CHAPTER EIGHTEEN"Jack, doing anything today?""Walton, what in hell . . .?"Jack O'Donnell and Joyce Hanson had been working through the ten-pound Christmas catalog known as the Sunday Times—she was up to Arts & Leisure and he'd advanced as far as Business—when my call interrupted their mutually agreed-upon vow of silence. Now that her apartment in the West Seventies had become Jack's weekend hideaway, his escape from phones and conferences, the number was as carefully guarded as a Minuteman launch code.The time was shortly afternoon. He'd just braved a foot of snow and sleet to retrieve the paper and a couple of fresh croissants, while Joyce was still recovering from a two A.M. session editing a speech one of his staffers had drafted for someILGWU holiday blowout the following week. Since he was still chewing over Noda's ominous phone call, wondering what to do, the last person on earth he wanted to hear from right now was Dai Nippon's lawyer, even if it was me."Feel like coming down for a Bloody Mary? An academic lady we both know is here, and we've happened across something you might find interesting. Very interesting.""Care to elaborate?""It's a little complicated, Jack. How about coming down?"He glanced out the frosted kitchen windows, puzzling what in blazes was up, then finally agreed."Keep the coffee hot.""You've got it."Joyce claimed to be unamused, though in truth maybe she wasn't all that heartbroken to have the place to herself for the afternoon. He grabbed his coat and said don't throw out The Week in Review.The streets were now at a standstill, so the prospect of finding, let alone traveling in, a taxi was implausible in the extreme. As a result Senator Jack O'Donnell shared the Broadway local with several hundred of his lesser-heeled constituents and finally managed to get down toSheridan Square, from which it was only a few mushy blocks over to my place.Ben greeted him at the door with me not far behind, doubtless looking as if I'd just stumbled in from a three-day forced march. Without a word he passed over his coat, then followed me downstairs where Tam was still going through the line of printouts spread across the dining room table, translating onto one of my yellow legal pads.I pointed him in the direction of the coffee urn stationed in the kitchen. He poured a cup, then came around and plopped down on the couch."Walton"—he sampled his brew, then set it down—"you're not going to believe what your goddam client did Friday. Swear to God, your man actually threatened me, the bastard, a not-too-subtle warning to back off.""Jack, that's small potatoes." I straddled one of the dining room chairs. "What would you say to a possible play by our friend Matsuo Noda that makesPearl Harborlook like a gesture of Japanese-American solidarity?""Two days ago I might have thought you'd been smoking a controlled substance. Now, I'm not so sure.""Well, we're still piecing it together. I don't think anybody could even imagine what's really afoot. One thing's for sure, though—this is big." I paused. "It might even be that Noda is somehow fronting for MITI, though I'm still not totally convinced."I'd been turning that possibility over, but I somehow couldn't buy it all the way. Wasn't Matsuo Noda's style. He was a loner."MITI?" He looked at me. "That's government, right? The Ministry of . . .""International Trade and Industry.Japan's 'War Department' for trade.""Yeah? Go on.""Listen. All Noda's talk about helping American industry? Of course it's bullshit. But I think it's just half the bullshit. What we suspect is, he's buying a little of everything so nobody will figure out their real agenda.""You'd better back up and take this from the beginning.""Wait a minute." Tam got up and started the turntable. Mendelssohn was still on the platter. Maybe we were taking too many precautions, but she still nursed the idea we might be bugged.With the music cranked up to "8," we proceeded to give Jack a quick summary of how the stack of memos on the table had come into our hands. In a way, though, they raised as many questions as they answered."Jack, nothing here is spelled out in detail. We have to take everything and sort of rotate it by ninety degrees to see how Noda fits in." I walked over to the table. "Tam, where's your translation of that one by what's-his-name . . . Ikeda?""Right here." She handed it to me."Here, Jack, start with this. Just to get up to speed on the background."He fumbled in his pocket, retrieved his bifocals, and began to read the yellow sheet.OPERATION MARKETSHARE - 90Internal Memo No. 22From: Hiromu Ikeda, Deputy Minister of Industrial Technology Sector, Ministry of International Trade and Industry(MITI)Subject: SUPERCHIPSWorld dominance in semiconductors will provide the basis for Japan's control of the global information industry by the turn of the century, which will be the key to our economic leadership and military strength. The critical path to achieving this lies with the coming generations of semiconductor technology—the submicron, giga-scale superchip. Accordingly, the objectives of Operation Market- share - 90 in the semiconductor sector should receive the highest possible priority. Areas of research should include semiconductor-grade polysilicon, silicon wafer production, ceramic packaging, quartz photomasks, X-ray lithography, supercooled Josephson junction circuits, and optoelectronic chips for optical switching. R&D should also be focused on digital signal processing, application-specific integrated circuits (ASICs), specialized dynamic random access memories (DRAMs), very large-scale integrations (VLSIs) for supercomputers . . ."Walton, I can't make heads or tails of this gobbledygook." He tossed down the sheet. "What's this all about?""What it means"—Tam spoke up—"is that Ikeda has targeted every emerging area of semiconductor research. Everything. A clean sweep. If he succeeds, sooner or later nobody else will even be able to make the really advanced chips. A few more years and America joins the Third World."Jack looked a little skeptical. Truthfully I found her extrapolation somewhat fanciful myself. But then, who knew?"Tam, how about showing Jack that other memo? You know the one."She didn't say anything, just turned back and sorted through the stack of yellow pages till she had it. Out came Jack's glasses again.OPERATION MARKETSHARE - 90Internal Memo No. 37From: Kenji Asano, Deputy Minister for Research and Planning, Ministry of International Trade and Industry (MITI)Subject: CURRENT STATUS OF R&DThis office has now completed its review of the recent survey of research and development (R&D) by Japanese firms compiled by the Science and Technology Agency, the results of which are the subject of this memorandum. Of the companies surveyed, 70% maintain that their research is equal or superior to that of leading firms in the U.S. and Europe, although only 18.2% consider themselves in unchallenged top position. Furthermore, the remaining 30% believe their research is inferior or lagging behind the West (ref. to Table 1). Of those who reported inadequate R&D in high technology areas, the following reasons were given . . ."Whoever wrote this is just poor-mouthing." He flipped on through the sheets, then looked up. "Saying he needs more money for basic research. I hear this kind of stuff all the time. Hell, Japan already spends nearly twice what we do per capita on nonmilitary R&D. What does he want?""Keep reading, Jack, and you'll see that the main R&D he's pushing is in computers and semiconductors. It ties in exactly with Ikeda's targets. This is backup consensus for the big drive.""You still haven't told me anything I didn't already suspect." He tossed the pages onto a side table. "So how about answering a few less-obvious questions?" "Shoot.""First off, what's this Operation Marketshare - 90 all about?" He took off his glasses and pocketed them."Jack, remember the famous Hitachi directive that got loose a while back, the one on how to market their 256K memory chips, ordering their salesmen just to keep underpricing American manufacturers till they had the sale, loss no object. According to Henderson, by the time the International Trade Commission got around to convicting them of dumping, they'd demolished America's domestic industry and nailed down ninety percent of the market.""Ninety, you say. Well, that's getting to be a familiar number." He slumped back against the sofa. "Out of curiosity, what's included in this MITI Marketshare - 90 operation?""Computers, of course. But also pretty much everything in high tech where the U.S. still has a leading position—from biotech to aerospace. These guys don't think small."I gave Ben a pat, then pulled Mori's printout around, going on to explain that we'd come across it in the drawer of her desk. It was, I added, obviously some kind of special computer sorting of the firms DNI was targeting. The categories in the sort were a breakdown of high-tech areas, with individual firms listed underneath, together with a summary of their research expenditures."Take a look. First, notice that this printout has been sorted and converted into this list here." I placed it alongside the page I'd found in the Xerox machine. "Voila, they're identical.""So?""Okay, now compare that list with the R&D areas targeted in Ikeda's memo." I laid Tarn's translation down next to Mori's pages. "See? Everything on Ikeda's MITI wish list for research in semiconductors is now being done by the American outfits named here in Mori's sorting, which is the latest revision in DNI's acquisition program.""What are you getting at?" He looked it over."It's a pattern." Tam spoke up. "These new buy-ups cover Japan's last remaining shortfalls in R&D. I spotted it right away. But what I didn't realize till we got these memos was that the areas covered by Mori's companies exactly dovetail with MITI's goals. I probably wouldn't have noticed it without her sorting. Mixed in with all the other companies Noda's buying, he's targeted those that fill the gaps in MlTI's semiconductor push."Jack looked at us quizzically. "Are you telling me MITI's behind Noda's program?"That's where Tam and I parted company. She argued it was obviously a MITI play: why start from scratch when you can just buy what you need? Sound business investment. For some reason, though, I wasn't so sure. Somehow that explanation seemed too simplistic. Unfortunately, however, there's a law in science or somewhere that says you should always pick the least-complicated theory that fits all your data. Hers appeared on the face of it to address the facts perfectly. Except for one unknown: if Mori did "accidentally" feed me the sorting that blew the