The First Law dh-8 Page 8

  Hardy was about to take a sip himself, but he stopped midway to his mouth, put the glass back down. "We're asking for thirty million dollars, David. Rodney King got six and he was one guy. We've got fourteen plaintiffs. Two million and change each. What could Kroll possibly offer that would get our attention?"

  "I think he was having a small problem with that question as well. I got the feeling he'd been chatting with his insurance company, which won't pay for intentional misconduct. To say nothing of punitives, which we'll get to the tune of say six or eight mil, and again there's no coverage. So if we win, Panos is bankrupt."

  "Which was the idea."

  "And still a good one."

  "Did he actually mention a number?"

  "Not in so many words."

  "But?"

  "But he's going to propose we amend the filing so Panos gets named only for negligence, no intentional tort. This leaves his insurance company on the hook for any damages we get awarded."

  "And why do we want to do this? To help them out?"

  "That's what he wanted to talk about before the depositions. I predict he's going to suggest that he rat out the city, give us chapter and verse on the PD and their criminally negligent supervision of his people, which strengthens our case, and in return he gets insurance coverage on any judgment we get."

  "What a sleazeball."

  "True. But not stupid," Freeman said. "If we were equally sleazy, it's actually a pretty good trick."

  "Let's not be, though. Sleazy. What do you say?"

  "I'm with you. But still, it's not bad strategy. And it could be even better if he thinks to suggest settling directly with us for say a quarter mil per plaintiff, which puts three and a half mil in the pot, a third of which comes to you and me, and his insurance pays for all of it. Panos comes out smelling like a rose. We make a bundle. The city's self-insured so they're covered. Everybody wins."

  Hardy liked it, but shook his head. "I don't think so, though. His insurance would have to agree, and why would they?"

  "Maybe Panos has got it himself. In cash."

  "That's not coming out smelling like a rose. That's down three plus mil."

  "But at least then he's still in business. We settle, sign a confidentiality statement, he raises his rates, he still wins."

  Hardy nodded grimly. "It's so beautiful it almost makes me want to cry. And all we have to do is change a word or two?"

  "Correct."

  "Just like guilty to not guilty. One word." For a brief instant, Hardy wondered if Freeman were actually considering the proposal, which Kroll had never actually voiced and may not even have thought of. "Are you tempted?" he asked.

  Freeman sloshed his wine around, put his nose in the bowl, took it out, and nodded. "Sure. It wouldn't be a worthwhile moral dilemma if I wasn't tempted. But it's half your case and I'm duty bound to admit that I believe it's a solid, pragmatic strategy, and not overtly illegal. If we don't do it, it'll be way harder to win."

  Hardy took the cue from Freeman and swirled his own glass for a minute. "So it's my decision, too?"

  "Got to be," Freeman admitted.

  "Give me a minute," Hardy said. "How much do I clear?"

  "Well, Kroll never gave me a specific number. But if I'm even close to what he's thinking at three and half million, say, and I bet I am, you personally bring in close to a half million before taxes."

  Silence gathered in the room. "Couple of years work," Hardy said.

  "At least."

  Hardy's mouth twitched. He blew out heavily. "For the record, I'm officially tempted." He put his glass down, walked to the window, pulled the blinds apart and stared a minute outside at the street. When he turned again, his face was set. "Okay," he said, "now that that's out of the way, fuck these guys."

  5

  For a wealthy man, Wade Panos kept a relatively low profile.

  He didn't need flashy clothes, since he wore a Patrol Special uniform every day at work. The Toyota 4Runner got him wherever he needed to go. The three-bedroom house on Rivera that he shared with Claire blended with the others in the lower Richmond District. He mowed his own lawn every Saturday, took out the garbage, talked over the fence with his neighbors. To all outward appearances, Wade was a regular guy.

  He'd started working as an assistant patrol special in Thirty-two when he was just out of high school. It was his father's beat. George ran a tight ship in those days, providing basic security for his two hundred clients, patrolling the beat on foot.

