Hot Red Money

by Baynard Kendrick

  “We got it,” Maury said. “After you left, Anne suggested that she might move into the front room and you could come and live with me. Now, who is Harry Catlett? You still haven’t told me.”

  “Ex-Naval Intelligence. Do you mind if I smoke, dear boy?”

  “Only to the point where if you take that pipe from your pocket we finish the trip in separate cabs. I didn’t ask you what Catlett was I asked you what he is.”

  T.T. sighed. “ ‘Tobacco, divine, rare, superexcellent tobacco, which goes far beyond all the panaceas, potable gold and philosopher’s stones, a sovereign remedy to all diseases.…’ ”

  “Except acute garrulity. What is he, T.T.?”

  “An investigator.” T.T. angrily clicked his plates. “Why consult me when your only desire is to insult me?”

  “What kind of an investigator? I know you go -through these difficult periods, Tom, but don’t blame me.”

  “I don’t think I’d better give you his title,” T.T. said stiffly. “I don’t like to be accused of garrulity.”

  “I’m sorry. Go ahead, T.T.”

  “Harry Catlett is an investigator for the Subcommittee to Investigate the Administration of the Internal Security Act and Other Internal Security Laws of the Committee on the Judiciary, United States Senate, Eighty-fifth Congress, First Session on Scope of Soviet Activity in the United States.” T.T. drew a deep breath.

  “All one word?” Maury asked him.

  “In German it would be ‘der Berwaltungforicherstaatsschulden.’”

  “Don’t go on, please,” Maury begged. “Your pronunciation is so bad I can’t understand it. That’s low German and I speak only high.”

  The cab stopped in front of the United States Court House. Maury paid off, and they took an elevator to the fifth floor.

  Harry Catlett was a blue-jawed stocky little man sitting behind an enormous oak desk, liberally ridged along each edge with cigarette burns, and considerably cleaner of litter than T.T.’s. He greeted them cordially.

  “Maury Morel, eh? I’ve read you a lot. You’re good—although I don’t agree with everything you say.”

  “I wouldn’t have a job if you did.”

  “No, that’s true. Of course—T.T.—I don’t agree with anything he says. That’s why I have a few dollars left to my name. Smoke?” He offered a pack to Maury, but not to T.T. Maury took one. So did Catlett. “Don’t be shy, T.T. Crank up your Stanley Steamer. You can’t talk without it and we’d better get under way. What’s with the press that brings you here today?”

  T.T. fired his pipe with a triumphant glance at Maury.

  “Maury’s on a story about Soviet hot money, Harry. I gave him all I could, but he wants more. Let him tell you.”

  “About what?”

  “Mainly about money being invested anonymously in United States’ industries through foreign banks.” Maury took out some flimsy and a copy pencil. “Would you say that’s a considerable sum?”

  Catlett put his cigarette down on the desk edge to make another burn. “I might say a hell of a lot of things off the top of my head, but you’d make an ass of yourself, and I’d lose my job, if you pulled direct quotes on me. How about it, T.T.?”

  “I’ll vouch for Maury’s discretion. If he publishes any figures I’ll let him say they came from me. We never saw you, Harry.” T.T.’s pipe was doing well.

  “Let me see.” Harry Catlett stared at the cigarette that was burning the desk top, then pushed it off gently and stomped it out on the floor. “You want to know if a considerable sum of money has been invested in the United States from Western Europe—”

  “Anonymously.”

  “You’ll have to guess the anonymous part for yourself. The long term investments from Western Europe at the end of last year were about ten billion. Long term assets are corporation stocks, which you’re asking about. That amounts to over half of all the foreign assets in this country. Do you call that a considerable sum?”

  “Ten billion! I certainly do. Okay. Would it be possible for money coming from the Soviet Union, or the satellite countries, or Red China, to buy up stocks of American corporations under such circumstances that the owners of the American corporations couldn’t learn the identity of the people buying the shares?”

  “It’s not only possible, we’re certain it’s being done. Your Russkian or his satellite gets dollars in this country through a foreign bank, using a numbered account to conceal his identity. He buys shares in the XYZ corporation—”

  “What about Crescent Valves, Inc.?” Maury interrupted.

