CHAPTER FIFTY-NINE
Paul made notes on a legal pad during the train ride to D.C., racking his brain to come up with every argument, legal and emotional, that he could throw at Gail Moskowitz. The information Carrie gave him about the cards in Folsom’s valises was incriminating, but not legal proof of anything criminal. Even so, he had come to the conclusion that the money had been given to Donald Matson by Folsom for “services rendered.” The information Gail provided appeared to show that Matson had helped Folsom get favorable deals from the FDIC. But, again, the deals weren’t unlawful, unless Folsom had bribed Matson. That brought him back again to the money in Folsom’s house, put there by Matson for safekeeping.
He was beginning to realize his argument was more emotional than legal. Gail would think he was an idiot trying to get her to do something to save Edward Winter’s business based on nothing but emotion. And, even if something illegal had gone on, could Gail take action? She was a staff attorney at the FDIC, not a member of executive management.
Gerald Folsom took a deep breath, wincing at the pain. That blonde he’d brought home had humiliated him, and every time he took a breath, the pain in his chest reminded him of that humiliation. His friend, Leon Naxos, the owner of The Towne House Restaurant, had asked around, but no one he talked to had ever seen the woman at the restaurant or around town before, and she hadn’t been around since.
Folsom began jerking his head around every time he drove past a tall, good looking blonde, hoping he’d run into that bitch. He’d follow her; find out where she lived and then call Toothpick Jefferson for another assignment. But he would sure like to spend a night in bed with her before she was eliminated.
Get a grip, he told himself. No woman is worth obsessing over. But then he saw another blonde standing at a bus stop and his heart rate accelerated.
He pulled into Broad Street National Bank’s parking lot and walked toward the entrance. At the front door, his cell phone rang.
“Yeah,” he said.
“Jerry, it’s Leon.”
“Hey, Leon. What’s up?”
“You wanted to know about that blonde you brought to the restaurant the other night? I’ve been asking around. There was a guy here in the restaurant that night who saw you two together. He came in again today for lunch and asked about you, wondering who the gal was with you that night. One of my waiters brought it to my attention. Apparently, the customer knew the girl from high school. Her name is Carrie Winter.”
Folsom snapped his phone shut. He felt like screaming. What the hell was going on?
He pulled himself together and entered the bank. He went straight to Sanford Cunningham’s office and closed the door behind him.
“Anything new on the Winter loan?” he demanded, pacing the office.
“Jerry, you’ve got to relax. If Winter pays off the loan on Thursday, so be it. If not, you’ll be in the restaurant business. I don’t think you—”
“I want that guy dead!” Folsom yelled.
Cunningham’s mouth dropped open. “Jerry, what are you saying?”
Folsom rubbed his hands over his face. Dropping them, he collapsed into a chair. “I mean . . . I want his business. I’ve got to have that business.”
“What’s your obsession with Winter?” Cunningham asked.
Folsom leaped out of his chair and lunged toward Cunningham, who pushed back away from his desk, his eyes suddenly wide and fearful.
Folsom stopped abruptly and stared at his outstretched hands. He dropped them to his sides, turned on his heels, and left the office without a word.
CHAPTER SIXTY
Paul sat in the reception area at the FDIC’s legal department for twenty minutes, and was beginning to wonder if Gail Moskowitz was even going to see him. He was second-guessing his decision to come to D.C. when Gail walked out of her office and waved him over curtly, glaring at him as he passed her and entered the office. She closed the door behind him and walked to the chair behind her desk. After sitting down, she continued to glare at him, not saying a word. Moskowitz was a slender, attractive woman who downplayed her good looks—minimal jewelry and makeup, her auburn hair swept back in a pony tail. An understated, conservative blue suit and white blouse completed the look.
“Gail,” Paul said, “I apologize for just showing up like this, but we really need to talk.”
“About what?”
“About Gerald Folsom, Donald Matson, and Edward Winter.”