whistle on Noda's design, why?"I think this has to be what the buying program on this list is all about," Tam answered. "He's taking over firms whose R&D coincides with MITI's targets. Matsuo Noda has been put to work simply acquiring what they need, but to make sure nobody suspects the real agenda, he's worked up this elaborate 'management assistance' story, buying all kinds of companies." Her voice was bitter. "The next step will be to set up joint ventures between these firms he's bought and their counterparts in Japan. Then all American R&D would be shared.""Which means"—Jack's face began to redden—"that since we always seem to lose out when it comes to commercializing what we invent, the U.S. ends up becoming one big think tank for Japan in the twenty-first century. We do the research, and they manufacture and market. They pick our brains and then cash in on it." He turned back to Tam. "Do you really think it was Noda who planned all this?""I wish I knew what to think." Her voice grew hesitant as she continued to stare down at the memo. "It's hard to believe Ken would do something so unethical—especially a grab like this—when I'm sure he's convinced Japan ought to be advancing its own R&D.""Ken? Who's—""Did you see who authored that second memo?" She pointed to the name."Kenji Asano is apparently a close friend of Dr. Richardson's," I broke in, my tone unnecessarily sharp. "Unfortunately, he seems to be an even closer friend of his cronies at MITI."Tam didn't respond, just sat there looking betrayed."Matt, let's be constructive here." Jack walked over and shook the coffee pot, then sloshed the last dregs into his cup. "We damn well ought to take some kind of action.""That's why we wanted to talk to you." Tam came back to life. "Do you think you could leak something about this? Maybe to the Times?""And say what?" He laughed, a little sadly. "That I've happened across a set of secret MITI memos that bear a coincidental similarity to some stolen DNI printout? Don't think that's exactly 'Fit to Print.'" He frowned. "But I'm glad our Mr. Noda has finally let slip his true intentions. I never believed all that pious malarkey about propping up American industry." He snorted. "The man gets a few suckers like you to help him destabilize our bond markets, in the process of which he turns the high-tech sector of American industry into a bargain basement for MITI."Tam sipped her coffee, maybe trying to act as if Jack's comment hadn't stung her the way I suspected it did. I decided to try and handle her defense."Jack, hold on a second. You've got to admit that a lot of these outfits Dai Nippon is buying are currently on pretty thin ice. If somebody doesn't come in here and help run them right, they're probably headed offshore anyway.""We're not talking about first aid now, Walton. We're talking about Matsuo Noda taking over the most strategic segment of our economy after pulling the biggest scam in the history of world finance.""That looks to be the story." I watched his cheeks redden with frustration. "So what do you propose we do? There's no law against foreign investment. Securities exist to be bought.""Well, dammit, Matt, we've both seen enough by now to realize this Noda genius is up to no good. We've got to stop him.""Couldn't agree more. So why don't you just arrange to have the SEC shut down trading in every stock DNI has in its gunsights.""You know that's out of the question.""Exactly. So what legal remedies are there? How do you squelch a takeover program that's not even against the law?""That's your specialty, counselor, or so I hear.""Jack, be realistic. We can expose this thing, maybe even try and lean on Tokyo to back off, but aside from shutting down trading there's no legal way to actually stop Matsuo Noda from buying whatever he likes. You can't shut Japanese investors out of Wall Street. There'd be a riot downtown. We're talking about the open market here, not some inside deal.""Forget legalities." He scowled. "Tell me how your damned corporate raiders go about shenanigans that don't quite match the letter of the law.""Jack, I've officially quit the business. Retired. Guess you hadn't heard.""That's what you think. You just got un-retired. As of this moment. Now give me one of those high-priced consultations you're so famous for.""For you, Jack." I looked him over. "One last play. Trouble is, there's not much that's do-able, at least on short notice.""You say 'not much.' Which means there's something.""Well, one possibility might be to try and slow him downsome, make him think twice, say, by punching up the prices of the stocks he's aiming at. Make them less of a bargain.""That's a start.""Not much of one.""Well, how could it be done?""Since you're such a Boy Scout, Jack, you probably won't like what I have in mind. This one's not exactly in the rule book.""Try me.""Okay, it's a long shot, and we'll definitely need some help. If we're going to tinker with the market, then we have to have somebody Wall Street trusts. And also somebody who's got a lot of money to play with, short term.""Sounds like our mutual friend from Georgia.""Well, Henderson can play the Street like a symphony. What I'm thinking of involves tricking the smartest guys around, the 'risk arbs.' We'd need to suck them in. If anybody can do it, he's the man.""Then I say let's give him a buzz.""Fine. Why don't I get him on the squawk box so we can all listen in." There beside the couch was an old conference phone some client once gave me as a Hanukkah gift. At long last it might be good for something.The risk arbs, by the way, are the risk arbitrageurs, those speculators who live with one ear to the ground. The minute they hear word, inside or otherwise, that a company is "in play," meaning it's a candidate for a possible takeover or merger, they immediately grab up and stockpile huge blocks of its publicly traded shares. Then they sit back and pray for a bidding war. Since company A has offered so much a share for company Z, maybe company B will step in and offer more. Or maybe company Z itself will outbid them both and offer even more in a stock buyback. They're the hyenas of the hunt, getting plenty of leftovers no matter who ends up buying Z. Besides, they don't really care anyway. They're not investing in American industry, they're laying side bets.Tam and Jack settled back while I punched in Bill's number.The doctor was in, and after a few profane formalities— tempered when we informed him of a female presence—he listened with uncharacteristic attentiveness. I gave him anupdate, concluding with the view that we ought to try heading off MITI's presumed play.Henderson, despite his admiration for Noda's style, didn't take kindly to the possible buy-up of America's remaining R&D in semiconductors, a specter that coincided all too closely to his own fable about how MITI had already eaten one segment, memory chips. I decided to start by seeing if he and I were on the same wavelength concerning countermeasures. Without tipping him to my own idea, I asked what he thought could be done."Tell you, it won't be easy. One thing, though, we could maybe try and scare 'em off with a little brushfire.""Try that in English, Bill," Jack interrupted."Don't know, maybe a few hot rumors could hit the Street . . . mergers, takeovers, your usual quick-buck action. Say a few of the CEOs of these outfits on Noda's Christmas list had a little powwow, a 'secret' meeting everybody manages to hear about, and supposedly talked about gettin' themselves bought out. Naturally they'd deny everything on the Evening News, which in itself will tell the Street we're talkin' wedding bells.""Is that really going to do us any good?" Tam was talking to the box."Afternoon, ma'am. Liked that last book of yours a whole lot. Hope you're keeping them boys sober." I could almost see Henderson turn up the charm, sculpting a voluptuous, horny divorcee in his ardent imagination. Tam, to my surprise, was not totally immune to his Georgia sweet talk. She sort of smiled to herself as he continued, "But to answer your question, a takeover rumor can do marvels for your stock price. What happens is the 'arbs' come in, snapping up blocks of stock and holding them, just in case. It can take a lot of securities out of circulation, at least short term. So if we could get the arbs to chasing those companies on Noda's list, they'd give the Japs a little competition. At the very least it'd kite the market, hurt their pocketbook.""Bill, that's why we wanted to call you. How about putting your finances where your flag-waving is? Be an arb yourself for a few weeks. Lead the herd. Start picking up some blocks of stock and shooting off your mouth a lot about your 'inside' information. I'll even kick in my modest retirement fund to help the action.""What if somebody pulls the rug out from under us? Shoots the whole thing down? We'd be left holding all that stock we'd bid up. We could lose our shirt.""Then protect the downside by buying puts. I have full faith you'll think of something. Come on, Henderson, be a market maker. You've got the credibility. All you have to do is set a spark to this, then we'll quietly head for the sidelines to make way for all those investment-house yuppies who love to shoot craps with their clients' money.""Have to be a quick in and out for damned sure. This hot-air balloon won't stay up for long." He paused, clearly not wild about the idea. "Tell you what, though, maybe if we had a real good story.""Ideas?""Well, how about this? Maybe we've just heard on the grapevine that those outfits on Noda's play list have started a little 'white knight' talking. And since this is just speculation, we might as well think big. Know who I mean?""The pride of Armonk.""Give that man a gold star. We both know IBM headquarters ain't talked to nobody but God since Watson outgrew his short pants, so it'd be weeks before they'd stomp on some horse-pucky rumor about how they were looking into saving whatever's left of the chip business here. Just covering their ass, we'll say. Friendly mergers. No poison pill stuff.""That's exactly the kind of specious 'supporting detail' that always triggers the Street's greed." I concurred. "Offhand I'd say that sounds just about perfect for tomorrow's hot tip on the Exchange floor."In truth it did seem like a workable first draft of an idea. No law against deep background sources that turn out to be 24-carat bullshit down the road. The antitrust implications would be front page for a couple of days, but since the administration adhered to the 'see no evil' school of regulation, that angle wouldn't impress the smart money. America starts thinking big, chucks the myth of garage