The Enemy Inside

by Steve Martini

  “Penitent?”

  “Ya, that’s it. Unlike those, violation of bank secrecy is a serious crime with large fines and prison in Switzerland. Unlike the movies, there is no total anonymity. To open an account you must identify yourself, produce a passport if you are not a citizen, and the account number is attached to your name.”

  “Here, have another drink,” says Harry. “Let me fill that mug.”

  Simon Korff pushes the stein across the table, his fist the size of a sledgehammer gripped tightly around the handle. He has a smile on his red face, cheeks with so many tiny broken blood vessels they look like ground beef. He is a prototypical German; you could put his smiling face and naked body on a poster and children would instinctively dress him in lederhosen. A large man, rotund, probably blond at one time, what little hair he has left has now turned gray. He is older than what I might have pictured. I am guessing late sixties.

  “Not even the Swiss government can get this information except in special cases.”

  Harry lifts the pitcher of dark lager with both hands and fills the stein almost to the brim. “There you go.”

  “You are a good host,” says Korff.

  “I like to listen to what you have to say.” Harry lifts the nearly empty pitcher, taps the glass with his finger as he looks at the waiter to bring another.

  We have been here a little over two hours. Four pitchers of beer, enough food to feed an army, and Korff is still sitting upright lecturing us on banking. Strangely enough, he hasn’t asked a single question about the supposed job offer.

  “You say the government cannot even get this information?” I ask.

  “No. No. NO!” He grips the stein in one hand and waves his finger in front of his nose with the other. “Only if there are serious crimes,” he says.

  “For example?”

  “Money laundering, drugs, evidence of organized crime. It used to be that even for tax evasion the government could not find out who had what on deposit. Now,” he says, “that has all changed.”

  “In what way?” I ask.

  He takes another large gulp from the stein and wipes his mouth on the back of his shirt sleeve. “Well, tax evasion was not a crime in Switzerland. At least not a serious crime. It was what you call, umm . . .” He searches for the term.

  “A misdemeanor?” says Harry.

  “That’s the word.”

  “I’m beginning to like this country,” says Harry.

  “Anyway. Because it was not a serious crime in Switzerland, other governments could not pursue their citizens for tax evasion on money deposited here. The Swiss government would not cooperate with them. Now that has all changed.”

  “Go on,” I say.

  “Your government has caused a lot of problems,” he says. “Hurt the banks. People lost jobs. All because they want the money.” He takes another drink.

  “What was your job at the bank,” I ask, “at Gruber?”

  “Oh. I was an officer at Gruber for twenty-two years. The last three I was what they call the anti-money-laundering compliance officer. A very important position,” he says. “It was my job to detect money laundering and to report it to the bank president and to the authorities.”

  “I see. Was there much money laundering that went on?” I ask.

  “Not in the beginning,” says Korff. “But toward the end before I retired, yes. It was very serious.”

  “Really?”

  He takes another drink and Harry fills the stein from the fresh pitcher.

  “Yes. It was bad.”

  “I’d be curious to know, how does a . . . uh . . . anti-money-laundering compliance officer discover such things?”

  “Usually cash,” he says. “When someone brings large amounts of cash to deposit, that is usually a problem. Especially small denominations. It’s often drug money.”

  “Are you familiar with the term PEPs?”

  “You must be reading my mind,” he says. “That was the problem at Gruber. You know what it means? This PEPs?”

  I nod. “Yes. Politicians, their families, people associated with them.”

  “Well, when people like this, some PEP shows up at the bank and he or she has cash, sometimes suitcases full of it, you know you are in trouble. You cannot take that money, no matter how much it is.”

  “And this happened at Gruber?” says Harry.

  “Oh, yes.” He takes another drink. A little bit of it sloshes down onto his belly. “It was the reason I was fired. That and your government.”

  “I don’t understand,” I tell him.

  “Let me tell you.” He leans toward the center of the table like he wants to whisper some secret.

  Harry and I join him halfway.

  “The Americans wanted to go after their citizens for taxes. They pressured the big banks. Not the ones here,” he says. “The ones in Zurich and Geneva, Bern. The banks with overseas offices in the United States. After so many years of threats, the banks and the Swiss government finally said enough. They agreed to some plan to release information so that the American government could go after these people, American citizens with accounts in Switzerland. But then,” he says, “they had a problem. The PEPs.” He looks at us and wrinkles his forehead until the furry mice of brows above both eyes begin to dance.

  “They had too many,” he says. “These people had accounts in banks all over Switzerland.”

  I shoot Harry a glance.

  “As you can imagine, this was embarrassing, hmm? They already told the press back in America that they were going to deal with these tax cheats. Now they find out there were powerful American politicians involved. And not just a few. So what to do?”

  “What did they do?” says Harry.

  “Consolidation,” says Korff. “They allowed the depositors, the PEPs, to move these accounts from the big banks where most of them were deposited to a handful of small banks in more remote areas. In the cantons. Because these transfers were inside Switzerland, they went unnoticed by the central banks in Europe and the United States. I don’t know whether they were informed or not. Probably not.

