“That’s a big change for you.”
“This little guy reminds me to keep it real,” he said, caressing his hair. Somehow the ponytail symbolized his closeness with nature and love for his fellow man. “But it’s for a good cause.”
“What do you mean?”
“I’m donating my hair to Locks of Love. They’re this great nonprofit that gives free wigs to kids fighting…” he choked up for a second, then finished his thought with all the earnestness of a wake, “…cancer.”
“That’s admirable,” I said, but didn’t mean it.
“We do what we can,” he intoned. “So, what’d you need from me?”
I had spent the earlier part of that morning poring over Paul’s personal transactions file—the file containing the investments that we employees were required to submit—and discovered some surprising information. In the prior month, he was part of a consortium of buyers who had negotiated an agreement with the lien holders on the Deakins Building to purchase it for a reduced amount. He then sold the building to another set of investors at an amount slightly less than the one he paid in the original sale. It was a curious course of action, one that I debated internally on how to broach.
“Paul, I wanted to ask you a couple of questions, off the record, as they say.”
“Uh-oh,” he joked. “This sounds serious.”
“Maybe, maybe not. Tell me about the Deakins Building.”
That wiped the smirk off his face.
“Deakins?” he repeated, trying to buy some time. All the nuances he was trained to pick up on during his daily functions failed him at that moment when he was in the crosshairs.
“Yeah, that building you bought and sold within a month,” I shot back aggressively.
“How did you hear about that, Chuck? You snooping around my personal files?”
It was another classic deflection technique.
“No and yes,” I told him. “I heard about the sale and then confirmed it with the official records.”
“I wish you would have come to me first. This is very inappropriate.” He was reverting to corporate lingo instead of answering the question.
“Paul, this has nothing to do with you.”
“It has everything to do with me.”
“I mean, my interest has nothing to do with you personally. You know my involvement with Ed Vadaresian’s family and all that ensued. A lot of it centered around the building you purchased, and I’m just looking to tie up some loose ends.”
“I don’t have any involvement with that,” he said.
“I know,” I replied, even if I wasn’t so sure I believed him. “Can you tell me about this deal?”
“What do you want to know?”
“For starters, why did you buy the building and then immediately sell it for a loss?”
“You’ll appreciate this,” he said, implicating me in whatever deed he was about to describe. “This wonderful government and its complicated tax system!” He went on to describe a convoluted tale of a series of tax incentives and write-offs he got for investing in the Deakins. It involved distressed properties, manufacturing zones, brown-field zones, and many more kinds of zones. The sale at a loss added further to his side of the ledger as he could write that amount off. I understood that there was some benefit to the numerous programs the government was offering to revive a sluggish commercial real estate market, but I didn’t understand how selling a building for a loss could actually result in Paul making money. “You’re forgetting that I stripped out the occupancy rights,” he said.
There was that phrase again. I remembered the assessor Arshalouys using it when he first spoke about the Deakins Building. He had said it like it was a desirable asset.
“What are those?” I asked.
“The city assigns every property a maximum occupancy. They literally give you a number. This is different from those signs you see at restaurants or in elevators. Those are fire codes to keep people from being trampled. These occupancy figures are done by the city planner. It’s one way they manage density. Naturally, you don’t want people building willy-nilly on every inch of land,” he explained, even though that seemed exactly what was done. “Nobody wants more gridlock,” he added. Gridlock in their neighborhood was what they really meant.
Paul went on to explain how the process worked. If a developer wanted to build a condo on your block, he had to comply with the occupancy figure already assigned to the piece of property he wanted to build on. If his assigned number was smaller than the one he wanted for his new building, his permit would be denied. “But here’s the beauty of this system,” Paul said, leaning forward. “You can sell them.”
“Sell what? The occupancies?”
“Yeah, I’ve done them a few times now. It’s not very well known outside of the commercial real estate world. Even people who own property don’t know it. I was just buying distressed properties from motivated sellers. But when I learned about these vouchers and that you could sell them, I lined up my investors and brushed up on the rules. You can sell them at any time to anyone you want—they are completely transferrable. The only stipulation is that they have to come from the same zone as where you plan to use them.”
First property vouchers and then zones—the pieces were starting to fall into place. The zoning manipulation that Claire and McIntyre hashed out came back into the picture.
“That Deakins property was a freaking gold mine,” said Paul, and we finally came to the part where he made his money. The man was literally salivating. He wiped his mouth with his sleeve and continued. “It was grandfathered in as a manufacturing complex, and so it had a very high number of vouchers. Apparently, this city still dreams of manufacturing jobs coming back. I sold them for a bundle.”
I then asked the inevitable question. “To whom did you sell the vouchers?”
Paul squirmed in his chair. “Sorry, I’m really not at liberty to say. I’m under a strict confidentiality agreement.”
“Come on, Paul, this is important.”
“I’m sure it is, but so is my agreement. They were very serious about not publicizing it. And this is too good a lode to risk messing it up. I’m already telling you too much.”
