Chapter 53
The next day Jack checked short volume on ReWire. Short volume was triple normal. In the past the enemy had concentrated on a single stock at a time. The program Lee and Alice designed showed that the enemy had only shorted more than one stock twenty-six times out of the suspected six hundred and seventy-six times they’d sold short.
He didn’t have to phone or email the order in. Lee and Alice had been busy, living on the phone and net, putting together an automatic trading program for the group’s brokers. When the telltales of higher short volume hit, the program sent out buy orders on the stocks. The good guys split the trades into pieces of one thousand shares or less and placed the orders through twenty-eight different brokers, scattered from London, by way of the Caymans, through Bogotá, up to Mexico City, over to Singapore, and Tokyo.
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The temptation to place at least some of the trades in the States was strong, but for the Feds’ meddling. He didn’t worry so much about getting convicted, censured, or even fined. He worried about spending energy and time tied up in court, every move watched and questioned. He didn’t want to leave the planet as a result of being bored to death by bureaucrats.
The enemy didn’t worry about US trading rules. It was one of the many business advantages of non-citizens. They didn’t face asset forfeiture if they were convicted. Two short blocks of fifty thousand shares each went in through a broker in San Francisco. The enemy’s timing was perfect. A short sale couldn’t occur unless there was an upward movement in the stock, known on the street as an up-tick. It didn’t matter how much the stock moved up. The price movement just had to be up. The news on the stock had been bad for the last six months. Meghan’s slow progress, along with the quality control problems at the plant in Davis, had depressed the stock price by three and a half points over the last eleven days.
Donald O’Hare reported trimming some fat at their corporate headquarters. He’d conned a bank into refinancing over half of their long-term debt a percent and a half lower than before. With that and other cost-saving measures, ReWire’s break-even point dropped by six million dollars. Even if their earnings came in twenty percent below First Call estimates, ReWire would have free cash flow for the first time in two years.
The stock was still near a three-year low. Watching the market made him doubt that this was the work of his enemies. The short volume was mostly on three major trades. Biotech had been out of favor with the brokerage community for quite a while.
The word on the street was that biotech was still overextended and any bad news in the segment would lead to a hard correction. The biotech group was on the top of the hit list because of all the recent bad luck in the group. Another thing bothering him was the lack of news stories planted to depress the stock price. All the bad news he could see had been out there for a long time. He scrolled back through the news stories they’d gathered to make sure. He scrolled past the stories about the attack on Meghan and the follow-up stories until he found the oldest bad news.
August 25, San Jose Mercury News Bureau
ReWire Chairman Denies Quality Control Problems at Davis Plant.
Donald O’Hare, President and Chairman of the Board of ReWire ticker symbol RWIR, denies persistent industry rumors that the company’s new plant in Davis has serious quality control problems on its newest production runs of Anti-Environ.
Anti-Environ is the newest in a series of drugs that, as its name implies, purports to create an inhospitable atmosphere for viral reproduction. The quality control problems are alleged to be caused by unexpected contamination of the growth cultures used to manufacture these genetically altered proteins. The plant in Davis is brand new and state-of-the-art. The initial studies using Environ to stop growth of Hepatitis C, D, and E, were very favorable. The reproductive rates for Hepatitis C and D were cut by a factor of 2, from a standard reproductive rate in a moderately heavy-drinking male.
DAVIS, CA, July 16
Chief Scientist of ReWire Denies Rumors of Flawed Production
Meghan McDonald, chief scientist of ReWire, sister of Bay Area entrepreneur Jack McDonald, denies rumors that the production facility being constructed at their new Davis plant is flawed and says the rumors were started by competitors. Numerous companies are in race to produce commercial quantities of a family of genetically altered enzymes that are said to inhibit the reproductive cycle of many families of viruses. ReWire has the apparent lead in this race, if they can reach their production estimates.
His private line rang. He answered it, saying only the four-digit extension: “Three-eight-four-seven.” Stockbrokers had started using automatic dialers to call all the unlisted numbers in the City about a year ago. They couldn’t get a list of the unlisted numbers. What they did instead was get a list of all the listed numbers and then had a computer program written to generate a list of the ones that weren’t there.
“Mr. McDonald, Captain Yan will be lunching at the Fire Dragon in fifty-five minutes. He apologizes for the short notice and wonders if you might be able to lunch with him.” It was Sergeant Washington.
“Are you his social secretary too, or is this business?” Jack asked.
