The St. Kitts Connection

By Alan E. Tonks

Terry Downes, a young commercial banker aspiring to achieve a top management position in the banking industry, runs into problems when reporting to a maverick banker at an aggressive Florida bank after moving from one of the most conservative financial institutions in the country.
After getting fired, he meets a couple of Canadian real-estate developers in his hometown of Wellington, Florida, who ask him to run their South Florida enterprises and acquire a commercial bank on their behalf to facilitate their real-estate businesses. After taking the job, and surprised that the Canadian's own an offshore bank in St. Kitts, Downes finds himself in the middle of a major drug trafficking ring. Before he can walk away, federal agencies raid his offices, close down the operations, after arresting and charging the Canadians.
Two years later, thinking that that all is behind him after testifying in front of a federal grand jury, which results in lengthy prison sentences for the defendants, Downes is dragged back into a situation involving both political upheaval in St. Kitts and a conspiracy to affect the outcome of general election India and the ultimate assassination of Rajiv Gandhi, India's former prime minister.
This riveting story, based on veridical facts, tells of a major Florida bank failure, an international political conspiracy, and worldwide drug and weapons dealing - all orchestrated by a huge ruthless Russian organized-crime syndicate and disclosed by Downes and a newspaper reporter.

• Language: English
• Publisher: AuthorHouse
• Release date: Sep 30, 2011
• ISBN: 9781463416010

Alan E. Tonks

Alan E. Tonks spent most of his career in the banking business, holding various top management positions in Maryland, Delaware and Florida financial institutions. His personal experiences inspired him to write The St. Kitts Connection, a novel based largely on true situations. He currently resides in Wellington, Florida where he operates his own business.

Book preview

PART 1

Chapter 1

Rajiv Ratna Gandhi, the president of the Indian Congress Party, when campaigning for India’s presidency in the upcoming general election, arrived at Meenambakkam Airport in Madras at 8:30 p.m. on May 21, 1991. He was on his way to an election rally, despite threats from Sikh extremists, Muslim fundamentalists, and the Liberation Tigers of Tamil Eelam. He was used to the threats. There had been a number of them over the past few years, including three assassination attempts.

At the airport, he addressed the media hordes, and by nine p.m., he was in a bulletproof car headed for Sriperumbudur, forty-eight kilometers southwest of Madras. His fifteen-vehicle motorcade included mostly Congress leaders, journalists, and police. Gandhi stopped to address the crowds wherever they gathered along the way, including a stop at the Indira Gandhi statue, where he placed a garland for his deceased mother. She had been assassinated seven years before by two of her Sikh bodyguards as she left her estate to attend a British television interview.

Gandhi had been the seventh prime minister of India—from October 31, 1984, when his mother died, to December 2, 1989, when he resigned after a general election defeat.

Born in 1944, Rajiv was the eldest son of Indira and Feroze Gandhi. Rajiv was a pilot for Indian Airways and had always avoided politics. His brother, Sanjay Gandhi, was considered the heir apparent to their mother, but died in a plane crash in 1980. When Indira Gandhi was assassinated, Rajiv was nominated prime minister by the National Congress Party, and his fate was sealed.

Gandhi turned out to be a technocrat who sought to modernize India through investments in technology. However, he surrounded himself with buddies and cronies and did little to ease chronic poverty or the vast inequities within Indian society. Like his mother, he was not able to contain the political problems afflicting India and found refuge with international entanglements and commitments.

He committed the Indian Peace-Keeping Force (IPKF) to Sri Lanka to help that government stop the militants’ pushing for a separate Tamil homeland. The five years he was in office were marred by scandals and allegations of corruption on such a huge scale that he lost the 1989 election.

Gandhi arrived in Sriperumbudur for the election rally. He got out of his car and waved to a crowd of cheering supporters as police officials formed a shield around him. He walked through the throng toward a specially constructed stage. A young woman emerged from the crowd with a sandalwood garland and kneeled at his feet. A deafening blast blew dust, debris, and body parts everywhere. Along with twenty others, Gandhi was dead. Thirty-three people were wounded.

Dhanu, the nondescript twenty-five-year-old woman, was a suicide bomber. Her clothing had concealed a highly sophisticated and powerful device with a foolproof triggering mechanism. The RDX plastic explosive, with the help of small steel pellets, achieved maximum impact and left a bloody circle of carnage.

