by Joseph Badal
“Hey, Sis. Everything all right?”
“Yeah, fine. Betsy doing okay?”
“Great. They’re keeping her in the hospital for another night. She’ll be home tomorrow.”
“I’ll stop by and see her today,” Carrie said. “The reason I called is to tell you we’re moving out of the hotel tomorrow morning. Wendy’s going down to the Cape. She’ll stay there until things settle down.”
“Tell her to stay off the phone.”
Carrie laughed. “I think she’s learned that lesson. You okay?”
“I’m pissed and I’m frustrated, but I’m okay. I remember Dad telling me life isn’t fair, but I never believed it could be this unfair. Maybe someone will pay Folsom back one day, but I’m not optimistic. Guys like Folsom always seem to come out smelling like roses.”
“Don’t be too sure about that, brother. Between Wendy’s complaint against him and the newspaper articles, maybe things are starting to fall apart for him.
“One other thing, those two men who helped me at Pastorius Park are going to watch the hotel tonight.”
“You expecting trouble?”
“Just being cautious. I’m certain Folsom was behind the last attempt on Wendy’s life. With all the pressure on him, he could go off the deep end.”
* * *
Katherine sat in a chair next to Betsy’s hospital bed while Betsy nursed the baby.
“He’s going to grow fast if he keeps eating like that,” Katherine said, marveling at the hungry baby.
“He’s just like his father, passionate about everything, even his food.”
Katherine laughed. “Eddie has always been able to eat anything and everything and has never had a weight problem. Lucky. I gain weight if I even look at food.”
The two women sat quietly for a while, and then Betsy said, “I’ve only known Eddie for a little less than three years. Can you tell me how losing his company will affect him?”
Katherine thought about the question. “Both of my children are tough and resilient. They’re survivors. The loss of the restaurants will be difficult for Eddie to take, but not difficult for him to live with. He’ll recover emotionally and financially. That’s not what I’m worried about. Eddie and Carrie have an almost unnatural sense of right and wrong. When they see someone being wronged, they want to make things right. To nurture the wronged party and to punish the abuser. Gerald Folsom has done so much wrong in his life—a lot to this family. I just hope they don’t try to make him pay.”
“Well,” Betsy said, “someone has to make that man pay for the wrongs he has done.”
“That’s what the law’s for, Betsy.”
“The law has done nothing to stop Folsom.”
CHAPTER SEVENTY-FIVE
“Jeffrey, this article in The Philadelphia Journal is a disaster,” Folsom complained to his attorney. “It’s caused a run on the bank. I’m portrayed as a monster.”
Jeffrey Rose rested his elbow on the arm of his desk chair and spread his hand over his mouth and chin. “I won’t lie to you, Jerry; this is a mess. I’ve seen things like this happen before. One problem piles onto another and pretty soon the client collapses under the weight of it all. We need to remove some of that weight.”
“Like how?”
“Like settling with your wife, getting her to drop the complaint against you. Like telling your damn bank officers to stop forcing customers to go out of business, rather than renewing good borrowers’ loans. This is a PR nightmare.”
Folsom nodded his head, as though he agreed with Rose. “Some bigwig at the FDIC is coming into the bank today for a meeting at 3. Maybe you should be there.”
“No shit, Jerry. You think I ought to represent you when you meet with a bureaucrat from a government agency that could not only put you out of business but throw your ass in jail? Jesus, what are you thinking?”
“I just found out a little while ago.”
Rose’s jaws clenched. “I haven’t heard anything from the police or the D.A. about those valises of cash they took out of your home. Or about those cards that were in with the money. Is there anything there I should be concerned about?”
“I can’t imagine what. Of course, I don’t know what was written on the cards.”
“What the hell could be written on anything that would implicate you in a crime?”
“Nothing, Jeffrey. I swear.”
“Okay. What’s the FDIC guy want?”
