The Novel of Financial Deception
Enters Its Third Year Online
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
Chapter 23
Chapter 24
Casing Wal-Mart
Miller Risk Advisors

Rigged Chapter 12



Ross M. Miller
Posted July 19, 2004

Kenneth Paine made a better impression in the flesh than he did on television or bookracks. He was delicately handsome with an impish charm that a video camera could not adequately project to GNN’s viewers on both sides of the Atlantic. He was considerably shorter, however, than one might have extrapolated from his seated image. He looked out through engaging blue eyes and his sandy hair had a touch of gray around the temples. He was such an obvious “good guy” that I was instantly wary of him.

After a firm, but friendly, handshake, Ken said, “Why don’t we step inside?”

“Didn’t the Aquarium just close?” I asked.

“I think I can talk our way in,” he replied.

We walked to the main entrance and Ken pulled open a glass door that was left ajar. Immediately to our right was an impressionistic white marble sculpture of two tall penguin-like birds with a large marble egg at their feet. Ken stopped in front of the sculpture and said, “That’s the great auk. You could think of it as the penguin of the Northern Hemisphere, though it’s not formally related to penguins. This sculpture is here as a reminder.”

“Of what?” I asked.

“Because of human thoughtlessness, the great auk is extinct and has been for some time. It reminds us not only of what we might do to other living beings, but ultimately what we might do to ourselves. Lately, I cannot help but identify the great auk with The Lowell Group. With GFF in the picture, Lowell is certainly threatened, if not outright endangered.”

We walked up to the guard’s station at a desk where several machines were covered with gray plastic. The guard, a slight man, smiled at us and said, “Hello, Mr. Paine. I hope that you and your guest will have a pleasant visit.” Ken assured him that we would and introduced me to Hernando.

The main building was devoid of human life. In the adjoining building, which looked out over the harbor, workers were setting up tables and chairs in preparation for an evening get-together that was likely hosted by one of the Aquarium’s corporate donors. My only previous visit to the Aquarium was years earlier at such an event arranged by one of GFF’s software vendors that was headquartered in Waltham.

“Pat and I are quite involved with the Aquarium,” Ken said as we continued into the center of the Aquarium, which was built around an enormous circular tank that was home to a vast array of fish and other aquatic life. A ramp, like Alaska’s, spiraled around the tank to the top where visitors could look down into it. Rather than ascend the ramp, we stayed on the ground floor with the penguins.

I knew that there was no way that Ken would get right down to business. He would try to soften me up first, get me to like him, and then zing me. I kept my defenses up while playing along.

“I discovered this place by accident,” he said. “After an especially rough day, I went out for a walk down to the water—The Lowell Group was much smaller back then and everyone worked out of our old offices on State Street—saw the Aquarium and figured why not go inside. That’s when I discovered the penguins and this rock garden of theirs. While it’s not particularly quiet here during the day—not with the hard walls and all the schoolchildren—you don’t find many financial people here.”

“It seems like an especially nice place when everyone’s gone,” I said.

“Well, after Pat and I got involved in the big drive to fund the new wing, we had donated enough of our time and money that we were given the run of the place. Our daughter works here as a volunteer over the summers. She just loves the birds. She even gets to feed them; they’re fond of smelt.”

I nodded as I tried to scope Ken out, which was difficult in view of the dim lighting and Ken’s tendency to speak at the penguins and not me.

As we walked around, Ken gave me a brief lecture. “The Aquarium has three species of penguin—the little blue, the rockhopper, and the African. The little blue, which are the smallest, are kept separate from the others for their own safety. The rockhopper and African penguins share this large area, though they seldom mix.”

“They all look a bit small for penguins,” I said.

“You must be thinking of the Emperor penguins, whose adults are about four feet tall; however, all other penguin species are considerably shorter. My favorites are the rockhoppers, who are less than half the height of the Emperors. Ken took me over to a chart that showed a line-up of the various species and then we went over to a display of penguin eggs. The Emperor penguin egg was huge—nearly five inches across. Most of the other eggs, including the rockhopper eggs, looked like oversized chicken eggs.”

