The news of Stern's alleged death sent the Lazard legions to the Internet for any news about what had happened in his locked penthouse apartment above a police station at 17 Rue Adrien-Lachenal, in Geneva's fashionable Rive quarter. "He was found at his Geneva home on Tuesday afternoon," a spokesman for the Geneva police said on Wednesday, March 2, the first scrap of official word. "The death was the result of a crime."
Michel heard the news about Edouard from his wife. He was traveling in Africa with Margo Walker. They had just spoken when Helene called Michel back ten minutes later to say that Beatrice had just heard the news of Edouard's death. "I called my daughter Beatrice," he said. "I didn't know he had been killed. I knew he had died. I told her what happened. At first, I thought he had committed suicide. Then she told me, 'I believe he received considerable help.'" Le Figaro reported that same day that Edouard had been assassinated. "He was rich, he got on people's nerves," the paper said. "His enemies could not find words strong enough to condemn his all-consuming ambition." Added Taki Theodoracopulos, the socialite columnist, "He was not only ruthless and a terrible bully, he was as close to being a monster as anyone can be and still be free to walk around in polite society."
After attending the press conference where the Geneva police confirmed that Edouard had been murdered--shot four times, in fact--and that an investigation had started, the Tribune de Geneve spoke with "Tina" (not her real name), Edouard's Portuguese maid, who told the paper how events unfolded. Tina had just returned to Geneva from Portugal, where she had been visiting her ill father for a few months, with Edouard's blessing. He had not wanted to hire someone else while she was away. She worked at Edouard's apartment each day in the afternoon but had not seen him in a week. "He was a discreet man," she said. "I cleaned his linen, his apartment, I knew what kind of yogurt he liked but I didn't know anything about his private life. He never spoke to me about it." At around one-fifteen on Tuesday afternoon, she received a call from one of Stern's associates at IRR. "We have been looking for Mr. Stern everywhere," the man said. "Do you have the key to his apartment?"
A few minutes later, she arrived at 17 Rue Adrien-Lachenal and went to the fifth-floor apartment, where she met Sandy Koifman, Stern's former partner, and his two assistants. Koifman remained quite friendly with Stern, and his new office was but one floor away from Stern's. Koifman had been searching for Edouard since he had missed two morning appointments, one with a former Goldman Sachs partner and one with William Browder, the founder of the Hermitage Fund, one of the largest and most successful equity funds dedicated to investing in Russia. Despite Edouard's having missed these appointments, Koifman still was not particularly worried. He had seen Edouard's new Bentley in the parking garage that morning. Koifman went off to lunch at Hashimoto, the sushi restaurant the two of them frequented. When Edouard still had not shown up after lunch, Koifman headed to Stern's apartment. He also called the local hospital and ascertained that nobody with Stern's name or his description had shown up there. "I was thinking, maybe he slipped and fell in the bathroom," he said. "I had a friend who died of a heart attack at forty-five."
Tina put the key in the lock, and when the alarm did not sound, she told herself, "Good, Mr. Stern is home." Once inside the apartment, a weird feeling overtook her. "An intuition," she said. "I felt strange," especially when she saw a pair of his tennis sneakers in front of the bedroom door. Koifman and his assistants brushed past her into the bedroom. "They had a curious expression on their faces," she remembered. She walked toward the door to look in, but they told her to stop. "It is better that you not see what is in there," they told her. "Go call the police." In great anguish, Tina went down to the apartment building's street floor and into the police station there. By two-thirty, there were swarms of police in the apartment, including detectives investigating the crime scene. The police interviewed her. "But I had not seen the body or traces of blood," she said. "The less I knew about this matter, the better."
What Koifman found in Edouard's bedroom sent a shock wave not only through Lazard but also through much of the financial world. "I went to the door, pushed it with a finger," he told the Vanity Fair reporter Bryan Burrough.
