"Why do you say that? How did you know?" Higgins inquired.
Mason sighed. "Cause he said, 'it's me remember?' and spoke like Archie Bunker. Good enough for you?" Mason grinned wide. Mason had the accent down to a tee. Higgins gave in to another round of snickers.
"He said, 'you like, eh?'" Mason spoke with an exaggerated New York accent and used the appropriate Italian hand gesture for 'eh!'. "I said, 'I like, but so what?' I still wasn't sure what he wanted. He said, 'they never took a loss, yet. Look for Friday. This Friday. They're gonna lose a bunch.' I said, 'how much' and he said, 'youse already know.'" Mason's imitation of a Brooklyn accent was good enough for a laugh.
"He then said, 'enjoy the next installment', and that was the last time I spoke to him. At any rate, the next package con- tained a history of financial transactions, primarily overseas; Luxembourg, Lietchenstein, Switzerland, Austria, Hong Kong, Sidney, Macao, Caymans and such. They show a history of bad loans and write downs on First State revenues.
"Well, I grabbed the Beanie from the Basement and said, help me with these now, and I got research to come up with the 10K's on First State since 1980 when McMillan took over. And the results were incredible." Mason held out a couple of charts and some graphs.
"We compared both sets of books. The bottom lines on both are the same. First State has been doing very well. McMillan has grown the company from $1 Billion to $12 Billion in 8 years. Quite a job, and the envy of hundreds of every other S&L knee deep in their own shit." Higgins cringed. He thought Ms. Man- chester should be shielded from such language. "The problem is that, according to one set of books, First State is losing money on some investments merely by wishing them away. They disappear altogether from one report to the next. Not a lot of money, but a few million here and there."
"What have you got then?" Higgins pressed.
"Nobody notices cause the losses are all within the limits of the loss projections and reserve accounts. Sweet and neat! Million dollar embezzlement scam with the SEC's approval."
"How much follow up did you do?" Higgins asked as his pen fly across the legal pad.
"Due to superior reporting ability," Scott puffed up his chest in jest, "I found that a good many account numbers listed in the package I received are non-existent. But, with a little prod- ding, I did get someone to admit that one of them was recently closed and the funds moved elsewhere.
"Then, this is the clincher, as the caller promised, today, I looked for the First State SEC reports, and damned if the numbers didn't jive. The books with the overseas accounts are the ones with the real losses and where they occur. The 'real' books don't."
"The bottom line, please."
"Someone has been embezzling from First State, and when they're through it'll be $3 Billion worth." Scott was proud of himself. In only a few days he had penetrated a huge scam in the works.
"You can't prove it!" Higgins declared. "Where's the proof? All you have is some unsolicited papers where someone has been play- ing a very unusual and admittedly questionable game of 'what if'. You have a voice on the end of a phone with no name, no nothing, and a so-called confirmation from some mid-level accountant at the bank who dribbles on about 'having to do it' but never saying what 'it' is. So what does that prove?"
"It proves that McMillan is a fraud, a rip-off," Scott retorted confidently.
"It does not!"
"But I have the papers to prove it," Scott shuffled through the folders.
"Let me explain something, Scott." Higgins put down his pen and adapted a friendlier tone. "There's a little legal issue called right to privacy. Let me ask you this. If I came to you and said that Doug here was a crook, what would you do?"
"Ask you to prove it," Scott said.
"Exactly. It's the same here."
"But I have the papers to prove it, it's in black and white."
"No Scott, you don't. What you have is some papers with accusa- tions. They're unsubstantiated. They could have easily been phonied. You know what computers can do better than I do. Now here's the key point. Everybody in this country is due privacy. You don't know where these came from, or how they were obtained, do you?"
"No," Scott hesitantly admitted.
"So, someone's privacy has been compromised, in this case McMil- lan's. If, and I'm saying, if, these reports are accurate, I would take the position that they are stolen, obtained illegally. If we publish with what we have now, the paper could be on the receiving end of a slander and libel suit that could put us out of business. We even could be named as a co-conspirator in a criminal suit. I can't let that happen. It's our obligation to guarantee responsible journalism."
