The Takeover Read online

  Malley looked up. “What do you mean?”

  “Winthrop, Hawkins represented the Bank of Manhattan when NASO acquired it.”

  “Really?” The other man seemed genuinely interested. “Tell me about it. I wasn’t with NASO at that point.”

  “Well, the transaction was hostile, so the senior executives of the Bank of Manhattan knew they would be out on their asses if NASO was successful in acquiring the BOM. They fought it—at least until Winthrop, Hawkins negotiated some very nice severance packages for the top five executives. It may interest you to know, Glen, that they received a combined severance agreement of thirty million dollars, which of course came right out of the shareholders’ pockets.” Falcon related this tidbit to show Malley just how privy to sensitive information he had been at one time.

  Malley was impressed. He was no longer smiling.

  “The amount was never explicitly stated anywhere. It was buried in several different fees supposedly paid to us—I mean Winthrop, Hawkins—and several law firms. And it was to be paid out over four years. But Winthrop, Hawkins and the law firms simply took the money they received and sent it to the five executives.”

  “You’re kidding.” Malley was incredulous. “But that’s ill…”

  “Illegal? No, not really. Unethical maybe. But not illegal. I checked out the strategy with the attorneys myself. We had to be careful about taxes, but it was all very legal. Though, of course, it certainly came close to the edge. But that was what it was all about in those days. Coming as close to the edge as possible. Winthrop, Hawkins made ten million dollars as our standard advisory fee. We were also to receive another ten million if we were able to keep Bank of Manhattan independent for at least a year after NASO filed its 13-D. You see, the BOM’s senior executives would be able to significantly increase their pensions if we were able to string it out over a year. Do you remember how long it took NASO to acquire the BOM from start to finish?”

  Malley shook his head slowly.

  “Fifty-three weeks. Winthrop, Hawkins made its extra ten million, and the BOM’s senior executives pushed up their pensions by about fifty thousand dollars a year.”

  Malley laughed. “You were the partner responsible for the deal at Winthrop, Hawkins?”

  Falcon nodded.

  “Must have been pretty exciting at that time. Christ, there were takeovers and mergers popping up all over the place. Every day it seemed like. You couldn’t pick up the Wall Street Journal without reading about another one.”

  “It was an interesting time, although at that point, in 1991, merger activity was already far below its high point.”

  Malley stared at a painting of colonial New York Harbor hanging on the far wall. “The late eighties really were incredible. Even for commercial bankers.” Malley seemed wistful, as if he were recalling a tender moment with a child. “God, there was so much money thrown around with the leveraged buyouts and hostile takeovers. We made huge fees and lots of interest income. Nice bonuses too. Whatever happened to all of that?”

  “You know, a few people got a little too greedy. Drexel, Burnham went out of business, and the government basically shut everything down. Of course, the investment bankers kept right on making huge amounts of money undoing what they had done.”

  “Andrew, do you think those days will ever come back? The hostile takeovers, the leveraged buyouts, and the huge amounts of money, I mean?”

  “We’d need a change of administrations, I think. This President is clearly not going to allow all of that to come back. From what I understand, the Federal Reserve has a mandate to come down hard on any bank that tries to lend into one of these huge leveraged buyouts. And this guy Filipelli, chairman of the Fed, is a tough man. He regards Wall Street as a necessary evil. He’s not going to allow the investment banks to use the commercial banks like that again, just to be able to line their own pockets with more cash at the risk of the national banking system.”

  “So the excitement is gone for good.”

  “At least for a long while.”

