Empty Mansions

by Bill Dedman

  Huguette filled in an amount on the second page of the solicitation, signed it, and sent it back. She had written in the entire amount the town was trying to raise, $1.85 million.

  Bock paid out the money slowly over the next three years, writing checks to the town’s sponsors, the Central Fund of Israel and the American Friends of New Communities in Israel. He said he had to fend off efforts by some in the town to use the money for other than its intended purpose.

  Bock went to Efrat in 2008, speaking at the dedication of the Efrat Emergency Command and Rescue Center. “So there I was,” he told the gathering, “an Orthodox Jew, seeking a contribution from a non-Jewish millionairess, for a project to provide a security system for this place called Efrat, which she had never heard of, in a country called Israel, which she read about in the papers but was not too familiar with. Fortunately, she knew that I had a daughter living in Israel, and every time there was a terrorist incident she would call me to make sure that my family had not been affected.”

  A plaque reads: “The security system for Efrat has been made possible by the generosity of Madame Huguette M. Clark. May the Almighty bless her with good health and long life.” Bock said that at first Huguette had insisted on anonymity, as she always did, but that she had relented as the dedication neared.

  Chris Sattler said Huguette expressed pride in the donation to Efrat. “She said she bought the fence to keep the bad people out.”

  • • •

  Huguette was just two miles from the World Trade Center on September 11, 2001, when Islamist terrorists killed nearly three thousand people in the United States. She had a personal connection to one who died: The son-in-law of her California attorney was killed on hijacked American Airlines Flight 77, which struck the Pentagon. Although she had never talked with her attorney, James H. “Jim” Hurley, Jr., in the thirty-five years he had handled her business in Santa Barbara, Huguette wrote a note of condolence.

  After September 11, as the news was filled with instances of deadly anthrax and other powdered substances being sent to prominent people, Huguette was insistent that she not receive anything else through the mail. From then on, she received no mail or packages directly from the few people who knew she was at the hospital. All mail had to be sent to 907 Fifth Avenue, where Chris Sattler would open it and deliver it, or be delivered by courier from Bock’s office. Bock said Huguette often seemed to draw her fears from the day’s news.

  Despite her fears, just two days after the September 11 attacks, ninety-five-year-old Huguette was thinking of others. She called her goddaughter, Wanda, in Massachusetts to assure her that she was fine in New York City. They discussed the horrible events, and Huguette remarked to Wanda how glad she was that her shades were drawn most of the time.

  CASHING OUT

  TO RAISE CASH for the accelerating gifts, Huguette had to sell some of her collections and property. In 2001, she sold her best Stradivarius violin, La Pucelle, which she had bought in 1955 and carefully maintained.

  In April 2003, she sold Renoir’s In the Roses, which had been the very first portrait by Renoir to enter a collection in the United States. The portrait shows a stockbroker’s wife with a plunging neckline seated on a bench in a rose garden. The Las Vegas casino magnate Steve Wynn bought the painting for $23.5 million. This Renoir, while in the hands of the Clarks, had not been seen by the public since 1937.

  IN CONVERSATION WITH HUGUETTE

  In November 2003, Huguette made an unintended call to my number. She apparently called me by mistake while trying to reach someone else. The call was placed station-to-station collect. She was briefly confused, but after she realized whom she had reached, we talked for about five minutes. I’m not surprised by the mistaken call. I’ve done that myself. But to this day I am perplexed: Why would one of the richest women in the world be placing a collect call to anyone?

  In 2005, Huguette put her Connecticut refuge, Le Beau Château, on the market. Documents show that Huguette was well aware of each of these sales, authorizing them and even directing how La Pucelle should be sold.

  The London violin expert and dealer Charles Beare had written to Huguette many times since the 1980s asking about La Pucelle. Finally in 2001 Wally Bock told him that Huguette had consented to sell it. At first Bock planned to let Sotheby’s auction off the violin. The estimate was $2 million to $3 million. Huguette insisted instead that Bock go through a dealer, because such instruments bring higher values in private sales.

