Kirk said nothing. But he started to buy shares of Mirage Resorts stock.
On the eve of their August wedding, Kirk and Lisa met with a battery of lawyers in his Tracinda office on Rodeo Drive. The prenuptial and confidentiality agreements were signed and notarized. But the center of attention was a five-page stipulation of paternity in which, among other things, Kirk accepted under penalty of perjury that he was the biological father of Kira Rose Kerkorian. He also agreed to pay child support of $35,000 per month until the following February when it would increase to $50,000 and continue until seventeen-month-old Kira reached her eighteenth birthday.4
By embracing the paternity issues directly, Kirk was able to accomplish one strategic advantage—everything related to Kira, from child support payments to custody—would be handled confidentially rather than in public hearings or open records. Both Kirk’s and Kira’s privacy was protected.
They were married the next day, just around the corner from Kirk’s office, in the Beverly Wilshire Hotel. It was Friday the thirteenth. There was no rice, no reception, and the couple left in separate cars for their separate homes.
A week into September with the thirty-day deadline for their prearranged divorce approaching, Lisa still was making a case for reconciliation and delay. She told friends she was hoping that Kirk would extend the marriage. Instead, Kirk was losing his patience. But he was also distracted.
At Mirage Resorts, Wynn had just fired his chief financial officer, a Wall Street favorite, and the shock was expected to drive his stock values even lower. When the markets opened on September 8, there was the anticipated trading surge—but without a price plunge. That’s because Kirk was buying at about $12 a share. A couple of days later, Tracinda had about $120 million invested in Mirage Resorts, a stake that was still a bit under 5 percent.
Wynn assumed the worst. Takeover. He had visions of Kerkorian at the door to Chrysler or Columbia or MGM. At a fund-raising event being held at the MGM Grand, Wynn tracked down Kirk and confronted him in front of a small group.
“I have no interest in having you take over my company,” Wynn said.
Kirk was noncommittal and raved about how little he paid for ten million shares.
“Are you going to do something unfriendly here?” Wynn pressed him.
“Absolutely not,” Kirk said.
Wynn left the conversation taking at face value Kirk’s assurance that he was attracted by the stock’s low price, that he was not seeking control of Mirage Resorts. But news of Kirk’s purchase gave a boost to share value as Wynn’s stocks jumped three dollars to $15. Kirk’s stake had already increased to about $150 million. And he wasn’t inclined to go hostile on an old friend.
“Steve isn’t interested. I’m just going to sell my stock,” Kirk told MGM Grand CEO Terry Lanni. Over the next few days he quietly took his profits and backed away.
The new Lisa Bonder Kerkorian finally surrendered. Kirk was not going to extend their marriage, and many of his financial promises hinged on her keeping their bargain to divorce by mid-September. She filed dissolution papers at the last minute that included the line: “Unhappy differences have arisen . . . which make it impossible for (the couple) to live together as husband and wife.”
In a more descriptive complaint, she accused Kirk of treating her “like disposable trash.” She said in a letter to Kirk’s business manager Anthony Mandekic that the billionaire “alternated between being warm, kind, tender, shy and charming, to the other side of his character, which lent itself to tyrannical screaming and destructive tantrums.”5 Her lawyers would later maintain that Kirk’s conduct toward Lisa was “consistent with his reputation as a corporate raider and destroyer.”6
Immediately after filing for divorce, Lisa flew off to New York with Kira and Taylor to spend a week in a luxury suite at The Pierre hotel. Kirk provided his private jet for her round-trip flight.
If Kirk was expecting Lisa to be transformed, grateful, or even less depressed now that she had legal claim to his name, he was soon disappointed. As he would later attest in a state court filing, Lisa’s “animosity toward me increased dramatically” after the divorce. “She hated being my ‘ex-wife.’”
More troubling to Kirk were her threats. At times, he said, she threatened to harm him and Kira. Nonetheless, they continued to be seen together at social functions. Lisa was Kirk’s guest at a black-tie dinner for the Boxing Hall of Fame. They spent Thanksgiving together. They went to Las Vegas together to see Streisand’s millennium New Year’s Eve countdown concert at the MGM Grand.