"I see." Scott didn't agree.
"Scott, you're good, real good, but you have to see it from the paper's perspective." Higgins' tone was now conciliatory. "This is hard stuff, and there's just not enough here, not to go with it yet. Maybe in a few days when you can get a little more to tie it up. Not now. I'm sorry."
Case closed.
Shit, shit shit, thought Scott. Back to square one.
Hugh Sidneys was nondescript, not quite a nebbish, but close. At five foot five with wisps of brown scattered over his balding pate, he only lacked horn rimmed glasses to complete the image. His bargain basement suits almost fit him, and he scurried rather than walked down the hallways at First State Savings and Loan where he had been employed since graduating from SUNY with a degree in accounting twenty four years ago.
His large ears accentuated the oddish look, not entirely out of place on the subways at New York rush hour. His loyalty to First State was known throughout the financial departments; he was almost a fixture. His accounting skills were extremely strong, even remarkable if you will, but his personality and appearance, and that preposterous cartoon voice, held him back from advancing up the official corporate ladder.
Now, though, Hugh Sidneys was scared.
He needed to do something . . .and having never been in this kind of predicament before . . .he thought about the lawyer . . .hiring one like he told that reporter . . .but could he afford that . . .and he wasn't sure what to do . . .was he in trouble? Yes, he was . . .he knew that. That reporter . . .he sounded like he understood . . .maybe he could help . . .he was just asking questions . . .what was his name . . .?
"Ah, Mr. Mason?" Scott heard the timid man's Road Runner voice spoke gently over the phone. Scott had just returned to his desk from Higgins' office. It was after 6P.M. and time to catch a train back home to Westchester.
"This is Scott Mason."
"Do you remember me?"
Scott recognized the voice immediately but said nothing.
"We spoke earlier about First State, and I just . . .ah . . .wanted to . . .ah . . .apologize . . .for the way I acted."
Scott's confirmation. Hugh Sidneys, the Pee Wee Herman sounding beancounter from First State. What did he want?
"Yes, of course, Mr. Sidneys. How can I help you?" He opened his notebook. He had just had his story nixed and he was ready to go home. But Sidneys . . .maybe . . .
"It's just that, well, I'm nervous about this . . ."
"No need to apologize, Hugh." Scott smiled into the phone to convey sincerity. "I understand, it happens all the time. What can I do for you tonight?"
"Well, I, ah, thought that we might, maybe you could, well I don't know about help, help, it's so much and I didn't really know, no I shouldn't have called . . .I'm sorry . . ." The pitch of Sidneys' voice rose as rambled on.
"Wait! Don't hang up. Mr. Sidneys. Mr. Sidneys?"
"Yes," the whisper came over the earpiece.
"Is there something wrong . . .are you all right?" The fear, the sound of fear that every good reporter is attuned to came over loud and clear. This man was terrified.
"Yes, I'm OK, so far."
"Good. Now, tell me, what's wrong. Slowly and calmly." He eased Sidneys off his panic perch.
Scott heard Sidneys compose himself and gather up the nerve to speak.
"Isn't there some sorta rule," he stuttere
d, "a law, that says if I talk to you, you're a reporter, and if I say that I don't want you to tell anybody, then you can't?" Sidneys was scared, but wanted to talk to someone. Maybe this was the time for Scott to back off a little. He stretched out and put his feet up on his desk, making him feel and sound more relaxed, less pressured. According to Scott, he generated more Alpha waves in his brain and if wanted to convey calm on the phone, he merely had to assume the position.
"That's called off the record, Hugh. And it's not a law." Scott was amused at the naivete that Hugh Sidneys showed. "It's a gentleman's agreement, a code of ethics in journalism. You can be off the record, on the record, or for background, not for attribution, for confirmation, there's a whole bunch of 'em." Scott realized that Hugh knew nothing about the press so he explained the options slowly. "Which one would you like?" Scott wanted it to seem that Sidneys was in control and making the rules.
"How about we just talk, and you tell me what I should do . . .what you think . . .and . . .I don't want anything in the paper. You have one for that?" Hugh was feeling easier on the phone with Scott.
