The Bancroft Strategy (6 page)

“Espionage ain't bean bag,” Drucker mused softly.

Oakeshott nodded. “Like I said, Pollux is as smart as they come. Just hope he didn't outsmart himself this time.”

“He was getting close, making good progress,” Garrison said. “Want to get in tight with the banking community? Start making loans and they'll come around soon enough, just to take a look at you. Pollux knew that one of the guys at the meet was a banker, with fingers in a lot of pies. A rival, not a supplicant.”

“Sounds pretty elaborate, and pretty expensive,” Oakeshott said.

Garrison scowled. “You don't get into the Ansari network by filling out an application.”

“The penny drops,” said Oakeshott. “Let me see if I've got this right. The same night that Ansari's supposed to be in his citadel of evil, finalizing a three-hundred-million-dollar chain deal for midsized armaments—the same night that he's dotting t's, authorizing digital signatures, and stowing a shitload of cash in one of his numbered accounts—we've got Jared Rinehart, a.k.a. Ross McKibbin, sitting down with a roomful of greedy shopkeepers in Beirut. Then he's snatched by a band of towel-heads with Kalashnikovs and attitude. Same night. Anybody think that's just an accident?”

“We don't know what went down,” Drucker said, gripping the back of his chair as if to keep his balance. “My gut says that he played the part of the rich American businessman too well for his own good. The guys who bundled him off probably figured he was worth a lot as a hostage.”

“As a U.S. intelligence agent?” Oakeshott sat up very straight.

“As a rich American businessman,” Drucker persisted. “That's what I'm saying. Kidnapping is pretty common in Beirut, even now. These militant bands need cash. They're not getting it from the Sovs anymore. The Saudi royals have pulled back. The Syrians are turning into skinflints. My guess is that they took him for the guy he claimed to be.”

Oakeshott nodded slowly. “Puts you all in a pretty pickle. Especially with what's happening on the Hill.”

“Christ,” Drucker muttered. “And tomorrow I've got another meeting with that goddamn Senate oversight committee.”

“They know about the op?” Garrison asked.

“In general terms, yeah. Given the size of the budget item, there was no way around it. They're probably going to have questions. I sure as shit don't have any answers.”

“What kind of a budget item are we looking at?” Oakeshott asked.

A bead of sweat on Drucker's forehead pulsed along with the vein beneath it, glinting in the sun. “Half a year means major sunk costs. Not to mention the manpower involved. We've got considerable exposure here.”

“Pollux's chances are going to be better the sooner we do something,” Gomes said earnestly, breaking in. “In my opinion.”

“Listen to me, kid,” Garrison said with a baleful stare. “Opinions are like assholes. Everybody's got one.”

“The Kirk Commission finds out what's gone down,” Drucker put in quietly, “I'm going to have two. And I don't mean opinions.”

Despite the shafts of midday sun, the room had come to seem shadowed, gloomy.

“I don't mean to be out of line, but I'm confused,” Gomes said. “They took one of our guys. A key player, too. I mean, Jesus, we're talking about Jared Rinehart. What are we going to do?”

For a long moment nobody spoke as Drucker turned toward his two senior colleagues and silently canvassed their opinions. Then he gave the junior officer a styptic look. “We're going to do the hardest thing of all,” the director of operations said. “Absolutely nothing.”

Andrea Bancroft took a hurried sip of bottled water. She felt self-conscious, as if everyone were staring at her. As a glance around the room confirmed, everyone
was
staring at her. She was in the middle of her presentation on the proposed deal with MagnoCom, widely seen as an up-and-coming player in the cable and telecom industry. The report was the biggest responsibility the twenty-nine-year-old securities analyst had been given so far, and she had put a great deal of time into the research. This wasn't just another backgrounder, after all; it was a deal in motion, with a tight deadline. She had dressed for the presentation, too, in her best Ann Taylor suit, with a blue-and-black plaid pattern that was bold without being forward.

So far, so good. Pete Brook, the chairman of Coventry Equity Group and her boss, was sending her approving nods from his seat in the back. People were interested in whether she had done good work, not in whether she was having a good-hair day. It was a thorough report she was delivering. A
very
thorough report, she had to admit. Her first few slides summarized the cash-flow situation, the various revenue streams and cost centers, the write-offs and capital expenditures, the fixed and variable expenses that the firm had incurred over the past five years.

Andrea Bancroft had been a junior analyst at Coventry Equity for two and a half years, a fugitive from grad school; to judge from Pete Brook's expression, she was in for a promotion. The qualifier “junior” would be replaced with “senior,” and her salary could very well hit six figures before the year was over. That was a lot more than her fellow grad students were going to see in academe any time soon.

“It's clear at a glance,” Andrea said, “that you're looking an impressive ramp-up in revenue and in customer base.” A slide with the upward-sloped curve was projected onto a screen behind her.