And Kirk kept providing gifts and cash. He bought her a $250,000 sapphire ring for her thirty-fourth birthday. She bought herself eight paintings from Christie’s of New York for $1.2 million to hang in her Greenway Drive house. She went on a jewelry-buying spree—$1,075,000 for diamonds, $310,000 for a padparadscha sapphire, and $42,000 for a pair of heart-shaped Chopard watches.
At about the same time, Kirk launched a buying spree of his own.
In the weeks immediately after Kirk quietly took his profits and cashed in ten million Mirage Resort shares, Steve Wynn had been locked in a public relations tiff with investment analysts. He resented their myopic focus on quarterly results to the exclusion of long-term planning and prospects. He wasn’t making many friends. And he wasn’t helping his stock prices, either. Then came an unusual performance at a Deutsche Bank investors’ conference in New York.
Steve Wynn’s presentation to a room full of bankers and analysts provided no charts, no graphs, and little comfort about the direction of the company. What Wynn did provide was a Broadway-style musical. Setting up a sound system, he played portions of the soundtrack and talked up a new eighteen-hundred-seat theater he planned to build. Steve sang along. He lip-synched. He danced and swayed and made just about everyone in the room nervous.
The New York Post captured some of the reaction with its headline: “Warbling Wynn Shocks Wall St.”7 The assumption that nervous investors tend to be sellers was proven once again.
Alarmed investors started bailing out on Mirage Resorts. A rush to the exits became a stampede when word spread that Kirk was also getting out—even though he’d cashed in his 4.9 percent weeks earlier.
Mirage Resorts stock fell more than $1 to $12.50 a share. And it kept right on dropping. Shares were down to $10 and change by early in 2000, below the asset value of the company.
One evening in late February 2000, the hungry alligator lunged. Kirk dialed Steve Wynn at his Shadow Creek home just north of Las Vegas. He was out to dinner until ten. For Kirk, a notoriously early riser, bedtime usually came early, too. After an early dinner, he liked to retire sometime between 8:30 and 9:00 p.m. Late evening business calls were unusual, but that night Kirk was primed and ready for Wynn when his phone rang at ten.
“I’ve got a new idea,” Kirk said eagerly. “How about I buy Mirage, the whole thing?”
“Are you kidding?” Steve was stunned.
Kirk suggested $17 a share—a $6.35 premium over the stock’s current depressed state. Steve laughed. Okay, that was a little low, Kirk conceded. But Wynn didn’t have a lot of room to negotiate. Kirk’s people would send over a letter in the morning. That would start the clock ticking. The Mirage Resorts board of directors would have to be informed.
There was no avoiding this offer. It could be friendly, or it could be hostile. The two old friends agreed to sit down together for talks. Steve hung up feeling a bit old and weary. It had been a rough stretch leading up to this conversation. A giddy Kirk hung up feeling thirty years younger.
It wasn’t a done deal. Not yet. But the game was afoot. Kirk’s favorite moment was at hand, the roll of the dice, the chips shoved into the pot, the shares in play. It was time for deal making.
He was in heaven.
They sat down together in Wynn’s Bellagio office, just the two old friends. Steve ordered a cup of coconut sorbet for each of them and then they got down to negotiating. He knew to sit to Kirk’s right—to be near his
best ear.
“We can go as high as $19 dollars,” Kirk opened. Steve countered at $21 a share.
Kirk grimaced. Steve was stoic.
And Steve said he had two nonnegotiable terms. Kirk groped for a pen and pad to take notes. First, Wynn would refuse to sign any kind of noncompete agreement. He didn’t want to be forced to stay out of the business. Second, Mirage Resorts would make the public announcement. That would underscore that this was a deal by mutual agreement, not a hostile takeover.
Wynn started to rattle off details about the company’s financial status, its debts, revenues, and cash flow as Kirk scribbled notes as fast as he could. In between notes, he was spooning down coconut sorbet just as fast.
It took only a matter of minutes. The sorbet was gone. Kirk and Stevie reached out to shake hands, and a $4.4 billion deal was sealed.
Back at MGM Grand headquarters Kirk walked in still high on adrenaline, sugar, and the deal of a lifetime. He slapped tables and made victory noises. He was Rifle Right again—dancing around the ring, feeling the rush from winning a tough fight.
