'And go for his gun,' Hawk said. 'And we wouldn't have to look for it no more.'
'Tempting,' I said. 'But not yet. Stay on Lance awhile longer. I want to see what Marty Siegel digs up. There's a connection here someplace, and I want to know what it is.'
'After a while,' Hawk said, 'you sort of forget why you got hired, don't you?'
'I still haven't found out who killed Trent Rowley.'
'And if you did, and it was some stranger, had nothing to do with all this, would you quit?' Hawk said.
I smiled.
'I'm a curious guy,' I said.
'You surely are,' Hawk said.
'Don't lose Lance. Even if you have to let him know you're there, don't lose him.'
'Remember to whom you are speaking,' Hawk said.
'And keep in mind that Lance has probably killed nine people.'
Hawk grinned.
'I got him there,' Hawk said.
'I'm sure you do.'
59
I t's Byzantine,' Marty said.
'You find it Byzantine?' I said.
'Me, the world's greatest CPA. I'm in awe.'
'Is it legal?' I said.
'Oh, God no,' Marty said.
'Can you explain it to me?'
'I can oversimplify it drastically,' he said.
'Oh good,' I said.
The rain had broken the humid stretch and the day was dry and pleasant. Marty had an office on Staniford Street, and we'd agreed to meet sort of halfway between us. Which is why he and I were sitting on a bench in the Common, not very far from the Park Street Station, watching the street life move past us on Tremont Street. Pigeons and squirrels circled us in case we were interested in feeding them, which we weren't. But neither a pigeon, nor a squirrel, is easily discouraged.
'As far as I can tell, your culprits are Trent Rowley and Bernie Eisen. Do you know what a special purpose entity is?'
'No.'
'A special purpose entity is a device often used for securitization of debt.'
'I urge you to oversimplify,' I said.
'It was always my intention,' Marty said. 'Say you have a shop, Spenser's Sandwich Shop. You have a bunch of customers who buy their sandwiches on credit, for which convenience you charge them one percent a month. So at the end of the day you have earned a hundred bucks plus one percent a month. But there's nothing in your cash register. What you do is, you create a special purpose entity, and call it, say, Susan's Equity Trust. You can invest your own money in this company, but at least three percent of it has to be independent capital. Then you sell your hundred dollars worth of accounts receivable and its interest payments to Susan's Equity Trust. Now at the end of the day you have a hundred in cash. Susan's Equity Trust, in turn, sells shares in itself to investors eager to make one percent a month on the sale of sub sandwiches. So Susan's gets a markup. The investors get their money back in installments plus the one percent interest. Got it?'
'Yeah, sure, banks do that, with mortgages, don't they? Car dealers?'
'Lot of people do it and it's perfectly legitimate.'
'Even when banks and car dealers do it?'
'Amazing but true,' Marty said.
'But in the case of Kinergy?'
'Rowley and Eisen were creating SPEs to hide debt. Remember what I told you. They had a ton of earnings, but not much cash.'
'The old mark to market accounting trick,' I said.
'Very good.'
'So the absence of cash would begin to create debt.'
'Right again,' Marty said.
'Or one or another project was a losing proposition.'
'And payment on the debt would use up cash.'
