The new managers were “pushing” Palladin to turn a bigger profit, Larbi Dahrouch later recalled. Salgo supported Palladin, but the new owners of the Watergate “only looked at the numbers.”
Palladin sat in his office adjacent to the kitchen every day, smoking cigarettes and writing up his menus. “He would have loved to have been profitable,” said his sous chef Jimmy Sneed, “but he didn’t know how.”
Jean-Louis was a “loss leader” for Salgo, who recognized the prestige that accrued to the Watergate for having arguably the best restaurant in the country. “Every chef was in awe of Jean-Louis Palladin,” Sneed recalled.
“With Salgo, everything was easy,” recalled Regine Palladin. “He let Jean-Louis do whatever.” But the new owners “wanted more and more.”
Despite the uncertainty surrounding his future, Palladin continued to astonish Washington diners. He served one meal with truffles in every dish—including the ice cream. At a spring luncheon for Washington’s elite chefs, Palladin served a feuillantine of raspberries layered with green basil sprigs. “The chefs were shocked,” wrote food journalist Joan Nathan. “Basil’s cousin, aromatic mint, would have been delicious. But basil with raspberries?”
After tasting crab soup in Maine, Jean-Louis decided to “do something in my way.” He used crab shells in the stock—“there should be the powerful taste of the fresh crab,” he said—and added lumps of crab at the last minute. His soup became a favorite dish of Mstislav Rostropovich, musical director of the National Symphony Orchestra.
Luscombe reviewed several proposals to manage the Watergate Hotel, including one from Cunard Line, which managed the Queen Elizabeth II ocean liner and owned the Ritz hotel in London. She selected Cunard, giving the firm a seven-year contract to manage the shops and restaurants throughout the Watergate, as well as the hotel, which it planned to turn into a five-star facility. It was Cunard’s first venture into the American market, but the company was pursuing contracts to manage luxury hotels in New York, Boston and Miami—all cities served by Cunard cruise ships.
Cunard turned to Sarah Tomerlin Lee, seventy-six, an imposing woman rarely seen in public without her pearls, whom the Washington Post called “the acknowledged empress of hotel interior designers,” to launch a two-year renovation of the hotel. Lee’s design amounted to a British conquest of the Watergate. “Presidential” suites became “royal” suites. A portrait of Queen Elizabeth II was installed in the “royal promenade” on the hotel’s garden level. (When an Argentinian delegation arrived, the hotel’s director of sales, Lynda Clugston Webster—who was married to Judge William Webster, former head of both the FBI and CIA—recalled, “the staff had to scramble to hide it somewhere.” Nerves were still raw, even years after the Falklands War.) The Watergate Terrace became the Brighton Restaurant. The Saddle Bar—named for Nicolas Salgo’s collection of antique saddles—became the Bath Royal Crescent Bar (where guests could order Pimms or Bass Ale and admire a giant birdcage). Banquets and meetings took place in the Trafalgar Conference Room.
In April 1986, the Watergate Hotel issued a twenty-page publicity kit, heralding its new managers, the Cunard Line, and providing details about the Watergate, from a history of its construction to a list of flowers in its gardens (daffodils, tulips, petunias, begonias and marigolds). The packet, wrote the New York Times, contained “almost everything anyone ever wanted to know about the Watergate. Almost.”
Nowhere in the package was any mention of the events that took place in the early-morning hours of June 17, 1972, when five men were arrested in the offices of the Democratic National Committee.
CLARE BOOTHE LUCE PACKED SEVERAL LIFETIMES OF ACCOMPLISHMENTS into her eighty-four years. She was a successful novelist, playwright, politician and diplomat. During the 1952 presidential campaign, Luce campaigned aggressively for the Eisenhower-Nixon ticket, and President Eisenhower later sent her to Rome as the U.S. ambassador, the first woman to serve as an envoy to a major country. Nixon appointed her to the President’s Foreign Intelligence Advisory Board, known by its acronym, PFIAB, the civilian board initially created by Eisenhower to provide candid advice to presidents on the quality of the nation’s intelligence-gathering activities. After she completed her term, she returned to her home in Hawaii, but kept her apartment on the eleventh floor of Watergate South, across the hall from Jimmy Carter’s attorney general Griffin Bell.
