by David Lender
The waitress left. Here goes. He shot a glance at Richard.
“Well, then,” Schoenfeld said, “you called this meeting, old boy. We understand you want to undertake some form of exchange. Suppose you tell us what you have in mind.”
Milner said, “As I told you, I’m planning to retire to Switzerland. Not my first choice, but it’s a circumstance my business with you has put me in.”
Delecroix said, “We are not responsible for your business decisions.” He didn’t look up from his appetizer.
“I’m not responsible for your systematic front-running of my deals costing me hundreds of millions over the years.” Delecroix now looked up, locked his gaze on Milner’s eyes. Guy thinks he’s got a cold stare. Milner said, “Do we need to cover that territory again? We worked that out, what, two years ago?” Milner saw Schoenfeld nod. Both he and Delecroix were being cautious. Milner said, “Let’s get to the point. I have reams of data, some of which our SEC probably has, some not.” He looked at Richard, pointed to the papers in front of him. Richard handed copies across the table. Schoenfeld picked his up, looked at the top page. Delecroix didn’t move, looking at it with his lip curled, like it was cancerous.
Delecroix said, “It is of no consequence.”
“Let me spell out the consequences. I also know things that would totally screw you guys if I disclosed them, and put you in a position similar to the one I’m in myself.”
Delecroix said, “Your position is one you put yourself in.”
“A position you and your trading network put me in.”
“You accepted your position as compensation for services.”
“Services my ass. I was going on about my business doing deals and you and your stooge, LeClaire, picked me off. I only got payback from you guys for what your scam cost me.”
“Describe it any way you wish,” Delecroix said.
“I just described it dead-on.”
He got the icy stare from Delecroix again, like Milner was supposed to quake in his boots. This guy overestimates himself.
Schoenfeld said, “Come now, we don’t need to dispute the facts. We are where we are. What are you proposing?”
“Yes, what do you want?” Delecroix said, looking irritated.
Good. He was getting someplace now.
Milner said, “A deal. But not the same deal as before, because I’m out of the business.” He paused for a moment to see if they reacted. “What I have to offer is my silence, and keeping these records locked away.”
Delecroix said, “What are these records you refer to?”
“Pages of them, right in front of you. You don’t want us to take this data to the SEC and the U.S. Attorney’s Office and tell them it was you guys who dreamed up the whole scheme, got LeClaire to be your flunkie to set up the trading network. That you guys directed everything and made the bulk of the money.”
“We already heard you. We don’t need you to draw us a map, as you Americans say it,” Delecroix said.
“Okay. Just making sure, what with the language differences between English and French, and our crude American English and the refined Queen’s English. I don’t want there to be any misunderstandings.”
Now even the old man was looking fed up.
Milner turned to Richard. Richard said, “We have copies of all the trades of your network going back four years.” Richard flipped open the pages all the way to the end, 22 pages in total. He turned back to the first page. “All LeClaire’s emails to order trades distributed out through GCG, and from which he kept records of the profits of your network. I’ve re-created it all here, including the separate network of Schoenfeld-owned entities operating through Golding & Company.”
Delecroix looked startled, scowled and picked up the papers for the first time. Milner suppressed a smile, and leaned his elbow on the table, put his hand over his mouth and grinned as broadly as he could. He wanted to let them see his eyes twinkling. Chew on that, Philippe. He saw Schoenfeld and Delecroix shoot sideways glances at each other.
Richard went on, “You’ll see on page one I’ve summed the profits of the network by deal—17 in total—and then totaled it for the overall network, with separate subtotals for the trades fanned out through GCG and Golding. The totals are $2 billion; $1.5 billion of it through GCG, $500 million through Golding.”
Delecroix was staring at the first page. After a long hesitation he said, “Enterprising, Reginald.”
Schoenfeld didn’t say anything.
Richard was glancing between Schoenfeld and Delecroix.