entrepreneurs, and staves off Japan using a dose of MITI's own medicine. IBM rides in to rescue what's left of Silicon Valley. It might just make Matsuo Noda back away. He'd learn America could play hardball too.We told Bill to take the rest of the day off. Jack was, I can report, noticeably encouraged. Tam also. For my own part I just crashed, with a few wistful reflections on my rockynon-seduction. But if we pulled off our little scam, she might be more inclined to take me seriously.As Shakespeare said, Lord, what fools these mortals be. I realized the true extent of Matsuo Noda's reach on Monday, just after noon. I was still home when Tam called from the office uptown to inform me of the latest developments. I was so busy on the phone just then, planting merger rumors with a few friendly columnists, that I was almost annoyed to take time out for her call. However, she quickly captured my attention.First, the revisions on DNI's acquisition program were in full swing. Noda had started purchasing those healthy semiconductor outfits on the new list.Then she went on to say that an additional set of buy orders had just gone out over the wire. Noda had been on his satellite hookup to Tokyo all morning, and he'd now finalized official authorization for a minor expansion, so to speak, in DNI's program. Apparently Tokyo had agreed with him that his portfolio should include a certain high-grade issue to achieve better overall "balance."She didn't say much more, for obvious reasons, but we both had a strong hunch what must have happened. If anything was bugged, for chrissake, it wasn't my apartment. That's B-movie stuff. It had to be my phone.Matsuo Noda had just kicked off a new buy program to the tune of three and a half billion. For what? More high-tech stragglers? Not precisely. One company, and in an amount intended to stay safely just below the Securities and Exchange Commission's Form 13-D mandatory reporting. Twenty-five million shares of IBM, roughly a full four percent of Big Blue.It was a massive variation of the "Pac-Man" takeover defense: you eat anybody you think wants to eat you. Noda's message to us was loud and clear: he could buy the USA anytime he wanted. Dai Nippon was unstoppable.CHAPTER NINETEENI hung up the phone very slowly."We've 'moved the shadow.'" I spoke the words to myself hesitantly, maybe even a little apprehensively. That was the name for a famous strategy of the seventeenth-century swordsman Miyamoto Mushashi, using a feint to lure your opponent into prematurely disclosing his battle plan.The way I saw it, Matsuo Noda now stood revealed. It had all been a setup. The financial scam, the help-American-industry cover, the MITI "guidance." This was a takeover, all the way. A global takeover. What else could it be?And the only people on this side of the Pacific who knew were Matt Walton and Tam Richardson.For some reason that thought brought to mind the professor at Stanford, the AI guy who'd disappeared. What was it Tam had said? He'd had dinner at her apartment? Asked her to do something for him in Japan? And her MITI friend, whose name was all over that stack of memos on the table downstairs? Asano. Where did he fit in?One thing, he'd helped Noda recruit her. They'd worked together, and their play had been flawless.But now our friend Matsuo Noda had a small headache. Tam Richardson and Matt Walton had exposed the underside of his game. The shadow had moved. Which meant it would only be a matter of time before he struck.Where was our weakness, hers and mine? What would cause us to lose our rhythm, to blunder? He'd already outmaneuvered Jack O'Donnell with ease. He had a master swordsman's unerring instinct for his opponent's weakness. So where was mine? I had to know it before he found it.He'd realized Jack could be blackmailed, if the stakes werehis constituents' jobs and lives. But I didn't need a job. And the only life . . .Of course! It was obvious. Amy.Could it be I was dealing with a madman who made people disappear?If I was about to take on a pro like Noda, I had to cover every possibility. Which meant I had to get her out, away, beyond his reach. Today.Still, though, there were so many questions. Who wasreally behind all the moves, the master puppeteer? Was it only Matsuo Noda, or was this possibly, just possibly, something that wound its way even higher. If so, who was the point man on that? Akira Mori?The only rational countermove now was to back off and "survey prevailing conditions." Miyamoto Mushashi'skeiki o shiru to iu koto. But to do that we had to remove ourselves beyond the reach of Dai Nippon's sword. How long did we have?I glanced at the clock on my desk, the little Sony digital. The number 12:18 stared back, the two dots in the middle flashing every second. Amy was still at school, and for the moment I couldn't think of a safer place. They wouldn't even let me in without a pass. She didn't get out till four P.M.So now what?Simple. In swordsmanship, vigilance is everything. And there are two things you always have to keep in view. The first is calledken, the surface actions, the moves your opponent wants you to see. The second, and more important, iskan, the essence of things, the real truth.Kencovers the superficial moves;kangives you the big picture.Instinctively I still believed we had only been witness token, the distractions, the insignificant feints of our opponent. The deeper wisdom ofkanstill lay beyond us. Time to probe.We had three and a half hours.I got up and headed downstairs to retrieve a couple of very important memos. If we needed them, we'd have them. The rest of the pile I brought back upstairs and locked in the sword room (the closest thing I had to a safe). Finally, I reflected a second and paused to scribble Emma a note, asking her to feed and walk Ben in case I wasn't around for a while. That taken care of, I retrieved my heavy topcoat from the front closet, walked out into the street, and grabbed a cab for the offices of Dai Nippon, International.Maybe our opening move should beuromekasu to iu koto, to feint a thrust that would induce a state of confusion in Noda's mind. Then we could stage a tactical retreat to plan the final, all-out attack.Retreat to where? Well, that part at least was easy: the obvious hideaway was my place down in the islands. The thing to do was to quietly catch American 291 and head for the Caribbean. If Noda did manage to track us down, he'd be in for a surprise. Let me explain.Back when the world was young and Amy was still a gleam in our eye, Joanna and I acquired a rambling white fortress, complete with pool, that was being offered to the first tourist appearing on St. Croix that day with ready cash. Seemed its Cosa Nostra owner back in Sicily (so the story went) suddenly needed a transfusion of a hundred grand in bail money. Fortunately I'd had a good year and happened to have the necessary liquidity. It was luxurious beyond vulgarity. Hardwood parquet floors, heavy tile roof (to withstand an Interpol bombing run? Who knows?), manicured grounds, satellite dish, a bar worthy of Caesars Palace, three bedrooms, and music in every room. It was oversize and garish and pretentious and . . . who cares, I loved the place. Sort of a Roman villa in the middle of paradise. However, because of the peculiar requirements of its former tenant, it also had a security setup to shame Fort Knox, including a six-foot fence, two-inch-thick doors, and TV monitors all over the grounds.If we could locate a little hardware to match Noda's Uzis, he'd be in for a surprise should he try and send down a Dai Nippon hit squad for an unscheduled visit.But first things first. Right now we needed to somehow lure Matsuo Noda into revealing more of his overall strategy.After the cab dropped me off, I rode the elevator up to twelve and passed through security. The complement of guards, I noticed in passing, had just been expanded. Instead of two, now there were four. And when I walked out onto the floor, nobody said anything, but there was an almost palpable air of tension. Stony silence, analysts nervous. Bad vibes, very bad vibes.I just ignored the stares and headed straight for Tarn's office. She was waiting, and she had an identical reading of thesituation. The minute I walked in, she got up and shut the door. Her first words . . ."He just brought in more security. That, and the IBM thing. Matt, he's getting worried.""Bet your ass he is. We're moving in too close. But I think Noda figures he's just toying with us now. Having some fun before he cuts us in half.""I'm not afraid of him. No matter what he tries." She glanced at the door. "Did you bring the memos?""Here in my briefcase. But I think it's too soon to show him everything we have. Right now he doesn't know what we've got. That's better.""Well, I've just begun to fight. I'm going to Tokyo to get the truth out of Ken." She paused, and her voice trembled slightly with anger. "He's got some heavy explaining to do.""You're incredible." I just looked at her. "I almost believe you still can't accept that your friend Asano is in on Noda's play. Since he's such a terrific guy.""Matt, I don't believe it. He wouldn't be part of this. You don't know him.""That I don't.""All I'm saying is, this doesn't feel right. He wouldn't involve MITI in whatever Noda's planning." She sat down, running her hands through her tousled dark hair. "You know, the fact is we still don't know for sure who's really behind what.""Exactly. How does everybody fit in, including us? We've got pieces of a puzzle lying around—a section here, a section there—but something fundamental is missing.""So what do we do next?""How about a little joust with our friend downstairs? Try and feel him out. Maybe we can lure him into making another move, something that'll give away more of his game.""You don't think he's actually going to talk.""Not really. He'll feint, parry. But if we watch carefully, maybe we'll glimpse more of the outline of his strategy. Then we'll know what our counter scenario has to be." I decided to hold off on telling her the getaway plan. Assuming the walls had ears, we'd already said too much. "Look, make you a deal. First let's see what happens with Noda, then we decide what to do about your friend Asano.""All right. But let's stay cool." She was locking her desk."You read my mind."With that settled, we strolled out, past the doubled security, and headed down to eleven. The way people looked at us, I felt as naked as Tam had been in the bath Saturday night. How much did they know?Matsuo Noda was in his office. His secretary buzzed us right through, almost as though he'd been waiting for our appearance."Dr. Richardson. Mr. Walton." He rose to greet us. "How