“Like Cheryl said, Parsons mainly does the liquidation work. The committee brought them on first thing, even before we got here. They’ve got forty-plus people here in New York, and probably another sixty or seventy in the other offices around the world. The partner running the engagement shows up here for an hour or two every month, and spends most of that time schmoozing the management committee. The real guy in charge is Evan Mills. Sort of an asshole, but a bright guy, once you get past the aging preppy thing.” Neary gave a little laugh. “Hey-you two might have a lot in common. He should be around here somewhere.”
We walked into a conference room. It was long and windowless, painted white and very brightly lit. Half a dozen computers had been set up on the metal and plastic conference table, and three men were gathered around one of them, peering at the monitor. They looked at us but gave no greeting.
“Mills?” Neary asked.
“Project office,” one of the men answered and gestured with his thumb. The three heads bent again to the monitor.
I followed Neary next door, to a room that was more walk-in filing cabinet than office. It was about eight by ten feet and fluorescent-lit, and nearly all the wall space was covered by shelves. Most of the shelves were filled with big, white loose-leaf binders labeled “Time Sheets” and “Expenses.” Some bore the Brill logo, but most were stamped with the Parsons and Perkins chop. A small metal desk was jammed into the back of the room. Its top was crowded with a computer, a telephone, a fax, in and out trays, stacks of blank forms, and, just now, a pair of worn deck shoes.
The shoes belonged to a young man sprawled in the chair behind the desk. He had a telephone handset propped on his shoulder, and a big white binder in his lap. He was listening to someone, and he rolled his slightly bulging gray eyes at us in exaggerated boredom. He ran a hand over a broad forehead and through a tangle of blond hair. Then he smiled and made a “yackety-yak” hand gesture and shot Neary with a thumb and forefinger. Besides the deck shoes, he wore baggy khakis and a navy blue sweater over a blue striped shirt. His sleeves were pushed up over wiry forearms, and on his wrist was a thick metal watch that looked like it had been carved from the instrument panel of a fighter jet.
On closer inspection, the man aged a dozen years. There were streaks of gray in the blond hair, and a web of fine lines around his eyes and his wide, almost lipless mouth. The hint of color on his sharp nose was from broken capillaries, not sunburn. I put him at forty, plus or minus. He ran a hand through his hair again and spoke into the phone.
“Yes, Mrs. Cleaver, we’ll get that over right away,” he said with mock sincerity. “And then will you let the Beav come out and play?” He listened some more and sat up quickly. His hand tightened around the phone, and he answered back with venom, “You think this is a bad attitude? Come down here and talk to my people. They haven’t had expenses reimbursed in over two months because you and your fucking bureaucrats can’t get the paperwork right. My attitude is nothing compared to theirs. I’ll resend the damn file, but-trust me-this is the last time we’re going to have this conversation. The next time I’m taking it up with the engagement partner, and you can explain to him why you keep fucking this up.” He slammed down the phone, and as soon as he did all traces of anger disappeared.
“What clowns. Trying to get accounts to process expenses, it’s like dealing with the fucking IRS,” he chuckled to himself. He put the binder on the desk and stood, stretching. He smiled at Neary and put out his hand. “It’s J. Edgar himself. How’re you doing, Hoov?” They shook. Hoov?
Neary smiled, with only a trace of strain, and made introductions. “Evan, this is John. John-Evan Mills. I’m giving John a little tour of the operation, and I was hoping you could give him a quick overview of what Parsons is doing.” Mills gave me a surprisingly strong handshake.
“Anything for you, Hoov, you know that. You another fallen G-man?” Mills asked me. I smiled but said nothing.
“Not saying, huh? Eyes only, need to know, you could tell me, but then you’d have to kill me-I get it.” He laughed and moved past us, into the corridor. Neary and I followed. Mills walked, and reeled off a practiced chatter as he went.
“I assume Hoov has given you the basics of who does what, right? So you know that Parsons is focused on the liquidation work. That’s meat-and-potatoes forensic accounting. But what does that mean, really? I always say that forensic accounting is like archeology, but not as messy, and you don’t get to camp out. They’re both about collecting a million tiny, unremarkable pieces of dirt, to build a picture of something from the past. In this case, the thing we’re rebuilding is MWB’s balance sheet.” Mills liked the sound of his own voice, and didn’t pause or even glance back at us as he spoke.
“I’m guessing you have no accounting background. No one does, except accountants, and even they’re not happy about it. So I’ll keep the jargon to a minimum. A balance sheet is basically a tally of a firm’s assets and liabilities. The assets are what it owns; the liabilities are what it owes. Creating this takes some sweat, but it’s not usually rocket science. For a bank, tallying the assets is a matter of adding up the outstanding loans that it’s made, plus cash or securities due to the bank from trading activity, plus whatever it has in its vaults-that could be cash, or stocks and bonds, or gold, or any number of things. And then you add in any cash or securities it has in accounts at other banks or custodians.
“Toting up the liabilities is the flip side. You look at any loans the bank has taken out, cash or securities it’s holding for clients, bonds or commercial paper it’s issued, whatever it owes from trading activity, and anything in its vaults that belongs to someone else. That’s basically what we’re doing here. Of course, with MWB there are complications.” Mills led us to the kitchen alcove. He poured some poisonous-looking stuff from a glass coffee pot and leaned against the counter.
“You guys want? No? That’s probably smart. Okay. The first and biggest complication in all of this work is the number of different legal entities-different financial institutions-that were under the holding company’s umbrella. The sheer number of names whose activities we have to sift through makes things much more difficult. Also, the MWB people were lousy record-keepers. I don’t know if that was by design or just incompetence, but it’s amazing they were ever able to pass an audit.” He drank some coffee and made a face.
“Those are the main problems, but we’ve had others to deal with. For example, the MWB traders were very active, so there were lots of deals still unsettled when their charter was yanked. We had to sort through all of those. Finding MWB’s cash and securities accounts at other institutions was another pain. We had some statements to work from, but ultimately we had to canvass all the firms that provide those services, to see if they had any accounts for MWB. And then there were the vaults. You’d be amazed at what they had in there. And let’s just say that a lot of it was of questionable provenance.” Mills smiled to himself and shook his head.
“So, once we piece together the balance sheet, then what? What do we do with it? Well, all the liabilities are somebody else’s assets. And no sooner had the regulators shut the doors on this place, than those folks started lining up with claims. To validate those claims, we’re reconstructing MWB’s activities with each of the claimants. It’s excruciating work; the more complex cases go back years and involve thousands of transactions.” Mills drained his cup.
“That’s it. In a nutshell, that’s what we’re doing, here in New York and in the overseas offices too.” He folded his arms across his chest and looked quizzically from one of us to the other. “I don’t know what else there is to tell.” I looked at Neary, and he looked back at me. Neither of us spoke.
“How do you do it?” I asked. “How do you go about putting the pieces together?”