“I’m getting damned tired of hearing about this. I already gave you all the information I’m going to provide.” She stood and barked, “Now get out. You’ve pushed our friendship too far already.”
Paul didn’t move. He put steel in his voice and said, “I need five minutes. That’s it. Then I’ll leave and never talk to you again, if that’s the way you want it.”
She dropped back into her chair, an exasperated look on her face. “Five minutes. Go.”
Paul told her about the cards signed by Donald Matson, with deposit and withdrawal information in Folsom’s house. He added his suspicions about where the money, over $2 million, had come from, tying his suspicions to the information Gail had given him about the sweetheart deals. Then he repeated what he had told Gail before, about the killer who had gone after Wendy Folsom. He talked about Donald Matson’s murder. Finally, he briefed her on what was going on between Edward Winter and Broad Street National Bank.
“There’s too much here to ignore, Gail. You’ve got to bring this to the attention of someone with authority around here, someone who will make things right.”
“Your five minutes are up,” she said. “Don’t come back.”
Paul was shocked at the way Gail dismissed him. He slowly stood, gathered his briefcase, and walked out. He felt drained, and barely had the energy to walk out of the building. After finding his hired car, he told the driver to take him to the train station. As the driver pulled away from the curb, Paul thought about having to wait in the station for the next train and then the long ride back to Philadelphia.
“How much to take me to Philadelphia?” he asked.
The driver looked at him in his rearview mirror. “You serious?”
“Absolutely.”
The guy thought about it for a minute and then said, “$800.”
Paul told him where he wanted to go. “Wake me when we get there.”
CHAPTER SIXTY-ONE
“What’s the latest?” Edward asked Nick Scarfatti. They were seated in Edward’s office.
“I heard back from the private equity firm in New York City. They’re very interested in making an investment and will put up $30 million to pay off the debt at Broad Street Bank and cover the cost of building new sites in Pittsburgh.”
“That’s great news,” Edward said, “but the look on your face tells me that’s not all you have to say on the subject.”
“Three things. One, they want the option to convert their $30 million loan to forty percent of the company’s stock. Two, the interest rate on the loan would be ten percent. Three, it’ll take them two months to perform their due diligence and to close the deal.”
“The interest rate’s onerous, but we can afford to pay it, and giving up forty percent ownership is better than losing one hundred percent of our company to the bank, but the two months are a deal killer.”
“Unless Paul Sanders can use some tactics to delay the foreclosure or convince a judge to grant an injunction against the bank,” Nick offered hopefully. “That could give us a few months of breathing room.”
“But even with an injunction, or with normal foreclosure procedures, if the bank changes the locks or shuts down the business, as they have the right to do according to our loan agreement, there will be nothing to sell sixty days from now.”
“Paul’s going to file a motion requesting the injunction on Friday or the following Monday, assuming the bank gives us a formal foreclosure notice at the end of the day tomorrow. Our future will then be in the hands of the court. Forgive me for being
pessimistic, but, at this point, I’ve lost confidence in the fairness of the system.”
Nick nodded his agreement.
“Let’s call an all-hands meeting for our restaurant managers and department heads for Saturday morning at 9. If the bank pulls the plug tomorrow, I want to inform our people and tell them what our options are.”
“Some of the employees are going to start looking for jobs as soon as they hear about this.”
Edward shrugged. “That’s their right.”
THURSDAY
JULY 28, 2011
CHAPTER SIXTY-TWO
Stanley Burns’ head was spinning as though he’d had way too much to drink, but alcohol wasn’t his problem. Rather, his and his family’s futures were on his mind. He’d gone home last night and felt distant from his wife and children all evening. After the children were put to bed, Burns’ wife, Yolanda, brought him a cup of tea, sat down next to him on the couch, and leaned her head on his shoulder. They’d sat like that for ten minutes, neither saying a word.
Finally, Burns whispered, “I don’t know what to do, Yolanda.”
