by Rene Fomby
Her bodyguard opened the door for her and she stepped out almost directly onto the sweeping steps leading up from the street to a large dark brown wooden door, set back in an archway and rising almost the entire height of the first floor. As she climbed the steps, the door suddenly flung open, and an aide to the Finance Minister met her and led her confusingly but efficiently through a series of snaking, labyrinthine passages to a small office set near the rear of the building on the third floor. Carlo Rossi, Italy’s Minister of Economy and Finance, was already waiting for her, seated on one of a pair of well-upholstered brocade couches facing one another in front of a large picture window. He rose as she walked in.
“Senora Tulley. Welcome.” He gestured toward the couch opposite him. “Please, make yourself comfortable. Can I get you some coffee? Tea, perhaps?”
Sam smiled at him cordially as she settled onto the couch, laying a blood red calf-leather folder containing all of her meeting notes on the modern glass coffee table in front of her. “No thank you, Minister Rossi. I’ve had more than my share of coffee already this morning. But, please, don’t let me stop you.”
“No, no. I am fine as well,” Rossi said as he waved off an aide and sat down himself, facing her. “I trust your trip to Roma has been comfortable?”
“Very much so, thank you,” Sam replied. “I still haven’t had a chance to make the grand tour of Rome, yet. Or really anywhere else in Italy, for that matter. Too much else to do, as you know. But then, that’s of course why I’m here.”
“Yes, yes. The bank. The trust. You have been placed—how do you Americans put it?—behind the eight ball.”
“And lately I feel like I’ve been caroming all over the table, bouncing from crisis to crisis,” she explained ruefully. “And now this.”
“Yes, this,” Rossi said, reaching toward the coffee table to retrieve his own notes. “And judging from what I’ve read—thank you again for making the bank’s finances available to us in such a short time—I would say it looks like the game may be coming to an end very soon.”
Sam took a moment to study Minister Rossi, who was himself watching her quietly from his perch on the richly embroidered silk couch, his light gray wool suit clinging tightly to his thin but well-sculpted body in the Italian manner, a bright green tie being the only suggestion of anything other than austerity, except for a gold Patek Philippe watch that hung somewhat loosely from his right wrist. Sam could see that his closely cropped salt-and-pepper hair had gone mostly to salt, but time hadn’t softened the hardness in his ice blue wolf-like eyes or the unmistakable edge to his smile. A former managing director and chairman of the International Monetary Fund, Rossi was a big proponent of tighter political integration within the European Union. He was on record arguing that the failure to create a single, unified European monetary and budgeting policy would result in nothing less than the complete collapse of the grand European experiment. He was also a strong opponent of economic sanctions against Greece and Spain, standing firm along with France against the stern economic policies being pressed on the two struggling countries by Germany and its allies. Sam planned to use that history today to sway him to her cause. The alternative was unthinkable.
“Minister Rossi,” she began. “As you have seen, BancItalia is in serious trouble. When William Tulley—disappeared—he managed to raid almost all of the liquid assets in the Ricciardelli Trust, including most of the liquidity in the bank, the money used to guarantee our deposits. As a result, we are way under water in terms of our liquidity ratios, and in technical violation of Italy’s banking regs.”
“More than technically, I would say, Senora Tulley. The bank can hardly make its own payroll right now, and you’ve defaulted on tax payments for two quarters now.” Rossi’s face had gone from genial to serious, and as he glanced down at the papers in front of him, his scowl grew even deeper.
“Yes, Minister, fair enough. And I fully understand your position on this, and the constraints imposed by the banking regs put in place after 2008.” Sam leaned forward, making sure to maintain steady eye contact with the minister. She couldn’t afford to look weak for even a moment, not right now, not when everything was on the line. “The thing is, those regs were designed to keep a tight rein on banks that were playing risky games with leverage and market manipulation to boost profits. But that’s not the case with BancItalia, and you know it. Our bank has always been a conservative player in the financial markets, ever since the days of the Medicis. The Ricciardellis are old school money, never in it for the short gain. What we’re facing right now has nothing at all to do with our banking policies, and everything to do with William Tulley’s criminal raid on our cash reserves. Something we had zero control over.”