Ten days later, on May 31, 1991, the Central Intelligence Bureau concluded that the terrorist act had likely been the work of the Liberation Tigers of Tamil Eelam.

Chapter 2

Wellington, Palm Beach County, Florida, 1986

Wellington, with ten thousand acres of land and twenty thousand residents, had always been a quiet community of ranches and farms, but in 1986 it was rapidly transforming into an exclusive hideaway for the equestrian jet-set. Anchored in the center of town was the Palm Beach Polo and Country Club, winter home to some of the world’s wealthiest people.

Most of the land was owned by the Kalahari Corporation, an electronics components firm, based in San Jose, California. Kalahari’s polo-playing chairman, Bill Grabowski, developed the Polo Club and brought world championship matches to the community.

Wellington had been mostly swampland until A.W. Bink Glisson and Charles Oliver Wellington got together in the 1960s. By 1986, they had created one of the nicest bedroom communities in South Florida.

So nice, in fact, that Terry Downes, a bright young executive with one of the best known financial institutions in the country, threw caution to the wind and agreed to join a feisty, freewheeling bank in nearby West Palm Beach.

Downes started his banking career in 1964 as a teller at Marlyand Merchants Bank in Baltimore. Born and raised in England, he had chose to immigrate to the U.S. seeking new opportunities in the business world. He worked his way through night school and was promoted through the ranks to vice president. But by 1976 he was stuck, with no more room to grow. Despite the fact that he made good money and had a great title, it wasn’t good enough. Downes had no real decision-making authority and at the rate things were going, he’d be well into middle age before he worked his way into a meaningful leadership position—if ever.

Besides, he was tired of the long hours, the empty promises, and the internal politics at Maryland Merchants Bank, so it didn’t take much effort for a headhunter to lure him away to become senior vice president of First State Bank & Trust of Delaware. Downes had married and started a family. He wanted to settle into a position where he could grow. He was an ambitious young man and wanted to build his name at a reputable bank. He had also learned a great deal about bank regulations and the laws applicable to the industry by being active in the American Bankers Association, which represents the country’s thirteen-trillion-dollar banking industry, and the Bank Administration Institute, an educational arm, of which he was a state director.

Yes, Downes was a man on his way up. By joining as prestigious an organization as was the First State Bank & Trust of Delaware, he was finally going to get the chance to show his stuff and make his mark on the industry.

Chapter 3

Founded in 1900 by Clarence F. St. Claire, president of the St. Claire Chemical Company, First State Bank & Trust of Delaware was well known as the St. Claire family bank. The family had become one of the world’s wealthiest in the one hundred and ten years since St. Claire Chemical had been founded by two English brothers. The company was headquartered in Wilmington, Delaware, and had become the largest chemical company in the world.

First State Bank & Trust of Delaware was founded to take care of all the St. Claire financial affairs. Every year it was rated by the bank monitor, a credible bank evaluation process, as one of the safest banks in the Northeast. In fact, thanks to its ultraconservative approach, the bank enjoyed the reputation of being the crown jewel of regional banks.

However, since the bank existed mainly for the convenience of the St. Claire family, little or no attention had been paid to financial performance. The Trust Department was the most important department in the bank, since it was where the family fortune had been held and managed. It was also the least profitable of all products and services offered by the bank, because trust fees were usually waived or heavily discounted.

Further, the Trust Department employed a number of St. Claire family members who were either direct descendants of or married into the family. They made sure the family estates were properly managed. The result was a heavily bloated department that made a minimal contribution to the bank’s overall bottom line.

First State Bank & Trust of Delaware had more than fifty billion dollars in assets under management, making it one of the largest trust banks in the country. But those assets were concentrated in the St. Claire family’s hands. Further, fifteen out of the twenty-one board members were St. Claire family members. The bottom line was, the bank wasn’t geared toward growth or innovation; if at all, it was probably the most exclusive club in the country. What was good for the St. Claire family was good for the bank.

Not coincidentally, what was good for Delaware State was also good for the St. Claire family. With roots already firmly planted back in the 1790s, the St. Claires had infiltrated everywhere from local town councils to state office, the governorship, and the Senate.

