The One Who Deserves Punishment and the One Who Deserves Praise
In early February of 1992.
Dry ivy clawed across the Harvard campus’s red brick walls like a spiderweb.
The snow that had fallen days earlier still hadn’t fully melted, leaving pale blotches scattered across the lawns, and the freshmen who had returned after their first break hurried along with cups of hot cocoa clasped in both hands.
···Ding!
The clock in Memorial Hall’s bell tower struck eleven.
The classroom doors flew open, and students poured out in a rush.
I was one of them.
I was cutting through the crowd, leaving the advanced macroeconomics lecture hall, my first class of the second semester, when someone called my name from behind.
“Hold on, Mr. Lee.”
Neatly kept gray hair, a straightened posture, and a gaze behind gold-rimmed glasses that seemed to pierce straight through a man.
It was Professor Warren Cromwell.
A sharp-eyed professor with whom I had once fought a mock investment battle.
Now, after class, he had personally called me over.
As Cromwell and I faced each other, it was obvious that the students passing by had slowed their pace to eavesdrop on our conversation.
A few of them even stopped outright, lingering at a distance to watch.
Professor Cromwell laughed heartily and tapped my shoulder.
“It’s a private matter. One of my favorite juniors wanted to send his regards to you. Alfie Solomons from the IRS. You’ve already met him, haven’t you?”
Alfie Solomons.
I had once made a deal with him through legal channels.
I had handed over the tax ledgers of John Ryu, a major tax evader and criminal, and in exchange I’d won a five-year exemption from any tax investigation into Lee Energy. That had been the bargain.
“Ah, you mean Team Leader Solomons. I met him before and learned quite a lot.”
“He sang your praises until I thought his throat would wear out. Says that thanks to you, he caught a big fish. He mentioned that the three of us should have dinner sometime soon. Could you make time?”
A dinner with a senior IRS official, Harvard’s professor of professors, and an undergraduate student.
There was no reason to refuse, and it was the sort of invitation I would have struggled to earn on my own.
“I’m honored. Call on me whenever you like, and I’ll be there.”
“Good. I’ll be in touch soon.”
Professor Cromwell walked away with a faint smile.
Then someone jabbed me in the side.
When I turned, my roommate Victor was standing there with a stunned expression.
“Whoa—good lord. Cromwell asked you to dinner first? Is this for real?”
“It was just a simple introduction through someone he knew. Nothing special.”
“Nothing special? Professor Cromwell asking a student to dinner first is probably a first in Harvard history.”
The wreck of a man he’d been last semester, after his breakup with Becky Thompson, was nowhere to be seen.
I walked beside Victor, talking as we went.
“You look good. You’re over it, then?”
“Totally! I went fishing in Florida with my dad. We had a man-to-man talk while wrestling a sailfish. Drinking beer with him out in the middle of the ocean and getting life advice—it cleared my head right up.”
“Sounds like you had a great time. I’m glad.”
“Oh, and Vivian’s been going on and on about how much she misses you. Why don’t you come over sometime this weekend? That idiot doesn’t study, just keeps singing all day and running off to dance around like she can’t even dance. Honestly, when is she going to grow up?”
“I’d be honored. I’ll bring a cake or something tasty when I come.”
Vivian was Victor’s younger sister.
Since she would go on to become a world-famous singer, keeping a good relationship with her seemed like a wise investment.
Then a giant shadow fell over us.
Looking up, I found Jack—dorm supervisor, resident adviser, and upperclassman—standing there with his usual lazy smile.
“Ah, so the dorm’s celebrities are all gathered here. Let’s make it through the second semester without causing any trouble, gentlemen.”
“We’ll do our best, senior.”
Jack gave my shoulder a light thump, looking pleased.
Beside him stood Drake Tomlinson in a football team jacket.
He was the guy I’d beaten half to death last semester, to the point of tears, but surprisingly enough we’d gotten along pretty well after that and were now the kind of people who sometimes spotted each other in the gym and helped with workouts.
“Sanha, you lifting tonight?”
“Yeah. You?”
“Me too. See you in the weight room. Mind if I watch you train today? Coach said your lower-body balance is art and told me to study it.”
“Really? Sure. I’ll come after dinner.”
There were quite a few others who greeted me first as well.
Most were women, though one in particular stood out.
“Sanha! No, Boss! What are you doing here?”
It was Caroline Channing.
She was smiling with a folder in hand, and with her hair neatly pinned up and her blouse so crisply arranged, she looked less like a student than a brand-new secretary.
Caroline had been hired as my secretary over the break.
That was why she called me Boss.
“I’m not interrupting anything, am I, Boss? I heard you were coming to University Hall later, so I finished setting everything up. Room 91 again today.”
She checked her wristwatch, winked, and then scurried off.
Once Caroline’s back vanished into the crowd, Victor muttered with a dazed look, “Man, you’re never going to have enough hands for everything you’re doing. A dinner invitation with a professor and some senior from the IRS, training with the football team ace, and now Harvard’s most beautiful secretary on top of all that... What, are you trying to become the god of Harvard?”