It opened. The bedroom is plain, a big bed--king-size, Americans would call it--nothing else. Very Zen. You see nothing laying about. Everything's in built-in closets. Just behind the door was a body on the floor, with a huge pool of blood behind the head. I have to admit, at first glance, I thought it was a piece of modern art. The French would call it Surrealist art. I thought it was something to step over, just a piece of art. I've seen weirder things in people's apartments. It took a moment--a minute, 30 seconds, five seconds, I don't know--for it to sink in that I was looking at a dead body in Edouard's apartment. It was covered head to toe in this, this flesh-colored suit--I later learned it was latex. There were no holes in the face. I don't know how someone could even breathe. You know when you walk past Macy's and they haven't dressed the mannequins yet? That was what it looked like. He was lying on his side. I couldn't see the face, the head. If I'd seen that same body in a Manhattan subway station, it would never have occurred to me it was Edouard Stern. You couldn't see anything.
According to Burrough's account of the murder, there was a thin white rope draped over the body and more ropes on a chair nearby. "It was really a nasty scene," Koifman continued. "You know that movie Seven? That kind of scene. It was just, you know, I don't mean to be dramatic, but it was...It was evil." Koifman spent the following six hours being interrogated by the police, and according to Burrough, he assumed that Stern had somehow died after hitting his head during rough sex.
He had no idea, though, that his friend and former partner had been heavily invested in the bizarre world of sadomasochism. It was not until two days after he found Stern's body, when the Swiss police held their press conference, that Koifman even realized Edouard had been shot.
Among former and current Lazard partners on both sides of the Atlantic, three theories quickly emerged about what had occurred. There was the Russian-eastern European Mafia theory, whereby Edouard was assassinated for trying to recover some of the money from soured investments he had made in that region. This theory was both complicated and enhanced by reports of his friendship with Alexander Lebed, a Russian army general who died in a helicopter accident in Siberia in 2002, and by Edouard's four-year affair with Julia Lemigova, a stunning former Miss Soviet Union. They had talked of marriage. In 1999, they also may have had a child together--Maximilien--who died suddenly six months later under the questionable care of an unnamed Bulgarian nanny. Had the nanny been hired to eliminate the evidence of their affair?
And of course, there was the S&M-gone-off-the-rails theory. Finally, there was concern that a series of lawsuits Stern had filed against Rhodia, a French chemical company in which he had invested--and nearly lost--$89 million, had upset many people, including the French finance minister, Thierry Breton a Bercy, who had been a director of Rhodia and a target of the suit. Koifman also discovered that a phone had been tapped in the New York office of IRR. Using the code name Operation Serrano, the DGSE, France's external intelligence agency, had Stern under regular telephone surveillance. "He was aware of men watching his apartment," a source close to Stern told the Mail on Sunday. "He said that powerful figures at Rhodia were trying to discredit him by investigating his private life." He told a friend the week before he died, "You will see, people will say that I am a homosexual but I don't care what people say."
Indeed, Edouard was sufficiently concerned about his own safety that he arranged in 2003 to obtain a permit to carry a gun for protection. Individuals are not permitted to carry a weapon in Switzerland, so Stern arranged for a permit in his native France, with the document being signed by Nicolas Sarkozy, a leading contender to succeed Jacques Chirac as the French president in 2007.
But it was the mafioso-hit theory that gained currency rather quickly since, through IRR, Edouard had numerous connections to eastern Europe and had lost quite
a bit of money there.