"Sure do. We'll just call it off the record for now. Everything you tell me, I promise not to use it without your permission. Will that do?" Scott smiled broadly. If you speak loudly with a big smile on your face, people on the other end of the phone think you're honest and that you mean what you say. That's how game show hosts do it.
"OK." Scott heard Sidneys inhale deeply. "Those papers you say you have? Remember?"
"Sure do. Got them right here." Scott patted them on his clut- tered desk.
"Well, you can't have them. Or you shouldn't have them. I mean it's impossible." Hugh was getting nervous again. His voice nearly squeaked.
"Hugh, I do have them, and you all but confirmed that for me yesterday. A weak confirmation, but I think you know more than you let on . . ."
"Mr. Mason . . ."
"Please, call me Scott!"
"OK . . .Scott. What I'm trying to say is that what you say you have, you can't have cause it never existed."
"What do you mean never existed?" Scott was confused, terribly confused all of sudden. He raised his voice. "Listen, I have reams of paper here that say someone at First State is a big crook. Then you say, 'sure it's real' and now you don't. What's your game, Mister?" Playing good-cop bad-cop alone was diffi- cult, but a little pressure may bring this guy down to reality.
"Obviously you have them, that's not the point." Sidneys reacted submissively to Scott's ersatz domineering personality. "The only place that those figures ever existed was in my mind and in my computer. I never made a printout. They were never put on paper." Hugh said resolutely.
Scott's mind whirred. Something is wrong with this picture. He has papers that were never printed, or so says a guy whose sta- bility is currently in question. The contents would have far reaching effects on the S&L issue. A highly visible tip of the iceberg. McMillan, involved in that kind of thing? Never, not Mr. Clean. What was Sidneys getting at?
"Mr. Sidneys . . .Hugh . . .do you have time to have a cup of coffee somewhere. It might be easier if we sat face to face. Get to know each other."
Rosie's Diner was one of the better Greasy Spoons near the Hudson River docks on Manhattan's West Side. The silver interior and exterior was not a cliche when this diner was built. Rosie, all 280 pounds of her, kept the UPS truckers coming back for over thirty years. A lot of the staff at the paper ate here, too. For the best tasting cholesterol in New York, saturated fats, bacon and sausage grease flavored starches, Rosie's was the place. Once a month at Rosie's would guarantee a reading of over 300.
Scott recognized Hugh from a distance. No one came in there dressed. Had to be an accountant. Hugh hugged his briefcase while nervously looking around the diner. Scott called the short pale man over to the faded white formica and dull chrome booth. Hugh ordered a glass of water, while Scott tried to make a light dinner of it.
"So, Hugh, please continue with what you were telling me on the phone." Scott tried to sound empathetic.
"It's like I said, I don't know how you got them or they found out. It's impossible." The voice was uncannily like Pebbles Flintstone in person.
"Who found out? Does someone else know . . .?"
"OK," Hugh sighed. "I work for First State, right? I work right with McMillan although nobody except a few people know it. They think I do market analysis and research. What I'm really doing is helping shelter money in offshore investment accounts. There are some tax benefits, I'm not a tax accountant so I don't know the reasons, but I manage the offshore investments."
"Did you think that was illegal?"
"Only a little. Until recently that is."
"Sorry, continue." Scott nibbled from the sandwich on his plate.
"Well there was only one set of books to track the offshore investments. They wanted them to be kept secret for various reasons. McMillan and the others made the deals, not me. I just moved the money for them." Again Hugh was feeling paranoid.
"Hugh, you moved some money around illegally, maybe. So what? What's the big deal?" Scott gulped some hot black coffee to chase the pastrami that almost went down the wrong pipe.
Sidneys continued after sipping his water and wetting his lips. "Four days ago I got this call, from some Englishman who I'd never spoken to before. He said he has all the same figures and facts you said you have. He starts reading enough to me and I know he's got what he says he got. Then he says he wants me to cooperate or he'll go public with everything and blow it right out of the water." Hugh was perspiring with tension. His fists were clenched and knuckles white.