timely. There is an urgent matter we have to discuss.""We want to talk about MITI." I decided to try and break his rhythm as quickly as possible. Take the action to him."Then this is a coincidence." An easy smile as he resumed his seat. "That happens to be the very matter I wanted to explore—""What we want to know," Tam interrupted, "here and now, is whether our program is being run by the ministry.""Dr. Richardson, you . . . and Mr. Walton, are in the employ of Dai Nippon, International, not MITI." He leaned back in his chair. "Though of course nothing in this world is entirely simple. Certain . . . interests of the ministry are germane to our programs here.""Then we'd like to hear about it." She glanced at the leather chairs but decided to remain on her feet. I did the same.His face was like granite. "Well, you are aware we've occasionally received input from MITI's Industrial Technology arm."How about Research and Planning, Ken's section?""Only a few informal—""Nothing to do with Marketshare - 90?"He betrayed a hint of confusion, quickly masked. "Dr. Richardson, with all due respect, I fear you may not be entirely aware of the various forces at play here." He leaned back. "This program of ours must succeed. There are many avenues of responsibility, but all difficulties will be overcome.""What do you mean?""All in time, please believe me." He smiled once more. "I'll readily grant you our acquisition program may have evolved slightly as of late in the direction of more-solid securities, but you can be assured that is merely a response to the concerns of certain conservative institutional investors in Tokyo." He continued, a silver tongue to match his silver hair. "Risk is involved. Not to mention an enormous quantity of funds. There is pressure on us just now to try and maintain a prudent balance in our portfolio." He glanced at his watch impatiently. As if he was anxious to move ahead. "Which brings us to the matter we have to address.""Just to set the record straight"—I decided to do a little parrying of my own—"you have nothing to say about any kind of MITI involvement? Including Marketshare - 90?""Well, this Marketshare - 90 proposition you refer to probably should be thought of as merely one of the ministry's more ambitious trial balloons, nothing more. It has the quality of—how do you say it?—woolgathering. Whatever its purpose, it should in no way be confused with Dai Nippon's objectives." Such was Noda's reply. Then in a remarkably convincing tone he added, "How could the ministry's planning possibly have anything to do with our program here?"Tam wasn't buying. "Looks to me like it has a lot to do withit.""Dr. Richardson, since I am no longer directly affiliated with MITI, I am not in a position to speak for every proposition arising there. However, we both know that the ministry's responsibility is to provide long-range industrial planning. They often circulate scenarios for comment. It's part of their job."We were rapidly losing our footing. Noda was top-ranked swordsman. He'd kept his discipline and revealed nothing. He was telling us we hadn't found an opening. He was right. It was a classic standoff.Or it should have been. Strategically, we should have taken that moment to back away and analyze Noda's style, searching for his weakness. But instead Tam made what turned out to be a fatal move. She struck, exposing herself."Since according to you MITI is not involved in this program, there should be no problem if I contacted them directly and talked this over. In Japan."I wanted to yell no, don't tell him anything.But it was too late."An excellent idea." He nodded gravely, then turned to me. "Do you intend to be part of this expedition as well, Mr. Walton?"What to do? The only moves left now were defensive. No way was I going to let Tam face the beast alone. Also, if Noda had me, he wouldn't need Amy."I assume you can spare me here for a few days.""But we will all be in Japan together." He removed his thin, wireless spectacles. "That is in fact the very matter I needed to discuss with you. It is time you both were brought more closely into the matters at hand. Beginning today. I've already made reservations on New York Helicopter, departing for Kennedy in two hours. From the East Thirty-fourth Street heliport."He had us. He'd seized the initiative, feinted us off balance, and defined the terms.She tried to recover. "When and where we go is something we intend to—""Ah, Dr. Richardson, one must seize the moment. It is past time you and Mr. Walton understood more fully the many levels of concern involved here. There are a number of things you need to see." He smiled as he replaced his glasses. "Because of the expected frequency of my travels in the coming months, I have just leased a Concorde. We refuel in Bahrain. I've been looking forward to having you both as my guests.""The answer is no.""Mr. Walton, I urge you not to forgo this opportunity too rashly." He looked me over. "In fact, since you are known to be an authority on Japanese arms, I could even arrange for you to have a firsthand look at the Imperial sword.""Forget it.""But the timing couldn't be more ideal. At the moment the sword has just been transferred to one of the metallurgy labs at Tsukuba Science City for minor repair work. Since Tsukuba is to be our destination as well, I can just telex the Imperial Household and instruct them to arrange a viewing date." He smiled again. "For a connoisseur such as yourself, nothing would please me more."There was something about the way he said it. I don't know. Maybe a strange glimmer flashed through his eyes. Looking back, I think that was the moment I first should have realized Matsuo Noda had decided he was God."You didn't hear me. We're not leaving now. At least not on your terms.""Mr. Walton, I really must insist." He glanced over at Tam. "What I intend to show you should be of extreme interest to you both.""I'll go when I'm ready." She turned and headed for the door."Dr. Richardson, I'm afraid we all have no alternative." He spoke quietly, his tone masking the harshness as he continued. "These offices have been sealed. As a temporary security measure. There appears to have been an unauthorized access to the NEC mainframe here. However, I've decided to postpone criminal charges for the moment." He smiled again. "Besides, the time has come for you both to know everything."We were on our way. I looked out of the window on my side, down through the haze covering New York's East River just below us, and took Tam's hand. The NY chopper was a Sikorski S58T, twin engine, two pilots. Events were moving so fast it was hard even to think. No doubt about one thing, though: we'd been outmaneuvered, outplanned, outfought. The only good part was, he had me as hostage, not Amy. In a final face-off with Noda, whatever he had in mind, I still figured I could take care of myself, MITI and all. The battle had just begun.When we walked out of Noda's office, there was no longer any mistaking the new security arrangements. Dai Nippon was on red alert."Well, Matthew, looks like we're about to get the big picture, like it or not.""On Noda's terms. Which wasn't the way it was supposed to happen.""I just need to confront Ken."For whatever good it may do, I found myself thinking. We were knee-deep in confrontations and we still didn't know a damned thing. What did Noda have planned for us? Whatever it was, I had a strong feeling I didn't want it.Back in my own office at Dai Nippon, there was only time for one phone call. The first name that came to mind was Joanna. I wanted to say, Look, if I don't make it through this, you and Amy are well provided for. She's got a trust fund that's seven figures, and you can have the house, the bank account, the whole damn works. Just don't ever let a man named Matsuo Noda anywhere near you or her.But I couldn't force myself to dial the number. It wasn't Joanna who was in over her head now; it was me. The subtle ornot-so-subtle difference was enough to stop me cold. I'd vowed to manage life on my own, and this was no moment to waffle.So, instead I did the next best thing and called The West Side Free School—which, I might add, may have been free in its disdain for classical curriculum, but it had very non-free tuition practices. I identified myself, announced an emergency, and asked to speak to Ms. Amy Walton. In about a minute she was there."Dad, we're in the middle of our Monday Geo-2 exam." She lowered her voice. "What's the capital of Somalia?""Honey, haven't a clue. Just try and do the best you can. Employ that exceptional brain of yours.""Thanks.""Adults don't have to know the capitals of Third World countries. That's a small perk we get for putting up with old age." I paused. "Amy, about this weekend.""Uh, oh." She sighed. "Betcha I know what's next.""Well, a problem's come up. I've got to take care of a few things.""Dad, the snow leopards. This weekend is when they're supposed to—""Honey, we'll hit the Bronx Zoo the minute I get back. I absolutely promise.""You going off somewhere?""Just a quick trip.""Where?" She perked up."We'll talk about it when I get back." I wanted to say "if I get back.""Big secret, huh?""Amy, I just wanted to . . . darling, be careful.""What's the matter? Dad, are you in some kind of trouble?"How could I answer? Damned right I was, but that wasn't the point of the call."Sweetie, just . . . just be especially careful. That's all. I'll try my best to make it up to you at Christmas. Maybe we can still get down to the islands somehow. And Amy . . .""Yeah.""I love you, honey.""Love you too, Dad. Look, I gotta get back.""I'm sure Ms. Winters will give you some extra time.""Don't bet on it. She's an old grouch. She's twenty-eight and an old maid."Twenty-eight. Old? Good God. I keep forgetting what it's like to be thirteen and think of the future as the next three weeks, followed by a gaping void."Sweetheart, that's not exactly ancient. Believe me. She's probably still got half a dozen good years left.""Tell her. Look, I've gotta run.""All right. Just advise your mother something unexpected came up. Maybe you and I can make it next weekend. We'll do the snow leopards, that's an absolute guarantee."
"Jack, doing anything today?"
"Walton, what in hell . . .?"
Jack O'Donnell and Joyce Hanson had been working through the ten-pound Christmas catalog known as the Sunday Times—she was up to Arts & Leisure and he'd advanced as far as Business—when my call interrupted their mutually agreed-upon vow of silence. Now that her apartment in the West Seventies had become Jack's weekend hideaway, his escape from phones and conferences, the number was as carefully guarded as a Minuteman launch code.