Wilmington was a town of old money, where the elite practiced studied poverty. There were more millionaires than any other community in the country, but the unwritten rule required that wealth not be flaunted. Indeed, here the ladies went to the salon to have their hair undone.

The elite were concentrated in Greenville, on the outskirts of Wilmington. They lived in houses that had been built during the Revolutionary War. Building codes were so strict that no new home had been built within the last one hundred years. All the best institutions money could buy fortified the invisible walls of privilege against all potential intruders. Their young were birthed at the best hospitals in the nation and educated at the most prestigious boarding schools—all financed, of course, by tax-deductible donations from family foundations and trusts.

Gentlemen congregated at the Wilmington Club, founded in 1855 by the St. Claire family. The club had been sued many times for refusing entry to Jews and women, but since some of the country’s finest lawyers sat on its board of governors and all were politically connected, attempts to change the club’s charter were routinely dismissed.

Lunch at the club was where all the corporate and family secrets were discussed, along with the relevant political maneuverings of the day. Waiters in white aprons served huge martinis and mediocre food. The atmosphere was stuffy. The main dining room had a large common table that sat thirty and where only certain people were allowed. The walls were adorned with the august portraits of board members through the ages. Each table was immaculately set with white-linen tablecloths, antique china, ornate silverware and crystal glasses. Each member had his own table, and the maître d’ of sixty-two years knew exactly where each member sat and how he liked his cocktail.

At the time, Delaware was known for its General Corporation Law. It was a corporate haven where most publicly traded U.S. corporations and Fortune 500 companies were incorporated. The advantage was that companies were then subject to Delaware law rather than the inconsistent laws of various states, wherever they might be domiciled. It certainly didn’t hurt that Delaware had no corporate income taxes.

While Terry Downes had accepted the job knowing full well about the St. Claire influence on the bank, what he didn’t realize was the extent to which they influenced daily operations and earnings. He was coming on board as a senior vice president reporting directly to President and CEO Frank Wiseman. Although he had performed his due diligence by speaking with other bankers before accepting the job, it had never occurred to Downes that anybody would interfere with his efforts to increase the bank’s earnings—especially not the St. Claire family, given its enormous interest in the bank.

What Downes saw at the bank astounded him. He was appalled by the rampant freeloading and uncontrollable overhead in the Trust Department. He was stymied by the us versus them attitude of the management team. The old adage, Making money hides a million sins, couldn’t have been more fitting. The bank was earning money but nobody cared how much. The bank bumped along with a very stable stock price and plenty of room to grow.

Downes was keen on improving the bank’s bottom line and spotted his chance when he realized that it had invested money in junk bonds in the 1970s. At the time, the accounting firm had insisted that the bonds be marked to market; in other words, they had to show up on the books at current market value, an accounting policy that required certain assets to be stated on their balance sheet at market value. The problem was that the bonds had since become worthless, which meant the investment portfolio would show huge depreciation and the bank would suffer a major hit to its earnings. At an institution as staid and stable as First State Bank & Trust of Delaware, that was simply unthinkable.

The bank had owned and occupied its fifteen-story headquarters at 300 West Delaware Street in Wilmington since 1935. Downes came up with the idea that the bank could rid itself of the junk bonds and take the big loss, but at the same time sell the building and take a gain. That way, the transactions would offset each other, resulting in little or no impact on the bank’s earnings.

Downes managed to convince the president and the board members. They met with the top management of the St. Claire Chemical Company to talk about their buying the building and leasing it back to the bank, until another facility could be found. Downes wanted to shop the deal so he could get the best-possible price, but was told by a director that St. Claire would make the deal and the bank would accept whatever the chemical company offered.

The transaction was completed, resulting in several million dollars’ being left on the table since the deal had been based on the bank’s breaking even. The company would pay the difference between the loss on the books and the break-even, and not a penny more. Downes was furious, but that was the least of his problems.

As part of the deal, the bank had to find another building. There were no suitable buildings available in Wilmington, so it became the job of Senior Vice President Downes to find the right property and get a new bank headquarters built. He spent three months looking for a site and meeting with general contractors, architects, and designers. Downes prepared his presentation, recommending that the bank purchase property east of Market Street. He presented architects’ renderings and estimated costs to the board for approval.

