Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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USA: Chapter One

I didn't mind picking up David at the airport. What ticked me off was driving in a blinding rainstorm in my day-old car, a car that twenty minutes ago turned into an instant sauna when the air conditioner suddenly blew hot air. So much for technology and cars with automatic everything.

The Philly International terminal wasn't much more comfortable, but at least the rain had slowed some as I was parking the car. According to the arrival's board his flight was on time, which was the first thing to go right today. As I approached the gate the British Air passengers were just starting to file through.

His long flight and our heat and humidity aside, David Nesbitt looked like most people picture an affluent London banker, which he is; mid-sixties, steel gray hair and van-dike beard, well over six feet tall without an ounce of fat and, as always, impeccably tailored. Walking ram-rod straight he obviously takes great pride in his appearance.

I haven't seen David in almost a year. We've worked together a number of times during the past dozen or so years, whenever his employer would retain my company to help spend their money - or more accurately, the money of one of their deep-pocketed clients. Over the years my company has found and bought things for them; things like ranches for raising cattle and thoroughbred horses, resort hotels, factories, farms, and land to build things on. All kinds of things. It was an intriguing relationship. I'd guess that over the years we've spent about a half-billion of somebody's money, plus or minus a few mil. And from what we could piece together, it was all for the same buyer. We knew David, and we knew his bank - one of the oldest and most prestigious in England - yet we hadn't a clue as to the identity of old moneybags. It was a screwy business relationship, almost bizarre.

"David, good to see you again."

"Likewise, Cole. Looks like you're having a bit of weather."

"We've had sweltering heat and humidity for almost two weeks; one of those damned Bermuda highs. It's typical Delaware Valley August, but if we're lucky the storm will cool things off some. I sure hope so, because we won't have air conditioning until we get to my office. I took delivery of my new car yesterday, and on the way here the air conditioning died."

"Pity. Had I known you were shopping for a new automobile I would have sent you literature on one or two of our superior British motorcars," David chuckled, knowing his dry humor wasn't wasted on me.

After claiming his luggage, we returned to my car and headed for my office in Jersey, with the windows down. The rain had stopped, but it was still warm and sticky.

"Is our property settlement still scheduled for the day after tomorrow?" David asked.

"Yes, four o'clock on Wednesday. Before we have dinner tonight I'd like to review the survey and settlement papers with you. Tomorrow morning we can drive out and look at the land. We've completed a preliminary site plan and there are a few problems, mostly with drainage and a buffer zone, but after my last meeting with the township engineer I think we have solutions he'll accept."

"That's good. I am anxious to see the land, particularly the surrounding area, but tomorrow morning presents a problem. Before I left London I had my secretary change my hotel reservations here. I'm spending tonight at the Taj in Atlantic City; I thought I'd give the wheel a try - but I can be back in your office by mid-afternoon tomorrow. That should give us ample time to visit the site, that is if it's convenient for you. And by the way, you are more than welcome to come with me to the casino."

"No thanks, as close as AC is, I try to stay away; I never seem to know when to walk away from the table. But please go and enjoy yourself - it's not the least bit inconvenient. How are you getting there and back?"

"I've arranged for their limousine to pick me up at your office at ten o'clock tonight. That should give us sufficient time for dinner, wouldn't you say? They'll return me to your office tomorrow afternoon."

"Ten should be fine," I replied. "I have a great little Italian restaurant in mind for dinner. I think you'll enjoy it."

The wet roads made the commute traffic worse than normal, whatever the hell normal is these days. By the time we arrived at my office the staff had left for the day but, as usual, my partner Suzy was still there. Suzanne Hammel - I'm the only one allowed to call her Suzy - is the better half of Hammel & McQuaid, Incorporated. I'm the other half. We're primarily builders and developers, and we do most of our own engineering and design. Over the years we've also acquired a number of investment properties, most as settlement on bad debts. This led us into real estate management, which in turn brought us more business from David's bank; management of a few of old moneybag's properties. Truth is, we'll do just about anything in our field as long as it's legal and will make money.