The time was shortly afternoon. He'd just braved a foot of snow and sleet to retrieve the paper and a couple of fresh croissants, while Joyce was still recovering from a two A.M. session editing a speech one of his staffers had drafted for some
ILGWU holiday blowout the following week. Since he was still chewing over Noda's ominous phone call, wondering what to do, the last person on earth he wanted to hear from right now was Dai Nippon's lawyer, even if it was me.
"Feel like coming down for a Bloody Mary? An academic lady we both know is here, and we've happened across something you might find interesting. Very interesting."
"Care to elaborate?"
"It's a little complicated, Jack. How about coming down?"
He glanced out the frosted kitchen windows, puzzling what in blazes was up, then finally agreed.
"Keep the coffee hot."
"You've got it."
Joyce claimed to be unamused, though in truth maybe she wasn't all that heartbroken to have the place to herself for the afternoon. He grabbed his coat and said don't throw out The Week in Review.
The streets were now at a standstill, so the prospect of finding, let alone traveling in, a taxi was implausible in the extreme. As a result Senator Jack O'Donnell shared the Broadway local with several hundred of his lesser-heeled constituents and finally managed to get down toSheridan Square, from which it was only a few mushy blocks over to my place.
Ben greeted him at the door with me not far behind, doubtless looking as if I'd just stumbled in from a three-day forced march. Without a word he passed over his coat, then followed me downstairs where Tam was still going through the line of printouts spread across the dining room table, translating onto one of my yellow legal pads.
I pointed him in the direction of the coffee urn stationed in the kitchen. He poured a cup, then came around and plopped down on the couch.
"Walton"—he sampled his brew, then set it down—"you're not going to believe what your goddam client did Friday. Swear to God, your man actually threatened me, the bastard, a not-too-subtle warning to back off."
"Jack, that's small potatoes." I straddled one of the dining room chairs. "What would you say to a possible play by our friend Matsuo Noda that makesPearl Harborlook like a gesture of Japanese-American solidarity?"
"Two days ago I might have thought you'd been smoking a controlled substance. Now, I'm not so sure."
"Well, we're still piecing it together. I don't think anybody could even imagine what's really afoot. One thing's for sure, though—this is big." I paused. "It might even be that Noda is somehow fronting for MITI, though I'm still not totally convinced."
I'd been turning that possibility over, but I somehow couldn't buy it all the way. Wasn't Matsuo Noda's style. He was a loner.
"MITI?" He looked at me. "That's government, right? The Ministry of . . ."
"International Trade and Industry.Japan's 'War Department' for trade."
"Yeah? Go on."
"Listen. All Noda's talk about helping American industry? Of course it's bullshit. But I think it's just half the bullshit. What we suspect is, he's buying a little of everything so nobody will figure out their real agenda."
"You'd better back up and take this from the beginning."
"Wait a minute." Tam got up and started the turntable. Mendelssohn was still on the platter. Maybe we were taking too many precautions, but she still nursed the idea we might be bugged.
With the music cranked up to "8," we proceeded to give Jack a quick summary of how the stack of memos on the table had come into our hands. In a way, though, they raised as many questions as they answered.
"Jack, nothing here is spelled out in detail. We have to take everything and sort of rotate it by ninety degrees to see how Noda fits in." I walked over to the table. "Tam, where's your translation of that one by what's-his-name . . . Ikeda?"
"Right here." She handed it to me.
"Here, Jack, start with this. Just to get up to speed on the background."
He fumbled in his pocket, retrieved his bifocals, and began to read the yellow sheet.
OPERATION MARKETSHARE - 90
Internal Memo No. 22
From: Hiromu Ikeda, Deputy Minister of Industrial Technology Sector, Ministry of International Trade and Industry
(MITI)
Subject: SUPERCHIPS
World dominance in semiconductors will provide the basis for Japan's control of the global information industry by the turn of the century, which will be the key to our economic leadership and military strength. The critical path to achieving this lies with the coming generations of semiconductor technology—the submicron, giga-scale superchip. Accordingly, the objectives of Operation Market- share - 90 in the semiconductor sector should receive the highest possible priority. Areas of research should include semiconductor-grade polysilicon, silicon wafer production, ceramic packaging, quartz photomasks, X-ray lithography, supercooled Josephson junction circuits, and optoelectronic chips for optical switching. R&D should also be focused on digital signal processing, application-specific integrated circuits (ASICs), specialized dynamic random access memories (DRAMs), very large-scale integrations (VLSIs) for supercomputers . . .
"Walton, I can't make heads or tails of this gobbledygook." He tossed down the sheet. "What's this all about?"
"What it means"—Tam spoke up—"is that Ikeda has targeted every emerging area of semiconductor research. Everything. A clean sweep. If he succeeds, sooner or later nobody else will even be able to make the really advanced chips. A few more years and America joins the Third World."
Jack looked a little skeptical. Truthfully I found her extrapolation somewhat fanciful myself. But then, who knew?
"Tam, how about showing Jack that other memo? You know the one."
She didn't say anything, just turned back and sorted through the stack of yellow pages till she had it. Out came Jack's glasses again.
OPERATION MARKETSHARE - 90
Internal Memo No. 37
From: Kenji Asano, Deputy Minister for Research and Planning, Ministry of International Trade and Industry (MITI)
Subject: CURRENT STATUS OF R&D
This office has now completed its review of the recent survey of research and development (R&D) by Japanese firms compiled by the Science and Technology Agency, the results of which are the subject of this memorandum. Of the companies surveyed, 70% maintain that their research is equal or superior to that of leading firms in the U.S. and Europe, although only 18.2% consider themselves in unchallenged top position. Furthermore, the remaining 30% believe their research is inferior or lagging behind the West (ref. to Table 1). Of those who reported inadequate R&D in high technology areas, the following reasons were given . . .
"Whoever wrote this is just poor-mouthing." He flipped on through the sheets, then looked up. "Saying he needs more money for basic research. I hear this kind of stuff all the time. Hell, Japan already spends nearly twice what we do per capita on nonmilitary R&D. What does he want?"
"Keep reading, Jack, and you'll see that the main R&D he's pushing is in computers and semiconductors. It ties in exactly with Ikeda's targets. This is backup consensus for the big drive."
"You still haven't told me anything I didn't already suspect." He tossed the pages onto a side table. "So how about answering a few less-obvious questions?" "Shoot."
"First off, what's this Operation Marketshare - 90 all about?" He took off his glasses and pocketed them.
"Jack, remember the famous Hitachi directive that got loose a while back, the one on how to market their 256K memory chips, ordering their salesmen just to keep underpricing American manufacturers till they had the sale, loss no object. According to Henderson, by the time the International Trade Commission got around to convicting them of dumping, they'd demolished America's domestic industry and nailed down ninety percent of the market."
"Ninety, you say. Well, that's getting to be a familiar number." He slumped back against the sofa. "Out of curiosity, what's included in this MITI Marketshare - 90 operation?"
"Computers, of course. But also pretty much everything in high tech where the U.S. still has a leading position—from biotech to aerospace. These guys don't think small."
I gave Ben a pat, then pulled Mori's printout around, going on to explain that we'd come across it in the drawer of her desk. It was, I added, obviously some kind of special computer sorting of the firms DNI was targeting. The categories in the sort were a breakdown of high-tech areas, with individual firms listed underneath, together with a summary of their research expenditures.
"Take a look. First, notice that this printout has been sorted and converted into this list here." I placed it alongside the page I'd found in the Xerox machine. "Voila, they're identical."
"So?"
"Okay, now compare that list with the R&D areas targeted in Ikeda's memo." I laid Tarn's translation down next to Mori's pages. "See? Everything on Ikeda's MITI wish list for research in semiconductors is now being done by the American outfits named here in Mori's sorting, which is the latest revision in DNI's acquisition program."
"What are you getting at?" He looked it over.
"It's a pattern." Tam spoke up. "These new buy-ups cover Japan's last remaining shortfalls in R&D. I spotted it right away. But what I didn't realize till we got these memos was that the areas covered by Mori's companies exactly dovetail with MITI's goals. I probably wouldn't have noticed it without her sorting. Mixed in with all the other companies Noda's buying, he's targeted those that fill the gaps in MlTI's semiconductor push."
Jack looked at us quizzically. "Are you telling me MITI's behind Noda's program?"
That's where Tam and I parted company. She argued it was obviously a MITI play: why start from scratch when you can just buy what you need? Sound business investment. For some reason, though, I wasn't so sure. Somehow that explanation seemed too simplistic. Unfortunately, however, there's a law in science or somewhere that says you should always pick the least-complicated theory that fits all your data. Hers appeared on the face of it to address the facts perfectly. Except for one unknown: if Mori did "accidentally" feed me the sorting that blew the whistle on Noda's design, why?
