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  “So we heard.”

  Fourtner raised one eyebrow but didn’t take the bait.

  Riley pulled out his notebook. “When was the last time you saw Joanna Moorehouse? Either personally or professionally.”

  “I hadn’t seen her personally in months. I stopped in at Sterling last week to pick up the April stats.”

  “You spoke to her?”

  “Yes, sat in her office—you’ve seen their offices?”

  The detectives nodded.

  “A fishbowl. We chatted, I was there for about ten minutes, I left. Before you ask, Joanna didn’t confide any worries or fears to me. There were some protesters on the sidewalk but I went in the back. I asked if they were causing her any problems but she said no—or rather, she said ‘nothing I can’t handle.’ I said, ‘They haven’t invented what you can’t handle,’ and she laughed. That was the last time I saw her.” His face grew cold, giving Jack a preview of what he would look like as an old man. “Who killed her?”

  “That’s what we’re trying to determine. When was the last time you were at her house?” Riley asked.

  He shrugged. “That mausoleum of hers? Quite some time. Four months, maybe?”

  “Do you know the alarm code?”

  “I don’t remember her having an alarm.”

  “Spare key?”

  He shook his head, dislodging a blond lock so that it swept one eyebrow, which simply reinforced the GQ look. “No key exchange, no drawer full of stuff in her bathroom, and I never met her parents. It wasn’t that kind of relationship.”

  Riley asked, “What kind was it?”

  “We are adults who enjoy—enjoyed—each other’s company. That’s all.”

  “What about your relationship with Sterling? What exactly do you do for the company?”

  Fourtner explained that securities, bonds, and other financial products were rated according to safety and stability—judged largely by historical returns—so that investors could make quick decisions about whether the products’ estimated earnings were a good deal compared to their risk.

  “But you’re paid by the people you’re rating.”

  “Yes. Is that a conflict of interest that’s gotten the system into trouble in the past? Yes. That’s why there’re all sorts of requirements and hoops we jump through today to make sure that our assessments are impartial. But we provide a business service for business investors. There’s no reason to make the taxpayers pay for it,” he said this last in a pious tone.

  “Tell us about Sterling’s ratings,” Riley said.

  Jack mentally chafed as Fourtner launched into another round of explanations regarding subprime mortgages, tranches, and CDOs. He decided to cut to the chase. “We know there’s a problem with the CDOs.”

  This did not seem to concern Fourtner, or even startle him. “And that problem is?”

  “They’re derivative products based on Sterling’s mortgage loans. The default rate of those loans is ten percent and rising.”

  Riley stared. Fourtner fiddled with the corner of his desk blotter; for one of the high-tech generation he seemed to actually use the calendar printed on the blotter pad, with appointments and reminders jotted in every square. Save for the weekends. All work and no play … “Some fraction of loans will always default, even under ideal circumstances, and the circumstances of the economy are much improved but hardly ideal. What we used to consider standard is now abnormal, and the abnormals are now standard.”

  Jack didn’t believe a word of it. It sounded like pure BS, and not even highly rated stuff. “And yet you say all their bonds are triple-A. I mean you, personally, rate them that way. Yet the Sterling regulator is taking a closer look.”

  “She can look all she likes. Joanna’s products have always been solid. What will happen under Lauren, I have no idea, but Sterling has always been able to satisfy its investors.”

  Still run-of-the-mill BS. “How?”

  “I beg your pardon?”

  Riley sipped his coffee. The pigeon pecked the window. They both watched this conversation as if it were a fight in which they hadn’t a dog. “How? The CDOs are based on the mortgage loans. The tranches may be chopped into risk categories but they’re still stacked on the backs of borrowers. If those borrowers stumble, the entire tower comes down.”

  “Interesting analogy.” Fourtner must have realized that condescension might not be the best course when one is on the list of suspects in two murders, and went on. “That would be completely true if the CDOs were the end of the line. They’re not. The CDOs are insured, in a sense, by the CDSs. The credit default swaps.”