Sergeant Washington chuckled. At least, Jack thought that the sound, somewhere between a lion growling and the rumble of thunder, was supposed to be a chuckle.
“Captain Yan often combines business and pleasure. Many people are eager to lunch with the Captain.”
Jack agreed to the lunch and rearranged the three meetings he had scheduled for early afternoon. One was with an SEC official who wouldn’t state his business but said Jack would be doing him a great favor by arranging a quick meeting.
The market got hammered all morning. The pundits said it was mostly on the lack of any progress in the Middle East, although rumors of another antitrust suit against Microsoft didn’t help. As if the pundits had a clue.
THERE was the usual line outside the Fire Dragon, mostly businessmen of all ethnicities over from the financial district for real food. Like most Chinese restaurants on the west coast, Cantonese had started the Fire Dragon. Over the years they added Mandarin and Szechwan and still made it work. There were a couple of groups of European tourists who had either stumbled onto the place or picked up one of the guidebooks written by someone who had actually been to the City. The restaurant also attracted the want-to-be-seen crowd. The atmosphere was comfortable, but not opulent. The place was designed to feed people well, comfortably and with some privacy.
Jack walked past the cashier, looking for Sergeant Washington, seeing neither he or nor the Captain. He knew very few phrases of Cantonese. Fortunately almost all of them had to do with travel, food, and cursing.
He heard the Sergeant’s voice behind him. He had been surprised so many times by the Sergeant suddenly appearing that he was almost immune. Washington led him back to the smallest banquet room off to the left of the main hall. The Sergeant held the door and closed it behind Jack, staying outside. Captain Yan smiled, stood up from his chair and walked over to shake hands.
Yan motioned him to sit, and followed the Chinese custom of small talk and small food until their initial hunger was sated. The owner, Lin Pin Lou, sixth-generation oldest son, served them himself as a show of respect. Jack knew him slightly, and as one of the medium hitters in the City, usually received a good table.
If Lin had been a dog he would have had his tail between his legs and peed on the floor as he approached the Captain. It was respect at a level Jack didn’t understand. There was something beyond respect. It was unexpected but definitely there-fear. The Captain nearly ignored Lin until Lin bowed and left, Yan acknowledging his exit with a flap of his right hand.
“I understand you have moved your sister from the hospital to your home in Tiburon. Does this mean she is almost well?” was Yan’s first question.
“Meghan is near consciousness, we hope. The doctor agreed she might improve more quickly in a homier atmosphere. She’s been home a week. All the tests say brain function is normal. At this point they say she pretty much has to decide to wake up. Physically she is doing quite well.”
He certainly didn’t tell Yan the major reason-security. His house had originally been built back in the late fifties by one of the paranoid industrialists of the cold war. It was more fortress than house and he felt a whole lot happier with his sister there than in a hospital, even a private one. The house was mostly cinder block and had a real basement and below that a sub-basement bomb shelter that extended down to the top of high tide. The grounds were nearly big enough to warrant the electronic gate. The twisting drive up the hill wouldn’t give a vehicle a chance to build up speed.
The ocean approach looked easy, but the steep steps were the only quick way up to the house from the dock. A good Marine platoon could take the house, but there would only be a squad left by the time they got inside-and none would make it into the bomb shelter. Quan Tree Dong, Colonel, Retired, ex of the 17th Sapper Brigade, Army of the Democratic Peoples of Vietnam, thought that the bomb-shelter would protect against a direct hit on the house by a 500-pound iron bomb.
Bob White hired Quan as a subcontractor for a few modifications to the house. Jack asked Bob how he had come to terms with hiring an NVA regular colonel, someone who had probably been responsible for the deaths of many good American boys. Bob said he had prayed on that question. He said an ex-movie actor formerly married to a media magnate and some politicians who kept getting elected had certainly killed a lot a whole lot more good American boys than the colonel. He said he wouldn’t do business with them, but he would with the colonel. Quan made very good suggestions about fields of fire and toughening the approaches up the driveway and off the dock.
“I’m sorry, Captain, you were saying?”
Jack had let his concentration lapse while the good Captain was talking. This was about as smart as falling asleep on an air mattress floating in a shark tank.
The Captain said, “I was saying that when I heard about your sister being moved to your house it made me think of a story I’d heard about you. I hadn’t bothered to check its validity before, but your reactions, or lack of reactions, during the interview with Ms. Schacter intrigued me. It seems you needed a zoning exemption to modify the dock on your property making it more efficient. One of the supervisors in your district, a neighbor, blocked the exemption, saying that a dock as modern and large as you wanted would destroy the esthetics of the neighborhood and therefore affect the values of neighboring houses.”