Rossi was watching her closely. Taking his time, he reached over and poured a glass of water from a silver pitcher sitting on the table between them. Finally, taking a tentative sip from the glass, he leaned forward again. “That is true, Senora. But it doesn’t change a thing. Overall, your capital adequacy ratio is barely adequate, but that’s only because you have so much tier two capital. Your tier one capital, your actual liquidity, is almost zero, and as you know, tier two is only intended to act as a safety valve for depositors, assets available for dissolving the bank and winding down its business. Not for propping up the bank as a going concern.”
“Right, I get that. And ordinarily I would agree that the bank’s financial position is untenable going forward. But this is a special case.” Sam leaned forward herself to pour a glass of water, and noticed that her left hand was shaking slightly. She used her other hand to steady the glass as she raised it to her lips. The last thing she needed right now was for Rossi to think she couldn’t handle the pressure.
Rossi shook his head, now not even trying to hide the scowl carved deeply into his face. “The thing is, Senora Tulley, the law does not allow for special cases. It does not allow me to look the other way.”
“Then the law is wrong, Minister Rossi.” Sam had regained her composure, and was ready to make her closing argument. Just as she had so many times during her criminal trials back in Texas. “Look, BancItalia is no ordinary institution. The Ricciardellis were front and center during the founding of modern banking, as far back as the crusades and the Knights Templar, if you can believe the legends. In fact, the bank’s official history says it was started as a Templar bank, allowing pilgrims heading toward Jerusalem to travel safely without having to carry large sums of cash. That makes the bank almost nine hundred years old. We can’t just stand by and let it fail now. Fail because we can’t give the old lady just a few more months to catch her breath.”
Rossi waved his hands in the air theatrically. “All interesting history, but irrelevant to this discussion.”
“With all due respect, sir, the history of the Ricciardelli commercial dynasty is not irrelevant at all. If anything, the history of the Ricciardelli family is the history of Italy itself.” Sam set her glass down to edge forward again, her eyes blazing and boring into Rossi’s. “And, I might add, the future of Italy, as well. I must warn you, if you stand by and allow BancItalia to fail, then you will have lit a fire that could very well burn down the entire Italian Republic in its wake.”
Rossi stared at her for a long moment before speaking. “Such drama!” He turned slightly toward his aide, still standing several feet away from them, trying to look invisible. Rossi smirked. “Senora Tulley has been in Italy for only a few months, and already she lectures us on the stability of our country.” He turned back to face her, still smiling, but with eyes that held little humor. “You should not think to lecture me, young lady. To threaten me. I assure you, Senora, Italy has endured many crises over the past century and a half, including the collapse of the House of Savoy that ended fascism and established the First Republic. Your bank is big, but it is not too big to fail. Italy will mourn the loss of a small part of its history, but then we shall move on. As should you.”
Rossi looked like he
was getting ready to stand up, ending the meeting, but Sam held up a hand to stop him. “Perhaps I didn’t make my point clearly enough, Minister.” She reached into her leather folder with her left hand and retrieved a thick sheaf of papers. “In here is an analysis of exactly what will happen to Italy’s economy if BancItalia is allowed to collapse.” She tapped her right index finger on the top page emphatically. “First, while the bank is a key asset of the Ricciardelli Trust, in terms of sheer numbers it’s a minor part of the overall balance sheet. But BancItalia’s true value to the trust cannot really be measured in terms of dollars and cents—sorry, that’s an American idiom, but you get what I mean—euros, then. The real value of the bank is that it serves as the very heart of the financial empire that makes up the trust. As a private institution, the trust has traditionally kept all of its business dealings very close to the vest. Our business secrets have almost exclusively been for our eyes only. Which, of course, meant that we severely limited any borrowing from outside of our little family business. As you know, you can’t borrow money without lifting up your financial skirts for all the bankers to have a look. But if you borrow from yourself, and if your bank is private, not public, well, those rules don’t really apply. As a result, the entire Ricciardelli empire largely sits atop a single asset. The bank. And if that bank collapses, the empire collapses as well.”
