A Calculated Risk

by Katherine Neville

  All federally chartered banks must be members of the Fed, and are required to maintain insurance deposits there. Each type of business the Bank of the World conducted required a different type of account with the Fed, with different reserve requirements. Each Wednesday, those reserve amounts were tallied for the week before, to be sure our deposits stayed within the variance permitted by law. Banks that ran negative for two weeks in a row had their wrists slapped rather sharply by the Fed. But neither did bankers like to leave excess funds lying in there, since the deposits earn no interest or income. So the activity required to stay within the letter of the law was both continuous and frenetic—and generated tons of paper.

  All the better for moi, I thought.

  When a bank like ours increased or reduced the balance in our Fed accounts, we could move the money back and forth from the Fed itself—or we could buy or sell our reserves to another bank, in the appropriately named Fed Funds Market. All these types of transactions were handled through Fedwire, which meant cash rolling in and out the door like hotcakes—and to many, many locations. When I was through with this caper, I’d be an expert in federal banking security, par excellence.

  “It seems to be a question of degree,” Tavish commented as we sat locked in my glass-walled office that afternoon, studying the Fedwire interfaces—those systems I’d formerly managed along with the rest. “I mean, this business of stealing,” he clarified. “A slip and you’re in the quagmire up to your nose. But it’s clear that if we can knock over the Fed, their security’s just as poor as ours.”

  “One small step for the criminal—one large step for crime,” I agreed. “But of course, we’re criminals only if we get caught. If we make it through to the end of the theft, we’ll yank all our code from the system, erasing our trail. They’ll never be able to prove we did anything, but no one will be able to argue with the results—hundreds of millions sitting in accounts where it doesn’t belong!”

  I was so deeply embedded myself, I could no longer remember the time when I felt I could bail out. But Tor would be proud of me—and Bibi too, I thought—for taking the leap this time without a shove. I now knew beyond doubt that what we were doing was right.

  I showed Tavish my plan, designed for maximum complexity to slow the auditors down as long as possible. He looked up, scratching his shaggy blond head.

  “You want to grab a billion or more in under two weeks?” he said. “Don’t you think the Fed might notice if that much of their money’s missing all at once?”

  “It’s not their money—it’s our money—the bank’s,” I explained. “And there’s more than eight billion dollars of it sitting out there right now. We’re required to keep an average percent of our assets there, by law. That doesn’t mean the Fed knows where it came from or what it’s for. Even if they notice a discrepancy, it will take them months, the way I’ve set this up, to trace more than a few of these myriad transactions.”

  “You’ve improved on our former technique,” Tavish agreed. “This is now like the salami from outer space—let’s give her a whirl.”

  “Well, Banks,” said Lawrence as he entered my office late that day, coat and carryall in hand, “isn’t it a bit late for calling impromptu meetings? I have a flight to catch.”

  “I got your memo,” I told him. “I understand I’m to shut down my project before your return. I think that might be jumping the gun a bit. I’d planned to prepare another proposal, about how to fix some of the problems we’ve—”

  “I believe we’ve had enough proposals, Banks,” he cut in abruptly. “Just write up what you’ve found and I’ll see that it gets into the right hands. You won’t be needed for the follow-up work, so far as I can see. I’m sending you back to Willingly’s department in two weeks. Good man, Willingly—too bad you didn’t see eye to eye, but you both have strong personalities. You’re a protagonist, and he’s—”

  “An antagonist?” I suggested sweetly. This bastard was signing my death warrant. I had to play for time.

  “In that case,” I informed him, “before you leave, I’d like you to approve these transfer papers for me. I’m sending Bobby Tavish back to his old boss, Karp’s department. It seems there’s some debate about whom he must work for—but I agreed to this with Karp some time ago.”

  “You must learn to handle these teckies, Banks,” Lawrence said as he scribbled his name across the forms. “You won’t get far by coddling them and listening to their complaints, believe me. If you clean up this project—get rid of your group—these efforts won’t go unrewarded. You have my word on that.”

  “Yes, sir,” I said politely. “And you know how much I value your word.”

  Lawrence glanced at me briefly, then wished me good evening, and left.

  I picked up the phone and booked the flight to New York. Then I called the personnel director and told him Tavish’s transfer to Karp had been approved—they could cut the paperwork. I phoned Karp, who was effusive with thanks, lies, and bullshit at the other end.

  Then I called Tavish.

  “Did they take the bait?” he asked.

  “Hook, line, sinker, and part of the pole,” I assured him. “No one will be the least surprised when you resign on Monday—except maybe Karp, who’s a bit slow on the uptake.”

  “I wish you could join me,” he said sadly, “but I understand someone’s got to stay behind and mind the shop. I’ll think of you in New York.”

  “Give my love to Charles and the Bobbseys,” I said, for we’d agreed that Tavish could monitor our operation quite well by using Charles—and the Bobbseys were grateful to hire someone who could help with their operation, even though on a temporary basis, and give them a long-needed break. “If you happen to hear from Pearl or Tor,” I added, “give them my best—but tell them we’re still going to beat them!”

