Chapter 433: Chapter 202: First Round of Confrontation
Washington D.C., the northeast side of Constitution Avenue.
The doors to the hearing room in the Senate Office Building were shut tight.
The hallway outside was packed with people. Reporters had set up their cameras, a forest of long lenses and microphones.
Lobbyists from various lobbying groups, dressed in expensive suits, gathered in small groups in the corners, exchanging the latest intelligence in hushed tones.
"The kid from Pittsburgh just went in."
"I hear the Republican Party is planning to eat him alive this time."
"Two billion US dollars, and he wants to mess with financial regulations. The nerve."
Whispers filled the air.
Inside.
The oppressive atmosphere was so thick it felt solid.
The lighting here was specially designed—ghastly white, harsh, and leaving no corner in shadow.
Leo Wallace sat at the witness table.
He wore a dark blue suit.
It was an off-the-rack suit from an old tailor shop in Pittsburgh. Though impeccably pressed, the fabric still looked a bit cheap under the high-definition lenses of the cameras.
Before him was a bare wooden table, holding only a microphone and a glass of water.
Across from him, the massive, horseshoe-shaped conference table loomed high above.
It was a deliberate architectural choice.
The Senators’ seats were elevated by a full two feet.
They sat in padded, high-backed leather chairs, looking down on the witness below.
This visual disparity established the power dynamic from the very beginning.
The red lights of dozens of cameras lit up simultaneously. C-SPAN was broadcasting the hearing live across the nation.
’So this is Washington’s brand of hospitality.’
Roosevelt’s voice echoed in Leo’s mind.
’Look at this layout, Leo. The Roman Senate was designed much the same way. They use height to create intimidation and light to create anxiety.’
Leo folded his hands on the tabletop. His fingers were cold.
’I see it, Mr. President,’ Leo responded in his mind. ’They’re trying to scare me to death.’
’Then let them see just how tough the people of Pittsburgh are.’
BANG. BANG. BANG.
The sound of a wooden gavel striking cut through all the noise.
Presiding over the hearing was Isaac Larson, Chairman of the Senate Appropriations Committee.
Immediately after, a figure from the Republican Party side stood up.
Brian Cole.
The sixty-five-year-old Republican Senator from Wyoming had eyes like a hawk and heavy bags under them.
Cole didn’t look at Leo.
He kept his head down, deliberately and slowly flipping through the thick document in front of him.
The only sound in the entire hearing room was the rustling of his pages.
This was psychological warfare. He was making Leo wait, using the silence to build pressure.
A full three minutes passed.
Only then did Cole take off his glasses, rub the bridge of his nose, and look up.
"Mayor Wallace."
Cole said slowly.
"I’ve reviewed your resume."
"Master’s degree in History from the University of Pittsburgh, incomplete."
"Community organizer."
"Elected Mayor of Pittsburgh only a year ago."
Cole steepled his fingers, pressing them against his chin.
"Is that all?"
"No experience working for any Fortune 500 company. No experience managing a team of over a hundred people. Before becoming Mayor, you barely even had a formal tax record."
"And now."
Cole pointed to the two-hundred-page bill in front of Leo, the "National Strategic Supply Chain Resilience and Regional Industrial Upgrade Act."
"You’re sitting in this room, which represents the highest legislative authority of the United States of America."
"You’re asking the Federal Government, asking the taxpayers of the entire United States, to pay a staggering two billion US dollars for your fantastical industrial utopia."
Cole let out a contemptuous laugh.
"Two billion US dollars."
"Mr. Wallace, with all due respect."
"With your qualifications, if you were in the private sector, you wouldn’t even be qualified to manage a decent convenience store."
"What makes you think you’re capable of managing this enormous sum? What makes you think we should hand the nation’s wallet over to an intern?"
Snickers and laughter erupted.
The Senators on the Republican Party side laughed without any attempt to hide it.
The reporters in the gallery were also whispering among themselves.
They were waiting, waiting for the young mayor to lose control, to get angry, to start ranting and protesting like any other inexperienced community activist.
Leo sat there, his expression blank.
He tapped his fingers lightly under the table, regulating his breathing.
He wasn’t angry. He didn’t even feel offended.
He just felt it was a little... tedious.
’Is this the level of Washington’s highest legislative body?’
’Opening with ad hominem attacks on par with a high school debate team?’
Leo reached out, took hold of the microphone, and adjusted its position slightly.
"Senator."
Leo began to speak, his voice steady and clear.
"You’re right."
"I have indeed never managed a convenience store."
"And it’s also true that I don’t have a glittering Ivy League degree or a leather chair in a Wall Street boardroom like many of you here."
Leo looked up, meeting Cole’s eyes directly.
"However, for the past year, I have been managing a city of three hundred thousand people."
"When I took office, the city’s police were on strike, its roads were collapsing, and its workers were unemployed."
"And now, I’ve gotten several neighboring industrial cities on the verge of bankruptcy back to work. Our unemployment rate has dropped by four percent, our communities have heating, and our children have schools."
Leo paused for a moment.
"A convenience store might only care about profit, about whether it can sell a bottle of coke for five more cents."
"But I have to care about survival."
"I have to care about the livelihoods of those three hundred thousand people, about whether they can make it through the winter."
"If you believe that kind of experience doesn’t measure up to managing a convenience store..."
Leo spread his hands.
"...then I suppose we have a different definition of the word ’management.’"
Leo’s rebuttal was unflustered, but it carried a hidden sting.
The smile vanished from Cole’s face.