As specific terms of the deal unfolded, however, there was some cringing and muffled howls of regret when Kirk said there would be no noncompete clause for Wynn. Did he mean something less than the standard five-year wait? Wynn was a very dangerous competitor. Surely that was still negotiable. No, Kirk would not bar Steve from rebuilding and returning to the hotel and casino business. Not even for five minutes. They shook hands on it.
“The only reason Steve could get away with saying that was nonnegotiable is because Kirk allowed it,” said Kerkorian lawyer and confidant Terry Christensen. “And it caused a huge hang-up on the MGM Grand side. Our guys knew that Wynn would be a serious competitive threat. He was great. He built the Bellagio, for Pete’s sake! And Kirk let him off the hook from the get-go.”8
MGM Grand was in a position to impose whatever terms it wanted. Everyone listening to Kirk’s account of his meeting with Wynn knew it. Kirk liked to say he didn’t need to get all the meat off the bone in a deal. He left plenty in this case. But that was Kirk. It may come as a surprise to some corporate executives who desperately fought off Kerkorian takeover advances, but Kirk thought he was making friends, not enemies, in his deals.
“In my experience, Kirk always made sure the other guy got a fair deal,” said financier Mike Milken, a mutual friend of both Wynn and Kerkorian. And both men called Milken within hours of their $4.4 billion handshake, each man raving about what a great deal he had just made.9
Wynn walked away with $500 million and went on to become the major competitor that MGM Grand executives feared. For Kirk, it was the deal of his lifetime.
38
Fateful Attraction
January 2001
Knott’s Berry Farm, California
Lisa Bonder was on a mission. Questions about the paternity of her toddler were threatening to expose the mother’s deceptions. She was trying to put those doubts to rest and silence the rumors once and for all. Kirk was the father. And Lisa was going to prove it. Let the DNA wars begin.
On this occasion she had invited Kirk’s adult daughter Tracy Kerkorian, forty-two, and one of Tracy’s friends on an outing to a Southern California amusement park known for its boysenberry pies, an Old West ghost town, characters from the Peanuts comic strips, and roller-coaster thrill rides. She brought along two nannies and the almost-three-year-old Kira. It was a chance for the half sisters to bond.
It was also a very sneaky way to get a DNA sample from one of Kirk’s very few blood relatives. The only other close family relation would have been Kirk’s nearly ninety-one-year-old sister, Rose. She had never warmed to Lisa and regarded her as a money-grasping “bimbo.”
Told that the sample was for Taylor’s junior high science project, Tracy and Katherine Savala readily agreed to spit into jars.1 Lisa sealed them, tucked them away in her bag, and they all went on to Camp Snoopy and other park attractions.
The guileless little Kira Rose had been doing her part to keep paternity issues at bay. She was by unanimous family agreement “the sweetest little baby.” And as she got older and more mobile she delighted in chasing Kirk and squealing “Papa!” all around the putting green at his Wanda Park estate. The sand traps collected her toy shovels and buckets. Fuzzy yellow tennis balls were fun to kick around the tennis court. And she loved Kirk’s dogs.2
Kirk wanted Kira to be his little girl without caveats or reservation. But as they grew closer, Lisa managed their mutual affection as a financial asset, what Kerkorian lawyers called a strategy of deceit and manipulation that would foster more than a decade of hard feelings and recriminations.
Kira’s paternity wasn’t an issue to Kirk until a series of events convinced him he had a problem money would never solve.
Early in 2000, at about the same time that he closed his deal of a lifetime with Steve Wynn, his marriage of thirty days to Lisa ended officially with a final decree of divorce. It left him feeling especially free and magnanimous.
Lisa said it left her heartbroken. Kirk sent her, the two children, and a nanny to Palm Beach for a week. They stayed at The Breakers in a $2,600-a-night suite. He chartered a Gulfstream private jet for their round-trip.
It was the beginning of a fresh round of money and support requests, over and above the $50,000 monthly child support Kirk continued to pay. Lisa decided she wanted out of Beverly Hills and wanted to sell the mansion on Greenway Drive. Kirk had provided the funds to buy it and to pay for renovations that continued. Lisa hadn’t even moved in yet. Kirk agreed to buy it from her, and he advanced $3.15 million in cash immediately as a down payment.
