The Paper Factory (Michael Berg Book 1)

by Norrie Sinclair

  Rivello shifted his gaze as the waiter delivered the two large Laphroaigs. The best malt whisky in the best restaurant in town. Well, in the city at any rate.

  Goodfriend lifted the whisky to his fleshy lips and sipped.

  “Bottoms up,” he said with a smile. Rivello couldn’t help thinking that the quaint English expression was more than appropriate given Goodfriend’s favorite pastime.

  “Cheers,” said Rivello, savoring its deliciously rich unique peaty flavor. “Here’s to making a killing while the rest of the world goes to shit.”

  “It’s already on its way,” said Goodfriend, “the demise of Hausmann Jakob was the tipping point.”

  “Nonsense,” said Rivello, “those buffoons were so overloaded with bad paper they would have gone bust anyway. The whole brokerage was a scam. The most valuable asset they had was their office building on Wall Street. The emperor had no clothes and everyone knew it. Every ten or fifteen years a badly run investment bank or broker goes down the toilet. Remember LTCM, Barings and BCCI? History’s littered with them. The vultures move in, suck up the pieces. The inefficient and ineffective getting chewed up by those who are better, faster, stronger. No one would have stepped in to bail out those guys. They got what they deserved. The market took it in its stride. The next one to go will be the different. The next one will change the world.”

  Goodfriend shrugged, “What do you mean next one?”

  “C’mon, Augustus, you’re fooling no one. You’re the European chairman of one of the world’s leading investment banks and you’re telling me that everything’s hunky dory out there in money land?”

  “I don’t know what you mean. We’re certainly in for a bit of a storm, but it’ll blow out. Always does. We have billions in assets and healthy cash flow. The other big banks are in the same position.”

  “Bullshit, Goodfriend,” Rivello leaned back in his chair and smiled. “You know as well as I do that you’re all leveraged up to your ass in debt. What you refer to as assets is billions, no, trillions of dollars that you’ve effectively borrowed from the Chinese and the Arabs and lent out to millions of people who have no hope of ever paying it back. Just like every other bank in the Western world, you’re holding billions of dollars in paper that is sooner or later going to be worth absolutely nothing. The only reason you have healthy cash flow is the merry-go-round hasn’t stopped. As soon as panic hits the market, money will dry up and Beirsdorf Klein and every other Bank that’s been betting the house will have no cash to cover its liabilities. The Western world goes into accelerated meltdown. It’ll make the Great Depression look like a market correction. Wipeout!”

  Rivello drew his napkin across his mouth and slammed his hand down onto the white linen table cloth. Augustus reddened and smiled meekly at some of the diners on surrounding tables as though to indicate that everything was under control.

  “Jay, please, I know a great many people here. Drawing attention to ourselves is not a good idea.”

  Rivello felt good. The whisky and wine they’d consumed with lunch had reduced his sensitivity to his surroundings, not high in any case. He leaned forward in his seat, glowering.

  “Fuck ’em. Most of the pricks in this room haven’t got a clue what they’re doing. They follow the herd, pushing the market along with greater and greater momentum until one day they push it off a cliff. Then they have the balls to turn round, hold up their hands and ask what the fuck happened. Most of these idiots won’t have a job in six months and they don’t have a clue. That includes you, Augustus.”

  “You underestimate us. The people at the top know what’s going on, and I’m not just talking about the banking world. We know that it’s impossible to stop. It’s gone too far. Now we have to minimize the damage. That’s where Elisabeth Kennedy comes in.”

  Rivello smiled. “Yes, I know. That’s exactly where I need your help.”

  “I arranged for you to meet her. What happened? Did she stand you up?”

  “I meet her next week. A meeting, I must admit, I’m looking forward to. No, Augustus, I’m sure Elisabeth and I will get on just fine. I need you for something else. Something no less important. I need you to see that Beirsdorf Klein is the next bank to hit the wall.”

  Chapter 36

  They rode for six hours. Barely said a word to each other.

