Jonathan Kellerman - Devil's Waltz

“Cooperation. Maybe we can be mutually helpful. To Cassie Jones.”

“How can you help her?”

He folded his arms across his barrel chest. “Your theory — the entire staff’s theory — is appealing. For a one-hour TV episode. Greedy capitalists sucking the lifeblood out of a beloved institution; the good guys come in and clean it up; cut to commercial.”

“Who’re the good guys here?”

He put a hand to his chest. “I’m hurt, Doctor.”

“What are you, FBI?”

“A different collection of letters — it wouldn’t mean anything to you. Let’s get back to your theory: appealing, but wrong. Do you remember Cestare’s first reaction when you floated it by him?”

“He said it was unlikely.”

“Why?”

“Because Chuck Jones was a builder, not a destroyer.”

“Ah.”

“But then he looked up Plumb’s job history and found out companies he’s been associated with tend not to live long. So maybe Jones has changed his style and is going for slash and burn.”

“Plumb is a slash-and-burn man,” he said. “Got a long history of setting up companies for raiders, then taking fat commissions on the buy-out. But those were companies backed up by assets that made them worth plundering. Where’s the incentive to destroy a nonprofit money-loser like Western Pediatrics? Where are the assets , Doctor?”

“The real estate the hospital sits on, for a start.”

“The real estate.” Another headshake, accompanied by a finger wag. The guy had a definite tutorial bent. “As a matter of fact, the land is owned by the city and leased to the hospital under a ninety-nine-year contract, the contract’s renewable for another ninety-nine at the hospital’s request, and the rent’s a dollar a year. Public record — look it up at the assessor’s office, just as I did.”

“You’re not here because Jones and his gang are innocents,” I said. “What are they after?”

He moved forward on his chair. “Think convertible assets, Doctor. A massive supply of high-quality stocks and bonds at Chuck Jones’s disposal.”

“The hospital’s investment portfolio — Jones manages it. What’s he doing, skimming?”

Yet another headshake. “Proximate but no panatela, Doctor. Though that’s also a reasonable assumption. As it turns out, the hospital’s portfolio is a joke. Thirty years of dipping into it to balance the operating budget has stripped it down to bare bones. In fact, Chuck Jones has built it up some — he’s a very savvy investor. But rising costs keep eating away at it. There’ll never be enough in there to make it worth fooling with — not at Jones’s level.”

“What’s his level?”

“Eight figures. Major-league financial manipulation. Fisk and Gould would have counted their fingers after shaking hands with Chuck Jones. His public image is that of a financial wizard and he’s even saved a few companies along the way. But it’s his plundering that fuels it all. The man’s destroyed more businesses than the Bolsheviks.”

“So he’s a slash-and-burn man, too, as long as the price is high enough.”

Huenengarth looked up at the ceiling.

“Why doesn’t anyone know about it?” I said.

He scooted forward a bit more. Very little of him was touching the chair.

“They will soon,” he said quietly. “I’ve been on his trail for four and a half years and the end’s finally in sight. No one’s going to fuck it up — that’s why I need total discretion. I won’t get derailed. Understand?”

The pink of his neck had deepened to tomato-aspic. He fingered his collar, loosened his tie and opened it.

“He’s discreet,” he said. “Covers himself beautifully. But I’m going to beat him at his own game.”

“Covers himself how?”

“Layers of shadow corporations and holding companies, phony syndicates, foreign bank accounts. Literally hundreds of trading accounts, operating simultaneously. Plus battalions of lackeys like Plumb and Roberts and Novak, most of whom only know a small part of each picture. It’s a screen so effective that even people like Mr. Cestare don’t see through it. But when he falls, he’s going to fall hard, Doctor, I promise you. He’s made mistakes and I’ve got him in my sights.”

“So what’s he plundering at Western Peds?”

“You really don’t need to know the details.”

He picked up his coffee cup and drank.

I thought back to my conversation with Lou.

Why would a syndicate buy it, then shut it down ?

Could be any number of reasons... They wanted the company’s resources, rather than the company itself

What kinds of resources ?

Hardware, investments, the pension fund...

“The doctors’ pension fund,” I said. “Jones manages that, too, doesn’t he?”

He put down the cup. “The hospital charter says it’s his responsibility.”

“What’s he done with it? Turned it into his personal cashbox?”

He said nothing.

Milo said, “Shit.”

“Something like that,” said Huenengarth, frowning.

“The pension fund is eight figures?” I said.

“A healthy eight.”

“Come on, how’s that possible?”

“Some luck, some skill, but mostly just the passage of time, Doctor. Ever calculate what a thousand dollars left in a five percent savings account for seventy years would be worth? Try it some time. The doctors’ pension fund is seventy years’ worth of blue chip stocks and corporate bonds that have increased ten, twenty, fifty, hundreds of times over, split and resplit dozens of times, and paid out dividends that are reinvested in the fund. Since World War Two the stock market’s been on a steady upward swing. The fund’s full of gems like IBM purchased at two dollars a share, Xerox at one. And, unlike a commercial investment fund, almost nothing goes out. The rules of the fund say it can’t be used for hospital expenses, so the only outflow is payments to doctors who retire. And that’s only a trickle, because the rules also minimize payments to anyone who leaves before twenty-five years.”

“The actuarial structure,” I said, remembering what Al Macauley had said about not collecting any pension. “Anyone who leaves before a certain period gets paid nothing.”

He gave an enthusiastic nod. The student was finally getting things right.

“It’s called the fractional rule, Doctor. Most pension funds are set up that way — supposedly to reward loyalty. When the medical school agreed to contribute to the fund seventy years ago, it stipulated that a doctor who left before five years wouldn’t get a penny. Same goes for one who leaves after any time period and continues to work as a physician at a comparable salary. Doctors are very employable, so those two groups account for over eighty-nine percent of cases. Of the remaining eleven percent, very few doctors serve out the full twenty-five and qualify for full pension. But the money paid into the fund for every doctor who’s ever worked at the hospital stays right there, earning interest.”

“Who contributes besides the med school?”

“You were on staff there. Didn’t you read your benefits package?”

“Psychologists weren’t included in the fund.”

“Yes, you’re right. It does stipulate M.D. Well, count yourself lucky to be a Ph.D.”

“Who contributes?” I repeated.

“The hospital kicks in the rest.”

“The doctors don’t pay anything?”

“Not a penny. That’s why they accepted such strict regulations. But it was very shortsighted. For most of them, the pension’s worthless.”

“Stacked deck,” I said. “Giving Jones an eight-figure cashbox — that’s why he’s making the staff’s lives miserable. He doesn’t want to destroy the hospital — he wants to keep it limping along with no doctor staying very long. Keep turnover high — staff leaving before five years or when they’re young enough to get comparable jobs. The pension keeps accruing dividends, he doesn’t have to pay out, and he’s able to rape the surplus.”