Coventry Equity Group was, as Brook liked to put it, a matchmaker. Its investors had money; the markets had people who could put that money to good use. Undervalued opportunities were what they looked for, with a particular interest in PIPE opportunities—private investment in public equity, or situations where a hedge fund like theirs could acquire a bunch of common stock or equity-linked securities at a discount. Those typically involved distressed firms with a serious need for a fast cash infusion. MagnoCom had approached Coventry, and Coventry's investment-relations manager was excited by the prospect. It seemed in surprisingly good shape: MagnoCom, as its CEO explained, needed the cash not to weather a bad patch but to take advantage of an acquisition opportunity.

“Up, up, up,” Andrea said. “You see that at a glance.”

Herbert Bradley, the plump-faced manager for new business, nodded with a look of pleasure. “Like I said, this ain't no mail-order bride,” he said, looking around at his colleagues. “It's a marriage made in heaven.”

Andrea clicked to the next side. “Except what you can see at a glance isn't all there is to see. Start with this write-off list of so-called onetime expenses.” These were numbers that had been buried in a dozen different filings—but, when gathered together, the pattern was unmistakable and alarming. “Once you drill down, you find that this firm has a history of disguising equity-for-debt swaps.”

A voice from the rear of the conference room. “But why? Why would they need to?” asked Pete Brook, rubbing his nape with his left hand, as he did when he was agitated.

“That's the one-point-four-billion-dollar question, isn't it?” Andrea said. She hoped she was not coming across as cheeky. “Let me show you something.” She projected a slide showing revenue intake,
then superimposed another slide showing the number of customers acquired over the same period. “These figures ought to be in a tandem harness. But they're not. They're both rising, yes. Only, they're not rising
together
. When one zags down in a quarter, the other might zag up. They're independent variables.”

“Jesus,” Brook said. She could tell from his crestfallen expression that he got it. “They're shamming, aren't they?”

“Pretty much. The acquisition cost per household is killing them, because the service is so deeply discounted for new customers and nobody wants to renew at the higher rate. So what they've done is run two flattering figures up the flagpole: customer growth rates and revenue growth rate. Assumption is, we're going to look at the big picture and see cause and effect. But the revenue is smoke and mirrors, ginned up by equity swaps, and by hiding the money they're losing on growing the customer base through all these supposed onetime charges.”

“I can't believe it,” Brook said, slapping his forehead.

“Believe it. That debt is a big bad wolf. They just put it in a dress and a bonnet.”

Pete Brook turned to Bradley. “And they had you saying, ‘What lovely big teeth you have, Grandma.'”

Bradley fixed Andrea Bancroft with a stern gaze. “You sure about this, Miss Bancroft?”

“Afraid so,” she said. “You know, I used to do history, right? So I figured the history of the company might shed some light on things. I looked way back, back before the DyneCom merger. Even then, the CEO had a habit of robbing Peter to pay Paul. New bottle, old wine. MagnoCom has a business plan from hell, but the financial engineers they hired are pretty brilliant, in a twisted way.”

“Well, let me tell you something,” Bradley said in a level voice. “Those pissers met their match. You just saved my goddamn ass, not to mention the firm's bottom line.” He grinned and started
applauding, having calculated that a quick surrender to the winning argument was the better part of valor.

“It would have all come out on the Form Eight-K,” Andrea said as she gathered her papers and started to walk back to her seat.

“Yeah, after the deal was inked,” Brook interjected. “Okay, ladies and germs, what have we learned today?” He looked around at the others in the room.

“Get Andrea to perform your due diligence,” one of the traders said with a snort.

“It's easy to lose money in cable,” another one cracked.

“Give it up to Bangin' Bancroft,” called out another would-be wit, this one a more senior analyst who hadn't caught the flimflam in his first pass through the PIPE proposal.

As the meeting started to break up, Brook came over to her. “Solid work, Andrea,” he said. “More than solid. You've got a rare talent. You look at a stack of documents that looks completely in order, and you know when something's off.”

“I didn't
know
—”

“You sensed it. Then, even better, you worked your ass off to
prove
it. There was a lot of ditch-digging behind that presentation. I bet your spade banged against bedrock more than once. But you kept digging, because you knew you'd find something.” The tone was of assessment as much as commendation.

“Something like that,” Andrea admitted, tingling slightly.

“You're the real deal, Andrea. I can always tell.”

As he turned to speak to one of the portfolio managers, one of the secretaries approached her, clearing her throat. “Miss Bancroft,” she said. “A call you might want to take.”

Andrea floated back to her desk, hydroplaning on relief and pride. She
had
kicked ass, just as Pete Brook said. His look of gratitude was genuine, and so was his praise afterward; there was no doubt about that.

“Andrea Bancroft,” she said into the handset.

“My name is Horace Linville,” said the man who called, needlessly. That much was on the call slip. “I'm an attorney with the Bancroft Foundation.”

All at once Andrea felt herself wilting. “And what can I do for you, Mr. Linville?” she said without warmth.

“Well…” The lawyer paused. “Mostly it's about what we can do for you.”

“I'm afraid I'm not interested,” Andrea replied, almost testily.

“I don't know if you're aware that a cousin of yours, Ralph Bancroft, recently passed away,” Linville persisted.