Milner was enjoying himself. The kid was doing great, like taking a client through a deal analysis. He came across crisp and confident, without betraying any of the nervousness or anger he must be feeling. Milner said, “Any questions on the data?”
Schoenfeld said, “No, it seems quite clear. I’m not certain if these figures agree precisely with ours—”
Delecroix cut in, “I am certain not with ours. They are off by 500 million or so.” He narrowed his eyes at Schoenfeld.
Schoenfeld said, “As I was saying, the figures are close enough so as not to dispute them. So what are you proposing?”
Milner said, “I’m proposing I keep quiet. As I understand it, you’re both in the clear. LeClaire is the Feds’ Source X. I gather you’ve made it to his advantage to keep you out of this, that he’ll offer enough of your network to get a splashy bust, including me, and headlines. So what’re you offering me?”
Milner saw Schoenfeld turn slightly to look at Delecroix. He could sense the tension between them, see the anger in Delecroix’s taut lips. Good. Richard had worked the power of information brilliantly. Now they’d see if the feisty Frenchman would act impetuously.
Delecroix said in a low voice, “For the fourth time, what do you propose?”
“That I keep quiet. What are you offering?”
Delecroix stared at him.
Milner stared back.
Richard was loving it, Milner and Delecroix each waiting for the other to blink. Richard felt juiced. The fatigue he’d felt at the beginning of the dinner was gone. It didn’t get much better than this. Milner—he and Milner—had these guys cold. Then he remembered what Milner said on the plane: stay alert. Don’t get cocky if it starts going well.
Sir Reginald cleared his throat, said, “I rather think we can make it worth your while.” He turned to Delecroix and said to him, “I suggest we make the proposal we discussed.”
Delecroix nodded. “But not with the split we discussed.” He waved Richard’s spreadsheet at Sir Reginald. “Let us say twothirds, one-third, to account for your side profits?”
Sir Reginald gave a sheepish smile.
Milner said, “You want us to step out for a minute so you guys can work this out?” The waitress came back in. She cleared the appetizers, put down their entrées, medallions of beef. No one spoke while she was in the room. She hurried out.
Sir Reginald said, “No, that won’t be necessary. We’re in agreement between ourselves.” He nodded to Delecroix.
Delecroix said, “We’re prepared to offer a full 10% of our enterprise.”
“Based on this information, that’s an additional $200 million,” Milner said.
Sir Reginald nodded. “An acceptable figure,” he said.
“I don’t think you’re hearing me. I’m leaving everything behind, worth an estimated $5 to $7 billion. And $1 billion of it in cash I can’t get out. That would be a nice round figure.”
Sir Reginald and Delecroix looked back and forth at each other. Sir Reginald’s eyes were wide. “One billion? You can’t be serious, old boy.”
“That’s less than 20% of my assets. And I’ve got a lot of good years left. What’s the present value of what else I could make if I didn’t have to pack it in?”
Delecroix said, “We don’t keep that kind of cash lying around. It’s absurd.”
“You’re a big bank, with lots of pockets. I’m sure you can figure it out.” He turned to Sir Regi
nald, “And you’re a privately owned company. You can do whatever you want.”
Sir Reginald said, “It’s too much.” He looked at Delecroix again, who raised his eyebrows, pursed his lips. “We will offer you $300 million.”
“No way,” Milner said. He started cutting his beef, chewing quickly as he ate it, Richard wondering how much Milner wanted, how much longer he’d play this out. He wanted to get to his own deal. But they agreed to let it wait until the end.
Delecroix said, “I encourage you to look realistically on what is feasible for us.”
“A billion is feasible.”
Richard was watching Delecroix and Sir Reginald, seeing no more glances back and forth between them. Sir Reginald slumped over in his chair, looking at his plate. Richard figured they were at their limit.
“I’ll tell you what,” Milner said. “Five hundred now, plus 10% of your business going forward.”
Sir Reginald looked at Milner. “What business?” he said.