Reagan reappointed Luce to the President’s Foreign Intelligence Advisory Board in 1981. MRS. LUCE IS BACK, PEPPERY AS EVER, the New York Times reported. “I’ve been coming to Washington since the days of Harding; that’s almost 60 years,” she said. “I don’t remember ever getting here and not being told everything is a mess, that the President is not doing as well as he should and he’s got all the wrong advisers around him. That’s part of the Washington game.”
She was slowing down a bit, after nearly a half-century of globetrotting, but doubted she would remarry. (Her husband, Henry Luce, the former publisher of Time magazine, died in 1967.) She was in the market for “a good friend and companion” who could serve as a movie pal and an escort around town. “But most of the intelligent men who would interest me are married to other women,” she lamented.
Luce purchased and combined two adjoining apartments in Watergate South, 906 and 907, for $850,000. But the new apartment, she soon discovered, did not meet her needs. It lacked room for her library, photographs and other memorabilia. “And worse,” she wrote the president of the Watergate South co-op board, Thomas Bernard Green, “there is no quiet room in which to write and edit my memoirs.” She tried to purchase the adjoining apartment—905—but the owners were not interested in selling. Then apartment 903, across the hall, became available for rent. “This quiet apartment which has the advantage to a writer of having no distracting view would admirably suit the purposes of a personal library-study for me,” she wrote Green. At a special meeting of the executive committee of the Watergate South board of directors, her request to use Apartment 903 as an office was approved—for her use alone, and not for any “stenographic or clerical staff”—provided she not use any noisy electric typewriters or copy machines.
On the morning of Thursday, May 24, 1984, construction workers accidentally cut two of three cables serving power to Watergate South. That night, at seven-thirty, the president and Mrs. Reagan left the White House for dinner at Watergate South in Luce’s apartment, joining FBI director William H. Webster, secretary of the interior Bill Clark and syndicated columnist George Will. At around ten-fifteen, a fuse connected to the remaining power cable blew, plunging Watergate South into darkness. Building staff were able to turn on auxiliary electric power, but there was not enough power to restore elevator service or light the stairwells. Secret Service agents knocked on the doors of Mrs. Luce’s neighbors seeking spare candles. As the agents and Watergate employees held candles, the Reagans walked down nine flights of stairs, returned to their car and sped away to the White House.
FOR THE SECOND REAGAN INAUGURAL IN JANUARY 1985, THE Watergate Hotel prepared special gift baskets for its guests, including a marzipan elephant; a “President’s Lunch Bar,” made with rolled oats and bee pollen, said to be a Reagan favorite; and an assortment of fresh fruit.
That weekend, arctic winds brought nine-degree weather to Washington; Reagan’s swearing-in was moved indoors and his inaugural parade canceled entirely. A few weeks later, when the snow melted in a brief thaw, the words “I Love You” and a signature, “Kimberly,” appeared as a burned-in message on the lawn facing the Watergate Hotel. Sherry Arnstein, a longtime resident, speculated this “destructive” act of vandalism might have come from an out-of-town guest at the inaugural. “Graffiti is all over the world, and sooner or later it had to come to the Watergate,” lamented another resident. The culprit eventually confessed: a fourteen-year-old girl named Kimberly, who lived with her parents in Watergate South.
ON THE MORNING OF JULY 23, 1985, U.S. MARSHALS PLACED Edith Berman’s upright piano, lamps, suitc
ases, a mattress and other belongings on the sidewalk in front of the Watergate West lobby. “It’s a disgrace,” Berman said. “I’ve lived here 16 years and I have no trouble with people. They have no complaint against me.” She stood in the lobby, dressed in a red housecoat and slippers, leaning on a cane, and said she would camp out on the doorstep. “If they don’t like it they can lump it.”
Edith Berman was one of the original owners in Watergate West. She often walked home from her office at the Red Cross headquarters near the White House, even on warm summer evenings. Like many other single women living at the Watergate—and many women in Washington at the time—she was intelligent, somewhat underemployed and fiercely self-reliant.