“You can’t make an omelet without breaking some eggs,” I said to Ken. He did not appear amused.

We walked over to see a baker’s dozen of rockhopper penguins standing on a bespoke outcropping and (true to their name) some of them were hopping on the rocks. As we approached, they greeted us with a group outburst that sounded like a cross between a honk and a bark. It was obvious why the rockhoppers were so popular—each penguin had a shock of golden feathers on either side of its head that stood in striking contrast to its black and white body. Two of the penguins, one larger than the other, occupied the top position on the rocks. I pegged them to be the king and queen penguin of the group.

“They’re cute and rather punk,” I said to my guide.

“You could put it that way. Each one has its own personality. The Aquarium staff has given them all names, but I have my own names for them.”

“I see that they have ID bands in case someone forgets.” The multicolored bands on a few of the penguins reminded me of the colors used by casinos on their high-denomination chips. I asked, “Why do those three look so mangy?”

“They’re not mangy, they’re molting—out with the old feathers, in with the new. See how shiny the black feathers of the other penguins are—those are their new feathers. It’s getting toward the end of molting season, so only the stragglers look disreputable.”

I noticed that two of the molting penguins were picking the feathers off each other and the odd penguin was just standing there and looking up at the king and queen.

“Why are the rockhoppers on these rocks, while the African penguins are over there?” I asked.

“If you look above the rocks, you’ll see that the air conditioning vents are aimed to blow directly on them and the rockhoppers like it cold.”

Indeed, the king penguin had leaned his head back so that the breeze ruffled the black and yellow feathers on top of it. High up on the wall several feet away from him was a digital thermostat with five buttons. I wondered how many years of penguin evolution it would take before the king penguin would become smart enough so that when the Aquarium staff had gone home for the night it would find a way to push the thermostat down and then reset it before they returned in the morning.

The relative uniformity of the penguins reminded me of my morning visit to Lowell headquarters. Could it be that Ken had named the king penguin “Simon” and the odd penguin “Lloyd”? While I thought it unwise to steer the conversation in that direction (and especially not to speculate on the possibility of gay penguins), it was time to try to mess with Ken in order to gauge his reaction.

“Do they lend out the extra penguins?” I asked with a straight face.

Ken paused and turned to me, “You can buy stuffed penguins in the gift shop, if that’s what you mean. They’ve got them lined up in the window. They make great gifts for the young ones.”

“No, that’s not it,” I said. “It seems to me that if art museums lend out works from their attics to members, that the Aquarium might do the same thing.”

“Not with these penguins, they don’t. You can adopt a penguin, but that just means that you’re keeping it in fish.”

We continued to watch the penguins—two in particular had gotten quite amorous. Ken obviously did not like where I was taking him and got down to business. “I don’t really know what Lowell did to merit a visit from someone of your distinction—top prize at the International Math Olympiad, Putnam Fellow, and Presidential Young Investigator. And, let’s not forget that gold bracelet. I’m surprised that they let you walk the streets.”

“Why’s that? I try not to hurt anybody.”

“I thought that the government kept people like you under wraps at the CIA, NSA, or somewhere so secret that one needs special clearance to know its name, let alone what it does.”

“You have a fertile imagination. I’m just a walking-around person like anyone else. And what about you? What’s a normal guy like you doing at Lowell?”

“Normal?” Ken chuckled. “It’s a long story, but I’ll give you the much-abridged version. I was a History and Literature concentrator at Harvard. Wrote my senior thesis on the mythology of modern life. Spent some time at Oxford, then came back and resumed my studies over at the Div School. I figured that religion was the biggest myth going so why not get to the bottom of it. While I was working on my dissertation, I taught English at the Commonwealth School, which is where I met Simon Lowell. His son went there and Simon was among the more reasonable of the parents. He enticed me over and the rest is history.”

“From the Harvard Divinity School to The Lowell Group is a big hop,” I said with one eye on the penguins. “Why did you take it?”

