Rigged

by Ben Mezrich

  Well, if that’s what they thought, they’d seriously underestimated him. They didn’t know anything about him, about how hard he’d worked to get there, about what his father had gone through—they didn’t know who David Russo really was, deep inside.

  Through the pain, David grinned up at Serena, and she sighed, because she knew that look in his eyes. They didn’t know who David Russo was—but they were about to find out.

  Chapter 12

  Monday morning, 9:10 a.m., the New York Mercantile Exchange.

  The trading floor was in full swing.

  Bodies crashed into bodies as the Technicolored jackets jockeyed furiously for position. Outstretched hands grasped after the hailstorm of trading tickets, screaming voices erupting from painfully hoarse throats as the numbers on the great board above flashed upward, downward, side to side. Crude oil, gasoline, heating oil, natural gas—the four biggest energy commodities, rising and falling with the fate of the nations that produced and depended on them, while a thousand fanatical men in brightly colored jackets fought a veritable gang war in their wake. Crude oil, gasoline, heating oil, natural gas—the four commodities that propped up the modern world, deconstructed into bright red digital numbers to be digested and reacted to: buy, sell, buy, sell. Fortunes made and lost in the blink of an eye, the flutter of a little white piece of paper, the collision of one shoulder with another. The chaos of a real, true, physical market in the form of a pitched battle between real, true, physical market forces.

  Gladiators at dawn, David whispered to himself as he strolled through the back doors of the vast, football field–sized room and headed directly toward the trading pits. Deep down, he was terrified, but his eyes remained straight ahead, his face completely calm. He could still feel the stitches pulling at the skin of his abdomen, but the pain was gone, and with it any qualms he had entertained during his brief four-day recovery at home, swathed in the nearly suffocating realm of his overprotective mother and equally zealous girlfriend. This energy, this electricity in the air— it simply didn’t exist in any other business. This was where David belonged.

  As he reached the edge of the trading pits, he saw the heads begin to turn. At first, the attention was fairly innocuous, curious eyes watching him as he strolled behind the traders. But then the attention became more focused, the eyes more narrowed. Traders grabbing one another and pointing, more heads turning, faces showing mixtures of emotions: confusion, surprise, and, of course, pure anger.

  David braced himself as one of the traders suddenly separated himself from the throng and started toward him. David recognized the kid from his first day at the Merc—Michael Vitzioli, the oversized thug in the red-and-orange-striped jacket. He had a cherubic face and a childlike shock of dark brown hair, but fists the size of lamb shanks. At the moment they were cocked and rising, and David knew he had only minutes to defuse the situation. Except, David wasn’t there to defuse anything. He was there to make a statement.

  “What the fuck do you think you’re doing?” Vitzi snarled as he kept coming forward. At least fifteen other traders were gathered close enough to hear. Most had momentarily forgotten about the great board up above and the never-ending rain of trading tickets.

  David let Vitzi get to within a few feet before he responded.

  “I’m learning about the oil business.”

  Vitzi’s face reddened. He jabbed at David with a thick finger. “No, I mean the badge. You think that’s funny?” David glanced down at his own lapel. He had affixed the trading badge right in the center, where he’d seen the traders wearing theirs. He then looked over at Vitzi’s badge, which had the kid’s nickname in big block letters: vitzi.

  He shrugged. “Mr. Giovanni told me to choose a nickname, because that’s what you meatheads do down here. So I chose myself a nickname.”

  Vitzi sputtered, trying to find words. David glanced down at his own trading badge again. The single word stared up at him: Dago.

  “You know what that fucking means?” Vitzi half-shouted.

  David knew exactly what it meant. In fact, David had debated with himself for a full hour whether he should go with “Dago” or the equally derogatory “Guinea.” He had settled on Dago because it just felt better rolling off the tongue.

