Like Rogero, he wore jewellery and had a fine collection of suits including his present choice, a black label by Marc Wallace, complemented by a cream shirt and matching tie. A gold watch adorned his left wrist and a single earring on his left ear, partially hidden by his long dark hair, kept in place by a hair band that kept the greasy fringe away from his handsome Latino face. A wedding ring lined his fourth finger representing a thirty-four year marriage to his childhood sweetheart.
Next was the balding, bespectacled Archbishop of São Paulo, Cardinal Atri, the newest member of the oversight commission having been appointed to replace Cardinal Faukes. Atri came to prominence slowly following two decades of work in the shantytowns of Brazil, a man who commanded affection for his love and generous nature, strangely not affecting an ability to budget.
Last of those present, Randy Lewis grinned with amusement as he ceased his applause and loosened his collar. He had met de Bois before, many years ago when he was still working for the Feds and de Bois was a director at Starvel, although their paths had not crossed since. Lewis never envisioned he would like de Bois. On paper he possessed the attributes of a modern day saint. In all his years in the industry Lewis knew finding a businessman with a conscience was one thing, but a Mother Teresa was something else. De Bois clearly wanted the world to know of the causes he supported: everyone knew of the causes he supported.
And de Bois never let five minutes go by without another reminder.
Over the years Lewis had seen it all. When he was Chairman of the Fed it was his job to make sure policy was implemented and while a job was a job he was sure as hell going to enjoy it. During his tenure anti-trust and monopoly procedures were tightened. The excessively rich were foiled in their attempts to get significantly more powerful and kudos came from every corner. Competition was steadily increasing throughout the 1990s and following the amendment of Glass-Steagall, which he had been strongly against, a new stage had been created. No longer was the industry the playing field of retail banks or investment banks, but companies whose services crossed the entire spectrum: in his words, ‘Monsters’.
Gabrielle yawned vigorously, her eyes continuing to pursue the visual narrations of Genesis high above her as a welcome distraction from what was going on below. For the others it was a chance to reflect. Numbers had been plucked from the air as though it was an epic game of bingo. De Bois spoke of forecasts in the manner of a weatherman and Lewis acknowledged many with isolated bouts of laughter accompanied by countless shakings of the head. Rogero and Dominguez made notes from time to time, usually at the same time. Every so often they would look at one another and make facial gestures, a practice devised from two decades of friendship that allowed instant communication without giving anything away to the rest.
De Bois had covered every aspect with an in-depth identification of how every penny had and would be invested, how every procedure would be undertaken, what this meant in terms of profit for the bank, what it meant for the Vatican and how Leoni et Cie would fair in terms of its industry.
At face value it seemed pretty good. Leoni et Cie was extremely resourceful, with market capital soon expected to pass the $7 billion mark again, catering for a global client base.
Profits were rising and predictions were good.
Rogero leaned back in his chair. ‘We are all grateful to Mr. de Bois for taking the time to prepare a most enlightening presentation,’ Rogero said. ‘You like to talk about numbers, chairman. But I fear your figures for future growth do not add up.’
Silence descended as all eyes focused on de Bois.
Juan Pablo Dominguez nodded. ‘Your calculations for extended investment portfolio seem to be very heavily based on accelerated growth, chairman,’ he said with accented English. ‘Such feats can only be achieved with heavily speculated investments and high levels of lending. Investments of this type have no guarantees. It would be unwise to overstretch our resources at a time of global uncertainty.’
Del Rosi: ‘Over the years the Vatican has tended to concentrate on less risky strategies aimed at steady growth strictly within countries with established economies. The purpose of the Vatican Bank is supplementing our extra costs at minimal risk for the purpose of helping the poor. Not to buy an NFL franchise.’
A brief outburst of laughter followed, including Gabrielle and Utaka, his first smile in a while. As the laughter faded, silence descended. Gabrielle watched Rogero. Already things were turning into a major tussle between the heavyweights.
‘Eminences, president, vice president, I cannot deny that there are aspects of the strategy devised both by myself and our late chief executive that include sailing our ship into uncharted waters, but the suggestions you have heard today are little different from what I oversaw at Rosco,’ the French descended Canadian said. ‘As you are all aware, gentlemen, the performance of Leoni et Cie since 2002 has been outstanding. The last few years aside, we have achieved leftfield returns in excess of anything else the bank has ever recorded. Both Al Leoni and myself were at the forefront of this. But if we are to continue to build, it is essential that we explore new avenues. The economic turmoil makes it even more essential that we look for new opportunities.’
‘Mr. de Bois, forgive me,’ Cardinal Atri spoke up, ‘but your proposals leave me slightly confused. It seems that many of your recommended investments are to occur in companies who operate primarily in many of the world’s poorest countries: Peru, Bolivia and El Salvador to name but a few. Such locations seem not only risky from an economic point of view, but you also seem to be concentrating in nations where regulation and supervision by the authorities is generally lower than the wider world.’
Cardinal Torres nodded. ‘Sadly, many of the companies on your list have a reputation for somewhat questionable business practices: particularly regarding environmental issues and conditions for their employees.’
