Absolute Risk (21 page)

A
fter he disconnected from Gage, Alex Z set his encrypted cell phone down on his desk and made intercom calls to the senior staff of the firm. He then picked up a binder and a folded flowchart and walked up two flights to the conference room next to Gage’s office.

Derrell Williams, Gage’s investigations director, was waiting. Two others entered after Alex Z and sat on either side of Williams.

They all felt the unusual dynamic.

Alex Z, running the meeting. A tattooed computer genius whose authority derived from the trust Gage invested in him.

Williams, in the opposite chair, whose authority derived from his judgment and mastery of investigative technique honed during twenty years with the FBI, the last four as special agent in charge in San Francisco.

Alex Z slid the binder across the rosewood table. Williams flipped it open. The woman on Williams’s right and the man on his left leaned in and scanned the first ten pages as Williams turned them.

Williams pushed the binder toward the woman, then looked up and asked, “How much of this have you verified?”

“I’ve been going at it from another direction,” Alex Z said. “The problem is that we don’t have access to the underlying bank records of the corporations that made the bribes to determine whether they match those that Faith has seen. The result is that I’ve had to focus on what I could prove is false, the kind of data that would show that these officials are lying and that their documents are forgeries.”

Williams nodded. “You mean trying to determine whether or not those who allegedly paid the bribes were in a position to do it—“

“And whether the offshore companies existed and the banks had branches in the relevant places at the relevant time. If we can prove they lied about one thing, we have to doubt the rest of what they’re saying.”

“And have you proved anything false?”

Alex Z shook his head, then unfolded the three-foot-by-three-foot flowchart and turned it toward them.

“This is what it looks like. The boxes on the left are the corporations who paid the most in bribes to officials in Chengdu. The middle boxes are the intermediaries that handled the money. The boxes on the right are the recipients.” Alex Z pointed at the RAID box. “Follow that one.”

Williams traced the alleged money trail from RAID to a company named Tai Hing Consulting in Hong Kong to the bank accounts of Zhao Wo-li in the Cayman Islands and of Zheng Mu-rong in France, and to the accounts of a dozen other Chinese officials.

“Why is there just a dotted line from Tai Hing to Wo-li?” Williams asked. “The rest of the lines are solid.”

“Because the money didn’t travel directly and Wo-li, and his wife didn’t know that part of the route. The RAID money went into the Tai Hing account in Hong Kong, but came out of a numbered account in the Bahamas. Wo-li assumes they’re related entities, maybe two branches of the same company, but he’s not certain.”

Williams nodded.

“Wo-li has now signed an affidavit saying that he negotiated the payment directly with Donald Whitson when he was head of RAID’s Asian operations.”

“That makes both him and RAID guilty of a violation of the Foreign Corrupt Practices Act.”

“Violations, plural. These bribes were renegotiated and paid every year.” Alex Z pointed at the corporate names on the left side of the flowchart. “And they were all doing it. And if Wo-li is telling the whole truth, and the Justice Department chooses to act on it, the boards of RAID, Spectrum, and the rest will be holding their semiannual meetings in Leavenworth for the next ten years.”

“And you’re bringing this to us now …”

“Graham. Things have turned a little rough in the thing he’s working on in Marseilles and he’s worried about Faith and about us.”

Williams narrowed his eyes at Alex Z. “Us?”

“As leverage against him and to keep what we’ve put together from becoming public.”

“At this point it’s all unverified.”

“But what will happen to the markets if they fear that the Chinese might act on their own and seize the

assets of the largest U.S. and European corporations over there? It’ll start a run on the companies’ stock and the stocks of all of the banks that they borrowed money from to build those factories.”

Williams leaned back in his chair and closed his eyes. When he’d been the FBI’s legal attaché in Hong Kong eight years earlier, the Economic and Political Section had estimated that China was underreporting foreign investment by at least fifty percent. It was a hundred and fifty billion dollars a year in the manufacturing part of the economy, not seventy-five billion, and of that, twenty-five percent had been paid out in bribes and kickbacks. He opened his eyes and stared down at the flowchart and saw that the method by which the bribes were paid was lying on the table before him.

The investigators to the left and right of Williams stirred in their seats. They’d seen the implication, too.

Williams looked back at Alex Z and said, “And Graham thinks he may have inadvertently set us up.”

“And Faith, too. He’s pretty sure his calls to her have been intercepted, either at his end or hers, and he’s trying to get her out of there.”

Williams spread his hands, pointing at the two sitting next to him. “Let’s lock the place down and guard the perimeter.”

Both got up and left the room.

Then to Alex Z. “Shut down the network. Internet access. E-mails. Everything.”

Alex Z pointed down toward the two floors of investigators below. “What about them? “

“Wipe the hard drives on a couple laptops for them to share for e-mails.”

The conference phone in the middle of the table beeped. Williams pressed the speaker button.

