Terminal Compromise by Winn Schwartau (my reading book .txt) 📖

he offhandedly said. Nobody objected.

There would have been no point in objecting even if anyone cared.

It was an unspoken truism that Higgins and other good attorneys

taped many of their unofficial depositions to protect themselves

in case anything went terribly wrong. With a newspaper as your

sole client, the First Amendment was always at stake.

“OK,” Scott began. His reporter’s notebook sat atop files full

of computer printouts. “A few days ago, on September 4, that’s

a Friday, I got an anonymous call. The guy said, ‘You want some

dirt on McMillan and First State S&L?’ I said sure, what do you

have and who is this?”

“So then you knew who Francis McMillan was?” Higgins looked up

surprised.

“Of course,” Mason said. “He’s the squeaky clean bank President

from White Plains. Says he knows how to clean up the S&L mess,

gets lots of air time. Probably making a play for Washington.

Big time political ambitions. Pretty well connected at Treasury.

I guess they listen to him.”

“In a nutshell.” Higgins agreed. “And . . .then?”

Mason sped through a couple of pages of scribbled notes from his

pad. “My notes start here. ‘Who I am don’t matter but what I

gotta say does. You interested’. Heavy Brooklyn accent, docks,

Italian, who knows. I said something like, ‘I’m listening’ and

he says that McMillan is the dirtiest of them all. He’s been

socking more money away than the rest and he’s been doing it real

smart. So I go, ‘so?’ and he says he can prove it and I say

‘how’ and he says ‘read your morning mail’.” Mason stopped

abruptly.

“That’s it?” Higgins asked.

“He hung up. So I forgot about it till the next morning.”

“And that’s when you got these?” Higgins said pointing at the

stack of computer printouts in front of Mason. “How were they

delivered?”

“By messenger. No receipt, nothing. Just my name and the pa-

per’s.” Mason showed Higgins the envelop in which the files came.

“Then you read them?”

“Well not all of them, but enough.” Scott glanced at his editor.

“That’s when I let Doug know what I had.”

“And what did he say?” Higgins was keeping furious notes to back

up the tape recording.

“‘Holy shit’, as I remember.” Everyone laughed. Ice breakers,

good for the soul, thought Mason. People are too uptight.

Higgins indicated that Scott should continue.

“Then he said ‘we gotta go slow on this one,’ then he whistled

and Holy Shat some more.” Once the giggles died down, Mason got

serious. “I borrowed a bean counter from the basement, told him

I’d put his name in the paper if anything came of it, and I

picked his brain. Ran through the numbers on the printouts, and

ran through them again. I really worked that poor guy, but

that’s the price of fame. By the next morning we knew that there

were two sets of books on First State.” Mason turned a couple

pages in his files.

“It appears,” Scott said remembering that he was selling the

importance of the story to legal and the publisher, “that a

substantial portion of the bank’s assets are located in numbered

bank accounts all over the world.” Scott said with finality.

Higgins interrupted here. “So what’s wrong with that?” he chal-

lenged.

“They’ve effectively stolen a sandbagged and inflated reserve ac-

count with over $750 Million it. Almost 10% of stated assets.

It appears from these papers,” Scott waved his hand over them,

“that the total of the reserve accounts will be taken, as a loss,

in their next SEC reporting.” Mason stopped and looked at Hig-

gins as though Higgins would understand everything.

Higgins snorted as he made more notes.

“That next morning,” Mason politely ignored Higgins, “I got a

call again, from what sounded like the same guy.”

“Why do you say that? How did you know?” Higgins inquired.

Mason sighed. “Cause he said, ‘it’s me remember?’ and spoke like

Archie Bunker. Good enough for you?” Mason grinned wide. Mason

had the accent down to a tee. Higgins gave in to another round

of snickers.

“He said, ‘you like, eh?’” Mason spoke with an exaggerated New

York accent and used the appropriate Italian hand gesture for

‘eh!’. “I said, ‘I like, but so what?’ I still wasn’t sure

what he wanted. He said, ‘they never took a loss, yet. Look for

Friday. This Friday. They’re gonna lose a bunch.’ I said, ‘how

much’ and he said, ‘youse already know.’” Mason’s imitation of a

Brooklyn accent was good enough for a laugh.