But Burrough, who started reporting the story for Vanity Fair after the murder occurred but before it was solved, suspected that the conspiracy theorists would be disappointed when the truth was known. His intuition proved accurate, if no less stunning, when police viewed the videotapes on the surveillance cameras that were all around the apartment building and discovered that a Frenchwoman, thirty-six-year-old Cecile Brossard, was the only person seen entering or leaving Stern's apartment the night of the murder. The tall, blond, and striking Brossard was said to be Edouard's long-term girlfriend, as well as a minor artist. "And she's some kind of artist, all right," Burrough wrote. "In addition to sculptures she creates in her spare time, her principal employment appears to have been as a very expensive call girl specializing in sadomasochistic sex." In 1996, she had married Xavier Gillet, an herbal-medicine therapist twenty years her senior, in Las Vegas. They lived an hour outside Geneva, but she apparently made frequent trips to the city as "Alice," a "leather-clad dominatrix," and appeared, for hire, at local hotels. It was supposedly in this kind of setting that Brossard and Stern met sometime around 2001. Her favorite movie was said to be A Clockwork Orange.
Oddly, until his murder on the night of February 28, very few people--even his closest friends, including Koifman--knew that Edouard and Beatrice had been officially divorced in 1998. The immediate family kept their divorce very quiet, even from Michel. When asked, Michel said only, "Edouard and Beatrice no longer sleep in the same bed," even though they had been divorced for years. They stayed in close touch, though, and Edouard was said to be an extraordinarily giving father to their three children. "He gave them both affection and energy," Michel said. "He was close to them. And for the children it was obviously a great blow. A great blow. And for my daughter, already separated, as you know, it is a blow, too, because he's been the person she has loved all of her life. She couldn't live with him, but she always loved him." Added Annik Percival, Michel's assistant: "It is very sad for the ex-wife and the three children."
Over time, by many accounts, Edouard's relationship with Brossard transcended its original--and ongoing--professional aspect. He seemed to be quite taken with her, and vice versa. He encouraged her artistic career and hired her to decorate his Zen palace in Geneva. He also reportedly took her on vacations to India and Africa. There is an extraordinary picture Brossard took of Edouard when they were on vacation together big-game hunting in Siberia. Edouard is holding a shotgun behind a freshly killed, massive brown bear. Blood from the bear's mouth appears on the snow. They once rented a game preserve--said to be the size of Belgium--near Lake Victoria in Tanzania. They would fly off for the weekend in his private jet to Venice, Florence, Bruges, and New York. Edouard pushed her to leave her husband and live with him. But she declined out of a fear that Edouard would lose interest in her, only to leave her forlorn and alone.
Much to Edouard's chagrin, they began to grow apart. She disappeared for a time in the fall of 2004 after they had vacationed together in Africa that summer. Edouard discovered she was in Las Vegas. He surprised her at the airport in Geneva when she returned. "Edouard was very upset at the time," a friend told Vanity Fair. "She didn't want to give up her life. She thought she would be left with nothing." He thought he had hit upon a solution in early January 2005, when he opened a bank account for Brossard at a Credit Suisse branch and put $1 million in it. He believed she could now leave her husband for him. Later reports, though, suggested Edouard had given her this money so she could buy a number of Chagall paintings for him, although how she would have access to such work is a mystery. They had also discussed getting married. In any event, once again, Brossard did not respond as Edouard had hoped. She stopped returning his calls and seemed to disappear once again.
On February 24, four days before his death, he confessed to his longtime lawyer Kristen van Riel, who had bailed him out of similar situations with other women, that he was in a bit of a fix. He told van Riel for the first time about Brossard and the $1 million bank account. The lawyer placed several calls to Brossard but, like Stern, had no luck. Then they decided to freeze her access to the account. "I'm never going to see her again," Stern told van Riel, who, on the contrary, predicted the scheme would get her attention and that she would call. "And--surprise, surprise--she did," said a Stern adviser. "She called Edouard on Friday," three days before his death. She was not pleased to have been "cut off," but in any event Edouard convinced her to fly that day to Geneva from Paris. They met three times over the next three days, including one final time on the evening of February 28. They were to meet at eight that night. Brossard arrived fifteen minutes early and let herself in with her key. "Only two people know what happened in that bedroom," Koifman told Vanity Fair, "and one is dead." It didn't take a great leap of faith, though, to believe that Edouard expected the Monday night visit to include some unconventional sex. Said Koifman: "I don't think you negotiate financial transactions wearing a latex suit."
