“A tin-can industry, you mean.”
“Not quite, but something along those lines. I have no idea who he knew at the AIA, but he walked out with sixty million kronor.”
“This is starting to get interesting. Let me guess: that was the last anyone saw of the money.”
“Wrong.” Lindberg gave a sly smile before he fortified himself with a few more sips of brandy.
“What happened after that is a piece of classic bookkeeping. Wennerström really did set up a packaging factory in Poland, in Lódz. The company was called Minos. AIA received a few enthusiastic reports during 1993, then silence. In 1994, Minos, out of the blue, collapsed.”
Lindberg put his empty glass down with an emphatic smack.
“The problem with AIA was that there was no real system in place for reporting on the project. You remember those days: everyone was so optimistic when the Berlin Wall came down. Democracy was going to be introduced, the threat of nuclear war was over, and the Bolsheviks would turn into regular little capitalists overnight. The government wanted to nail down democracy in the East. Every capitalist wanted to jump on the bandwagon and help build the new Europe.”
“I didn’t know that capitalists were so anxious to get involved in charity.”
“Believe me, it was a capitalist’s wet dream. Russia and Eastern Europe may be the world’s biggest untapped markets after China. Industry had no problem joining hands with the government, especially when the companies were required to put up only a token investment. In all, AIA swallowed about thirty billion kronor of the taxpayers’ money. It was supposed to come back in future profits. Formally, AIA was the government’s initiative, but the influence of industry was so great that in actual fact the AIA board was operating independently.”
“So is there a story in all this?”
“Be patient. When the project started there was no problem with financing. Sweden hadn’t yet been hit by the interest-rate shock. The government was happy to plug AIA as one of the biggest Swedish efforts to promote democracy in the East.”
“And this was all under the Conservative government?”
“Don’t get politics mixed up in this. It’s all about money and it makes no difference if the Social Democrats or the moderates appoint the ministers. So, full speed ahead. Then came the foreign-exchange problems, and after that some crazy New Democrats—remember them?—started whining that there was a shortage of oversight in what AIA was into. One of their henchmen had confused AIA with the Swedish International Development Authority and thought it was all some damn do-gooder project like the one in Tanzania. In the spring of 1994 a commission was appointed to investigate. At that time there were concerns about several projects, but one of the first to be investigated was Minos.”
“And Wennerström couldn’t show what the funds had been used for.”
“Far from it. He produced an excellent report which showed that around fifty-four million kronor was invested in Minos. But it turned out that there were too many huge administrative problems in what was left of Poland for a modern packaging industry to be able to function. In practice their factory was shut out by the competition from a similar German project. The Germans were doing their best to buy up the entire Eastern Bloc.”
“You said that he had been given sixty million kronor.”
“Exactly. The money served as an interest-free loan. The idea, of course, was that the companies would pay back part of the money over a number of years. But Minos had gone under and Wennerström could not be blamed for it. Here the state guarantees kicked in, and Wennerström was indemnified. All he needed to do was pay back the money that was lost when Minos went under, and he could also show that he had lost a corresponding amount of his own money.”
“Let me see if I understand this correctly. The government supplied billions in tax money, and diplomats to open doors. Industries got the money and used it to invest in joint ventures from which they later reaped vast profits. In other words, business as usual.”
“You’re a cynic. The loans were supposed to be paid back to the state.”
“You said that they were interest-free. So that means the taxpayers got nothing at all for putting up the cash. Wennerström got sixty million, and invested fifty-four million of it. What happened to the other six million?”
“When it became clear that the AIA project was going to be investigated, Wennerström sent a cheque for six million to AIA for the difference. So the matter was settled, legally at least.”
“It sounds as though Wennerström frittered away a little money for AIA. But compared with the half billion that disappeared from Skanska or the CEO of ABB’s golden parachute of more than a billion kronor—which really upset people—this doesn’t seem to be much to write about,” Blomkvist said. “Today’s readers are pretty tired of stories about incompetent speculators, even if it’s with public funds. Is there more to the story?”
“It gets better.”
“How do you know all this about Wennerström’s deals in Poland?”
“I worked at Handelsbanken in the nineties. Guess who wrote the reports for the bank’s representative in AIA?”
“Aha. Tell me more.”
“Well, AIA got their report from Wennerström. Documents were drawn up. The balance of the money had been paid back. That six million coming back was very clever.”
“Get to the point.”
“But, my dear Blomkvist, that is the point. AIA was satisfied with Wennerström’s report. It was an investment that went to hell, but there was no criticism of the way it had been managed. We looked at invoices and transfers and all the documents. Everything was meticulously accounted for. I believed it. My boss believed it. AIA believed it, and the government had nothing to say.”
“Where’s the hook?”
“This is where the story gets ticklish,” Lindberg said, looking surprisingly sober. “And since you’re a journalist, this is off the record.”
“Come off it. You can’t sit there telling me all this stuff and then say I can’t use it.”