The meeting barely lasted five minutes when H. Jordan St. Claire took the floor and announced, Mr. Downes, it will be a cold day in hell before this board approves a bank headquarters east of Market Street.

At first, Downes was stung. He had wasted the last three months of his time because he hadn’t realized that Market Street was the demarcation zone between us and them—the elite and the masses. The building had to be constructed west of Market Street, on property owned by the St. Claire Chemical Company. But the sting quickly gave way to fury when the board blithely appointed not only the engineering firm but also the architect and general contractor to be hired.

Downes couldn’t have felt more neutered. In the eyes of an outsider, this ambitious young executive would have been seen as a man of considerable heft and influence. But in reality, the St. Claires were the puppet masters. Downes had a huge problem on his hands.

He had made the move to Delaware to apply his management skills and be accountable for achieving results. Yes, the compensation package was superb, but it wasn’t good enough to simply do the bidding of a family with such a firm grip on the past. The bank clearly would be left out of the future.

Delaware lawmakers were in the process of passing the Financial Center Development Act, a law that would allow out-of-state bank holding companies to establish special-purpose non-banking subsidiaries within the state. The point of the legislation was to lift the ceiling on interest rates that banks could charge. This would encourage out-of-state banks to relocate from states that restricted interest rates under their usury laws.

Downes had realized that banks with credit-card subsidiaries would scramble to relocate to Wilmington. Now he also knew that he—and First State Bank & Trust of Delaware—would be left in the dust during this little gold rush. The St. Claires were too entrenched in the running of their one-hundred-ten-year-old, multibillion-dollar piggy bank to move forward with the technology or management practices needed to capitalize on the coming changes within the banking industry.

Downes had finally landed his dream job among the established elite of the banking world. He pulled down a six-figure salary and lived in an enormous house with an estate-sized property befitting a country gentleman. It should have been nirvana. However, he had seriously miscalculated the degree of insularity and the layers of calcification that often encrust such rarified circles.

Short of marrying a St. Claire, he would never be trusted with any serious decision-making authority. It was, and always would be, us versus them.

Chapter 4

Banking in the nineteen-eighties was a rapidly changing business. To remain competitive, banks had to continually address efficiencies in all areas. Ergo, banks could not afford to have the lowest-paying positions, as they historically had done. At the very least, they had to be competitive with public accounting and law firms to maintain a qualified workforce and remove any deadwood.

First State Bank & Trust of Delaware was dripping with deadwood, and Downes knew the situation wasn’t about to change. The bank may have been a public company, but in reality it was being used by a family of multimillionaires for its own causes. There were too many sacred cows for Downes to have any effectiveness in addressing issues of competence and efficiency. He often wondered how this large commercial bank could keep getting such high safety ratings for fiscal performance and be considered any kind of jewel, given all the money that was wasted.

Although he looked and sometimes acted like the quintessential Northeastern banker, Downes had a clear nonconformist streak. He was outspoken in his dislike for bank examination policies and procedures and had earned quite a reputation for an article he had written, published in the Harvard Business Review, about the ineffectiveness of the three-tiered bank supervision system in the U.S.

As a guest speaker at various bank functions, he often chastised the examination procedures of the Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the Federal Reserve Bank, the entities responsible for supervising federally chartered banks. His main complaint had to do with the often-useless bank examination reports being written by uninformed and narrow-sighted examiners.

Downes thought it would make more sense to have one regulatory agency that was more professional than the three he considered a total waste of time and money. He proposed an agency that would expand the scope of work to include operational reviews, internal controls, accounting systems, and quality of management. His opinions, although generally greeted with agreement among his peers, often got him into hot water with the regulatory agencies—and with the occasional bank.

So, when Downes got a call from a Miami-based headhunter searching for a high-energy and innovative individual to take over as vice chairman and chief operating officer for a large commercial bank in Florida, his interest was piqued. The board, he was told, wanted someone with the experience and track record to take over responsibility for bank operations and eventually become CEO.

Downes took a good hard look at his career and concluded that he didn’t want to stay in an environment where politics were rampant and job satisfaction a rarity, no matter how big or prestigious the bank. He’d much rather be a bigger fish in a smaller pond, where he could control his own destiny. He was done being the errand boy for others who, by virtue of their having more money or power or both, could demand decisions that were poorly considered or outright wrong.

