much twisted metal in the larger train wreck of MWB. They were a few of the many companies secretly controlled by MWB, the story went, which had turned them all into conduits for money laundering. One of the firms listed, its name underlined in the fax, was Textiles Pan-Europa. According to the article, many of the executives of these now defunct companies were missing. Some, like the Textiles senior executive team, had turned up dead.
Pierro moved restlessly around the room while I read, for a while reading over my shoulder. Then he wandered into the hallway, to pace. Mike went to the window again and stood there motionless and silent, his head nearly touching the glass. When I finished, I stacked the papers into a pile.
“So?” Mike asked, without turning around.
“The implication, I guess, is that Textiles was an MWB front, and that they were using the loans from French to wash money-pumping clean dollars from the loans into Textiles’ U.S. subsidiary, and paying off the loans with dirty money from the parent company in Europe.” Mike nodded, still staring into the night. I leafed through the first few pages of the fax again.
“And I guess this memo from Nassouli to ‘The Files’ is meant to be the smoking gun. The credit application and the corporate documents should have been prepared and signed by executives from Textiles, not by the salesman making the loan.” Mike nodded again. The dark glass reflected the smile on his face. I continued. “But there doesn’t seem to be anything conclusive here. Nassouli’s memo is the most damning, but you can’t tell from this if it’s accurate, or even genuine. And there’s nothing that tells us if the loans were arranged before or after MWB came into control of Textiles.” Pierro came back into the room as I was speaking and sat down across from me.
“That’s right,” he said, softly. “Nothing concrete, just the suggestion that I was working with these bastards, and that I was a party to fraud.” I looked again at the message on the cover sheet.
“You think this is blackmail?” I asked them both.
Pierro answered. “Mike’s a lawyer, so he’ll say he’s not sure. Me-I don’t know what the hell else it could be.” Mike still had not said anything, nor had he moved from the window. We were coming to a tricky part now.
“Assuming that’s what this is, how much leverage do they actually have here?” I asked, looking across at Pierro. His chuckle surprised me.
“Hey, I like that. Much better than ‘Are you a crook, Rick?’ Very smooth. But the deal with Textiles was by the book. I did all the homework I was supposed to do on that deal, and on every other credit line and loan I produced. Textiles had everything in order. Did I do business with MWB? Absolutely-lots of it, and so did everybody else on the Street back then. They were big players. And clean players, as far as anyone knew at the time. I knew Gerry Nassouli, and I thought he was a smart, funny guy. He introduced us, and a lot of other firms, to a lot of deals. But that meeting in the memo, the one with Nassouli and the account forms, that didn’t happen.”
“So, what do you want to do about it?” I asked. Pierro answered quickly.
“I want to know who sent this. I want to know what he’s after.”
“If it is blackmail,” I said, “you’ll find out what he’s after soon enough.”
“Yeah, but he’ll be a lot easier to negotiate with if I know who he is,” Pierro replied. I was quiet for a while.
“I’m not sure I follow. Are you saying that you want to bargain with whoever sent this?”
“Yeah, exactly,” Pierro answered. “I want to know what he wants, and if I can work him into something reasonable-and I have assurances that he won’t be back for more-then I’m happy to pay him to go away.” He said this as if it were the most natural, logical thing in the world. I looked over at Mike, who was still by the window, silent. I shook my head.
“Blackmail usually plays out in only a few ways,” I said. “If the victim’s guilty, and the bad guy’s proof is for real, then the victim pays- and usually keeps on paying, because bad guys don’t walk away from a meal ticket. Or else the victim decides to tough it out, and take the heat for whatever it is he’s done, rather than be somebody’s perpetual cash machine. In which case, the bad guy either follows through on his threats or figures it’s too much trouble and goes away.
“If the victim’s clean, then he tells the bad guy to take a hike and he calls the cops. What doesn’t happen is an innocent guy paying up, and trying to make some sort of deal with the blackmailer. The payment alone looks like an admission of guilt. On top of that, you run a risk of pissing the guy off-which may cause him to up his price, or worse. If you’re in the clear on this, my advice is to go to the cops.” Mike turned from the window and came back to the conference table.