“I assume he’s reacting to that damn newspaper article. By making me look bad, the newspaper has damaged the FDIC’s reputation. After all, it was the FDIC that brought me in to buy the bank.”
“What are we going to tell the guy at 3?”
“If what the paper wrote is true about the way borrowers are being treated at the bank, then my right-hand man has abused his position. He’s taken too much authority on himself and has made decisions without clearing them through me. I think I should fire Sanford Cunningham on the spot at that meeting and promise to clean things up.”
“That’s good,” Rose said. “We can issue a press release—no, better yet, you’re going to hold a press conference at 5 this evening. It’ll make the 6 o’clock news. You’ll announce Cunningham’s firing. And you’ll say you’re going to investigate everything he has done and make restitution to all customers who have been mistreated.”
“Is that necessary? Can’t we—”
Rose interrupted Folsom. “Are you kidding me? Your fucking livelihood, your future are on the line here, and you want to quibble about spending money to save your ass. Besides, you’re saying that you’re going to make restitution; you don’t have to actually do it. After a few weeks, the heat will be off.”
“I like that, Jeffrey.”
“So Cunningham is the one who has been making the decisions at the bank?”
“That’s right.”
“Then fire his ass this afternoon and announce it to the world at 5.”
“The paper quoted a Stanley Burns, who was appointed president of the bank after you took over. What’s his story?”
“He was senior lending officer. He was promoted based on Cunningham’s recommendation. I’ve never really had any contact with the guy. He reported to Cunningham.”
“Good.”
“Anything else?”
“I’m still worried about the cash and cards the police took from your place,” Rose said. “But we’ll have to deal with that when we find out what’s on them. And between now and 3, try to contact your wife and offer to pay her whatever she wants to withdraw her complaint.”
“Will do, Jeffrey,” Folsom lied, knowing he wouldn’t have to pay that bitch a dime, not even the $5 million he’d written into their pre-nup agreement. She would be dead tonight, along with Carrie Winter, and anyone else with them.
CHAPTER SEVENTY-SIX
Jeffrey Rose had a bad feeling about his client. He knew when he was being lied to because he had a lot of experience dealing with sociopaths and psychopaths. He wasn’t certain about what part of Folsom’s story had been true and what had been false, but he knew it wasn’t all true.
He didn’t like paying for information. It wasn’t the cost—his clients ultimately paid. Rather, he didn’t like the risk and the implied favor he would now owe someone. But he found the number he was looking for in his electronic Rolodex and dialed it anyway.
“Sergeant Rhoades.”
“Hey, Gil. How ya doin?”
There was a brief silence on the other end of the line until the man apparently finally recognized Rose’s voice.
“Hey. It’s been a while.”
“Yeah, Gil. I need your help.”
“Depends on what it is.”
“Always does, my friend. The department served a search warrant on the home of Gerald Folsom yesterday. All the detectives took out of the house wer
e two cases of cash and a few note cards.”
“Gerald Folsom?”
“Yeah. Assault and battery charge.”
“There’s a real buzz going on around here about that search warrant. But it’s not about the assault and battery charge. In fact, I heard the cash and cards have been passed on to the White Collar Crimes Division. I also heard the Feds have been brought in.”
“You still in charge of the evidence room?”
“Yep.”
“I need to know what’s written on the cards that are in those cases.”
“Word gets out I released that information, my job and pension will be down the drain. No thanks; you’re asking too much this time.”
“Twenty grand, Gil.”
“Holy shit! Fine, I’ll call you back.”
* * *
“Kelly, your article made quite a splash.”
“Hey, Paul, good to hear from you. I’ve been meaning to call; I haven’t thanked you and Edward Winter yet for bringing this to my attention.”
“At least you listened, Kelly.”