  “Look, man, of course I know what it means. This is a badge of honor to me. I’m a poor kid from Brooklyn with a dago mom and a dago dad, and I’m a proud goddamn dago too. So you can take it or leave it, I really don’t give a fuck.”

  David could feel the tension rise around him as his little section of the trading floor suddenly went dead silent. He wondered if he had gone too far. Well, fuck it, he thought to himself. They weren’t going to remember him as the guy whose hospital room was filled with enemas after his appendix burst during a board meeting. They were going to remember him as the guy who demanded respect right from the beginning. Either that, or the guy who got his ass kicked all over the trading floor by a Neanderthal in a red-and-orange-striped jacket.

  Vitzi glared at him for a good five seconds. Then, finally, something crazy happened. He grinned and reached forward with one of those lamb shanks and gave David a big paisan handshake.

  “You’re all right, buddy. I nearly knocked your fuckin’ head off, but you’re all right.”

  David’s heart was pounding as he accepted the handshake, then separated himself from the thuggish trader. He shook a couple more hands, then quickly headed off the trading floor. As he reached the elevator that led up the spine of the building to the higher, more civilized floors, he detached the offending badge and shoved it deep into his back pocket. He doubted he’d ever have to wear it to work again.

  Ten minutes later, he was still breathing hard as he took a seat on the massive antique leather couch that took up most of the back wall of Giovanni’s corner office. There was a cup of coffee on the glass table by his knees, next to a plate of pastries that seemed vaguely familiar, pricking at memories from his childhood excursions to the old-world Italian markets where his mother had done most of her shopping.

  Giovanni pointed at the plate from behind his huge wooden desk on the other side of the long rectangular room, but David shook his head. Giovanni shrugged, going back to his phone call. He had been on the line when Harriet first ushered David into his office and hadn’t come up for air since. David was glad to have the free time to admire Giovanni’s office, which was decorated nearly floor to ceiling with one of the best collections of New York sports memorabilia David had ever seen outside of a museum.

  The largest portion of the collection was housed in a glass shelving unit that spanned the length of the office’s enormous picture windows. David counted at least a dozen baseballs signed by various Yankee rosters, most notably one signed by the entire 1958 World Series team and another signed by the 1996 winning team. There were two Darryl Strawberry jerseys and three mitts signed by Joltin’ Joe DiMaggio himself. There were also basketballs signed by various incarnations of the Knicks, hockey sticks and pucks from a Rangers fan’s wet dream, and photos galore of Giovanni with various stars from at least three different generations, perhaps more. It was really an impressive gathering of material, and David could only imagine how much it was worth. Not that Giovanni would be selling it anytime soon; it was the kind of collection that a die-hard New Yorker took with him to the grave.

  The more David learned about Giovanni, the more he was in awe of the man and what he’d accomplished. During his recovery from his appendix bomb, David had had a chance to refresh his knowledge of the man he’d come to work for—a sort of “eye on the prize” exercise he’d put himself through to erase the bad taste of Gallo’s prank with the enemas. Seeing this incredible sports collection—and knowing that, as a kid, Giovanni would sneak into Brooklyn Dodgers games because his parents, immigrants from the old country, couldn’t afford to buy him tickets to see his beloved team play—was inspiring. David knew that Giovanni had switched his allegiance to the Yankees around the same time he’d dropped out of hig
h school to start a landscaping company with two cousins who’d been Yankee fans from the start. After he’d rolled his landscaping profits into his first real estate success—a run-down tenement building in Borough Park he revamped and sold back to the city for twice what he’d paid for it—he’d bought season tickets, and his true love affair with the championship team had begun. Now that his family—three sons, two daughters, and six grandchildren between them—had inherited his passion for the team, he’d exchanged the season tickets for a box, which alone was no doubt more expensive than the first home he’d shared with his wife of thirty-one years. Giovanni was a true American success story, and his chairmanship of the Merc was just one more exclamation point on a résumé that spanned half a century.