Paul looked intransigent. He was sitting on his gold mine and he wasn’t about to do anything to tip off other prospectors in town. There was still the question, however, of how this miner found his mine.
“All right,” I said. “Why the Deakins?”
“What do you mean?” he asked.
“The Deakins Building,” I repeated. “How did you first hear about it? I’m just a little confused, because it’s a random building in an area that I don’t imagine you know much about. And coincidentally it was owned by one of our associates.”
Implied, and not so subtly, in my question was the fact that Paul had to have been snooping in personnel files to even discover this building’s existence. I then gambled that where there was smoke, there was fire. He had, after all, mentioned other buildings. “How did you find out about all the properties you’ve bought?”
The threat to unveiling his real estate transactions was grave. But it paled next to the threat of bringing down the core of his investment strategy—his job at our firm. Fifteen years from retirement, he was already in the descent mode of his career. The hard work had been done to get to this position. Now it was all about maintaining it until he finally touched down into a very comfortable retirement.
“We’re friends, right?” he asked. I let the question go unanswered. There was a delectable pleasure in watching him squirm. “In a way, I was helping them,” he reasoned. In Paul’s logic, trolling the confidential files for associates’ real estate investments and then targeting those who were underwater constituted help. “I’d help get them out from under the trouble they were in. That’s how I found the Deakins. That Ed character was way overextended. When I first approached him he blew me off. He said he had some other deal going that was going to generate a lot more than the propert
y was worth.”
“That’s how you found out about the occupancy vouchers.”
“Yeah. He talked like he had something big going, and I was so new to the game that I just let it go.”
“But once his body was discovered and ownership rights were transferred to the father-in-law you decided to revisit the transaction?”
Now it was his turn to remain silent.
“Who did you sell the vouchers to, Paul?”
THE BETTER GOOD
Valenti was gobbling up vouchers. He was undoubtedly building something in that area, but I was wrong that the Arroyo was to break ground in Lincoln Heights. In that regard, McIntyre had told me the truth when he said they had no intention of building there. But the manipulation of the zones gave me a clue where to look. Those two extra slivers of land now falling in Zone 8 were done for a reason—they didn’t have the vouchers for where they wanted to build, so they adjusted the zones to include an area that was rich with them.
The picture started to come together. And the key was to follow the voucher trail. I knew the Deakins had been a target for a while, and they eventually got what they needed. As Paul so deliciously described, he’d made some “good coin” on the sale. The other slice in that pie was Carmen Hernandez’s women’s center. That structure also landed in the thin slivers of zone changes. Carmen had played the city and Councilman Abramian like a fiddle. She got them to buy the land for her and gave her development money to renovate the properties. But what if there was more to the deal that I was missing?
I was surprised that Carmen agreed to meet me. She’d probably linked me to the story that Mike was working on and that might eventually be published posthumously. Her off-the-record comments to Mike’s request for a quote weren’t fit to print even if she had given her approval. Proponents of peace and harmony often had the worst tempers. Perhaps Mike’s murder had elicited some feelings of guilt and thus her acceptance of my invitation.
“Nice to see you again,” Carmen greeted me warmly at the door to her office in Echo Park. She wore an embroidered floral dress with a dizzying palette of colors, the kind normally reserved for cultural parades but one that she had adopted as her everyday uniform. Carmen had sweeping arched eyebrows—they may have been drawn that way—which gave her the look of being perpetually interested in whoever was talking.
She worked in an open-plan office with several desks, copy machines, and filing cabinets. Three or four Hispanic kids, probably Chicano Studies majors, buzzed around the room with the important air of people who were “making a difference.” Carmen glided through her small army of interns to an imposing desk in the back, where alley light poured in through large picture windows.
“Can someone get Mr. Restic a coffee?” she called out, even though she was a mere five feet from the coffee machine.
“I’m fine, thank you,” I said and sat down in the chair opposite the desk. Carmen took her seat and lamented at the volume of work that had to be done. She wore a wearied look. “It’s for a good cause,” I felt the need to add. That brought her out of her artificial sullenness.
“First things, first,” she started. “Your friend. I’m sorry for your loss. We may have had our differences, but I cannot condone violence. A life is so precious, and yet the youth of today wantonly disregard it. In their defense, they know no other life than that of the streets. That’s the disservice we’re doing to our children in this city. There are no jobs. The schools are underfunded and underserved and out of step with the special needs of our diverse cultural potpourri.” Somehow Mike’s murder was a referendum on the plight of inner-city youth. “We thank the Lord they found his killer. He was an Armenian gentleman?” The racial distinction was telling. She said it like she and all other Latinos had been absolved from past sins.
“The police believe it was him, yes,” I replied, but my tone said I didn’t agree with it.
“The right man?” she asked.
“Maybe.”
Carmen studied me. I could see her body get a little tense.
“And so what is it you wanted to discuss, Mr. Restic?” She shifted to a more formal tone.
