by David Lender
“You’re not going are you?”
“Yeah. I think Milner may be a way out of this mess.”
Kathy took a few steps toward him, her eyes narrowed, said, “You can’t be serious. It could be a trap.”
“I can’t just sit around. And I need to get to Milner at some point anyhow. What can happen to me with lots of people around for a big meeting?”
Milner sat in his office, looking up Park Avenue. He checked his LCD screen. Tentron was trading at $41.50. He glanced down at his watch: 11:15 a.m. Sandy had asked for a meeting. Stephanie buzzed the intercom. “Mr. Sharts is on the way up.”
“I take it you heard about Ken Stern?” Milner asked before Sandy even sat down.
Sandy didn’t answer, just gave him a grave look and a nod.
“That’s part of what I wanted to talk to you about. This is out of control. You should go to the police, and the Feds.”
“And that’s the good news, I assume.”
“You decide. The other reason I came over is that my partner in Washington got wind that Charlie Green, the SEC Chairman, was briefed on a major pending insider trading case.”
Milner nodded, then sat very still.
Sandy went on, “Once the Chairman gets briefed it’s hard to keep a lid on it. They usually make a move shortly after that.”
“Shortly could mean weeks, couldn’t it?”
Sandy just stared back at him.
“And so you think they’re ready to…” Milner’s voice trailed off. He couldn’t think of the right word. Pounce? Spring? They sounded so dramatic.
“I don’t know for sure,” Sandy said. “But I can’t understand why you’re still screwing around with some deal. Start talking or start running.”
Milner leaned back in his chair. “Anything else?”
Sandy shook his head.
“Okay, message received. Thanks. I have a meeting coming up. I’ll call you later.” He watched Sandy turn and leave. Sandy had a point: why was he still screwing around with this deal? Then he felt his throat constrict. He had some uncomfortable, if not inevitable decisions to make.
At Gale’s Uniforms on 86th and Lex, Richard bought a dark gray pair of coveralls big enough to fit over his suit. He also bought a gray baseball cap with “Otis” in big letters on the front, and a soft duffel bag large enough to hold his briefcase. He stood in uniform outside Grand Central where he could see the lobby of the Helmsley Building across 45th Street. At 11:55 Richard saw Jack, Steinberg and LeClaire walk into the lobby. At 12:45 he saw Nick Williams and his advisors arrive for the 1:00 p.m. meeting. He walked into the building at 1:45.
By the time he changed out of the coveralls in Milner’s men’s room, the meeting was already breaking up in Milner’s mezzanine floor conference room. Everyone was shaking hands, smiling, slapping backs. They obviously had a deal.
Now Richard’s heart was pounding, not from nervousness. This was gonna be it: the hell with a $6 billion deal, one he helped hatch and was a player in. He was here to save his ass.
After everyone came downstairs to the main floor and most of them left, LeClaire, Jack and Mickey stood around near the elevators, chatting. Then LeClaire waved good-bye to Richard and got into the elevator. Jack walked over to Richard. Jack was wearing a we-just-did-a-deal smirk. Richard’s guard was up.
Jack said, “Where were you before the meeting? We stopped at the Carlyle to pick you up, but you weren’t there.”
“I must have already been on the way.” He and Kathy had kept their rooms at the Carlyle in the event they got phone calls from anyone at the firm, so no one would know they’d moved. Just in case. Now he was glad they did.
Jack nodded. He paused, seemed to be thinking. He must have known it was bull. “Why don’t you come back downtown with me and Mickey?”
Did Jack think he was stupid? Richard wasn’t about to get shot, or hit by a car, or whatever.
“No thanks,” Richard said. “I’m gonna head back to the hotel once everybody leaves.”
Jack shrugged, nodded and walked back over to Mickey.
As Jack and Mickey got into the elevator, Richard’s heart started pumping hard again. The most important part of his day, maybe his life would come in the next few minutes.
Richard crossed the room to Milner and waited until he finished chatting with Harrelson, one of the Devon guys.
“Harold, there’s something I need to talk to you about,” Richard said.