  The rear end of the bike swung out. His stomach lurched. Single track, sandy dirt surface, potholes everywhere. Were roads in Romania all like this? The gradient changed. Foothills. Darkness already closing in on the mountains that stood behind them. Where on earth was she taking him? The bike dipped into a gully. Darkness consumed them. Tereza slowed. Alongside him, beyond the range of the headlamp, passed the shadowed outline of buildings. The bike abruptly turned down a narrow track, just wide enough for a car. They lurched to a halt a few moments later. There were no lights on in the building in front of them. It vanished with the light from the bike.

  His leg cramped as he pulled it over the seat. The backpack fell from his shoulders. His backside was numb, back and legs painful, cramped-up like hell.

  “Come on.”

  “What is this place?”

  “I’ll tell you when we get inside. It’s safe here.”

  She moved forward, bent down and rummaged around at the side of the door, produced a key and unlocked it. He noticed her catch his look of surprise.

  “Nothing to steal.” No hint of irony in her voice.

  He squinted as she hit the light switch.

  “I was expecting candles,” he said, only half mockingly.

  Tereza she made her way through a doorway to the right.

  “You need a drink? Because I do.”

  The room was fifteen meters square, furniture old fashioned, well looked after. A fireplace built into the wall opposite. The scent of stale smoke hung in the air. Ash in the fireplace. Recently used. There was a couch, a low coffee table and two chairs. No television. Michael sat down on the couch. If it were daylight he’d be able to see the narrow driveway through the window.

  She walked to the cabinet, pulled out two tumblers and a full bottle of something that looked like vodka. He suspected that it wasn’t. She poured two large measures, sat facing him and proceeded to empty her glass in one swallow.

  Michael lifted his glass, intent on doing the same. He was halfway there when the sharp, bitter taste of the alcohol hit the back of his throat.

  “Jesus Christ, what the hell is this stuff? It’s like drinking barbed wire. Worse.”

  “Tuica. A Transylvanian specialty. Recommended only for those who can hold their liquor.” She laughed, her smile absorbing all of his attention. It made him feel good, draining the tension from him. He leant back on the couch.

  “You should drink more of that stuff,” he smiled broadly, “it does wonders for your mood.”

  “I only drink with people who can keep up with me.” She filled both glasses.

  “No surprises this time.” She lifted her glass, waiting for him to do the same.

  It slid down smoothly. Undoubtedly because his throat and tongue were already anaesthetized.

  “Tell me what’s going on. I’m drinking shots of barbed wire with a beautiful woman in the middle of nowhere. Until a few hours ago I thought Transylvania only existed in fairy tales. It’s time. I can’t do anything to help you, or myself, if I have no idea what in hell’s going on.”

  She told him. How she found her father with his head blown apart. She told him about the bankruptcy and about the death of her mother. She told her story. He observed her intently. She spoke matter of factly, as though it had all happened to someone else. It probably had, he thought, you can’t go through something like that and come out the other end the same person.

  “I’m sorry,” he said, “I can’t imagine what you’ve been through. But where do I come into the picture? How am I connected? Why am I here?”

  “There’s a lot you don’t know. What I do know is that at the moment our fates are inextricabl
y linked. Through Rivello. But I can’t go on now. I’m so tired. Besides, my Uncle István will be here tomorrow. This was his family’s home. He grew up here. My father grew up in this village also. They were good friends. István was the one who found out what happened to my family. About Rivello. You sleep here on the couch. I’ll fetch you some blankets. We’ll talk in the morning.”

  ---

  The voice carried from somewhere else in the house. Male, deep, guttural. A language he couldn’t identify. Michael raised himself from the couch. He winced at the pain across his back and thighs. He stood with some difficulty, made his way to the door. The voices were coming from a room at the bottom of the hallway. The kitchen. A rich breakfast smell of cooking reached him.

  No sooner had he walked through the door than a large, portly bearded man lunged at him, threw his arms round his shoulders and began slapping him on the back.

  “Michael, Michael, I am so glad you are here. Tereza has told me everything about you. I’m sure we will become great friends.”

