The Burden of Proof kc-2 Page 6

  "What for?" he demanded. It did not attract business to tell customers that a federal grand jury was raking through your records.

  "To determine what information they provided." One of the perpetual problems of a grand jury investigation was developing even a rough estimate of what the government knew. Most companies or individuals were not bold enough to disregard the FBI's usual request to keep the agents' questioning secret.

  Dixon continued to venture mild objections, but eventually he gave in.

  His defense of his business was instinctive. He had started extolling futures in the little rural communities, and over three decades had made Maison Dixon a colossus with corporate clients, commodities pools, managed accounts. MD was a clearing member of all the major exchanges in Chicago and New York, and maintained large offices with humming telephone banks in both cities as well as here, In the meantime, in the late 1960s, Dixon had led a group of local futures merchants in the formation of a small commodifies exchange in Kindel County. Dixon's notion was to trade in lot sizes that were more in keeping with the needs of smaller retail customers. The Chicago Exchange would not trade a contract for the future delivery of wheat or soybeans of less than five thousand bushels. In Kindle, you could trade five hundred at prices that followed Chicago's, tick for tick. The Kindle County Futures Exchange-the KCFE had established its 'minimarket' in all the most popular contracts, and Dixon continued to press his fellow directors for innovations. For the last two years, he had been relentlessly courting the approvals needed to trade a future on the Consumer Price Index. Dixon had made not one smart play in his life but half a dozen. He was regarded with the usual mix of awe and distaste in the financial community. A maverick. A shark. Shrewd.

  Unreliable. But talented. He had fierce enemies and many admirers.

  "Who are these customers, Dixon? What do they have,in common?"

  "Nothing. Nada. Different commodities. Different strategies. The only thing I'd say is, they're probably the five biggest customers I have." He uttered this with considerable resentment. The government was attacking at a vulnerable spot.

  "And what have you to do with these accounts Dixon?"

  "Not much. Those are big trades they're looking at," said Dixon.

  "House rule is that I'm notified on anything that size. But that's it."

  "Big trades?" asked Stern.

  "Look at 'em," said Dixon. "Everything there is fifteen hundred contracts, two thousand contracts. Pit's gonna jump with those kinds of orders."

  "Explain, please."

  "You understand this, Stern. Take pork bellies. One car of bellies-one contract-is 40,000 pounds. I get a customer who wants fifteen hundred cars, that's a whole lot of bacon. The price is gonna take off like a rocket. It's supply and demand. You know, we try every gimmick known to man to slow things down. We lay off trades to friendly brokers. We buy the cash commodity and sell the future. But you can't stop it completely. It's like changing nature."

  "Ah-ha," said Stern. So they did know something. The government was investigating large trades, trades which MD handled, trades which Dixon knew about, trades which, when placed, had had a significant impact on prices. "And is there nothing else which occurs to you?"

  Dixon shook his head gravely. Nope, nothing, he didn't know a thing.

  Stern laid his thick finger again across his lips.

  Even with this news, it remained difficult to assay the government's suspicions. The records called for could relate to a number of schemes, particularly on the futures exchanges where knavery of all kinds was rife. Were Stern to guess, his estimate would be that Ms. Klonsky and her colleagues suspected market manipulation of some kind.

  There were all manner of baroque ploys. A month or two ago, the papers had been full of stories about a foreign government with a failing sugar crop which had tried to force down the world sugar-futures price so the government could buy and fulfill upcoming delivery commitments more cheaply. They had circulated authoritative rumors that something tailed 'left-handed sugar,' a no-calorie form of natural sugar, had been perfected. For three days prices plummeted, then the futures commissions merchants across the country had discerned what was occurring and bid prices out of sight. Dixon, perhaps, had found some less obvious-but equally illegal-way to tamper with the markets' responses to these huge transactions he handled for his customers.

  Dixon, however, continued to point up signs that he was in the clear.

  "That subpoena doesn't even mention my name," he said.

  "That has to be good, doesn't it?"