“Sure.” He motioned toward the living room furniture in the center of the penthouse. “You wanna listen to some music? The amps are warmed up and everyone’s leaving.”
Richard shook his head. His mouth felt sticky, dry. He realized how tense he was, and must have looked it, because he saw Milner’s face change, go blank. What if this turned into a negotiation? With Milner. Damn.
“No?” Milner pointed up to his office. “Let’s go upstairs.”
Richard followed Milner to the mezzanine, now thinking this might not have been a great idea. How well did he really know Milner? Sure, Milner thought he was a nice kid, maybe even considered himself an older mentor to Richard. But in the dark of night, what was he really capable of? He certainly wasn’t the mole, but even worse, could be the center of the mole’s group. Well, if that was so, Richard would be talking directly to the source. That’s what he decided last night. And he wasn’t about to change his mind now, nervous shits or not.
“What’s on your mind?” Milner asked as he sat down behind his desk.
“I’ve had an unusual few days. I’m not sure where to start.”
“Go on,” Milner said. He wasn’t moving, looking directly at Richard. Richard with a hunch that Milner had an idea what this was all about. He couldn’t turn back now.
“The SEC and the U.S. Attorney’s Office hauled me in a few days ago, believing I was part of an insider trading ring at Walker. They’d uncovered emails from Walker New York to GCG Paris and then to all over the world. The emails involve trades on homebuilders around the time of the Southwest deal, Tentron and a lot of other deals. They include at least three more of your older deals. They also have tapes of telephone conversations between a friend of mine and me. We stumbled on some of these email messages and were following the situation. In fact, we’ve got a whole computer file of them showing trades on 17 deals going back four years. We might even have more than the SEC does. They think my friend and I are involved. We aren’t.”
Milner was now nodding, still making eye contact.
“They tried to pressure me into turning in others in exchange for a deal. I have a lot of respect for you, and so this is an awkward conversation for me, to say the least.”
“Go on,” Milner said. He leaned forward, put an elbow on the table and clasped one of his big hands over his mouth, his eyes smiling. Richard realized Milner was too experienced a deals guy not to know it showed. In this case, hopefully the smile was genuine. But how many guys negotiating with him saw it as an unintentional slip, took the head fake?
“I don’t know if you’re involved in this, and whether or not we have anything to discuss. But I think we can be helpful to each other. One of the last things the senior enforcement guy from the SEC said to me was that they’ll get the entire network—including you—with or without my help. I’m potentially in a lot of trouble even though I haven’t done anything. In fact, I’m hiding out at a hotel to keep the U.S. Attorney’s Office from hauling me away in handcuffs.”
Milner didn’t respond for a moment. Then: “That’s it?”
“That’s not enough?”
“You’re learning, but you’re not there yet.” He was now leaning forward with both elbows on the desk, smiling. “You’re supposed to ask for something. You never wanna give something up in a negotiation without asking for something back. And the information you just gave me is worth a lot.”
“In the past you said I was among friends.”
“Times like this you can’t assume that, even though you are.”
“You
negotiate with friends?”
“Sometimes. Maybe you’re not supposed to, but in this business it becomes intuitive. I know some guys who don’t even know when they’re doing it.”
Richard thought of Jack for a moment. Intuitive. But maybe the word was compulsive. Richard said, “I’m not sure what to ask for, other than your help if you can give it.”
Milner said, “Okay, I’ll think about it. Thank you. I’ll try to think of some way I can reciprocate.”
Richard nodded.
Milner smiled again. “Pretty hairy. But you look like you’re doing okay. You are, aren’t you?”
“Yeah.”
“You got balls, kid.”
Milner rode the elevator up to his apartment. The thing seemed so slow and wobbly tonight. In a high-end apartment building like this it should be smooth as silk. The smell of oil on some mechanism—they must have just serviced it—made his stomach queasy. That made him think about dinner, the last thing he felt like doing. He and Mary Claire with Mindy, Mary Claire’s sister, and her coat-hanger-smile husband, Eddie Resnick, senior partner at Moron, Knucklehead and Resnick, who never met a waitress he didn’t wanna grope.