"And then, I called you and you came unglued. Right?" Scott was trying to emotionally console Hugh, at least enough to get some- thing more. "Do you think you were being blackmailed? Did he, the English guy, demand anything? Money? Bribes? Sex?" Scott grinned. Hugh obviously did not appreciate the attempt at levi- ty.
"No, nothing. He just said that I would hear from him shortly. That was it. Then, nothing, until you called. Then I figured I missed his call." Hugh was working himself into another nervous frenzy.
"Did he threaten you?"
"No. Not directly. Just said that it would be in my best inter- est to cooperate."
"What did you say?"
"What could I say? I mumbled something about doing nothing wrong but he said that didn't matter and I would be blamed for every- thing and that he could prove it."
"Could he prove it?" Hugh was scribbling furiously in his note- book.
"If he had the files in my computer I guess I would look pretty guilty, but there's no way anyone could get in there. I'm the only one, other than McMillan who can get at that stuff. It's always been a big secret. We don't even make any printouts of it. It's never on paper, just in the computer." Hugh fell back in the thinly stuffed torn red Naugahyde bench seat and gulped from his water glass.
Scott shook his head as he scanned the notes he had been making. This didn't make any sense at all. Here was this little nerdy man, with a convoluted tale of embezzlement and blackmail, off shore money and he was scared. "Hugh," Scott began slowly. "Let me see if I've got this right. You were part of a scheme to shift investments overseas, falsify reports, yet the investments always made a reasonable return in investment." Hugh nodded in agreement silently.
"Then, after how many, eight years of this, creating a secret little world that only you and McMillan know about . . ."
"A few others knew, I have the names, but only McMillan could get the information from the computer. No one else could. I set it up that way on purpose." Hugh interrupted.
"OK, then you receive a call from some Englishman who says he's got the numbers you say are so safe and then I get a copy. And the numbers agree with the results that First State reported. Is that about it?" Scott asked, almost mocking the apparent absurd- ity.
"Yeah, that's it. That's what happened." Hugh Sidneys was such a meek man.
"That leaves me with a couple of possible conclusions. O
ne, you got yourself in over your head, finally decided to cut your losses and make up this incredible story. Maybe make a deal with the cops or the Feds and try to be hero. Maybe you're the embezzler and want out before it's too late. Born again bean- counter. It's a real possibility." Hugh's face grimaced; no, that's not what happened, it's just as I told you. "Or, two, McMillan is behind the disclosures and is now effec- tively sabotaging his own plans. For what reasons I could hardly venture a guess now. But, if what you are saying is true, it's either you or McMillan." Scott liked the analysis. It was sound and took into account all available information, omitting any speculation.
"Then why would someone want to threaten me?
"Either you never got the call," the implication was obvious, "or McMillan is trying, quite effectively to spook you." Scott put a few dollars on the table next to the check.
"That's it? You won't say anything, will you? You promised!" Hugh leaned into Scott, very close.
Scott consoled Hugh with a pat on his wrinkled suit sleeve. "Not without speaking to you first. No, that wouldn't be cricket. Don't worry, I'll call you in a couple of days."
His editor, Doug McGuire agreed that Scott should keep on it. There might be a story there, somewhere. Go find it. But don't forget about the viruses.
* * * * *
The headline of the National Expos, a weekly tabloid caught Scott's attention on his way home that evening in Grand Central Station.
EXCLUSIVE! S&L RIP OFF EXPOSED!
Scott's entire story, the one he wasn't permitted to print was being read by millions of mid-American supermarket shopping housewives. In its typically sensationalistic manner, the arti- cle claimed that the Expose was in exclusive possession of documents that proved McMillan was stealing 10's of millions from First State S&L. It even printed a fuzzy picture of the same papers that Scott had received. How the hell?
Chapter 4 Thursday, September 10
Houston, Texas.
Angela Steinem dialed extension 4343, Network Administration for MIS at the Treadline Oil Company in Houston, Texas. It rang three times before Joan Appleby answered. Joan was the daytime network administrator for Building 4. Hundreds of IBM personal computers were connected together so they could share information over a Novell local area network.
Terminal Compromise Page 8