Paris Match, the borderline racy French magazine, seemed to know exactly what happened that night in Edouard's apartment. "He presses a button concealed in the living room furniture, and two hidden drawers slide open," the magazine reported. "One contains sex toys for lovemaking sessions. The other holds four loaded firearms. Cecile Brossard continues to ask questions, but Stern doesn't answer her; he is elsewhere. He slips into the latex suit that she gave him, and begins to lead her on. She plays along. His hands are bound, and he's sitting on a 'pleasure accessory.' At this point, she reportedly heard him tell her, 'A million dollars is expensive for a whore.' At this, she grabs a gun and shoots four bullets in a row, two in the head, one in the chest, and one in the stomach. Stern falls to the ground." L'Express, another French magazine, confirmed in its own account that Edouard's final words were indeed "A million dollars is expensive for a whore." L'Express claimed Brossard then picked up a nine-millimeter pistol and fired one shot at Edouard's head from a distance of ten to fifteen centimeters, killing him instantly. She fired three more shots for good measure.
MICHEL BELIEVED THE simplest explanation for Edouard's murder was the most likely one. "Some people are always Machiavellian," he said, "and always believe things are more complicated than they appear. And I have the opposite tendency. I have the tendency that the explanation which is the stupidest is generally the right one and not the smartest. He had obviously just promised her money and then taken it back. What to me is unbelievable is then getting physically tied up, in front of somebody he had just done that to. It's a proof of either confidence or a wish to take risks, which is strictly unbelievable. But this is what occurred, and I believe it was in his nature to take this sort of risk. And so, it's not completely surprising that a person like him finishes in a tragedy like that. It's not totally surprising." He said he had not known of Edouard's unusual sexual interests, "but as my father used to say, 'In sexual matters, nothing is astonishing.'"
On March 15, the police showed up at Brossard's apartment, searched it, and took her away for questioning. She cracked. The records of her telephone conversations proved that what she originally told the police did not make sense. She told them everything. She took them to the shores of Lake Leman, where she had tossed the murder weapon and the two other guns she had taken from Edouard's apartment. A police diver found them all plus a key to his apartment she had also tossed. The police took from her the letter Edouard had written to her proposing marriage, but only after she had asked for--and received--a copy of it. At first Brossard was incarcerated in Champ-Dollon prison in Geneva. Suffering from severe depression, she was later admitted to a psychiatric hospital. "She is a desperate woman who cries a lot and has killed the man she loved," one of her lawyers said.
WHILE SHOCKING, AND an understandable diversion, Stern's murder had no discernible effect on Bruce's long march to the Lazard IPO. Edouard had been gone from the firm since 1997, and his needling lawsuits were immaterial at best. While the $300 million that Eurazeo invested in Stern's IRR
seemed, over the years, like a poor investment--the original EU264 million investment had been written down to EU190 million at the end of December 2004--somehow even this was salvaged when, in October 2005, Eurazeo sold its IRR stake for EU307.7 million back to IRR itself, for an improbable profit of EU44 million after seven years. The combination of the cash sales of the IRR and Lazard stakes in 2005 completed Eurazeo's nearly decade-long transformation from Michel's personal investment vehicle into a full-fledged publicly traded private-equity firm, now one of Europe's largest. Eurazeo's stock price responded accordingly and now trades around its all-time high of EU104 per share, up more than 100 percent since Bruce and Michel reached their truce. The rise in the Eurazeo share price, of course, greatly benefited its largest shareholders, including Michel and his sister; the proprietary traders at UBS, led by Jon Wood, who had been successfully fighting Michel for nearly ten years; and Credit Agricole, which is close to making a profit on its investment after doing Michel a favor in 1999 and buying out the stake in Eurazeo held by the raider Vincent Bollore.
The last tycoons: the secret history of Lazard Frères & Co Page 89