Who was Wanda’s inside source on this investigation?
It was Justin who insisted on adding that last line. He knew Wanda well, he said. Knew the way she worked. She never attempted an investigation of this potential scope—something big enough to link organized crime to Wall Street—without having some sort of inside contact. He told Reggie he’d bet her everything he owned on it. She said, “No, but I’d like to bet a dinner.” When he looked up, confused, she said, “If you’re wrong you have to have dinner with me. My treat. I’ll find someplace expensive where you don’t have to wear a tie.”
Justin smiled sadly—or maybe it was just kindly, Reggie thought—and shook his head. “No bet,” he told her. “Sorry. But . . . you know what? I don’t have to explain. That’s just not going to happen, though. I appreciate what you’re trying to do, but it’s not necessary. No dinner, no socializing. Okay?”
She nodded, for the first time embarrassed in front of him. And then she did her best to recover, cleared her throat and said, “We’ve got to get somebody looking at the Ascension trades, see what the exchange of moneys is all about.” He nodded in agreement; she thought he was embarrassed, too. Then she said, “And we’ve got to go through Ellis’s e-mails. There are a lot of them, but they might turn something up.”
“Why don’t you take the e-mails?” he said. “I think I’ve got the right guy to examine the trades.”
“Your father’s guy?”
“Roger.”
“Can he do it quickly?”
“I’ll try to get him down this afternoon. If he can’t, we’ll see if your guys can help. But Roger knows a hell of a lot. And what he doesn’t know, he’ll research to death.”
“And what about you?”
“I need a little time to think.”
She cocked her head and both shook her head and grinned the smallest of grins. She couldn’t help herself. “You’ve got something.”
“No,” he said, “just a few things nagging at me.”
“What?”
“I don’t know,” he said. “I can’t tell yet. Maybe nothing.”
Reggie hesitated. She saw the quick look of discomfort cross his face; he was worried she was going to bring up a social dinner again, so she quickly said, “Listen, there’s something I’m supposed to do, but I want to check with you first.” He waited and she went on, “I have to report in to Zach Fletcher.”
“Okay.”
“Here’s the thing. On this type of case, they like to work with the local authorities. So he’ll tell Silverbush at least some of what we know.”
“You’re asking me because . . . ?”
“I’m asking you because I want to make sure it’s all right with you before I do it. I don’t know how you feel about information getting back to the DA. And I thought you’d want to tell me if there’s some specific information you’d like us to hold back.”
He thought about it for a moment. “Go ahead,” he said.
“With everything?” And when he nodded, she said, “You sure?”
“Pretty sure,” Justin told her. “Either his head’ll start spinning when he realizes this case has moved so far beyond him, or he’ll just go blindly on and dig his own grave.”
“An even deeper one than he’s already been digging, you mean.”
“Exactly.”
“If we bring him in, you realize it means there’s a chance the link between Harmon and LaSalle and Wanda might become public.”
He nodded again. “It’s all right. Maybe it should now. Keeping it to ourselves hasn’t helped us much. Maybe it’ll bring something out we haven’t been able to uncover.”
Her head bobbed up and down a bit in agreement. Then she gathered up the stack of printed e-mails. “Might as well go over these at the motel, huh?”
He knew she wanted him to ask her to stay and work with him. But he didn’t. So she said she’d check in later. Justin looked at his watch. 11 a.m. He went to the phone.
“Dad,” he said when he was put through to his father’s office. “I’m wondering if I can borrow Roger Mallone.”
“You coming up?” Jonathan Westwood asked.
“I was kind of hoping he’d come down.”
“When?”
“I thought I’d try to hire a plane to get him here as soon as possible.”
“Today?”
“Right now.”
“You paying him?” Jonathan asked.
“Aren’t
you
?” Justin responded. And he thought he almost got a laugh. He didn’t. But almost.
“What time do you want him there?” Jonathan said.
