Brotherhood Beyond the Yard (The Simon Trilogy) Page 17

  The banks that created the toxic instruments known as subprime mortgages, which fueled the financial disaster, were on the verge of insolvency. The entire financial system spiraled downward: first with the banks and their cohorts, then with the other mortgage lending institutions, and then it spilled into the stock market. It traveled from Wall Street to Main Street.

  It was January 2008, when the stock market suffered its first significant downturn, and in March, the Dow Jones Industrial Average was at its lowest level since October 2006.

  By June, the Senate Banking Committee desperately proposed housing bailouts, followed quickly in July by the sitting president signing into law the Housing and Economic Recovery Act, guaranteeing up to $300 billion in new thirty-year fixed rate mortgages for borrowers.

  In September, the federal government took control of Fannie Mae and Freddie Mac, two of the largest mortgage holders. In combination, they either owned or guaranteed $12 trillion of the mortgage market. It was a once valid concept gone wrong—investors worldwide backed $5.2 trillion of these debt securities, which they purchased from various U.S. sources.

  During the same month, Lehman Brothers, a premier global financial services firm, collapsed, as the Federal Reserve loaned $85 billion to American International Group, known as AIG, an equally premier financial services organization, to avoid total insolvency.

  As problematic as these events were, it was easy to understand why consumer lending dried up, and consumer spending came to a screeching halt.

  Not only was the American public in a panic, so were Senator Baari and La Fratellanza, all except Simon.

  “I have a plan to stop the spiraling economy, but I don’t think we should put it in place until after Abner is sworn in as president,” Simon explained, in an effort to console his brothers.

  “I agree. That way, he will get full credit for saving the country from a financial collapse, and it will give him an abundance of political capital, which he will need,” Hank said in approval.

  “We have only two months to go, and I’m convinced we can hold on until then. Remember, I have the ability to suspend trading on Wall Street if necessary, along with other controls if it truly starts to fall apart,” boasted Simon. “The current administration is still responsible, and they appear to be doing all they can, but we must monitor the situation closely.”

  For the moment, they forgot about Abner, and focused more on their own financial futures and those of their families. The gang of four, ignoring Simon’s boasts that he could fix the situation, pleaded with him to stop the problem immediately.

  “For the sake of the election!” they shouted.

  “It will work itself out,” he calmly assured them.

  —

  A week later, in mid-September, to their surprise, amidst all the lunacy, a young, highly intelligent economist who worked with the current secretary of the Treasury developed something called TAP, the Toxic Asset Plan. Toxic was a term created to describe nonperforming assets.

  The economist had designed TAP to transfer trillions of dollars to various banks to buy their failed assets. The objective was to help free up the frozen credit market to stimulate the economy. The most threatening risk was that the federal government would then own an enormous portfolio of exotic mortgage instruments created out of thin air. A few weeks later, in October, the sitting president, still under tremendous pressure, signed TAP into law, providing $700 billion of government funds to purchase assets. Their true value was indeterminable.

  However, before this new infusion of capital took hold, the stock market suffered its worst week in seventy-five years, down 40.3 percent from its record high in October 2007. As an emergency measure, the Federal Reserve provided $900 billion in short-term loans to banks and another $1.3 trillion directly to companies outside the financial sector.

  They pulled out all the stops to end the bloodletting, but in the new global economy, shock waves still hit the stock markets around the world. In spite of all the massive federal spending that created an unprecedented number of bailouts, it appeared to reduce the panic in the streets, and there was a massive sigh of relief. It became apparent that the federal government’s intervention had a salutary effect and began to stimulate the economy to a small degree—long enough to take the focus off the war and redirect it to the economy.

  With less than a month before the election, the financial crisis caused Baari’s challenger to lose significant ground.

  On November 4, he was defeated.

  Senator Abner Baari won the election.

  The unimaginable had happened, and no one celebrated more jubilantly then La Fratellanza—first, in earnest for all it had achieved—second, for finally coming to the end of a long, hard-fought “game.”

  —

  After the swearing-in ceremony, Hank was still attached to Abner’s hip, but this time as chief of staff. He worked diligently with the new president and aided him in selecting his cabinet appointees. One of the first appointees Hank recommended was the young economist that developed TAP. The economist became the new secretary of the Treasury.

  The president, with Hank’s glowing endorsement, made two other appointments.

  He appointed Seymour the president’s documentarian. Seymour was delighted, as it suited him well.

  “I recognize you were the point person that made me look good,” Baari said, “and in addition to the documentary, I want you to produce short clips to promote key agendas—to be aired on television, on the Internet, and all other forms of communication, as necessary.”

  “Thank you, Mr. President.”

  Initially, the president offered him the position of communications director, continuing in the role he performed during the campaign. However, Seymour believed that position was more demanding and restrictive, and not wanting to be so entrenched in the administration, he convinced him that Paolo would be a better choice.