“Sound familiar?” he asked Pierro. Mike looked at me and shrugged resignedly. “I told him the same thing when he first came in with this.”
Pierro smiled indulgently, like we were good guys, funny guys, but a little slow on the uptake. “I know what you’re saying, but the fact is I have a lot invested at French, a lot on the table right now that I can’t walk away from,” he said. He turned to me, more serious now.
“That investment is important, John, because I’ve got a big family to take care of. My wife, Helene, and I, we’ve got three kids to raise. And we take care of my folks, down in Boca, too. We also help out Helene’s family-her mom and her sister in North Carolina.” He paused and looked down at the table for a moment. “These people depend on me, John. They look to me, and I’m not going to let them down.”
“I’m not following, Rick,” I said. “If this stuff is bullshit, then you should be fine at French. Your career there shouldn’t be at risk.” He laughed again, but this time there was an edge to it.
“My career there has always been at risk. Maybe you haven’t noticed, but I’m not the typical French Samuelson investment banker. I dress the part now. I got rid of my polyester suits, and cleaned the dirt from under my fingernails, but I’m the odd man out there, and I always have been.
“You know what my old man did for a living? He worked in the yards at the Long Island Rail Road. The old lady was a receptionist, made minimum wage working at a chiropractor in Huntington. I was the first one in my family to go to college-much less get an MBA. There weren’t too many guys with that pedigree when I was coming up at French. It might’ve been different if I’d stayed on the banking side, or gone to the trading floor. There, there were always a few guys like me, some who’d started as clerks or in the mailroom and worked their way up. But not in investment banking.
“It’s been an uphill battle for me from day one, but I’ve gotten where I have because I’ve produced. Year in and year out, I put up the numbers-even the last couple years, when the M amp;A business dried up and blew away. If I hadn’t, I would’ve been out on my ass. There are some people at French who think I’m basically a cleaned-up car salesman, and maybe they’re right. But like it or not they live with me, because of my P amp;L.
“Now I’m up where the air is thin, John: the executive committee. There aren’t many seats up this high, and the fighting is vicious. And the way things are these days-on the Street, and in the press-one whiff of something like this, whether it’s true or not, would finish me. It’d be over for me at French and anywhere else.”
There was no hint of self-pity in his voice, no chip on his shoulder. He spoke with a confident reasonableness that made everything he said seem self-evident and simple, and made what he was suggesting seem the obvious, practical course. I could see how he would be a devastating salesman. We were quiet for a while.
“I think this is a bad idea,” I said finally. It seemed woefully inadequate in the face of Pierro’s certitude. “Even if I can come up with something and you can strike a deal with the guy, you’ll never be sure he won’t come back someday.”
“I don’t need to be sure,” Pierro answered. “I just need him to stay quiet until the executive committee meets and decides on new members. If this thing doesn’t screw me up, I’ll make it-believe me. And once I do, it’s a different game. Then, I’ll have a seat at the table. I’ll be part of the most senior management of the firm, and any problem I have will be the firm’s problem too. Certain people won’t be able to flush me down the crapper based on rumor. When I say that the deal with Textiles was straight, people will hear me out.”
“When does the committee meet?” I asked.
“Five weeks from now, just before Christmas,” Pierro said.
“Not a whole lot of time,” I said. I turned to Mike. “And what about the feds? The MWB case is still going on.” Mike nodded. “Nothing good is going to happen if this takes us into their territory. Best case, they get really pissed off. Worst case, they take an interest. I don’t need to tell you how ugly that could be.” Mike nodded some more.
“I’ve discussed the dangers with Rick, at length,” Mike said. “We’ll have to be careful about coming to their attention, very careful. If we reach a point where you think that’s becoming a possibility, you let us know. We’ll decide then whether or not to take it any further.”