“What are you talking about? I’m just trying to live hard.”
Victor and I headed to our next class.
And there, we ran into a friend I’d been curious about.
Grace Fairfax.
She had already arrived in the lecture hall and was going over a stack of papers, though no matter how I looked at them, they didn’t seem to be homework.
Even when Victor sat down beside her, she didn’t so much as glance his way; only when I sat on the other side did she finally look up.
“Oh, Sanha. You’re here.”
The title on the document she’d been reading caught my eye.
Proposal for Coordinated Operation Between Campus Ventures and the HAA Angel Fund
I scanned the page and spoke.
“You’re trying to pull in Harvard Alumni Association money and invest it in student ventures.”
“Huh? How did you know? I haven’t told anyone yet.”
“Your title says HAA. And knowing you, you wouldn’t be satisfied with small money. I took a guess.”
“Don’t go reading other people’s minds like that!”
Grace thumped my shoulder with her tiny fist a few times.
Then she explained the next business plan for Blood & Guts.
“Thanks to the lottery project last time, our credit rating’s gone Triple A. So let’s finally start laying the groundwork properly.”
“Victor and I don’t have any new business ideas. So we’ll help support yours.”
“Good. This one is the real deal. The returns will probably beat your warehouse business. If I do this properly and don’t wander off course, I’ll show you just how high the margins can go.”
Grace pointed to a section of the paper with her pen and continued her explanation.
“Alumni have money but no idea where to put it, and students have ideas but no capital. I’m going to be the bridge between them. Management fee, 2 percent. Performance fee, 20 percent.”
A 2 percent management fee and 20 percent performance fee.
It was the classic, most rational—and most aggressive—profit structure in fund management, the one known in the industry as two and twenty.
The very idea of applying the golden rule of hedge funds while still an undergraduate was extraordinary.
And I knew why I was on Grace’s side in the first place.
It was for this.
From the beginning, I had wanted Grace to carry out this business.
And now, thanks to the profits from the lottery project, she could propose ideas with far more stability.
I didn’t know the full details, but I’d heard that when Grace later sold Blood & Guts to GreenHell and was knocked out of the succession race, it had been because she’d had to swallow her pride and ask for favors all over the place after the initial lottery project failed.
Now that she had succeeded without begging anyone and turned the lottery project into a real success, the butterfly effect from that alone would send her future climbing in a far more favorable direction.
“If we can just bring in HAA money, your influence on campus will be second only to the president’s.”
“To be more precise, it would be our influence.”
Grace smiled brightly for the first time.
I could feel that she was recognizing me as a partner.
Victor was a little ambiguous, though.
I let myself be greedy for a moment.
“Let me know if you need help. I can invest some starting capital.”
“No. This time, I want to try doing it entirely on my own strength. It would be easier if I accepted your help, but then I feel like I’d stay your subordinate forever instead of your partner.”
While reflecting on how much she had relied on my help during the lottery project, she also seemed determined to prove her own capability this time.
I nodded.
“All right. I’ll cheer you on. But if you get stuck, ask me anytime. If it’s something I can help with, I’ll give it everything I’ve got.”
“Of course! I’ll even pay you top consulting fees by industry standards!”
“And you can always call me too, Grace!”
“Hmm... Victor, I think I’d rather charge you an entry fee.”
Grace, Victor, and I looked at one another and burst out laughing.
***
After class, I headed to University Hall according to schedule.
Passing through the old arched entrance and into the first-floor lobby, I found Caroline waiting for me.
“You’re here, Boss?”
“You don’t have to use honorifics when it’s just the two of us.”
“Oh? But I like it this way. Looking up from below at a handsome man. It’s a personal preference, so don’t complain.”
Caroline winked and placed a cold brass key on my palm.
“It’s the key to Room 91. I’ve already locked it in under the Boss’s name for long-term use.”
“Thanks. But why Room 91 of all places? There are bigger rooms.”
“I learned this in organizational psychology. People unconsciously avoid rooms tucked away at the end of hallways. That makes it the area with the lowest foot traffic, and it’s perfect for privacy or keeping a lid on eavesdroppers.”
“Aren’t I getting a little too much special treatment?”
“Hoho—well, it’s not like anyone else was using it anyway.”
I made my way to Room 91 with Caroline seeing me off.
***
Inside the room, two men were already waiting.
They were Vito Hamilton in a perfectly tailored suit and Soren Hamilton with a briefcase resting on his knees.
Though they were only distant relatives, and had never been particularly close, over the course of the projects we’d shared they had become considerably more familiar with each other.
Vito was serving as legal counsel for Lee Energy in his capacity as a lawyer, while Soren had officially accepted the role of CFO just last month.
It was rare for a tax accountant to take on the financial command of a company, but Soren had long since moved beyond the role of mere tax representative.