  The absence was superficially encouraging. But there would have been little reason for the agents to be so obvious in their pursuit of Dixon last week-or to have gone out of town with their initial subpoenas-unless they believed he would quickly recognize the meaning of these inquiries. His client, Stern decided, was keeping things to himself-not unprecedented in these circumstances, and, Lord knew, the general course with Dixon. Today, however, was probably not the time to press, On his feet again, Stern, as he often did, took a moment to stare from his window in Morgan Towers, the city's tallest building, down to the Kindle River, whose swift waters ran here, through various tributaries, into the Mississippi.

  With its shining, silvery face, the Kindle had been first named La Chandelle, the candle, by the French trader JeanBaptiste DuSable, who had tarried here on his way from New Orleans to what eventually became Chicago. DuSable's trading post, named after him, was now by far the largest part of a consolidated tri-city municipality of almost a million. Just south, where the river branched and rejoined, two other towns, Moreland, settled by the English, who had Anglicized the river's name, and Kewahnee, once an Indian encampment, had grown up from barge ports and had been merged into DuSable in the mid-1930s. In this era of urban sprawl, the entire area, including the tri-cities, was usually referred to by the name of the surrounding county-Kindle-a hodgepodge megalopolis of city and suburb, prosperity and blight, home in total to almost three million people. The willingness of locals to see their city known by the county name had probably not been dampened by the rediscovery during the 1960s that DuSable, traditionally referred to as the first white man in these parts, had been black.

  Dixon was speaking behind him. He wanted to know if they were obliged to turn over all the records the government required. Most of the trades, given their size, had been executed in Chicago, and the search for documents would occupy days for Margy Allison, Dixon's executive vice president, who ran the Chicago office, three hundred miles from here.

  "I see no choice," said Stern. "I shall complain to the prosecutor bitterly about the burdens of production. Tell her your business will be brought to a standstill. And I must have some time to look at the records, to see if I can make out what the government suspects. But eventually we must produce. We cannot challenge the subpoena as overbroad -it is quite precise."

  "Whatever happened to the Fifth Amendment?" That was Dixon for you, cavalier where. other executives would.stammer before the words could come from their mouths.

  Stern explained that the subpoena sought records which belonged in law to the corporation rather than to Dixon himself. The corporation, not an individual, had no Fifth Amendment rights. Dixon could refuse to testify about the records; but the papers themselves would have to be handed over, Claudia buzzed. She had lOonsky. Dixon, in the meanwhile, chewed on his cigar and puzzled over the mysterious logic of the law.

  "Ms. loonsky," he said.

  "Mr. Stern," she answered. A clear, self-assured voice.

  They had never met, but Stern had seen her in the courtroom when she approached the podium for status calls. She was in her late thirties, Stern thought, a robust-appearing woman with broad shoulders, dark hair, strong hands. In court, she had emitted the forbidding persona familiar to many assistants, including a number of the women; eager to prove themselves as tough as their male counterparts, they often came across as humorless and driven, citizens of the late century who saw bmtaiity as a necessa
ry mode in female style. It was largely a pose, but under the circumstances, Stern saw little reason to be refn, ing.

  "Two of your storm troopers arrived at my home a few days ago with a subpoena for my client Dixon Harmell."

  An instant passed without sound. Storm troopers. Stern himself was surprised by the ruffian edge in his voice. Ordinarily, he prided himself on his civility. In the mehnfime, Dixon, across the desk, was beaming. He had rarely been exposed to Stern when he was so pointed.

  "Perhaps I need to explain the circumstances," Stern said.

  "I understand the circumstances," Ms. lOonsky shot back.

  She was bristling already.

  No doubt, everyone understood the circumstances, Stern thought. He had many friends in the prosecufmg offices, both the Kindle County Prosecutor's and the United States Attorney's Office, but they were adversaries, too-and human. It was delicious gossip. Did you hear?

  About Stern's wife? Here again, as he contemplated this, the world seemed to open, and the force of painful emotion rushed up at him out of his own breast. How, how was it possible? It was such an unreasoning mess. He closed his eyes, which were burning, and he could sense Dixon stirring. It was a sad comment that his shame, more than anything else, brought on these moments, and that the same pride carded him throughmsome forward-straggling thing impelled him to go on with dignity. Where, damn it, was his cigar? When he spoke, there was no tremor in his voice.

