Authors: Brian Haig
He explained, “Swaps are like barter. Morris and whoever they’re swapping with make up some artificial exchange rate for the value of each other’s services, and then they both book it as revenue.” He allowed me a moment to think about that, then said, “But it’s not.”
“And this is legal?”
“Legal . . . ? Yes. Nearly all telecoms do it.”
“So what’s the problem?”
“One, it’s not necessarily real money. Two, it can be abused.”
“How?”
“Take Morris—say it has excess capacity because it’s not meeting its growth targets. Like, it built a highway that handles a million cars a day, but only half a million cars are paying tolls. Got that?”
“Go on.”
“So it says to this other company, ‘Hey, I’ll give you space for a quarter of a million cars in exchange for space for a hundred thousand cars on your roads. The net value to each of us is eighty mil. ’”
“That’s what swapping is?”
“An idiot’s interpretation of it.” He paused, then asked, “Do you think you understand it?”
“Got it.”
Prick.
John went on, “They’re purchasing each other’s services but you have no way of knowing if there’s any value.”
“Why?”
“Maybe it’s a paper exchange. Neither company actually ends up sending cars onto the other guy’s network, so they’re trading unused road space for unused road space, and it all stays unused road space.”
“So it’s a chimera?”
“It might be. It’s even worse if they’re round-tripping.”
“Round-tripping?”
“Right. Usually this involves a hidden exchange inside the deal. Since they’re both exchanging services, what happens is one or the other side inflates the value of what it’s exchanging. For example, Morris might only provide twenty million in services but bill it at eighty, and book the other sixty as profit. Or vice versa.” He added, “As an investor, I might be more comfortable if I knew who Morris is swapping with.”
Wrong, wrong, wrong, big brother. I asked him, “Do you know Jason Morris?”
“Yeah, but not well. We met when he was still in an entrepreneurial firm and I was running around looking for investment money for my Internet start-up.”
“What did you think of him?”
“A visionary—lots of smarts, lots of energy, and I’d trade all my riches for his poontang list. The guy only sleeps about three hours a night. The rest of the time he’s making money or fucking.” He paused, then concluded, “Pretty much what the press says he is.”
“Is he honorable?”
He laughed. “There is no honor in business. There’s law and how close you adhere to it.” He paused, then added, “More relevantly . . . there’s profit.”
“Do you like him?”
“I bought his stock. Why?”
“No particular reason.”
He laughed again. Then he said, “Regarding Morris, listen close.”
“I’m listening.”
“Three kinds of guys get into this biz. One, the techie who loves what he builds and can’t wait for everybody else to love and admire it. Two, the money guy who’s in it to see how much he can make.”
He stopped talking. I reminded John, “You mentioned a third?”
“Jason—guys like him. His whole identity is wrapped up in his company. It’s an extension of him. That company is his ego.”
Left unsaid was that my brother had cashed out at the height of the boom, banked his winnings, and retired at the decrepit age of thirty-six. His company went bankrupt a year later. What did that make him?
Anyway, I asked, “Is it a good company?”
He replied, “Look, someday telephones will be collecting dust in museums. People will point at them and giggle . . . that people actually only
talked
to one another, without seeing their faces, they’ll think that’s quaint. Videophones, my boy . . . that’s the next great big thing.”
“But really, John, is it a good company?”
“You’re not listening.”
“Am too.”
“Jason plans to usher that in. He’s not just fiber optics, he’s developing the compression and decompression systems that will allow moving pictures to work across phone lines. There’s every possibility Morris Networks will be the AT&T of the twenty-first century. Jason will buy and sell Bill Gates a dozen times over.”
“Quit exaggerating.”
“Twenty times over.”
“If his ass is attached to such a gold mine, why’s he swapping?”
He replied, “Turn to page six, fifth line down.” I did, and he continued, “R&D expenditures—forty percent of his revenue. Jason’s in a race. He has to get the inventions and patents that can deliver videophones before his competitors. See his problem?”
“He has to stay in business long enough.”
“And telecom CEOs are dropping like flies. Global Crossing, WorldCom, Qwest, and those are just the big ones. They miss a few growth targets, their stock tanks, the banks lower their credit ratings, then the lawyers show up for the Chapter 11 filings and stockholder lawsuits.”
