Washington, D.C.
In a luxurious mansion near Rock Creek Park in the northern suburbs of the city, Richard Mellon Scaife was informed by his assistant that his guest had arrived. Scaife immediately went out to greet him. The guest, Martin Mendels, was a slightly overweight middle-aged white man in his fifties, wearing rimless glasses.
Most importantly, Martin Mendels was one of the seven members of the Federal Reserve's Board of Governors, its highest decision-making body.
After a warm exchange of pleasantries, the two entered the villa's sitting room and took their seats. Scaife personally poured coffee for Mendels, which had already been prepared. With a warm smile, he asked, "Martin, how are Melissa and the kids doing recently?"
Mendels nodded slightly as he took the coffee. "They're doing well. And you?"
"Not bad," Scaife replied casually, sipping his own coffee before diving into the real topic. "Martin, let's be honest. We've known each other for so many years, haven't we?"
Mendels glanced at Scaife with a slight smile. "Of course, Richard…"
"Charlie. Call me Charlie."
"Alright, Charlie," Mendels said with a nod. However, he quickly put down his coffee cup and cut straight to the point: "To be honest, Charlie, I regret to inform you that I can't help you this time."
Richard Mellon Scaife's expression remained steady, even after Mendels' direct statement. "Don't be so absolute, Martin. You saw how the Nasdaq closed yesterday, didn't you? 6,317 points. A total market value of $7.6 trillion. This is pure madness. For the sake of the federal economy, Martin, the Fed must take action to curb the bubble before it expands further. Don't you agree?"
"Charlie, I'm just an ordinary Board of Governors member. Above me, there's the Vice Chair and the Chair. And beyond that, the White House and Congress. Do you think we can make decisions on our own?" Mendels replied, his gaze fixed sharply on Scaife. "If even the White House is out of your reach, you should be lobbying Congress instead of coming to me."
"I know you don't have final authority," Scaife acknowledged, pausing before continuing. "But Martin, I hope you can help me in another way—just this once. And if you agree, I can offer you a significant reward."
Mendels hesitated for a moment before cautiously asking, "What exactly do you mean?"
"Agree to an interview and make a public statement about the Fed's intent to raise interest rates."
As soon as Scaife finished speaking, Mendels shook his head firmly. "I'm sorry, Charlie. I can't help you with this. You know as well as I do—I'm only five years away from retirement, and I have a wife and three children to consider."
"$1 million," Scaife offered without missing a beat. "And after your retirement, I can secure a position for you as a trustee of the Andrew W. Mellon Foundation."
"It's not just about the money. Let's pretend we never had this conversation," Mendels said, standing up abruptly. "Also, Charlie, I can guess you've been heavily shorting tech stocks lately. My only advice, as someone who's known you for years, is this: close out your positions."
With that, Martin Mendels turned and walked briskly to the door, as if fleeing from the devil himself.
Left with no choice, Richard Mellon Scaife followed him to the door. Watching Mendels leave in a rush, Scaife suddenly kicked the door in frustration. Moments later, the sound of furniture being thrown and smashed echoed from the sitting room. The assistants and servants who had just appeared quickly retreated at the sound of Scaife's enraged shouts.
Close out the positions?
If he could, he certainly would have done so long ago. But now, it was too late to turn back.
Since the U.S. presidential election in early November, Richard Mellon Scaife had raised nearly $300 million through loans and asset pledges, pouring it all into shorting tech stocks.
His inspiration came from a certain young man.
Years ago, Simon Westeros had built his empire during the 1987 stock market crash by taking a massive gamble. Scaife, after carefully analyzing the state of the tech industry, concluded that he could make a similarly bold move.
Initially, Scaife's team believed that tech stocks would reverse their upward trend before the end of the year or, at the latest, by mid-January. Their reasoning was simple: many tech companies would be releasing their quarterly and annual financial reports during this period, and combined with Scaife's efforts to rally his political and financial network, he was confident that the tech bubble would burst.
But reality had defied expectations.
It was now January 25th, and not only had tech stocks failed to crash, but they continued to soar. Particularly after Egret Corporation's 1996 annual financial report press conference on Wednesday, the tech giant's stock surged over the next two trading days, pushing the Nasdaq to yet another record high.
As of Friday's close, the Nasdaq index stood at 6,317 points, up 16% from 5,426 on November 6, election day. Egret's valuation had skyrocketed from $579.6 billion to $751.9 billion during the same period—a staggering 29% increase in just three months.
The media and public were increasingly convinced that Egret would become the world's first trillion-dollar company.
For Scaife, his $300 million was tied up in Nasdaq futures and short positions against leading tech stocks like Egret. Initially, he had been conservative, avoiding excessive leverage. But as his paper losses mounted, he began doubling down to recoup his losses.
The result was catastrophic.
As of Friday's close, Scaife's losses had exceeded 50%. His $300 million had dwindled to less than $150 million.
On Forbes' 400 Richest Americans list last year, Scaife was one of six Mellon family members to make the cut, with a net worth of $700 million. Most of his wealth came from inherited stakes in companies like Mellon Financial Corporation, Alcoa, and Chevron. The $300 million he raised was secured against these assets.
If the $300 million were completely wiped out, it wouldn't just decimate Scaife's personal wealth. It would also drastically reduce his shareholdings, jeopardizing the implicit power these holdings represented.
The Mellon family's influence over its cornerstone companies—and by extension, its sway in U.S. political and economic circles—relied heavily on this intricate web of interlocking ownership.
If this gamble failed, Scaife's branch of the Mellon family would face a severe blow to its foundation.