  “What made it worse was that many of these transfers were made in cash. Large, large amounts of cash. Big bills. In the United States the largest denomination is the hundred-dollar bill. But in Switzerland we have the thousand-franc note, worth almost eleven hundred US dollars. The PEPs, the American PEPs, were showing up with multiple trunks, you know . . .” He gestures extending his arms way out.

  “Steamer trunks,” says Harry.

  “Ya. That’s it. The steamer trunks, filled with thousand-franc notes. Truckloads of them.”

  “Why not just wire the funds?” asks Harry.

  “They did not want any record of the transaction other than the deposit at the bank.”

  “You know, a friend of mine mentioned something about this.” I look at Harry. “You remember, what was his name? Ahh . . . Graves.”

  “Tory Graves,” says Harry.

  “That’s it.”

  “You know him?”

  “Oh, yes.”

  “He came to visit me,” says Korff.

  “No, what a small world.”

  “Yes. He was very interested in what was happening. In particular, where this money came from and how they would be able to use it.”

  “Yes, we’d be interested in that as well,” says Harry. He pours more beer.

  “Sure,” says Korff. “I will tell you.”

  THIRTY-EIGHT

  Cheng settled into the seat on the Chinese Army executive jet as it sped toward the Dabie Mountains. He was halfway along on his journey, the two-and-a-half-hour flight from Hong Kong back to Beijing.

  As he looked down on the sprawling foothills he could see another dam under construction, one in a vast series of projects.

  China had come a long way. Cheng may have been a godless bureaucrat, but he knew that his nation had been blessed more than once by Joss, the ancient Chinese god of good fortune. They had but one great adversary left in
the world, America, and to Cheng’s thinking, based on every measure available to him, America was in decline.

  While the United States was distracted with its Mideast adventures and its myopic focus on terrorism, China was busy investing in long-term infrastructure and industry, grabbing up critical global resources—oil, metals, and rare earth among others. Even the fabled iPhone and the Apple computer were assembled in China.

  As America’s wars dragged on with no long-term political solution, voters grew weary. Cheng’s analysts in the Bureau predicted this result years before it actually occurred. They based their predictions on an earlier model, the war in Vietnam. The perceived American enemy was different, but the result was the same.

  America, once in a war stance, had a tendency to perceive its enemy as a vast unified monolith. Cheng couldn’t be sure whether this was driven by military strategy or political ideology. But he and his analysts could see its effect. In Vietnam the monumental enemy was international communism, toppling dominoes that would consume the world if Vietnam was lost. In fact what was being waged was a war of nationalism by a country the size of California with an economy that was struggling to become third world.

  Now the United States was gripped by an Islamic wave of jihad, hostility that transcended national boundaries, launched by a multitude of splintered subnational groups, many of them with different motives and grievances. There were so many of these that they defied identification. Even here, in the tribal chaos and ancient feuds of the desert, America had managed to inflate the balloon of a large unified enemy, an army of Islamic radicals. The violence was real, but the army, if it existed, was unified by only one thing—its hatred for the West, Europe and America. To Cheng and to China, this was a huge boon. They couldn’t have invented anything this beneficial if they had designed it themselves.

  Cheng had to wonder if decades from now historians might look back and realize that what was actually in play were numerous wars of nationalism being waged across an entire region in the Middle East. Cheng suspected that this was the result of artificial boundaries drawn by the Western powers in the Hall of Mirrors at Versailles at the end of World War One. These boundaries had completely ignored ethnic, religious, and tribal factions. Instead, colonial spheres of influence were carved out of the desert for the Western powers who won the war so that they could plunder the oil reserves just then being discovered. In a place where tribal blood feuds were millennial in duration, this was like planting the seeds of poison to be harvested in the future.

  In America, after more than a decade of desert warfare in Afghanistan and Iraq, the party out of power won election and took control. America reversed course and withdraw its forces. Chaos ensued.

  The American faction now out of power claimed that the winner so hastily abandoned the field and withdrew that they were now the authors of anarchy in a growing number of places in the Middle East. America’s partisan divide went global. Its allies began to question US resolve. From everything Cheng could see, all of this played into China’s hands. American allies who already had doubts concerning US military and political resolve began to double up on them, including many of the Asian nations that were China’s neighbors, its competitors in the race for the Spratly Islands.

  One of these was the Philippine Islands. It was to this that Cheng now turned his attention. He was troubled by a report he had just received, the cable still in his hand.

  Cheng knew that Joe Ying possessed his own private jet. It was a modern Gulfstream G650, a plane costing almost sixty million US dollars. It had a range exceeding eight thousand miles. More than enough to fly nonstop from Hong Kong to the American West Coast.

  And yet upon leaving Hong Kong, Ying’s Gulfstream didn’t fly to California. Chinese radar and overhead surveillance showed the plane diverting to the Philippines. Cheng wondered why.

  He alerted the Chinese embassy in Manila, and two agents were dispatched to see what was happening. As it turned out, Ying wasn’t topping off the Gulfstream with fuel. Instead, a limousine picked him up at the airport and transported him to one of the five-star hotels in downtown Manila.