  “I never mentioned them, did I?” Catlett squinted at Maury through half closed lids.

  “No, but I’d like you to,” Maury told him.

  “Anything you like,” Catlett said. “One damn plant is as good as another. Your Russkian, or satellite, buys shares in Crescent Valves, Inc. with his dollars obtained through—”

  “Maybe the Banque-du-Shebab Syrie?” Maury broke in again.

  “Maybe you’re a better script writer than I, Morel. You seem to know enough about some matters to qualify for a job with the State Department or the Treasury. Why the hell is he pumping me, T.T.?”

  “He’s a reporter, that’s why.” T.T. bit hard on his pipe stem. “Knowledge is of two kinds: we know a subject ourselves, or we know where we can find information upon it.”

  “Yeah—yeah,” Catlett said. “Also you can drive an investigator to drink but you can’t make him talk—unless he wants to. What’s the pitch, Morel?”

  “Will you give me the same assurances I gave you? That you won’t mention the Globe-Star or me?”

  “That’s hard to give. I’m a sworn officer. I’m supposed to feed any facts I collect back to the chief counsel of a Senatorial subcommittee. Aside from being nobody’s fool, my boss is hepped on the subject of perjury.”

  T.T. said, “Maury has a boss who is just as hepped on facts as yours, Harry. I have the same boss. Still, the ‘confidential source’ line works for us as well as it does for the FBI, or any investigative agency.”

  “I’ll take a chance.” Catlett lit another cigarette to decorate the desk edge. “You have my word that neither of you, nor your paper, will be mentioned to the subcommittee—but that’s not saying I won’t start running down any leads you might slip to me.”

  Maury said: “Naturally.” He gave him the story of his own part in Beshara Shebab’s murder; the last-word mention by the dying man of Turlock and the Amity Rest Home; his own interview with Dr. Marian Rheinemann; the copy of Lycoming’s Leads on her desk; and the ten dollar tip to Dave Alren, that made him think Aaron Turlock and Igor Sandor might be one and the same. “They were,” he concluded unhappily.

  Catlett wet his lips, sent his cigarette the way of the rest, and critically examined the newest cauterization on the desk edge. “Brother,” he said, “that’s a beaut!” It was impossible to decide whether Maury’s revelations or the burned wood was the object of his exclamation. “I suppose you never read the papers, either of you, being on one—except your own by-lines.”

  “I saw the story,” Maury stared glumly out of the window, intent on a window washer held on his perch with a safety belt against a building across the street. If that belt should break—! He felt much the same way.

  “What story?” T.T. inquired smokily, wagging one patent leather toe.

  Maury came back to the firing line. “Aaron Turlock was murdered last night in the Amity Rest Home—or Igor Sandor, whichever you like. He lived in Garden City under the Turlock name. He was entered in the home as Sandor. He had a wife, Opal, and a three year old son, Nikki. They haven’t been found yet.”

  “Murdered!” T.T.’s pince-nez popped from his nose to hang on the safety ribbon. He replaced them and asked, “By one of the other patients? Are they sure it was murder? Why not suicide if he was in a Rest Home?”

  “According to Dykes, our man who covered the story, Turlock was shot by a sharpened steel bolt while he was close to his open window, tal
king to someone through the screen. That’s all so far.”

  “Have you been to the police?” Catlett asked.

  “No. I’ll wait for them to come to me.”

  “You won’t have a long wait, I’ll bet.”

  “No, not long. That’s why I’d like some fast information. They’re already riding me about that Beshara Shebab affair. I’ll get to the point: This Dr. Marian Rheinemann, who runs the Amity Rest Home, is the daughter of Jason Philips—”

  “Who did own and run Crescent Valves, Inc.” Catlett supplied.

  Maury nodded. “Dr. Rheinemann, in addition to being the most succulent dish of frozen red-tangerine these lecherous old eyes have ever feasted on, is the ex-wife of a broker named, Max Rheinemann. According to her, she and Max are still palsy-walsy, in spite of the fact the time limit’s up on a valid decree nisi, and they’re both free.”

