“Highway Sixty-five is the main road from the Twin Cities up to the Hayward Lakes resorts,” Levine said. “My husband worked on the project for six years, it was a big deal, you bet.” She dug around in the kitchen cabinet, found a Wisconsin road map, and traced the line of the highway with a finger. “The project was on the up-and-up. The project saved lives . . . It was only later that the trouble started. My husband was a comptroller on the project, and there was trouble right away with equipment. That’s all on disk one, the books.”
The general contractor, ITEM, subcontracted with several dozen smaller independent companies to do the planning, environmental studies, equipment and materials supply, earthmoving, and paving.
The key was in the heavy equipment. One of the companies, Cor-Nine, leased twenty-odd pieces of heavy equipment, mostly heavy dump trucks, along with a few graders, to ITEM over four years, for a total package price of $7.3 million. They also paid Cor-Nine $210,000 for maintenance and repairs.
“That’s what really made me laugh, when Ron told me about it,” Levine said. “The maintenance, that was hilarious.”
“Too much, or not enough?” Jake asked.
“I suppose you’d say too much, since the equipment didn’t exist,” Levine said.
“Didn’t exist.”
“Didn’t exist. Ron said you couldn’t see it, even at the time. The equipment could always be somewhere else . . . You’re only talking about one piece for every five miles or so of the road, and there were so many little contractors coming and going that nobody but ITEM knew who was doing what.”
“They did the whole highway at the same time? They didn’t just do ten miles at a time?”
“Normally, a project would be staged, maybe over fifteen years or so. To maximize the return, they had to do the whole thing while Governor Landers was in office,” she said. “They already had a two-lane highway going up, so they constructed another two lanes beside it, all at once. After that was done, they coordinated the old highway with the new highway in stages—essentially, cleanup work, building intersections. That was legitimate, too. It minimized the traffic and business disturbances in all these small towns along the way . . .” She tapped the small towns on the map.
“And Cor-Nine was Landers and his pals.”
“No, no. Cor-Nine was some people you never heard of, a bunch of Frenchmen.”
“Frenchmen?”
“Yeah. They were a French-based equipment-leasing corporation that, after you traced it to France, came back to the Bahamas and then disappeared,” she said. “If anybody asked, ITEM could say that all they knew was that they were leasing equipment at a good price. If the money disappeared, it was some kind of French tax-avoidance deal. Couldn’t blame ITEM for that.”
“You seem to know an awful lot about it,” Jake commented.
“I was a bookkeeper before I got married,” she said. “I know about money.”
“So how did the money get to Landers?”
“Through his brother. Sam.”
“The guy in Texas,” Jake said. The vice president’s colorful sibling, big hat and big boots, a lime green Cadillac with longhorns welded to the hood.
“Right. Sam Landers goes down to Texas, a hot real-estate market for retirees—no state income tax, warm weather. He sets up a development company. The vice president and his friends own about seventy-five percent of it and Sam has the rest. The key thing, though, is the financing. The Landers family had no money—but Sam managed to get financing for his Padre Island apartments from . . .”
“A Bahamas bank,” Jake said.
“Yes. He builds the apartments—they are quite nice, I understand—repays his loans, and walks away with a nice profit. A very nice profit. The profit is nice because the Bahamas money is buried in the construction. For the money he supposedly puts into them, the apartments should sell for $450,000. But, because he’s not actually repaying the loans, he’s building $550,000 apartments. Nothing else can compare. And they’re snapped up by retirees who can see the deal they’re getting, but which is invisible on paper. He pays his taxes—no state income tax in Texas, remember—and the money is back in the United States, all legal and tax-paid.”
“But they lose forty percent to the feds.”
“Not really. They actually made some profit on the construction. They came out of it with probably five to six million. And then, with a perfectly good development company, and with some experience and a track record, they started doing real projects. They’ve been making money ever since. The vice president is probably worth fifteen million. Maybe twenty.”
“How did your husband know about all the different parts of the deal?”
“He watched the whole thing get set up. There’s a man named Carson, Ron’s boss, he told Ron to keep his nose out of it. That stuff goes on in any big state project. But Ron knew there’d be trouble sooner or later, and he didn’t want to be the one who went to jail, so he made copies of everything. On the sly. Carson’s still one of the big shots at ITEM. He held Sam Landers’s hand through the first couple of apartment projects. And he kept books, on the computer, you know, and Ron made copies. Those are the DVDs.”
They spent an hour sitting on the front-room couch, looking at paper, loading the DVDs into Jake’s notebook, going through the notes, the records, the bank documents, the real estate titles, and tax documents. Altogether, the package was as devastating as advertised. If true.
“If true,” Jake said.
“Well, Al Green said that the thing is, everything here has a public record behind it. Records that the Landerses can’t dodge,” Levine said. “It’s all visible, but nobody could ever tie it together without inside knowledge.”
Jake looked at his watch. “I gotta get you out of here.”
Now she was nervous again. “What’s going to happen?”
