Fatal Exchange

by Russell Blake

  The rest of this trilogy is intended as a work of fiction. Any similarity between the characters depicted in this work and real persons, living or dead, is coincidental.

  Book One – Kotov Syndrome

  This chess phenomenon, first described by Alexander Kotov, can occur when a player does not find a good plan after considerable consideration of a position. The player, under time pressure, suddenly decides to make a move – usually a terrible one which was inadequately analyzed.

  ~~Prologue~~

  Outside the parking garage the temperature had dipped below freezing, and the rumble of traffic had long since faded as the city shut down for the evening. Even the smallest sounds reverberated through the stark expanse, cascading in a diminishing ripple of echoes. A fluorescent light flickered overhead, occasionally sputtering a warning of imminent demise – resulting in an uneasy illumination of the ominously darkened space.

  A grey American-built sedan with government plates punctuated the late-night silence as it pulled down the ramp onto the lowest level and parked in a far corner, cutting its lights and engine. Inside the vehicle, the driver sat motionless, scanning the car’s surroundings. One hand silently toyed with a worn key fob, an unconscious habit, mechanical in its regularity.

  After several minutes, footsteps disrupted the equilibrium as a figure approached the vehicle from the far end of the garage. The passenger door opened and the new arrival sat down, passing a CD-ROM to the driver. The passenger’s grey eyes darted to the rearview mirror, peering into the dim light of the garage…searching.

  “This is the outfit we need help with. We have nine months,” the passenger said in a low voice, seasoned with years of cigarette abuse.

  The driver nodded and waited for more. His passenger smelled of alcohol, garlic and dried sweat.

  “We appreciate the hand. I…I know it’s a hell of a favor, but your guy said he could make this happen, so...”

  Satisfied there was nothing more of value the visitor could impart, the driver leaned towards him…slowly…invading the passenger’s space to whisper in his ear.

  "I'll get it to him. This meeting never took place."

  ~~Chapter 1~~

  Rick brushed past the Marine guard, offering an imperceptible nod of greeting, and entered the familiar confines of the large foyer that led to his office. Another day of non-stop action, people moving urgently down the heavily carpeted hallways, earnest looks and murmured dialog the rule.

  His secretary handed him a sheaf of papers as he passed her desk. Mandy had been with him in one role or another since his days at the law firm, and when he’d accepted his current position she’d been part of the deal. She organized his life and kept his days running smoothly; no small feat, considering the number of hours he spent working on behalf of his master. Rick made a slitting gesture with his thumb across his neck, and she smiled at him as she continued her telephone discussion. She knew it meant he didn’t want to be disturbed by anyone, either in person or by phone. It was the beginning of another brutal week and he had his hands as full as usual. He settled back behind his neatly organized desk and considered the trees out on the expansive, snow-covered lawn.

  What a month.

  Every possible nightmare scenario had come hurtling down the pike at them; from a new terrorist threat emanating from the Mexican border to a bio-hazard scare in Boston, then the discovery of E. coli in the San Antonio water supply. And the month was only half over. He loved the adrenaline rush of the job, but four years of it had put a lot of miles on the chassis.

  Another late night yesterday, and he’d had more than his usual glass or two of wine with Stewart as they’d discussed the Beltway’s intrigue and power plays. The whole point of the evening had been to request some deniable assistance – and the mission had been accomplished; he’d asked Stewart to help out with a delicate matter, and Stewart had agreed.

  But his head felt a little thick today, which was no way to operate in this environment.

  The red com light on his phone blinked, and the synthesized ringer issued forth its annoying chirp. He stabbed the speaker button.

  “I don’t want to be disturbed, remember?”

  “He needs to see you. Now.” Mandy didn’t need to say anything else.

  “Any idea what to bring, what he wants to talk about?”

  “He didn’t say. Just asked to see you ‘soonest’ as he put it.”

  Rick sighed. “I’m there. Thanks. Sorry if I’m snappy.”

  He didn’t wait for a response, punched the button again, got up and pulled on his suit jacket. Grey, conservative cut, nothing fancy. Muted tie over a starched white dress shirt, fine quality, but not too fine. Discreet, nondescript. He cracked his neck, heard a pop, and pushed his shoulders back as he walked through his office door and back to the main hallway. He smiled at the older woman who was the gatekeeper. She waved him into the large office, books lining one wall halfway up to the high ceiling.

  “Ah, there you are, Rick.” The man sitting in his shirtsleeves looked up as he came into the room, took off his reading glasses and fixed the younger man with a penetrating gaze. A look passed which spoke of power, and a disposition accustomed to being accommodated. It was unmistakable.

  “Good morning, Mr. Vice President.”

  ~ ~ ~

  Sweat trickled down Steven’s face, and the ocean breeze did little to mitigate the increasing heat from the rising sun. The usual parade of crazies was absent in the early hours of the morning. Later, the nonstop rollerblading bikini models and faux gangbanger/surf punks on elaborately configured bicycle choppers would clog the boardwalk and the running path, but for now it was the province of the athletically inclined, the pet owners out for some pre-breakfast relief, the odd can collector and metal-detecting hopeful scavenging for the previous day’s residual treasures.