He looked at the young man below him, his gaze turning cold and grim.
’The kid’s got a silver tongue.’
"Very good. Excellent rhetoric."
Cole nodded.
"Since you brought up survival, and your so-called achievements."
"Then let’s talk about just how you achieved these miracles."
Cole pulled a blue report from the stack of documents.
"According to our investigation, you established a system in Pittsburgh called the Pennsylvania Industry Alliance Trust."
"Within this system, you issue a type of electronic note, also called the Pennsylvania Industry Alliance Trust, used for commodity trading and wage settlement between the cities in your so-called Industrial Revival Alliance."
"Mr. Wallace, please explain to the committee."
"Does this system operate outside of the Federal Reserve system?"
"Does it have a banking license from the United States Currency Bureau?"
"Is it supervised by the Federal Deposit Insurance Corporation?"
Leo’s heart sank.
’They really came prepared.’
"It’s a regional credit mutual aid system, Senator," Leo answered cautiously. "It’s not a bank. It’s just an accounting tool based on the supply chain..."
"An accounting tool?"
Cole cut him off, his voice suddenly rising.
"Don’t play word games with me!"
"If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck!"
"Your system accepts public deposits, issues loans, and conducts cross-regional settlements."
"That’s a bank!"
Cole slammed the folder shut, making a loud BANG.
"According to the Dodd-Frank Wall Street Reform and Consumer Protection Act."
"Any financial institution engaged in bank-like activities must be subject to systemic risk supervision."
"And you, Mr. Wallace."
"You have established a shadow bank with no oversight, no reserves, and no legal basis whatsoever!"
"You are using this illegal financial instrument to attract deposits with high interest rates, creating a massive subprime debt bubble in the Rust Belt!"
Cole leaned forward, his presence overwhelming.
"Tell me."
"Are you using the money of these poor people to run a Ponzi scheme?"
"When this bubble bursts, when those notes become worthless paper, who’s going to foot the bill?"
"The Federal Government?"
Cole was attacking the very foundation of the bill’s implementation, the thing described in the legislation as a "distributed supply chain tracking and settlement system."
If Leo admitted the system was a financial institution, he would be breaking the law because he didn’t have a license.
If he denied it, he would be accused of illegal fundraising.
No matter how he answered, if he was branded with a violation of the Dodd-Frank Act, his bill would be canceled immediately.
The FBI’s economic crimes division might even show up at Pittsburgh City Hall tomorrow.
The room erupted in an uproar.
The reporters scribbled excitedly.
Shadow banking, subprime crisis, Ponzi scheme.
These terms were too sensitive. This was the stuff of major headlines.
Leo sat there, looking at Cole.
’Mr. President.’
Leo called out in his mind.
’We’re in big trouble.’
Roosevelt’s voice rang out.
’Leo, listen.’
’You need to understand, this isn’t a Federal Court. This is a Congressional hearing.’
’What you need here isn’t a legal victory, but a public relations victory.’
’You need to think outside the box. Redefine what a bank is.’
’You need to tell him why your system is safer, and more ethical, than those legitimate banks on Wall Street.’
’Attack the banks themselves. Attack their original sin.’
Leo took a deep breath.
He picked up the glass of water on the table and took a sip.
That one-second pause made everyone in the room think he was stumped.
Cole flashed a triumphant smile.
"What’s the matter? Can’t answer the question, Mr. Mayor?"
Leo set the glass down.
"No, Senator."
Leo looked at Cole.
"I was just thinking about how you mentioned the subprime mortgage crisis."
Leo’s voice was calm.
"If I recall correctly, the subprime crisis that destroyed countless American families was caused by the very same legitimate banks at the top of Wall Street, the ones with all the proper licenses and subjected to full regulation."
"They packaged garbage as gold and passed the risk on to the taxpayers."
"And you, Senator Cole, didn’t you vote in favor of the bailout plan for them back then?"
Cole’s smile froze.
"We are discussing your system right now!" Cole snapped.
"My system?"
Leo stood up.
"In my system, every single note is backed by a ton of real steel, a truckload of real cement, a worker’s real hours of labor."
"We don’t do leverage, we don’t do derivatives, we don’t do speculative betting on thin air."
"We put money into the real economy, into the production lines."
"You ask me if this is a shadow bank?"
Leo’s gaze sharpened.
"If a system that allows workers to get paid, factories to operate, and cities to function is a ’shadow’..."
"...then what does that make the legitimate banks that only care about dividends, layoffs, and offshoring industries?"
"Does that make them Vampires?"
"You accuse me using the Dodd-Frank Act."
"Fine."
"I’m right here."
"You can send the Auditing Bureau to investigate. Send the Federal Reserve to investigate."
"See if you can find a single dollar in my books that has flowed into some imaginary bubble."
"See for yourselves who is creating the risk, and who is shouldering the responsibility."
"We aren’t creating a crisis, Senator."
"We are in the ruins, cleaning up the mess you left behind."
"You’re avoiding the question!" Cole banged on the table. "The law is the law! You must answer whether your system is subject to regulation!"
"The law is also meant to serve the people, Senator."
Leo replied coolly, giving Cole no further opportunity to press the point.
This was political theater in Washington.
You ask what you want, and I’ll say what I want.
No one expected a real answer. It was all just a performance.
Cole looked at Leo’s fearless face and knew he couldn’t gain any more ground on this issue.
He waved his hand resentfully, signaling an aide to hand him the next set of attack materials.
The first round of the confrontation was over.
It had been perilous, but Leo had held his ground.
He knew this was only the beginning.
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