Miller and Nichols had a very late lunch at the Hay-Adams because Stephanie Holland was on the floor riding herd on what an aide described as a crucial bill that needed her full support. At the table, they had looked over Nast’s absurd plan, and it was even worse than they thought it probably would be.
They didn’t make it back to her suite of offices in the Longworth House Office Building on South Capitol Street until well after three, and neither of them was happy about the delay. But they were coming with hats in hand, and it was never wise to anger the woman who was second in line to succeed the president behind the VP.
Nevertheless it was galling, especially to Nichols, who as Treasury secretary was fifth in line to the presidency. But it was all about pecking order, and Holland was letting them know just that.
The same aide came out to the anteroom. “Gentlemen, the Speaker will see you now,” he said and turned on his heel and walked across the corridor, not bothering to make sure they were following until he was at the open door and stepped aside.
Holland was at her desk, her eyes glued to her computer screen. Without looking up, she waved them to sit down in front of the fireplace, which during the summer was always filled with bouquets of flowers.
“Be just a minute,” she said.
Miller and Nichols exchanged a glance, but took seats across a low coffee table from a beautiful Eames chair known as the Speaker’s Throne.
After a full two minutes, she looked up, smiling. “That’s done,” she said, and she got to her feet and came over to them.
She was a stylish woman in her mid-fifties, slender, with soft brown hair parted down the middle—the same as her politics, she liked to say. She almost always dressed in a white silk blouse and plain skirt, medium heels, and a simple strand of pearls that accented her lovely neck.
They stood up as she came over, offering her hand first to Nichols. “Bob, how lovely it is to see you again.”
“And you, Stephanie,” he said, taking her delicate hand in both of his for a longish beat.
She turned to Miller. “Mr. Chairman,” she said, and shook his hand for just a moment. “Sorry I had to keep you waiting, but it was the new fisheries bill, which needed a steady hand. It’s been a pet project of mine.”
“We understand,” Nichols said.
“Please have a seat, and tell me what I can do for you this afternoon.”
“We talked last week at the Kennedy Center party, and I touched on the problem we’re having with debt,” Nichols said. “Especially ours and China’s.”
“You bored me to tears,” she said, fluttering her fingers, which she did when she was dismissing something she thought irrelevant. “And before you start again, I know all about Spencer’s master plan to save our republic as we teeter on the brink of economic disaster.”
Miller gave an involuntary grunt. How she had been able to get her hands on Nast’s crazy plan was beyond him. Except that, although she wasn’t an intellectual giant, she did have daunting contacts.
“Do you have a comment, Mr. Chairman?” she said, smiling, something she always did when she was being sarcastic.
“This is not a frivolous issue, Madam Speaker,“Miller said. “At this very moment, China’s central bank is about to let its commercial banking system go under, which threatens to bring on worldwide chaos. In fact, we got off the phone with Governor Liu, who’s head of the People’s Bank of—”
“I know who he is,” Holland interrupted. “In fact, we played tennis once at Merion Cricket Club outside of Philadelphia.”
Miller was beyond frustration, but she held up a hand for him to allow her to continue.
“I’m not being frivolous,” she said. “I realize that we couldn’t sell all our Treasury bonds at today’s auction, and that the stock market is in a free fall because of it. But I have to wonder.”
“Wonder what?” Nichols asked.
“Wonder if it’s as bad as you say it is. Nast wants to take us to DEFCON Five and have you print unlimited amounts of money to make up for the T-bond debacle. The fool wants to give just about every other American twenty grand in cash—and you have to admit that’s a slick move. Meanwhile I’m told that the two of you want to go to DEFCON Three by raising the rates on Treasurys until someone buys them at a hell of a cost to us, and then ask Congress to hand out maybe a trillion dollars like we did in ’08 to save Wall Street.”
“Spence’s proposal would ruin our fiscal standing,” Miller said.
“Well then, what do you want from me?”
“Go public with your opposition,” Nichols said.
“To your idea or Spence’s?” She smiled. “I’ll think about it.”
Miller shook his head in disbelief. “With all due respect, Madam Speaker, we need to act right now.”
Nichols broke in. “If and when the PBOC refuses to help the commercial banks—which is in actuality a scheme to oust Hua as head of the government—it will end up being ’08 or something even worse.”
“Are the both of you so sure that you’ve read the China situation accurately?”
“Yes, we have,” Miller said. “As head of the PBOC, Liu is in a strong enough position to pull it off. He’ll take charge in Beijing, and Hua will be exiled, jailed, or executed.”