  “Yes, yes, I’m sure we will,” said Michael, taken aback by the man’s familiarity, “in which case it would be good to at least know your name.”

  “Tereza, you have not been so remiss as to neglect to tell this young man about me?” he furrowed his brow and simultaneously raised a bushy eyebrow.

  “Michael, this is my Uncle István. When you do become great friends, you will probably be required to call him Pisti. István is my late father’s oldest and dearest friend.” Tereza’s voice becoming noticeably uneven, she took the old man’s hand and kissed him on the cheek.

  Pisti ruffled her hair as one would do to a small child. “Let’s not get over emotional, my dear girl. We must be quick or we will be scraping our breakfast from the bottom of the pan. Michael, take a seat, I hope you’re hungry.”

  Chapter 37

  “I don’t get it,” said Michael. “The bank must have lost a fortune when they pulled the loan.”

  Michael drained the glass within moments of the monk placing it on the table in front of him. They’d climbed to the monastery. He’d completely missed it in the darkness of the night before. An hour spent half climbing, half scrabbling up a winding, narrow stony path, had left Michael parched. Tereza and István sat opposite him at a circular, timeworn wooden table in the courtyard. Behind them the old monk retreated, black cassock throwing up dust in its wake.

  “By forcing us into bankruptcy, Beirsdorf Klein lost over a hundred ten million euros. For no reason.”

  “Beirsdorf Klein. I know them. Augustus Goodfriend?” said Michael.

  “He was the one. The one who pulled the loan.”

  “That’s ridiculous. He’s the European chairman. Why would he be getting involved directly? Particularly in a relatively small transaction. Well, small for those guys anyway. And why would he risk his own reputation by losing his own bank a huge chunk of money?”

  “I think he was paid to do it,” said Tereza.

  “I doubt it. Goodfriend doesn’t need money. He’s worth tens of millions, hundreds maybe. Who bought it?” said Michael.

  “No one. Not immediately. The company couldn’t repay its debts. We were forced to put it into liquidation.”

  “Let me guess. Then someone came out of nowhere and bought it from the liquidator for a fraction of its value.”

  “That’s right.” István took over, “The liquidator sold Vass in its entirety to a company based in the Cayman Islands. No one else would touch it.”

  “What did the liquidator say? Did you try to find out the identity of the buyer?”

  “He wouldn’t talk, at the beginning. But I gave him no choice. Turned up in his office. He went crazy, started shouting at me. He told me if I ever came near him again he’d have me arrested for harassment. He was nervous. More frightened than angry. It was the same with the coroner who performed the autopsy.”

  “Sorry,” said Michael, “you’ve lost me. What coroner, what autopsy?”

  “Papa’s autopsy. He could never have killed himself. I insisted there was an autopsy. They objected at first. I persevered with the help of an old friend of my father’s who still holds a senior position in the Pest County police force.”

  “And what did the coroner find?” said Michael.

  “There was nothing to find. At first.”

  “What do you mean?”

  “Papa was a big man. He would have resisted. He must have realized they were going to kill him. Yet the house was spotless. Nothing overturned, everything in its place. No sign of a struggle in my parents’ bedroom.”

  “Doesn’t that back up the theory of the police?”

  “Look, Michael, my father would never have killed himself. Besides that fact, when you blow your head off with a shotgun, particularly a shotgun with a large bore, as my father’s was, the recoil is extremely powerful. When the gun jerked backwards, his finger would have been caught in the trigger guard. It would have been severely bruised, most probably broken.”

  “You saw his hands?”

  “I went to the undertakers. They left me alone with Papa. It was so difficult. I lifted the coffin lid, examined his fingers. There was no injury to his fingers, not even a bruise.”

  “Okay, but that doesn’t prove anything. It’s still subjective.”

  “That’s why I requested a second autopsy. They’d have had to use some kind of drug to sedate him, perhaps knock him out. There would have been traces of the drug in his system. I asked the court’s permission to have the body exhumed and autopsied for a second time. The judge refused. I paid the coroner a visit. Her reaction was just as defensive and hysterical as the company’s liquidator.”