  When we hung up, I felt a terrible cold chill move through me. I was alone now—surrounded by villains—and who knew for how long? I hadn’t heard from Tor in weeks, not since they’d left for Europe.

  I glanced at the calendar on the wall—February 1—just over two months since my night at the opera. In the seventy-two days that had passed, I’d knocked over two of the largest financial institutions in the world (if you counted Tor’s theft, it was three), and everything in my life had been turned upside down. Though I knew it, I couldn’t really feel it; I just felt numb inside.

  I was thirty-two years old, and by most standards, a success. All the achievements in my life had been won by beating the System. But soon there wasn’t going to be a system to beat anymore. I was destroying it, wasn’t I?

  Tor had known this all along, of course. With one swift kick, he’d knocked away my supports, so the only thing I could cling to was reality—actual reality, not the kind found in systems and structures and other people’s rules. He wanted me to take a good, hard look at my life, stop playing the games we all invent to pretend to ourselves that what we’re living out isn’t real. And if what I saw stretching behind me was a crumbling, rotten bridge of my own making—a wasted ruin—I knew what he’d tell me to do.

  I sat in my office surrounded by glass, and looked at the fading orchid in the vase before me. A few brown blossoms had fallen, scattered across the desk. I heard Tor’s voice whispering, ever so softly, in my ear. His voice said, “Light the match.”

  By the Monday of Lawrence’s return—when I was expected to shut down my project and get off the system—I still had no solution to the dilemma.

  By then, Tavish and I had finished transferring the monitoring of our crime to Charles Babbage’s full-time diligence, though it meant the little computer would have to stay up around the clock for a while in New York. Someone still had to keep an eye on the systems here, just to see who might be snooping around. But if I got transferred back to Kiwi, as Lawrence had threatened, I’d be occupied full-time cleaning the lavatories with my toothbrush.

  As I passed through the fairyland of glass walls to Lawrence’s office, I was pretty glum
. Though Tor had always said the best defense was a good offense, I wasn’t sure what I could do that would be offensive enough to stop the wheels that were already set in motion. The least I could do was to give it my best shot.

  Lawrence greeted me without rising; he was dug in behind the entrenchment of his desk and unwilling to part with ground. It hardly mattered—the ammo I had this time would melt under a small blowtorch, and I knew he could do better than that with his breath.

  “Let’s have a look—this is the wrap-up report?” he said, extending his hand.

  He skimmed the first few pages, then read the rest more closely than I’d hoped for, considering that my hours on earth were numbered. I sat there swinging my legs, looking out at the fog-bound view. I knew I might get one shot if I were lucky. I closed my eyes and tried to visualize the terrain in the dark.

  “Banks,” he said, looking up with patience, “this study seems unnecessarily alarmist to me. You suggest our security can be violated—”

  “Has been violated,” I corrected.

  “But I shouldn’t describe our systems as ‘lax in security.’ It might be misunderstood. I realize these systems aren’t exactly state-of-the-art—”

  “Unless the art is Renaissance fresco painting,” I agreed.

  “But frankly I’m losing patience with all these studies, and I no longer plan to finance them. I’ll be responsible for making sure that your concerns are addressed. Your request for follow-up work is denied.”

  “I’m not requesting that you finance any improvements to security,” I assured him, “or that the Managing Committee should be involved either.”

  I stood up and took a deep breath—it was now or never. “That’s why I’m turning my findings over to the audit department,” I said. “It’s really their job to ensure the appropriate safeguards are put into our systems, and now that Tavish has left, I’m the only one who can advise them about where to look for holes in security.”

  I surely didn’t want the auditors inspecting the system just now, but since it seemed they already knew that we’d violated security (hopefully, not why!) they’d be expecting to see my report—that was the reason Lawrence had used for wrapping things up on my project. On the other hand, if I could work along with them, it would serve the double job of keeping me informed of their activities—and out of Kiwi’s hands.

  But Lawrence’s response was something I hadn’t bargained for, and it threw me for a loop. I assumed he’d either send me packing back to Kiwi or agree to my suggestion. Instead, he sat there with my report in his hands and said nothing. And then—after something more than a mere pause—he actually smiled!

  “The auditors?” he said, raising a brow as if he found the idea a novelty. “I really can’t see why they should be involved at all.”

  Wrong answer, my dear. And that will cost you queen and castle.

  The right answer—as director of the largest division of the bank—was that we should call in the auditors at once. It was he who should stress that our lingerie was lily white—not I. It was he who should insist we had nothing to hide—not I. It was he who should pick up the phone at once and refer the whole matter to the boys in blue—not I.

  The fact that he did none of the above meant we most assuredly did have something to hide. I wondered what in hell it could be.

  Now he was standing up behind his desk, smiling and extending his hand for a shake as he slipped my report surreptitiously into his drawer. I hadn’t a clue what was happening, but I got to my feet as well.

  “I don’t like to haul in the auditors to solve our problems, Banks,” he told me. “Not until we’ve a solution of our own to propose. I’ll tell you what—take a little time, a month or so, perhaps—and have a really good look at those security systems of ours. Be ruthless, if you like. Who knows? Maybe we need to start from scratch and design some brand-new security, even if it means a little extra spending. And let me know if you need any staff to help.”