If this Florida bank could offer an exciting opportunity, be financially sound, and receptive to meeting the challenges of the inevitable changes ahead, then Downes could well be their man.

He agreed to meet with Bud Gardner, president of the PLS Group, Miami.

Chapter 5

Bud Gardner and PLS were professionals, quite unusual in a field that was unregulated and attracted fast-talking résumé-peddlers out to make a quick buck. Gardner knew banking and knew exactly the type of person who would be a successful leader. Although he had already interviewed dozens of prospective candidates, Downes was the one he was most interested in because of his experience and philosophies. Once Gardner was sure that Downes was truly interested in the position, he revealed who his client was: SunFirst Bank of West Palm Beach, Florida.

Gardner presented Downes with a synopsis of the bank’s financial results for the previous five years, the previous two annual reports, and the latest 10Q form filed with the Securities and Exchange Commission.

In reviewing the critical financial performance ratios of commercial banks in South Florida, Downes learned that SunFirst had been in the top percentile for the previous three years. The latest annual report showed that SunFirst Bank earned in excess of two percent on average assets, whereas the average Southeast bank was earning 1.5 percent. SunFirst also produced a return on stockholders’ equity of over twenty percent compared to an average twelve percent among all other banks. It had assets of over one billion dollars and a capital ratio of seven percent. SunFirst employed five hundred people in twenty branches in Palm Beach, Broward, and Brevard Counties.

Bruce Stanier, the bank’s chairman, CEO, and majority shareholder, had taken the bank from ten million dollars in assets in the late sixties to over one billion dollars by 1981. His bank’s earnings performance was the envy of all the local banks. SunFirst was the largest independent bank in the Southeast.

Fifty-year-old Stanier was a charismatic banker, considered one of the most influential businessmen in Palm Beach County, if not in all of South Florida. He was immensely loyal to his close friends, many of whom were employees of the bank, with some holding high political offices in the state. He was, in the eyes of many, very shrewd in his dealings and, although he maintained that banking was his primary interest, he had actually made his fortune in real estate. The bank was merely the conduit to facilitate those deals.

Stanier had started his banking career as a commercial-loan trainee at Chemical Bank in New York. He’d heard of the opportunities in South Florida and decided to move to Lake Worth, where he got a job as a loan officer at the local SunFirst. Once on board, Stanier purchased some shares and became friendly with Jim North, the bank’s senior lender and one of the original founders of the bank.

From those simple beginnings, Stanier’s connections rapidly grew. North introduced him to local politicians and business people, and together they began to buy out the shares of the other original owners. After less than two years of finagling and manipulating the other shareholders, Stanier and North had controlling interest in the bank and appointed themselves chairman and CEO and vice chairman and COO, respectively. They soon changed the name from SunFirst Bank of Lake Worth to SunFirst Bank to enhance the perception that the bank catered to a much larger market than the town of Lake Worth.

Stanier was clearly the visionary and North the heavy lifter. Stanier didn’t pay much attention to the inner workings of the bank and North less so, but together they recruited knowledgeable people by offering them an opportunity to acquire shares in the bank through an employee-stock-ownership plan.

Along the way, the bank became more involved in real-estate lending until it was well known as the bank that would lend money to any real-estate project, regardless of the credit-worthiness of the borrower.

It was the early nineteen-eighties. Real estate was booming in South Florida and SunFirst grew accordingly. When capital was needed to facilitate the bank’s growth, Stanier raised money through public offerings and structured the deals in such a manner that his own ownership would not be materially diluted.

Stanier aggressively grew SunFirst’s branch network and core deposits at a time when banks were restricted from establishing branches outside the counties where they had been chartered. To get around this inconvenient state law, Stanier simply partnered with businessmen outside of Palm Beach County, convinced them to invest in a de-novo commercial bank, and form a new charter. Stanier would name himself chairman; SunFirst would handle the marketing, advertising, and all other operations.

The start-up would be called SunFirst of the respective county, as agreed to by the shareholders, and after waiting the statutory two years from the charter approval, would be merged into SunFirst Bank.

