Feeney graduated from Cornell in 1956 with a bachelor’s degree in hotel administration. He had a number of job offers from hotel chains, but he didn’t like the idea of working his way up inside a Marriott or a Statler. His mother wondered how he could turn down such fine offers, but he told her he was waiting for the right opportunity. He was impatient to see the world and make his own way as an entrepreneur. He and Chuck Rolles decided to drive across the United States from New Jersey to see what California offered.
Before they left, Rolles came to Elizabeth and Feeney introduced him to some of his old pals in a New Jersey tavern. One was a U.S. Navy veteran who boasted that he had a system to beat the roulette wheel in a casino. All they needed was to make sure the wheel had only one zero. They couldn’t lose, he said. The two Cornell graduates decided to try out the system on their road journey. They headed for Reno, Nevada, where they discovered there was a single zero on the roulette wheels. Reno at the time was a fast-growing gambling town with several casinos, including Harold’s Club and Harrah’s. They rented a room in a boardinghouse for construction workers and started hanging around the gaming rooms to see how things worked. “We’d sit there having a beer or something, taking down the numbers for an hour or so as they came up on the roulette wheel,” said Rolles. Back in the rooming house, they studied the numbers.
After a couple of days they were ready. They figured they would need a stake of $500. Rolles had enough cash to put up half, but Feeney had to hock his portable typewriter and camera in a Reno pawn shop. Rolles took a picture of him going into the pawn shop dressed in shorts and an aloha shirt that he had picked up in Hawaii.
“We went to the casino and we started playing at 11 o’clock at night and we’d play all night, and, geez, the system worked,” said Rolles. “We’d put ten cents on a group of six numbers. And if one of those six hit, we’d get 50 cents back. We covered all thirty-six numbers. The only thing that would hurt us was a zero. Otherwise we were making money on every roll.”
Things went the way they were supposed to go, and they just kept making money. They would play for six hours, have breakfast with the construction workers, sleep a bit, play some basketball, then return at night and play six more hours. “We walked back to our apartment in the middle of the street afraid somebody would know how much money we had on us,” said Rolles. “We’d have two or three hundred bucks in winnings. We thought we were wealthy.”
In their enthusiasm, the two Cornellians fantasized about playing for a couple of years and retiring rich. “So we decided not to quit,” said Rolles. “We kept playing. Then all of a sudden one morning, about 5:30, things started going not right. We got into our trouble zone, and covered our twelve numbers and put all the money on. We went twenty, twenty-five spins of the wheel without hitting one group of twelve numbers, and we thought that could never happen. Well, it happened. We put our last bets out and the twenty-fifth spin came and they didn’t hit, and so I wanted to bet everything on the next one—I was ready to bet my life almost.”
But Feeney wouldn’t let him. “No,” he said. “We’re through.” They cashed in their chips and left. They still ended up well ahead, by $1,600 apiece. Feeney got his typewriter and camera out of the pawn shop, and the pair drove on to California, where with two other friends they rented a cottage for the summer in Santa Monica, on the outskirts of Los Angeles. They spent some idle days playing volleyball on the sands. Rolles remembered Chuck slipping off in the mornings to take a course at UCLA. “Three of us would kind of sleep in, but Chuck would go off to summer school in the morning to take lessons in Russian.” At Cornell, Feeney had taken extra credit hours in French and Russian. At the time, he had half a notion that he might end up in intelligence. The National Security Agency had tried to recruit him at a debriefing on his discharge. An official told him, “People like you can continue to serve your country. Just sign here.” He thought about it for a few seconds, then said, “No, thanks.”
After a month, Chuck Rolles, who hadn’t done his military service, got his draft notice to report to Pensacola, Florida, and the pair set off on the long car journey back to the East Coast. They drove through Nevada again and stopped at a little casino by a remote gas station. It was now Feeney who wanted to test the system a bit further. Rolles told him that he had had it, and he would wait in the car. He settled down to sleep as Feeney disappeared into the casino. He came back after thirty minutes and said, “Let’s get the hell out of here.” “He never told me how much he lost,” said Rolles.
Feeney never played games of chance again. “I have always been down on gambling since then,” he said. “We had the good fortune to make $3,200 divided by two before our system went belly-up, and to stop playing before we lost all of that.”