“Your investment in Walker. And your overall profits in Schoenfeld & Co.,” and, turning to Delecroix, “and yours in your merchant banking subsidiary.”
“Outrageous,” Delecroix said. Sir Reginald didn’t say anything. He was looking at his plate again, his jaw slack.
Dead meat. Nobody said anything for a moment.
Then Delecroix smiled, took a swig of his wine. “Three hundred million plus a 10% interest going forward is workable.”
Milner nodded.
Sir Reginald lifted his head and looked straight ahead. The color was gone from his face. “Done,” he said.
Milner smiled. “I’m glad you’re both seeing reason. I’ll have my banker get in touch about wire transfer arrangements. And a couple more things. Richard and his people—his family and his girlfriend—are kept out of this. They haven’t been involved and you know it. Tell LeClaire to keep them clean or there’s no deal.” Milner looked over at Richard. “And Richard’s got a longer memory than mine.” Milner reached into his pocket and then handed a piece of paper across the table to Delecroix. “And finally, this is a bank account number and the phone number for a Swiss banker, Mr. Schott. To show your good faith I’ll need each of you to send an initial $5 million deposit to this account by tomorrow at noon. I’ll be checking. If it’s not there, no deal and we blow you guys sky high.”
Richard saw Delecroix puff his cheeks out, then blow out air through his lips. Sir Reginald waved his finger.
Done deal. At least as long as Richard held onto the data.
The limo came to a stop between two Gulfstreams on the tarmac at Heathrow. “This is where we say good-bye for now,” Milner said. “You sure you don’t wanna come to Switzerland with me until we do a deal with Croonquist? I’m gonna have Sandy call him first thing in the morning to set it up.”
“No. I’ll go back to New York, keep up the front with Jack and Mickey.” Richard figured he’d take his chances Croonquist didn’t haul him in until Sir Reginald and Delecroix got to LeClaire to call the Feds off his back. And Jack to call off whoever had chased Richard in New York.
“Okay. We’ll see how things turn out. Whatever happens, it’s been a pleasure knowing you, kid. You’ll go far.”
Richard felt his throat go lumpy. He extended his hand. Milner took it in that great palm of his. “Thanks,” Richard said. “I’ve learned a lot from you.”
“I’m glad. And if this was my last deal, not a bad way to go out. We did a pretty good ham-and-egg.” He pointed to the G550 on Richard’s side of the limo. “That’s yours,” then pointed out his window, “this one’s mine.” He opened the door, turned to go. “Oh, I almost forgot.” He turned back. “I have a gift for you.” He pulled a bag out of his raincoat pocket and handed it to Richard. “I hope someday you get to buy a world-class stereo system.” He turned again, opened the door and left. Richard saw him hurry up the steps of a G450. The stairs were pulled up and the door closed within seconds of Milner getting inside. When would he see Milner again?
Richard opened the bag Milner gave him. It contained two boxes with Russian letters on them. He opened one. A 6C33 audio tube was in it. He laughed, then realized tears were falling onto his hands as he put it back in the box.
Milner collapsed into a seat on the G450, feeling drained, his lower back stiff. He sighed, loosened his tie, then reached into his breast pocket to feel the digital recorder. He reached with his other hand to hit the intercom button.
“Let’s get outta here,” he said to the captain.
“Right,” he heard back, and the engines started warming up.
He thought of calling Sandy, then realized at this hour he’d still be asleep in New York. Besides, he’d rather call him from a landline from Switzerland. Safer.
He pulled the digital recorder out of his pocket, unhooked the microphone, pulled the microphone wire out from under his lapel and curled it up. He rewound the recorder and hit “play.” He felt his chest constrict, his arms tense. Nothing. He rewound some more, then again. He felt a bolt of shock. There was nothing on the recorder. He tried to stand, as if he could run from the fact, felt himself jam against the seatbelt and plopped down again. Damn. The Devon guys said it was possible to jam a digital recorder with sophisticated equipment, no way to assure it was failsafe. Now what?