He realized the elevator had nothing to do with anything. He was haunted by the conversation, no, tip-off, from the kid, Richard. Man, they’re all over Tentron and at least three more of my old deals. And the senior enforcement guy said he’d get me. That, and the kid saying he was hiding out to keep from being hauled in by the U.S. Attorney’s Office. And all on top of Sandy telling him the SEC Chairman had been briefed on a major insider trading case.
It could be any day now they’d come for him, maybe even any moment. The hell with waiting for his 250 million to get wired out. He could walk in, tell Mary Claire, fire up one of the Gulfstreams and they’d be in Europe within eight hours. The elevator doors opened at their penthouse. He turned the key and stepped into the entry hall. Now his stomach felt light and his legs heavy, the scent of the lilies in the vase on the breakfront sickeningly sweet. His mouth felt dry. It was time. He didn’t see how he could put off talking to Mary Claire about it any longer.
When he crossed the foyer he could see something was wrong. Mary Claire sat shrouded in semidarkness on one of the living room sofas. She wasn’t dressed for dinner, or even hard at it in the bedroom as usual, contemplating her choice of dresses sprawled over chairs and the bed. Her face was in shadow.
“What’s wrong?” he said, switching on a lamp.
She looked up, and in the light he saw her lips were taught and her eyes were hard with anger. He felt a flash of alarm, tension in his chest. Then he saw her face relax. She smiled.
“Less, now.” She patted the sofa next to her.
He walked over and sat down.
“Talk to me, hon,” he said. He kissed her, then pulled back to observe her. No makeup on, but she could still pass for her late 40s. Not so slim-waisted anymore, but still a beauty.
“Dinner’s canceled. I know you won’t mind that.” She rolled her eyes, as if to say she couldn’t stand Eddie either. “It seems Eddie’s rubbing a showgirl in Mindy’s face.”
“Kind of a cliché, isn’t it?”
“She’s not really a showgirl, but you know what I mean.”
Milner nodded.
“She always said he could do what he wanted as long as he didn’t go around publicly embarrassing her.”
Milner shrugged.
“Now she can’t ignore it, and for some odd reason it’s actually broken her heart.”
“I can’t see how he wouldn’t have done that ages ago.”
“Nor I, but we girls are funny creatures sometimes.” She clasped one of his hands in both of hers. “Like me. I’m just a simple girl. All I really need is you to believe in.” She smiled at him and clutched his hand harder, then said, “Don’t get me wrong, I’m used to all this,” and she waved a hand around the apartment, “and I’d never go back to living without it, but I haven’t lost sight of what’s really important to me.”
Milner was becoming aware of the sensation that his legs weren’t there and that some pressure on his chest was pushing him downward through the sofa to the floor, it seemed.
Mary Claire continued, “Something like this, well, even though it may not seem major to you, really strikes home for me.” She moved closer, put her face up to his, looked straight into his eyes. “I’ve never had any reason to lose faith in you, and I know I never will. That’s something I could never say to my sister right now, because I know it would kill her. But it doesn’t keep me from feeling how lucky I am, and from saying it to you.” She kissed him.
Milner couldn’t speak. He felt his heart pounding and his breathing labored, wondering if she noticed it.
Mary Claire stood up. “Well, let me go see what I can whip us up for dinner.” She headed toward the kitchen.
Milner sat back into the sofa and felt his pulse ramming, his chest heaving. How could he tell her after that? He’d rather step in front of a bus than endure seeing her face as he destroyed her belief in him. Eddie a common cheat. Milner a crook and a fraud. The difference in scale was hard to fathom.
Milner got up, walked into the powder room off the foyer. He opened the tap and felt his hands shaking as he splashed water onto his face, then again, and again and again. When he finished he avoided looking at himself in the mirror, then sat on top of the toilet as he dried his face. He’d have to go for broke. He couldn’t hurt Mary Claire, wouldn’t risk betraying her trust if he had a way to avoid it. This kid, Richard, might be the answer. If he could get a hold of the information the kid had, he might be able to crawl his way out of this with his reputation at least partway intact. And more important, face Mary Claire with the truth. He got up and walked out to the phone to call Harrelson from Devon & Company.