The Captain paused as Sergeant Washington brought in three manila folders. The sergeant apologized for the interruption, saying the Captain had to sign some papers. While Yan was signing, he glanced around the room again, knowing where Yan was heading and hoping he wouldn’t get there. The painting of trees in blossom with buzzing bees on the wall looked like an original Ju Lian.
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Under the painting, on a cart, stood an ancient Minolta copier with attached collator. Years ago he bought one like it, used, for his first office. It was a 3050, dependable, and reasonably fast. It could also rotate a copy, crop, size, and add a gutter.
The Captain apologized for the delay and started back in on his story. “It seems this neighbor, Martin Guzman, owned a nightclub that catered to, what is the term? Oh, they are called, “RUBs,” Rich Urban Bikers. It is rumored you stopped by his place of business to ask him to change his mind and he not only refused, but was extremely rude. The rest of the story is from the police report.”
Yan opened the file and read bits and pieces. “A group of three men, among them Mr. McDonald, entered the nightclub at 11:30 PM on the Sixteenth of September, 2006 and paid the hostess to seat them at a table near the stage. Although the owner of the club says this group became drunk and belligerent and started a fight, eyewitnesses deny this. One witness, the singer who was on stage at the time, a “Dusty Rose,” insisted that Mr. Guzman, some of his security staff, and regulars at the bar taunted Mr. McDonald’s group and when their taunting drew no reaction, attacked Mr. McDonald and his group.”
Yan looked up at him and grinned like a nine-year-old who’d just discovered his favorite shooter, the one he thought he’d lost, mixed in with some old marbles in the bottom of the front pocket of his Levi 501s.
“Mr. Guzman and four members of his security staff were admitted to the hospital, all but Mr. Guzman and his head of security being released the same night. Property damage to the lounge was later established by the insurance claims adjuster, as being $76,000?”
The last he said with rising inflection of a question, expecting explanation.
“Flimsy construction?”
It was a good thing no one at the county clerk’s office remembered anyone copying a set of the building plans. Somehow two load-bearing pillars had been accidentally knocked down, doing most of the damage.
“The investigating officer, Lieutenant Yolanda Santiago, is certain you somehow coerced the group into attacking you. She is not certain of how you did this as none of the patrons who were sitting nearby can remember any remarks or gestures that could remotely be considered threatening. Somewhat curiously, Mr. Guzman, when he was again capable of appearing at meetings, failed to show up at the meeting where the decision was made to grant the exemption you requested. Your dock was rebuilt to stand as it does today.”
Yan again stopped, took the half-glasses off his nose and rubbed his face vigorously before making very direct eye contact.
“I understand Mr. Guzman sold his home near yours shortly after, moving to the City. My policemen would not have left so many unanswered questions, nor would we have been so naive. Sometimes it is good to take matters into your own hands. There are occasions where you can take action without much risk and this action has good consequences and gives great satisfaction. This building permit was probably such a time. Goading a street tough into throwing a punch at you and then slamming him to floor of a BART station was probably another. On other important things, like this despicable attack on your sister and all its attendant evils, you would do much better to help the authorities where you can and leave the ‘dirty work’ to us.”
Again the Captain paused, this time with a serene look on his face, as if waiting for something before he said:
“I know that you know that this case is something much more than a robbery gone wrong. If others are hurt of die because you do not share your knowledge with me, I will make your life a living hell. I also know that you are a moral man of good judgment. Please consider very carefully the timing of a future much-needed conversation, the one in which you share with me as openly as I have shared with you. I repeat for clarity. Please consider this timing very carefully. My judgment of you is that you will do the right thing. Perhaps you are lacking in information that would help you make this decision. Sometimes this knowledge comes from unexpected places and at unexpected times. Now, if you will excuse me for a moment, I must use the restroom. One of the reasons I wanted to eat here was because of the medicinal properties of certain foods. I believe, based upon unfortunate recent experience, that it may be a few minutes before I return. Please stay.” With that Yan rose and left. He left two of the three files sitting on the table.
Jack waited until the door was firmly closed before he walked over to the copier. Under the copy of the Police report on Mr. Guzman’s unfortunate incident, was a copy of the file on Albert Weise. He opened the clip on the stack of papers in the folder and checked for staples, paper clips or anything else that would jam the copier. He checked the paper tray in the copier, pulling out a few hundred sheets and fanned them before putting them back and hitting the start button.