  It didn't take Wade long to realize that his father was missing a substantial opportunity-big money could be made in this field. People wanted protection, especially once they came to understand that without it, bad things could happen. More importantly, Wade was adept at identifying enterprises-prostitution, the drug trade, gambling dens-that operated outside the protection of the law. These businesses couldn't survive in his beats without his protection, and rather than roust them out or turn them over to the regular police, he found most of them willing to enter into partnership with him.

  By the time Wade was twenty-five, he'd made enough on his own to buy his first beat from the city. Ten years later, when he inherited Thirty-two after his father's death, he had six of them and a payroll of nearly ninety assistants. He was fortunate that his timing was so good. About five years ago, the city had limited the number of beats to three for any one individual, but his holdings were grandfathered and allowed to stand. His books showed that he was pulling down close to a million dollars a year.

  Until relatively recently, the actual figure was about twice that. And in the last three years, the profits had become nearly obscene. Not that he was complaining.

  Since so much of his income was in cash, Wade had had to become skilled at laundering it, and to this end he formed a holding company that owned four bars in various parts of the city, each of which pulled down a tidy legitimate profit and substantially more in dirty money. Being a good businessman, Wade always kept his eyes open for rundown watering holes that he could scoop up at bargain prices, then renovate to a veneer of respectability. He'd also found that, once a property appealed to him, his connections, associates and business practices could often help a struggling bar along on its journey to bankruptcy.

  He'd wanted the Ark now for a couple of years, and since he'd learned of John Holiday's interference with his business in the past four months, he was more motivated than ever to take control of the place. Put the son of a bitch back on the street where he belonged. Because of its central downtown location, with any kind of attractive atmosphere it would draw heavily from the police, legal and financial communities, so it was a natural fit for his operation. But this lawsuit didn't look like it was going away anytime soon-Dick Kroll wasn't having any luck with Freeman and Hardy-and anything Wade could do to cut into their enthusiasm was to the good.

  Not incidentally, if he could get his hands on the Ark, it might also finally provide a safe and comfortable living for the son of his little sister Rosie. Nick Sephia had become a trial for all of them. He'd proven his loyalty to Wade on several occasions, true, but his judgment often got him into trouble, as it had with the LaBonte girl. Wade was hoping that with seasoning, age and experience, Nick could become an asset as a bar manager, instead of a liability as muscle- he didn't have the self-discipline that muscle called for.

  Also, truth be told, Wade felt guilty about Nick, who'd grown up without a father because of him. Twenty-some-odd years ago, when Wade had realized that Sol was hitting Rosie, he had beaten his brother-in-law to within an inch of his life, then given him the option of leaving town or dying. Nick's father had made the smart choice.

  Now, near eight o'clock on this Friday night, Wade was in a tuxedo, waiting for Claire to finish dressing and come downstairs. He sat in a folding chair hunched over a large jigsaw puzzle that he was working on at a card table in the enclosed porch at the back of his house. A light rain still fell just outside the windows.

  He usually worked on his puzzles fo
r the half hour before dinner after he got home. It took about two weeks to finish one of these big ones, after which Claire would transfer the completed puzzle to a plywood backing and glue it down. She told him she donated the things to shelters or schools or something, but Wade couldn't really imagine anyone really wanting one of them. He thought it possible that Claire simply threw most of them away and told him the story about giving them to charity to spare his feelings.

  Wade didn't really care.

  The joy was in the doing of them, and this one was particularly challenging. Twelve hundred pieces. The picture on the front showed nothing but the water in a swimming pool-blues and shadows. He had most of the border now, and was about a third done. Suddenly, a five-piece segment fell into place and he sat back, pleased.

  "Claire!"

  "Two minutes," she chimed from upstairs.

  He frowned. Two meant ten. Standing up, he pulled at his bow tie and walked back to the kitchen, where on one of the stools by the counter the paper lay open to the Metro section. And as so much did-except for his jigsaw puzzles-the story brought him back to business. And again, to Nick.