  Seymour was happy to be able to pop in and out of the White House at will, as he documented the president’s life for the film, First 100 Days in Office. He was also eager to return to his neglected company, MediaLynx, and to resume his career as filmmaker. He had no qualms about managing both.

  The president then appointed Paolo to the unusual role of communications director, along with maintaining his role as speechwriter.

  “I’m well aware it was your words that propelled me through two successful elections, and I finally accepted that by and large I was only the reader,” he graciously admitted.

  “I appreciate your words, Mr. President.”

  “I also recognize your uncanny ability to predict public sentiment and to be fully prepared with statements to minimize any concerns. I want you to be the man at the podium, as my press secretary.”

  “Thank you again, Mr. President, but with all due respect, I don’t believe my Italian accent, however slight, will be well received in that role. I can, however, recommend an excellent candidate who worked with me on the campaign.”

  “Let’s look him over, but since he reports to you, make sure he shields me and suppresses the frequency of question-and-answer sessions. I don’t want to provide the press corps and others with ammunition to be used against me later.”

  “Yes, Mr. President. I understand.”

  The president had little direct contact with Chase, but Hank already had a candidate for budget director. So Chase blissfully returned to his CFO position at the National Depositors Trust Bank in New York, putting his involvement in the “game” behind him.

  No one knew exactly what Simon’s plans were, nor did he shed any light on them. At that point, his brothers were less apprehensive after their fantastic coup.

  It was over—or was it?

  19

  THE POLITICAL UNSPIN

  It was a bitterly cold morning in February 2009, but inside the George Washington University Hospital, there was nothing bitter about the gurgling seven-and-a-half-pound baby boy named Mario Salvatore.

  As the proud father,
and equally proud uncle, stood counting fingers and toes, Natalie laid back looking stunning.

  Hamilton watched from outside the hospital room door, not wanting to intrude. He was honored to have been included, and it warmed his heart as he gazed at his extended family.

  Shortly after that blissful occasion, the Salvatore family returned home and acclimated to a new routine. Paolo’s consisted of Mario’s midnight feedings and performing his duties at the White House by day. Spending those intimate moments watching his son’s face as he drank from his bottle—contrasted with facing the president each day—intensified Paolo’s inner doubts about his role in the plot. He became noticeably concerned for his wife and his new son.

  Natalie observed the increasingly negative changes in Paolo’s demeanor, but continued to ignore it for the moment. She was dealing with her own adjustments, having taken a sabbatical from Georgetown University to stay at home with Mario.

  During the little time alone with Paolo, she would often ask, “Is there anything I can get for you?”

  “No,” he’d snap.

  “Would you help me with Mario?”

  “I’m busy right now,” he’d grumble.

  “Is everything okay?”

  “Yes,” he would respond, and then leave the room.

  This atypical behavior continued for weeks.

  At the time, Natalie thought he was overwhelmed with the pressures of fatherhood and exhausted from having just come off the campaign trail. She had no way of knowing that Paolo’s increased tension, verging on paranoia, was brought on by his close relationship with Noble and Hamilton, which conflicted with his commitment to La Fratellanza.

  As President Baari settled into the Oval Office, Paolo was struggling to balance his life between family and the White House.

  —

  Concurrently, Noble had just finished vetting a string of senators and congresspersons that were on the 2008 election circuit. It was also during this time that Noble’s curious streak overcame him. His inquisitive nature was most often his greatest asset, but there were other times it became a bit of a hindrance.

  He knew the severe consequences of delving too incisively into the president’s personal life. He would not only put himself at risk, but also the credibility of the agency. Considered part of a “super snooping” agency by some, any intrusions they uncovered would reflect on the entire organization. Naturally, it would raise questions about how far and deep they had strayed.

  However, some questions were gnawing at Noble, driving him to the limit.

  I’m not sure what it is, but something doesn’t compute. It has something to do with how the president ascended to the lofty office, and I won’t find peace until my doubts are satisfied.

  He began to have flashbacks of the theses he had read while at Harvard, and something kept drawing him back to their pages.

  This convergence of events gave rise to what became the beginning of the “political unspin.”

  —

  One of the odd jobs Noble had at Harvard was to catalog all the theses submitted and subsequently published by the graduates.

  A few years prior to his attending Harvard, a highly controversial thesis, reported stolen, was held for ransom. For this reason, the university kept all theses in a special room, under strict security, only accessible to the author and a few others, including Noble.

  When Simon Hall asked him to join the inner sanctum of the study group, he declined, but that didn’t stop him from being inquisitive about its members. Especially after he began to spend more time with them. Noble enjoyed the occasional beer at Jake’s, or a spontaneous dinner with the group, but that was the extent of his socializing. Clearly, he was an introvert at heart.

  I’m just curious as to what these guys are like on a deeper level, something I’m not privy to, since I’m not officially part of their group, he would often ponder.

  He concluded that reading from their theses would gain him more insight about his comrades. He surmised that the theories they had constructed and their conclusions would expand his understanding.

