic deal, although nobody’s saying as much, lest Uncle Sam get bigger ideas about future settlements with other firms. If Protractor was a $600 million malfeasance, the talk goes, what should BofA be looking at on Countrywide? $6 billion? Meanwhile the rumors about LIBOR are intensifying, with Barclays the name on the tip of everyone’s tongue. The numbers being thrown around will surely run well into the billions.
As usual, ugliness is in the eye of the beholder. To 99 percent of the world, $600 million will sound like a lot of money, but Mr. Market clearly knows what’s what, and the stock’s at $150; a month ago, you oculd have bought it for $125 and change.
And so it goes.
JULY 16, 2010
Mankoff called first thing this morning. He didn’t sound like himself—half his sentences seemed to glitch in the middle—but he did manage to tell me that Rosenweis went to see Polton yesterday after the close, and the two men had a frank exchange of views centering on Polton’s role in the SEC-Protractor outcome. It was made clear that either some accommodation must be reached, or Polton will never do another ten cents’ worth of business with STST. That might not sound so ominous to us, but once the word gets out that Polton’s on the STST shit list, a lot of other lucrative doors will close to him and he knows it. The upshot is that bygones are to be bygones, and Polton will personally pick up $350 million of STST’s tab at the SEC. Who said virtue isn’t its own reward?
AUGUST 6, 2010
Like most people, I keep tucked away in my mind a list of my best and worst days. My best list starts with November 21, 2008, when the news of Winters and Holloway’s appointments was released. There’s also the day I was tapped for Bones; the day my old man and I won the father-son squash doubles at the Racquet Club. The destruction of the Bank of West Congo went under.
That’s the good stuff. Yesterday, July 31, goes right to the top of the list of yours truly’s All-Time Worst.
Most of the day had gone pretty well. A meeting with Maecenas’s accountants concluded that we’re in good shape. This was followed by lunch at the Morgan Library and a productive discussion of a future Lewis Carroll exhibition, followed by drinks at the Stuyvesant Club with a friend from Denver, who filled me in on the world of cultural investment and finance in the Rockies. I got home around seven.
B’s crisscrossing the Midwest for the next ten days, scouting locations, so I’m on my own. Our relationship is progressing nicely: say, eight on a scale of ten. We see each other two to three times a week when she’s in the city. We’ve developed an easy intimacy; sometimes she’ll stay over, sometimes I will, most nights we return to our separate homes and separate beds.
So all seemed copacetic until about 9:30 p.m., when the house phone rang, and the guy at the lobby desk told me that a “Mrs. Lucia” was downstairs asking for me. Whatever this was, I thought, it was unlikely to be good news.
It wasn’t. She looked terrible. “What’s wrong?” I asked.
“First of all, I need a drink. Now.”
I poured her a stiff single malt, no ice. She took a couple of unladylike swigs. When she spoke, her voice was a rasp.
“Leon’s leaving,” she told me.
“Leaving? My God.” I sat down heavily, then got up and stiffened both our drinks. “Tell me.”
“I’ve just come from the office. I was at the Four Seasons charming one of my lapdogs at the Times when I got a call telling me to get my fanny down to global headquarters posthaste. To Richard’s conference room. The Executive Committee was there. Then Leon got on the speakerphone from Santa Fe.
“He told us that he has been diagnosed with early onset Alzheimer’s. He’s been everywhere: Mayo, Johns Hopkins, MD Anderson in Texas. At present, the symptoms come and go, but he feels the disease gaining on him. He’s decided he can no longer responsibly perform his duties as CEO and has asked to be relieved, effective immediately. They’ve appointed a special committee to handle the matter of succession, but of course it’ll be Richard.”
She moved nervously around the room, fussing with her hair, stopping to examine a row of narrow shelves on which I’d ranged my old man’s trophies.
“These are nice,” she said, almost dreamily. “They remind me of the house I grew up in.”
Then she returned to the sofa, sat down beside me, and patted my cheek. “Oh, Chauncey. What will become of you without Leon? How long have the two of you been together?”
“Thirty years this past June.”
I poured another round. We talked about what life was going to be like at STST without Mankoff.
“I’ll stay on board for a while,” she said. “There’s a lot about this firm that isn’t easy to defend, but at least we’re not a bunch of crooks. Not compared to some others I could name. And I fancy I haven’t done a bad job. But I can’t see working for Richard indefinitely. Eventually I’m going to move back to London. I’m thinking about joining with some friends in a social advisory service for rich foreigners. Everything from what school to apply to and which fork to use to travel, what decorator to hire, how to wangle an invitation to Ascot, how to get a good table at Harry’s. It’s the best way for people like us to use our taste and background to make really very good money teaching all these Chinese, Russians, and Arabs how to spend their jillions. God knows, Chauncey, I don’t have to tell you about that.”
“I’m not sure how to take that,” I replied.
“Listen, being a whore is an honest business. These are riffraff who believe that unless something’s expensive, it can’t possibly be any good, which lets one mark up goods and services to three or four times their normal cost. I may ask you to help me now and then. Fix up a box at the opera, arrange for someone to sit close to Anna at the Costume Institute gala.”
“I shall be delighted. If the price is right.”
“You may assured it shall be.”
I poured us another round. We talked for a long while, until suddenly Lucia exclaimed, “My God, look at the time!” It was getting on for 1:00 a.m., and she got up and rushed out the door, barely thanking me for the drinks and the sympathetic shoulder.
I stumbled to bed. My mind went back three years to that equally dull morning outside Three Guys, and all that had happened as a result. It was as if a life was ending, you’d have to say it was.
The issue now is, where the hell do we go from here?
AUGUST 26, 2010
Just back fro
m visiting the Mankoffs in Santa Fe. A tiring trip, whose emotional stress wasn’t helped by a late flight, a missed connection in Dallas, and an overnight stay at a vile airport hotel in Nashville. It was 10:00 a.m. this morning when I finally dragged myself into the apartment.
So: Santa Fe. It started with a call a week ago from Grace Mankoff. Could I come down? Leon would like to see me.
To get to Santa Fe, you fly into Albuquerque and then take a shuttle bus a bit over an hour north, where you’re dropped off downtown. On my trip out, I left at the crack of dawn, and by early afternoon, I disembarked in Santa Fe to find the Mankoffs waiting for me. Leon looked OK. Grace looked beat.
To my surprise, Mankoff was at the wheel, although I could see Grace keeping an eagle eye on him. The short trip proceeded without incident. Their house is about twenty minutes northwest of the city, in scrubland that’s mostly undeveloped, but which is dotted here and there with large pueblo-style houses, low-lying in the pueblo style, and with vistas to die for. Their house is a very pleasant, homey place: big open rooms and porches decorated with Hopi and Navajo art, blankets, drawings, and pots. There’s a music room with a harpsichord I recognized from the Connecticut house. Mankoff’s other instruments, though—along with his musical manuscripts—have been given to Yale.
The visit went about a million times better than I expected. The atmosphere was upbeat; Mankoff wasn’t the drooling, withdrawn, shambling being I’d anticipated. Now and then, he seemed confused by small things or simple tasks. There was one morning when we were going downtown when he seemed momentarily taken aback by the task of starting the car. Still, if you didn’t know him as well as I did, you’d’ve said that the old engine was ticking over more or less normally. I did get Grace Mankoff off to one side one day to ask for a medical briefing; all she said was that her husband was like a refined orchestra that had been turned over to a tempestuous, quixotic, unpredictable conductor with a drinking problem. “All in all, it still plays reasonably well, but there are moments …”
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