“Do you have now, or have you had, any agreement with the Soviet Union to coordinate sales of gold?”
Drew himself was surprised at his question. It came out spontaneously as a way to get himself out of the corner du Plessis was pushing him into.
Du Plessis seemed taken aback. His face, expressionless until that moment, stiffened and his eyes widened involuntarily. He recovered quickly.
“I think the history of our opposition to the Soviet Union dictates that such an arrangement would be out of the question,” he said evenly.
“Yet the Soviet Union finally joined the diamond cartel controlled by South Africa.”
“That was strictly a business decision. It was not possible for the Soviet Union to sell its diamonds outside the cartel. But the Soviets have been selling their gold quite successfully without any arrangement with us.” Du Plessis looked at his watch. Drew realized his time was nearly up.
“Would it be possible for me to visit a gold mine, to see the damage for myself?” he asked, certain of the answer.
“Out of the question. I’ve explained the situation to you. Now, if you’ll—”
“There are rumors of activity at the mines.”
“Of course, we have started immediately to repair the damage. It will take months.”
“There’s been no independent verification of the sabotage. There’s too much gold in the market. Some traders are beginning to wonder if there really was a sabotage.”
Du Plessis’s smile was icy. “Surely, Mr. Dumesnil, no respectable trader would dare question the credibility of your own renowned news service.” He rose and extended his hand. “Have a safe trip home,” he said, cutting off the journalist’s protest.
As he drove back to Johannesburg through the flat, dull countryside outside Pretoria, Drew felt a cold anger growing within him.
Du Plessis was a skilled interview subject. He had effortlessly parried Drew’s attempts to pry more information out of him. Like most veteran journalists, though, Drew had developed an alarm system against the falsehood or, what in fact was worse, the half-truth. A hunch, a sixth sense, whatever name it had, Drew’s experience in hundreds of interviews—thousands, even—told him that he was far from plumbing the depths of du Plessis’s knowledge.
In the end, the South African’s performance had not been convincing. The burden of proof, as far as Drew was concerned, was very much on those claiming there had been sabotage.
The more it appeared likely that the sabotage was a hoax, the greater became Drew’s resentment of the manipulation. Pretoria had coldly calculated how it could dupe Western journalism and Western financial markets and had then unscrupulously done so.
The anger went deeper, though. Drew had struggled to keep his integrity as a journalist, and in profound ways this crisis was revealing to him just how important this integrity was to his whole sense of identity. The falsehood perpetrated by du Plessis, if it was that, amounted to a violation of Drew’s integrity, as violent in its psychological impact as rape.
Drew felt shame as well, shame at his victimization. He was deeply discouraged. But he found the shame and discouragement fueling his anger now. The magnitude of the hoax—if it was a hoax—went far beyond Drew’s personal feelings. His sense of duty obliged him to redress the damage done to society by the falsehood. Half formed in Drew’s mind, too, was the realization that in uncovering the truth now, he could make amends for his former vulnerability.
As he drove past Johannesburg’s northern suburbs, Drew almost reveled in the resolve he felt. The anger from his encounter with du Plessis surmounted his fear at the adventure he was about to embark on with Rampart and Van der Merwe. The need to establish the truth overrode all personal considerations.
~
Abrassimov closed the dossier on his desk, removed his glasses, and lit a cigarette. Du Plessis’s call was due in ten minutes.
The vice-chairman was used to his cramped quarters, though spacious by the standards of the crumbling building at 37 Plyushchika Street. Construction of new offices in Kirovskaya had, predictably, been delayed, so the largest bank in the world remained housed in the plain nineteenth-century building, and Abrassimov stayed where he was.
Little matter, thought Abrassimov. He did not need to impress anyone. For years, the cream of Western banking had trooped through this tiny office or the shabby conference room down the hall, courting him, bidding for his business—his business being to please take their money.
And he had taken it, negotiating Vnesheconombank into one of the best credits in the Euromarket, getting margins within a fraction of triple-A-rated U.S. companies.
The foreign affairs bank, previously known as Vneshtorgbank, was the Soviet Union’s main link to the Western financial world. It negotiated hard-currency loans, invested the funds profitably abroad, and handled all foreign exchange trading. Over the years, Western dealers had learned to respect the “Redman” who had become one of the most important players in international financial markets.
Vnesheconombank was also the selling agent for the Soviet Union’s gold production. Western experts estimated annual Soviet output at 350 tons, about half that of South Africa’s. Abrassimov smiled to himself. Western experts were wrong. The Soviet Union had not disclosed any statistics on production since 1935, though, so Western experts had some excuse.
Of course, they had not fooled the South Africans. Abrassimov remembered his first face-to-face meeting with du Plessis, eighteen months ago.
“We know that you are selling less gold than commonly thought,” the Afrikaner said. “Western estimates say you are selling your full production of three hundred and fifty tons a year. We think it is closer to two hundred thirty tons.”