“And it’s these swaps keeping Morris afloat?”
“You just got your business degree. Listen, I have to run. I just bought a new yacht and I’m dying to try it out.”
It’s great having a successful brother. Really.
So, what did I have? Jason Morris’s business survival depended on a shady company that meets his lawyers in secretive, out-of-the-way places, that brings along a bunch of unsavory-looking goons, that dictates the terms of contracts. And the executives of that same consortium completely clam up when I ask them to name their holdings.
All of which added up to what?
A scene from
The Godfather
popped into my head, a corrupt old man with his daggerlike finger in Jason Morris’s chest as he droned on about the deal he couldn’t refuse, while Jason dreamed of the day he could buy and sell everybody on the Forbes 400 list.
Money, money, money—the root of all evil. Money tied to ego, the root of the most sublime evil.
M
Y ANSWERING MACHINE HELD THREE CALLS FROM CY BERGER. HE KEPT ASKing me to call him back as soon as it was convenient, and I assumed by that he meant convenient for me. But I didn’t care what he meant; I’d call when I was ready. And I wasn’t. Not yet.
Aside from my other growing problems, the firm was threatening me and Janet with charges serious enough to merit disbarment and even jail. But the firm needed my signature on the audit, which was leverage, albeit limited leverage. There surely was a plan B, which probably involved drafting some compliant associate to sign the audit. But there was a roomful of accountants who had witnessed my daily involvement in the audit, and legal niceties had to be met, so the compliant associate would have to go back and review every aspect of the process, and the timeline would no doubt slip beyond Friday. At the moment, I was a far more convenient solution, bordering on becoming completely inconvenient.
So I called Cy, and we exchanged a few phony pleasantries before he got around to it, asking almost nonchalantly, “So Sean, we had a difficult morning, didn’t we?”
No,
we
didn’t have a difficult morning, and it was so asinine to suggest otherwise that I decided not to reply.
The pause lasted long enough for Cy to realize that this tack would go nowhere. Finally, he said, “Well, I believe the ball’s in your court.”
“You mean, what will it take for me to sign the audit?”
“I’m going to be blunt here. That’s what we’re wondering.”
“I’m innocent and I want to clear my name.”
“Fair enough. Harold told you, you’ll have that chance.”
“And Hal implied it would be a kangaroo court.”
After a moment, he said, “Hal is very protective of the firm. He has a tendency to be melodramatic.”
“Is that a fancy word for being an asshole?”
He chuckled. “It will be fair, Sean.” He then promised, “You have my word on this.”
“But that still poses a problem, doesn’t it?”
“What problem?”
“I need to get into your server to prove my innocence.”
“Oh. . . I see you what you mean.”
“And I’ll need one of your computer people to guide me through the database.”
“Even if I could allow that, it’s too late. We need to get that audit into Defense tomorrow.”
“No problem. I’ll work all night.”
After a considerable pause, he said, “All right. But Hal has to be there.”
“Wrong. Hal will get a printout from the server in the morning. Remember, the server sees all and remembers all.”
He realized that my request was a small price to pay and said, “Fair enough.”
So I walked out of the paneled elevator an hour later and entered the seventh floor, where, with the notable exception of Mr. Piggy-eyes, the firm’s entire administrative staff was crammed into a sprawling cube farm. Cy had told me that a computer expert named Cheryl would be waiting, and indeed, a skinny black woman of about forty was seated beside the water cooler, her nose stuffed inside the latest issue of
Glamour
. She did not look like a computer nerd, she looked like an overstressed, worn-down sub-urban mom, but I suppose they come in all flavors.
I introduced myself and she immediately complained, “I got a little boy bein’ watched by my mama and don’t want to be doin’ this all night.”
“If you’re good, you won’t.”
“I’m good.” She sized me up and asked, “So . . . what you wanta see?”
I explained that Lisa Morrow’s active files had been wiped clean, and I needed to see if there was a record of her messages magnetically lingering in the wiry bowels of the server.
“ ’Course there is,” she informed me, and we then worked our way through the cube maze and eventually squeezed ourselves into her office carrel.
Cheryl fell into her chair, typed a few commands into her computer, then pointed at a chair and ordered, “Sit. And keep your mouth shut. I don’t like being bothered when I’m workin’.”
