Peter Spiegelman - Black Maps

“Toting up the liabilities is the flip side. You look at any loans the bank has taken out, cash or securities it’s holding for clients, bonds or commercial paper it’s issued, whatever it owes from trading activity, and anything in its vaults that belongs to someone else. That’s basically what we’re doing here. Of course, with MWB there are complications.” Mills led us to the kitchen alcove. He poured some poisonous-looking stuff from a glass coffee pot and leaned against the counter.

“You guys want? No? That’s probably smart. Okay. The first and biggest complication in all of this work is the number of different legal entities-different financial institutions-that were under the holding company’s umbrella. The sheer number of names whose activities we have to sift through makes things much more difficult. Also, the MWB people were lousy record-keepers. I don’t know if that was by design or just incompetence, but it’s amazing they were ever able to pass an audit.” He drank some coffee and made a face.

“Those are the main problems, but we’ve had others to deal with. For example, the MWB traders were very active, so there were lots of deals still unsettled when their charter was yanked. We had to sort through all of those. Finding MWB’s cash and securities accounts at other institutions was another pain. We had some statements to work from, but ultimately we had to canvass all the firms that provide those services, to see if they had any accounts for MWB. And then there were the vaults. You’d be amazed at what they had in there. And let’s just say that a lot of it was of questionable provenance.” Mills smiled to himself and shook his head.

“So, once we piece together the balance sheet, then what? What do we do with it? Well, all the liabilities are somebody else’s assets. And no sooner had the regulators shut the doors on this place, than those folks started lining up with claims. To validate those claims, we’re reconstructing MWB’s activities with each of the claimants. It’s excruciating work; the more complex cases go back years and involve thousands of transactions.” Mills drained his cup.

“That’s it. In a nutshell, that’s what we’re doing, here in New York and in the overseas offices too.” He folded his arms across his chest and looked quizzically from one of us to the other. “I don’t know what else there is to tell.” I looked at Neary, and he looked back at me. Neither of us spoke.

“How do you do it?” I asked. “How do you go about putting the pieces together?”

“The mechanics of it?” Mills looked at me and shrugged. “One of my teams is down the hall. You can hear it from the horse’s mouth.” We followed Mills out of the alcove, back along the corridor, to the conference room Neary and I had peeked into before. The same three men were there. Mills spoke to all of them.

“Troops, let me tear you away from your labors for a moment. You all know Hoov, from Brill. This is his friend, John,” Mills paused dramatically and looked at me, “Mysterious John. He has some general and very quick questions for you, and then you can get back to the salt mines.” He turned to Neary and me. “Here you have Stan Greer,” he pointed to a pale, thin, bespectacled man with straw-colored hair, wearing a blue plaid shirt, “Charlie Koch,” a heavyset, freckled redhead wearing a Jets sweater, “and Vijay Desai,” a slim, dark Indian man, wearing a bright red sweater over a black shirt. They looked slightly annoyed at the interruption and a little uneasy-in part, no doubt, due to Mills’s introduction. “Mysterious John,” indeed. Mills looked at me.

“Evan has described, generally, what kind of work you’re doing here. But I’d like to get some idea of how you actually go about doing it. Maybe you can start with how you’re organized-who does what?” They looked at Mills and then at each other, uncertain about who should talk. Mills looked bored and gave them no help. Finally, Desai jumped in.

“You know we’re doing balance sheet reconstruction and claims evaluation?” he asked me. I nodded. “The balance sheet work is done by teams of people, all accountants with a lot of audit experience, usually three to six people on a team. We’ve split up the different MWB entities and assigned a set to each team. They work on the balance sheets for their assigned entities, plus they review the work from other teams as a quality check. We’ve got separate groups working the claims. Usually two to four people per team on those.”

“And where do they start, what are they working with?” I asked.

Desai kept talking. “Mainly they’re looking at data from the bank’s general ledger systems and its other record-keeping systems. And at filings MWB made with regulators over the years, with the Fed, the State of New York, the Comptroller of the Currency, and so forth. Ultimately they go back to source documents-account applications, trade tickets, confirmations, loan agreements, statements, correspondence with clients, those sorts of things. We go to the document system for all of that.”

Mills looked at his watch and then at Neary. “Hoov, if there’s nothing else, I’ve got stuff to do, and so do these guys. Unless you want me to start billing you for consulting work.” Subtle as it was, we took that as a hint to go.

Neary and I said our thanks and headed for the elevators. At the door that would take us to the guard station I looked back and saw Mills, standing motionless at the end of the long corridor, watching.

“Kind of an annoying bastard, isn’t he?” I said, as we waited for the elevator.

“Yep,” Neary agreed.

“Not much of a tour, either,” I said.

“Not much,” Neary agreed, “but then, we weren’t paying for his time. Come on, we’ll have a look for your documents.”

It was after five o’clock when we returned to the third floor, and the dim views through the windows had darkened to night. Lights shone in the buildings nearby, and the floor seemed more deserted than ever. I followed Neary to a small office. The dark wood desk was bare except for a PC and a phone. Neary sat behind the desk, switched on the PC, and pulled the keyboard in front of him.

“Pull a chair around,” he said, and I did. He typed quickly, logging into the network and bringing up the browser. When the search-engine page was in the browser window, he sat back and looked at me.

“So this is where we play ‘I’ll show you mine if you show me yours,’ ” he said. I looked back at him, silent. He continued, “I’m doing the driving here,” he pointed to the keyboard, “and if you don’t give me something to search for we’re not going to get very far.”

“You could always let me drive,” I said.

Neary snorted, “That’s not going to happen, John. I’m out on a limb just having you in here, so unless you open up a little, this is where we stop.” We looked at each other in silence. Neary wasn’t trying to strong-arm me, but he wasn’t bullshitting me either. I had a choice to make. I nodded and pulled out my notebook.

“Everything I’m interested in is dated eighteen years ago. Let’s start with letters from Nassouli, with dates in February of that year,” I said. He nodded and started typing. The engine came back with twenty-one documents that met the criteria. I scanned down the results list. None of them were the ones I was looking for. The dates were wrong, and so were the topics. Neary looked at me, and I shook my head.

“We’re zero-for-one,” Neary said.

“Actually zero-for-two,” I said. He shrugged.

“What’s next?” he asked.

“How about letters to Nassouli dated…” I checked my notes again, “March eighth through March fifteenth that year.” This time, the engine found eleven documents. And one of them jumped out at me. Neary saw me staring.