“Every road I followed led to a single question: What is the nature of God? I couldn’t understand religion without understanding God. But no matter how hard I tried, God eluded my grasp. But then, I noticed what happened to those before me who had tried to get in touch with God. The fortunate ones entered into a blissful, vegetative state while the less fortunate found themselves in rubber rooms. Neither path appealed to me. The more that I learned about what God had created—about this life and its wonders—the less I wanted to stand apart from it and the more that I wanted to become involved with it.” As Ken expounded upon the divine, the odd penguin emitted an unearthly squawk.

“But there are lots of ways to participate in life. Why become a mutual-fund manager other than for the obvious reason—money?”

“You may not believe this, but money had nothing to do with it. I saw the quest, the challenge. My chances of understanding God—much less demonstrating his or her existence or nonexistence—were virtually nil. Beating the market seemed doable. Even if I failed, the downside didn’t look so bad—I could always ease into a management position with an investment house. And, for all I knew, beating the market was but the first of several destinations on my spiritual odyssey. Not to mention, I felt that I had an important edge over the competition, most of whom are mathematically-oriented guys like you.”

“What kind of edge?” I asked.

“If there’s one thing I learned in the time that I spent studying mythology and theology, it’s how people can create believable stories—so believable that millions, sometimes billions, will follow them—out of complete lies. Corporations are no different. The better ones develop their own religions—the more cynical would call them cults—and their stock price is nothing more than a measure of how many investors they convert into believers. While other money managers have been trained to follow the numbers, I follow the story.”

“And so that’s the story or should I say the myth that you’d like me to believe.” I said without making any effort to hide my skepticism.

“I can see that you are a tough customer. Yes, I have my own story. It’s not good enough for me to outperform the market and my peers, I must sell people on the belief that my superior performance is more than luck or that if it is luck that there is something about me that attracts luck. Simon has been a big help in getting that message across.”

I looked at the king penguin, whose head feathers still ruffled in the breeze, and asked, “But what if you start to attract bad luck?”

“Is that why you’re here?” Ken asked. “To change my luck.”

“I don’t think of it that way. I’m here to uncover the truth.”

The apparent sincerity of my response got a rise out of Ken. “And that’s precisely what makes you so dangerous. To me. To Lowell. To GFF. To these penguins. To the sharks in the tank above us. And—above all else—to yourself. Hasn’t anyone told you no one wants to know the truth, especially about themselves?”

“Didn’t you learn in divinity school that the truth shall set you free?”

Ken did not seem to appreciate my flippancy. “I think you’re taking John out of context.” he said. “But I have no time for a bible lesson. For all the time I have spent searching for the truth, I doubt that I am any closer to the answer now than I was back in high school.”

“Wasn’t that prep school? Phillips Exeter. Or do you just call it ‘Exeter?’”

“I see that you’ve done your homework. I wouldn’t have expected otherwise.”

“And obviously, you do yours.”

“It’s my job—that’s all it is—homework. Dig deeply enough, and you can get to the bottom of any story.”

“Like Lowell’s?”

“I view it as more of a legend than a story. To me, it is a legend worth preserving. It is what I believe in and—getting back to the great auk—its days are numbered. They have been for a long time.”

“You think?”

“I’ve thought so from the day I arrived at Lowell. And the world has changed tremendously in my nearly twenty years there, much more than in the fifty years before I joined the company. Most of the other Boston investment houses that were like Lowell vanished years ago; Boston has become little more than a satellite of Wall Street. In some ways, so has the entire world. The age of the gentleman is long dead and gone. I bought into this deal in hopes of—I hope you can pardon the dreadful cliché—delaying the inevitable.”

“I’ll let you know when the clichés become too painful for me.”

Ken flashed a charming smile and I let him talk away while I watched the penguins with him.

“I had followed several companies that GFF had acquired. The pattern was always the same. For a while, anywhere from two to six years, GFF would only assert itself in small ways, little more than the minimum necessary for the financial and legal integration of the new subsidiary. Management, culture, even pay scales, would stay the same as long as the cash kept rolling in. Then, something would happen. A big contract would be lost. A blip in supplier prices would squeeze margins. Something. And then GFF would move in. Out with the old managers, in with the new ones—handpicked and trained by Mike Quinn himself. Those who weren’t fired would soon quit. Within a year, the transition would be complete and the business would look like any other GFF business. I thought that Lowell could hold out five years. It never occurred to me that we could attract so much attention so soon and for so little reason.”