“What?”

“It’s Ray Kaplan downstairs. Is something going on? I’m watching a rising curve of attacks on our system. It started last night and it’s moving exponentially for the last few hours.”

“Have they gotten in?” Williams asked.

“Not yet.”

“Disconnect us.”

Kaplan’s voice rose. “You mean—”

“Unplug anything that connects our computers to the outside world.”

T
he smoke from Old Cat’s unfiltered cigarette merged with the fog as he walked across the parking lot and away from the generator building. The whispering and snoring and soft lullabies he heard through the thin cloth of the makeshift tents intermingled with memories of the communal life on the collective farm of his youth.

He continued for a hundred yards beyond the last tent and the last guard, until there was only silence, except for his slow drag of air through the tobacco and his long exhale. The low mist separated and he could see stars against the blackness and high clouds side-lit by the moon. He shivered as the mist closed over him again.

His mind drifted back to nights listening to the elderly veterans of the Long March who’d fled the advance of the Nationalists, the long, circling retreat, and he wondered whether a long march of defeat awaited him, too, or whether it would be a short walk with his hands tied behind him that would end with a bullet in the back of his—

“Don’t move.”

The voice was low and harsh.

Old Cat grabbed for the semiautomatic in his coat pocket. Arms locked on to his.

Warm breath wafted toward him from faces inches away. Cold metal dug into his ear.

“Make a sound,” the voice said, “and I’ll shoot.”

Handcuffs snapped around his wrists. Tape slapped against his mouth. Hands clamped onto his elbows and turned him ninety degrees and forced him forward. He stumbled two steps, then his feet caught up with him. A car motor started. A door opened, but the inside light stayed dark.

From fifteen feet away, he recognized that it was a PLA Brave Warrior combat vehicle. He’d seen them on the roads around Chengdu and often wondered who was the enemy.

Now he knew. And it was him.

Soldiers bracketed him in the rear seat as the SUV crept across the parking lot and toward the road leading out of the special economic zone. As they drove toward the gate, Old Cat glanced back at the lamp-lit tents, imagining the comforting sounds he’d heard just minutes earlier, and the nostalgic moments that followed, and became aware that while he regretted dying, he wasn’t afraid.

The headlights came on and illuminated the near highway, but faded into a distant darkness—

And that was it. That was the source of his regret: a future he couldn’t imagine.

Perhaps if he’d gone to college, maybe even as far as high school, he might’ve been able to devise a destination for himself and for the rebellion.

Instead, all he knew, all any of them knew, was what they were fleeing from:

Confucianism had been death.

Nationalism had been death.

Communism had been death.

And now capitalism had become death.

They had all believed that a rebellion would come someday—all the starving farmers and the sick children and the slaves and the wage-slave workers and the landless laborers.

No, that wasn’t it.

They had all merely hoped. And since it had been mere hope, they hadn’t prepared, and not just with arms, but with ideas.

Old Cat watched the lights of the Chengdu Military Air Base rise up in the distance, a razor-edged jewel stark-lit in the surrounding dark countryside.

And he wondered how they would kill him.

Preparation. How does one prepare? Maybe that had been the Chinese problem all along, the legacy of Buddhism. One endures. One suffers. One burns incense for ancestors who suffered before. If life is suffering, then death is no more than a flame gone out and memory is no more than dissipating smoke, and the future can be no different than the past.

An image of the innocent face of the Christian kid came to him. What was his name? Jian-jun? Yes. Jian-jun. He had a good story to tell, but his religion had no answer either.

The man on the cross, would he build a car or dam a river or spray pesticides? If not, what work would he do?

Old Cat then remembered a cartoon he’d seen years earlier: a textile worker looking up from where he was

sewing a “What Would Jesus Do?” baseball cap and saying, “I’m not sure what Jesus would do, but I’m sure he wouldn’t be doing this.”

Old Cat thought of the anthropologist sleeping in the storage room. She must have answers to these questions. She’d spent her life watching, listening, thinking. Maybe she had seen a society where people didn’t poison each other, where all was not suffering and exploitation.

The Brave Warrior came to a stop.

A gate slid open.

Soldiers saluted. Their arms sleeved in sharp-creased jackets. Their heads encased in matte-black helmets. Their machine gun barrels glinting in the headlights.

If only there’d been time to ask.

T
he hearing will come to order.”

Senator Geoff Prescott struck his gavel a second time and the news reporters and photographers spread into streams moving from the front of the room and circling toward their seats. He then looked at Milton Abrams.

“I apologize for the delay due to the archaic nature of the Senate’s roll call procedures, Mr. Chairman.” Prescott smiled, a smile that Abrams assumed he was not alone in recognizing communicated the opposite of the sincerity that Prescott intended. Abrams suspected that Prescott enjoyed as much as the others hearing his name called in the Senate chamber. “It’s not just the economy that needs modernizing.”