The original shareholders were given shares in SunFirst Bank in exchange for the shares in the de-novo bank, then becoming advisory board members. By the end of 1982, Stanier had branches in Dade, Broward, Brevard, Martin, and St. Lucie Counties, with established core deposits in each region.

He had also become business partner with some pretty undesirable people.

The members of Stanier’s board of directors were major borrowers of the bank, and he had an equity interest in each of their projects. They were all indebted to Stanier for making them millions of dollars, since no other bank would have granted them the credit.

Stanier ran his board like a separate company by building profit participations and equity kickers into each of their loans. The bank made money on the interest and fees, but Stanier had a personal stake in each of their projects, clearly in violation of bank regulations.

Terry Downes wasn’t aware of any of this as he reviewed the brief bios available for SunFirst board members. He tried to glean a sense of the experience level of the bank’s management team from the most recent annual report and from his contacts at other banks in South Florida.

He did have enough information to conclude that SunFirst was heavily invested in the booming real-estate and construction sector, had probably grown too fast, and therefore lacked the necessary support systems, internal accounting, and administrative controls to adequately support its growth.

Downes couldn’t wait to interview for the job to see if it was what he had hoped for.

Chapter 6

Banking in South Florida in the early eighties was especially cutthroat because of the growth in real-estate development projects and the state’s restrictions on branch banking. Retirement communities were popping up all over to meet the demand from Northerners migrating to the Sunshine State. Banks were scrambling for deposits so they could keep up with the loan demand.

Real-estate loans were considered safe investments because property values kept increasing. That was a far cry from the Northeast, where regulators frowned on banks’ having more than twenty percent of their loan portfolios tied up in real estate.

The Florida State Banking Department was busy processing applications to establish new banks and savings-and-loan associations. They were not necessarily good investments offering good returns, but they facilitated construction and development projects and provided a vehicle for consumer mortgage loan financing.

The start-up capital requirement for a de-novo commercial bank was three million dollars, or $1.5 million for a state or federally chartered savings-and-loan association. So anyone with a reasonably well-thought-out business plan, a relatively solid board of directors, and owners who would absorb the start-up costs would be approved.

Little attention was paid to the background or experience of the organizers, as long as there was at least one director with some knowledge of banking. This relaxed attitude by the state led to many unsavory characters’ getting involved in the banking business.

With the banking boom came competition. All kinds of gimmicks were offered for customer deposits, and banks began to offer brokerage, leasing, insurance, and other services.

The problem was that these financial institutions were vulnerable to money laundering. In some cases, they were formed for the sole purpose of laundering drug money. South Florida was a major transaction point for South American drug cartels, and they used the banks to handle large transactions.

Although the Bank Secrecy Act required banks to report cash deposits of over ten thousand dollars, it didn’t stop the flow of money from illegal activities through many small banks.

On Thursday, July 19, 1981, Terry Downes arrived in West Palm Beach feeling a little apprehensive. Although he had made career moves before, this was by far the most important, for it would involve moving his family to a totally unfamiliar place. Despite the problems at First State Bank, he had been treated very well there, so he felt a little twinge of guilt. But he was convinced that SunFirst was the opportunity he had been looking for, and there couldn’t be a better place to live than West Palm Beach.

A young man met him at Palm Beach International Airport, driving a late-model Mercedes convertible with the top down. It was probably meant to impress, but South Florida is steamy in the summer, even if gale-force winds are blowing. So Downes was soggy and a little bit miserable by the time they arrived at their destination, thirty minutes down the road.

The North Lake branch of SunFirst Bank was a two-story, stand-alone building on a busy road a couple of blocks from the Intracoastal Waterway. At the entrance, a huge American flag limped along in the humid air atop a twenty-foot flagpole. Underneath there was another flag with the logo SunFirst Bank—the People’s Bank. Inside the entrance to the left there was a secretary and private waiting area, behind which was the chairman’s suite.

A huge lobby that included ten teller stations encompassed most of the first floor. The plush, dark green carpeting, dark wood, and brass fixtures created a very elegant décor. The lobby was filled with antiques and fine art. Crystal chandeliers hung from the ceiling. A silver coffee urn and cookies were set out for customers who could relax on two antique sofas. An attractive young woman welcomed customers as they entered the bank. Remington statues nestled amid tropical foliage and fresh-cut flowers. This looked like a bank that catered to high-end customers.