“I certainly can. What I’ve told you so far is in the public record. You can look up the report if you want. The rest of the story—what I haven’t told you—you can write about, but you’ll have to treat me as an anonymous source.”
“OK, but ‘off the record’ in current terminology means that I’ve been told something in confidence and can’t write about it.”
“Screw the terminology. Write whatever the hell you want, but I’m your anonymous source. Are we agreed?”
“Of course,” Blomkvist said.
In hindsight, this was a mistake.
“All right then. The Minos story took place more than a decade ago, just after the Wall came down and the Bolsheviks starting acting like decent capitalists. I was one of the people who investigated Wennerström, and the whole time I thought there was something damned odd about his story.”
“Why didn’t you say so when you signed off on his report?”
“I discussed it with my boss. But the problem was that there wasn’t anything to pinpoint. The documents were all OK, I had only to sign the report. Every time I’ve seen Wennerström’s name in the press since then I think about Minos, and not least because some years later, in the mid-nineties, my bank was doing some business with Wennerström. Pretty big business, actually, and it didn’t turn out so well.”
“He cheated you?”
“No, nothing that obvious. We both made money on the deals. It was more that … I don’t know quite how to explain it, and now I’m talking about my own employer, and I don’t want to do that. But what struck me—the lasting and overall impression, as they say—was not positive. Wennerström is presented in the media as a tremendous financial oracle. He thrives on that. It’s his ‘trust capital.’ ”
“I know what you mean.”
“My impression was that the man was all bluff. He wasn’t even particularly bright as a financier. In fact, I thought he was damned ignorant about certain
subjects although he had some really sharp young warriors for advisers. Above all, I really didn’t care for him personally.”
“So?”
“A few years ago I went down to Poland on some other matter. Our group had dinner with some investors in Lódz, and I found myself at the same table as the mayor. We talked about the difficulty of getting Poland’s economy on its feet and all that, and somehow or other I mentioned the Minos project. The mayor looked quite astonished for a moment—as if he had never heard of Minos. He told me it was some crummy little business and nothing ever came of it. He laughed and said—I’m quoting word for word—that if that was the best our investors could manage, then Sweden wasn’t long for this life. Are you following me?”
“That mayor of Lódz is obviously a sharp fellow, but go on.”
“The next day I had a meeting in the morning, but the rest of my day was free. For the hell of it I drove out to look at the shut-down Minos factory in a small town outside of Lódz. The giant Minos factory was a ram-shackle structure. A corrugated iron storage building that the Red Army had built in the fifties. I found a watchman on the property who could speak a little German and discovered that one of his cousins had worked at Minos and we went over to his house nearby. The watchman interpreted. Are you interested in hearing what he had to say?”
“I can hardly wait.”
“Minos opened in the autumn of 1992. There were at most fifteen employees, the majority of them old women. Their pay was around one hundred fifty kronor a month. At first there were no machines, so the workforce spent their time cleaning up the place. In early October three cardboard box machines arrived from Portugal. They were old and completely obsolete. The scrap value couldn’t have been more than a few thousand kronor. The machines did work, but they kept breaking down. Naturally there were no spare parts, so Minos suffered endless stoppages.”
“This is starting to sound like a story,” Blomkvist said. “What did they make at Minos?”
“Throughout 1992 and half of 1993 they produced simple cardboard boxes for washing powders and egg cartons and the like. Then they started making paper bags. But the factory could never get enough raw materials, so there was never a question of much volume of production.”
“This doesn’t sound like a gigantic investment.”
“I ran the numbers. The total rent must have been around 15,000 kronor for two years. Wages may have amounted to 150,000 SEK at most—and I’m being generous here. Cost of machines and cost of freight … a van to deliver the egg cartons … I’m guessing 250,000. Add fees for permits, a little travelling back and forth—apparently one person from Sweden did visit the site a few times. It looks as though the whole operation ran for under two million. One day in the summer of 1993 the foreman came down to the factory and said it was shut down, and a while later a Hungarian lorry appeared and carried off the machinery. Bye-bye, Minos.”
In the course of the trial Blomkvist had often thought of that Midsummer Eve. For large parts of the evening the tone of the conversation made it feel as if they were back at school, having a friendly argument. As teenagers they had shared the burdens common to that stage in life. As grown-ups they were effectively strangers, by now quite different sorts of people. During their talk Blomkvist had thought that he really could not recall what it was that had made them such friends at school. He remembered Lindberg as a reserved boy, incredibly shy with girls. As an adult he was a successful … well, climber in the banking world.
He rarely got drunk, but that chance meeting had transformed a disastrous sailing trip into a pleasant evening. And because the conversation had so much an echo of a schoolboy tone, he did not at first take Lindberg’s story about Wennerström seriously. Gradually his professional instincts were aroused. Eventually he was listening attentively, and the logical objections surfaced.
“Wait a second,” he said. “Wennerström is a top name among market speculators. He’s made himself a billion, has he not?”
“The Wennerström Group is sitting on somewhere close to two hundred billion. You’re going to ask why a billionaire should go to the trouble of swindling a trifling fifty million.”