  Shit, Jack thought. Something else.

  “CDSs are completely misnamed, because they’re not swaps at all. They’re insurance policies in case the customers default. Sterling buys a credit default swap from Ergo Insurance for a fee. If the borrowers keep paying, nothing goes wrong, Ergo keeps collecting its fees. You’ve met the rep, Deb Fischer? If too many borrowers in a certain tranch default and the security loses its value, then Ergo gives Sterling enough money to cash out their investors. Simple.”

  Jack and Riley were silent, trying to spot the catch. There had to be a catch.

  “CDSs got a bad rep during the crisis. Some critics, including a lot of congressmen who were trying to look good to their constituents by going to a televised hearing and asking oh-so-tough questions of the Wall Street baddies, said that with CDSs banks and mortgage companies were actually betting on their borrowers to fail. It skirts the line between, on one hand, hedging your bets so that your bank doesn’t lose a lot of money and hurt your investors or shareholders or customers who utilize your products, and, on the other, simply trading products to make a profit for the bank on the backs of the customers you’re supposed to be working for. Violating fiduciary duty, in other words. Plus you could buy a CDS on a bond when you didn’t even own the bond, which meant you could bet on other banks’ CDOs. That’s kind of like buying a life insurance policy on someone you don’t even know. It’s creepy, but it’s legal.”

  “Okay,” Jack said. Maybe Sterling’s products were solid plus shored up by an insurance policy, and maybe Jeremy Mearan had pointed them toward Fourtner out of sheer jealousy… or maybe Fourtner was a very smooth talker.

  “During the financial crisis everyone had taken CDSs too far—that was the problem, relying on them to be a safety net and a cash cow at the same time. And, for a time, they were. But a safety net that saves you when you jump from the third floor isn’t going to stop you when you jump from the eightieth. AIG got way too far into CDSs and it nearly killed them because insuring CDOs wasn’t regulated the same as insuring people’s lives or homes. The funds didn’t maintain sufficient capital. Then once people looked at the collateral—the housing market—in these collateralized debt obligations and saw it dropping like a stone, AIG needed even more money to make up the difference. Eventually the government had to come to the rescue with the bailouts.” He stared pensively, either at his reflection in the window or at the pigeon behind it. “Insufficient capital was the core problem in the mid-2000s.”

  “Sterling has sufficient capital?” Jack asked, having run out of intelligent questions. All he wanted to know was whether Sterling deserved its triple-A rating, and this guy sure as hell wasn’t going to tell him if it didn’t.

  But, to his surprise, Fourtner hesitated. Then he said, “Yes.”

  Just “yes”? No long-winded explanation of some esoteric financial product? “Where is it? This capital? In cash?”

  “Not only cash—tangible assets have to be at least six percent of total net worth, that’s all. That includes property, equipment, accounts receivable. There’s no point in keeping a lot of cash these days, not with interest rates at rock bottom.”

  Joanna Moorehouse apparently hadn’t gotten that memo, Jack thought. Because she had a crap ton of cash and he wanted to know if this guy knew about it, but had no way to find out other than to ask. “Did you know about Joanna Moorehouse’
s account at the Banco de Panama?”

  Fourtner didn’t react. “I’m sure Sterling has a lot of accounts. I don’t audit them. I simply rate the bonds they sell.”

  The hell with this. “And your ratings are suspiciously high. Why is that?”

  “Suspicious to whom?”

  “How much did Joanna Moorehouse pay you to get those triple-As? Or did she offer you some other form of payment?”

  “Are you suggesting that I took bribes from Joanna?”

  “It’s not a suggestion. It’s a statement.”

  “Made by whom?”

  Riley set his porcelain mug with its complimentary coffee on the edge of Fourtner’s desk. “Everyone involved with Sterling.”