  'If you understood, I must say I find your conduct deplorable. Perhaps I should speak to Mr. Sennett." Stan Sennett, a career prosecutor, had been U.S. Attorney for two or three years now. He was the toughest and most humorless of all, and far from an ally of Stern's. Sennett was unlikely to become exercisedwthe agents, after all, were just doing their jobswbut Klonsky could not say that.

  "Look, Mr. Stern, this was an honest mistake. It might even be," she said, "that if you gave me half a chance, I would have apologized. I've been calling you for days now."

  Stern, rebuked, still chose not to answer. She had een an Assistant for only a year, following a clerkship in the U.S. court of appeals, and, presumably, a distinguished law school career, and he sensed an advantage in her inexperience. She had acquired a reputation as bright but phlegmatic, even flaky, the kind to blow hot and cold. He did not wish to lend her any reassurance.

  "Tell me, Ms. Klonsky," said Stern, shifting the subject,

  "what is the nature of your investigation?" ',I'd prefer not to say right now."

  "Are other agencies involved besides the FBI?" Stern wanted to know about the IRS in. particular. They were always. trouble. And if the federal regulators were in-volvedmthe Commodities Futures Trading Commission he might gain some idea hous gossip. Did you hear? About Stern's wife? Here again, as he contemplated this, the world seemed to open, and the force of painful emotion rushed up at him out of his own breast. How, how was it possible? It was such an unreasoning mess. He closed his eyes, which were burning, and he could sense Dixon stirring. It was a sad comment that his shame, more than anything else, brought on these moments, and that the same pride carded him throughmsome forward-straggling thing impelled him to go on with dignity. Where, damn it, was his cigar? When he spoke, there was no tremor in his voice.

  'If you understood, I must say I find your conduct deplorable. Perhaps I should speak to Mr. Sennett." Stan Sennett, a career prosecutor, had been U.S. Attorney for two or three years now. He was the toughest and most humorless of all, and far from an ally of Stern's. Sennett was unlikely to become exercisedwthe agents, after all, were just doing their jobswbut Klonsky could not say that.

  "Look, Mr. Stern, this was an honest mistake. It might even be," she said, "that if you gave me half a chance, I would have apologized. I've been calling you for days now."

  Stern, rebuked, still chose not to answer. She had een an Assistant for only a year, following a clerkship in the U.S. court of appeals, and, presumably, a distinguished law school career, and he sensed an advantage in her inexperience. She had acquired a reputation as bright but phlegmatic, even flaky, the kind to blow hot and cold. He did not wish to lend her any reassurance.

  "Tell me, Ms. Klonsky," said Stern, shifting the subject,

  "what is the nature of your investigation?" ',I'd prefer not to say right now."

  "Are other agencies involved besides the FBI?" Stern wanted to know about the IRS in. particular. They were always. trouble. And if the federal regulators were in-volvedmthe Commodities Futures Trading Commission he might gain some idea how the charges originated.

  "I can't answer," said Klonsky.

  "What about Mr. Hartnell? Are you willing to say whether or not he is a target?"

  She paused, being careful. Klonsky had had her share of bad experiences with the defense bar already.

  "I can't tell you he's not."

  "I see." Stern thought. "When will you be able to be more precise about his status?"

  "Perhaps after we look at the documents we've subpoenaed.

  They're due today."

  "Well, I am afraid that we shall be a bit late providing them. You are basically asking that Mr. Hartnell and his employees stop running his business and look for records for weeks."

  "It's not that bad," said Klonsky.

  "I am assured it is."

  Klonsky sighed. She was tiring of the conversation. "How long?"

  "We need an extension of at least three weeks," he said.

  Dixon was looking on approvingly. He had his cigar tucked in his cheek, and a large enthusiastic smile. This was better than TV. "No, I am sorry," said Stern, "I had not consulted Mr. Hartnell. Best make it a full month."