“Don’t you think GFF has legitimate cause for concern?” I asked.

“Of course not. We have compliance officers up the wazoo and our standards and code of ethics are the most stringent in the industry. No offense intended, but your audit team is nothing compared with what we face from our regulators.”

“None taken.”

“In every SEC and state attorney general’s investigation into mutual-fund abuses, Lowell’s name has never once appeared. I don’t know what you are looking for, but money doesn’t just vanish from Lowell.”

“Well then, what happened to your fund? What’s your story for the last six months and why did everything happen just as GFF took over.”

“My strategy backfired. That sort of thing happens all the time. It’s inevitable and it’s temporary. I see it as little more than a test of my character. As for the timing, when you’ve managed money as long as I have, you find that coincidences just happen. I’m no Jungian—though I find an expanded version of Jung’s concept of archetypes useful—but maybe it’s all synchronicity.”

“Archetypes? Synchronicity? What the—”

“It all goes back to Plato’s cave. Somewhere there is an ideal world, a world of perfect abstractions and this seemingly material world of ours is but an imperfect image of that ideal world. As Plato pointed out, all that we see are but shadows cast on a cave wall. Some things seem like coincidences only because we are unable to observe the real phenomena that link them together. That’s one way of rationalizing what Jung referred to as synchronicity. But I feel that there’s so much randomness in the world and so much going on at any one time, eventually everything that can happen, does happen. As we speak, somewhere someone is being dealt a royal flush.

“Interesting choice of example.”

“As for archetypes, the way I see it they are the ‘real’ things—the Platonic ideals—that cast the shadows on the cave wall. One reason that penguins are so intriguing is that each one is such an excellent instantiation of the penguin archetype. People are a lot more complicated and companies even more so. The actors in myths are not real people; instead, they are archetypes—the beautiful princess, the good king, the evil sorcerer, and so on. It is a rare person who fits an archetype exactly; most people are exceedingly poor reproductions of a remote Platonic ideal. In our culture, those rare individuals who embody some archetype particularly well frequently become celebrities.”

I resisted the temptation to say “Like yourself?” and instead asked, “What about companies?”

“When you get down to it, a company is nothing more than a collection of people. While the CEO may—with the help of his consultants and investment bankers—have a specific archetype in mind for his company, most companies have minds of their own because their workers, despite any corporate brainwashing efforts, ultimately think for themselves.”

“Getting back to your mind for a moment, what was your strategy and what went wrong?” I asked.

“I can give you a rough outline and you can always read my book—I’ll have a signed copy sent over to you. You must realize, as some of my colleagues are fond of saying, that if I told you how I do what I do, I’d have to kill you.” Ken looked back over at the penguins, who had let out another collective squawk, after he said this. Maybe he was sizing them up as prospective witnesses. “Most fund managers spend their time searching for winners, especially for the big winners just as they are becoming big. I used to do that, too. But as the money I managed grew past a billion dollars, it became harder to find enough big winners to get the performance that my investors were demanding. So, I changed course and rather than focus on the stories that would drive a stock’s price up, I began to look for stories that were pure hype. I wanted to find truly mythic companies that were about to have their myths exploded. All I had to do was avoid some of those companies, while holding on to my share of winners by spreading my money around, and that alone would be enough to give my fund the required edge. You can look at my record—Enron, WorldCom, Global Crossing—I bailed out of all of them right before . . . whatever. I still manage to avoid the big disasters, it’s just one small disaster after another that’s eating me alive.”

Might Ken’s “small disasters” be related to what Tara had found? Could Ken’s mythological universe and Tara’s astronomical one be two ways of looking at the same thing?

“Speaking of shadows,” Ken continued, “I could probably make GFF happy simply by turning Aggressive Growth into a shadow index fund.”

“What’s that?” I had some idea, but wanted Ken’s spin.