She would need a place to stay in Southern California before relocating to New York. Kirk leased her a Malibu beach house for the summer at $100,000 a month. She would need more money to live in Manhattan. A suite at the Regency Hotel ran about $1,200 a night. Kirk raised his monthly child support payments—already the highest in California history at $50,000—to a temporary monthly sum of $75,000 until she found a permanent residence.
Kirk certainly never identified with the Michael Douglas “greed is good” Wall Street character Gordon Gekko, but he was starting to feel like the Michael Douglas character Dan Gallagher in Fatal Attraction. Lisa was starting to show up at awkward times.
One evening at the Polo Lounge a host had barely seated Kirk and his new love and tennis partner, Una Davis. He had his usual scotch on the rocks with a splash of water in his usual booth in the back corner of the bar. And as usual Kirk sat facing the wall. Una had a view of the entry.
She saw Lisa coming.3 The angry ex had a bewildered Kira by the hand and arrived yelling, “How could you!” She directed her rant at Una. “We have a daughter. He’s the love of my life.” Kirk sat silently shaking his head as the waitstaff escorted Lisa away.
And there were other incidents that prompted Kirk to accuse her of stalking him. Lisa blamed such conduct and her own “irrational statements” on “the stress, anguish and distress I have endured for years.” At the same time, she continued to insist that Kira was Kirk’s biological daughter.4
Lisa’s erratic and embarrassing public conduct emboldened friends and relatives to press Kirk to cut off all contact with her. They also spoke more openly about their suspicions. Hollywood agent Mort Viner, one of Kirk’s tennis buddies and a longtime friend, shared information from a good friend that Lisa once had a romantic fling with Steve Bing. That friend was Anne DuPont, Lisa’s double-date companion that night at the Hotel Bel-Air when Lisa skipped off for a quickie with the playboy.5
Kirk didn’t want to believe it. Besides, Kirk’s adopted daughter, Linda, had encountered Lisa once at an in vitro clinic, allowing Kirk to imagine that if Lisa were lying, at least the real father wouldn’t have a name. But rumors of a Bing connection spread among Kirk’s inner circle.
His friend, the retired Las Vegas sheriff Ralph Lamb had a suggestion: “Buy a garbage truck.”6
“What?”
“
Yeah, just drive by Bing’s house and pick up his trash. Get some DNA.”
Against this backdrop of rumors and growing impatience, Lisa finally overplayed her hand. If Kirk wanted her to give up her suite at the New York Regency and bring Kira back to Los Angeles, she demanded that he first set up a trust fund. Not for Kira, but for Lisa herself. She would be satisfied, she said, with $25 million.
That’s when the gravy train careened off its rails. That’s when the generous billionaire said “No!” And that’s when Kirk decided that he would find out once and for all whether little Kira really was his offspring . . . or not.
Steve Scholl, a former Las Vegas police detective working as chief of security for Kirk, took hair samples from Kira and Kirk and sent them off to a lab in Seattle. A couple of weeks later the lab results came back. Kirk’s orders were to call him immediately.
Kirk took the call aboard his new private plane, a Boeing 737 business jet. He was flying home after stops to inspect some of his newly acquired Mirage Resorts properties. No one seated around him had any idea who was calling or what the conversation was about. Kirk barely said a word. He listened in silence. He hung up. And he sat in silence. He went directly home after landing at the Van Nuys Airport, went to his room, and called a friend.
In La Jolla, about a hundred miles south, Una Davis was waiting to hear that Kirk was home from his travels. When the phone rang, she picked it up with a cheerful greeting. But Kirk could barely speak. It was Kirk, she was certain of that. But . . . he was sobbing.
Over the next hour, while crying along with the devastated Kirk, Una was able to piece together what happened. Kirk had been “scientifically excluded” as a possible father of Kira. No business deal, no personal disappointment, had ever seemed to hit him in the gut like this. He was simply undone.
Periodically, Una would appeal to his anger, trying to turn his grieving into outrage. “That goddamned Lisa Bonder!” she’d say over the phone. But Kirk didn’t bite. She realized he was too sad to be mad.7
The Gambler Page 30