  For someone accused of a crime he seemed remarkably sanguine … but then, he probably always looked that way. Jack could see why he and Joanna made the perfect friends-with-benefits couple—no worry that either one of them would ever evidence a shred of human feeling. Nothing mattered but the bottom line. Feelings were only a distraction.

  Exactly, it occurred to him, as he lived his life these days.

  The accumulation of indignation dissipated like a puff of breath on a cold day.

  “I assume you mean Anna Hernandez and morons like Ned Swift,” Fourtner was saying. “Most people have no idea how money actually works, how a financial firm actually makes a profit. It’s not their fault—most of it is rather opaque. All I can do is assure you Joanna never bought a rating from me, not with her body or her money or anything else. I won’t even waste your time going on about how much I resent the implication.”

  Just as well. They had wasted too much time already. Jack stood up and Riley followed suit. They thanked him for his time and left. The coffee mug stayed on the desk. The pigeon didn’t budge from his window. Both seemed to serve as one final indication of how little effect the cops’ visit had had on Sidney Fourtner’s day.

  Chapter 21

  “Thank heavens you’re back,” Carol exclaimed as soon as Maggie, her arms coated in antibiotic ointment, walked through the door with Tyra Simmons’s samples.

  “I didn’t realize you’d miss me so much. I’d have left you my charm bracelet to remember me by.”

  Carol didn’t even run with the joke, having noticed the myriad of small cuts and the deep smears of blood on Maggie’s shirt and pants. “What happened to you?”

  “Long story. The main point of it is that the car’s going to be out of commission for at least a day. What did you need me for?”

  “Were you in an accident? Are you okay?”

  “No and yes. I’ll tell you the whole story if you tell me why—”

  “You need to talk to Denny about this Graham trial. The defense brought in some hired whore to poke holes in your fingerprint identification.”

  Maggie dropped the manila envelope on her desk and slung the strap of her small purse over the back of the chair. “Well, that’s called getting a second opinion and they’re welcome to it. We have to trust the jury to know a hired gun when they see one. And to know a guy who shot his girlfriend to death just like he shot his last girlfriend to death and probably the one before her when they see him.”

  “Yeah, well, talk to Denny. He’s worried.”

  “Of course I will. But when isn’t Denny worried? I think it’s in his job description.”

  She took a step in that direction but the middle-aged Carol lifted a hand, palm out. “Wait.”

  “What?”

  “You have a charm bracelet?”

  *

  Denny did, indeed, appear worried, and even more so when she gave him the briefest possible rundown of the incident.

  “Wait, wait. Someone shot at you?”

  “No, at Anna. I happened to be standing there.”

  “How do you know they were aiming at her? I’m not trying to freak you out, but—”

  “Do I look freaked out?”

  Denny, always honest, said, “Yeah, a little. Sorry, but … there it is. Anyone would be. Especially with this Graham trial and talk of a hit list—”

  Maggie rubbed her forehead; every movement of her arms made the skin feel tight and creaky. She had gotten the right shoulder healed from its dislocation and now the arms, especially her left, felt skinned. “Not you, too.”

  “It doesn’t help that the entire sum of evidence is this one print on this one gun.”

  “Which was found under his bed and whose bullets match the slug found in the victim.”

  “The slug hit bone. It got pretty mashed up.”

  “The general characteristics match. That’s evidence.”

  “Circumstantial.”

  “And a witness.”

  “Her five-year-old daughter. She did great on the stand, but the jury is going to remember their own kids and judge accordingly. At five my son insisted that the neighbor had a robot that drove his car and that our dog could talk.”

  “Are you sure it couldn’t?” Maggie couldn’t resist asking.

  “I’m just saying.”

  “Yes, children aren’t always reliable but they’re also amazingly observant. Plus there’re statements from his very grown-up cronies and her friends about how much they fought and that he had pistol-whipped her the day before and how she had been planning to leave him.”

  “Most of which have already been recanted since each one of those witnesses has a criminal record that dates back to their teens and they know how snitches fare in jail when they find themselves back inside for violating probation. It’s been child’s play for the defense to skewer them.” He settled back into his chair, hand to chin.