  “Okay,” I told him, totally confused. “I’ll write up a schedule and plan and leave them for you tomorrow.”

  “No rush,” he assured me, seeing me to the door. “We want to do this thing right.”

  I made my way down the glassed-in corridor in a daze. This was the man who’d told me—only week before last—to wrap up my project and put my staff in the pasture, who’d told me two minutes ago he was sick of proposals and studies. Suddenly he’d stopped the clocks, halted time, told me money was no object. My head was spinning as I approached my own office.

  “Are you still employed?” asked Pavel. “You seem to have come out intact; have you counted your fingers and toes?”

  “My fingers and toes are all there—but something’s definitely missing. You can unpack the boxes while I try to figure it out. Looks like we’re staying awhile.”

  I went into my office, closed the door, and looked out at the layer of fog sitting on the bay. A cabin cruiser broke through the mist. I watched it until it passed under the Bay Bridge. It reminded me of the one Tor and I had taken to the island. That seemed a hundred years ago. Where was he, and why hadn’t he called? I needed to talk to someone who was a master at analyzing people and their motivations—and that certainly wasn’t me.

  I knew, as I sat there alone in the fog, that Lawrence had no interest in our security at the bank. He was even less interested in what the auditors thought of that security. This had nothing to do with security or the auditors; it had nothing to do with me. What it had to do with was Lawrence himself.

  I reviewed Lawrence’s accounts for weeks, until nearly the end of February, but could find nothing amiss. It was driving me crazy. He seemed clean as a whistle. Why would a guy like Lawrence, who got half a million in preferred stock in his Christmas sock each year, do anything to rock the sleigh?

  Perhaps he wasn’t doing anything—maybe it was something he was about to do. But how could I figure out what was on the agenda? I considered sending Pavel into his office for a peek at the calendar—but recalled that Lawrence kept everything in his mind and nothing on his desk.

  But there was a correspondence file that wasn’t in any drawer—and I had the key. It was the mail message file, used by every officer at the bank to send electronic memos via computer. If Lawrence was as nervous as his behavior had suggested, it must be something he was planning to do quite soon. I read two hundred boring memos before I found it.

  It was just a half-page memo to the Managing Committee, entitled: “Shelter of Investable Funds.” The subject was parking—of a kind that had nothing to do with cars. It had to do with money, and it was illegal. Nevertheless, nearly all banks did it, and camouflaged it as something else until they got caught.

  At the end of each banking day, they moved their offshore profits to a tax haven, like the Bahamas, by having their branches there “buy up” those profits. That way, everything was transferred off the books before it was taxed. Was it mere coincidence that this memo pertained to exactly the sort of investment scheme being set up right now by my mentor—Dr. Zoltan Tor?

  I was about to delve into the subject further, when I received an unannounced visit to my office by Lee Jay Strauss—director of internal audit.

  Lee Jay Strauss was more than an audit manager. His key job was to resolve unusual discrepancies in our Federal Reserve deposits. The accounting department handled the usual ones; that Lee was in my office meant some hanky-panky was suspected.

  “Verity—may I call you Verity?” he asked, looking at me with droopy, sad-dog eyes though his horn-rim glasses. I told him that would be fine.

  “This is just an informal visit—off the record,” he assured me. “It seems we’ve a small glitch in our reserve position for last month. I’m sure it can be easily explained. Probably just a ripple in the system.”

  He laughed at his own witticism.

  “I’m afraid I don’t know much about the Federal Reserve,” I told him. “I don’t even know how much we send them each month.”

  “A
ctually, it’s each day,” he told me, checking his notes as if he had our conversation all outlined there on crib sheets.

  “So they sock it to us every day, do they?”

  “We probably shouldn’t scoff,” Lee told me seriously. “After all, the Federal Reserve provides many services and protective features that banks would otherwise have to provide on their own. Remember how difficult banking was before the system was established!”

  “I’m afraid that was before my time,” I said. “But I understand it was pretty rocky turf. Now, what can I do for you today?”

  “Probably very little. It’s just that we’re missing some of our reserve for the end of January, and we’re not sure where it went.”

  “Well, I haven’t got it,” I said, looking up my sleeve with a laugh.

  “No, I’m sure not. The thing is, we do know where it went, but we can’t explain it. It seems it went right into our own bank—here in San Francisco.”

  “Then what’s the problem? Can’t you just put it back where it belongs?”

  “It isn’t as simple as all that,” he said—though he hardly needed to explain all this to me, since I was the one who’d cooked it up. “You see, the money we should have sent to the Federal Reserve seems to have been sold off to other banks, which we frequently do when we need to reduce our reserve and another bank needs to increase their own. In this case, however, that wasn’t the situation—so it’s quite unclear how the money ended up moving around that way.”

  He pushed a paper across the desk showing multiple transactions that had posted in various banks: Chase Manhattan, Banque Agricole, Crédit Suisse, First of Tulsa, and a few random money market accounts. I looked up from the paper and smiled.