Roger Mallone was four or five years younger than Justin. Parts of him—his face, his ruddy complexion, particularly his eyes, which didn’t have much sadness or much introspection—looked a lot younger than Justin. But Justin was surprised to see that his father’s employee’s body had started to look like an old man’s. He’d put on weight, and his arms were looking heavy and fleshy. He couldn’t yet be described as having gone to seed, but he was on his way. Since the last time Justin had seen him, just around a year earlier, Roger looked like he’d gone from being a tennis player to being a golfer. He was thirty-five and looked forty. Justin thought that, at this rate, Roger would be a forty-year-old who looked fifty. And at fifty he’d look sixty-five. Maybe this was the price of success. Justin sucked in his own gut and made a mental note that he’d get back to the gym as soon as possible. And maybe even start yoga lessons again.
Roger was Jonathan Westwood’s chief financial officer. He had rapidly moved up the corporate ladder to become the elder Westwood’s most trusted adviser at the banks Jonathan owned and ran. Mallone was as thorough as a money man could be and equally honest and hardworking. Justin figured the guy never slept because you could name any stock, any company, any business-related matter at all, and Roger could immediately give you the up-to-the-second latest information on the subject.
The one thing Roger Mallone wasn’t was brave. Justin had brought him into a collision course with two earlier cases and, while Roger had proved invaluable both times, he was not happy with his proximity to danger. The first time Roger had been dragged in unwillingly—at gunpoint, in fact. And the gun had been held by Justin. The second time Roger had, more or less, volunteered; but he’d crossed paths with Bruno and, at their first encounter, a frightened Roger had done just about everything but piss in his pants. Justin was fairly sure that the man’s bladder had not yet fully recovered.
This third time around, however, Roger was being as cooperative as it was possible to be. Perhaps it was because he felt safe this time—Justin had assured him that there was no immediate danger lurking around the corner. Or perhaps it was because Roger had, to Justin’s surprise, been accompanied on this trip by Jonathan Westwood.
Justin’s father was at the door when Justin opened it to welcome Roger. They shook hands warmly, gave each other a partial hug, then Justin had welcomed the two men into his living room.
“This is a surprise,” he said to his father.
“I decided as long as you were paying for the transportation, I’d take advantage of it.”
“My pleasure.”
“I’m assuming this has to do with what happened to Ronald,” Jonathan said.
Justin nodded. “And a lot more than that, too.” He filled both men in on what had been happening. Not every detail, but anything he thought might be relevant, to take advantage of their financial expertise. Justin was not unhappy that his father was sitting in on the session. Jonathan Westwood had a clear and incisive way of looking at complicated problems. He’d helped Justin focus on potential solutions in the past. Jonathan was very good at weeding out extraneous information and zeroing in on the things that mattered.
Justin had reached the point in his tale where he could give the details of his visit to Ascension and tell them the various elements of Ben’s computer thievery. Justin’s father sat passively, taking it all in, but Justin could see Roger’s eyes light up at the thought of poring over another firm’s trading history.
When Justin had finished filling them in, Roger just said, “Give me everything and let me go through it.”
“It’s a lot,” Justin said.
“I know it’s a lot. So why don’t you just leave me to it?”
“Don’t you want us to do anything?” Justin asked.
“And what is it you think you can do?” Roger asked. And when Justin shrugged, Roger said, “This is going to be a lot of info to slog through, and a lot of it will be technical and boring. To you, not to me. So why don’t the two of you get out of here? Come back in a few hours.”
Jonathan looked at his son and raised his eyebrows, a look that said,
He wants it, let him have it.
The two Westwoods wished Roger Mallone luck, and headed out the door.
“Wait,” Roger said just as the door was about to shut behind them. “You’ve gone beyond dial-up, right?”
“All the way to Wi-Fi.”
Roger did his best Marv Albert impersonation: clenched his fist and hissed out a quiet, “Yessss.”
“Go wild,” Justin said. And this time he and his father actually got to leave.
Justin asked his father if they could walk awhile. He said he was glad that Roger had wanted to be alone. He had things he wanted to ask Jonathan, things he wanted to pick his brains about. Jonathan said he was more than happy to stroll. And he told his son to pick away.