“An interesting assessment,” Holland said. “But wrong.” She let it hang for a moment. “Liu, like you, Mr. Chairman, prides himself on being an economist, not a politician. While Hua, though low-key, is a superb politician. Between him and Liu there is no contest. From what you told me, I think you misheard Liu on the phone today and came to the conclusion that he was talking about nuclear war.”
“That’s not true,” Nichols said.
“When it comes to politics, both of you are out of your depth,” Holland said. “If you want my advice, gentlemen, leave politics to the politicians.”
“China or not, Madam Speaker, we’re in trouble,” Nichols said. “Our debt load is killing us, and something will have to give if we can’t raise money in the bond market to spend our way out of it.”
“That makes me wonder if this might be some clever ploy by Spencer’s old boss, with Nast himself right in the middle of it.”
“Ploy?” Miller asked, scarcely able to believe what he was hearing.
“By Reid Treadwell,” she said. “I know the man well. Very well.”
“You went to college together,” Nichols said.
“Yes. And we were an item for a bit, if you can believe it. I got to know him before he became the big man on campus, but even then he was a scheming son of a bitch.”
“Why are you telling us this?” Nichols asked. “What’s your point?”
“No matter what happens in the next few days, I want you to take a very hard look at Reid and Burnham Pike and Spence’s current relationship with the firm. Nast may be the president’s man, but he’s still Reid Treadwell’s humble servant.”
“I’m still not following you.”
“I got a call from Betty Ladd today. She and I are what you might call members of a women’s club—women who Reid has used and discarded. She said that from her perspective as president of the NYSE she’s been conducting an informal inquiry into his recent business practices. He’s taken his firm to an all-cash position, and she thinks that could be a prelude to some sort of an under-the-table maneuver.”
“The man has a lot of friends here in Washington, including Farmer himself,” Nichols said.
“Not a lot of people want to cross him,” Miller added, realizing his mistake the moment the words came out of his mouth.
“Including you, Mr. Chairman?” Holland asked. “The Federal Reserve regulates the major banks, including Burnham Pike. Or does Reid have some sort of a hold on you?”
“Certainly not,” Miller said. “But he is one of Farmer’s major supporters.”
“What about the chair that BP endowed when you were in academia? That was a million a year. And you did a stint as a consultant for the firm, which paid well, I’m told. Maybe after the Fed you might want to return.”
“I don’t know what the hell you’re getting at, Madam Speaker. Treadwell may own Spencer, but the Federal Reserve—and that’s me—is independent from everyone, bankers and politicians.”
“I’m not insinuating anything here. All I’m saying is that Reid Treadwell is a slippery customer whose major passion in life is Reid Treadwell, because at heart he’s just a frightened little boy from a small town in Ohio.”
“He doesn’t come across that way,” Miller said.
“In school he was class president and had a Rhodes scholarship lined up when one of his professors accused him of cheating on a test. He came to me in tears saying that his life was over. He would be a laughingstock, and even his summer internships at Burnham Pike would disappear.”
“What happened?”
“He called me that night and said he was going to end his problems once and for all. No one would be able to laugh at him ever again. I ran over to his dorm and found him sitting on the edge of his bed with a gun against his temple, his finger on the trigger.”
“Jesus,” Miller said. “That’s not the Treadwell I know.”
“Anyway, I managed to talk him down, and it was just a few days later that he dumped me,” Holland said.
“So, what was the upshot?”
“Before we parted company, I told him that with his golden tongue, he could probably talk the professor into withdrawing the charges. But it didn’t matter because he said that he had it all worked out.”
“And?”
“I told him what he was going to do was unethical at the very least, but he wouldn’t listen. Turns out he had a friend at Burnham Pike who told him that the professor had inherited a small sum of money and had opened an account there. Between the two of them, they doctored some trading records and reported the professor for insider trading.”
“My God,” Miller said.
“Supposedly the professor was front-running a pending merger deal, and he’d bought stock in the company that was going to be acquired ahead of time. Of course when the deal went through, the stock went crazy, and the professor made a ton of money.”
“Let me guess,” Nichols said. “The professor was arrested, the university dumped him, and the cheating charges against Treadwell were dropped.”
Nichols sat forward. “Treadwell’s friend at BP was a man named Dammerman?”
“None other,” Holland said.
“Hard to believe,” Miller said. “But in the meantime, where do we stand? We’re going to need Congress to help out just like it did in ’08.”
The aide came to the door. “Madam Speaker, the president is on the phone.”
“Line one,” Holland said without getting up from her chair. “Yes, Mr. President, what can I do for you this afternoon?”
“Tell those two sons of bitches sitting across from you to get their tender asses back here on the double, we have work to do!”