“A mutual fund that pick stocks in a way that statistically guarantees that its performance won’t venture too far from a chosen index, usually the S&P 500. Clever shadow indexers make it look like they have a different industry mix from the index that they’re shadowing, but the outcome is still the same. Most of the growth funds that are larger than mine, as well as some of the smaller ones, have essentially given up on trying to beat the market, which is more difficult for larger funds anyway. While sufficiently bad performance can scare money out of a fund, money tends to leak more slowly out of a successful fund that reverts to average performance. Of course, this cheats the investors because the management fees for a fund that is supposed to be actively managed are much higher than for an index fund and that’s why I don’t want any part of it. I’ll just have to fix things—with or without your help.”

 “You’re lucky that the market is giving you time to plot a new strategy,” I said. “With the market closed, both small and large disasters are precluded.”

“Not really,” Ken said. “They can still happen, they’re just not reflected in the market price. Furthermore, my fund owns several million shares of Consolidated Information Systems, the company that built and runs the network that is causing all the trouble. They should take enough of a hit when the market reopens tomorrow to ruin my day. Just another in a string of small disasters.”

“Tomorrow? Is that certain?” I knew that with the stock market in full swing, it would be more difficult to deal with Lloyd and his people.

“It should be back tomorrow. Wall Street thinks it will be ready to go at nine-thirty tomorrow, but not all the noises are reassuring. We’ll see. You wouldn’t happen to know anything?”

“Me? What would I have to do with the stock market . . . or any other market for that matter?”

“Possibly quite a bit. With your background, I could easily imagine you at a hedge fund. That’s where lots of other math jocks have gone.”

“True enough,” I said, “some of my classmates found work on Wall Street. From what I hear it’s better than driving a taxi. I never saw the point. It’s so . . . out of control.”

“Out of control? What do you mean?”

“Take this place—the New England Aquarium—it’s a controlled environment, at least from the viewpoint of the . . .” Gazing at the penguins, I found the appropriate word: “Inmates.” I waited for Ken to stop laughing. “Everything works according to a strict set of rules—feeding times, climate control, et cetera. And, from what you tell me, they don’t even let the penguins out for special occasions. A modern casino works the same way. Everything is controlled, even more controlled than this building. There’s more at stake. The odds that I calculate on my computer are precisely the same odds that I’ll see at the poker table. Each deck has exactly the same fifty-two cards and the only way to tell them apart is to turn them over. Each time I’m dealt pocket rockets, I know what they’re worth. No one can print any more aces. I can’t say that about a share of stock.”

“Pocket rockets?”

“A pair of aces in the hole. You might call them American Airlines, but ‘pocket rockets’ is the more common name.”

“Well,” said Ken, “on the Exchange it’s AMR, not AA. AA is Alcoa.”

“Fine. To continue my analogy, you always know what your chips are worth. The cashier’s window is always open and the house is always there to buy back the chips. You don’t have to find a buyer to take your chips off your hands at the price he’s willing to pay.”

“That’s exactly what makes financial markets so fascinating. You never really know what anything is worth—you can never be sure just what cards you are holding or what deck you’re playing with. The big money is to be made in separating the myth from the reality.”

“But what if it turns out that the markets are all myth and no reality?”

“I guess that when that day comes I’m out of a job. But still, such a remote possibility is not enough to get me to hop on the next plane to Las Vegas or drive over to some tacky reservation. Anyway, I see that you’re not doing that anymore.”

“I moved on.” I was unwilling to show Ken any more of my cards even if it might make him more forthcoming.

“So you did. Now you’re part of one of the world’s most powerful corporations. Perhaps a more important part than you realize. A corporation that looks for the edge in everything it does. I wonder if you know what you’ve gotten yourself into. You may have unwittingly bought into the myth of GFF.”

“And what myth is that?”

“The myth of the corporate übermanager. I respect Mike Quinn and based on what I’ve seen I have no reason to doubt that GFF is the best-managed company in the world—not so much because its management is so great, but mostly because the others are so bad. Still, you have to wonder about a company that makes its numbers on the button every quarter without fail.”

“Just as you have to wonder about a mutual fund manager who beats the market for thirty-seven consecutive quarters.”