"I think this has to be what the buying program on this list is all about," Tam answered. "He's taking over firms whose R&D coincides with MITI's targets. Matsuo Noda has been put to work simply acquiring what they need, but to make sure nobody suspects the real agenda, he's worked up this elaborate 'management assistance' story, buying all kinds of companies." Her voice was bitter. "The next step will be to set up joint ventures between these firms he's bought and their counterparts in Japan. Then all American R&D would be shared."
"Which means"—Jack's face began to redden—"that since we always seem to lose out when it comes to commercializing what we invent, the U.S. ends up becoming one big think tank for Japan in the twenty-first century. We do the research, and they manufacture and market. They pick our brains and then cash in on it." He turned back to Tam. "Do you really think it was Noda who planned all this?"
"I wish I knew what to think." Her voice grew hesitant as she continued to stare down at the memo. "It's hard to believe Ken would do something so unethical—especially a grab like this—when I'm sure he's convinced Japan ought to be advancing its own R&D."
"Ken? Who's—"
"Did you see who authored that second memo?" She pointed to the name.
"Kenji Asano is apparently a close friend of Dr. Richardson's," I broke in, my tone unnecessarily sharp. "Unfortunately, he seems to be an even closer friend of his cronies at MITI."
Tam didn't respond, just sat there looking betrayed.
"Matt, let's be constructive here." Jack walked over and shook the coffee pot, then sloshed the last dregs into his cup. "We damn well ought to take some kind of action."
"That's why we wanted to talk to you." Tam came back to life. "Do you think you could leak something about this? Maybe to the Times?"
"And say what?" He laughed, a little sadly. "That I've happened across a set of secret MITI memos that bear a coincidental similarity to some stolen DNI printout? Don't think that's exactly 'Fit to Print.'" He frowned. "But I'm glad our Mr. Noda has finally let slip his true intentions. I never believed all that pious malarkey about propping up American industry." He snorted. "The man gets a few suckers like you to help him destabilize our bond markets, in the process of which he turns the high-tech sector of American industry into a bargain basement for MITI."
Tam sipped her coffee, maybe trying to act as if Jack's comment hadn't stung her the way I suspected it did. I decided to try and handle her defense.
"Jack, hold on a second. You've got to admit that a lot of these outfits Dai Nippon is buying are currently on pretty thin ice. If somebody doesn't come in here and help run them right, they're probably headed offshore anyway."
"We're not talking about first aid now, Walton. We're talking about Matsuo Noda taking over the most strategic segment of our economy after pulling the biggest scam in the history of world finance."
"That looks to be the story." I watched his cheeks redden with frustration. "So what do you propose we do? There's no law against foreign investment. Securities exist to be bought."
"Well, dammit, Matt, we've both seen enough by now to realize this Noda genius is up to no good. We've got to stop him."
"Couldn't agree more. So why don't you just arrange to have the SEC shut down trading in every stock DNI has in its gunsights."
"You know that's out of the question."
"Exactly. So what legal remedies are there? How do you squelch a takeover program that's not even against the law?"
"That's your specialty, counselor, or so I hear."
"Jack, be realistic. We can expose this thing, maybe even try and lean on Tokyo to back off, but aside from shutting down trading there's no legal way to actually stop Matsuo Noda from buying whatever he likes. You can't shut Japanese investors out of Wall Street. There'd be a riot downtown. We're talking about the open market here, not some inside deal."
"Forget legalities." He scowled. "Tell me how your damned corporate raiders go about shenanigans that don't quite match the letter of the law."
"Jack, I've officially quit the business. Retired. Guess you hadn't heard."
"That's what you think. You just got un-retired. As of this moment. Now give me one of those high-priced consultations you're so famous for."
"For you, Jack." I looked him over. "One last play. Trouble is, there's not much that's do-able, at least on short notice."
"You say 'not much.' Which means there's something."
"Well, one possibility might be to try and slow him down
some, make him think twice, say, by punching up the prices of the stocks he's aiming at. Make them less of a bargain."
"That's a start."
"Not much of one."
"Well, how could it be done?"
"Since you're such a Boy Scout, Jack, you probably won't like what I have in mind. This one's not exactly in the rule book."
"Try me."
"Okay, it's a long shot, and we'll definitely need some help. If we're going to tinker with the market, then we have to have somebody Wall Street trusts. And also somebody who's got a lot of money to play with, short term."
"Sounds like our mutual friend from Georgia."
"Well, Henderson can play the Street like a symphony. What I'm thinking of involves tricking the smartest guys around, the 'risk arbs.' We'd need to suck them in. If anybody can do it, he's the man."
"Then I say let's give him a buzz."
"Fine. Why don't I get him on the squawk box so we can all listen in." There beside the couch was an old conference phone some client once gave me as a Hanukkah gift. At long last it might be good for something.
The risk arbs, by the way, are the risk arbitrageurs, those speculators who live with one ear to the ground. The minute they hear word, inside or otherwise, that a company is "in play," meaning it's a candidate for a possible takeover or merger, they immediately grab up and stockpile huge blocks of its publicly traded shares. Then they sit back and pray for a bidding war. Since company A has offered so much a share for company Z, maybe company B will step in and offer more. Or maybe company Z itself will outbid them both and offer even more in a stock buyback. They're the hyenas of the hunt, getting plenty of leftovers no matter who ends up buying Z. Besides, they don't really care anyway. They're not investing in American industry, they're laying side bets.
Tam and Jack settled back while I punched in Bill's number.
The doctor was in, and after a few profane formalities— tempered when we informed him of a female presence—he listened with uncharacteristic attentiveness. I gave him an
update, concluding with the view that we ought to try heading off MITI's presumed play.
Henderson, despite his admiration for Noda's style, didn't take kindly to the possible buy-up of America's remaining R&D in semiconductors, a specter that coincided all too closely to his own fable about how MITI had already eaten one segment, memory chips. I decided to start by seeing if he and I were on the same wavelength concerning countermeasures. Without tipping him to my own idea, I asked what he thought could be done.
"Tell you, it won't be easy. One thing, though, we could maybe try and scare 'em off with a little brushfire."
"Try that in English, Bill," Jack interrupted.
"Don't know, maybe a few hot rumors could hit the Street . . . mergers, takeovers, your usual quick-buck action. Say a few of the CEOs of these outfits on Noda's Christmas list had a little powwow, a 'secret' meeting everybody manages to hear about, and supposedly talked about gettin' themselves bought out. Naturally they'd deny everything on the Evening News, which in itself will tell the Street we're talkin' wedding bells."
"Is that really going to do us any good?" Tam was talking to the box.
"Afternoon, ma'am. Liked that last book of yours a whole lot. Hope you're keeping them boys sober." I could almost see Henderson turn up the charm, sculpting a voluptuous, horny divorcee in his ardent imagination. Tam, to my surprise, was not totally immune to his Georgia sweet talk. She sort of smiled to herself as he continued, "But to answer your question, a takeover rumor can do marvels for your stock price. What happens is the 'arbs' come in, snapping up blocks of stock and holding them, just in case. It can take a lot of securities out of circulation, at least short term. So if we could get the arbs to chasing those companies on Noda's list, they'd give the Japs a little competition. At the very least it'd kite the market, hurt their pocketbook."
"Bill, that's why we wanted to call you. How about putting your finances where your flag-waving is? Be an arb yourself for a few weeks. Lead the herd. Start picking up some blocks of stock and shooting off your mouth a lot about your 'inside' information. I'll even kick in my modest retirement fund to help the action."
"What if somebody pulls the rug out from under us? Shoots the whole thing down? We'd be left holding all that stock we'd bid up. We could lose our shirt."
"Then protect the downside by buying puts. I have full faith you'll think of something. Come on, Henderson, be a market maker. You've got the credibility. All you have to do is set a spark to this, then we'll quietly head for the sidelines to make way for all those investment-house yuppies who love to shoot craps with their clients' money."
"Have to be a quick in and out for damned sure. This hot-air balloon won't stay up for long." He paused, clearly not wild about the idea. "Tell you what, though, maybe if we had a real good story."
"Ideas?"
"Well, how about this? Maybe we've just heard on the grapevine that those outfits on Noda's play list have started a little 'white knight' talking. And since this is just speculation, we might as well think big. Know who I mean?"
"The pride of Armonk."
"Give that man a gold star. We both know IBM headquarters ain't talked to nobody but God since Watson outgrew his short pants, so it'd be weeks before they'd stomp on some horse-pucky rumor about how they were looking into saving whatever's left of the chip business here. Just covering their ass, we'll say. Friendly mergers. No poison pill stuff."
"That's exactly the kind of specious 'supporting detail' that always triggers the Street's greed." I concurred. "Offhand I'd say that sounds just about perfect for tomorrow's hot tip on the Exchange floor."
In truth it did seem like a workable first draft of an idea. No law against deep background sources that turn out to be 24-carat bullshit down the road. The antitrust implications would be front page for a couple of days, but since the administration adhered to the 'see no evil' school of regulation, that angle wouldn't impress the smart money. America starts thinking big, chucks the myth of garage entrepreneurs, and staves off Japan using a dose of MITI's own medicine. IBM rides in to rescue what's left of Silicon Valley. It might just make Matsuo Noda back away. He'd learn America could play hardball too.