“It’s actually closer to two hundred twenty,” Abrassimov conceded. “Our traders have become very sophisticated, manipulating futures markets to disguise physical sales, which are made through a variety of new channels, not all of them official. It is very difficult for Western observers to follow. They think we are more desperate than we are.”
“We also think your production has increased well above historical estimates,” du Plessis continued. He paused.
“We are stockpiling two thirds of production,” Abrassimov readily conceded. Obviously, their intelligence in this domain was excellent.
“Which puts your production on par with ours,” du Plessis said, a glint coming into his eyes. “At least, with our official production.”
“But you, too, have increased production, isn’t that right?” Abrassimov said.
“Three years ago we abandoned our policy of mining only a certain percentage of reserves,” du Plessis explained. “Instead, we pushed existing capacity to the maximum. We did not inform anyone of this change in policy.”
“How high is your current production?”
“A thousand tons a year.”
Abrassimov grunted, his opinion of the low quality of Soviet intelligence confirmed again. Their best estimate had been 850 tons.
“The extra production has been very useful in securing essential imports,” du Plessis added.
This exchange of information had also been essential to the talks between the two countries, talks about mutual interest.
The light flashing at the base of his telephone interrupted Abrassimov’s reverie. He picked up the receiver.
“The journalist is becoming dangerous.” Du Plessis did not bother with small talk.
“Dumesnil?”
“He was here, asking about the sabotage. Asking whether we were working together.”
Abrassimov was silent.
“You did not succeed in Paris,” du Plessis continued.
“It was intended as a warning, you will remember,” the Russian responded placidly.
“He did not heed the warning. He has become too dangerous.”
Abrassimov sighed. The Afrikaners were exacting. First the Canadian, even though his only mistake was to thwart their timing. Then the Austrian. Now the Americ
an.
“You ask much of us,” Abrassimov said to the South African. “What has become of the stringer?” The Russian deliberately reminded du Plessis of Van der Merwe’s successful evasion of their plans for him.
“He is no danger. He cannot leave the country; he will cause no harm. But Dumesnil is a threat.”
“You’re right,” Abrassimov said with a note of weariness. “He must be taken care of. I’ll take charge of the matter personally.”
With no further comment on the journalist, du Plessis expressed his concern about the gold market. “The situation is delicate. The market is confused at the amount of gold that seems to be for sale. And the trading in gold futures is unsettling.”
“It is unsettling,” Abrassimov murmured. “Do you think Marcus is hedging?”
“I presume so, but there must be others as well.”
“Following their natural predatory instincts!”
There was a silence. “We can reduce our sales until the market is firm again,” the Russian suggested.
“It might be useful.” Du Plessis accepted the concession matter of factly. “Perhaps the Rio conference will support the gold price.”
“The Latin Americans do seem more serious this time. But I wonder if Western speculators will be worried enough to move funds out of the dollar into gold.” Abrassimov’s own traders had reported a ripple in the gold market from the Rio communiqué, but nothing lasting.
“Not even the Fed can hold up the fiction of solvent debtors much longer,” du Plessis said.
The Russian shrugged, oblivious to du Plessis’s inability to see the gesture. Abrassimov had no illusions about the ruthlessness of the Americans in defending their own interests. “We knew the situation in the markets would be very risky, but so far things have gone well.”
There was little else to discuss. The events of the next few days would do much to determine their actions.
Abrassimov sat quietly at his desk after du Plessis’s call, hunching up unconsciously against the late afternoon chill.
He wondered if the South African was suspicious. Du Plessis was difficult to read. Abrassimov felt he understood the younger man—he saw the similarity in the devotion each of them had to their countries. But the Russian had little experience of these sober, bland Afrikaners, whose reserve masked a fanaticism more like that of a mullah than the cynical patriotism Abrassimov was used to dealing with.
In the end, Abrassimov realized, du Plessis had no more choice with Vnesheconombank than he did with Marcus. Even if the South African distrusted Soviet intentions, there was nothing he could do about it.
The Afrikaner was right to worry about the market’s confusion. So far things were working, but that much gold could not continue to come onto the market. Abrassimov was willing to slow down Soviet sales; the gold could sit in the vaults a little longer. The Russian knew he would be free to sell all the gold he wanted shortly, and at an exorbitant price.
~
Carol looked up to see Vic Daniels, the Fed’s chief trader, standing in front of her.
“Here are the printouts on Comex and Chicago,” he said, putting a stack of computer listing paper in front of her. “The Bank of England will transmit bullion statistics overnight.”
“Thanks, Vic,” Carol said with a smile.
She studied the thin, wiry man standing there. His curly dark hair was salted with gray, his tie loosened. His fingers were stained brown from nicotine, but out of deference to others—and the New York City ordinance—he smoked only in his office. He was in his late thirties, but looked at least ten years older.
“Since when does the Fed’s top dealer play delivery boy?” she asked finally.
Daniels smiled ruefully and reached absentmindedly in his shirt pocket for a cigarette before catching himself.
“Needed a change of scenery,” he said, smiling still. Carol had developed a thick skin for chauvinist remarks, especially from men like Daniels, for whom such comments were simply a bad habit.