“Touché,” Ken said in a way that sparked another penguin uprising. “But there is an important difference. I am forced to play by a far stricter set of rules than Mike does. Every day when the major markets close, I get a grade based on the value of each of my holdings under a system of accounting that leaves no wiggle room. Mike operates under a much looser set of accounting rules. You might say that he’s able to manufacture earnings—all with the blessings of the legal and accounting professions, not to mention the government.”

“Manufacture earnings?”

“It’s one of the privileges that comes with being a multinational conglomerate. GFF buys and sells companies all the time. The Lowell Group may have been GFF’s largest acquisition so far this year, but it is only one of maybe fifty.”

“Fifty?” I said. “That many?” I knew that Ken’s number was on the low side.

“Most of them are small acquisitions, if you call a few hundred million dollars small. The important thing is not what GFF buys, but what it sells. Unlike the stocks in my mutual fund, most of the businesses that GFF owns aren’t traded in an active market. The only way for GFF to know what a business is truly worth is to sell it. Until then, GFF gets to carry it on its books at the price that it paid for the business.”


“Well, you can think of GFF’s businesses as being silos, some with unrealized gains and some with unrealized losses. Any quarter where it appears that GFF is having trouble meeting its earnings targets, it can manufacture what it needs by raiding the appropriate silo. It can sell a winning business to harvest earnings, if you’ll allow me to mix a metaphor. If things are going better than expected, it can take the opportunity to sell a losing business.”

“Are you saying that’s how GFF always makes its numbers down to the penny?”

“That’s exactly what I’m saying, though it does take careful planning and exquisite timing to pull it off and so exceeds the capabilities of any other company in the world. And it’s no coincidence that most sales of GFF businesses are slated to close just before the end of a quarter. Indeed, GFF has had to save some deals from falling through by lending the buyers some of the funds necessary for the purchase.”

“Let us assume that your theory is correct. Can GFF continue to do this indefinitely?”

“No, at some point everything—silos and good luck—runs out. It always does. If a problem at a business as large as The Lowell Group generated sufficient losses, GFF could quickly blow through its silos. Then its numbers wouldn’t look so good.”

“Really?” I said. “But there’s nothing illegal with using these silos, as you call them. Is there?”

“No, there isn’t. Not if one does it carefully. That said, it still bothers me a great deal that Mike and the rest of GFF’s senior management strenuously deny that they are doing anything to ‘manufacture,’ ‘manage,’ or ‘smooth’ their earnings. That seems more than a little disingenuous to me. And then there’s the whole question of its pension fund.”

“I hear that they’re doing pretty well,” I said. “The last time I looked my retirement was still there.”

 “How they are doing is debatable, but that’s not the issue. The issue is how the pension fund influences GFF’s bottom line. I’m not alone in being troubled by the fact that the pension fund generates a sizeable fraction of GFF’s reported earnings. The dominant school of accounting theory says that I shouldn’t worry because what GFF hopes to earn on the investments in its pension fund greatly exceeds what it expects to pay out to its workers. But the only basis for these hopes and expectations is what GFF’s accountants and actuaries think will happen over an indefinite and uncertain future. The rules are so convoluted that even during a quarter where the pension fund is by any measure losing money, GFF can report a big gain.”

While I was still at the old lab, Roland and I led a delegation to the pension fund’s offices in White Plains (close, but not too close, to the hive) to see what the Research Lab could do for them. Their big technology push involved creating a giant database of all the research reports sent to them by their gaggle of brokers. None of this really mattered, however, because the pension fund didn’t make its big money on stocks. Its specialties were venture capital and real estate. When the Mighty Quinn would find a business opportunity or land deal that he liked but that was unsuitable for any of GFF’s businesses, he would refer it to the pension fund for a possible investment.

It then occurred to me that Lowell might be a good fit for the pension fund. Lowell was strong in stocks and bonds while the pension fund excelled in more exotic investments. It was time for the next pointed question.

“Does Lowell feel threatened by the pension fund?” I asked. “You both do the same thing and we know how much Mike hates redundancy and wants to improve efficiency, why does he need both of you?”