  The Newport Beach maintenance squad noisily raked the sand as he ran. The group of modified tractors ensured that every new day was orderly and clean on the long beige stretch, and that no cigarette butt or soda bottle was left to sully the main attraction for the town’s summer revenue. A placid ocean offered up the odd ripple to the ever-optimistic surfers awaiting the perfect curl a few dozen yards offshore.

  Mornings like this were the norm for the privileged few who resided in the twenty-foot wide homes squeezed along the beachfront. At three million dollars and up for a sheetrock dwelling only slightly wider than a trailer, the inhabitants had endorsed their love of the setting with their wallets, and had a vested interest in keeping the locale picture-perfect.

  This was his favorite time; when his mind could wander over whatever thoughts bubbled into his consciousness, accompanied by only the rhythmic pounding of his soles on the spotless pavement and the occasional cry of a seabird. To any observer, Steven would appear to be a lean late-thirties male with nondescript features – other than a crooked nose from an ancient fracture and a small scar under his right cheek – with carelessly cut light-brown hair and a somewhat vacant expression of puzzled concentration on his not-quite-movie-star-handsome face. His muscle tone was unusually well defined from years of martial arts practice. He looked fit, tanned, easy-going and friendly.

  The run was part of his morning routine. He got up at 5:30 and gulped down a cup of scalding black coffee, threw some dog food into a bowl, pulled on sweats and an old T-shirt and followed the strand for two and a half miles to the second pier, and then back again.

  Same routine every weekday, without fail, for the last five years. His Belgian shepherd, Avalon, loped alongside him, easily keeping pace and more than familiar with the circuit. The green bungalow with the porcelain panda sitting in the window meant only one more mile to go.

  Breathe in, exhale slowly, shake out incipient cramp in shoulder, brush sweat out of eyes.

  Almost there now. Almost there.

  Put on a final burst of speed, feel the familiar burn in his quadriceps and calves, and then hop over the low gate that separated the patio from t
he thoroughfare.

  Back in the house, he had enough time to rinse off, towel dry his hair and then sit down at his computer and log on to see the pre-market activity and scan the news. Any passers-by seeing him hunched in front of his dual screens at the oceanfront picture window would have probably thought he was a securities analyst or portfolio manager or financial planner, chained by vocation to his monitor in the wee hours.

  Nothing could have been further from the truth.

  Steven had retired several years earlier, having sold his software engineering company, pocketed some ‘fuck you’ money and happily declared himself out of the business world for good. At thirty-nine he’d been one of the luckier entrepreneurs to emerge from the subsequent economic carnage; many of his friends had lost everything and were struggling to start over.

  He couldn’t bitch.

  The plan had been to devote some time to mastering his martial arts hobby, and perhaps open a dojo to occupy a few hours whenever he ran out of ways to amuse himself. But events had conspired against him. Plans had changed. Bad investments in real estate had eaten almost half his capital, which left him far short of where he needed to be for permanent retirement. So he spent the better part of 6:15 a.m. through 1:00 p.m. staring at rows of numbers on ever-changing computer screens, interrupted only by fits of frenzied typing and the occasional phone call.

  “Damn it. They’re doing it again,” Steven muttered to himself. “The stock’s up again on no news – it’s like the market’s completely ignoring reality.”

  “Honey, what’s up now?” a sleepy female voice called from upstairs.

  “Nothing. I’m just watching junk being sold like it was platinum, and losing money each tick up.”

  “Don’t get too worked up,” she said. “I’m going back to sleep. Wake me up around eight, and don’t forget to turn off the coffee machine or it’ll boil down.”

  Steven focused on the screens. On the right were three windows with tables of numbers blinking and changing constantly. On the left was the familiar format of the Internet message boards. Overlaid were several open browser windows with websites partially displayed.

  All the windows and screens had the same symbol on them.

  APDT. Allied Pharmaceutical Development.

  Not exactly a household name; a Milwaukee-based conglomerate that specialized in early stage biotechnology development – one of thousands of entities that made up the landscape of publicly traded companies in the U.S. markets.

  And Steven’s current object of fascination and frustration.

  ~ ~ ~

  Across the continent, the same symbol was displayed on another set of computer screens twenty-four stories above Wall Street, in a lavishly appointed office with a panoramic view of the New York skyline.

  “Take it up another few bucks, and then let’s dump it and take out the stop losses.” The voice belonged to a man in his late fifties hunched over a speakerphone, his grey, curly hair framing an artificially tanned, heavily-lined face. “Knock out at least twenty percent and run it into the ground before we start covering…”

  Nicholas Griffen was also not a household name, and yet he’d achieved a certain notoriety on Wall Street – an infamous trader, investment banker and financier who specialized in biotech. He managed a $1+ billion domestic venture fund that invested exclusively in early to mid-stage biotechnology stocks, and was also the director of an offshore fund based in the Caribbean.