We told Bill to take the rest of the day off. Jack was, I can report, noticeably encouraged. Tam also. For my own part I just crashed, with a few wistful reflections on my rocky
non-seduction. But if we pulled off our little scam, she might be more inclined to take me seriously.
As Shakespeare said, Lord, what fools these mortals be. I realized the true extent of Matsuo Noda's reach on Monday, just after noon. I was still home when Tam called from the office uptown to inform me of the latest developments. I was so busy on the phone just then, planting merger rumors with a few friendly columnists, that I was almost annoyed to take time out for her call. However, she quickly captured my attention.
First, the revisions on DNI's acquisition program were in full swing. Noda had started purchasing those healthy semiconductor outfits on the new list.
Then she went on to say that an additional set of buy orders had just gone out over the wire. Noda had been on his satellite hookup to Tokyo all morning, and he'd now finalized official authorization for a minor expansion, so to speak, in DNI's program. Apparently Tokyo had agreed with him that his portfolio should include a certain high-grade issue to achieve better overall "balance."
She didn't say much more, for obvious reasons, but we both had a strong hunch what must have happened. If anything was bugged, for chrissake, it wasn't my apartment. That's B-movie stuff. It had to be my phone.
Matsuo Noda had just kicked off a new buy program to the tune of three and a half billion. For what? More high-tech stragglers? Not precisely. One company, and in an amount intended to stay safely just below the Securities and Exchange Commission's Form 13-D mandatory reporting. Twenty-five million shares of IBM, roughly a full four percent of Big Blue.
It was a massive variation of the "Pac-Man" takeover defense: you eat anybody you think wants to eat you. Noda's message to us was loud and clear: he could buy the USA anytime he wanted. Dai Nippon was unstoppable.
I hung up the phone very slowly.
"We've 'moved the shadow.'" I spoke the words to myself hesitantly, maybe even a little apprehensively. That was the name for a famous strategy of the seventeenth-century swordsman Miyamoto Mushashi, using a feint to lure your opponent into prematurely disclosing his battle plan.
The way I saw it, Matsuo Noda now stood revealed. It had all been a setup. The financial scam, the help-American-industry cover, the MITI "guidance." This was a takeover, all the way. A global takeover. What else could it be?
And the only people on this side of the Pacific who knew were Matt Walton and Tam Richardson.
For some reason that thought brought to mind the professor at Stanford, the AI guy who'd disappeared. What was it Tam had said? He'd had dinner at her apartment? Asked her to do something for him in Japan? And her MITI friend, whose name was all over that stack of memos on the table downstairs? Asano. Where did he fit in?
One thing, he'd helped Noda recruit her. They'd worked together, and their play had been flawless.
But now our friend Matsuo Noda had a small headache. Tam Richardson and Matt Walton had exposed the underside of his game. The shadow had moved. Which meant it would only be a matter of time before he struck.
Where was our weakness, hers and mine? What would cause us to lose our rhythm, to blunder? He'd already outmaneuvered Jack O'Donnell with ease. He had a master swordsman's unerring instinct for his opponent's weakness. So where was mine? I had to know it before he found it.
He'd realized Jack could be blackmailed, if the stakes were
his constituents' jobs and lives. But I didn't need a job. And the only life . . .
Of course! It was obvious. Amy.
Could it be I was dealing with a madman who made people disappear?
If I was about to take on a pro like Noda, I had to cover every possibility. Which meant I had to get her out, away, beyond his reach. Today.
Still, though, there were so many questions. Who wasreally behind all the moves, the master puppeteer? Was it only Matsuo Noda, or was this possibly, just possibly, something that wound its way even higher. If so, who was the point man on that? Akira Mori?
The only rational countermove now was to back off and "survey prevailing conditions." Miyamoto Mushashi'skeiki o shiru to iu koto. But to do that we had to remove ourselves beyond the reach of Dai Nippon's sword. How long did we have?
I glanced at the clock on my desk, the little Sony digital. The number 12:18 stared back, the two dots in the middle flashing every second. Amy was still at school, and for the moment I couldn't think of a safer place. They wouldn't even let me in without a pass. She didn't get out till four P.M.
So now what?
Simple. In swordsmanship, vigilance is everything. And there are two things you always have to keep in view. The first is calledken, the surface actions, the moves your opponent wants you to see. The second, and more important, iskan, the essence of things, the real truth.Kencovers the superficial moves;kangives you the big picture.
Instinctively I still believed we had only been witness token, the distractions, the insignificant feints of our opponent. The deeper wisdom ofkanstill lay beyond us. Time to probe.
We had three and a half hours.
I got up and headed downstairs to retrieve a couple of very important memos. If we needed them, we'd have them. The rest of the pile I brought back upstairs and locked in the sword room (the closest thing I had to a safe). Finally, I reflected a second and paused to scribble Emma a note, asking her to feed and walk Ben in case I wasn't around for a while. That taken care of, I retrieved my heavy topcoat from the front closet, walked out into the street, and grabbed a cab for the offices of Dai Nippon, International.
Maybe our opening move should beuromekasu to iu koto, to feint a thrust that would induce a state of confusion in Noda's mind. Then we could stage a tactical retreat to plan the final, all-out attack.
Retreat to where? Well, that part at least was easy: the obvious hideaway was my place down in the islands. The thing to do was to quietly catch American 291 and head for the Caribbean. If Noda did manage to track us down, he'd be in for a surprise. Let me explain.
Back when the world was young and Amy was still a gleam in our eye, Joanna and I acquired a rambling white fortress, complete with pool, that was being offered to the first tourist appearing on St. Croix that day with ready cash. Seemed its Cosa Nostra owner back in Sicily (so the story went) suddenly needed a transfusion of a hundred grand in bail money. Fortunately I'd had a good year and happened to have the necessary liquidity. It was luxurious beyond vulgarity. Hardwood parquet floors, heavy tile roof (to withstand an Interpol bombing run? Who knows?), manicured grounds, satellite dish, a bar worthy of Caesars Palace, three bedrooms, and music in every room. It was oversize and garish and pretentious and . . . who cares, I loved the place. Sort of a Roman villa in the middle of paradise. However, because of the peculiar requirements of its former tenant, it also had a security setup to shame Fort Knox, including a six-foot fence, two-inch-thick doors, and TV monitors all over the grounds.
If we could locate a little hardware to match Noda's Uzis, he'd be in for a surprise should he try and send down a Dai Nippon hit squad for an unscheduled visit.
But first things first. Right now we needed to somehow lure Matsuo Noda into revealing more of his overall strategy.
After the cab dropped me off, I rode the elevator up to twelve and passed through security. The complement of guards, I noticed in passing, had just been expanded. Instead of two, now there were four. And when I walked out onto the floor, nobody said anything, but there was an almost palpable air of tension. Stony silence, analysts nervous. Bad vibes, very bad vibes.
I just ignored the stares and headed straight for Tarn's office. She was waiting, and she had an identical reading of the
situation. The minute I walked in, she got up and shut the door. Her first words . . .
"He just brought in more security. That, and the IBM thing. Matt, he's getting worried."
"Bet your ass he is. We're moving in too close. But I think Noda figures he's just toying with us now. Having some fun before he cuts us in half."
"I'm not afraid of him. No matter what he tries." She glanced at the door. "Did you bring the memos?"
"Here in my briefcase. But I think it's too soon to show him everything we have. Right now he doesn't know what we've got. That's better."
"Well, I've just begun to fight. I'm going to Tokyo to get the truth out of Ken." She paused, and her voice trembled slightly with anger. "He's got some heavy explaining to do."
"You're incredible." I just looked at her. "I almost believe you still can't accept that your friend Asano is in on Noda's play. Since he's such a terrific guy."
"Matt, I don't believe it. He wouldn't be part of this. You don't know him."
"That I don't."
"All I'm saying is, this doesn't feel right. He wouldn't involve MITI in whatever Noda's planning." She sat down, running her hands through her tousled dark hair. "You know, the fact is we still don't know for sure who's really behind what."
"Exactly. How does everybody fit in, including us? We've got pieces of a puzzle lying around—a section here, a section there—but something fundamental is missing."
"So what do we do next?"
"How about a little joust with our friend downstairs? Try and feel him out. Maybe we can lure him into making another move, something that'll give away more of his game."
"You don't think he's actually going to talk."
"Not really. He'll feint, parry. But if we watch carefully, maybe we'll glimpse more of the outline of his strategy. Then we'll know what our counter scenario has to be." I decided to hold off on telling her the getaway plan. Assuming the walls had ears, we'd already said too much. "Look, make you a deal. First let's see what happens with Noda, then we decide what to do about your friend Asano."
"All right. But let's stay cool." She was locking her desk.
"You read my mind."
With that settled, we strolled out, past the doubled security, and headed down to eleven. The way people looked at us, I felt as naked as Tam had been in the bath Saturday night. How much did they know?
