But all that was for later. Personally, Henry suspected Holland had approved of the Finden Holdings arrangement and the proprietary trading scheme it had facilitated as a way to save his share price. But it would serve no practical end to indulge in an airing of his views. What Henry needed was a functioning institution capable of playing its role as the situation unfolded. If Holland was the man who could deliver that, then so be it. Others would decide his fate.
“It’s a sad case, really,” Holland observed. “Doug was a bright guy. If anything, I probably promoted him too quickly. I blame myself for that. Obviously the pressure got to him. He lost his judgment. I don’t know if you heard about the other stuff … I hesitate to mention it. But it seems he might have gotten into some trouble with this kid, a boy actually, might even have been underage, I’m not sure. Surprised the hell out of me. I’d never seen any indication of that. But I guess it fits the pattern. You deceive people in one part of your life, and if you get away with it, it just takes over.”
He paused here, trying to gauge his progress with Henry. Apparently doubtful of his headway, he pressed on.
“Off the record,” he said, “there’s a good chance this’ll make your sister’s life easier. I don’t think Doug will be out there in Finden much longer. He’ll have to pay his lawyers with something.”
This had occurred to Henry, though he had said nothing about it to Charlotte. Only a few days ago she had learned that her legal victory had been reversed. The news had struck her hard. Winning that case had at last justified her crusade, not only against Fanning and the town but against her larger enemy: that general encroachment of money and waste and display. Having it taken away had crumpled something in her. Her hectoring voice had grown subdued. When he’d once more mentioned the idea of moving, she had made none of her usual protests. Knowing that he was going to be in Boston, he’d asked Helen to set up an appointment at the assisted-living home that Cott Jr. had recommended, and he and Charlotte were scheduled for a visit there that afternoon.
What good would it do now to share the news of Fanning’s downfall? It would only give her false hope. Even if the man were forced to sell, the house itself wasn’t going anywhere.
He took a bite of lobster, letting his lack of response to Holland speak for itself.
“Fanning’s not my concern,” he said eventually. “Perhaps we could proceed to business?”
“Of course.”
“Let me start by saying that if you or your board is under the impression that Union Atlantic is too big to fail, you’re mistaken. There’s no question here of a bailout. If you go under, the markets will take a substantial hit, but with enough liquidity in the system we can cut you loose. I hope you understand that.”
This, of course, was a bluff. Henry had already begun receiving calls from the Treasury Department. The secretary was confident, his deputies said in their transparent euphemism, that the Federal Reserve shared his concern about market stability. Translation: the White House is watching this one. The administration, while opposed under free market theory to the government rescue of a failing corporation, didn’t want to see Union Atlantic fall apart. There were perfectly prudential reasons for this, many of which Henry agreed with, but the chatter coming out of the executive branch at the moment suggested another concern: the argument for the invasion of Iraq was hitting its stride now, and an event of this size could change the domestic and congressional equation. They didn’t want distractions. That was the gist of it. By all means avoid the appearance of rewarding speculators — no moral hazard — but now’s not the time for stringency.
Would he feel the satisfaction of justice done if an operator like Holland were brought to heel? Of course. Who wouldn’t? But whatever spleen the liberals liked to vent on the captains of industry, there were certain hard facts that had little to do with individual actors. Five hundred points off the Dow was one thing. Disruption of the credit markets was another. Dry up the lending system and the losses would no longer redound to the investor class alone. The man working for the Texas theme-park company that had been bought out with leveraged debt it could no longer service would lose his paycheck soon enough. As a general matter, particularly in the mouths of politicians, Henry disliked the use of personal anecdotes to illustrate the workings of the economy. They were almost always a distortion, a falsely simple story of cause and effect. Truth lay in the aggregate numbers, not in the images of citizens the media alighted upon for a minute or two and then quickly left behind. Currency devaluations created more misery than any corporate criminal ever would. What the populist critics rarely bothered to countenance was the shape of things in the wake of real, systemic collapse. In Argentina, the middle class was picking through garbage dumps. The failure of Union Atlantic wouldn’t deliver the country there, but then again, these were uncertain times. And whose risk was that to take?
“I don’t think anyone’s talking about a bailout,” Holland said. “We’re talking about capital injections. I think you’d agree, the brand has value, not to mention assets. All we’re looking for is a way to reassure potential investors.”
“You’re talking to the Emirates?”
“Among others, yes. We’ve got some interest in Singapore as well. The issue is the timing. I’ve got seventy-two hours to make a margin call. That’s not very long to roll out a sales pitch. If Citi or Morgan or someone of that scale were to come on board, even in a symbolic way, it would make a big difference.”
Holland dipped his head to one side and gave a slight roll of the eyes, a gesture that combined genuflection with a modicum of fatalism. He was nothing if not a good actor. His fellow CEOs, who thrived on their relative appeal in the eyes of various corporate boards, were circling to watch the kill, despite what would be in the enlightened self-interest of their own companies — that is, to prevent a broader crisis. Meanwhile, the big foreign investors sensed opportunity but didn’t want to be taken for fools. What Holland needed was Henry’s back-channel cajoling and if not the Fed’s cash, at least its imprimatur on the deal to save the bank. The loan he wanted was one of gravitas and prestige.
“And what if we say no?” Henry said, setting his silverware down on his plate. “What if I get on the phone and instead of suggesting the ‘community’ rally around to protect one of its own, what if I tell them you’re an awfully bad bet and that in the end the market will do its job and decide what you’re really worth? And if that’s a dollar a share then so be it. What then?”
For the first time since they had sat down, Holland’s big politician’s guile fell away and he leveled at Henry a cold stare, his act of forthrightness and contrition gone.
Henry’s instinct had been right: Fanning was too close to this man for Holland not to have been involved. He had been Holland’s instrument.
“What then?” Holland echoed, in a slower, more deliberate voice. “Well, I guess I’d wonder if that was the outcome our government actually wanted.”
“Really? Are you suggesting the Fed lacks independence? Are you suggesting we take our marching orders from the political branches?”
Holland leaned back from the table. “Come off it, Henry. I’ve spoken to Senator Grassley’s people. I know what you’re hearing from Treasury. So what’s with the civics lesson?”
In his mouth, the phrase sounded almost dirty. Incredible, Henry thought. Here he was, Henry Graves, the gray pragmatist, accused of naïveté. It made him wonder. Could it be that despite all the legalized venality he’d witnessed over the years, despite even what he would have said of himself not ten minutes ago, that he actually was naïve? That some kernel of protest had survived in him? What would that even mean? That after forty years he should stand up and say to the system he’d spent his life protecting, I disagree? Stability doesn’t save anyone. Regulation is just a ruse to cover up organized theft and it convinces no one but the public. He didn’t believe this. And yet like some wide-eyed undergrad, like the philosophy major he’d once been, he felt an urge. A longing even. One he barely recognized.