“I think you’ll like the next two articles. Today’s article mentioned that Folsom and Matson worked together on a lot of deals and that Broad Street National Bank is putting a lot of pressure on some of its customers, forcing them out of business to foreclose on them. In tomorrow’s story, we’re going to give dates of each deal Folsom did with the FDIC and how much he paid. Thanks to the information you got from Gail Moskowitz, we can show a lot of detail, including how the prices Folsom paid were better than the prices paid by any other investor made with the FDIC.”
“I heard a rumor you might find interesting,” Paul said. “I hear the PPD executed a search warrant on Folsom’s house and now has certain information in its possession.”
“And why would I be interested in that?”
“Because written on cards taken from Folsom’s home are dollar amounts and dates coinciding with the dates of the transactions Folsom did with the Feds.”
“What would these amounts and dates tell me?” Loughridge asked.
“That Donald Matson received large amounts of cash on the same dates Folsom closed deals with the FDIC.”
“Are you telling me Folsom bribed Matson?”
“Now, now, Kelly, don’t you think you should do a little leg work of your own? The next thing you’ll want me to do is write your articles.”
CHAPTER SEVENTY-SEVEN
The instant all of the attendees were in their seats, Henry Rentz took charge of the 3 p.m. meeting at Broad Street National Bank. Seated at the head of the table, Rentz was professorial-looking in his brown horn-rimmed glasses, thick snow-white hair, bow tie, white shirt, and brown suit. He pointed at the stenographer and said, “I am Henry Rentz, Regional Superintendant of the Federal Deposit Insurance Corporation for the Mid-Atlantic Region. I am advising everyone in this room that we are now on the record and everything in this meeting is being recorded. I would appreciate it if each of you would introduce yourself, stating your position and affiliation. Let’s start with Ms. Moskowitz at my left.”
“Gail Moskowitz, Staff Attorney with the FDIC at the Washington, D.C. headquarters.”
“Bruce Couples, Area Supervisor for the Office of the Comptroller of the Currency.” Couples sat in the middle of one side of the table, between Moskowitz and Sanford Cunningham. A fifty-something, rotund little man with a walrus mustache and wire-rimmed glasses, Couples wore a perpetual frown and seemed humorless. His suit was gray; his tie striped red and blue.
“Sanford Cunningham, Folsom Financial Corporation’s Chief Financial Officer and representative at Broad Street National Bank.”
“Gerald Folsom, President of Folsom Financial Corporation, which owns Broad Street National Bank.” Folsom sat on the other side of the table, across from Bruce Couples, to the right of Jeffrey Rose.
“Jeffrey Rose, attorney for Mr. Folsom.” As usual, he wore his blue suit, blue and yellow striped tie, and black Ferragamo tasseled loafers. With his year-round tan, he looked healthier than the others in the room.
“All right, ladies and gentlemen,” Rentz said, “let’s get started. I assume you’ve all read today’s Philadelphia Journal article about Broad Street National Bank.” He looked around the room and noted that each person nodded or murmured that they had read the article.
“We have a public relations problem here that can go well beyond just Broad Street National-specific issues. The newspaper is claiming Broad Street National Bank has aggressively damaged some of its customers by refusing to renew perfectly good loans, and then foreclosing or threatening to foreclose on the collateral behind these loans. Perhaps this is stating the obvious, but when an investor takes over a bank from the FDIC, it does so at a discounted price. In other words, Mr. Folsom here was able to buy Broad Street National Bank at a significant discount to the bank’s book value. The FDIC allows this to happen because we recognize the investor assumes a risk in taking over a troubled financial institution. Everybody with me so far?”
Again he waited for some sort of response from the people in the room. Then he continued.
“In fact, we construct a lot of these bank transactions under a loss-share arrangement, whereby the FDIC, in effect, indemnifies the investor from a substantial part of any loss that might occur. But it should be immediately apparent to all of you that there is room for significant abuse in this type of situation.
“For instance,” he picked up a file and raised it, “let’s take the bank’s loan to Winter Enterprises.” He now looked directly at Gerald Folsom. “You familiar with Winter Enterprises?”