Cardinal Utaka also nodded. ‘The Vatican has never endorsed companies who employ child labour.’
De Bois chewed momentarily on his pen before using it to gesture.
‘Eminences, please do not misunderstand my proposals. Cardinal Atri, as a newcomer to the oversight commission, perhaps it is fair to say you know less about me than some of your colleagues. I assure you, I too am a man of ethical consideration. The investments I have put forward are merely some of many, giving an all-round portfolio, thus protecting the bank from risk. Over the last twenty years I have seen with my own eyes the negative consequences of reckless investment. For that very reason I have never chosen to invest in companies of questionable pedigree, nor would I advocate providing loans to new businesses that fail to meet the necessary criteria. The recommendations I have given specifically avoid investing in companies whose primary gain is from deadly sin such as gambling and gun production. I have even agreed to give up smoking.’
Vague laughter followed.
Torres shook his head. ‘Chairman, it is not only a questionable approach to business morality that I find concerning. By investing in companies who also have links to governments of questionable actions, particularly in South America where drug cartels are so prevalent, it seems difficult to tell with certainty that our paths and those of spurious pedigree cannot cross.’
Del Rosi nodded. ‘The Vatican Bank cannot afford to risk backing individuals of dubious nature.’
A brief silence followed as all eyes focused on de Bois.
‘Mr. de Bois, I’m afraid certain members of the council do not share your confidence for future growth,’ Lewis said. ‘Either that or they do not trust you.’
Rogero laughed. It was obvious that Lewis was being a deliberate ass.
‘Mr. de Bois, isn’t it true that while a director at Starvel you were once accused of fraud?’ Cardinal Atri asked.
A slight hush descended. De Bois paused before answering.
‘Yes, eminence, that is true, but the allegations you refer to were confirmed to be false. As a matter of fact Mr. Lewis was Chairman of the Fed at the time
of the allegation. If anything you probably know more than me.’
A brief outburst of laughter swept around the table, briefly taking the emphasis off de Bois. He looked briefly at Swanson, who sat with an expression of boredom.
Cardinal Torres looked with interest at Lewis. ‘Well, Randy?’
Lewis stuttered, unusually for him. ‘Mr. de Bois’s performance with both Starvel and Rosco was certainly remarkable, gentlemen. His fine business record crosses many industries,’ he said, shuffling papers in his hands. ‘But I was certainly somewhat sceptical of certain elements of Starvel’s business model. Looking at your proposals here, I cannot help but notice similarities, particularly regarding potential privileges to attract wealthier clients from Europe and America.’
Lewis pointed at the paper in front of him.
‘One of the biggest problems with Starvel was a tendency to assist the richest clients moving funds across borders undetected. In the past, Leoni et Cie have made a good effort to avoid this kind of practice. The days when Switzerland hid the resources of the rich from the authorities of a host nation are over.’
De Bois removed his pen from his mouth. ‘I understand your concerns, former Chairman, but as I am sure you remember, Starvel, even the parts where I was not involved, was never found guilty of breaking any laws.’ He paused momentarily. ‘Assisting our own clients in establishing tax effective investments is not, nor has it ever been, in any way illegal.’
It was intriguing to Gabrielle how de Bois referred to Lewis in the context of his former role. She was vaguely aware how Lewis had investigated Starvel back in 1999 when de Bois was a director. She remembered her father and Louis Velis had even discussed the possibility of a takeover of Leoni et Cie, not that it went ahead. De Bois clearly disliked Lewis and this did not faze Lewis.
Lewis nodded. ‘Be that as it may, as President Rogero and Vice President Dominguez have quite rightly pointed out, many of your projections here are all very well when the market is going well.’
Rogero nodded. ‘Frankly, our former chief executive was rather more particular in his financial strategy.’
Former chief executive? These guys seemed to think Al Leoni did all the work. Tact and diplomacy were both gifts he had been blessed with and he knew when to use them.
He smiled warmly. ‘President, eminences, on the contrary. These forecasts you have seen today were also the belief of our former chief executive. He shared the vision of Leoni et Cie. He believed, as I do today, that if Switzerland and the US can cooperate and coordinate our strategies, share our strengths and amalgamate our resources, then we can consolidate our position as a front-runner in our industry. He, too, shared my vision for a better world, and also agreed that the future of Leoni et Cie lay not only in walking the well trodden paths, but in forming new ones, including those of the inaccurately dubbed Third World.’
Dominguez hid a smile.
‘While I have no doubt that your desire to end world poverty is noble, Mr. de Bois, I do have my doubts as to whether Mr. Leoni acted without contingency,’ Rogero said. ‘And I am also quite concerned that much of your investment portfolio includes such heavy speculating on oil, gold and currency futures.’
Rogero turned to face Gabrielle.
‘Ms. Leoni, your family have been involved with Leoni et Cie since its beginning. Do you believe that your father would have acted so much on speculation?’
All eyes turned to Gabrielle.
‘Well, my father personally believed that speculating was a lot like gambling. He made it a rule not to speculate or lend more than a certain percentage of revenue.’
A series of nods and agreements followed. De Bois replaced the pen in his mouth and removed it once more.