  There was one hitch: Huguette refused to let La Pucelle leave the apartment to be seen by potential buyers. She didn’t say why, but that wouldn’t make it easy to sell the violin.

  Beare, however, had a regular customer, and the dealer knew just what to tell him. He called David Fulton, a software millionaire in the Seattle area. A former concertmaster, Fulton had merged his Fox Software database company into Microsoft and was now using his fortune to collect the world’s finest violins.

  Beare remembers telling Fulton, “I have in hand the very best Strad that will ever be available to you, almost certainly the finest Stradivari that’s not in a museum and certainly the best preserved. This is the last chance you’ll ever have to get a fiddle this great. Are you interested?”

  Fulton couldn’t travel then to New York, but he agreed to buy La Pucelle at the asking price, sight unseen.

  There was another hitch. Beare said the confidentiality agreement proposed by Bock was so onerous that not only would it forbid him to disclose whom he had bought the violin from, or even the seller’s gender, but it would prevent him from revealing that he owned the violin at all. He could not play it in the presence of anyone, ever.

  Fulton responded that either the violin was for sale or it wasn’t. A less restrictive arrangement was negotiated: Fulton agreed to a ten-year ban on revealing the previous owner.

  Beare went to 907 Fifth Avenue to pick up the violin for Fulton. He was allowed in the side service entrance and up the freight elevator to Huguette’s kitchen. And there, on a stainless steel counter, in a leather case, was La Pucelle, with its famous frontpiece of Joan of Arc. Chris Sattler also showed Beare the well-worn Strad that Huguette called her Traveler, explaining that she had kept La Pucelle untouched.

  La Pucelle is indeed an extraordinary instrument, said the acclaimed violinist James Ehnes, who played a sad, sweet tune with a French name, “Salut d’Amour,” for the instrument’s first recording, in 2007. “It really has an amazing purity of tone,” Ehnes said. “But purity with incredible breadth as well. I think that it’s like a beam of light that is very strong and very wide.… I’ve never seen another violin like it.”

  Huguette was disappointed in the selling price. She’d said the violin might be worth $10 million. La Pucelle had cost her $49,500 in 1955, equivalent to about $327,000 in the inflated dollars of 2001. But she was entirely right about keeping it out of the auctions. She received $6 million, at that point a record price for a Strad, multiplying her investment eighteen times.

  SHAKEDOWN

  HOW TANTALIZING this eccentric patient was for the leaders of a nonprofit hospital dependent on fund-raising. Here was a woman, well into her nineties, with something more than $300 million, and she was living in their hospital.

  The hospital’s doctors and managers could have treated the patient and sent her home, then follow up with a request for a donation. But they allowed her to stay in the hospital for twenty years, repeatedly coming back to her for larger and larger donations. They knew who was living in the darkened hospital room: the girl who could spin straw into gold.

  A month into her stay, Dr. Henry Singman alerted the brass at Doctors Hospital that his patient “was quite wealthy, the scion of a multimillionaire copper industrialist.” When the doctor told Huguette that it was costing him $20,000 to paint his house, a few days later she gave him a check for $20,000. When an air ambulance from Italy cost him $65,000 after he broke his hip, Huguette gave him that amount. Singman proposed to help the hospital develop
an “appropriate cultivation approach” to seek donations. When a woman from the development, or fund-raising, staff met with Huguette, Dr. Singman introduced her as a member of the “public relations” staff.

  Doctors Hospital soon became part of Beth Israel Medical Center, in 1991, becoming known colloquially as Beth Israel North. The hospital president, Dr. Robert Newman, took the lead in internal discussions about how to persuade Huguette to give the hospital some of the wealth she so obviously was not using. In a memo to the fund-raising staff, he stated bluntly, “Madame, as you know, is the biggest bucks contributing potential we have ever had.” A specialist in treating addiction and well known for establishing methadone clinics, Dr. Newman started visiting Huguette three months after she checked in.

  The hospital worked on Huguette from the classic donor-development playbook.

  Step one: research.

  At the New York Public Library, officials researched W. A. Clark, trying to estimate how many millions Huguette may have had. From her advisers, the hospital learned that she hadn’t signed a will.