  Griffen’s technique was to make money promoting companies, and then create volatility, swinging the stocks up and down by related-party trading and passing out insider tips – profiting from both the increases and decreases in price. He’d be long on a company, holding options and shares whose value increased significantly when the hype started on the stock, and then when his network of media cronies and pet analysts created a frenzy of buying and speculation resulting in triple or quadruple-digit percentage gains, he’d contrive a media event that would tunnel the company's share price. Of course he’d have sold all his long positions at or near the top, and gone short to profit again from the fall – and once he’d panicked the market, he’d reap even larger gains on the trip down.

  Shorting stocks involved borrowing shares from a broker and then selling them, in the expectation of being able to buy them back and return them to the broker later, when the price was lower. It was a bet on a price decline, where the value of the short sale increased as the price of the stock fell.

  Griffen had long ago discovered that the economics of manipulation and destruction, of pumping prices up artificially then driving prices down, were far better than those of trying to choose winning companies and buying their shares, waiting for the world to discover their merits. It was much easier to create a mania over a company’s massive price increases and hugely profitable potential, and then panic the crowd by screaming fire in the crowded theater, profiting from the ensuing chaos via short selling. In the ensuing panic, investors sold first, and asked questions later. And the more pronounced the fall, the more panicked they became, generally.

  Griffen’s group was expert at using his network of media sources to create a bubble in a stock by hyping a company with marginal or no real technology or value, and then using a deluge of unlimited selling to panic a market, thereby destroying the company’s market cap. The term for it was pump and dump – it was illegal, but the regulators rarely if ever enforced the rules, so what the hell. Only an idiot would drive fifty-five if there were no cops around. And Griffen was no idiot.

  He knew from experience the market was a zero sum game – and for him to make a fortune, investors on the other side of the bet had to lose. That’s just how it worked. Zero sum. The trick was to ensure you were on the winning side.

  The second line rang.

  “Griffen – what?” he barked at the box.

  “They’re nixing any more shorting until we deliver the slug from last week on Allied. Said this afternoon’s a non-starter; the regulators are in today and they’re looking over shoulders,” advised the calm, unemotional voice.

  “Is there any room to wiggle?” Griffen inquired.

  “Not now. Maybe tomorrow, once the shop’s back to normal.”

  Griffen sighed. “All right. Puts a crimp in today – but them’s the breaks. Let’s talk tonight…”

  He punched the other line back into active status. “Change of plans. Start covering the shorts. Pick up a few thousand, sell off a few hundred from the Pac Ex, walk the ask down and then see if anyone bites. Rinse and repeat. Get us whole for the day.”

  “No problemo, boss.”

  Terminating the call, he watched as the stock price slowly fell, went back up a few cents, swooned again, went up again. He considered his performance that of a virtuoso musician, and he delighted in being the stock-gaming equivalent of a maestro…in a long tradition of master manipulators who’d worked on Wall Street for the last hundred years.

  This was his province, his world. He was in his element with the ticks on the screen, representing tens of millions of dollars to be made or lost.

  Griffen was one of a rare group of financial movers and shakers who were largely above any regulatory or law enforcement probes – small token fish were occasionally nabbed, but the real money jockeys were untouchable. On the contrary, he received preferential treatment from the SEC, which came in handy when he needed help with a particularly troublesome stock. There was nothing like a trading halt or an investigation to crater a company, at least long enough for him to make a few bucks.

  He was sharp, smooth, refined, and completely amoral. And most importantly, he was rich.

  ~ ~ ~

  Emil spoke into the specially configured phone in a soft, emotionless voice. The phone’s encryption technology ensured prying or eavesdropping ears would decipher nothing but a screeching data stream, using Department of Defense-level scrambling.

  “It really is perfect. Given our level of financial commitment to the opposition party, we could easily
get them twice as much as they need this year.”

  Emil Weingard worked within a rarified division of the government’s clandestine machine, responsible for making things happen in deniable ways. Officially he was in the Information Operations Center/Analysis Group, but his real role was much more important than that. He was a fixer, and had gained notoriety at West Point by writing his thesis on a highly autonomous strategy for running covert missions, coupled with some intriguing alternative mechanisms for funding them. He was recruited shortly thereafter.

  His job was to procure large amounts of cash for delicate projects that were essential to national security – projects that Congress wouldn’t necessarily approve of. He currently had two active deals, one of which involved the continued support of an anti-establishment dissident group in Iran , and another which involved untraceable support for a splinter faction in the German government.

  Emil fancied himself a secret agent of sorts, but deep in his heart he knew he was a banker. The irony that he’d conceptualized a self-sufficient team approach to clandestine operations and had wound up being the bean counter wasn’t lost on him, but he was pragmatic. After the disastrous revelations of Iran Contra, the more sensitive agencies couldn’t afford any embarrassments and the only way to compartmentalize and seal off the risk was by using a tightly limited approach to the problem. Emil had come up with his team’s funding sources, which later became the standard for most of the other teams. How many others, he didn’t know – and ‘Need to know’ was still the guiding principle.