The young man who had chauffeured Downes to the bank was Jonathan Tyler, the new-accounts representative. Downes followed him to the private waiting area, where they met Sheryl Mitchell, Stanier’s secretary. Mr. Stanier and Mr. North are expecting you, she said, as she dialed an extension to announce their arrival.

Without any wait, Stanier burst through his office door, hand extended. Welcome, Terry! Come in and have a seat.

Downes walked into a spacious office filled with exquisite antiques and artwork. What really caught his attention, though, was the biggest vase of fresh-cut flowers he had ever seen. How odd, he thought. It wasn’t something he had expected to see in a bank executive’s office.

Terry, I’d like you to meet Jim North, our former vice chairman.

North remained seated on a sofa across the room from Stanier’s desk as Downes shook his hand and took a seat across from him. Sheryl Mitchell promptly appeared with coffee and cookies.

Jim North wore white pants, a red polka-dot shirt, red sports coat, white shoes, and no socks. He was very tanned, in his early fifties, with white hair and a white handlebar mustache, and did not appear to be one’s typical bank executive, nor did he seem the least bit interested in meeting or speaking with Downes.

Stanier, by contrast, was nearly manic. He was one of those types that had to blurt everything out in one nonstop sentence, making it difficult to figure out what the question—or the point—might be.

When Downes did get to talk, he focused on the possible regulatory changes that would allow banks to branch outside their states. He emphasized the technological changes he thought would have an even bigger impact on banks and their ability to remain competitive.

North gruffly cut him off, If it ain’t real estate related, we ain’t interested, no matter what changes are in store for banks.

Stanier backed him up, sort of: Jim is right. We make all our money on real-estate deals. But we must be up-to-date in our back office, he said. He had a little snicker, which Downes found immediately irritating.

North was leaving his post as vice chairman to pursue personal investments. He was, however, going to stay on as a consultant to the bank. Unimpressed by what he’d heard so far, Downes decided to find out more about North’s departure. So Jim, could you tell me why you’re stepping down?

For personal reasons, he replied, as he lit a huge cigar.

North talked about his relationship with Stanier, how they had gotten involved in the bank in the sixties, and his desire to get more involved in real-estate deals. He felt good about the bank and he thought he’d done a good job getting the operations to where they are today.

It’s time for somebody else to take over, but don’t worry: I’ll still be around, North assured Downes. I still have a bunch of shares in SunFirst.

When Downes asked about the overall management structure, Stanier drew an organizational chart on a notepad. After identifying the managers and supervisors, he checked off the names of those he thought were doing a good job and placed an X through the names of those who needed to go.

When Downes asked about their performance evaluations, Stanier and North looked at each other. One of the areas where we need to make a change is in HR, North acknowledged.

What about budgeting and planning? asked Downes.

What about it? North snapped back.

We have no budget system, and neither do we do any formal planning, Stanier said.

Don’t need it, North interjected. But we do need to get rid of our CFO.

Stanier then spent some time talking about his branch network, how successful they had been in circumventing the regulations, and his desire to expand into counties where real-estate projects were taking off.

Neither asked about Downes’s background or experience, and the whole meeting lasted no more than thirty minutes. It ended when Stanier looked at his watch and abruptly stood up, saying that he had an important meeting scheduled. He told Downes how much of a pleasure it had been to meet him.

North was to take Downes to the Lake Worth branch, where his old office was. He’ll introduce you to some of our people, and we’ll discuss making you an offer to join us and let you know, Stanier said, as he shepherded them out the door.

North looked a little putout but Downes was a bit too stunned to really notice. He was caught off-guard by the brevity of the meeting, the lack of curiosity about his credentials, and by Stanier’s abrupt brush-off.

Downes wanted to go to the airport rather than to the Lake Worth branch. However, since there were no earlier flights out other than the one he’d already booked, he thought he might as well check it out. Along the way, North pointed out projects that SunFirst had financed, who the developers were, and how much money had been or was being made on each project.

Chapter 7

The Lake Worth branch was the original SunFirst Bank when it had been chartered in 1968. On the main floor, the branch had the same expensive décor as North Lake and roughly the same number of employees.

Downes was taken upstairs