“Relax,” I tried to allay her suspicions. “I just want some information. I’m not a reporter. I have no interest in publicizing anything we discuss. I want information that could help me understand who could’ve had reason to kill my friend.”
“I had nothing to do with it. Surely you can’t think that I did?”
“I come with no preconceived notions,” I answered vaguely.
“I want to help.” I waited for the but. “But I don’t feel I should discuss this topic with you and certainly not without my legal counsel present.”
“I thought you said you had nothing to do with this?”
“Who are you to accuse me?” she attacked.
“Lady, don’t play this game with me. If you start throwing your weight around like you do with these stupid kids then there will be trouble.”
“There’s nothing to throw.”
“How much did you make selling occupancy vouchers to Valenti for the properties where the new women’s center is to be built?” Her cheeks turned crimson under the crimson blush. “I’ll take your silence to mean that it was a fair amount.”
“Can we discuss this outside?” she asked. Gone was the booming voice with the cadence of a pep rally. I leaned in and matched her tone.
“Is this volume better?” I asked. “Are you afraid your crusaders will hear that there’s a cause higher than the one you’ve sold them? Like you said, the poor youth of today. They’ve yet to learn the lure and destructive nature of money.”
“What do you want?” she asked coldly.
“How did the deal work? Start from the beginning. Who approached whom?”
Carmen explained the origins of the deal. It was cooked up by Langford. Like Valenti told me, everyone in a deal needs to come out in the black for it to work. Langford wanted the vouchers for the Arroyo deal. He also wanted to work a few angles on the soon-to-be women’s center properties to maximize his return. He approached Carmen with the idea to have the city pay for it. He instructed her to use her connections with Councilman Abramian to ram the agreement through.
“Did the councilman know about the voucher part of the deal?” I asked.
“Did he know about that little aspect of the transaction? No. Did he and the city get a much-needed boost in a depressed area that will continue to give back to the community for decades to come? Yes,” she said in a resounding fashion.
I listened to the rest of Carmen’s story through the filter of knowing that the person telling the tale always told it in a favorable light as it pertained to her. Where Langford was the bully and idea man, Carmen was the babe in the woods. I imagined the truth was somewhere in the middle. And when she told me the terms of the deal, I knew it was understated. Going by the rule of thirds—whatever a gambler says he lost in Vegas is actually three times that number—the money she made on the voucher deal was a hefty sum.
“Did you know Ardavan Temekian?”
“No.”
There was little emotion in her answer. It was direct and decisive. I believed her.
I was back to where I started. There was a connection between these vouchers and the murders, but the details behind it were hazy at best. Temekian seemed to fit into the play, but again I didn’t know how.
I thanked Carmen for her time and honesty. She looked relieved to have it over and wanted to make sure of it by walking me to the door.
“I learned at a young age that life isn’t fair,” she told me. “There comes a time in all of our lives when we have to do things that may compromise what we believe is right and moral, but the larger need outweighs it. One step back, two steps forward, as they say. It’s not that we are proud of it. Lord knows we aren’t. But the Lord also knows the reasons why we did it and he’s been known to make some exceptions.” She smiled. “The larger good sometimes requires a little dirtiness so you can wash more h
ands. You can understand where I’m coming from.”
“If that makes you feel better,” I told her, “then I’m willing to go along with it.”
THAT OLD ROUTINE
Claire and I met at a bar on Grand Avenue that catered to the corporate world from 5 to 9 p.m. and to the USC crowd after that. There was always a window in between when the drunken remnants of the corporate crowd intermingled with the college kids getting an early start on their partying. It was bad enough that you stayed for that fourth beer, but then to be confronted with fresh-faced youth starting out their evenings while you just wanted to go home and go to bed was a particular injustice.
We drank old-fashioneds with a giant square of ice and maraschino cherries. They went down easily. We kept the conversation light, and for a moment we slipped back into a world that didn’t exist anymore, one where we’d meet up after work and slug a few cocktails and complain about our bosses and direct-reports with equal vitriol. The jokes got funnier as the night progressed. We’d then sober up at a new restaurant that was getting all the buzz, and we’d eventually head home, where we’d finish the night off proper—that’s if the common excuse of exhaustion and an early morning conference call didn’t interfere. As if sensing that we were reverting to our old habits, and not wanting to proceed to the horizontal part, Claire changed the subject.
“Langford brought the deal in,” she started. “And it was for a lot more than what Carmen told you.”
“I figured.”
“We got a good portion of the required vouchers from that transaction alone. That and the Deakins property.”
“That was my co-manager, Paul Darbin,” I reminded her, although she didn’t need it.
“When’s he going to cut that ponytail?”
“I was hoping he’d get arrested as one of those Occupy Wall Street protesters when he went out for his lunch.”
“One can dream.”
“How many deals did Langford bring in?” I asked.
“Just the Carmen deal. He was working Deakins but, well, you know what happened there.”
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