  “I understand why you think what you think, but it’s all circumstantial,” said Michael.

  “Tell him about the photograph,” said István.

  “Photograph?” He turned back to Tereza.

  “My family. On a table in their bedroom lay a photograph in a silver frame. It had always been there. For thirty years, maybe more. My parents, my brother. Me. I was very young. It disappeared. The same day. Whoever killed Papa took it. It was the only thing that was taken from the house.”

  “You think there was a connection between your father’s death and the company’s forced liquidation.”

  “Not death, Michael, murder. Falcon Enterprises bought Vass Holdings from the liquidator for ten million euros and sold it to a major Vass competitor eight weeks later for two hundred million. Before Beirsdorf Klein pulled the loan, the company was valued at half a billion euros.”

  “Did you find out who owns Falcon?”

  “Of course,” said István, “at first Tereza tried to go through a lawyer who had access to the company registry on Grand Cayman. Unfortunately, ownership details were restricted and the officers of Falcon were sitting on the Board by Proxy. Falcon operated with the real owners and management hidden behind a smokescreen.”

  “Then how did you manage to find the real owner?” Michael said to István.

  “Oh, I didn’t find him, Tereza did. Tereza and I met Fazel Dalaman for dinner when he came to Budapest soon after the deal was done. Fazel wanted to meet Tereza to ask if she would consider returning to Vass Holdings as marketing and communications director. She politely declined, but not before asking him whom he’d bought the company from.”

  “The name you mentioned before?”

  “Jay Rivello.” There was an edge to Tereza’s voice as she said the words, distaste pitted in her eyes.

  “He killed your father.”

  She nodded her head.

  “The first time I saw you. You were in Katowice that day to kill Rivello. What happened?”

  “I couldn’t get close enough. The note to you was my insurance policy.”

  “What do you mean insurance policy?” said Michael.

  “You were another tie to Rivello. I knew that if you tried to dig around too much Rivello would want you to disappear. It looks like I was right.”

  He
knew now who’d been tailing him since he’d left London. The photographs. Delivered to unsettle him the night before he left for Poland.

  “So you set me up. Risked my life for the sake of revenge? Not only that, but you quite happily watched my life go down the toilet instead of warning me.”

  She wasn’t about to apologize. Her jaw was clenched. She stared straight back at him.

  “You must understand,” said István, “what Rivello did to Tereza affected her in ways that you cannot imagine.”

  Michael understood all right, but he didn’t like being used as bait. He stood up.

  “I’m going back down to the village. I’ve got some thinking to do.”

  He made his way to the rough hewn staircase that led from the monastery to the valley floor. There was no movement behind him.

  Chapter 38

  A firestorm was brewing. The two days she’d spent in Saint Moritz had only confirmed her worst fears. It had been clear that some of the most powerful people in the world knew that a tsunami was about to hit them. Most frightening of all, there was absolutely nothing they could do about it. She’d heard the phrase “damage limitation” more times in two days than she had heard in her whole career.

  For four weeks now she’d been chairman of the Federal Reserve Bank. Elisabeth had never felt so helpless.

  “Mrs. Kennedy, a great pleasure to meet you,” the man said. It struck her that his smile hadn’t quite reached his eyes. He sat, reached for his napkin, spread it across his lap.

  “You must be Stephen,” said Elisabeth. “It’s a pleasure to meet you also.”

  The constrained, pretentious airs of the waiters were difficult to tolerate. La Bibliotheque had been Riblaw’s choice. Elisabeth spent most of her lunch hours with a sandwich, catching up on correspondence. They ordered. A few minutes of small talk followed. Elisabeth decided to move the conversation on.

  “If you’ll forgive me, Stephen, I have an incredibly busy schedule and would really like to get to the point. Augustus Goodfriend was kind enough to arrange our meeting, but to be quite frank he didn’t elaborate. How is it that I can help you?”