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  “I thought the whole point of the hybrid was Islamic financing.”

  Rahmani laughed. “Fred meant it as a joke. He only went through with it as an object lesson for us.”

  Gage shook his head. “You’ve completely lost me.”

  “An example.” Rahmani laid his forearms on the table, palms up. “You know how Orthodox Jews aren’t allowed to turn light switches on or off on the Sabbath?”

  Gage nodded.

  “The way they get around it is to use a shade that you can rotate so that it blocks the light. They flip the switch on before sundown on Friday and leave it on until sundown on Saturday. By rotating the shade, they get light when they want. Ingenious. They also have elevators that stop on every single floor on Saturdays so nobody has to push a button.”

  “They invented ways to get around the rules.”

  “In fact, but not in spirit. It’s all bullshit.”

  Rahmani glanced at Ilkay standing at the counter reading a newspaper, and then lowered his voice.

  “Like my business. Muslims aren’t supposed to pay interest—riba—so instead of the customer financing the car through a bank, I buy it, lease it to them, and at the end of the lease, they give me a little extra and they then own the car.” He pointed in the direction of his office. “That’s what ijara means in my company’s name. Lease.”

  “And your bullshit is calling it profit, instead of interest.”

  Rahmani raised his cup, took a sip, and then said, “Exactly.”

  “How does Fred fit—”

  “I’ll tell you. One evening, Fred explains how a hybrid company works. He says that we’re not shareholders. We don’t own it. We’re what they call guarantors. We’re responsible for the debts—”

  “Or the profits—”

  ”—when the company closes down. In the meanwhile it’s completely out of our control. Completely. Fred then asks whether it’s okay if the hybrid loans out money and earns interest and the value of the company increases, and then pays it all to us as profit when the company closes down.”

  Rahmani held up a forefinger. “Remember. It’s not our company when it’s earning the interest. The money is out of our hands and Sharia law doesn’t apply.”

  “And that also means,” Gage said, “that the profits at the end could be considered capital gains instead of regular income.”

  Rahmani grinned. “You’re good. Really good. Fifteen percent federal tax rate, instead of thirty or more. And we don’t have to take the gains until the company goes out of existence. It’s like a 401(k), except offshore and you can put in as much money as you want.”

  “It should’ve sounded too good to be true.”

  Rahmani shrugged. “Nothing ever sounds too good to be true at the time. At that point we’re on our feet dancing, and the idiots that we were, we dance right down the path Fred laid out for us.”

  “And the rest is history.”

  “If the terrorist financing allegation hadn’t come up, we’d probably still be doing it.”

  Framed by 9/11, Gage knew that there was no way Hennessy, or any FBI agent or U.S. Attorney, would’ve found Rahmani and Ibrahim’s defense credible. No one sets up a tax fraud as a joke.

  But there was still the question of where the money went that these men had put into the hybrid.

  “How was the money used for terrorist financing?” Gage asked.

  Rahmani shrugged again. “We never learned for sure.” He gestured toward Ilkay. “His wife was close to Fred’s wife, Ibadat. You know she’s a Muslim from China, right?”

  Gage nodded. “Xinjiang.”

  “Ibadat told Ilkay’s wife that Hennessy leaned on her about a Muslim separatist group that bombed a U.S.-owned company over there ten years ago. Spectrum. Vice President Wallace’s old company. Hennessy implied that money from the hybrid was used to finance the bombing.” Rahmani rapped on the tabletop with his knuckle. “But I never saw or heard of a single piece of evidence that proved it.”

  Gage suspected that pressure to prosecute Ibrahim had come from Wallace and that Ibrahim’s deportation must’ve been a compromise: face saving for the FBI and a way for Ibrahim to protect his wife. And the cover-up of the details served everyone’s interest: The FBI prevented the widespread use of the technique and Ibrahim didn’t get exposed to the Muslim community around the world as a heretic.

  Gage now also understood that Rahmani’s “May Allah grant …” was an act. The man liked Ibrahim, didn’t blame him for anything, not even for the tax bill. And Rahmani had long ago acknowledged to himself that he’d brought that on himself.

  “Did you tell all of this to Tony Gilbert when he came by?”

  “He didn’t seem all that interested. All he wanted was to find Fred. Or so he said.”

  “You help him?”

  Rahmani shook his head. “How could I? I don’t know where Fred is or even if he’s still alive. And even if I did know, I wouldn’t have told him. Gilbert was like a pit bull wagging his tail. You don’t know which end to believe, so you keep your hands in your pockets.”

  Gage smiled. “I thought Muslims weren’t supposed to touch dogs at all.”

  “Religious opinion is divided on the subject.” Rahmani smiled back. “It’s sort of like tax law.”

  “But you settled with the government.”

  “We all decided it would be better for us and for Fred if the story didn’t stay in the news—”

  “And the details didn’t come out.”

  Rahmani rocked his head side to side, and then nodded and took another sip of his coffee.

  “And now you know my story,” Rahmani said. “What’s yours?”

  “Hennessy may have been killed—” Rahmani flopped a hand toward Gage, cutting him off. “That’s his story. I want to know yours.”