  Malley took a sip of coffee. He was beginning to sober up from lunch, and his focus returned to the interview. “Andrew, if you don’t mind my saying so, one of the things I’d worry about if you were to come here is that the job wouldn’t hold your interest. I mean, it wouldn’t be exciting the way it was at Winthrop, Hawkins. Commercial banking without all of the leveraged buyouts can be, well, pretty boring sometimes. Oh, sure, we’re trying to get into all that investment-banking stuff, underwriting stocks and bonds, advisory work and so on, but it will take years before we get anywhere. As you know, firms like Winthrop, Hawkins have a lock on that business, and they aren’t letting go of it easily.” Malley gazed at Falcon intently, as if judging him. “I think this job is a quick fix for you. You need money because you lost what you had in that software company, so you’ll accept our offer. But as soon as you have an opportunity to jump to one of the investment banks, you’ll go. Please don’t take offense at this, but I have to be honest. If it were up to me, I probably wouldn’t offer you this job.” Malley paused. “But it isn’t up to me.”

  Falcon did not bother telling Malley that he had already visited almost every investment bank on Wall Street—even the very small firms—and no one wanted him. At first they would be excited about the prospect of recruiting such talent. But then, after the third or fourth round of interviews, just when they should have begun talking compensation, things would go cold, and the human-resource people would send him a thin envelope apologizing for the fact that he wasn’t quite what they were looking for. It was difficult for him to understand. It was as if someone were following him, giving the firms information that caused them to back away from hiring him. But that was ridiculous. Just paranoia brought on by his dire financial situation.

  Falcon looked Malley straight in the eye. “What do you mean it isn’t up to you? You’re the senior vice president in charge of all lending east of the Mississippi. You are the decision maker.”

  “Not this time, Andrew. You must have really impressed somebody upstairs, because I get the feeling that if you don’t take this job, they’re going to fire me. Who the hell did you talk to in the executive suite?”

  Falcon shook his head. “No one.”

  “You haven’t met Boreman or Barksdale yet?”

  “You mean the chairman and vice chairman?”

  Malley nodded.

  “No. I met an SVP in human resources, but that was it.”

  “The merger was what, five years ago? Boreman wouldn’t have been at NASO at that point. But Barksdale was. Maybe he remembers you from the merger,” Malley said.

  “Maybe.”

  “How did you hear about this position, Falcon?”

  There it was—the first time Malley had referred to him simply as Falcon, not Andrew. It was the classic evolution all business associates underwent, and it still bothered him after so many years. They called him Andrew for a short time, to be polite, and then instinctively began calling him Falcon. Friends called him Andrew. Business associates called him Falcon. But wasn’t that what he wanted? A name people would remember. Wasn’t that why he had given himself the new name after high school?

  Falcon answered the question. “A headhunter called me out of the blue. Some guy I had never heard of before. He wouldn’t tell me how he got my name, but that’s typical for those guys.”

  “It’s amazing how fast your headhunter became aware of this position. We fired the woman who headed the team we want you to take over only two weeks ago.” Malley glanced at the open calendar on his desk. “Wednesday, the week of the twenty-first.”

  “Really? That guy did work pretty fast.” Strange, Falcon thought. The headhunter had called him on Monday of that week, two days before NASO had actually fired the woman. And the headhunter had specifically mentioned the position the woman had held and that they had let her go, though of co
urse he did not mention her by name.

  “When did the headhunter call you?”

  “That Friday. The twenty-fifth, I guess.” For some reason Falcon did not want to be forthcoming.

  “Uh-huh.” Malley continued to stare at Falcon. “Well, the bottom line is that we want to hire you. We’re willing to pay you a salary of one hundred twenty thousand a year and a bonus that could reach fifty percent of your annual salary.”

  One hundred eighty thousand dollars. That was it. The maximum he could expect to earn. It beat the crap out of food stamps, but it didn’t come close to the $1.1 million he had earned at Winthrop, Hawkins. And it paled in comparison to what MD Link should have been worth by now.

  “We want you to head up Team Two, which is responsible for marketing NASO’s credit and noncredit products throughout Maryland, Delaware, Pennsylvania, and Ohio. Your title will be vice president, and you will have five professionals reporting to you, another four administrative assistants, and three secretaries—one of whom will be your personal secretary.”

  Just a vice president. There were probably two thousand VPs in the NASO organization. “I would report to you?”

  “Yes.”

