to the DEA. However, if you have information you would like to share with them, please call me, and I will give you my contact's name and number.
Yours sincerely Donald Winters Vice President
I stared at the fax.
Money laundering. That meant, I believed, the recycling of illegally obtained cash through the financial system. Now I remembered from the first fax that this company. International whatever, Panama, had transferred some funds to a Dekker Trust account. And the lawyer who had ordered the transfer was an associate of a suspected money launderer. Which meant that one of the Dekker Trust accounts might contain laundered money.
So this was what Martin Beldecos was working on before he died! No wonder Eduardo wanted to make sure that he received Martin's messages personally, and that no one else saw them.
I picked up the fax and walked over to Eduardo's comer office. I knocked on the door and tried to open it. It was locked.
"He's not in today," said a middle-aged woman presiding over a corral of desks just outside his office. "Should be in tomorrow. Can I help?"
I dithered over giving her the fax. Eduardo had said I shouldn't let anyone else see any of Martin's messages. Even though she was his secretary, this was clearly an important message. I remembered the implied threat in Eduardo's voice, and decided the safest thing was to wait until I could give Eduardo the message personally.
"No that's all right," I said, and made my way back around the square of trading desks to my own seat.
"One nil!" Dave flung his phone down onto his desk and stood up in triumph, liis arms in the air. He attracted only a quick glance from the other traders around him. Another small victory over the market. Another dollar
made.
Suddenly I felt cold. Perhaps Dave had been right. Perhaps Martin had been murdered by a contract killer. If he knew about money laundering at Dekker, someone might have wanted to shut him up.
No. I was just being fanciful. I clutched the fax tightly I should just give it to Eduardo and forget about it. He could sort it out.
But perhaps Eduardo already knew aU about it. If someone was laundering money through Dekker Ward, it wouldn't surprise me if Eduardo was involved.
What the hell should I do?
I looked around for Jamie, but he was still out at his
meeting.
Then I saw Ricardo moving toward me.
"Still want to keep that Argentine position? They're lagging the market a bit, aren't they? "
I dropped the fax onto my desk and wrenched my brain back to business. "The reasons we bought the bonds still hold good," I said. "So yes."
"OK, fine. We'll see what happens. Now, what are you doing at the moment?"
The fax to Martin Beldecos was right there, face up on my desk, partially covered by my left arm. Now was the hme to tell Ricardo about it. Just give it to him and
forget it.
But something made me hold back. I think it was because I couldn't foresee the consequences, although I was sure they would be important. I needed time to think it through first.
So, keeping my arm on the desk, covering Martin Beldecos's name on the title sheet, I said simply, "Reading."
''Uh-huh. Don't you think it's about time you got involved in a real deal?"
"Yes. That would be great."
"Good, Isabel is going down to Rio tonight to sort out this favela deal. She'll need some help. Can you go with her?"
"Of course." My pulse quickened at the prospect of working closely with Isabel. Besides, this was a great opportunity: my first business trip at Dekker, on a big deal. One that Ricardo was personally interested in. Although I had to admit he seemed to be personally interested in every deal.
I glanced toward her. She was leaning back in her chair talking on the phone, but she had seen Ricardo with me, and gave me a quick smile of encouragement.
"Good, rd like you to see how we operate in tiie markets we know well before I set you on to Russia," Ricardo said. "See what you can do."
A voice interrupted. "Ricardo! Vasily Ivanov from the Russian Finance Ministry on twelve!"
"Ah, the Russians are coming." Ricardo smiled and returned to his desk to take the call.
Isabel put down her phone. "Pull up a chair," she said. "I'll tell you what we're doing."
"Just a second," I said. I picked up the fax, glancing at it once again. Then I opened the bottom drawer of my desk, which was still empty, and tossed the fax inside. I'd deal with it later, when I had had a chance to think about it.
I pulled over the chair from my desk and sat next to her. I could just smell her perfume. Concentrate!
"I said all this would get easier once you started do-
ing it rather than just reading about it, didn't I?" She smiled shyly, a flash of teeth that came and went. ''Well, I may be proved wrong. This deal isn't a good one to start on."
"I'Udomybest."
"OK. Let me tell you the story. First of all, do you know what afavela is?"
"It's some kind of a slum, isn't it?"
"That's right. In Brazil there's been massive migration from the countryside to the towns over the last forty years. People arrive in the cities without anywhere to live. So they find some empty ground and build a shelter there. They make them out of pieces of timber, corrugated iron, things like that. As more people come, their homes become a bit more substantial, and these areas grow into large communities, some of them with thousands of inhabitants. These are the favelas."
"They sound grim."
"They are," said Isabel. "They have no sanitation; open sewers run through the streets. No running water. No garbage collection. If there's a fire, the fire service can't get in to put it out. There are very few schools or clinics. There are drugs and gang wars. They're horrible. No humans should be allowed to live in those conditions."
"So why don't the authorities do something about them?"
"They've tried. Whenever they move the residents, they just build afavela somewhere else. Sometimes the city will build cheap housing for some people, but then these are replaced by thousands more. And you know how little money Brazil has to spend on anything these days."