“Thought you’d be too busy for sightseeing,” she responded good-humoredly.
Daniels glanced at the door behind him. Carol had a quiet office on the ninth floor. It was narrow, with a window looking out onto Maiden Lane. A metal bookcase filled with books and documents covered one wall. The desk was positioned so that Carol faced the door, with her back to the window.
“I’m a bit concerned about Halden,” Daniels said, lowering his voice.
Carol wrinkled her brow, suppressing her own agreement for the moment. “In what way?”
“He’s moody, more withdrawn than usual. Of course, he’s under a lot of strain, too.”
“I think Martinez’s suicide hit him hard,” Carol said.
“There’s other things, though. As you know, he’s obsessed by the gold market”—the figures he had brought Carol were for the report on gold trading she submitted at the end of every day— “and he’s monitoring the Latin American safety net very closely.”
“That’s all natural enough, given the situation.”
“It’s hard to explain—there’s something that goes beyond just natural interest. For instance, the other day he asked me what would happen if the Fed all of a sudden stopped supplying the overnight credits for the Latin American banks.”
Carol felt a chill pass over her.
“You know he’s not a big one for hypothetical questions,” Daniels continued. “I was so surprised I just stuttered a bit and finally said, ‘Well, the whole fucking market would just go to hell in a breadbasket.’ That made him laugh, as if it were all a big joke—but I think the question was serious.”
Carol was on the point of repeating her conversation with Halden on the plane back from Rio, but she checked herself. It would only add to Daniels’s worry, without contributing to any solution. After all, what could they do about Halden’s odd behavior anyway?
“He’s only human,” Carol said. “This whole thing has him rattled. He’s traveling a lot, not sleeping much. Maybe his own worries get the best of him sometimes.”
Daniels scratched his head with both hands. “Maybe you’re right,” he said, with a deep sigh. “I guess we’re just used to him being imperturbable.”
“Thanks for coming by, Vic,” Carol said in gentle dismissal. “I’ll plug these figures right into the report.”
“Right,” the trader said, sounding relieved, as though he had discharged an important mission. “Hang in there,” he said as he turned to leave.
Carol swiveled back to her computer screen and quickly entered the futures statistics into the report she had written. She worked automatically while her mind sorted out her conversation with Daniels.
Halden had been withdrawn since their return. Usually he would take a few minutes for conversation, no matter how pressured he was. Lately, though, he had been distracted, even abrupt in his encounters, at least with her—guarded, she realized, afraid he would accidentally confide some secret he preferred to keep.
Halden’s question to Daniels about the Latin American safety net bothered Carol. Together with his question to her about a crash, at best only half in jest, it showed a dangerous turn in the central banker’s thinking. For most of the professionals in the bank and at the Federal Reserve Board in Washington, Halden was the only top official who really seemed to understand the full implications of the debt crisis. His stalwart resistance to rash action had reassured all of them.
But now he seemed ready to bandy about doomsday scenarios like the most untutored analyst at the National Security Council.
Carol printed out her report and decided to deliver it personally. Perhaps she could get a reading on Halden that would calm her worries.
She walked into Halden’s reception room on the tenth floor without knocking. It was nearly six. Halden’s secretary, who had put in considerable overtime in the past two weeks, had left early today.
Carol walked to the door of Halden’s office and looked in. The room was empty, but Halden’s jacket was draped
over his chair, so he was somewhere in the building.
Carol crossed the thick carpeting, admiring the view of the Stock Exchange from Halden’s window. She put her report down on the desk mat, so that Halden would see it when he returned. There was already a light blue folder, similar to the one containing her report, on the desk. She was intrigued, because light blue in the Fed’s obsessive bureaucracy was reserved to her department. Normally, all reports passed through her, but she had no idea what the folder on Halden’s desk might contain.
With sudden decisiveness, she picked up the other report and opened it. She noticed the initials of one of her assistants; Halden had evidently gone to the economist directly for the information. The folder contained a concise listing of known holdings of U.S. debt securities by foreigners.
Carol was puzzled. The information was banal enough. Her department kept running tabs on foreign holdings, and Halden could request that information anytime he wanted it. Why had he gone outside channels for it, then? The report was dated that day—there was no reason for the request not to go through her.
Carol was not a stickler for bureaucracy. Although she was thorough and methodical herself, the Fed’s undeviating adherence to its myriad rules often exasperated her. But that very insistence made any divergence so much more remarkable.
She returned the folder to the desk as it had been. It was a small anomaly in Halden’s behavior, but it added to her concern about his state of mind.
Her thoughts turned to Drew. She trusted him implicitly and wanted badly to talk to him. He could be more objective about her concerns regarding Halden and the Fed. She was perhaps too close, too involved with the personalities.
It comforted her, anyway, to think of Drew. Their time together, brief as it was, had sparked feelings that were new to her. She wished very much he were not half a world away.
THIRTEEN
It was nearly midnight when Cyril turned off the lamp and they went out the back door. Drew followed behind the black man, with Van der Merwe bringing up the rear.
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