The word went back to the tavern in New Jersey that Feeney and Rolles had made big money on the roulette wheel and that the system worked. The guys there put their money together and sent two representatives out to Nevada to cash in. They lost everything.
CHAPTER 3
Banging the Ring
By midsummer of 1956, Chuck Feeney still had no idea what to do with his diploma. But after Cornell he felt confident he could go anywhere in the world. He had a bankroll of $2,000 based on his casino winnings, and he still had four months left of the thirty-six months of government money from his GI scholarship. To claim the remainder, however, he had to enroll in a course, either in the United States or abroad. Many hours spent in the Hotel School library reading books on tourism and travel had stimulated his urge to see the world. He had always wanted to go to Europe, and the bankroll was burning a hole in his pocket. He went to the French consulate on Fifth Avenue and Seventy-fourth Street in Manhattan to inquire about tuition fees in French colleges. To his surprise, he learned that university education in France was free. That was even better. He bought a cheap ticket for a Cunard liner and within a few weeks he was in Paris. After signing up for a month’s intensive course in French at the Sorbonne, he wrote off to colleges in Grenoble and Strasbourg asking for admission.
In early September 1956, the secretary in the admissions office of Grenoble University in southeast France looked up to find the twenty-five-year-old crew-cut American in her office. “Here I am, I want to register for the school, for the political science department,” said Feeney in heavily accented French. “The dean sees no one,” she replied stiffly. “Well, I’m here,” he said.
“I kept sitting there reading my magazine and this guy kept shuffling in and out of the room,” recalled Feeney. Finally, in some exasperation, the secretary said, “The dean will see you.” “Naturellement,” replied Feeney. In his office the dean said, “Monsieur Feeney, you are an interesting candidate.” “Yes, I appreciate that!” “You see, you are the first person to request admission to the political science school of Strasbourg and send the letter to Grenoble!” Feeney had put his application letters in the wrong envelopes. He shot back. “Yes, but it’s evident I’m here and it’s here I want to be. If I wanted to go to Strasbourg I would not be in Grenoble.” The dean threw up his hands. “Why not!” he said. He admitted Feeney for a master’s course in political science at the fourteenth-century university. The Cornell graduate was the only American in the department, something of which he was always proud.
Life was cheap in Grenoble, spectacularly sited in a broad valley surrounded by the snow-capped French Alps. Feeney’s basic living costs came to about $15 a month. His French, tennis, and skiing improved considerably. The U.S. government inexplicably sent him $110 scholarship checks for six months rather than four. Someone up there likes me, thought Feeney.
At the end of his eight-month course, Feeney hitchhiked south with his kit and tennis racquet, looking for money-making opportunities. Getting rides was difficult as there were so many people on the roads holding up handwritten signs to show their destination. Outside Antibes, he displayed a notice in large letters on his tennis racket saying, “English conversations offered.” He had no trouble getting
a lift after that. On the Mediterranean Coast, Feeney met an American who was teaching children of naval officers from the U.S. fleet based at Villefranche-sur-Mer, a picturesque port of eighteenth-century houses and steep cobblestone alleyways. Villefranche was the home port of the USS Salem, a heavy cruiser serving as the flagship of the U.S. Sixth Fleet with a complement of nearly 2,000 officers and enlisted personnel. “I started to realize there were these naval dependents around,” said Feeney. “I asked him [the American teacher] what they did in summertime and he said they were at a loose end, so I decided to start up a program like a summer camp for the navy kids.” Feeney had seen a business opening, and a way of being helpful. He rented a room in a pension in Villefranche and organized a summer camp on the beach. Almost seventy American kids were delivered into his care by grateful navy parents, and Feeney had to hire four other Americans as staff.
In Villefranche, Feeney made a deal with the tennis club manager to sweep the courts in return for playing for free. On the courts he met André Morali-Daninos, a French Algerian psychiatrist on vacation who was intrigued by the young, educated American doing a job young French students would disdain. Morali-Daninos was a highly decorated war veteran who had joined the French Resistance during World War II and had brought his family to Paris in 1945. They came to Villefranche for their summer holidays, and in those days before mass tourism, the family usually had the beach to themselves. Morali-Daninos’s twenty-three-year-old daughter, Danielle, a student at the Sorbonne in Paris, was somewhat disconcerted therefore at the invasion of the beach by dozens of screaming and whistling children with their American counselors. She was particularly struck, however, by the kindness and firmness with which the good-looking group leader treated the children. The vivacious French Algerian and the twenty-six-year-old Irish American got to talking, and a romance started up.