“He then said, ‘enjoy the next installment’, and that was the

last time I spoke to him. At any rate, the next package con-

tained a history of financial transactions, primarily overseas;

Luxembourg, Lietchenstein, Switzerland, Austria, Hong Kong,

Sidney, Macao, Caymans and such. They show a history of bad

loans and write downs on First State revenues.

“Well, I grabbed the Beanie from the Basement and said, help me

with these now, and I got research to come up with the 10K’s on

First State since 1980 when McMillan took over. And the results

were incredible.” Mason held out a couple of charts and some

graphs.

“We compared both sets of books. The bottom lines on both are

the same. First State has been doing very well. McMillan has

grown the company from $1 Billion to $12 Billion in 8 years.

Quite a job, and the envy of hundreds of every other S&L knee

deep in their own shit.” Higgins cringed. He thought Ms. Man-

chester should be shielded from such language. “The problem is

that, according to one set of books, First State is losing money

on some investments merely by wishing them away. They disappear

altogether from one report to the next. Not a lot of money, but

a few million here and there.”

“What have you got then?” Higgins pressed.

“Nobody notices cause the losses are all within the limits of the

loss projections and reserve accounts. Sweet and neat! Million

dollar embezzlement scam with the SEC’s approval.”

“How much follow up did you do?” Higgins asked as his pen fly

across the legal pad.

“Due to superior reporting ability,” Scott puffed up his chest in

jest, “I found that a good many account numbers listed in the

package I received are non-existent. But, with a little prod-

ding, I did get someone to admit that one of them was recently

closed and the funds moved elsewhere.

“Then, this is the clincher, as the caller promised, today, I

looked for the First State SEC reports, and damned if the numbers

didn’t jive. The books with the overseas accounts are the ones

with the real losses and where they occur. The ‘real’ books

don’t.”

“The bottom line, please.”

“Someone has been embezzling from First State, and when they’re

through it’ll be $3 Billion worth.” Scott was proud of himself.

In only a few days he had penetrated a huge scam in the works.

“You can’t prove it!” Higgins declared. “Where’s the proof? All

you have is some unsolicited papers where someone has been play-

ing a very unusual and admittedly questionable game of ‘what if’.

You have a voice on the end of a phone with no name, no nothing,

and a so-called confirmation from some mid-level accountant at

the bank who dribbles on about ‘having to do it’ but never saying

what ‘it’ is. So what does that prove?”

“It proves that McMillan is a fraud, a rip-off,” Scott retorted

confidently.

“It does not!”

“But I have the papers to prove it,” Scott shuffled through the

folders.

“Let me explain something, Scott.” Higgins put down his pen and

adapted a friendlier tone. “There’s a little legal issue called

right to privacy. Let me ask you this. If I came to you and

said that Doug here was a crook, what would you do?”

“Ask you to prove it,” Scott said.

“Exactly. It’s the same here.”

“But I have the papers to prove it, it’s in black and white.”

“No Scott, you don’t. What you have is some papers with accusa-

tions. They’re unsubstantiated. They could have easily been

phonied. You know what computers can do better than I do. Now

here’s the key point. Everybody in this country is due privacy.

You don’t know where these came from, or how they were obtained,

do you?”

“No,” Scott hesitantly admitted.

“So, someone’s privacy has been compromised, in this case McMil-

lan’s. If, and I’m saying, if, these reports are accurate, I

would take the position that they are stolen, obtained illegally.

If we publish with what we have now, the paper could be on the

receiving end of a slander and libel suit that could put us out

of business. We even could be named as a co-conspirator in a

criminal suit. I can’t let that happen. It’s our obligation to

guarantee responsible journalism.”

“I see.” Scott didn’t agree.

“Scott, you’re good, real good, but you have to see it from the

paper’s perspective.” Higgins’ tone was now conciliatory. “This

is hard stuff, and there’s just not