  "That's ridiculous. These records are probably in a few cabinets."

  "I am informed otherwise, Ms. Klonsky. This is a federal grand jury investigation. I represent both the corpg. rotion and Mr. Hartnell personally. You will not identify your targets. I must be alert to conflicts at the same time that I try to be certain that our compliance with your subpoena is exact. I am required to make at least one trip to Chicago, if not more, to do that. If you wish to limit your requests, or tell me what is needed first, I would try toblige." She was silent. If she narrowed her request, she might disclose her interests. "If you think I am being unreasonable, make a motion to compel. I shall be happy to explain all this to Judge Winchell."

  Chief Judge Winchell, a former prosecutor, would rule for the government eventually. But no judge in the federal courthouse would set strict deadlines for Sandy Stern this month. His personal circumstances required no mention here.

  Ms. Klonsky knew the score.

  "No further extensions," she said. She gave him a date-the second of May. "I'll send you a letter."

  "Very well," said Stern. "I shall look forward to meeting with you, after you have reviewed what we provide."

  "Right," she said.

  "And, of course, Ms. Klonsky, I do accept your apology."

  Klonsky, pierced, hesitated, but thought better of whatever she had in mind.

  "Right," she said again and clapped down the phone. Stern could not restrain his satisfaction. That had gone well.

  Ms. Klonsky was high-strung and ill-humored and he had gotten the better of her. When the month was over, they could ask for another week or two, if need be.

  Dixon was laughing, delighted to see the government bashed.

  He asked what she had told him.

  "Very little. Except that she would not rule out the possibility that you are a target of' her investigation."

  Dixon drew on his cigar. He was instantly far more subdued, but he shrugged gallantly.

  "You slowed her down," he said.

  Stern listed what he would be doing near-term: the other customers he would contact; his trip to Chicago tO look over the records for the subpoena as soon as they had been gathered.

  "In the meantime, you know how these things go, Dixon.

  Discuss this with no one but me. Act on the assumption that everyone around you is wearing a tape recorder.
It would not be surprising if one of them is."

  For the first time today, Dixon briefly sported a look of discomfort: he buttoned up his lips and shook his head Then he ground out the cigar and stood.

  "I'm sorry this comes up now, Stern," Dixon said. "I hate to be the thing that drags you back into the office."

  Stern raised a hand. "I suspect I shall be here a good deal." He said this somewhat heroically, but that lost feeling came over him again. He had no notion, really, of the immediate future, or even, for that matter, of what lay.further ahead. A few images had stirred themselves: figures of stillness and order. He would mind the office and his clients in a state of settled dotage.

  Dixon, of course, had different thoughts in mind.

  "Oh, you'll have other distractions eventually." He glanced down at his stubbed cigar with the most minute salaciousness. Stern recoiled a bit, but he knew that Dixon was merely crnude enough to say what others were thinking.

  Even in tear-stained eyes thick with grief and sympathy, Stern could see he was already differently regarded. A single man. Certain facts were elemental. In his present mood, Stern was persistently repelled by contemplation of this subject. More to the point, he knew that his circumstance was hardly ordinary. What woman of even modest sense would be eager for the company of a man with whom another female had literally found life not worth living?

  "I assume this will cost a fortune," Dixon said as he picked his sport coat off the sofa arm.

  "It will be expensive," said Stern, barely able to suppress a smile.

  Dixon was rich. His business was worth millions, and he paid himself a seven-figure salary each year, but he maintained the typical frugality of a man. who had snuggled. He groused unremittingly about the appalling level of his legal fees. But years ago, in Stern's salad days, during that period when Dixon was still attempting to win Stern back after. marrying Silvia, Dixon had obligingly urged Stern to bill him like any other client, and Stern had never forgotten the instruction. One more peculiar harmonic had been established between them. Dixon paid for Stern's tolerance, and Stern was willing to allow it to be purchased. And always the concern on either side about who was getting the better of the deal. "I can leave some of the documents to the younger lawyers to examine," Stern said, "but we know too little. I must do most of this myself. Ms. Klonsky will take priority over other matters."