“Well, put it this way: why would he risk his own and his company’s good name on such a blatant swindle?”
“It wasn’t so obviously a swindle given that the AIA board, the bankers, the government, and Parliament’s auditors all approved Wennerström’s accounting without a single dissenting vote.”
“It’s still a ridiculously small sum for so vast a risk.”
“Certainly. But just think: the Wennerström Group is an investment company that deals with property, securities, options, foreign exchange … you name it. Wennerström contacted AIA in 1992 just as the bottom was about to drop out of the market. Do you remember the autumn of 1992?”
“Do I? I had a variable-rate mortgage on my apartment when the interest rate shot up five hundred percent in October. I was stuck with nineteen percent interest for a year.”
“Those were indeed the days,” Lindberg said. “I lost a bundle that year myself. And Hans-Erik Wennerström—like every other player in the market—was wrestling with the same problem. The company had billions tied up in paper of various types, but not so much cash. All of a sudden they could no longer borrow any amount they liked. The usual thing in such a situation is to unload a few properties and lick your wounds, but in 1992 nobody wanted to buy real estate.”
“Cash-flow problems.”
“Exactly. And Wennerström wasn’t the only one. Every businessman …”
“Don’t say businessman. Call them what you like, but calling them businessmen is an insult to a serious profession.”
“All right, every speculator had cash-flow problems. Look at it this way: Wennerström got sixty million kronor. He paid back six mil, but only after three years. The real cost of Minos didn’t come to more than two million. The interest alone on sixty million for three years, that’s quite a bit. Depending on how he invested the money, he might have doubled the AIA money, or maybe grown it ten times over. Then we’re no longer talking about cat shit. Skål, by the way.”
CHAPTER 2
Friday, December 20
Dragan Armansky was born in Croatia fifty-six years ago. His father was an Armenian Jew from Belorussia. His mother was a Bosnian Muslim of Greek extraction. She had taken charge of his upbringing and his education, which meant that as an adult he was lumped together with that large, heterogeneous group defined by the media as Muslims. The Swedish immigration authorities had registered him, strangely enough, as a Serb. His passport confirmed that he was a Swedish citizen, and his passport photograph showed a squarish face, a strong jaw, five-o’clock shadow, and greying temples. He was often referred to as “The Arab,” although he did not have a drop of Arab blood.
He looked a little like the stereotypical local boss in an American gangster movie, but in fact he was a talented financial director who had begun his career as a junior accountant at Milton Security in the early seventies. Three decades later he had advanced to CEO and COO of the company.
He had become fascinated with the security business. It was like war games—to identify threats, develop counter-strategies, and all the time stay one step ahead of the industrial spies, blackmailers and thieves. It began for him when he discovered how the swindling of a client had been accomplished through creative bookkeeping. He was able to prove who, from a group of a dozen people, was behind it. He had been promoted and played a key role in the firm’s development and was an expert in financial fraud. Fifteen years later he became CEO. He had transformed Milton Security into one of Sweden’s most competent and trusted security firms.
The company had 380 full-time employees and another 300 freelancers. It was small compared to Falck or Swedish Guard Service. When Armansky first joined, the company was called Johan Fredrik Milton’s General Security AB, and it had a client list consisting of shopping centres that needed floorwalkers and muscular guards. Under his leadership
the firm was now the internationally recognised Milton Security and had invested in cutting-edge technology. Night watchmen well past their prime, uniform fetishists, and moonlighting university students had been replaced by people with real professional skills. Armansky hired mature ex-policemen as operations chiefs, political scientists specialising in international terrorism, and experts in personal protection and industrial espionage. Most importantly, he hired the best telecommunications technicians and IT experts. The company moved from Solna to state-of-the-art offices near Slussen, in the heart of Stockholm.
By the start of the nineties, Milton Security was equipped to offer a new level of security to an exclusive group of clients, primarily medium-sized corporations and well-to-do private individuals—nouveau-riche rock stars, stock-market speculators, and dot-com high flyers. A part of the company’s activity was providing bodyguard protection and security solutions to Swedish firms abroad, especially in the Middle East. This area of their business now accounted for 70 percent of the company’s turnover. Under Armansky, sales had increased from about forty million SEK annually to almost two billion. Providing security was a lucrative business.
Operations were divided among three main areas: security consultations, which consisted of identifying conceivable or imagined threats; counter-measures, which usually involved the installation of security cameras, burglar and fire alarms, electronic locking mechanisms and IT systems; and personal protection for private individuals or companies. This last market had grown forty times over in ten years. Lately a new client group had arisen: affluent women seeking protection from former boyfriends or husbands or from stalkers. In addition, Milton Security had a cooperative arrangement with similar firms of good repute in Europe and the United States. The company also handled security for many international visitors to Sweden, including an American actress who was shooting a film for two months in Trollhättan. Her agent felt that her status warranted having bodyguards accompany her whenever she took her infrequent walks near the hotel.
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