Suzy is the widow of Walter Hammel, the founder of our company, who died six years ago in an automobile accident. Walter hired Suzy as his secretary when she came east from San Francisco with her young daughter about twelve years ago, running away from a bad first marriage. Walter had hired me fresh out of engineering school about four years before Suzy showed up. When I interviewed for the job he told me he had a sixty-year-old body with ninety-year-old knees, and he was looking for an engineer with a strong pair of legs who wanted to learn the construction business. I qualified on both counts and he hired me. He was a widower, and even though considerably older than Suzy, he obviously also had an eye for a great-looking pair of legs. I always felt that she was somewhat on the rebound, and seemed to crave the kindness and affection that Walter freely gave - not only to her but to her daughter Julia as well. But the chemistry must have been right because less than three years later Suzy and Walter were married. Walter had no children from his first marriage and, from the beginning, treated me more like a son than an employee. We quickly developed a bond that was even closer than I enjoy with my own father; partly, I guess, because I've lived about twelve-hundred miles from my parents since finishing high school. When Walter died so tragically I felt as though my whole world had ended as well; the future I had so carefully planned revolved around Walter and the business. I really enjoy engineering and design, and spent the first few years in the company rotating between board work and field assignments, but the last nine or ten years I've had precious little time on the drawing board; mostly chasing around from one construction project to another, or bird-dogging something for David's client.

Walter's estate was divided between Suzy, Julia and myself. I inherited a nice little nest egg plus about thirty acres of prime land near Hilton Head, Julia had her college education secured with a fantastic trust fund, and Suzy was left everything else, including the business.

In the weeks following Walter's death Suzy received and promptly rejected two very lucrative offers for the business. She said Walter left it to her and, by God, she was going to either run it successfully or run it into the ground. And, much to my surprise, she offered me a full partnership to help her run it. She became Ms. Inside, while I as Mr. Outside. Not only does she do a great job managing the office, but she can wrap a tough client around her little finger in nothing flat, combining a no-bullshit approach with a rare mix of high-society class and sensual charm. Better yet, she uses the same approach to keep our accounts receivable on time. Our aging schedule has to be one of the best in the industry.

On the subject of age, I know she tops my thirty-eight years by at least three or four; Suzy jealously guards her age and can get really testy whenever anyone is stupid enough to ask her about it. But, not so amazingly, her age is rarely the subject of male conversation. What is, is her long-legged blond good looks, and the way she fills out her clothes. And it appears the heritage will continue for a long time; Suzy's fifteen-year-old daughter Julia is a clone of her mother.

After David washed-up, he joined Suzy and me in my office. As he usually does when he visits, he produced two small wrapped boxes from his attache case. Ever the gentleman, he bowed slightly as he handed both to Suzy. "Suzanne, you look lovelier than ever. This is another sterling owl for Julia's collection, and a small piece of Victorian jewelry I thought you might enjoy."

"Thank you, David, you're a dear," she said, "Julia will be pleased, and you know how I love Victorian jewelry. Julia's coming here directly from her tennis lesson - she's been looking forward to seeing you. She should be here any minute now."

"Suzy, bring Julia in when she arrives. David and I have a lot to do before dinner, and I'd like to get started. David's going to the casino later, so we have to be back here before ten. If you'd like, why don't you and Julia join us for dinner?"

"Thank you Cole, but tonight will be difficult. Julia won't be dressed for dinner, and I stayed late to catch up on some paperwork; today has been absolutely impossible. Besides, I'm sure we can all get together before David returns home, possibly dinner tomorrow evening."

"Sounds excellent to me," David said with a grin, "as long as you all join me as my guests."

Dinner was exceptional. It's a small place where you bring your own wine. David and I shared an antipasto and then each had a great filet of blackened salmon, accompanied with sides of salad and linguine, warm, crusty bread and a bottle of my best Chianti. We finished with creamy cannoli and espresso. I've always had difficulty deciding which is more satisfying; good food or good women. I can live very happily with an excess of women. Luckily, good metabolism and exercise help offset my indulgence in the other.

We made it back to my office with half an hour to spare. My car's air conditioning still didn't work and, since it was a warm, steamy evening, I invited David in to wait for his limo. I decided to use the time to quiz him again about our mysterious client. Past attempts at this had produced almost nothing, so I decided to try a different approach.

"David," I started, after we settled into the two most comfortable chairs in my office, "Suzy and I consider you a good friend, in addition to being a great client. I'm sure I don't have to tell you what you and your bank have meant to Hammel & McQuaid. In the years we have worked together I don't think you and I have had one serious disagreement. But, unfortunately, the issue of your client's identity is beginning to cause real dissension between my brother Ben, Suzy and myself. I know you and I have gone in circles over this more than once - I've even tried making an inside joke out of it with Ben and Suzy - but Ben is dead serious and refuses to see any humor in it. And, common sense tells Suzy and I that we can't disagree with him.

"As our company attorney, Ben has badgered us for years to find out who we're involved with. It may seem ridiculous to you, but Ben's concern is that we're unknowingly aiding in the laundering of mob or drug money. He believes that if somebody were to come down on you or your client, Hammel & McQuaid would be in a very precarious position. Just yesterday, Ben told me he intends sending you a letter formally requesting identification of your client. He said he should have done it years ago. His pessimism and concern have started to rub off on Suzy, and, I admit, I'm getting..."