“You know what?” Kathy said as she entered their room at the Waldorf, “I think you are the best looking guy I ever saw.” She crossed the room to him, hooked her arms under his and kissed him. She leaned back, “Let me get a better look at you.” Richard started laughing; the warmth in his chest was magic to him. “Yup.” She pulled away from him, giving him a coy look. “And I’ve got a present for you.”
“I was hoping you did.” Richard was smirking at her now.
“Not that. Later.” She turned and retrieved her briefcase from where she’d dropped it next to the door, pulled out some papers. “This. You remember the list of foreign institutions we developed last night?”
“Yeah.” What did she have?
“The names stuck with me, so I checked the spreadsheet files on my laptop. I also checked the dates on Milner’s previous deals that you told me Croonquist mentioned to you versus the capital accounts of Walker & Company.”
Richard was flipping through the pages. The bottom page was a spreadsheet showing dates, names of the four institutions they had identified last night as linked only to the London staging point, and dollar amounts. Where is she going?
Kathy went on, “The two Swiss banks and the Chilean and Hong Kong institutions are majority-owned by Schoenfeld & Co.”
Richard said, “But the London staging point we identified last night is called Golding & Co.”
“Yes, and if I’m right, it’s also owned by Schoenfeld & Co. But the other interesting fact I uncovered relates to the dates of Milner’s deals the SEC says are involved. Shortly after each of those three deals—Tungsten Steel Service Centers, Ernest-United and Val-Tech Industries—GCG and Schoenfeld & Co. put more money into Walker.”
Richard said, “So there’s something fishier going on than we suspected last night.”
“Right. Every time Milner did a deal, not only did Walker make money, but Schoenfeld and GCG made money, and they reinvested the profits into Walker & Company shortly afterward.
Richard was trying to put it together.
Kathy went on, “I had Walker’s capital accounts and financial statements because I worked on a potential IPO of Walker for Jack last summer.” Ka
thy was standing with her hand on her hip, probably not trying to look sexy, but Richard wanted to kiss her again. She raised her hand as if to stop him. Did she know what he was thinking all the time? “There’s more. Each of those times they reinvested, their ownership came out the same. Parity at 51% for Schoenfeld and GCG combined.”
“This is fishier than I thought. That means our mole is passing information to our foreign partners, who are using it to create illegal trading profits to finance their worldwide expansion via Walker & Company.”
Kathy laughed. “It just sounds so laughable that anybody would be using an insider trading ring to finance the development of a global investment bank.”
Richard said, “GCG is an entrepreneurial place. Lots of little profit centers, and very decentralized. The Walker stock is held in the merchant banking subsidiary, which reports directly to Delecroix. And Schoenfeld is the quintessential, old school private English merchant bank.”
Kathy just looked at Richard.
“Global schmobal,” Richard said.
“What?” Kathy asked.
“Global schmobal. That’s the term Jack used to describe Sir Reginald’s worldwide plan.”
“The mole can’t be Sir Reginald.”
“No, but the foreign partners may be at the top of this whole network. I wonder if Milner knows this.”
“Milner? Why would you ask that?”
“I told him about getting dragged in by the SEC and Holden. Told him about them targeting him, too. And about the data we have. I said if any of this was helpful to him, I hoped he’d help us out.” Kathy was scowling like hearing this was hurting her. “He said he’d get back to me. He played his cards close to the vest, but I think he knows more than he’s saying.”
“That was a lousy idea. Does he know where we’re staying?”
“No.” The thought that Milner might feel threatened hadn’t crossed Richard’s mind. He felt a whoosh of realization wash over him. Stupid. What if Milner had him tailed? Came after him? He knew how the Devon guys worked. And Kathy here, too. He shook his head at Kathy as he said, “No, he doesn’t know where we’re staying.” At least he didn’t think so.