"OK, so what's the solution?"
"Well, the Municipality of Rio de Janeiro think they've found one. It's called the favela hairro project. Bairro means neighborhood. The idea is that instead of trying to move or replace the favelas, they will try to change them. Turn them into proper neighborhoods. So they v^ill build roads, health centers, schools, parks, water systems, electricity. But most important of all, they'll give the inhabitants of the favelas title to their properties."
"What, ownership?"
"Not quite. But a long leasehold, which is more or less the same thing. This should make a big difference. Once these people know they're not going to be turned out of their homes, they'll improve them. And just as important, they will have an incentive to stop newcomers building on their land. It should make a big difference. They should turn into proper bairros."
I thought about it. "Will it really work?"
"It should," said Isabel. "It's certainly worth a try. We have to do something."
"And how will all this be financed?"
Isabel leaned forward, eager to explain. "That's where we come in. Although the World Development Fund is happy to help, organizing the financing for these projects can be quite a problem. Usually it has to go through the municipality. There it can be mixed up with funds for other projects, and all kinds of budget-related bureaucratic restrictions have to be met. In the past there have also been accusations of contracts being awarded at inflated prices in return for kickbacks. Also this project could be partially self-financing from taxes raised from the favelas, but the municipality is not allowed to pledge tax revenues to any specific source. So the whole idea got bogged down."
"Sounds like a nightmare."
"It was. Until we thought of the idea of a trust."
"A trust?"
"Yes. A trust will be
set up to fund the project. ItTl be called the Rio de Janeiro Favela Bairro Trust. ItTl be funded with a hundred million dollars from the municipality, and two hundred nnillion dollars from a ten-year bond issue guaranteed by the World Development Fund."
"And arranged by Dekker Ward."
"Precisely"
"And this trust is responsible for financing the project?"
"That's right. There will be trustees from the municipality, from the favela, and from the World Development Fund."
"Very neat." I thought a moment. "How will the money be repaid?"
"The trust will receive the rental payments from the favela inhabitants under the long leases. Because they're rental payments, not taxes, they can be applied to the bond issue. Of course, if that isn't sufficient, then the municipality or the World Development Fund will make up the difference."
"I see. But won't the Rio authorities be unhappy about losing control of the funds?"
"That's been the problem," said Isabel. "But the current mayor of Rio really does want to do something about these places. And he and the new finance secretary are quite strict about not awarding contracts to political allies. This will help them clean the whole thing up."
"So everyone gains? "
"That's the intention. Brazil needs foreign capital. This is a way of making sure it gets to where it's needed most."
I was impressed.'' Was this your idea? " i
"Yes. Or at least the trust structure was. Tve wanted ! to do something like this for a long time, but no one took any notice. Then Ricardo put his support behind it, and it looks like it will finally happen. If we can squeeze it through the Brazilian bureaucrats, that is." ! "What are they Uke?"
"You'll see." '
At five o'clock, Jamie passed by my desk, his | jacket on.
"How did it go with the insurance company?" I asked. ;
"Great! They're going to commit a hundred million ! pounds to the emerging markets. And that's just for i starters. If they like the experience, they'll stump up ; more. And have no doubt about it, I'm going to make this a wonderful experience for them." |
"So where are you off to now?"
"Alejo's in town. I'm meeting him at his hotel, and j then we're going out for a drink or two." Alejo was one of Jamie's Mexican accounts. "I'd ask you along, but he's one of my more sensitive clients." i
"That's OK. I'm off to Brazil this evening." i
Jamie raised his eyebrows. "Brazil? That was quick." j "Ricardo asked me to help Isabel with the favela I deal."
"That should be interesting. Isabel's good. You can learn a lot from her. Her father's some big-shot banker out there, so they all listen to her. But remember. Don't touch."
I smiled. "Oh, Jamie. Just before you go. I got a fax for Martin Beldecos I wanted to discuss with you. I'm not sure what I should do with it—" Jamie looked at his watch. "Look, I've got to go. I'm
late already and I don't want to piss off this guy. Let's talk about it when you get back, OK?"
"But, Jamie-"
"Have a good trip, Nick," he said, and marched swiftly out of the office.
I looked at the fax. I would have to leave soon myself, if I was to allow time to cycle home, pack, and get out to Heathrow to meet Isabel. But it seemed too important to just ignore.
I read it through again. Donald Winters, the man at United Bank of Canada, had said he would give me the name of his contact at the DEA. That sounded like useful information to have, although I wasn't yet sure whether I would actually contact the agency itself. That would require careful thought. I dialed United Bank of Canada in Nassau and spoke to Winters's assistant who said he would be out all afternoon. I decided not to leave a message, but instead composed a swift fax asking for his contact at the DEA.
The machine had run out of paper, and when I finally worked out how to refill it. United Bank of Canada's line seemed to be permanently engaged. It wasn't until six-thirty that I saw the two sheets chug satisfyingly through the machine.