"Pardon me," David interrupted, an edge to his voice, "sending the letter will accomplish nothing, except to agitate my directors, and possibly jeopardize our relationship. Believe me when I tell you that we have been as concerned about this issue as your brother - and we have been for quite a few years. Not too long ago it resulted in the resignation of three of our directors. This happened when they panicked after discovering that over the years we had received a number of inquiries from Scotland Yard, Interpol, and even your own CIA, about the client's identity."

David got out of his chair and began pacing my office. His face was expressionless as he continued, "You must believe me when I say that no one in my organization knows who the client is. Also, other than myself and Alexander Trimble, our CEO, no one even has access to any of the key account records. With those records an investigation might uncover the name or names, but, with the mind-boggling paper trail and red herrings created by the client we're convinced it would take years of digging - and with no guarantee of success. Some years ago we did attempt an investigation, thorough but very discreet. It quickly ended in a blind alley and we backed off. To conduct such an investigation today presents a risk we just cannot take. It is not an exaggeration to say that if an investigation succeeded in identifying the client, and they, in turn, exercised their threat to terminate our relationship, it would most likely destroy the bank. At best, the financial impact would be staggering.

"Off the record, I can give you the reason for our dilemma, and how the whole bloody mess started." David's gaze drifted around the room. He seemed to be searching for words, almost stalling - totally out of character. He also was avoiding my eyes, and this bothered me even more. I'm pretty good at flushing-out a snow-job, so maybe I was hearing what he thought I wanted to hear.

"The account was first opened in 1953," he continued. "and by the way, the age of the account is what still convinces most of our directors that we are not handling drug money, either then or now. Likewise, the international dimensions of the account quell their fears about mob ties. Personally, I have disagreed all along with their rationalization - drugs and world-wide organized crime existed long before 1953 - but it satisfies them, so I keep my opinion to myself.

"To get back to my story, it all started when the bank received a detailed letter of instructions followed by a wire transfer from a Milan bank. The transaction was to cover the purchase of ten-thousand shares of our bank's stock - a relatively small purchase, and a bit out of the ordinary, but properly structured. What was odd were the instructions. They were brief but very explicit. They stated that future investment activity would occur on a regular, but unscheduled basis, and would always be either by wire transfer or private courier. They also told us to retain all shares, unless notified otherwise, and to pay any administrative fees and taxes incurred by the account. Finally, they warned that outside accountants would conduct unannounced, periodic audits of their portfolio and, the kicker; that any attempt on our part to trace transactions, or otherwise meddle, would result in immediate loss of the total account.

"I've been told that Peter Willard, the bank officer who was assigned to handle the initial transaction, and later the full account, wasn't overly concerned about the unusual conditions. The bank was prospering in the post-war economy; our stock had appreciated more than twenty percent during the previous year, and Peter apparently thought the investor was some eccentric old coot trying to capitalize. At the time he also assumed that future investments would be in additional bank stock. He was wrong."

David sat down and loosened his tie. He was more uptight than I had ever seen him and it was making me uncomfortable. "For the first year or so," he continued after a deep breath, "there was little activity, and the investments were limited to bank shares. But then we started receiving very large deposits, with specific instructions as to what other things we were to purchase or invest in. This type of investment management in the banking industry is fairly common today, but in the mid-fifties, it was somewhat unique, particularly at our bank. Willard and the other bank officials at that time had, at best, little experience in such matters. In a matter of a few short years, they placed the bank in an inextricable position. Alex Trimble and I agree they must have been blinded by optimistic dreams of unlimited bank growth, possibly fueled by personal greed.

"When I took over the account in 1967, after Peter's death, the bank had grown considerably, most of the growth attributable to the value of the account. It had mushroomed to the point where a majority of our directors finally began expressing concern about the phantom ownership. There was considerable talk about the situation - all behind closed boardroom doors - but they couldn't agree on a course of action. The issue was repeatedly tabled. By the mid-eighties, when Walter Hammel turned our projects over to you, the account represented a considerable percentage of our total assets. Today its value is staggering, probably more than the combined national budgets of two or three small countries I could name."

"David, I hear what you're saying. Most of it is news to me, but I seriously doubt it will change my brother's mind. And it'll add fuel to his argument when he hears your personal feelings about the possibility of drug and mob ties. You have to admit, it's a classic money laundering scenario."

"I agree, up to a point..."