In Villefranche, Feeney came into contact with people making a living from the U.S. Sixth Fleet. Groups of pretty women and salesmen waylaid the sailors and hustled for orders to supply the ship’s exchange store. He got to know a money changer named Sy Podolin who had bought up a row of old lockers and rented them to naval personnel so they could dump their uniforms and change into civvies when on shore leave. For a couple of weeks in August, Feeney made some extra money by managing the “navy locker club” for Pudlin in the evenings, opening up the lockers for sailors coming and going to the bars.
As the summer ended, Feeney planned to head north again. He loved the student life and “had enough money squirreled away that I could have gone to a German university.” However, one night in a Villefranche bar he met an Englishman, Bob Edmonds, who was trying to start a business selling duty-free liquor to American sailors at ports around the Mediterranean. He asked Feeney to help him.
The U.S. Navy did not allow the consumption of alcohol on board, but Edmonds had established that sailors could buy up to five bottles of spirits duty free and have them shipped as unaccompanied baggage to their home port. It could be a big market: There were fifty ships in the U.S. Sixth Fleet in the Mediterranean and the crews were rotated three times a year. The savings for the military personnel were huge, and almost every seaman on board could afford to buy a five-pack for collection back in the United States. A five-pack bought duty free in Europe cost $10, including delivery, while the same five bottles in the United States would cost over $30. Edmonds had failed to convince a British military supplier, Saccone & Speed, to work with him and had gone out on his own. He desperately needed an American to help him.
“There’s a big fleet movement, forty ships are coming in,” he told Feeney. “I can only see twenty. I’m looking for a guy that can see the other twenty.” “What do you mean?” asked Feeney. “Go and talk to them about buying booze.”
Feeney and Edmonds started going on board ships to take orders from the crew members, mainly for Canadian Club whiskey and Seagram’s VO. They then arranged for the liquor to be shipped to U.S. ports from warehouses in Antwerp and Rotterdam. There was no need for capital, as they did not have to pay for the merchandise in advance. For a period they had the market to themselves, but competitors were quick to arrive. Edmonds went to check out new opportunities in the Caribbean while Feeney went to Edmonds’s home in Hythe in the south of England to process orders. Feeney returned to Villefranche in October and was told the U.S. Sixth Fleet was heading for Barcelona. He took the train to the Spanish port, only to discover that the ships had been delayed.
Feeney had read in a Cornell alumni bulletin that Robert Warren Miller, another graduate of the Hotel School, had started work at the Ritz Hotel in Barcelona. With time to kill, he made his way to the Ritz on the tree-lined Gran Via de les Cortes Catalanes. Entering the lobby, he saw the familiar figure of Miller, with a shock of brown hair and cheeky grin, behind the reception desk. They hadn’t been friends at Cornell—Miller was a year ahead of Feeney—but Miller recognized the wiry blue-eyed American immediately. “Feeney,” he said. “What are you doing here?” Replied Chuck, “What are you doing here?”
That casual exchange marked the start of one of the most profitable partnerships in international business history.
Miller’s journey to Europe had been as haphazard as Feeney’s. He was brought up in Quincy, south of Boston, where his father was a salesman for an industrial oil company. Miller got a draft deferment and went to Cornell from high school on a scholarship. Money was tight in his family, too, and he had to work part-time as a waiter and short order cook. A couple of months after graduating in 1956, when he was working as a line cook in Newport Beach, California, he got a message from his father in Quincy that his call-up papers had arrived. Miller drove to Santa Ana, signed up for the U.S. Marine Corps, and was sent to San Diego boot camp. However, a medical examination revealed a scar on his head from a childhood accident, and a marine captain asked him to sign a waiver releasing the U.S. Marine Corps from liability should he injure his head in combat, adding that if he didn’t sign he would be honorably discharged. Miller took the honorable discharge. He was given $78 and put on a bus to San Diego.