  “I will now make the cheese more binding,” Catlett said. “Doc has a boy-friend, as well as an apartment at 74th and Park Avenue. After her harrowing six hour day at the House of Horrors, on Long Island, she repairs to her own little five room attic, complete with bar, where she entertains the boy friend until the wee small hours, when he isn’t feeding her at some de luxe nightspot or tooling her around in his Continental. Not infrequently, friend ex-husband visits her, too, and the three of them spend an evening together. The morality of all this has been questioned discreetly by some scandalmongers, but we’ll skip it for fear of corrupting T.T.”

  “Steed threatens steed in high and boastful neighs,” T.T. remarked quite cryptically. “Who’s the boy friend?”

  “A ponderous, money-stuffed joker called Henry Lycoming.”

  Maury turned slowly and surveyed Harry Catlett without surprise. “Father, daughter, ex-son-in-law and daughter’s lover. How many more ingredients do you have to have to bake a pie?”

  “None,” Catlett said. “I’ll bake one for you—but you won’t like it and neither will T.T. The steak’s spoiled and the kidneys are bitter, and the crust is tough. The recipe is solely mine, and I’m a lousy cook. I learned the art by listening for two years to the sworn testimony of representatives of the Federal Reserve Bank, the Stock Exchange, the United States Department of State, Department of Defense, and ten other bunches of governmental buckpassers known by their initials, including the S.E.C. Do you want to know what art I learned—the one great art that I found had been mastered by them all?”

  Maury nodded along with T.T. “Tell us the art.”

  “Ducking!” Catlett barked out. “It’s your fault, my fault, T.T.’s fault, and the fault of your paper and all the others. It’s the country’s fault. We’re a nation of criticizers, first, last, and all the time. We live by throwing brickbats, but never bouquets. We set men up in office to make a lot more unenforceable laws.

  “To obey them ourselves? Hell no! We want to see the laws broken so we can write to the papers, and blow the men down. The art of staying in public office is ducking, gentlemen, ducking responsibility—passing the buck. If anyone has guts enough to face his own job squarely and tell the truth in public service we’ll tear him to pieces. That goes from the President of the United States on down.”

  “That’s a bitter pronunciamento, Harry.”

  “You tell ’em, T.T.! I’m an investigator. One of the kidneys in the pie. Now, let’s take a peek at the other side of the medal. The criticism comes from the bosses in Russia, and the public employees they put in. The same in any Communist country. Throw a verbal brickbat at a Commissar, or at Khrushchev, or at your boss in the tractor factory, and you don’t just lose your job—you die!

  “Americans don’t get that, and the Soviets, who aren’t as dumb as they look, trade on that fact—the fact that we criticize every law enforcement agency we have. An unfortunate majority of so-called loyal Americans consider that: Our police are flatfeets. Our sheriffs are jokes. Our Intelligence officers—Air, Army, Navy—are brown-nosers and thugs bent only on killing profitable defense contracts. Our Federal officers are Cossacks and publicity hounds—trampling on business and violating public rights—and that goes from tax collectors clear up through J. Edgar Hoover.”

  Catlett paused. The small office was very silent while T.T. elaborately filled his pipe and got it going again. “Don’t think we haven’t denounced and condemned the FBI,” Catlett went on, “and the Communists have helped us. In 1940 the whole organization of the FBI was saved from destruction only by Attorney General Jackson and F.D.R.”

  “And the pie?” Maury inquired. “What about the Crescent Valve pie?”

  “Everything I’ve been raving about is seasoning for the pie. Let’s just call it the ‘Hot Money Pie.’ That’s more applicable. Crescent is just an example of too many more exactly like it. I don’t know and you don’t know who the hell controls Crescent Valves today, and that takes in several agencies which have investigated that company. Naval Intelligence; they have a Commander there now, since they’re on a Navy contract. Defense Department. Treasury Department. Security and Exchange Commission. Plus some jerks like me.”

  “What about the FBI?”