Shortly after moving into her one-bedroom apartment in January 1969, she reported several issues with the appliances to Riverview Realty. Most problematic was the air-conditioning system, which created so much humidity she had to sleep on the living room couch, keeping her bedroom door closed. Her wool rug and pad, parquet floors and the wall in her bedroom were seriously damaged by the moisture. After two years of sleeping on the couch, Edith Berman had enough.
Acting as her own attorney, she filed a lawsuit claiming “breach of express and implied warranties” against Watergate West, Inc., the owners’ cooperative association; Riverview Realty Corporation, the sales agent for the building; and Watergate Improvements Associates, the developer. Her lawsuit charged these entities had delivered an apartment “containing numerous defective appliances.”
Four years later, she finally had her day in court. On the witness stand, Berman described her travails with the defective air conditioner. Another witness, a member of the co-op board, corroborated her testimony. The lawyer for the Watergate West cooperative said it could not be held legally responsible for the defects reported in January 1969, because the cooperative had not been formed until five months later, long after the defects had been discovered and reported. A lawyer for Riverview Realty said sales agreements showed they acted only as a “managing and sales agent” for Watergate West and any warranties made to Edith Berman would have come only from the developer of the project or the manufacturer of the equipment itself, not the real estate agents.
A jury was selected to hear Berman’s case, but the judge stepped in and ruled Riverview Realty acted only as an agent in the sale of Watergate West apartments, and was therefore not “contractually liable to the person who buys the apartment or any condition in the apartment.” The judge also ruled in favor of a motion by the Watergate West co-op board to dismiss Ms. Berman’s suit and ordered her to pay the board’s legal fees, as well as those of Riverview Realty. Edith Berman immediately filed an appeal.
On September 6, 1978, nearly nine years after Edith Berman first moved into her living room at Watergate West to avoid her defective air-conditioning system, the District of Columbia Court of Appeals, in a two-to-one ruling, held Riverview Realty financially responsible for the defects in Watergate West’s heating and cooling system. The majority opinion held that the sponsor of the Watergate project was accountable under product liability law for any units that proved defective. While there was no contract between Ms. Berman and either Watergate Improvement Associates or Watergate Construction Corporation, each of those entities was “an integral part of the overall producing and marketing enterprise” and therefore “each one of them can be held accountable to the ultimate consumer for the damage caused by the defective product.” For the next five years, Berman v. Watergate West was the nation’s leading case in the area of “implied warranties” to homebuyers. In 1983, the District of Columbia Court of Appeals extended the protections of Berman to condominiums.
For two years, starting in 1979, Edith Berman paid a $40 monthly assessment for her share of improvements to Watergate West’s central heating and air-conditioning systems—costs which were not covered by the $600,000 settlement reached with developers in 1977. But the repairs, she said, failed to resolve the problems in her unit. In 1981, she started to deduct $40 each month from her association dues. Within three years, she had held back a total of $1,441.44 and Watergate West successfully petitioned to have her evicted for nonpayment. Berman—acting as her own attorney—appealed the eviction order, but her appeal was dismissed when she failed to file any briefs.
A city truck arrived to take her belongings to a storage facility, but Berman wouldn’t allow them to load up. “That’s for people who have no money,” she said. She called a private moving firm. A neighbor invited Berman to spend the night in her apartment, but she declined. At least two people offered to pay Berman’s past-due co-op fees, including Florida senator Paula Hawkins, a Republican, who lived in the Watergate. “Based on her withholding payments since 1975,” said a Watergate West lawyer, “we would be leery of letting her back in.”
In early 1986, an attorney for Watergate West sold Berman’s apartment for $125,000, deducted the outstanding mortgage and $11,910 in attorney’s fees, and sent her a check for the balance.