“What’s bothering you, Stanley? You haven’t been happy for a couple weeks.”
He looked at her, surprised. “You didn’t say anything.”
“I thought, sooner or later, you would tell me about whatever was troubling you. But you were so cold tonight I couldn’t let this go on. Besides,” she said, smiling wryly, “we haven’t made love for two weeks.”
He explained how he hated going to work every morning and how he felt he was violating his principles working there. He’d told her about his conversation with Sanford Cunningham about the Winter Enterprises’ loan and what the bank was doing to Winter. And he told her he felt dirty participating in what the bank was doing to Edward Winter, a man with whom he’d had a long-standing relationship and for whom he had high regard. ”
“You remember that speech you gave to the Temple University business ethics class a couple years ago?” Yolanda asked. “You told me after you came home that day that one of the students had asked you to list the most important traits of a leader. You told her three of the most important qualities of a leader were education, experience, and character. But if you could only pick one trait, it would be character.”
He’d hugged Yolanda and later that evening they’d made love. Before he fell asleep, he thanked God for giving him such a wonderful wife.
He now sat at his desk in the bank, where he’d been since 6:30 that morning, and stared at the tiny article on the last page of the front section of that morning’s Journal. The stories about the charges against Gerald Folsom for spousal abuse had dwindled down to almost nothing. He had decided last night he was going to do something, but he hadn’t yet decided what that would be. This article finally made up his mind for him.
He logged onto his computer and accessed the bank’s financial files. Selecting information about the bank’s capital accounts, loan delinquency information, and appraisal data on loan collateral, he ran off copies. Then he looked up the number for the Journal and called. He asked to be put through to the reporter covering Gerald Folsom. The operator put him through, but he got voicemail suggesting he leave a name and number, or dial a four-digit number to transfer to the business editor. Burns punched in the four numbers and listened to the rings. He almost bailed on the call after five rings when a woman finally answered.
“Kelly Loughridge.”
“Ms. Loughridge, my name is Stanley Burns. I’m president of Broad Street National Bank. I’d like to talk to someone about the bank and its new ownership.”
“Listen, Mr. Burns, if you’ve got a problem with one of our articles about the bank, you need to have your attorney call our legal department, and—”
“I have information for you, Ms. Loughridge, about practices here at the bank that I believe are unethical and illegal. I suggest you should talk with me.”
The woman muttered something that sounded to Burns like, “Thank God Almighty,” but Burns couldn’t be certain.
“I’m sorry, what did you say?”
“Uh, nothing, Mr. Burns. When would you like to meet?”
“How about right now? I’m downtown; I could be at your offices in ten minutes.”
“That would be perfect.”
When Stanley Burns arrived at the Journal’s offices, Kelly Loughridge and a staff reporter named Russell Morgan were waiting for him in a conference room.
“Can I get you something to drink, Mr. Burns?” Kelly asked.
“Water would be good.”
Kelly went to a small refrigerator in a corner of the room and took out three bottles of water and passed them around. She watched Burns take a long pull on his bottle and then set it on the table.
“You said you wanted to talk about Broad Street National Bank,” she began.
“Ms. Loughridge, I want to talk about a whole lot more than that.”
Kelly felt a chill run down her spine. “Do you mind if we record this meeting?”
A sudden look of uncertainty crossed Burns’ face, but he finally said, “Go right ahead.”
She nodded at Morgan, who pressed a switch on a recorder in the middle of the table. She noted the time and date and the people in attendance and then asked, “Would you like to make a statement, Mr. Burns? And is this for the record?”