“Bingo!” Ken said. “You’ve hit on why you’re here.”

I knew what Ken was getting at, but I wanted to hear his interpretation. “And that is because . . .”

“The real reason for your—and I hate to use the phrase around here—fishing expedition is to find an excuse to put The Lowell Group under the control of the pension fund and have it report to Joe Conway.”

I had met briefly with Joe, the head of the pension fund, on my visit. He had been an all-American guard at Howard University and is rumored to have passed up an offer to play on the Cincinnati Royals beside Oscar Robertson to join GFF straight out of college. Joe also served as GFF’s treasurer, a position that guaranteed that everyone would see his face in GFF’s annual report.

“If Joe’s behind all of this, it’s news to me. Until you mentioned it, the pension fund has never come up in connection with The Lowell Group.”

“I can assure you that it’s all our management can think about, not to mention the other fund managers who, as you are probably aware, joined GFF on far less favorable terms than I did.”

“So, what’s the problem with working for Joe?”

“Maybe we were naïve,” Ken said, “but one thing that attracted us to GFF was the prospect of managing their pension-fund assets. Not only would that place a lot more funds under management, but other large companies or state governments might be more willing to have us manage their funds. If Lowell vanishes into GFF’s pension fund, that is far less likely to happen. They are tarnished by several botched attempts to manage money for other pension funds. Our record may not be wonderful, but it’s a lot better than theirs.”

“Then it has nothing to do with Joe himself?”

“I doubt that any of us would be thrilled with moving to Westchester County, but I have nothing against the man, in fact, I rather like him.”

“What about the others? Simon? Lloyd? Richard?”

“Big egos are easily bruised, not to mention that they are set in their ways. This is a traditional business in what for a long time was a traditional town. Simon certainly saved the company, but he’s still stuck in the past, just not so distant a past as the others.”

“It seems to me that your traditions include a rather narrow view of who gets to rise to the top at Lowell”, I said, watching for Ken’s reaction. “Don’t forget that the Mighty Quinn was once not so mighty and grew up in modest circumstances—much as most of us at GFF did—not far from here.”

“I think that if you look at things carefully, GFF’s glass ceiling is not much higher than ours. I can’t defend how some of my colleagues think—to be honest, I’m repulsed by many of the things that they say in private—but I understand where they’re coming from. The Lowell Group, which started out as a family business, still views itself as one big family. Mike may have abandoned the notion of lifetime employment the day that he took over GFF, but The Lowell Group still feels a strong obligation to its employees on every rung of the firm’s ladder. While other fund managers were laying people off after the Crash of ‘87, Lowell stood by its employees and don’t think that they don’t remember. At Lowell, loyalty still means something.”

Ken’s defensiveness told me that the conversation was beginning to degenerate and that it was unlikely that I would learn much more. Ken confirmed my intuition by looking at his watch and saying, “I really must be going, I have an analysts’ dinner to attend over at the new Ritz-Carlton.”

“Thank you for your time,” I said. “I guess that I’ll be seeing you around tomorrow.”

“Sorry to disappoint, but I’m leaving first thing for San Francisco to check out some companies and I’ll be gone the rest of the week. I think you’ve heard all you need from me. I’m curious to know what you’ll catch.”

I hoped that he was referring to my so-called fishing expedition and not something else.

The more stalwart rockhoppers let out an asthmatic farewell honk. Ken led me back to the Aquarium’s entrance and we passed a sign that showed a cartoonist’s conception of a penguin tangled up in a careless patron’s bubble gum. Hernando unlocked the door for us and bid us good night. The sun had recently set and a full, misty moon hung low over the water.

Ken’s driver was waiting and Ken apologized for not being able to give me a lift because he was already running late. He offered to send for a water taxi, but I politely declined. The driver came to open the door for him and once he was seated, Ken said, “Good luck,” with an amiability that I could parse. I had a lot to think about on my walk back to the hotel.

Copyright 2004 by Ross M. Miller. Permission granted to forward by electronic means and to excerpt or broadcast 250 words or less provided a citation is made to