“I had a strange reaction to the Ascension people and offices,” Justin said as they began to walk in the direction of the center of the charming old whaling village.
“Strange how?” his father asked.
“I’m not naïve,” Justin went on. “Anything but. You know I don’t expect—well, the best, let’s say—out of people. But these guys were different.”
“Different from whom?”
“Different from you. Different from the kind of moneyed people I know.”
“Hedgehoggers? They
are
different. They live in a different world. At least it’s different from the one I live in.”
“Talk to me about it.”
“Tell me what you want to know.”
“Everything,” Justin said. “Anything. It’s the way I like to work. Learn things, get a feel for the overall picture. Then I’ll see if something specific sticks. See what fits into the puzzle . . . or see what doesn’t fit. Sometimes that’s just as important.” He noticed his father was staring at him. “What?”
“That’s the way I work, too. When I’m looking at a company that wants a loan, that’s what I do. I learn about their business, I learn about the people running their business, I listen to them talk, watch them when they talk.”
“Same thing, really,” Justin said. “It’s all about getting it right.”
Jonathan came back with a “hmmm,” and then he picked up the pace of their walk and said, “One of the first hedge fund managers I ever met—maybe ten, twelve years ago—his arrogance was astonishing. I remember him coming to a meeting and basically he was saying that if I didn’t get him what he wanted, he’d just
buy
me. Buy the big business, take the small thing he wanted out of it, then dismantle it, sell off the spare parts. I remember he looked at me and said he didn’t care about the way things used to be done, he was the new breed, the new thinker. He said he was a man with no history. I remember he actually said he was like a phoenix, that he’d risen from the ashes as a brand-new person. He told me he was a completely self-made man.”
“What did you say?”
“I told him he must also be a very religious man because it was clear that he worshiped his creator.”
“I bet he didn’t like that.”
“He couldn’t have cared less. Too self-absorbed, too absorbed with money and greed to care about anything that anyone else said or thought.”
“What happened to him?”
“Made half a billion dollars in about two years. Lost a billion the next year. I think he’s working for his father now, somewhere in the Midwest.” Jonathan Westwood took a deep breath. Justin was startled to hear a faint wheeze. The first indication of frailty he’d ever had from his father. “There are about seven thousand hedge funds in the United States now. Ten years ago, there were maybe three, four hundred. They control a lot of money. A
lot
of money. Right now, probably over nine hundred billion dollars. And they control it quietly and secretly.”
“Ascension manages about two billion bucks.”
“Small to mid-range,” Jonathan said. “There are a lot of funds in the two- to five-billion-dollar range. That’s small in this universe. But you know what you can buy with five billion dollars?” Before Justin could answer, Jonathan said, “Anything you want.” Then he said, “The people who run these funds, they personally make sixty, seventy, a hundred million dollars a year.”
Justin whistled in amazement. “I knew about it, of course. But somehow I didn’t quite realize . . .”
“Very few people do. You know how it works?”
“I know a little bit, but keep talking.”
So Jonathan talked. And Justin listened as they strolled. He listened as Jonathan told him that hedge funds were basically started for rich people who wanted someone else to manage chunks of their money. The funds were open only to wealthy investors, and even now the minimum you could invest to get into a fund he’d heard about was twenty-five thousand dollars, and many wouldn’t let you in for less than a million. Because they were basically serving rich people, they didn’t have the same government restrictions and oversight that, say, a mutual fund would, when small investors have their money at risk. Hedge funds and hedgehoggers could move into almost any area that attracted them. They could trade equities, currencies, and debt. They could make loans, buy companies, and control companies and run them if they thought they had the know-how.
“And how do these guys, guys like Evan Harmon, make their money?” Justin asked.