  “Ten to one the FBI, too—assuming they have jurisdiction. They can’t just jump in because somebody’s failed to register some stock in an unlisted corporation or refused to reveal the beneficial owners’ names. Someone must point out that some violation of a Federal statute has occurred: espionage. Atomic Energy Act, internal security, failure of a foreign agent to register with the Attorney General, before the FBI can step in.”

  “Do you think any of those statutes are being violated in Crescent Valves?” T.T. asked curiously. “You said you’d done some investigation on that company, Harry.”

  “Both of you seem to think so. That’s what brought you here. Frankly, I’m up a creek, as I’ve been trying to explain. Old Man Philips owned the plant originally. A closed corporation. Family affair. Then he reincorporated to get money for expansion. Five hundred thousand shares of stock at a par value of ten dollars a share.”

  “Five million dollars,” T.T. remarked.

  Catlett nodded and took a paper from his drawer. “Now, let’s take a squint at Crescent Valves, Inc., today. I’m going to simplify it. Round hypothetical figures. Try to make it clear. The whole damn plant we’ll say is apparently owned by seven people, all Directors. Jason Philips, an upstanding, loyal American citizen and man of distinction, is Chairman of the Board, but he’s old and has been very ill. He owns 249,000 of 500,000 shares—49 8/10 %—and, brother, that isn’t control. One of the other directors had to vote for him to put him in as Chairman. Point one that smells to me.”

  “I thought you said he was a grand old man.”

  “That’s my point, T.T.! You don’t get to be Chairman of a Board in our upright circles of industry just because you’re a grand old anything. You get it because you own a controlling interest in the voting stock, period unquote exclamation point.”

  “A front, hunh?”

  “A front, exactly. Clean as a barrel of detergent, needed to wash the other Directors in, and nary a word to say about personnel or policy. Now let’s switch channels and take a gander at the other six Directors who among them own control: President and Treasurer, Max Rheinemann, a broker; Dr. Marian Philips Rheinemann, his ex-wife; Bruno Vogl, an Electronics Engineer, and Production Manager; A. C. Metzger, H. L. Montross, and C. B. Stoane, brokers. All of those six own approximately 41,833 shares each, 8 4/10% each—or 50 2/10 % of the total stock, giving them control. Maybe you can spot the gimmick in that, T.T.”

  “Eight and four-tenths per cent each? That’s easy. The S.E.C. Act of 1934 requires the beneficial owner of 10% or more of the stock of any listed company, wherever he is, to disclose his identity. Those six directors you’ve named could be acting for anyone, anywhere—running a defense plant that leaks top secret information at the seams.”

  “And probably are,” Catlett declared vehemently. “One more blast and I’m through. The Director of the Pentagon’s Of
fice of Personnel Security Policy, recently told a Senate Internal Security Subcommittee that the Defense Department has no way of knowing for sure the identity of all foreign investors in American defense concerns. Swiss and Canadian banks and United States brokers, in some cases, have refused to divulge the identity of foreign investors investing money in American corporations. No law or S.E.C. regulation forces them to do so.”

  “So they won’t grant a clearance to a foreign controlled facility—but how do they know? They make sure that key employees, officers, and nominees to the board of a company on defense work are United States citizens. So were Dillinger and Al Capone. More than a score of subpoenas have been issued to American industrialists. Don’t they trust them? They’re good American industrialists—but there isn’t a law in this country that can’t be obviated by people who don’t happen to be good. Those just conceal the facts and don’t comply.”

  Catlett pounded the desk with his fist. “This is a matter of enforcement of laws on the books right now. All Congress wants to do is make new ones, and not grant a stinking cent in appropriations for investigators—creeps, like me. Cut down on the FBI, the Treasury Department, the S.E.C. So what happens? Narcotic peddlers, panderers, racketeers, and Russkians can fly their dough from here into a half a dozen countries abroad, dough that’s made by turning boys and girls, into addicts and prostitutes, dough that’s made by milking, spying on, and sabotaging all types of American industry—and the next thing we, know their stooges, posing as good Americans, are owning and running the very industries that have been milked—bought into with that hot money. And, brother, that hot money is not only hot—it’s tax free!”

  “But there must be some way of ferreting out these stinkers,” Maury protested.