“Yes, to both of your questions.” He took a deep breath and rattled it out slowly. “I’ve been employed at Broad Street National Bank for sixteen years. I started as a credit analyst, moved to a commercial loan officer position, ultimately became Senior Credit Officer, and am now President. Until about two weeks ago, I worked for Sol Levin, the founder and a significant owner of the bank. But on July 16, Mr. Levin was fired by the board, at the insistence of federal regulators. That night, the FDIC took over the bank. They had already worked out a deal to sell the bank to Gerald Folsom and his Folsom Financial Corporation. I would like to bring a few things to your attention, which I believe you will find interesting. Actually, every citizen of this country should be interested in what I am about to tell you.
“First, it makes no sense why the Feds took over Broad Street National. Sure we had some loan problems, but our capital base was well above statutory requirements, and ninety-eight percent of our loans were current. Yet the regulators decided the collateral on our loans was worth only sixty percent of the value determined by appraisals, and they also decided many of our borrowers would begin to renege on their loans. The regulators came into the bank with a mindset that the Philadelphia and Pennsylvania economies were going to go down the drain and that commercial real estate borrowers were going to default in droves, even though there was no evidence to back that up. With that mindset, there isn’t a bank in the country safe from being taken over by the federal government. They came into Broad Street National Bank, wiped out Sol Levin and the other stockholders, and handed the bank to a guy who cares about nothing but making the biggest bang for his buck.”
“Isn’t that what banks are all about, Mr. Burns?” Morgan asked.
Burns looked at Morgan with a sour set to his mouth. “I’m not here to have a discussion about philosophy and capitalism, Mr. Morgan. But your question displays a complete lack of understanding about the banking business. Banks, especially community banks like Broad Street National, have to apply for a charter. They have to establish that they are providing a service to the community. So, no, they’re not in it for the biggest bang for the buck. In fact, even if a bank’s management was in it for profit alone, the regulators would fine them for not giving back sufficiently to the community. ”
Kelly glared at Morgan and said, “Perhaps we can let Mr. Burns complete his statement without further interruptions.”
Morgan looked down at the table top. His face was flushed and he looked sufficiently chastised.
Burns pointed at his briefcase resting on the table beside him. “I brought detailed data about the bank’s loan portfolio and capital positions to back up
what I just said.
“The second point I want to make is that the arrangement between Gerald Folsom and the federal government represents an abuse of the trust Americans have placed in their federal government. The deal Folsom received is unconscionable. An uneducated person with a 50 IQ could make money off a deal like the Feds gave Folsom—and not just a little. A fortune. I’ll also provide you with information about the terms of that deal.
“Finally, I think Folsom is using the bank to rob bank customers of their assets and, in some cases, their businesses. All with, at the very least, the passive assistance of the federal government. I don’t believe the government knows exactly what Folsom is doing, but that, in effect, means the government is not properly supervising the people they are handing these banks over to. I’ve got some examples of what Folsom is doing to take over bank customers’ businesses.”
“Would one of the examples be Winter Enterprises?” Kelly asked.
Burns showed shock. “How could you know that?”
“Lucky guess. I’ve talked with the attorney for the company. He is hopping mad about the way your bank has dealt with his client.”
“As he should be,” Burns said. “Winter Enterprises is the poster child for Folsom’s perfidy.”
Burns opened his briefcase and took out an inch-thick file. He slid the file across the table to Kelly.
“We’ll need some time to digest all of this,” Kelly said. “Where can we contact you?”
“I’m going back to the bank to submit my resignation. Then I’ll be at home.” He gave them his home and cell phone numbers. “Oh, if you want to know about everything Folsom is doing, you should call Sanford Cunningham. He’s Folsom’s right-hand-man. I doubt he’ll talk to you, but you can always try.”
“How does this headline sound: Bank President Resigns, Claims New Owner Is Stealing Customer Assets?”
“Just about right,” Burns said, smiling.
After he left, Kelly said to Morgan, “I’m going to read Burns’ file. I want you to try to meet with this guy Sanford Cunningham. Ask him about Burns’ allegations. Then call Folsom and try to get an interview. Tell him we’re going to run an article about corruption at the bank. Remind him that declining to comment will not look good.”
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