  Ordinarily this might have been a matter of little or no consequence, except for the fact that two hours later another dark Town Car was seen chauffeuring Ying to Malacañang, the white gingerbread building on the Pasig River that served as the Presidential Palace.

  This was no coincidence. The Philippines had become China’s most serious rival in the increasingly contentious and sometimes heated conflict to win the Spratly Islands.

  There was never any doubt among Chinese leaders that the government in Washington coveted the Spratlys because of their rich treasures. US oil and gas interests salivated at the thought. America no doubt regretted the fact that it had not claimed the islands as part of its vast Pacific “protectorate” in the days immediately after the Second World War, when American power went unchallenged. But at that time no one knew their value.

  Now the United States was hobbled by new realities: the government in Beijing was a rising power, the waters around the islands were becoming a Chinese lake, and Washington could make no colorable claim to the islands due to their location remote from any US territory or possession.

  For this reason they needed a game piece. Chinese intelligence, Cheng’s bureau, now believed that the Philippine government in Manila had become just that—America’s pawn in the battle for the Spratlys. If the United States could muscle the islands into Philippine hands, they would no doubt receive their share of the treasures.

  Ying knew that his own intended prize, a generous slice of the rich oil and gas concessions, required that he be on the winning side. If he backed the loser, he stood to gain nothing.

  The stakes in this contest were sufficiently high that Cheng couldn’t afford to take a chance. What was Ying doing at Malacañang Palace? If the United States prevailed, and it was later determined that Ying played a hand, Cheng’s association with him would be more than enough to take the dragon down. He would end his days chopping wood in some mountainous frozen gulag, or worse, tied to a concrete post already pockmarked by bullets.

  It was near midnight. Proffit was back in L.A., lying in bed wide awake, listening to his wife snore through the wall in the adjoining bedroom. Home two days and he was already missing his liaisons with Vicki Preebles. The supple secretary may have been manipulative, but she didn’t snore.

  Yet that wasn’t the reason Proffit couldn’t sleep. He was wondering whether to tell his wife about the phone call he received earlier in the day. He was afraid if he did, she would rip his head off. More than that, he was petrified that whatever he was now caught up in might take the firm down, or himself. He knew it had to do with Serna, but how? Until he had the answer to that, he had no choice but to keep it to himself.

  Proffit was in his L.A. office and had been on the phone with Cyril Fischer, his number two in D.C., when the call was interrupted by a breaking tone from the intercom.

  “Just a sec.” Proffit pushed the button on the phone. “I left instructions not to be disturbed!”

  “Sorry, but I thought you might want to take this one,” said his secretary.

  “Who is it?”

  “An assistant to Senator Maya Grimes, says his boss would like to talk to you.”

  “She’s on the line?”

  “Extension six.”

  “Tell him I’ll be right with her.” Proffit punched the button to Fischer. “Gotta take another call. I’ll get back to you in a few minutes.” He hit extension six. “This is Cletus Proffit.”

  “Just a moment for Senator Grimes.”

  A few seconds later the familiar voice came on the line. “Mr. Proffit?”

  “Hello, Senator. How are you?”

  “I’m good. I hope I didn’t catch you at a busy time.”

  “Not at all.”

  He wondered what she wanted. If it was a campaign fund-raiser, his firm’s dance card was already punched full. Since Serna’s death he had
a drawer full of these, all of them bundled and mailed from the Washington office to his personal attention in case there was something Serna had been up to that he should know about.

  “To what do I owe the honor?” said Proffit.

  “It’s not about money, if that’s what you’re thinking.”

  She must have had a crystal ball. But then, these days why else would any politician be on the phone?

  Proffit knew her, of course. Who in the state didn’t? They had met a few times, just in passing at crowded political and social events. But they were not intimates.

  Proffit was a Democrat, a dyed-in-the-wool liberal who, when necessary, wore it on his sleeve. His specialty was entertainment law. He did enough work in and around Hollywood that his liberal credentials were as necessary to survival as breathing air.

  Grimes had once been a Republican, a former state legislator, and was elected secretary of state for California. She had parlayed this into a successful bid for the US Senate almost twenty years ago. As the state turned increasingly blue, Grimes saw the fiery finger etch its warnings on the wall. She switched parties, but only halfway. She went Independent. That was twelve years ago.

  This was about the same time that she and Serna had become tight, doing the women’s thing up on the Hill. At least according to the information that Proffit was able to dredge up. Grimes now caucused with the Democrats. Serna had taken bows for this. She claimed to be the instigator of Grimes’s conversion. Now there were growing rumors that the senator might actually become a Democrat before the next election. The world was full of opportunity for those who were sufficiently flexible.

  Proffit wondered if that’s what the call was about. “What can I do for you?”

  “Actually it involves an important matter of Senate business. I need help from someone who is knowledgeable and somewhat connected with the organized bar in our state. You come highly recommended.”

  For a moment Proffit was flattered. “Of course, assuming it’s something I can do, I would be happy to help.”

  “It is,” said Grimes. “You’re aware there are some vacancies on the federal courts in the state, for both the Southern District as well as the Ninth Circuit?”