"Look, David, for now, the best I can offer is to set up a meeting between you and Ben, maybe tomorrow afternoon after you return from Atlantic City. I think Suzy and I should sit in as well. Would that be acceptable to you?"

"Yes. I don't know what more I can add, but I'm willing to talk to Ben and try to convince him not to do anything rash."

"One other thing," I continued, "your statement that the bank's financial security would be jeopardized if the client's identity is disclosed puzzles me. How? What the hell David, if I know anything I know how much of the client's money Hammel & McQuaid has invested in hard, real property. No stocks, no bonds, no pork bellies or commodity futures. Just hotels, resorts, land, mineral rights, industrials - all rock-solid deals. We've never been permitted to buy into anything; it has always been buy it all - or buy nothing! The client wouldn't be a partner to anybody. I'm sure most, if not all, of our deals have appreciated ten-fold. I mean what the hell David, how can that hurt your bank?"

"Cole, your involvement usually ends when the investment is in place, so you probably don't know what frequently happens at the other end. You are correct about the present worth of most of the investments. Other than their early purchase of shares in our bank, no stocks, no bonds. And they have prohibited investment in any publicly owned entities. We can only guess that this is caused by their obvious desire for complete control and concern for their anonymity."

David again got out of his chair and walked to the window where he gazed out at the darkness, his face expressionless. "We very closely monitor the performance of all account holdings. Early on, we were ordered by the client to liquidate anything that didn't appreciate at least seven percent each year. I can recall only one exception to that rule. And, regardless of performance, it applies to anything in which they feel a killing can be made with a quick turnover. So, and this is where the wicket gets sticky, with a percentage of the total account constantly being turned over, we're forced to retain considerable working capital, usually the proceeds of liquidated assets. However, to maintain a good bottom line, we invest most of this capital in short-term paper, usually at the highest current rate of interest. Good banking practice demands we do this. But this also forces us to outguess the client; we base our strategy on short-term market projections, plotted against what we think the client will order us to buy - massaging the crystal ball if you will - and creates the situation that can seriously hurt us. At any given time we're holding between four-hundred-fifty and six-hundred million in deposits for the client, only a small portion of which is liquid. Loss of the account would, therefore, cause a colossal cash flow pinch. If you understand the domino effect this might create, you can certainly appreciate our concern. It could even bring down the bank."

On a few occasions in the past I had actually felt guilty about some of the fees - large but legitimate - we had invoiced David's bank for our services. It now struck me that the effect of those fees was as significant as spitting in the ocean. The account was big all right; I never realized just how big. "I'm trying to understand, David, but it's hard to reconcile all of what you've said. How can so much money be handled for so many years without some direct contact, without a screw-up by somebody?"

"There have been a few, but fortunately they've been at our end and have been easily resolved. The basic procedure hasn't varied one iota since the first transaction." David looked at his reflection in the window and buttoned his collar and adjusted his tie. "All withdrawals requested by the client and account earnings are wire transfers to a number of banks in your country, South America and Switzerland, or are paid out as cash transactions, picked-up at our bank by courier, usually with about five days notice. They use a number of courier services, but never the same one twice running. Traceable, you ask? Probably. And I'm sure without too much effort; if it weren't for the confounded risk! All instructions and correspondence from their end arrive by messenger or, believe it or not, by regular mail. Mail comes with various postmarks, mostly from the continent, and always without a return address.

"Due to the paper balances on hand, actual deposits by the client are now much more infrequent, usually occurring only when they have ordered a major acquisition. When they do occur, it's by wire transfer from the same Milan bank. Speaking of Milan; in addition to the usual identification number, shortly after the account was opened it was labeled "The Milan Portfolio' by Peter Willard. It is still known by the same name. And Cole, to put things in perspective, in 1953 all account records were kept in a single manila folder in Peter's desk. Today the account has a dedicated file room, with an integral vault, and is administered by myself and a staff of five."

I was about to ask another question when a honking horn broke the silence. His limo had arrived. We agreed to continue the discussion tomorrow afternoon and I gathered-up his luggage and headed for the parking lot. After wishing him luck in the casino, I watched the taillights of the white Lincoln disappear down the drive, then set the security alarm, locked the office and headed for home. The Phillies were playing in St. Louis and I could probably catch the last few innings on the tube.

On the drive home I thought about what I had heard tonight. It was mind-boggling. Whoever our oddball client was, he or she - or maybe it - had been around a long time, and was very, very rich. Too rich for my tired brain to comprehend. It had been a long day.

Originally published: Tuesday, March 20, 2007; most-recently modified: Wednesday, June 05, 2019