“The name’s familiar, but I can’t say I really know anything about it,” Folsom said.
Rentz caught the surprised look on Cunningham’s face, but didn’t acknowledge it.
“Well, since you’re not familiar with the details of the Winter Enterprises loan, how about if I bring you up to date?”
Folsom shrugged, seemingly indifferent.
“Winter Enterprises owes the bank $20 million, secured with real estate originally appraised at $67 million, and recently appraised at $50 million. The loan is also collateralized by the company’s franchise agreement. The original loan to value was even lower than the current LTV of forty percent. The company is amazingly profitable and is growing at a time when the economy is contracting.
“What do you think, Mr. Folsom, is this a loan you would like to keep on the bank’s books?”
“Sounds like it,” Folsom said. “I guess I’d want to know what other business the customer would bring to the bank, like deposits and credit card transactions.”
“So, $2 to $3 million in average collected balances in the bank and $20 plus million in credit card transactions annually would get your attention?”
“Absolutely.”
“Then explain, Mr. Folsom, why your bank is unwilling to renew Winter Enterprises’ loan? Every number I just gave you describes your bank’s relationship with this borrower. I thought you said this is the sort of relationship Broad Street National Bank would like to have.”
“I have no idea, Mr. Rentz. It seems to me we should be doing business with this company.”
“Who would know the answer to my question?” Rentz asked.
Folsom looked across the table at Cunningham. He had thought about taking Jeffrey Rose’s advice about firing Cunningham before this meeting, but decided terminating Cunningham in front of all these people would be much more fun. He’d make the bastard pay for raising his voice at him during their last telephone conversation. “Sandy, you handle the day-to-day dealings of the bank; perhaps you should answer Mr. Rentz’s question.”
Rentz, along with everyone else in the room, looked at Cunningham, who appeared to be confused. Cunningham’s face had turned crimson-red and his eyes were boring into Folsom like laser beams.
“I a
m quite familiar with the Winter Enterprises relationship,” Cunningham said finally. “Before Folsom Financial took over Broad Street National, the bank had already made the decision to not renew their loan because of the bank’s commercial real estate exposure. The Office of the Comptroller of the Currency criticized Broad Street’s previous ownership and management for its high concentration of commercial real estate loans. When we took over the bank, we merely tried to comply with the OCC’s direction.”
Cunningham glared next at Bruce Couples, the OCC man. “Your agency forced the previous owners of Broad Street National Bank to write down its commercial real estate loans to levels deeply discounted from real market values. I was shocked at the write downs. Candidly, that’s the main reason I recommended to Mr. Folsom that he invest in the bank. The deep discounts created a very profitable opportunity for us.”
Cunningham then turned to look at Rentz. “What do you think would have happened if we started making real estate loans after the OCC and the FDIC criticized the former owners for doing the same thing?”
“But, Mr. Cunningham, the OCC never told the previous bank owners or Folsom Financial Corporation to not extend credit to Winter Enterprises, did they?”
“No, not that I’m aware of.”
“I can understand why the previous owners would have decided to eliminate as much of their commercial real estate debt as possible. They were trying to survive. They needed to raise capital to prevent the FDIC from taking over the bank. But what’s your excuse? You don’t have that sort of pressure on you. Why would you destroy a sound, profitable business?”
Cunningham’s face flushed red again. He looked at Folsom, as though searching for a life line, but none was forthcoming. He muttered something under his breath and then looked back at Rentz.
“Because, Mr. Rentz, Gerald Folsom told me to take down Edward Winter and his company.”
Jeffrey Rose jerked forward in his chair and shouted, “That’s preposterous. Mr. Cunningham is trying to place blame on my client, who has had nothing to do with the daily workings of the bank. He trusted Mr. Cunningham to manage the bank’s affairs in a legal and ethical, but profitable manner. Obviously, he has failed to do so.”