  The article was about the new Russian Kamov Ka-32 helicopter that one of Wade's relatively recently acquired clients, Georgia AAA Diamond, had purchased as a gift for the San Francisco Police Department. The deal was that, in return, the jewelers could use the chopper to transport their gem imports, with police guard, directly to and from the corporate jet at the airport in south San Francisco to the city.

  Here was a nice picture of Dmitri Solon, the company's thirty-four-year-old CEO. He was posing by the helicopter with Mayor Washington, Police Chief Dan Rigby, some city supervisors, and members of the California legislature. It was amazing, Wade thought with some pride, that he and Solon had been able to create such a substantial krysha- Russian for "roof"-as protection for Georgia AAA in such a short time.

  Wade knew Solon well by now. He was a smooth operator who spoke nearly perfect English. The protege of Severain Grotny, head of the Ministry of Precious Metals and Gems in Russia, Solon had ostensibly come to San Francisco with a twofold mission-to open a state-of-the-art diamond cutting and distribution center and, not incidentally, to make inroads into the international monopoly of the De Beers diamond cartel.

  Wade couldn't help smiling as he scanned the platitudes in the article, for he knew the truth about Georgia AAA, and this was that Solon and Grotny were using the business as a front to systematically loot nothing less than the national treasury of Russia. He knew this because about eighteen months ago, before Solon had even opened his doors, Wade had signed him up as a client in another of his beats. It hadn't taken him three months to become suspicious of some of the activity he witnessed, some of the questionable personnel on the periphery of things.

  So he set up special surveillance teams and about two months later, he and his nephew Nick found a pretext to stop one of Solon's imported Russian employees as he left the building one evening. He was carrying a bag of uncut diamonds worth, Wade later discovered, approximately fourteen million dollars. Rather than report the incident to San Francisco police, Wade brought him first back to Solon.

  The ensuing discussion was more than enlightening. It was breathtaking.

  Once it became clear that Wade's agenda was cooperation rather than interference, Solon seemed almost relieved to be able to explain. The financing for Georgia AAA, about $170 million, had come directly from the Russian treasury in the form of diamonds, jewelry and silver, but mostly from gold, five tons of gold-and most of that investment grade commemorative coins from the 1980 Olympics. This had all come under diplomatic pouch, Grotny's pouch, on Lufthansa Airlines. After it had arrived in this country, Solon arranged for its delivery to Premier Metals, the top gold distributor on the West Coast. Premier then melted down the coins and established the Georgia AAA account, based on ounces of gold on deposit with them.

  With his $170 million line of credit, Solon had gone a little wild. Although it was on the market for a mere five million dollars, he paid eleven million for the four-story building that would house his new Diamond Center. At about the same time, he spent three million dollars for his rambling mansion in the hills of Kensington; $800,000 for two cigarette boats; more than a million for a Rolls-Royce and two Aston Martins; and around eighteen million for a Gulfstream twin-engine corporate jet. There were other acquisitions as well-condos at Lake Tahoe, a small Napa winery, a chain of Bay Area gas stations. All were intended to bolster the image Solon wanted to convey-he had unlimited money and extraordinary connections.

  Wade looked down at the newspaper photograph again. The young Russian entrepreneur had certainly done himself proud.

  But he couldn't have done it without Wade Panos, who'd helped him build his krysha, extended Solon's connections through Wade's own to the political elite of the city and even the state. And it had all begun the night that he and Nick had busted the messenger with the bag of diamonds. Wade had asked Solon this simple question: If Georgia AAA was in the business of cutting and selling diamonds, why was he sending fourteen million dollars' worth of them away? The answer was that only a fraction of the diamonds imported from Russia ever made it to the floor of Georgia AAA's high-tech cutting room showcase. Most were sent to a sister Georgia AAA office in Antwerp, where disguised with false invoices from Angola and Zaire, they were then, ironically, sold to De Beers for cash, which was then wired either back to San Francisco or to Grotny in Moscow.