His mind raced through the options he’d considered but dreaded having to pursue. Milner looked out the widow, starting to think it through, then his gaze settling on the other Gulfstream taxiing Richard toward a different runway, toward an uncertain future. He felt a stab of guilt, lowered his eyes.
New York City. After he landed in New York, Jack saw Sir Reginald was calling him on his cell phone. What the hell does the old fart want now? He answered it.
“I say, old boy, how was your trip?”
“Uneventful. You miss me so soon?”
“Are you familiar with the old expression, ‘call off your dogs’?”
“Is there a point here?” Jack’s antennae were up.
“Do you remember our two young friends we discussed recently?”
Where was this going? “They’re at the top of my mind.”
“There’ve been some developments. I can explain later. I urge you to stand down with your plans for them. It could result in some severe complications for all of us.”
“I think I understand.”
“I sincerely hope you do, old boy, or it could result in your taking an extended holiday by yourself.”
Jeez. He’d have to make a stop in Canarsie before heading back into Manhattan.
“Thought for a while there you’d run out on me,” Kathy said when Richard walked into their hotel room at the Waldorf, “maybe found a perkier girl.” She stood in a T-shirt and panties in the bedroom doorway, her hand on her hip. Her hair was a mess, eyes puffy from sleep.
All Richard could think was how beautiful she looked. Richard froze there just inside the door of the darkened room, watching the early morning light from the bedroom window play in her hair, on her skin.
“You gonna stand there all day, farm boy?” She smiled.
The smile he’d cross an ocean for. Richard walked over and kissed her. Her breath was musty, but she tasted great. She held onto him tighter than usual. “I have a lot to tell you,” he said after a moment.
“Later,” she said, pulling him toward the bedroom.
“You’re clean, young man,” Toto said. “I just talked to Jack. Have you seen the news?”
“Yeah,” Richard said. He sat on the bed in a hotel bathrobe, Kathy just finishing dressing. He’d seen the announcements. François LeClaire was identified as Source X. He’d turned in ten other Wall Street legal and investment banking professionals, all of whom had been arrested by 10 a.m. that morning. British and French authorities had arrested another four GCG and Schoenfeld & Co. back-office personnel. Harold Milner, who Roman Croonquist, SEC Director, Division of Enforcement, called “the central figure in this diabolical ring,” was nowhere to be found. He was believed t
o have fled the country. Walker & Company was granted full immunity, was cooperating in the case, and was reported to have been instrumental in convincing Mr. LeClaire to turn himself in.
“Come over,” Toto said. “Bring Kathy. Jack and Mickey are on the way. I’ll take you all through it when you get here.”
Jack and Mickey were already in Toto’s office when her assistant ushered Kathy and Richard in. Toto was standing behind her desk, looking like she’d been mugged, but beaming. Richard watched Jack for any signs. He felt a prickly sensation in his spine, tension in his forehead.
Toto said, “Holden was like negotiating with the Russians. He had nothing in the end, though. LeClaire had insisted upon full immunity for all directors, officers, employees and shareholders of Walker, as well as the firm itself. He admitted he was acting on his own, at least at Walker, and in concert with the cast of characters you saw get arrested this morning. And of course, Milner.”
“Did he say why he did it?” Jack said.
Richard held his gaze on Jack. Nothing.
“Never talked to him. I saw part of his plea bargain agreement, though. They’re taking most of LeClaire’s assets in escrow for the eventual fines.”
“What about the potential for liability for Walker?” Steinberg said.
“I think you’re clear. The SEC, the U.S. Attorney’s Office, the Manhattan District Attorney’s Office are all party to your immunity from criminal prosecution. There may be some civil lawsuits, but since LeClaire was acting on his own and the Feds have exonerated you, they shouldn’t cost you too much.”
Richard saw Jack shoot Mickey a look, then a theatrical exhale of relief.