“They take a two percent fee off the top from their investors. And twenty percent of the profit. Ascension has two billion dollars to invest? That means they’re guaranteed an income of forty million dollars when they wake up on the first of the year. That’s if they
lose
money. If they make a ten percent investment profit on two billion, the fund has a profit of two hundred million. Twenty percent of that brings in forty million more dollars to the firm. That’s a nice little eighty-million-dollar income right there. And without crazy overhead. If push came to shove, one person could probably manage a hundred million-dollar funds from his garage as long as he had a computer and a few phone lines.”
Jonathan said that the kind of money people made managing hedge funds over the past decade had changed the whole world. Investors lost sight of the products—not to mention the people and the companies—that were being invested in. The only things that began to matter were the profits—and then what mattered even more were all the toys that could be bought with those profits: the Warhols and Picassos, the Gulfstreams and Falcons, the horses and the horse farms, and the tens-of-thousands-square-foot mansions bought on miles of private beaches.
Justin asked what could go wrong with these funds, how they could blow up. When his father wanted to know why he wanted to know, Justin explained that it’s the way cops had to think: They have to look for the worst possible scenario. “It’s what people do when things go wrong that keeps me busy,” he said. “People don’t do desperate things—like commit murder—when they’re getting what they want.”
“It’s simple. Hedge funds blow up if they lose money for too long,” Jonathan said. “Or even short term—if they lose too much too quickly.” What happens, he explained, is what often happens with companies. Success breeds the desire for more success: the urge to get bigger and bring in more and more and more. The hedgehog business has gotten so competitive, too, they start to care about the appearance, and they build up overhead, and suddenly if you have a down period you’re in way over your head. You start with a fancy office, a lot of midtown Manhattan space. Your fund’s too big to manage by yourself, or even as a two-
person team, so you’ve got to pay analysts and traders and accountants. And buy computers and Bloomberg terminals and research services. “Soon you can’t live on the fixed fee; two percent doesn’t cover it. And you’ve bought your Gulfstream and the million-dollar memberships in several different golf clubs and the house in Palm Beach and your wife has her charity balls, and guess what? If you don’t make a profit for two or three quarters in a row, people start pulling out their money. Once that happens, you’re dead.”
“Gotta sell the private jet, huh?”
“Unless the creditors come and take it away.”
“Tell me about the people. The hedgehoggers.”
“It’s impossible to make absolute generalizations, you know that.”
“Then just give me your general impressions. I promise I won’t go around thinking that all hedge fund guys are evil sons of bitches.”
Jonathan shook his head disapprovingly at his son’s flippancy. But he said, “It’s a different game than the one investment bankers play. It’s about the thrill. And it’s not even about making a score . . . it’s about making a
big
score. The biggest score. If you want to play in this game, you’ve got to have some balls. And I mean some iron balls. They’re not interested in small bets. You put five or ten million dollars into something, what’s five or ten million against a billion? It’s nothing. It’s meaningless. But if you have a billion-dollar fund and you see your opportunity and you put fifty million or a hundred million down, then you’ve got something. You can shake things up. Have an impact. That’s the way they think. They don’t believe in protecting themselves. If they think they’ve got something good, they’ll put ten percent of their assets down on it. Sometimes more. You realize what a gamble that is? They think like hot rollers at a craps table. The more you win, the more you bet. You get on a good enough winning streak, you break the bank. But if you crap out too many times, you’re out of business. You’re also probably a heart attack waiting to happen or you’re an alcoholic or you can’t sleep for an hour without popping a dozen pills.” Jonathan took a deep breath now and, again, Justin heard a wheeze coming from within his father’s chest. “Have I told you what you wanted to know?”
“It’s a start,” Justin said. “You still like meatball heroes?”
“Your mother doesn’t approve of meatball heroes.”
“Is she meeting us for lunch?”
Jonathan acknowledged his son’s logic with a brief nod of his head. “Good hero place, is it?”
“The best,” Justin said. And when Jonathan smiled wistfully, his son added, “It’s on me.”
It was the first time Togo had ever gotten his instructions by phone. The man said there was not time to meet, that things were moving quickly around them and they had to move just as quickly. Even quicker, he said.