  Essentially, it was a money-laundering scheme through which diamonds from the Russian National Treasury could be dumped into the world market and converted to cash. The San Francisco Georgia AAA Diamond Center, for all of its grandeur and visibility, was in fact merely a front to legitimize an immense traffic in unregulated diamonds. And, established in the center of one of his beats, it had fallen into the lap of Wade Panos.

  His commission during the past year-essentially to have Nick instead of one of Solon's people carry the diamonds and guard them to and from the airport to the Diamond Center, plus a little muscle and political favor-was a little more than six million dollars, most of which Solon wired directly from the Antwerp office to Wade's account in the Caymans. The rest came back to San Francisco, where Wade used it to keep his own krysha in good repair. He loved the term-the roof that protected you. The people you paid off.

  But Nick.

  Even with his new job, Nick remained a problem. Because he was young, headstrong and prone to violence, he hadn't worked out at all as an assistant patrol special. Wade had thought the simple job at Georgia AAA would serve two purposes. First, it would keep his nephew out of trouble and, second, Wade would have his own man, and a relative at that, on the inside to protect his position with Solon.

  But after a little more than a full year at it, neither part was working out too well. Nick had too much free time, no real job to do, and too much money. He was upping his profile all over town-getting into fights, gambling, throwing his weight around-and this was not good. When it was time for his deliveries, he would show up around the Georgia offices, self-important, well-dressed and surly, and alienate everyone from the cutters to Solon himself.

  Even more disturbingly, he had somehow ended up with Julio Rez as his partner on these trips. Wade didn't know Rez well, but thought him capable of shooting Nick and stealing the diamonds they were transporting.

  He needed to get Nick out of there, get him a real grownup job, maybe at the Ark, then put his brother Ray in with Solon to protect the relationship. Ray was good with people.

  But suddenly he straightened up, tugging hard now at his collar, getting it loosened up. He looked at himself in the mirror on the kitchen wall-his skin color was awful, a flushed ochre that made him look both pale and flushed.

  He thought he could feel his blood pressure pushing on his eardrums. He brought a hand up to his nostrils, checked it for blood.

  Look at him. What the hell was he doing?

  Here he was, Wade Panos, nobody's
idea of a lightweight, brooding over individual strategic moves again- and again and again-when the real issue, the big issue, was that these two goddamned lawyers looked like they were going to try to shut him down. They were threatening the entire foundation of his life's work. Okay, he understood they saw their chance to clear a nice chunk of change here. He assumed that they were just businessmen like he was, looking out for opportunities. He didn't blame them for that. And maybe it was true that Wade had been pushing his luck the last couple of years, throwing his weight around too much in the beats, giving them the opening. So okay, the lawsuit was a wake-up call. Maybe he'd rein things in a little with his troops in the future. His dealings with Solon were bringing in the bulk of his income now anyway. But without the beats and Wade's presence in the field as his legitimate power base, even that relationship could erode. And that would be disaster.

  So Freeman and Hardy had delivered the message that they were on to him. So he'd tone things down and they'd make a decent pile for their efforts. What more did the greedy bastards want? He'd floated the idea that he was ready to make an offer, settle this thing. He'd even provide evidence to help them fleece the city a bit.

  Fuckers.

  "What's the matter?" Claire stood in the door to the kitchen. He hadn't heard her come downstairs. "You're frowning," she said. "You look sick. Do you feel all right?"

  "Fine." He shook his head. "It's nothing. Just business."

  "I thought business was good."

  "Business is all right."

  "And yet you're frowning."

  He shrugged, debating with himself whether he should burden her with his own worries about the lawsuit. But no. The solution came to him full-blown, all at once. He didn't have to do this Kroll's way, according to Hoyle. He wouldn't even tell Kroll. He could end his troubles with the lawsuit, or at least slow things way down, anytime he wanted. He was being reasonable, and if Freeman and Hardy and their spies and stooges didn't choose to be, then what happened after that wouldn't be Wade's fault. They would have asked for it. All of them.