If he could undo his decisions, Richard Mellon Scaife swore he would never have acted so impulsively. But there was no turning back now.
After smashing nearly every piece of furniture in the sitting room, Scaife finally calmed down enough to make a call to Julian Robertson, the head of Tiger Fund.
In recent years, Scaife had spent millions digging up dirt on Clinton, effectively burning his bridges with the White House. As for Congress, while the Westeros system had been notably restrained last year, Simon's lavish spending during the 1994 midterm elections had left many wary. Combined with the growing economic influence of Westeros-backed companies, few dared to openly oppose him.
His last-ditch effort—to influence the Federal Reserve—had also failed.
With no more cards to play in Washington, Scaife could only pin his hopes on Julian Robertson. After all, while Scaife had risked $300 million, Tiger Fund had billions at stake in its short positions. Scaife didn't know the extent of Tiger Fund's losses, but they were likely just as severe, if not worse.
One way or another, it was time for a final gamble.
Meanwhile, Simon had spent the weekend on the East Coast.
When Scaife's meeting with the Federal Reserve Board member occurred on Saturday afternoon, Simon was informed the same evening. To prevent the Fed official from doing anything rash, Simon passed the information to the White House.
Knowing that Clinton—still entangled in scandals Scaife had spent years digging up—would ensure the official was "properly counseled," Simon felt no need to intervene further.
Though he anticipated the shorts would make their move soon, Simon's schedule remained unaffected.
On Saturday night, as planned, he had dinner with Natasha Richardson, whom he had met during the Sundance Film Festival. The evening unfolded predictably from there.
The next day, Sunday, January 26, was another cold winter morning in New York. From the breakfast table, Simon could see Central Park blanketed in snow.
Natasha Richardson woke up late and joined Simon at the table just as he was halfway through his meal. After ordering her breakfast, she gave him a pointed look and, with her distinct British accent, said, "Simon, I've come to the conclusion that you're utterly wicked."
Though her words were accusatory, Natasha's cheeks turned red as she spoke.
The previous night, after some initial nerves, Simon had suggested they relax by watching a film. She agreed, only to find that Simon had chosen Blow-Up, the 1966 classic by Italian director Michelangelo Antonioni.
The problem? The film's lead actress was none other than Natasha's mother, Vanessa Redgrave.
Despite her indignation, Simon's calm smile remained. "Natasha, don't you think it's a brilliant film?"
"Of course," she admitted reflexively, then
added, "But you're still wicked."
"Well," Simon replied with feigned innocence, "I thought you were quite excited last night."
Natasha, just about to take a bite of bread, tore off a piece and tossed it at him.
Catching it easily, Simon popped it into his mouth and teased, "Alright, only wicked people see wickedness. All I see is beauty. Didn't you notice? The fashion of the '60s is still timeless. I've already instructed Lady A to suggest this film to Melisandre's team for inspiration. The clean lines and solid colors are stunning, and you should try them too. They'd suit you perfectly."
Natasha narrowed her eyes at him. "Are you saying I'd look good in a shift dress?"
"Yes, because you're very… straight."
Another piece of bread flew across the table.
Later that morning, Simon didn't immediately dismiss Natasha after their one-night stand. Instead, he invited her to join him for a meeting with none other than Martin Scorsese, the topic of discussion being Gangs of New York.
The original Gangs of New York, produced by Miramax, starred Leonardo DiCaprio and Daniel Day-Lewis. With a $100 million budget, it grossed only $190 million worldwide, falling short of expectations. Alongside the underperformance of another big-budget Miramax project, Cold Mountain, it deepened the rift between the Weinstein brothers and Disney, ultimately leading to their split.
Simon had no intention of repeating Miramax's mistakes. For any art film, Simon's internal rule capped the budget at $50 million unless there were extraordinary circumstances.
Gangs of New York was one such exception.
The story originated from a 1928 book of the same name that Scorsese had long admired. He'd dreamed of making the film since the 1970s, but the project stalled after the box office failure of Once Upon a Time in America in the 1980s.
Now, decades later, Scorsese still hadn't let go of the idea. Simon, with access to suitable funding and memories of the film's modest original performance, decided to greenlight the project.
There was another critical factor: Leonardo DiCaprio.
Fresh off filming Titanic, DiCaprio was recovering from James Cameron's grueling shoot. With the "big ship" poised to make cinematic history, Gangs of New York could serve as DiCaprio's first post-Titanic project, ensuring a heightened profile and box office appeal.
However, Simon wouldn't be giving Scorsese $100 million. The budget was capped at $65 million. As a historical drama with no reliance on special effects, this amount was more than sufficient. DiCaprio, still affordable before Titanic's release, and Daniel Day-Lewis, also not exorbitantly priced, made the budget realistic.
Production wouldn't begin this year, though. Day-Lewis was committed to Shakespeare in Love, and the project would have to wait until 1998. By then, Titanic's success would ensure massive attention for Gangs of New York, effectively saving $50 million in promotional costs. With Scorsese's pedigree and the film's decades-long buildup, Simon saw little risk.
Finally, since Natasha Richardson had accompanied him, Simon decided to cast her as the lead actress.
With her aristocratic British background and talent, Richardson was perfectly suited for the role. At 32, her age was just right. What she had lacked until now was opportunity.
As for Cameron Diaz, who had played the role in the original version, Simon had never been impressed by her. Since her breakout in The Mask, Simon had avoided casting her, leaving her career to languish in obscurity instead of reaching the heights it had in the original timeline.
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