“Tontine. Haven’t heard that word in ages. Michael Caine-The Wrong Box. Which brother lived longer.” Mike was trying to loosen Baynes up by making light of things. “Which one got all the money. Is that the right movie, Coop?”
“Yup. Robert Louis Stevenson story.” Mike knew the movies, I knew the books.
“What’s a tontine anyway, Donny?”
“They’re schemes for raising capital-like a combination of a group annuity and a lottery. A Neapolitan banker named Lorenzo de Tonti invented them in the seventeenth century.”
“They legal?” Mike asked.
“Not anymore, ’cause they’re basically swindles. But-but-it was just a name we used. There was no tontine involved.”
“Financial geniuses, the Italians. They got Tonti, Ponzi-Gotti-all came up with clever ways for guys to make a buck. I’d think as a prosecutor you’d know enough to stay away from that kind of stuff.”
“It was Moses Leighton who formed the club. I was in private practice at the time. It was just a well-intentioned way of raising money for the restoration of some old properties in the city.”
“Like how?”
“It’s a simple concept. In a real tontine, each member invited in pays a sum-say five hundred dollars from twenty members each. The money’s invested, and every year-every good year-you get a dividend. When an investor dies, the money is reallocated among the survivors. Last man standing gets the whole pot-a gamble that in the old days could leave someone with a fortune.”
“Your tontine wasn’t real?” Mike asked. “Is that what you’re saying?”
Mike was baiting Donny and it was working. Asking simple, general questions about the concept to get his subject to open up. And Donny Baynes was talking.
“They’ve been banned in this country for decades. Moses Leighton had this idea to start an organization for private funding to help the city raise money for neglected projects, things that just wouldn’t get repaired or restored because of budget restraints.”
“And Ethan was a new city councilman at the time,” I said.
“Exactly. It was a lot about paving a future for his son, of course.”
“With a swindle?” Mike asked.
“Listen to me, will you?” Donny liked being in the superior position to Mike again. “This is why the first tontines were created-for governments to use to raise capital. They were good things. Louis XIV created a tontine in 1689 to fund military operations when he was broke. It was honest. It worked. The last surviving investor lived to the age of ninety-six with that fortune. The British government copied the idea to go to war against France a few years later.”
“So why’d they stop working?”
Donny was gesturing with both hands. “Investors caught on. They bought shares for infants and children, instead of for themselves. If the kids lived till old age, they often made pots of money. The governments weren’t able to keep up with the costs. That’s why you’ve got a pension today, instead of a tontine-instead of a death gamble.”
Mike nodded his head. “Okay, so what did old Moses have in mind?”
“The city owns a good number of properties in the five boroughs that have historic significance. They’re run by a nonprofit trust that raises private funds for them, in tandem with the city parks department, since several of them sit in local parks.”
“Is Gracie Mansion part of that trust?” I asked.
“It is. And these are great old houses that date back centuries, so they’re enormously expensive to maintain. Moses Leighton had a creative idea to help the city do just that.”
“With an eye to restoring Gracie in case his son needed a mayoral roof over his head,” Mike said.
“Bloomberg was a little more popular than Moses expected. That’s why Ethan took the congressional seat.”
“So the club?” I asked.
“Moses invited thirty or forty guys to participate as members. I think he wound up with a little more than half that at every dinner. Some of them were politicians, and others were wealthy businessmen, but all approved of his plan.”
“What was it?
“A dinner club. A perfectly respectable dinner club,” Donny said, looking Mike in the eye. “Every second month Mr. Leighton arranged to have dinner catered for us at one of these different properties. Most of them are restored, to one degree or another, and run as museums.”
“You rented them?”
“Even you can do it, Chapman. It’s one of the ways they make money. Most people don’t even know these places exist, especially in the other four boroughs.”
“Leighton paid for the dinners?” Mike asked.
“He did. He underwrote them. But we each had to make a contribution to his enterprise. Five hundred, a thousand, each according to his means, I guess. If you were in public service, you paid less, and he had some very high rollers from the investment banking world. You gave him your check, which went to the trust to restore the houses, of course.”
“Not the tontine?”
“A pretty harmless tontine, Chapman, like I said. At each dinner, every member had to bring a bottle of wine-a really fine wine. The money went to its designated purpose, and the wine got stored in Moses Leighton’s cellar. Last man standing gets a damn good selection of wines, to toast those gone before him.”
“Who’s in the club?”
“I told you, it’s been disbanded.”
“Why’d that happen?”
“A few of our original members-uh-had some problems.”
“Hit the skids?” Mike asked. “Who were they?”
“Moses and Ethan Leighton, of course, were the founders of it. Ethan invited me to join, along with a couple of our other law school friends who were also at big firms. I’ll give you their names if you think it matters. One of them was convicted of insider trading, so he was the first to go.”
“A classmate of yours?”
“Yes. And a year later, one of the men was a suicide-jumped out the window of a hotel room where he’d been holed up doing drugs. Had a problem with crystal meth and male prostitutes.”
“Guess the screening for club standards was a little loose,” Mike said. “Was Kendall Reid in the club?”
Donny rubbed his hands together as he answered. “No. But Reid was around the Leightons all the time back then. Working for Moses, I think, before he became Ethan’s aide. He wasn’t in on these dinners. Probably because he was just considered staff by the Leightons. That may be why he’s so resentful about all this, telling you about me, like I’d done something wrong.”
“Did Ethan ever bring a woman to any of these meetings?” I asked.
“Not once. Nobody did. Don’t get me wrong, Alex. No reason it couldn’t have been that way. Nothing improper. It was just a throwback to the old boys’ club kind of thing that Moses Leighton thought would be amusing every now and then.”