  Step two in the playbook: strategic cultivation. Show the donor that you know her and care about her.

  Dr. Newman sent Huguette cashmere sweaters, balloons, and gourmet chocolates from Paris. He had lived in Japan for three years, so they had much to discuss, and his wife, who is Japanese, visited Huguette several times. He introduced Huguette to his mother, who was in her nineties and had lived in France for many years. The mother wrote to Huguette and visited her in the hospital. They watched ice-skating on TV together, as Huguette explained the backstories of the Olympic figure skaters in their princess costumes. Huguette also shared a Smurfs television special with her. “I kid you not!” Dr. Newman wrote to colleagues. “My mom spent 30 minutes watching the Smurfs celebrate Christmas; she deserves a medal.”

  In January 1994, Dr. Newman wrote to Huguette:

  Dear Mrs. Huguette: I took the liberty of sending a copy of your very kind season’s greetings card to my mother in Nice. She frequently asks about you. My mother is an avid amateur graphologist, and I want to share with you her comments on your handwriting. “The most remarkable and admirable handwriting! I am greatly impressed by so much willpower, clear thinking and an orderly mind. Amazing.” Clearly, I’m a tiny bit biased, but in my humble view my mother is very rarely wrong; certainly, I agree with her fully in this particular judgment. All the best, Robert Newman.

  Huguette appeared to enjoy the visits by the hospital staff and insisted that they send her photographs of their children and grandchildren. She remembered their names and asked about their activities.

  Behind her back, hospital officials made fun of Huguette for her delight in cartoons and dolls. They advised anyone soliciting her to keep the focus on donations, “even if she changes the subject to Smurfs or Flintstones.” When she complained that the hospital had included her name on a list of benefactors, piercing her veil of privacy, one hospital official quipped that they should give her “one Smurf to make amends.”

  Step three in the development playbook: solicitation. Make specific appeals based on the donor’s interests. Huguette seemed to take the most interest in making gifts that honored her doctors. When she gave $300,000 for a cardiac lab, the hospital put Dr. Singman’s name on it in appreciation for helping raise the money from his patient. She gave $80,000 to the hospital as a tribute to both Dr. Singman and her surgeon, Dr. Jack Rudick. In her first decade in the hospital, she gave $940,000.

  Hospital leaders sought advice from Dr. Rudick, who urged them to make larger, specific requests, because “she has no ‘concept’ of money.”

  Dr. Rudick followed his own advice, borrowing $1 million from his patient. Though he signed promissory notes agreeing to pay the money back with interest, he made no payments. When Rudick asked for another $500,000, he told Huguette he wouldn’t be able to continue as her doctor otherwise. Her attorney, Bock, called this “almost blackmail,” warning Huguette that Dr. Rudick was misleading her by claiming that he needed the money to open an office in the city, when in fact he was retiring. She was not resentful, signing documents forgiving his loans entirely. Dr. Rudick denied this account, saying he never misled Huguette or even asked her for the money. He said that he and Huguette agreed from the beginning that the $1 million was actually a gift, though it was described as a loan in the documents.

  Her nurse, Hadassah Peri, encouraged Huguette to make gifts to the hospital. The hospital waived some of Hadassah’s fees when she had back surgery.

  Hospital officials said they had no idea that Huguette was giving gifts to her doctors or nurses. Internal emails show that gifts to Hadassah, who was not a hospital employee, were discussed at a 1998 meeting in the office of the board chairman, shipbuilding tycoon Morton Hyman.

  Hospital correspondence shows that officials were disappointed with their own results. “I think her gifts,” Dr. Newman said, “considering what she could have given, considering what other people had given, … had been relatively, relatively modest.” He lamented in an email to fund-raising staff, “Without knocking her past gifts, the potential has been overwhelmingly unrealized.”

  • • •

  Hospital officials knew from Huguette’s advisers that she had not signed a will. Dr. Newman urged her to sign one, then sent his mother to share with her “the great joy and spiritual satisfaction of preparing her will.”