  Well, there was an opportunity. Not to wish any harm to him, but he’d probably be dead of that heart attack in a year. Maybe the bank would move him into Malley’s position. “I’d like to be able to hire my own secretary.” Falcon thought of Jenny. She still hadn’t found a job yet either.

  “I don’t think there would be a problem with that. Can I take that to mean you’re going to accept the offer?”

  “It means I would like to take a couple of days to think about it.”

  Malley nodded uneasily.

  * * *

  —

  The woman danced effortlessly to the heavy beat of the bass booming from huge speakers positioned throughout the trendy Upper East Side nightclub. Several men danced around her, though none had been invited to do so. They moved wildly, attempting to catch her attention, but she remained impassive to their gyrations. She was lost in the music.

  Falcon watched her move behind and between the arms and legs of her uninvited suitors. She was gorgeous, absolutely gorgeous, and he was impressed. She was tall, perhaps five-eight, and the bun atop her head, formed by her long, silky, ebony hair, made her appear even taller. Her beautiful face was accented by huge, dark eyes, high cheekbones, and full, red lips. Her long black dress plunged deeply between small but well-formed breasts. Her skin was dark, but it was difficult to determine in the low light of the club just how dark she was. Greek? Perhaps even Spanish. He didn’t care.

  Out of all the beautiful women at the club, this was the one the men watched most carefully. They watched her every move. The insecure men pointed and poked each other, fantasizing because they knew they stood no chance with her. The confident men hung back by themselves, calculating. And the stupid ones tried to dance with her.

  It was not simply her physical beauty that attracted Falcon and the rest of the men to her. It was the way this creature carried herself. She danced beautifully, never too quickly, never too slowly, always in time with the music. As though she were making love to it. She completely ignored the men about her even as new suitors approached with each song, and the ones who had tried to gain her attention for a few minutes faded into the mass of dancing flesh in search of easier prey. Her head and arms swayed rhythmically. Falcon gazed, mesmerized.

  He had positioned himself against a column, close to where she moved. He found that he could not take his eyes from her. It was as if a lightning bolt had struck him, and he was too intoxicated to worry about his pride at this point. Every few moments he swore that she glanced at him through innocent eyes. But he knew it was simply the alcohol and his imagination.

  Suddenly a large, dark man moved through the crowd with greater purpose than any of the other suitors. He did not dance or circle around her until finally coming close, as the other men did. He walked directly to her, cutting through the gyrating male bodies, who were at first irritated at the new competitor but quickly melted away as they became aware of his huge size.

  Falcon’s pulse quickened as the man took the woman by the wrist and began to pull her toward a door at the back of the club. He watched them go, standing straighter as they moved away. She did not complain, but neither did she readily accept her fate, tugging slightly against the man. As they reached the door, the woman turned to take one more glance at the dance floor. And then she was gone, pulled into a private room by the dark man. Falcon watched the door close.

  For several minutes he stood staring at the door. When it became obvious the woman was not coming back, he turned again toward the dance floor. There was nothing else to compare to the dark-haired vision. Was that all it had been? A vision?

  Falcon politely declined a buxom blond woman who asked him to dance. She was pretty, but his mind remained full of the beautiful girl with the dark eyes. He watched the blonde return to the dance floor as he brought the scotch to his lips. It was his sixth drink in the last three hours.

  A hundred and twenty thousand dollars in salary. A fifty percent bonus. A hundred and eighty thousand dollars a year in total compensation. Most would be ecstatic. Not Falcon. It had been the wrong decision to leave Winthrop, Hawkins. There could be no denying that any longer. He had attempted to contact Granville twice after their confrontation at the Harvard Club, hoping that the older man would soften on his promise to never again allow Falcon to work at Winthrop, Hawkins. But Falcon’s calls were not returned. He had tried one last time after leaving NASO this afternoon. But nothing. By now he would have been earning several million dollars a year instead of the paltry compensation NASO was offering. He had thumbed his nose at Granville, and now Granville was thumbing his right back.