  Noble never intended to be malicious, but again, his intellectual curiosity compelled him to uncover some answers. One evening, he decided to take the five hardbound books from the Pusey Library, with the intent to read and return them quickly to their rightful place. Then there was that horrible fire, and it became impossible to return the books. Noble, ashamed and dissatisfied with his waywardness, placed the books in a box with other memorabilia and stored them in a safe place.

  But not before reading the theses.

  He remembered he found the theories original and quite ingenious, although he never fully understood their applicability. He certainly didn’t comprehend how their conclusions would apply in today’s world. Noble never made the connection, until recent events caused him to recall the theories embraced between the pages in those etched leather bindings.

  The banking crises, followed by the swearing in of the first minority president in the White House, are two events that seem frighteningly familiar.

  Noble desperately needed to get his hands on the books, but could not remember where he had stored them. He thought of them possibly being in his home, in the boxes that he had piled in the second bedroom, or in the storage locker he rented for his other possessions. Then, of course, there was his family’s home in Kansas, which he and Natalie had never allowed themselves to sell.

  —

  When Noble vetted Abner Baari earlier in 2006, along with the other senators, he detected nothing suspicious. The president’s grandparents reared him in Kansas when orphaned at birth. He graduated from Northwestern, and after working several years with the Chestnut Foundation, he attended the University of Chicago Law School. Everything that followed was public record and exploited ad nauseam during the campaigns.

  After the swearing in of the forty-fourth president, Noble could no longer control his curiosity—he broke the director’s cardinal rule.

  He began checking and rechecking, in infinite detail, the various databases. Based on his exhaustive analysis, he was aghast to discover that the information on the president’s file entered into several different computer systems—only a few years before—was fictitious. Furthermore, Noble, who happened to have grown up in the same hometown as the Baaris, didn’t know the family. He was also able to uncover that John and Sara Baari died as reported in an automobile accident, but they had no children. Then he checked the elementary and high school records, only to find that those records had been fabricated as well.

  He was overwhelmed to learn that it would have been impossible for Kathleen Baari to have worked for the Peace Corps and been assigned to Libya in 1970, at the time of Abner’s birth. During the 1970s, the Peace Corps did not assign women to Libya, especially since the tensions were high between the United States and the rogue nation. Muammar al-Qaddafi had forced all U.S. personnel off the military bases and required the renegotiation of oil production contracts. It was during this time Qaddafi began using oil embargoes as a political weapon to drive up the cost of oil. It was also an attempt to force the United States to end its support of Israel.

  Noble recalled that the tensions had heightened again in 1986, when the U.S. bombed Libya in retaliation for the death of two American soldiers in the bombing of the Berlin discotheque. Noble also recollected that during the retaliatory strike, Muammar al-Qaddafi’s two-year-old adopted daughter was killed. He reviewed the reports carefully and, to his amazement, he discovered a family in Qaddafi’s complex, including a sixteen-year-old boy, had also died in the bombing. On the surface, the information didn’t appear to hold any grave significance.

  Then what Noble did uncover was explosive.

  However, before he took the information to the director, he needed more proof. He also feared Paolo might be involved and wanted absolute certainty before he risked destroying his sister’s life.

  He needed the theses to fill in the blanks.

  20

&nb
sp; THE FINAL OBSTACLE

  After the election, the financial crisis simmered down a few degrees. Then during the Christmas season, consumer spending was abysmal, and after the inauguration, the crisis started to bubble up again. The financial crisis continued, but this time it spiraled downward relentlessly.

  On March 6, 2009, the Dow Jones closed at 6,627 points. Other markets around the world were experiencing similar volatility, adding to an already unstable situation. Investors, dazed by the turmoil, began to recalculate the value of their portfolios, only to find their personal wealth had taken a lethal blow. The stock market dropped 50 percent from the prior year.

  No answers seemed in sight.

  And La Fratellanza, along with some of the greatest economic minds throughout the world, didn’t know when, or if, the downward trend would stop.

  The gang of four in particular was in a panic, primarily because they felt responsible for placing their man in the Oval Office—a man they knew had never faced a crisis of this magnitude.

  They needed Simon. He claimed he could fix it.

  Surprisingly, Chase was the first to activate his pager, which didn’t post a time or day, only the word NOW.

  It was a Friday and the market was about to close. It was also a difficult travel day at best, and with pandemonium in the business world, it was sure to be a nightmare.

  Hank happened to be in Washington, along with Paolo and Seymour. They didn’t know where Simon was at the time, but they all would need to make travel arrangements to leave on the next flight.

  Hank activated his pager with the word SAT.

  —

  The members of La Fratellanza arrived Saturday morning and convened in their office on the South Side, all accounted for except Simon. Sitting around the round conference table, they strategized for hours. By six o’clock that evening, they had a sinking feeling that Simon wouldn’t be arriving. The fact that they’d had no correspondence from him during the past terrifying week was atypical, suggesting that something was dreadfully awry.