Prescott looked over the notes lying before him. “Where were we?” An aide stepped forward and then pointed down. “Ah, yes. I see. We’d just gotten to the issue of inflation and the theory under which your predecessor operated, in effect, claiming that price stability requires less than a hundred percent employment.”

Abrams nodded.

“But let’s clarify our terms,” Abrams said. “Until I was confirmed as Federal Reserve chairman, the phrase ‘full employment’ meant up to seven percent unemployment, and price stability meant inflation at a rate that didn’t threaten what was called full employment. What I did was to simply—“

“You made your ideas clear at your confirmation hearing and we all know you executed it.” Prescott glanced at his watch. “Can’t you advance the ball here a little bit?”

Abrams thought of Viz McBride sitting in the back row of the hearing room and remembered the size of his hand when he’d picked up a water glass in the kitchen. It was so large that his fingers met the base of his palm—and Abrams imagined it wrapped around Prescott’s throat.

“The point I intended to make, Senator, was that the figures that we’ve relied on for the last four administrations have underestimated inflation by at least fifty percent, perhaps more, and the same is true of unemployment.”

Abrams pointed his finger over his shoulder at the business press.

“The markets need not panic,” Abrams said. “Indeed, anyone who trades in the next few hours based on those comments is a fool. The world is what it is. The economy is what it is. None of that has changed in the last thirty seconds.”

Abrams noticed that three of the twelve senators smiled, seven frowned, and two were looking at their BlackBerrys and had missed the exchange altogether.

Prescott’s face flushed.

“You’re saying that the last four presidents have been

lying to the American people about the true rates of inflation and unemployment?”

Abrams ground his right knuckles into his left palm under the table. He wanted to answer by saying that they couldn’t have been lying because none of them understood enough about the economy to know what the truth really was. They lied no more than his brother-in-law’s myna bird did when it proclaimed to anyone entering the living room that the sky was falling.

“No, Senator. I think that they were misled by certain conceptual issues of measurement and definition.”

“And the point is?”

“That we need to be realistic about inflation, about real inflation. The world is watching. The fact that we lie to ourselves doesn’t mean that foreign governments on whom we rely to buy our debt aren’t telling themselves the truth.” Abrams raised his finger. “The only reason—the only reason—that the U.S. bond market hasn’t collapsed in recent years is that foreign purchasers of our debt—based on their own, independent calculations and based on readily available data—still believe that despite the true rates of inflation and unemployment we’re still a good risk.”

Abrams let them absorb that thought, then said, “In addition to inflation as normally defined, there is also what I call functional inflation. Eighteen percent interest on credit card debt and the decline in real wages during the last thirty-five years, both have the same effect as inflation, but it has not been recognized as such.”

“Say our real inflation rate is seven percent,” Prescott said, “say our real unemployment rate is fourteen percent—I’m not conceding that it is—but just say. What does that mean for our bond markets?”

“It means that if there’s a spike in worldwide commodity prices, for example, for tin, copper, and platinum, inflation will skyrocket. We won’t be able to pay our debts and the usual buyers of our treasury bonds will back away.”

“To say nothing of what would happen if oil prices increase again.”

Abrams nodded.

“And if that happens all at once? “

Abrams heard the rustle of the business reporters leaning forward in their seats to make sure that they got the quote right.

“The economy won’t recover for a generation.”

Abrams thought for a moment, then decided to put the problem in the kind of concrete terms the public would understand.

“Let’s put it this way. To the holders of treasury bonds alone, we owe an amount equal to the gross domestic product of the U.S. for a single year. That is, all of the goods and services produced for consumption inside of the country—and there are a couple of ways at looking at how to pay it off.”

Abrams spread his hands.

“Just for purposes of perspective, here’s a hypothetical. Imagine paying it off in one year. Every penny that anyone earns goes to pay the debt. That means that no one in the U.S. eats anything, burns any fuel, drives anywhere, buys anything.”

Abrams watched a smirk appear on Prescott’s face. Apparently the only hypotheticals he appreciated were the ones he himself offered.

“Imagine on the other hand that we pay it off in ten years,” Abrams continued. “In that case, American lives

will be limited to three things. Working, eating, and sleeping. And every penny that isn’t needed to pay for housing or for food, won’t go into movie tickers or cell phone bills or iPods, but will travel offshore to pay off the debt.”

Abrams watched the senators swallow and reach for their collars and dress necklines as if the truth was suffocating them.

Senator Prescott’s face flushed again.

“That’s science fiction, Mr. Chairman. Not economics. You can take any scenario and stretch it and expand it and turn it into a nightmare.”

Prescott’s pounding finger thunked against the oak dais, reverberating through the microphone in time with his sentences like a creeping monster.

“And I see no benefit in playing out in this hearing a fantasy of zombies and the world coming to an end.”