  Another few minutes went by as David alternately eyed the sports paraphernalia and the Italian pastries; both seemed equally off-limits, the trappings of a world he hadn’t yet earned his way into. He contented himself with watching the seagulls dart and spin by the picture windows, flashes of glorious life in an otherwise characteristically gray sky.

  Finally, Giovanni finished with his call and came around the side of his desk. Instead of sitting across from David, he put a hip against the windowsill, palming the hilt of a Louisville Slugger miniature baseball bat that even from a distance David could see had been signed by none other than Mickey Mantle.

  “Everyone’s talking about your exchange a few minutes ago on the trading floor.”

  David raised his eyebrows. That was fast. Giovanni grinned.

  “This place lives on stories, rumors, and innuendo. Interesting tactic, kid. Dago. Personally, I probably would have decked you. But it was smart thinking. That trading floor is a schoolyard, and you gotta play by schoolyard rules.”

  David blushed, embarrassed that Giovanni knew about his trading badge, but thrilled that the man had complimented the thought behind it. And if Giovanni had heard the story, by now everyone in the building probably had too.

  “Don’t worry about Gallo,” Giovanni continued, reading his mind. “He’s a pathetic dinosaur. It might surprise you to know that we’re about the same age. I know he seems three decades older—because while I’ve been swimming forward for the past fifty years, he’s been treading water in this lucrative swamp of his. He’s made a fortune in this place—and he doesn’t see any reason to let anything change. From dairy to potatoes to heating oil to crude, these guys were tucked away in their insulated little corner of Manhattan, and nobody was watching—they had it all to themselves. Getting to work at nine-thirty and leaving at two. If they didn’t have the NYMEX, they would be shining shoes. Gallo’s got to understand—things are changing, David. Fast. Which is why I hired you in the first place.”

  David watched as Giovanni lifted the little baseball bat and twirled it in his hands.

  “Anything I can do to help,” David said, though it had sounded much less lame when it was just a thought in his head. “I’ve been reading up on oil and the exchange nonstop since my appendix exploded—but I think it’s still going to take some time before I’m up to speed.”

  Giovanni laughed. “It took me ten years to get up to speed. But it’s a different world now. And that’s my point—it’s the whole fucking world, not a little trading floor in a forgotten corner of New York. Oil is the biggest thing going, and it’s only getting bigger. The whole world is watching—and guys like Gallo are going to have to learn to adapt.”

  Giovanni swung the bat in a low arc, nearly knocking a picture of George Steinbrenner off the glass shelves.

  “Adapt to what?” David asked.

  Giovanni winked at him. “That’s what you’re here to help figure out. How does this exchange fit into what’s going on in the rest of the world? What’s next? Automation? Expansion? Exchanges are springing up all over the place. Business is spreading. London, already big and growing every day. What’s next? Hong Kong? Tokyo? I don’t have a fucking clue. I’m an old guy in an old suit taking care of the other old guys in their old suits. But you and Reston, you’re the future, and you’re going to be my eyes and ears. Here at the Merc, and around the world.”

  David’s heart was pounding again. A week ago he was looking forward to visiting old-age homes and calculating estate taxes; now Giovanni was talking about big issues, worldwide possibilities. He wasn’t sure, specifically, what his role was going to be, but he liked the sound of it so far. Sadly, more edification was going to have to wait, as Giovanni was suddenly pointing the baseball bat toward the door.

  “Now get your dago ass out of here, so I can get some work done. Harriet has some crap for you to go over for a meeting with some Washington politicos I’m taking tomorrow morning, so don’t waste any more of your time getting into fights with the animals downstairs.”

  David hurried toward the door. As he passed through, Giovanni shouted after him:

  “And, kid, I’m glad you didn’t die at the board meeting. Would have been a lot of fucking paperwork to fill out.”