  The music seemed to grow louder. Falcon glanced at his watch. Two forty-five in the morning. Whenever he awoke later today in the one-bedroom Queens hovel he had rented to facilitate his job search, he would call Malley and accept the offer at NASO. What choice did he have? He was eating hot dogs for breakfast, lunch, and dinner. In another month he wouldn’t be able to afford rent. The day after tomorrow, when the terrible hangover had subsided, he would take the ten-thousand-dollar signing bonus NASO was offering and rent himself a real apartment in Manhattan.

  Falcon turned to go, to find a taxi that would take him all the way back to Queens. But as he turned, she was there, blocking his path. To his surprise, he found himself staring into the same dark eyes that had fascinated him so from the dance floor. She was even more beautiful than he had first thought.

  Falcon was vaguely aware of the circle of suitors—her constant entourage—but they were irrelevant now, and the dark man was nowhere to be seen. Falcon was the focus of her attention. She smiled slightly, tilted her head back and to the side, and took his hand. And suddenly Winthrop, Hawkins, NASO, the bankrupt MD Link, and his financial problems evaporated.

  Phoenix Grey lifted the soft drink to his mouth as he stood in a dark corner of the club. He had been watching Falcon for two weeks and felt as if he knew the man intimately. Suddenly he sensed the change in Falcon’s demeanor. The girl, with one look, had lifted him out of his depression. She could become a problem. He would have to report this development to Rutherford.

  6

  The chairman of the Federal Reserve System of the United States of America. His power was absolute and irrevocable. Once appointed by the President and confirmed by the Senate, he was beholden to no one, just as Supreme Court justices, once confirmed, were insulated from the electorate. His term lasted only four years, and he could be replaced at the end of it by another Presidential appointee, but that didn’t happen often. Any President who dared consider the idea of replacing a sitting Fed chairman against his will risked the wrath of the “I” bankers, who would crater the stock and bond markets. The Street placed grave importance on an independent F
ed chairman, and every President was painfully aware of this.

  Carter Filipelli sat alone at the head of the huge mahogany table in the middle of the Federal Reserve’s formal boardroom. He was awaiting the arrival of the other nineteen people who would sit at this meeting of the Federal Open Market Committee, or, as the Street called it, simply the FOMC. They should have been a powerful group, but Filipelli did not allow them to exert their authority to any great degree.

  The boardroom was cold and imposing, hardly conducive to back-and-forth exchanges between the participants, and Filipelli used this sterility of setting to his advantage. Frowning brass eagles, polished so that they shone even in the dim light of the large room, perched on the upper edge of the chandelier that dominated the space above the long table. The walls were covered by maps of the twelve Federal Reserve districts that sliced the country into strange and asymmetric shapes. Behind Filipelli was a huge fireplace in which lay several large logs that had been on the hearth for at least a decade. Over the fireplace was another brass eagle, this bird much larger than those on the chandelier. One talon clutched arrows, the other an olive branch. The air in the great room smelled like that of an ancient library, musty and bookish.

  Filipelli laughed aloud, and the sound echoed in the huge room. He was the Fed chairman, arguably one of the most powerful people in the world. With only sporadic resistance from one or two of the other members of the FOMC, he set monetary policy for the United States by controlling interest rates and bringing to bear the Fed’s vast cash reserves. He could raise rates to head off inflation, thereby inducing a recession, causing pain and suffering; or he could lower rates, spurring economic growth and putting billions into the collective pockets of the country.

  Many Americans did not understand the absolute power of the Fed chairman: his ability to act independently and without constraint, his ability to single-handedly create prosperity or poverty. It flew in the face of every tenet of democracy. And this blatant disregard for the American system of government was not advertised by either political party or by Wall Street. It was perhaps the only thing in the world these three constituencies could unanimously agree upon. And with good reason. If the general populace came to understand the Fed’s unchecked structure, they might demand change, which would spell disaster for the country. No Fed chairman could be shackled by a democratic process and be expected to react to the split-second machinations of modern financial markets.