  “Personally, I don’t have one. Professionally, someone asked me to locate Fred and find out what really happened.”

  “Maybe you should go knock on the door of the hedge fund. Rumors in the financial pages say that he’s their secret weapon. Maybe they know where he is.” Rahmani smiled. “Maybe they have him in an old missile silo, ready to shoot down their competition.”

  Gage recognized that the maybes were a test to divine his intent.

  “It seems a long way around to connect two points,” Gage said. “And I’m not sure that whatever he’s doing now—or is alleged to be doing now—is relevant to what happened then.”

  In fact, Gage believed the opposite, but the more narrow the focus, and the more Rahmani believed that exonerating Ibrahim was Gage’s aim, the more likely he’d help.

  “It seems to me,” Rahmani said, “that your real interest is not in Fred, but in what happened to Hennessy.”

  “Only in the sense that his death provoked my client into wanting to know whether or not Hennessy was right about Fred being framed and whether that had something to do with Hennessy’s death.”

  Rahmani smiled, then looked over at the café owner and called out, “Ilkay, turn on the music. Mr. Gage here seems to want to dance.”

  Gage shook his head.

  “It’s true that I wouldn’t be here if there wasn’t a suspicion that Hennessy had been murdered. And it’s true that the person who hired me wants to know whether he’s dead because he intended to expose something—either about the past or about the future.” Gage raised his right hand as if to swear an oath. “But at this point, all of the evidence I have points to the past.”

  When he said the word “evidence,” Gage felt a little like Bill Clinton manipulating the word “is” or George Bush redefining the word “torture.”

  “I can see you’re not an idiot, Mr. Gage, so you’ve no doubt noticed that there are similarities between a hybrid company and a hedge fund. Your money is out of your control for a period of time, you don’t know what they’re doing with it, and you don’t have the right to know.”

  Gage drew back. “You’re not suggesting that the Relative Growth Funds is engaged in terrori
st financing?”

  “Not with its board dominated by the last three Republican administrations. All I’m saying is that the past may not be all that distinct from the present.”

  “Only one man knows the answer.”

  Rahmani nodded. “But if I was that man, I’d want to know who’s really asking the question.”

  Gage leaned forward and rested his chin on his cupped hands, trying to give the appearance of deliberating over whether to reveal the name of his client. There was no way he’d say it was Abrams, but he thought of a partial truth that would satisfy them both.

  “You married?” Gage asked.

  “Of course.”

  “You have children?”

  Rahmani paused and stared into Gage’s eyes, and then said, “I see. This must be very painful for Hennessy’s family.” He shrugged. “The problem is that Fred agreed to deportation to protect his wife and the group and for that reason broke off contact with us after he left.”

  They sat in silence for a few moments. Gage didn’t think it was safe to pressure him any further.

  “I can try to get a message to him,” Rahmani finally said, “but I may never know whether it gets delivered or even whether he’s still alive to receive it.”

  Driving away from the café, Gage found that he believed Rahmani, but wasn’t convinced of the man’s reasoning. It was just as likely that it was Ibrahim who had isolated himself from his past to protect himself as much as to protect his friends.

  What worried Gage now was that if Ibrahim had been unjustly prosecuted by his adoptive country, then he’d have a motive to get even, and if he hadn’t been the mastermind of a terrorist financing plot before, he might have acquired a reason to become one.

  A genius like Ibrahim wouldn’t find it hard to divert a few million dollars, maybe tens of millions of dollars, from a two-trillion-dollar hedge fund into a terrorist’s hands.

  In any case, Gage decided, the answer wouldn’t be found in Boston, where the trail had begun, but where it had ended.

  He glanced at his watch as he merged onto the highway toward Logan Airport. It was still too early in the Chinese morning to call Faith. The news reports he’d listened to on the way to meet Rahmani had said that the Chengdu uprising was spreading east toward the industrial cities, not west into the mountains, but he was sure it would soon, and he feared she’d get caught up in it, for the largest volume product now being manufactured in China was blame.

  CHAPTER 24

  Don’t pretend you know when you don’t,” Milton Abrams said to Alice Thornton, director of the Fed’s Division of International Finance. She’d flown up from Washington to meet him in the local office he maintained at the New York branch. “China is gorging on dollars and euros and we don’t have a clue about how many.”

  “These are just estim—”

  “Based on what? The lies they tell us?”

  Abrams pushed himself to his feet, yanked off his suit jacket, and then paced behind his oak desk. When he looked back, Thornton was staring down toward her lap, but he didn’t think her eyes had yet focused on the report lying open there. He noticed a strand of her brown hair hanging beside her cheek. It had pulled free from the silver butterfly barrette he’d bought her in Marseilles after the meeting as a thank-you for helping him control his fury. The chairman of the Federal Reserve wasn’t allowed to appear as a lunatic in public and she’d prevented that from happening.

  He walked over and placed a hand on her shoulder. “I’m sorry. I know you’re as worried about this as I am.”

  Thornton looked up. “And as isolated from the rest of the Barons.”

  The Barons were the senior civil service staff of the Federal Reserve and the gatekeepers of the information that the board and governors received. Despite the fourteen-year terms of the political appointees, the Barons treated them as visitors passing through their feudal kingdom.