Like Feeney, Bob Miller did not want a white-collar job. Having read a lot of Hemingway, the twenty-two-year-old Cornellian had romantic ideas of becoming a writer or a soldier of fortune. He signed on for a three-month trip on an ocean-going tuna boat and while waiting to sail, crossed the Mexican border into Tijuana for a weekend spree. There he got involved in a brawl and was badly beaten and thrown into jail. By the time he was released, with torn shirt and only one shoe, the tuna boat had sailed. It was the low point of his life, and he decided to sort himself out. Miller went back to hotel work in the United States, saved $3,000, and headed for Spain on a Greek ocean liner, the Queen Fredericka. He made his way to Madrid, and from there to Barcelona and the job at the Ritz reception desk.
When Miller finished his shift that day, he and Feeney went out for dinner. Miller still had his $3,000 bankroll and was already bored working “in a monkey suit” in the hotel. They decided to throw in their lot together and try to make money from doing business with the U.S. fleet. Miller told the Belgian hotel manager, Juan Vinke, what he was planning and handed in his notice. Vinke laughed and said, “There’s no future in that. Stay with us at the Ritz. You could be a great hotel man one day.”
While Miller was working out his notice, Feeney enrolled for Spanish lessons. “He was a hyperkinetic person always charging around, so he figured while he was there he might as well learn to speak Spanish,” recalled Miller.
Miller had already gotten a glimpse of the duty-free rackets that were common in postwar Europe. He told Feeney about a Hong Kong priest in Barcelona who changed U.S. dollars at black-market rates. The priest had shown Miller a small assortment of watches, film, cameras, and cigarettes for sale in his back office that he had smuggled under his soutane from Andorra, a tiny tax haven in the Pyrenees. “Don’t worry, all of the profits that I make go to the church,” he said cheerfully, adding that Miller should go to Hong Kong, where almo
st everything was duty free.
Feeney and Miller made Villefranche their base and started taking orders for liquor from U.S. naval personnel. They needed cars, so Feeney got a little Renault Dauphine and Miller a Simca, and they started driving or taking trains to ports all along the Mediterranean where the fleet docked: Marseilles, Cannes, Barcelona, Valencia, Gibraltar, Genoa, and Naples. They would not see each other for weeks, then would meet back at Villefranche, agree on what to do next, and go off in different directions. Chuck designed a business envelope to give to people on the naval ships with a price list of whiskies. They found “bird dogs” on board, to whom they promised commission for getting sailors to sign up for the five-packs that they could pick up at their home ports. Receipts for duty-free liquor became so commonplace on board ships they were accepted as stakes in poker games.
The booze business in early 1958 had become very competitive, and the two Cornellians looked for other things to sell. In April, they went to the World’s Fair in Brussels and got ideas for expanding their inventory, adding such items as perfumes, cameras, toy trains, transistor radios—the latest thing in technology—and German beer mugs, which they had inscribed with insignia such as the marine emblem, Semper Fideles.
The key to success was getting on board the U.S. ships, which were generally off limits to civilians. Feeney and Miller had to compete with salesmen from France, England, Holland, and Belgium, trying to flog everything from perfume to suits. Approaching a ship “cold” was difficult. But by dressing as respectable Americans and speaking “American,” they could usually talk their way past the shore patrol to get on board and meet the supply officer, whose permission was necessary to sell items openly to the sailors. They sometimes “banged” the ring—the distinctive gold Cornell ring with azure stone engraved with the letter C—to make friends with Cornellians among the ships’ officers, who would then invite them on board for lunch. They tried to find out from contacts in the United States if there were any Cornellians on board ships about to sail for the Mediterranean, especially supply officers who had trained at the Hotel School. In Naples, Feeney once got around a strict embargo on civilians boarding naval ships by climbing up the gangway with the garbage collector and telling the supply officer, “I’m here about the trash.” “There were stories that Chuck would be on the beach and somehow he would be in a little boat and next thing in a bigger boat and next thing in the officers’ quarters on a carrier selling to guys,” recalled Chuck Rolles, who served in the navy. “He wasn’t supposed to be there but nobody knew how he got there or how he got back.” Cornell contemporary and ex-marine Fred Antil remembered hearing stories about Feeney turning up on the gangplank of an aircraft carrier and the admiral asking, “How the hell do you always know where we are?” and Chuck replying, “Admiral, who do you think sends you?”
The Billionaire Who Wasn't Page 3