“I wasn't,” Andrea replied, her voice softening. “I'm sorry to hear that.” Ralph Bancroft? The name was only vaguely familiar.

“There's a bequest,” he said. “Of a sort. Triggered by his death. You'd be the recipient.”

“He left me money?” The lawyer's elliptical formulations were beginning to irritate her.

Linville paused. “The family trusts are quite intricate, as I'm sure you appreciate.” He paused again, and then lurched into an elaboration, as if aware that what he said might have been taken the wrong way. “Ralph Bancroft had been a member of the foundation trustees, and his passing leaves a vacancy. The charter specifies eligibility, and the percentage of members that must belong to the Bancroft family.”

“I don't consider myself a Bancroft, really.”

“You're a trained historian, no? You'll want to be fully informed of the antecedent circumstances before you make any final decisions. But I'm afraid we're on a very tight schedule here. I'd like to drop by and present these details to you formally and in person. Apologies for the short notice, but it's an unusual situation, as you'll see. I can come to your house at half-past six.”

“Fine,” Andrea said, her voice hollow. “That's fine.”

Horace Linville turned out to be a wren-drab man with a pear-shaped head, sharp features, and an unfortunate ratio of scalp to
hair. A driver had taken him to Andrea Bancroft's modest Cape Cod–style house in the Connecticut town of Carlyle, and waited outside as he entered. Linville brought with him a metal-sided briefcase with a combination lock. Andrea led him into the living room and noticed that he glanced at the seat of the armchair before sitting on it, as if examining it for cat hairs.

His presence made her feel oddly self-conscious about her home, a place she had on a twelve-month rental, in a not-so-expensive neighborhood of a generally somewhat pricey town. Carlyle was one or two train stops too far from Manhattan on Metro North to make it a proper bedroom community, but some of its inhabitants did the commute. She had always taken some measure of pride in her Carlyle address. Now she thought about what her place must seem like to someone from the Bancroft Foundation. It must seem…small.

“Like I said, Mr. Linville, I don't really consider myself a Bancroft.” She had seated herself on the sofa, at the other side of the coffee table.

“That's not quite to the point. By the foundation's guidelines and charter, a Bancroft is exactly what you are. And with Ralph Bancroft's passing—with the departure of any member of the board—a series of eventualities are triggered. There's a…disbursement that accompanies this responsibility. A bequest, if you like. That's how it's always been done at the foundation.”

“Let's put history aside. I work in finance, as you know. We like things to be clear and specific. What's the specific nature of the bequest?”

A slow blink. “Twelve million dollars. Is that specific enough?”

The words vanished like smoke rings in the wind.
What
had he said? “I'm not following.”

“With your authorization, I can wire those twelve million dollars into your account by the end of the banking day tomorrow.” He paused. “Does that make things clearer?” He removed a set of documents from his briefcase, arrayed them on the table.

Andrea Bancroft was dizzy, almost queasy. “What do I have to do?” she choked out.

“Serve as a trustee of one of the most admired charitable and philanthropic organizations in the world. The Bancroft Foundation.” Horace Linville let a moment of silence elapse yet again. “Not everyone would find this terribly onerous. Some might even regard it as an honor and a privilege.”

“I'm stunned,” she said finally. “I don't know what to say.”

“I hope it's not inappropriate for me to make a suggestion,” the lawyer replied. “Say yes.”

Washington, D.C.

Will Garrison ran a hand through his steel-gray hair; in repose, his basset eyes and jowly face might have seemed kindly. Belknap knew better. Anyone who had encountered the man did. There was an earth-science logic to it: The hardest rock was born of pressure over time.

“What the hell happened in Rome, Castor?”

“You got my report,” Belknap said.

“Don't bullshit me,” the older man warned. He stood up and twisted closed the blinds that hung over the interior glass wall of his office. The room had the bolted-down look of a ship captain's office: no loose articles in sight, everything squared away, secured. A tidal wave could have rocked the office and shifted nothing. “We've sunk God knows how much in resources and personnel into three separate Ansari ops. The directive was clear. We get inside, we see how it works, we follow the tentacles where they go.” A display of tea-colored teeth. “Except that wasn't good enough for you, was it? Instant gratification takes too long, huh?”

“I don't know what the hell you're talking about,” Belknap replied, wincing involuntarily. It hurt when he breathed: He had cracked a rib when he vaulted over the brick wall outside the villa. His left ankle
had been strained and sent up shooting pains when it had to bear any weight. But there had been no time even for a visit to a medic. Hours after his escape from Ansari's men, he was in the Rome airport, boarding the first commercial flight to Dulles that was available. It would have taken longer to secure transport from one of the U.S. military bases in Livorno or Vicenza. Belknap barely gave himself time to brush his teeth and finger-comb his hair before he raced to Cons Ops headquarters on C Street.

“You've got brass ones, I'll give you that.” Garrison returned to his chair. “Showing up here like this with that concerned expression on your face.”

“I'm not here for tea and cookies, okay?” Belknap replied testily. “Start talking sense.” Though he and Garrison had a reasonably functional working relationship, they had never clicked personally.