Rossi glanced briefly toward the stack of papers Sam was gripping tightly in her left hand, then looked back up, shaking his head slowly. “I can understand your predicament, Senora, but surely you must realize that the Italian people cannot be asked to pay for your family’s arrogance and insularity. As you Americans say, you put all of your eggs in one basket, and now that your basket is falling to pieces—”
Sam held up her hand again, interrupting him. “I’m sorry, maybe I haven’t made myself completely clear, Minister. My apologies for that. But what’s at stake here is not just the Ricciardelli Trust, although the loss of that would be devastating for my family, for sure.” Sam leaned over to set the stack of papers in front of him. “Have your people look over these numbers. See if they agree with my accountants and financial experts. What they’ve documented here is something they call the ‘cascade effect,’ triggered first by the collapse of the bank, then by the subsequent failure of the rest of the Ricciardelli empire. When I mentioned a fire a little earlier, this is precisely what I was referring to. A small fire can usually be handled rather easily. But if you ignore that fire, if you let one house burn unchecked, the fire will jump to all of the other houses around it. And pretty soon that inferno becomes so large you can’t control it at all. Think Nero, standing around and fiddling while Rome burned to the ground. That is exactly what will happen to Italy’s economy if we don’t put this fire out now and save the bank. The Italian economy is not just a bunch of independent silos. It’s a tightly woven network. A tapestry, if you will. Pull at one thread, and the entire tapestry starts to unravel. Set fire to one corner of the tapestry and let it burn for a while, and there’s nothing you can do afterwards to undo the damage.”
Rossi was still unconvinced. “From what I understand, although the Ricciardelli Trust is very substantial from your perspective, it is still very minor in terms of the overall Italian economy—”
Sam decided it was time to end the meeting. Rossi wasn’t going to budge. Not right now, not until his own people had poured over the economic analysis and outlined to him just how bad the situation truly was. But she had one last pearl to drop on him before she left. “Minister Rossi, at the start of this meeting I told you that BancItalia’s failure would ultimately cause the failure of the Republic itself. I wasn’t exaggerating when I said that. As you know, the bulk of the Ricciardelli business interests are clustered in the northern regions of Italy. That shouldn’t be surprising to you—the bank is headquartered in Venice, as it has been for almost a thousand years, and virtually all of Italy’s industrial production is located in the northern half of the country. The south is mostly the agricultural breadbasket of Italy.”
Rossi shook his head impatiently. “Yes, again you are telling me what I already know about my country—”
“And Rome, the capital of Italy, is for all intents and purposes in the south as well,” Sam pointed out. “And therein lies your biggest problem, your real risk in all of this. All across Europe, the United States—the entire world, really—nationalism is on the rise. People have become tired of the old order, particularly governments that they see as stealing from the productive members of society to prop up the unproductive elements. As Rome has consistently done in Italy, robbing the north to dump money into largely unsuccessful efforts to create jobs in the south.”
Rossi motioned to his aide and stood up to leave. Sam remained seated. “Again, Senora Tulley, I don’t need lectures from some upstart American on how to run my country. Our economic policies are an Italian matter. None of your concern, in the end.”