‘Ms. Leoni with all due…’
‘Shhh!’ Utaka said. ‘Go on, my dear.’
She hesitated momentarily. ‘My father favoured less risky strategies such as gold deposits, arbitrage and hedging. While he did not neglect futures completely, he was more concerned with long-term stability than accelerated growth. Also I was largely under the impression that both investing in companies in LEDCs and the opening of new branches in South America would only occur in moderation.’
Rogero nodded and Gabrielle felt silently pleased. She had justified her appearance.
‘Speculating is a grey area, Gile,’ Swanson said. ‘We all know that. When it comes off it’s fantastic. But the Vatican Bank is not a typical investment bank. Nor do our directors have the morals to act like one.’
‘I thought as an investment banker you would favour speculating,’ Riva said. ‘Every investment banker I’ve ever spoken to believes it combats market inefficiency.’
Lewis laughed, De Bois exhaled on his pen.
Dominguez: ‘Mr. de Bois, I am also somewhat intrigued by your proposals regarding the establishment of new branches, particularly, again, in countries whose economic measures, particularly its attitude toward supervisory policy and regulation are, how should I put this: underdeveloped.’
De Bois smiled. ‘Vice president, I do not deny that I have always advocated more relaxed measures with regard to regulation and favoured a strategy that accommodated such action during the infant years of Rosco. The companies of the British AIM have thrived for this reason. Please be under no illusions, banking has changed since the 1980s when banking secrecy and dangerously low levels of supervisions resulted in criminal misuse. Speaking purely from my own experience, I favour them only because, historically speaking, companies who have adopted similar strategies have gone on to make better returns. LABCC I seem to recall enjoyed great success in such ways.’
Rogero shook his head. ‘LABCC was operating at a time when Latin America was constantly under speculative attack from the nations of the West. We never operated in nations outside our own continent and even those outside Colombia were under extreme supervision.’
Swanson nodded. ‘Even Starvel’s greatest weakness was susceptibility to bad loans given to poorly run companies.’
Dominguez: ‘Leoni et Cie is no ordinary bank, chairman: particularly now that Ms. Leoni has decreased her stake. This bank now belongs primarily to the Vatican Bank. The Pope himself would have to agree to any changes in strategy.’
‘What do you suggest?’ Giancarlo Riva asked, arms folded. ‘That we fail to capitalise on reasonable investment opportunities simply because it’s against your conscience? The Church has learned to adapt in all elements of banking. In the past the Vatican forbid usury, but that, too, has adapted with time.’
Lewis laughed to himself, his attention on Riva.
‘The emerging markets have always been a popular target amongst the successful banks. With successful planning, the strategy of Misters Leoni and de Bois could be correct,’ the Italian continued.
‘As you’re undoubtedly aware, vice president,’ de Bois said, his eyes on Dominguez, ‘times have changed. It is not like the old days when a bank was simply a bank. Mr. Lewis, you know that better than most, it was you who oversaw the change in American legislation. If Leoni et Cie is to continue to be profitable then it must continue to adapt. The primary agenda of the Vatican Bank has always been first and foremost to make a profit. The mission of the Catholic Church has always been to promote a message of peace and charity. The Bible says love thy neighbour: not to become a Communist.’
Widespread laughter filled the room.
‘Nevertheless, I do not believe in speculating,’ Rogero said strongly, his smile fading. ‘For many years LABCC followed the ideals of the traditional great banks of Switzerland. I even paid our employees a little more when they avoided such tomfoolery. Futures contracts are never easy money – Barings has taught us that much.’
Lewis: ‘Overstretching in a bull market might have worked before the crunch, but it was also over reliance on that what caused it. I am also concerned that investing heavily in companies operating in nations of questionable government, and in particular opening multiple branches in these countries increase
s the risks of effective supervision on our part. Particularly as such branches would be under the management of local individuals with questionable backgrounds, and forced to rely on a loan portfolio of companies and individuals susceptible to default. If Mr. de Bois wishes to run the bank in accordance with his vision, I suggest he forms his own bank. Either that or he make us an offer for our shares.’
The room fell silent. De Bois again removed his pen from his mouth as though it were a cigar.
Dominguez raised his hand. ‘Mr. de Bois, I understand the board at Leoni et Cie recently granted you corporate loans of up to $40 million to cover your margin calls.’
‘Yes, vice president that’s correct, what’s wrong with that?’
Dominguez: ‘Nothing, Mr. de Bois, do not misunderstand me. But such an occurrence might seem strange at this time.’
Torres: ‘In the eyes of the council, it seems such an occurrence is somewhat at odds with your confidence for future growth.’
De Bois prepared to answer but Cardinal del Rosi beat him to it.
‘I can assure my fellow cardinals and members of the supervisory council that the Vatican Bank is under great assurances that these loans are temporary necessities to help ensure that Mr. de Bois can cover his costs on other businesses and will be repaid at the agreed time. It would undermine confidence further should our chairman be required to sell large amounts of stock.’
Another brief silence followed. Gabrielle studied each face in turn. It was tough to predict what they were thinking. Dominguez wrote something down, Lewis folded his arms. Del Rosi stared at de Bois.
The Templar Agenda Page 26