  Chapter 13

  Four hours later, David was so deep in oil, he felt like one of those ducks they used to show on TV after the Exxon Valdez destroyed the coast of Alaska. The task Giovanni had assigned—via Harriet, of course, who actually smiled as she dropped the offending material into the in-box that had miraculously appeared on the desk in his cubicle while he was at home recovering from his appendix bomb—was fascinating in theory. David had to calculate what the potential risk to the oil market in general—and the NYMEX in particular—would be if a short but successful revolution ever took place in Iran. But given David’s lack of knowledge of the industry, and his even more pathetic grasp of what really went on down on the trading floor, he was forced to start at the basics and work his way up. Four hours of Internet research and visits to the Merc library, and still he felt like a third-grader trying to write a college term paper.

  After a fifteenth attempt at putting his thoughts together, he let his pencil clatter against the desk and rubbed his hands against his eyes. He had a feeling that Giovanni had assigned the task as an introduction by fire—and David was beginning to feel a little more than singed. He realized that he was going to need help.

  He could really think of only one option. He grabbed a notepad from the drawer in his desk and strolled across the fifteenth floor toward an office to the left of the elevators. He was about to knock when the door swung inward with a creak of mechanical gears.

  David stood in the open doorway, his closed fist still in the air. “Isn’t that cool? I had a guy install it after I saw it in a movie. Gives me an edge, right from the get-go. And it’s really fun to see the looks on people’s faces. Although in your case, it’s a real improvement, considering the last time I saw you, you had a mouthful of carpet.”

  Still seated behind a desk nearly twenty feet away, Mendelson

  waved David into his office. As soon as David started to move, Mendelson hit a button on the underside of the desk, and the door slammed shut—nearly taking David’s heels off in the process.

  Mendelson’s office wasn’t as large or expensively attired as Giovanni’s sports museum, but it still had more character than anything David had seen at Merrill Lynch. The dominant theme seemed to be air travel—or more specifically, luxury air travel. Photos and models of private airplanes lined two sets of steel shelves, and the open carpeted area in the center of the picture window–lit room was dominated by a scale model of some sort of futuristiclooking jet with a shiny tubular body, short curved wings, and a streamlined tail that made it look more rocket than plane.

  “That’s my baby,” Mendelson said as David navigated around the model to take a seat on a small leather divan by Mendelson’s desk. “She’s the most beautiful girl I’ve ever met, and she can do New York to Paris in five hours.”

  “Sounds like you’re in love,” David said.

  “You don’t know the half of it. I left my second wife for that plane. Or more accurately, my second wife left me when I put seventy million dollars
more into my baby than I had into my wife’s wedding ring.”

  David laughed, then realized Mendelson was serious. Seventy million dollars. The number was staggering. He remembered what Reston had told him—that Mendelson had been one of the biggest traders around. Obviously, David had come to the right place for information about the trading floor.

  “Mr. Mendelson, I need a crash course in trading.”

  Mendelson smiled. “From what I hear, you’ve already got the basics down. Pick out the biggest guy on the floor, insult the fuck out of him, then get out of the way.”

  David grinned. “If that was all there was to it, I’d be down there decking meatheads all afternoon.”

  “Hah. No, that’s not all there is to it. Because those meatheads are actually pretty impressive, when you think about ’em. Not one of them is making less than five hundred thousand dollars a year. A few are bringing down millions, and an even smaller few are bringing down tens of millions.”

  David whistled. It was hard to imagine a guy like Vitzi making that kind of money. David knew the basics of trading—buy low, sell high, and the reverse—but when it came to oil in all its forms, he was a neophyte. How did you judge supply and demand? How did you factor in all the variables, from the weather to wars in the Middle East to drunk captains driving oil freighters into the Alaskan shoreline?

  “It’s like that scene in The Matrix where all the numbers are floating down the screen,” Mendelson said, leaning back in his chair and lifting his bare feet up onto his desk. “At first, it seems like noise, none of it makes sense. It takes time to adapt to what’s going on. And one day, suddenly, those numbers have meaning.”