RESTAURANT CORPORATION OF AMERICA, KNOWN BY ITS initials, RCA, ran food service at the Watergate Hotel, the Watergate Terrace Restaurant and the Peacock Lounge in the Les Champs arcade. The hotel kitchen staff was unionized, like that of every other major hotel in Washington at the time, with the exception of that at the Four Seasons in Georgetown. RCA, however, was a non-union employer and hoped to keep it that way, as evidenced by the notice they placed on employee bulletin boards at the Watergate:
SOLICITATION OF ANY KIND, INCLUDING SOLICITATION FOR CLUBS, ORGANIZATIONS, POLITICAL PARTIES, CHARITIES, ETC. IS NOT PERMITTED ON WORKING TIME OR IN CUSTOMER AREAS. DISTRIBUTION OF LITERATURE OF ANY KIND IS NOT PERMITTED ON WORKING TIME OR IN WORKING AREAS. OFF-SHIFT EMPLOYEES ARE NOT ALLOWED ON THE PREMISES.
Roxie Herbekian graduated from the University of California, Berkeley, and headed to Washington, hoping to work for a progressive cause, but the best she could land was an unpaid internship. To earn extra money and pay her rent, she answered a help-wanted ad in the Washington Post and took a job as a room-service operator at the Watergate Hotel. She started working the morning shift—six-thirty to ten-thirty—from a small desk in the corner of the kitchen. A couple of months later, she picked up a second shift as a waitress in the Peacock Lounge and worked there most days until 4:00 P.M.
A few months after she started working at the Watergate, a waiter invited her to an organizing meeting sponsored by the Hotel and Restaurant Employees Union, Local 25. At that meeting, Roxie and a handful of other employees were given lists of coworkers to contact, along with authorization cards for employees to sign. “It was really exciting,” Roxie recalled later. “I was great at getting people to sign up.” Sherwood Dameron, a young African-American waiter from Richmond, Virginia, attended the meeting too. He took a list of employees and a stack of authorization cards as well.
A week later, Gene Flick, general manager of the Watergate restaurants, asked Roxie to stop by his office. She remembered him as pale and puffy, a fifty-something version of the Pillsbury Doughboy. Flick asked her if she was aware of RCA’s no-solicitation rule. She said she knew nothing about it, and Flick informed her he was suspending her for three days, pending an investigation. When she returned to work the following Monday, she had been replaced. Flick confirmed she had been fired for violating the no-solicitation rule, but refused to put it in writing. He handed Roxie her severance check. Sherwood Dameron was fired later that day. Roxie took a job with the union, earning $100 a week to organize hotel and restaurant workers in the District. Sherwood also worked a short time for the union, then took a job with another hotel and eventually moved home to Richmond.
An administrative law judge ruled RCA had violated two sections of the National Labor Relations Act by “disparately enforcing” its no-solicitation rule against Herbekian and Dameron by allowing six separate instances of other “solicitations” by employees, including raising funds to buy a going-away cake for a Les Champs waiter, a birthday cake for a Les Champs bartender and
a sterling baby spoon for the pregnant wife of a Les Champs chef. On August 21, 1984, the full National Labor Relations Board ordered RCA to offer Herbekian and Dameron their old jobs back and remove from their employment files any records of their firing. The board also demanded RCA post a notice which read in part:
The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice.
WE WILL NOT coercively question you about your union support or activities and the union support or activities of your fellow employees . . .
WE WILL NOT suspend, discharge, or otherwise discriminate against any of you for engaging in protected concerted or union activity . . .
WE WILL offer Roxie Herbekian and Sherwood Dameron immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority . . . and WE WILL make them whole for any loss of earnings and other benefits resulting from their discharge, less any net interim earnings, with interest.
The Restaurant Corporation of America immediately filed suit to overturn the NLRB ruling and in 1986, a three-judge panel of the District of Columbia Court of Appeals, a federal court second in power only to the Supreme Court, issued a ruling in Restaurant Corporation of America v. National Labor Relations Board. By a vote of two to one, the NLRB decision was reversed and the firings of Roxie Herbekian and Sherwood Dameron were reinstated. According to the majority opinion, written by Judge Robert H. Bork and joined by Judge Antonin Scalia, the other examples of workplace solicitations—for baby spoons and going-away cakes—were simply “instances of intra-employee generosity.” While somewhat disruptive within the workplace, these events were “counter-balanced by an accompanying increase in employee morale and cohesion.”
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