The Enemy Inside

THIRTY-TWO

So what did you find out?” A half hour out on the flight and Harry and I settle into the coach seats and listen to the drone of the jet engines. We’re on our way to Amsterdam, the first leg of the trip.

“It’s a moving target,” says Harry. “Some of the numbers Alex gave us at his parents’ house that night are dwarfed by more recent news accounts.” Harry has been living at the Del’s business center for the last three days. Doing research.

“One Swiss bank alone claims there are fifty-two thousand Americans with secret numbered accounts.”

I shoot him a glance. “You’re kidding.”

“We’re obviously in the wrong business,” says Harry. “But I have to say, the IRS played hardball. They turned the screws on the overseas banks. Threatened them with heavy withholding taxes on their US operations if they didn’t cooperate. Threatened some of them with criminal sanctions for aiding and abetting tax evasion. Most of the banks were forced to make concessions to open their books. One bank alone paid fines totaling seven hundred and eighty million dollars to the US Treasury,” says Harry.

I whistle low and slow. This is probably a measure of the value of their American operations. The fine is likely a drop in the bucket compared to their US business.

“Plus the disclosure of forty-five hundred names,” says Harry. “American depositors and their account numbers to be drawn at random and delivered to the IRS. That’s intended to scare everybody else into disclosing offshore assets on their tax returns.”

“That would do it for me,” I tell him. “But then I wouldn’t have enough money to open a numbered account in the first place. What about this guy, Korff? Any lead on him?”

“I have a few addresses in and around Lucerne. It’s not an uncommon name. Strange thing is,” says Harry, “Lucerne is not a big banking center. Zurich, Bern, even Geneva, but not Lucerne. There are a few of what they call cantonal banks, local provincial institutions. But why this one, Gruber A.G., is in the middle of Graves’s story, I don’t understand. Doesn’t make sense.”

“We’ll have to ask the man when we find him,” I say.

“Also the whistleblower, Betz. There’re a number of articles about him online. And it’s true what Alex said. He did claim to have information about American politicians with secret numbered accounts in Switzerland. I printed some of the stuff out. It’s in my briefcase. What’s more,” says Harry, “there doesn’t seem to be a lot of interest in finding out who they are.”

“Don’t you think that’s strange?” I ask.

“Maybe. I don’t know. Then again, not necessarily,” says Harry. “Powerful people in D.C. are often allowed to skate. We always think of ourselves as head and shoulders above any banana republic. In the end, are we really that different? Human nature being what it is,” says Harry.

“Never thought of it that way.”

“You should. That’s not to say everybody’s corrupt. There are, no doubt, a lot of good people there. Like everywhere else, about five percent of any population account for most of the problems,” says Harry. “Usually the same five percent, and they’ll do it over and over again if you give ’em a chance. It’s just that people with power have a much greater opportunity for mischief, and they probably get away with it more.

“Every once in a while they’ll nail some guy in Congress, indict him, convict him, and send him away just to let the rest know that there are some limits. It hasn’t happened for a while. Probably overdue,” says Harry.

“For years there have been stories of insider trading by members of Congress,” he tells me. “You have to figure these people are privy to a lot of secrets. Potential investments nobody else in the world could get near. The temptation would be great to pass the information on to friends, and relatives. The last time they bailed out the banks,” says Harry, “word is that there were key members of Congress who knew who was getting what and when, long before it was ever made public.

“Later there were charges that family and friends, distant relations went out and jumped on the stocks for the banks getting the money. If so, some of these people could have made a cool killing on the back of the taxpayers who picked up the tab,” says Harry. “I’m not saying it happened. Nobody was indicted. But there were accusations.”

“Sounds like you think Martha Stewart ought to complain,” I tell him.

“I would if I were her,” says Harry. “Not that it would do her any good. It’s what I told Alex that night, remember? Prosecutorial discretion? Nothing you or I can do about it.

“But here is something I do want you to think about. And when you do, I want you to worry,” says Harry. “Promise me?”

“Ok, I’ll worry,” I tell him.

“I’m reading between the lines, so take it for what it’s worth. Remember the term Alex told us about, PEP-politically exposed persons?”

“Yeah.”

“Well, it’s a term of art. It’s all over the literature on private numbered accounts. And it’s highlighted in red letters. It’s a major cause for concern,” says Harry. “Everybody from the UN on down.”

“Go on.”

“There’s an article, I printed it out. According to this piece-and I can’t vouch for its accuracy, it’s from one of the US financial networks-they’re reporting an undisclosed number of US political figures, maybe past, maybe present, they don’t know for sure. But it’s pretty certain that they are account holders who possess offshore numbered accounts and who have not disclosed or paid taxes on the funds in those accounts.”

“How do they know?”

“Because some information slipped out in the random selection process. If I had to guess, I’d say it was probably a mistake. And it’s certain that there are more.”

“Why doesn’t the IRS go after them?”

“They don’t know who they are,” says Harry. “All they know is that they are sufficiently prominent to show up on the bank’s PEP list, not by name, only that they are American political figures who have undisclosed accounts. Worse than that. The IRS can’t be sure how deep the swamp is. Or for that matter what’s swimming in it.”

“What do you mean?”

“Bits and pieces of information,” says Harry. “But if you put it all together you get a mosaic.”

I start to smile like he’s putting me on.

“Listen to me. I spent three days looking at this stuff because you asked me to. I looked at the tea leaves and now I’m telling you what I read in them. No one knows how much money is on deposit in individual accounts for these so-called PEPs, or how many officials are involved. Nor do they know where the money came from. And that’s the key, the source of the funds. IRS and Treasury tripped over this when they started shaking down the foreign banks. And now they can’t be sure how bad it is.”

“Go on.”

“There’s no way to know,” says Harry. “But according to one of the articles, a scholarly piece, that’s one of the major fears. It’s why PEP deposit holders, politicians, their family members are great big red flags for these private banks. And the banks don’t always know because the account is probably opened in the name of some other straw man. This is not money these politicians would want the world to know about.”

I sit there listening, my brain reeling like an empty spool, to what Harry is saying.

“What are you talking about? You mean bribes?”

“Shh, not so loud,” says Harry. He gives me an exasperated look. “It’s one thing to be bought off by some lobbyist in D.C. representing poultry producers in Iowa. Or, for that matter, even if the chickens are in Poland. But what if some of this money is coming from a foreign government, the recipient may not even know it,” says Harry. “He knows he’s being bought. But if he fulfills the quid pro quo, he may also be committing an act of treason.” Harry looks at me. He is stone-cold serious.

“Take that and multiply it by a dozen other members, and ask yourself, does the IRS or for that matter any other government agency really want to roll that rock over? Given the low public esteem of Congress or government in general?” says Harry.

“Holy sh. .”

“Shh. Quiet,” says Harry. “It could be nothing. Maybe somebody popped a window and I’m feeling the effects of the thin air. Then again that might explain why so many people have been dying in accidents lately.”

Four rows back and on the other side of the aisle, the dark-haired woman holding the novel tried to listen to what the two men were saying. Their heads kept moving closer to each other as they spoke. The engines were too loud and their voices too low.

When they landed she would wait for the other passengers to unload, then check the seats of the men for any scraps of paper they may have left behind. There was a two-hour layover in Amsterdam. They weren’t going anywhere. Ana knew she’d catch up with them again, on the connecting flight to Zurich, and if not then, on the train to Lucerne. It was going to be a long trip.