Matsuo Noda was in his office. His secretary buzzed us right through, almost as though he'd been waiting for our appearance.
"Dr. Richardson. Mr. Walton." He rose to greet us. "How timely. There is an urgent matter we have to discuss."
"We want to talk about MITI." I decided to try and break his rhythm as quickly as possible. Take the action to him.
"Then this is a coincidence." An easy smile as he resumed his seat. "That happens to be the very matter I wanted to explore—"
"What we want to know," Tam interrupted, "here and now, is whether our program is being run by the ministry."
"Dr. Richardson, you . . . and Mr. Walton, are in the employ of Dai Nippon, International, not MITI." He leaned back in his chair. "Though of course nothing in this world is entirely simple. Certain . . . interests of the ministry are germane to our programs here."
"Then we'd like to hear about it." She glanced at the leather chairs but decided to remain on her feet. I did the same.
His face was like granite. "Well, you are aware we've occasionally received input from MITI's Industrial Technology arm.
"How about Research and Planning, Ken's section?"
"Only a few informal—"
"Nothing to do with Marketshare - 90?"
He betrayed a hint of confusion, quickly masked. "Dr. Richardson, with all due respect, I fear you may not be entirely aware of the various forces at play here." He leaned back. "This program of ours must succeed. There are many avenues of responsibility, but all difficulties will be overcome."
"What do you mean?"
"All in time, please believe me." He smiled once more. "I'll readily grant you our acquisition program may have evolved slightly as of late in the direction of more-solid securities, but you can be assured that is merely a response to the concerns of certain conservative institutional investors in Tokyo." He continued, a silver tongue to match his silver hair. "Risk is involved. Not to mention an enormous quantity of funds. There is pressure on us just now to try and maintain a prudent balance in our portfolio." He glanced at his watch impatiently. As if he was anxious to move ahead. "Which brings us to the matter we have to address."
"Just to set the record straight"—I decided to do a little parrying of my own—"you have nothing to say about any kind of MITI involvement? Including Marketshare - 90?"
"Well, this Marketshare - 90 proposition you refer to probably should be thought of as merely one of the ministry's more ambitious trial balloons, nothing more. It has the quality of—how do you say it?—woolgathering. Whatever its purpose, it should in no way be confused with Dai Nippon's objectives." Such was Noda's reply. Then in a remarkably convincing tone he added, "How could the ministry's planning possibly have anything to do with our program here?"
Tam wasn't buying. "Looks to me like it has a lot to do with
it."
"Dr. Richardson, since I am no longer directly affiliated with MITI, I am not in a position to speak for every proposition arising there. However, we both know that the ministry's responsibility is to provide long-range industrial planning. They often circulate scenarios for comment. It's part of their job."
We were rapidly losing our footing. Noda was top-ranked swordsman. He'd kept his discipline and revealed nothing. He was telling us we hadn't found an opening. He was right. It was a classic standoff.
Or it should have been. Strategically, we should have taken that moment to back away and analyze Noda's style, searching for his weakness. But instead Tam made what turned out to be a fatal move. She struck, exposing herself.
"Since according to you MITI is not involved in this program, there should be no problem if I contacted them directly and talked this over. In Japan."
I wanted to yell no, don't tell him anything.
But it was too late.
"An excellent idea." He nodded gravely, then turned to me. "Do you intend to be part of this expedition as well, Mr. Walton?"
What to do? The only moves left now were defensive. No way was I going to let Tam face the beast alone. Also, if Noda had me, he wouldn't need Amy.
"I assume you can spare me here for a few days."
"But we will all be in Japan together." He removed his thin, wireless spectacles. "That is in fact the very matter I needed to discuss with you. It is time you both were brought more closely into the matters at hand. Beginning today. I've already made reservations on New York Helicopter, departing for Kennedy in two hours. From the East Thirty-fourth Street heliport."
He had us. He'd seized the initiative, feinted us off balance, and defined the terms.
She tried to recover. "When and where we go is something we intend to—"
"Ah, Dr. Richardson, one must seize the moment. It is past time you and Mr. Walton understood more fully the many levels of concern involved here. There are a number of things you need to see." He smiled as he replaced his glasses. "Because of the expected frequency of my travels in the coming months, I have just leased a Concorde. We refuel in Bahrain. I've been looking forward to having you both as my guests."
"The answer is no."
"Mr. Walton, I urge you not to forgo this opportunity too rashly." He looked me over. "In fact, since you are known to be an authority on Japanese arms, I could even arrange for you to have a firsthand look at the Imperial sword."
"Forget it."
"But the timing couldn't be more ideal. At the moment the sword has just been transferred to one of the metallurgy labs at Tsukuba Science City for minor repair work. Since Tsukuba is to be our destination as well, I can just telex the Imperial Household and instruct them to arrange a viewing date." He smiled again. "For a connoisseur such as yourself, nothing would please me more."
There was something about the way he said it. I don't know. Maybe a strange glimmer flashed through his eyes. Looking back, I think that was the moment I first should have realized Matsuo Noda had decided he was God.
"You didn't hear me. We're not leaving now. At least not on your terms."
"Mr. Walton, I really must insist." He glanced over at Tam. "What I intend to show you should be of extreme interest to you both."
"I'll go when I'm ready." She turned and headed for the door.
"Dr. Richardson, I'm afraid we all have no alternative." He spoke quietly, his tone masking the harshness as he continued. "These offices have been sealed. As a temporary security measure. There appears to have been an unauthorized access to the NEC mainframe here. However, I've decided to postpone criminal charges for the moment." He smiled again. "Besides, the time has come for you both to know everything."
We were on our way. I looked out of the window on my side, down through the haze covering New York's East River just below us, and took Tam's hand. The NY chopper was a Sikorski S58T, twin engine, two pilots. Events were moving so fast it was hard even to think. No doubt about one thing, though: we'd been outmaneuvered, outplanned, outfought. The only good part was, he had me as hostage, not Amy. In a final face-off with Noda, whatever he had in mind, I still figured I could take care of myself, MITI and all. The battle had just begun.
When we walked out of Noda's office, there was no longer any mistaking the new security arrangements. Dai Nippon was on red alert.
"Well, Matthew, looks like we're about to get the big picture, like it or not."
"On Noda's terms. Which wasn't the way it was supposed to happen."
"I just need to confront Ken."
For whatever good it may do, I found myself thinking. We were knee-deep in confrontations and we still didn't know a damned thing. What did Noda have planned for us? Whatever it was, I had a strong feeling I didn't want it.
Back in my own office at Dai Nippon, there was only time for one phone call. The first name that came to mind was Joanna. I wanted to say, Look, if I don't make it through this, you and Amy are well provided for. She's got a trust fund that's seven figures, and you can have the house, the bank account, the whole damn works. Just don't ever let a man named Matsuo Noda anywhere near you or her.
But I couldn't force myself to dial the number. It wasn't Joanna who was in over her head now; it was me. The subtle or
not-so-subtle difference was enough to stop me cold. I'd vowed to manage life on my own, and this was no moment to waffle.
So, instead I did the next best thing and called The West Side Free School—which, I might add, may have been free in its disdain for classical curriculum, but it had very non-free tuition practices. I identified myself, announced an emergency, and asked to speak to Ms. Amy Walton. In about a minute she was there.
"Dad, we're in the middle of our Monday Geo-2 exam." She lowered her voice. "What's the capital of Somalia?"
"Honey, haven't a clue. Just try and do the best you can. Employ that exceptional brain of yours."
"Thanks."
"Adults don't have to know the capitals of Third World countries. That's a small perk we get for putting up with old age." I paused. "Amy, about this weekend."
"Uh, oh." She sighed. "Betcha I know what's next."
"Well, a problem's come up. I've got to take care of a few things."
"Dad, the snow leopards. This weekend is when they're supposed to—"
"Honey, we'll hit the Bronx Zoo the minute I get back. I absolutely promise."
"You going off somewhere?"
"Just a quick trip."
"Where?" She perked up.
"We'll talk about it when I get back." I wanted to say "if I get back."
"Big secret, huh?"
"Amy, I just wanted to . . . darling, be careful."
"What's the matter? Dad, are you in some kind of trouble?"
How could I answer? Damned right I was, but that wasn't the point of the call.
"Sweetie, just . . . just be especially careful. That's all. I'll try my best to make it up to you at Christmas. Maybe we can still get down to the islands somehow. And Amy . . ."
"Yeah."
"I love you, honey."
"Love you too, Dad. Look, I gotta get back."
"I'm sure Ms. Winters will give you some extra time."
"Don't bet on it. She's an old grouch. She's twenty-eight and an old maid."
Twenty-eight. Old? Good God. I keep forgetting what it's like to be thirteen and think of the future as the next three weeks, followed by a gaping void.
"Sweetheart, that's not exactly ancient. Believe me. She's probably still got half a dozen good years left."
"Tell her. Look, I've gotta run."
"All right. Just advise your mother something unexpected came up. Maybe you and I can make it next weekend. We'll do the snow leopards, that's an absolute guarantee."