Sam smiled at him for the first time since their meeting had begun. A cold smile, with narrow, feline eyes. “And that, Mister Rossi, is where you’re wrong. Because, as your people will see when they run through the financial analysis I just provided to you, any economic wildfire started by the collapse of BancItalia in Veneto will sweep quickly across the region, then into Lombardy, Piedmont, down into Emilia-Romagna. Next, it will consume Tuscany, then Umbria. And none of this is Pulcinella’s secret. The Lega Nord is already rising up in those regions, becoming stronger, playing on the same anger I’ve already discussed. Playing on historic tensions between the north and south that have existed since the Kingdom of Italy was first founded, stoking the fires of secession. The Lega party owns Veneto and Lombardy as we speak, and is running a close second in Piedmont and Tuscany. The pressure on politicians in the north to back secession has never been greater—all it needs right now is a spark, and you know it. As a southern American, I understand secession, I understand how a country can suddenly find itself splitting in two along industrial and agricultural lines. And if you think Rome can hold this country together once it all starts to unravel—like that tapestry I mentioned—then think again. The economic divide in Italy is getting worse, not better. It’s all in that analysis. Of the 943,000 Italians who became unemployed between 2007 and 2014, 70% were southerners. And in the past few years the problem has only gotten worse. Without the taxes from the industrial north, how are you going to feed all of those people? All of those increasingly desperate people?”
Rossi stared at Sam as she slowly gathered her papers and stood up to face him eye to eye. His face was livid. “So, what, is this a threat, Ms. Tulley? Is this blackmail? If I don’t let your bank off the hook, if I don’t look the other way, you’ll support an insurrection against my country?”
“This is no threat, Minister Rossi,” she answered quietly. “This is not blackmail. I’m just spelling out the political and economic reality to you, the same way my Italian advisors laid it out to me. And I’m not here asking for a handout. I’m not asking for the government of Italy to somehow prop up the bank to keep it from failing. All I’m asking for is a little time. I have all of the assets I need to fix this problem. As I said, the bank is but a small fraction of the Ricciardelli fortune. I just need a little more time to sell off some of the trust’s assets, to convert hard assets into cash. Give me a little breathing room, and I can sell off those assets at something closely resembling their real market value. Otherwise, at best we’re talking a fire sale. Assuming, of course, that the vultures don’t just wait for everything to collapse on its own, then swoop in to pick up the pieces for free.” She paused to catch her breath. “Give me just six months, and I’ll have the tier one assets up to at least half of where they were before Tulley raided all of the money. Give me a year, and I’ll have the bank back stronger than it has ever been. You have my word on that.”
Rossi eyed her carefully, still quite obviously seething with anger. He looked down at the stack of papers she had given him. Thinking
. And knowing in his soul that her analysis of the political situation in Italy, while probably exaggerated, was not too far off the mark. “Assuming my economists agree with your analysis—and that’s a big word, assuming—then maybe I can give you four months.”
Sam smiled and stuck out her hand. “Four months is a good start. Then we can meet again and see where we are at that point. In the meantime, I have a lot of work to do finding buyers for some of our companies. S-a-a-y, you wouldn’t happen to know anyone who wants to buy a tractor plant, would you?”
Rossi hesitated, then finally reached out and shook her hand, still frowning. “No deal yet, Senora Tulley. Not until I get an answer back on all these numbers. But, okay, I’m sure someone around here has a suggestion about possible buyers, so I’ll have them get back to you.”
“All I can ask, Minister,” Sam replied, smiling broadly and giving his hand a firm squeeze. “All I can ask.”
18
Siena
It was a beautiful day, and Sam had the targa top down on the candy red Alfa Romeo 4C Spider as she roared down the twisting country road leading from Rome to the family vineyard just south of Siena. Her bodyguard had protested once again that he couldn’t properly protect her if she was out driving the high-performance sports car on her own—and he definitely couldn’t keep up with her in the standard issue Mercedes sedan he was tailing her with as she whipped around the narrow curves with little to no concern for her brakes. Sam had always had a passion for sports cars growing up, but even if her parents could have afforded to buy her one, there was no way her mother would have ever let that happen. And then came Luke’s accident in the Porsche Boxster.
But after all the stress of preparing for the meeting with the Italian Finance Minister, not to mention the stress of trying to get a handle on the far flung but crumbling financial empire her daughter had inherited and her former father-in-law had all but destroyed, Sam felt ready for a little adventure. Ready to throw caution to the wind and just be free for a little while. God knows all that would come to a screeching halt once she got back to the castle and her never-ending list of obligations and responsibilities.