  Abrams didn’t trust them any more than they respected him, an outsider imposed on them by a president during the lame-duck years of his second term, who only then felt safe in acting on his principles. And one of those was his resolve that plain speaking should replace jargon at the Federal Reserve, and the plainest-speaking economist he knew was Milton Abrams.

  The title of the speech that had won the president over was: “Full Employment Is No More Full Than Welch’s Grape Juice Is 100% Juice.”

  It had been an attack on economists’ use of the phrase “full employment” to mean a level of employment that wouldn’t trigger inflation—which meant that they considered seven percent unemployment to be full employment.

  That was followed by an article titled “A Moral Hazard Is Not a Sand Trap” in which he attacked the view that immorality in the world of finance was always likened to a hook or a slice, simply a mistake or an accident that had led corporate officers astray, rather than a willful exploitation of an opportunity to swindle.

  Abrams had insisted that the phrase “moral hazard” be replaced by the more accurate “incentive to lie, cheat, and steal.”

  He did the same thing in other op-ed pieces and speeches for other bits of self-deceiving jargon:

  “Price stability objective,” which actually meant the rate at which prices rose.

  “Core inflation,” which excluded the goods that most cut into consumers’ budgets: food and heating oil and gasoline.

  He then moved on to “balance sheet stress,” “favorable supply shocks,” “asymmetric policy bias,” “capital deepening,” and “total factor productivity.”

  Abrams’s first instruction to the staff upon arriving at the Fed was that the language it used in its reports and press releases had to be plain enough for anyone in the country with a high school education to understand.

  The Wall Street Journal led a protest against the policy, starting off with an editorial titled “Lost in Translation.”

  CNBC called it “the names game.”

  The first lesson Abrams learned from the experience was that the war wasn’t limited to words and titles. It soon took the form of street battles outside the Fed: police battalions fighting betrayed workers who’d realized that the last four administrations hadn’t been trying to eliminate unemployment, but maintain it—and at levels prescribed by academic theories that were as transient as the homeless.

  The second lesson Abrams learned, taught to him by Thornton, was that the economic data the government released to the public were no more reliable than the words in which they were framed. And he discovered why: The statisticians in the Labor, Commerce, and Treasury departments had been vetted over the years for their political views, rather than their academic credentials.

  Abrams didn’t trust any of them. And now he feared that his demands for clarity in a cloudy world would drive Thornton away.

  He returned to his desk and sat down and asked Thornton, “What’s the bad news you were about to tell me? ”

  “The Chinese State Administration of Foreign Exchange announced today that their holdings in dollars have now passed one point one trillion.”

  “And when you factor in foreign currencies held outside of the central bank, it has to be double that.”

  Thornton shrugged. “That’s my … estimate.”

  Abrams reddened. “Sorry about that.”

  “I know you weren’t angry with me.”

  “What are the Chinese saying about their foreign debt?”

  “A couple of hundred billion, more or less. Chump change.”

  They both knew that all the figures were unreliable. For more than a decade China had been holding some of its reserves in the names of offshore front companies so that their central bank wouldn’t have to report them.

  “But here’s an interesting thing,” Thornton said. “I’ve been watching a slow rise in the value of Japanese yen and Singapore dollars and Taiwanese NT in the last few months—”

  “Which leads you to suspect that the Chinese are using some of their dollars to buy other Asian currencies—”
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  “In the countries from which they get their imports, especially food.”

  Thornton handed him a sheet displaying a four-color bar chart showing investment levels throughout Asia for the last two years. She pointed at two side-by-side bars, the previous year on the left and the current year on the right.

  Abrams stared at the chart, seeing in the visual presentation what he hadn’t seen in the data alone. He felt his body tense. He looked up at Thornton.

  “China is turning all of Asia into an economic colony by becoming its central banker and controlling the flows of currency.”

  Thornton nodded, then pointed toward the flat-screen television on his bookshelf.

  “Worse than that,” Thornton said. “The last Indian-made Toyota rolled off the factory floor today. I watched it on CNBC this morning. Tomorrow they’ll begin dismantling the plant for shipment to China.”

  Abrams’s eyes moved from the blank screen toward the window. He gazed down at the traffic merging at the tip of the sculpture-studded Louise Nevelson Plaza.

  “It never crossed my mind,” Abrams said, “that someday it would be cheaper to manufacture a car in China than in India. It’s absolutely astounding.”

  He thought of the hundred million Chinese laborers traveling into the cities from the countryside, then from city to city looking for work.

  What did Marx call it? Abrams asked himself. A reserve army of labor. Surplus, superfluous people who kept wages low not only in China, and not only in India, but throughout the world.

  “I’ll give you a piece of data about China that’s completely reliable,” Thornton said.

  Abrams blinked himself back to the present and looked at her.

  “The CIA is saying that there have been a hundred and fifty thousand labor actions and riots in the last twelve months. There have even been protests at factories owned by the People’s Liberation Army, and the military is very unhappy. As if to send a message to the Politburo, older representatives of the PLA have been showing up in full-dress uniforms for meetings, even private ones.”