From the founding of Lee Energy to the design of money-laundering structures, the acquisition of bankrupt companies, and the filing of government subsidy applications, he had handled every financial matter himself.
As the company grew, the scope of work became too large to justify paying him only a tax accountant’s fee, so I had offered him a formal executive position.
The package included a high salary and a bit of stock options, and Soren had accepted within an hour.
“Welcome, Boss.”
Both men stood and greeted me respectfully.
On the old oak desk, the documents were already arranged in neat piles.
“Sorry to keep you waiting. Let’s get started. How are things in Texas?”
“Here you are.”
With a confident expression, Vito handed over the first report.
Texas Oil Field Development Permits and Mineral Rights Confirmation Report
The first page of the thick stack of papers showed a map of Texas, with red dots marked in various places.
“Things are moving smoothly. The state government is cooperating actively.”
“In what way, specifically?”
“The land we purchased falls under the Grandfather Clause.”
Vito pointed at the red dots marked on the map with a finger.
“It was a site where drilling permits had already been granted back in the 1920s, so we can skip the modern, more onerous environmental review and local consent procedures. We’ve bought ourselves at least three years.”
“And the state’s reaction?”
“Entirely welcoming. The economy’s been terrible lately, after all.”
Vito turned another page and went on.
“Unemployment is over 8 percent, so from the governor’s perspective, a company like ours that creates large-scale jobs is practically a savior. The officials in charge of permits have been extremely cooperative as well. Paperwork should move at twice the usual speed—maybe even three times.”
Vito’s explanation was crisp and clear.
It was matching exactly what I had aimed for.
This time, Soren adjusted his glasses and spoke.
“The gold mine profits are... astonishing.”
He spread out a thick set of financial statements and continued his explanation.
///////
Wishville Gold Mine - Third Week of Operation
- Gold bar production: 60 bars (approximately 744 kg) / Market value: $8,400,000 / Estimated operating margin: 52%
///////
“As you ordered, all gold extracted has been refined into bars and stored in bank safe-deposit boxes.”
“And the collateralized loan line?”
“Approved by three major banks at 80 percent of market value. We can convert it to cash whenever necessary.”
The numbers on the financial statements Soren had handed over were truly beautiful.
Wishville’s gold mine was, quite literally, a goose laying golden eggs.
When I added the unlaundered oil money and the Harvard Alumni Association operating funds to that income, my available assets were already well above fifty million dollars.
But Soren’s expression was not bright.
His finger was pointing not at the revenue column, but at a specific item in the cost column.
“The problem is... some of the subsidiaries you acquired, Boss.”
Soren’s voice dropped a shade lower.
“The transport company, King Baboon Pipeline Service, is running a severe deficit.”
“······?”
I took the report and scanned the figures.
I had acquired King Baboon Pipeline because I judged it to be a valuable piece of infrastructure.
It had been a bargain purchase at bankruptcy auction, yes, but it came with eighty miles of small-diameter pipeline, six storage tanks, and twelve transport trucks—a genuinely valuable logistics company with real infrastructure.
It was supposed to be the key subsidiary that would carry the crude oil and minerals produced by our oil field and gold mine, so why was it suddenly losing money?
“That’s odd. The equipment is state-of-the-art, and we kept only veteran engineers from the industry. We’re feeding it plenty of work from the parent company, so how can it still be in the red?”
“Exactly. On the books, it says material costs have risen and repair expenses have increased due to aging equipment... but statistically, the numbers don’t make sense.”
“Do you have evidence?”
At my question, Soren opened to a specific page and explained.
“During the same period, the average material-cost increase in comparable companies was 3 percent, but these firms recorded 15 percent. The same goes for repair costs. Sales are up, but profit margins are collapsing. That simply doesn’t happen when raw material prices are stable.”
As befit a meticulous tax accountant, Soren had pinpointed the contradiction in the numbers with perfect accuracy.
It stank.
A truly vile stench of rot.
I set the report down on the desk and folded my arms.
“Hmm.”
There was technology, capital, and a market.
And yet the company was failing?
There was only one possible reason.
“So it’s not that the company has no money. It’s that there are too many thieves, isn’t it?”
“That would be my assessment.”
Soren nodded in agreement with my conclusion.
Vito, too, clicked his tongue while looking through the papers.
“Inflated material costs, wages paid to phantom employees, unnecessary outsourcing fees... The pattern is obvious.”
The same kind of greedy management bastards who had fired me in my previous life and driven me out onto the street.
I would not tolerate that kind of garbage in my company.
“Mr. Soren, Mr. Vito. Set up an audit team immediately.”
“Understood. We’ll begin at once.”
At the same time, I called Caroline outside the room and had her book plane tickets.
“Tomorrow and the day after are both free in my schedule. I need to go to the site myself.”
“Huh? You’re going personally?”
At my decision, Vito and Soren blinked in unison.
I gave a refreshing nod.
Going there would tell me everything I needed to know.
Who deserved punishment, and who deserved praise.
---