Pleased that I had at least done something, I stuffed the papers I would need for my trip into my battered briefcase, and rushed out of the office. I was excited at the prospect of the next few days, but also nervous. Only three days into the job, and I was already on my first trip! Normally, I was confident in my ability to pick things up quickly, but I was afraid that I would be way out of my depth in Rio. I hoped Isabel would be patient.
5
Humberto Novais Alves, the Finance Secretary for the Municipality of Rio de Janeiro, leaped to his feet and held out his arms. "Isabel!" he said. ''Tudo hem?" He kissed both her cheeks and rattled on in Portuguese.
Isabel broke free and turned to me. "Humberto, this is my colleague Nick Elliot. He doesn't speak Portuguese, but I know English isn't a problem for you."
"No problem at all!" said Humberto, pumping my hand. His round face broke into a grin. "Sit down, sit down." He gestured to a group of sofas and armchairs. "Some coffee?"
As Humberto organized it, I looked round his office. It was large and well furnished, no doubt befitting his status. The walls were adorned with diplomas and photographs of gleaming new housing projects. The big desk was devoid of paper. The room smelled of new carpet. Every few seconds a pneumatic drill burst into life in the street below. I glanced out of the window. We were ten floors up. The dark flanks of the mayor's office rose up a hundred yards away, a tower block just taller than the Finance Department. And behind that the sea, mountains, and crowded buildings of Rio de Janeiro.
We had come here straight from the airport, through
the chaotic grime of Rio's northern suburbs into the shabby administrative center of the city. Our taxi had parked in what looked like a wire-fenced building site surrounding the Finance Department, and we had negotiated four sets of security guards, receptionists, and secretaries before finally reaching the inner sanctum of Humberto's office.
A woman entered with a tray and three small cups of coffee, which she handed to each of us. Humberto added several spoonfuls of sugar to his, and Isabel some drops from a little blue plastic bottle. I took mine straight, sipping the gritty black liquid carefully. It was strong and bitter.
"And how is your dear father, Isabel?" Humberto asked, taking a seat at the conference table. He was about fifty, and looked to my eyes more English than Brazilian. Pale and a little pudgy, with thinning dark hair, he wore a smart gray suit and striped tie. He would have blended in well in Whitehall.
"He's fine," she replied. "Working hard as usual."
"With some results. Banco Horizonte is doing very well these days, I hear. It has quite a reputation. When was it established? Eight years ago?"
"Ten years in October."
"Well, he has achieved a lot in ten years. Give him my good wishes, won't you?"
"I will." Isabel's smile was a bit strained. I got the impression that many of her business conversations in Brazil started off with her father.
Humberto took a sip of coffee and lit a cigarette. "Well, Isabel my dear, we have good news. Very good news. Everything is finally coming together. The Rio de Janeiro Favela Bairro Trust was formally established yesterday, with myself as chairman." He placed a hand
on his chest and made a mock bow. "The mayor is completely behind the idea, I mean completely We have had ten departments working on this." He counted them off on his stubby fingers: "Finance, Health, Urbanism, Education, Housing, Fire, Water, Environment, Social Development, and the Attorney General's Office. And they are all working together. That, as you know, is quite an achievement."
"Great!" Isabel's face lit up. This was better than she had expected.
"You have the documents I sent you?"
"They're right here," said Isabel, patting her briefcase. "I have some comments. Nothing substantial, but we need to make a few changes just to be sure the mechanism works correctly. And then of course we've got the meetings tomorrow with the rating agencies. They shouldn't be a problem. They just have one or two final questions."
; The rating agencies were responsible for assessing and publishing a credit rating for each new deal brought to market. Given the complexity of Isabel's structure, this had required quite a lot of work on their part, but they were almost comfortable with it.
"Good. Let me get Rafael. One moment." He picked up his phone and spoke quickly in Portuguese. "He'll be here in five minutes."
He placed his hands on the desk in front of us and beamed. "But once we have agreed on those documents, and satisfied the agencies, there's nothing at our end to stop us from going further."
"Then we can launch the deal at the end of next week, as we planned?"
"As far as we are concerned, yes."
Isabel caught something in the civil servant's tone. "Humberto?"
''There is one small problem. It's probably nothing."
"Yes?"
"The World Development Fund has to check some small details with Washington. They say they'll get back to us at the beginning of next week."
"What details?"
Humberto shrugged.
"I'U call them," said Isabel.
"Good. Isabel, we are going to do this deal, I promise you."
Isabel smiled. "We certainly are."
There was a quiet tap on the door, and the lawyer, Rafael, entered. We retired to a meeting room where we went over the documents Isabel had brought with her. I had read them through several times until I thoroughly understood the structure, and I was able to make some useful suggestions. It was good to contribute something for a change.
In the taxi to our hotel, I asked Isabel how she thought the meeting had gone.
"I'm pleased. After a year it looks like we're almost there. Humberto has always been enthusiastic about the deal. He said there would be no problem getting all the authorizations, but I admit I didn't believe him. And now it looks like he's done it."
"What was all that about the World Development Fund?"
Isabel frowned. "I don't know. I'll find out when we get to the hotel. Oh, by the way, thanks for your help in that meeting. You certainly have picked up a lot." She gave me a shy smile, a smile to die for.
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