Fine by me. I moved a stack of manuals off the chair, laid them on the floor, and sat. Cheryl was already typing commands and long lines of incomprehensible code were flashing incessantly across the screen. She was really grumpy.
She asked, “What you say her name was?”
“Morrow . . . Lisa Morrow.”
She nodded. “She the blond chick from the Army used to work upstairs?”
“Yup.”
“Heard she died.”
“She was murdered, actually.”
“Uh-huh. I heard she was good folk.” She studied her screen and said, “What you wanta look at?”
“Lisa’s e-mail going back, say, three months.”
She continued typing. “Everything’s kept going back two years.”
I watched what she was doing. In a way, I envy people who understand how the byzantine machine works, and in a larger way I don’t. Most programmers are weird. When I was a kid we were told not to sit too close to the TV, or hair would grow on our palms—but maybe I’ve got my warnings confused. It strikes me today’s mommies should warn their kids that too much time on your computer turns you into a dimwit.
She finally said, “Shit, shit, shit. Would ya look at this.”
“What?”
“A firewall ’round her file.” I suppose I looked a bit clueless, because she added, “Code protection. Single-layered, but it’s a good one, very complex.”
“What’s that mean?”
“That somebody don’t want us lookin’.”
I studied the screen. “No way to get past it?”
“Hack past it.”
“Yeah? How do we do that?”
“
We
don’t.” She spun around in her chair and faced me. “The server administrator can fix it . . . tomorrow.”
Some voice in the back of my brain made me ask, “And that would be who?”
“Mr. Merriweather.”
Wasn’t that a surprise? Actually, it wasn’t; so I took a gamble and asked, “He a pal of yours?”
“That fatassed moron? He got no friends on this floor.”
That news was no surprise either. I said, “Cheryl, it’s very possible something in that database will embarrass Merriweather, maybe even get him fired. But tomorrow morning, he’ll know from the server printouts that we tried to enter Lisa’s file, and he might find a way to block us forever.”
“That’s your problem. Wanta hear my problem? I got a kid with my mama.”
“I’ll buy your kid a shiny new bike, a baseball glove, whatever.”
She stared into her computer screen for a long while. She finally said, “A BB gun. That’s what he wants.”
“Deal.”
I took the stairwell upstairs, tried to fix us espressos, was foiled by the machine again, settled for two cups of regular coffee, and then returned to settle in and observe Cheryl in action. A stream of curses poured out her throat every ten minutes or so. I did not regard this as a hopeful sign.
She had started at ten, and at eleven I thought I detected a faint trace of a smile. It was nearly midnight when she mumbled, “Oh, baby,” leaned back in her chair, ran her fingers through her hair, and announced, “Shit, I’m good.”
I observed a long column of e-mails on the screen.
“Could I?” I asked. She climbed out of her chair, saying, “I gotta go pee. Don’t you break nothin’.”
I began with Lisa’s oldest e-mails and worked forward. I checked incoming mail for the two files, and outgoing for any references to the Boston cases. Modern young executives, like Lisa, transact a lot of business electronically. I’m more old-fashioned, aka, a technological idiot. But even if my mastery were to extend beyond punching
off
and
on
, I prefer face-to-face and phone interaction, where a facial tic or a verbal nuance allows you to detect what’s not being said, which often is more revealing than what is. Lisa had sent or received up to a hundred messages a day.
I felt unnerved, and actually a bit sad, rummaging through the messages of a dear but dead friend. Pieces of her—Lisa’s intelligence, warmth, efficiency, and wit—jumped off the screen. I found myself stifling a sob or two.
Half her messages went to other firm members and concerned firm business, from her caseload to mundane administrative matters. I knew barely a handful of the firm’s lawyers. Most of the names were just names.
Twenty or more times a day, Lisa e-mailed friends, associates, clients outside the firm, and I recognized the names of several JAG officers. She was popular and made a point to stay in contact with her chums, passing on jokes and anecdotes, but more often just brief, cheery notes, the high-tech version of a blown kiss. Cheryl returned from the ladies’ room with two cups of espresso, and we sipped and chatted as I opened more e-mails, trying to detect anything curious or suspicious. A number had enclosures I made sure to open on the chance the legal files had been smuggled into Lisa’s file in that manner.