  Hospital officials considered having their legal department scope out what would happen to Huguette’s money at her death if she died without a will. There was a problem, however. One official raised in a memo the fear that if the hospital leaders asked for advice from their own lawyers, “they might push the question of whether she should even be living in the hospital.”

  Indeed, Huguette was hidden away from hospital inspectors, according to two former employees at Doctors Hospital, a nurse and a social worker. The Joint Commission, which accredits hospitals, made regular visits to Beth Israel to ensure it met standards. One of its standard investigative techniques was to choose a “tracer” patient, going through all of a patient’s file, evaluating each department that had worked on that patient’s case. Patients with long stays might attract particular attention, as Huguette did on at least one occasion. With more than twenty thousand pages of medical records, Huguette would have been the ultimate tracer. The nurse and social worker said that her name was left off the daily patient census and they were told to hide her file when inspectors came. In later years, every new page in her hospital chart was stamped with an admission date of January 1, 2003, which was nearly twelve years after her actual date of admission. As one fund-raising official noted in the file, “If we were forced to ‘evict’ her, we’d certainly have no hope of any support.”

  The hospital encountered financial difficulties, spurred on by a couple of high-profile malpractice cases in obstetrics. By 1995, Moody’s Investors Service had lowered the hospital company’s bond rating, and in 2000 dropped the rating again as its liquidity reached “an extremely low level,” with only six days’ worth of cash on hand. Beth Israel in 1997 became part of a hospital super-company, Continuum Health Partners, with Dr. Newman the CEO over Beth Israel, as well as St. Luke’s-Roosevelt and the New York Eye and Ear Infirmary.

  Huguette came to the hospital’s rescue. In 2000, when Hyman asked her for a donation, she decided to give a painting by Edouard Manet, Peonies in a Bottle. Sotheby’s appraised it at $6 million, and she instructed Chris Sattler to deliver it to Dr. Newman’s apartment, insisting as always that her gift be anonymous. Yet the hospital was foiled again. Only $3.5 million was bid at Christie’s in November 2000, including the commission for the auction house; the hospital declined to sell it at that price.

  In Huguette’s hospital room, Dr. Newman discussed with her what to do with the painting. It was mid-November 2000, as the disputed presidential election between George W. Bush and Al Gore remained in doubt. Huguette lamented the “terribly confused political situation,” te
lling Dr. Newman she was strongly for Gore. (She was a Democrat, just like her father, though in the intervening years the Republicans and Democrats had switched sides on nearly every political issue.) She also spoke of the volatile situation in the stock market, which was falling, and of the generally poor results in art auctions. The Picasso that had recently sold for $50 million, she told Dr. Newman, was “ugly.” When he stressed that the hospital needed the money from the Manet painting, Huguette urged him to wait until the political situation resolved and to see what the market was doing before making any decisions. He said waiting could cost the hospital money if art prices continued to decline.

  But the hospital did wait, to keep her happy. The next summer, it tried the auction again, accepting the same $3.5 million that had been bid previously and pocketing $3.1 million after paying the commission. Huguette’s market advice had not been bad: Though the price hadn’t gone up, it hadn’t declined either.

  • • •

  It was time for the hospital to go for the big score.

  In March 2004, Dr. Newman proposed to Huguette that she transfer $106 million of her wealth to the hospital. His pitch emphasized that she would be the beneficiary, receiving “an unconditionally guaranteed cash payment” of $1 million per month for life. That number seemed to catch her ear, and she said she would think about it.

  Of course, Huguette would have had to hand over all her stocks and bonds, as well as the Connecticut house and perhaps a few more paintings. Dr. Newman emphasized how such a gift would be a blessing, “freeing you from the considerable burden” of having to arrange the sale of property herself.

  The type of contract proposed by Beth Israel is called a charitable gift annuity, which universities and other nonprofits tout to their donors, sometimes without fully explaining the pitfalls. Huguette was nearly ninety-eight years old, with a life expectancy of only 2.9 more years, based on actuarial tables, not on her medical history. According to the proposal she was given, for every million she gave the hospital, she would receive about $100,000 back each year, for a total of $310,750 over those 2.9 years of remaining life. She’d get a charitable deduction of $718,010 for the rest.