  Maggie sat back as well. At least her back didn’t hurt. A defense challenge didn’t worry her—the facts were what they were—but she hated the idea of being recalled to court. She hated the idea of going to court in the first place. Few tortures more nerve wracking were permitted on U.S. soil. Confined to a chair while someone did their best to make you look either incompetent at best or corrupt at worst for as long as they chose to continue … only a pure masochist, or perhaps an adrenaline junkie, could enjoy that. She was neither. “Who’s the expert witness?”

  “Some guy from Idaho. The prosecutor says he wrote a statement that the ridges don’t line up and your report lacks all detail and fingerprint science can’t satisfy all the Daubert requirements.”

  “Wow. Everything but the kitchen sink.”

  “The prosecutor is bouncing off the walls. If this case is lost it’s going to look bad for the city and worse for the department. Graham has killed at least three women, and his last right-hand man vanished into thin air a few years ago, all for fun, and at least twice that many on gang business. It’s not as if he tried hard to cover his tracks—he practically posts the news on Facebook with a smiley emoticon.”

  “That wouldn’t surprise me.” She had glanced at him once or twice in the courtroom—with having to divide her attention among the prosecutor, the defense attorney, the judge, and the jury, she could very often leave the stand with no recollection of what the defendant looked like. But Graham, she remembered.

  A very ordinary-looking man, white skin, light brown hair, a trimmed goatee, heavy biceps under his dress-for-court shirt, the kind of guy you could picture grilling burgers over a backyard pit, the kind who might curse at the pull string on his mower and make every peewee ball game his kid played. Until he smiled, which he did often.

  Then the crooked tilt to his lips seemed to reflect an unholy glow into his eyes, and his brows would knit with an intensity that made one wish, beg, plead to the heavens, “He’s not looking at me, is he?”

  But he had been, watching her every breath from the time she had approached the witness stand until she passed through the audience pews to the door at the back of the room. As she had pulled it open she had noticed him still watching, turned completely around in his seat and ignoring the prosecutor as he called the next witness. He had caught her eye in that instant before she gratefully slipped from the court
room, hoping never to return.

  It got under her skin. She didn’t like what she’d seen there, a salaciousness, a freedom, a promise—of what, she didn’t want to imagine. Maggie had encountered plenty of killers before Graham and usually found them subdued and dull. Not him.

  Apparently this creepiness didn’t translate through the camera because he had plenty of women writing to him in prison. His attorney seemed fond of pointing out how many marriage proposals he had received since his incarceration. Graham liked to read them to the reporters during breaks in the trial. It mystified Maggie to know there were some human beings who when everything told them that something was X they would insist it was Y. Maybe it made them feel smart or special, in that like a conspiracy theorist they could see what no one else could. Maybe they had been so wronged in life that they automatically mistrusted everything told to them. Or maybe, she thought, they were really, really stupid.

  “All I can suggest,” Denny was saying, “is bone up. On current studies, statistics, Daubert points, your resume, proficiency testing, everything. Who knows what this guy will pull out to throw at you.”

  “Sounds like fun,” she said wearily. “I’ll do my best.”

  “You always do. So what is up with these two women? We haven’t seen a case that violent since they found that little foreign girl in the cemetery. And even she wasn’t, like, disemboweled.”

  “I don’t have any idea. There’s a mind-boggling amount of money involved, but it goes in all different directions and these corporate types aren’t going to confess to anything shady—”

  “Doesn’t sound like a business thing, anyway. Nobody disembowels over money, unless that money is in the form of fifty kilos of Colombian snow. Then maybe.”

  “I don’t know,” Maggie said. “Did I mention this is a lot of money?”

  “Don’t they have someone in jail anyway? He killed the women because they repossessed his house or something?”

  “He only confessed to the first victim, and his story isn’t exactly hanging together.”

  “Still, if you’re looking for something more personal … home is as personal as it gets.”