The Billionaire Who Wasn't

by Conor O'Clery

  Feeney’s concern for the safety of his children was heightened when his daughter Caroleen befriended Isabella Rizzoli, the daughter of Angelo Rizzoli, the Italian moviemaker and publisher of the Milan newspaper Corriere della Sera, whose home was a five-minute drive away. They both attended the same school, and Caroleen started bringing Isabella to their home. When Caroleen visited Isabella’s house, she saw guards with Uzi submachine guns patrolling the grounds. Once, when the two girls went to an amusement park together, Isabella’s father provided armor-plated cars and six armed bodyguards. “Her father was a very high-profile target and I was always nervous,” said Feeney. “They used to flaunt their money and drive up to school in a huge car.” He refused to let Caroleen accompany her friend to Italy “because they would have got two for one.” Isabella Rizzoli loved the Feeney family so much that when the Feeneys moved to the United States some years later, she begged her parents to be allowed to go with them. They sent her instead to a school for the rich in Switzerland. There she got hooked on drugs, and in 1987, a month after her twenty-third birthday, she committed suicide. “This beautiful girl, Caroleen’s friend, got drugged up and threw herself off a building in Monaco and killed herself,” said Feeney. Her short life illustrated dramatically that money did not guarantee happiness.

  Feeney made a practice of welcoming at the house lost and unhappy people like Isabella, especially children from broken homes. He gave teenagers jobs or sent them to college and became their mentor. It was something his own kids had to learn to cope with. In his teenage years in New Jersey, Feeney was noted for bringing friends home to be looked after. A boy from a single-parent family came for one night and stayed the summer, recalled his sister Arlene.

  People close to Feeney saw a change in his personality during this period of his life and noted how, as he approached middle age, he worried more about the state of the world. The early days of business had been a time of optimism for Americans and Feeney had discovered a new, vibrant world where everything seemed possible. Following the Great Depression and World War II, the world was enjoying an unprecedented period of stability and prosperity. Then came the assassination of President John F. Kennedy in 1963, the war in Vietnam, and anti-American protests around the world. “He and so many of his friends were able to pull themselves up by their bootstraps,” reflected his son, Patrick. “I think with that momentum he was expecting the world to be a better place. As he grew older that hasn’t happened. His disappointment comes from having so much hope when he was younger.”

  Paradoxically, while Feeney became more frugal, he was pushing himself ever harder to build up the global duty-free business that was making him even richer. To Danielle, he seemed more driven, more involved in his professional interests. He read business books and biographies of successful businessmen. He was constantly traveling, to London, New York, Hawaii, Hong Kong, Tokyo, Guam, Saipan. Associates such as Tom Harville remembered Feeney in those days as “a driven man, constantly searching for new opportunities, constantly traveling and constantly studying, rarely traveling with luggage, preferring to leave a change of clothes at each of his many travel ports.”

  But for his children these were the happiest times. They loved their school on the French Riviera. They remembered that when they went to “snow school” up in the mountains, their father would drive for three hours with projector and screen in the car to show their class the latest movies, for instance, The Sound of Music and Born Free. Feeney brought his elderly father out to Saint-Jean-Cap-Ferrat and organized trips to New Jersey for the family. There were frequent guests, and always, a sense of fun.

  Feeney established a personal business office in Monaco, a short drive along the Côte d’Azur, where he could do his dictation and manage his growing business interests. He recruited a tax specialist, Jack Moore, and employed Helga Flaiz, who had been with DFS since the Cars International days, as his secretary.

  Feeney was drawn back to an executive role in DFS by a management crisis in 1975. Tony Pilaro, having assumed the role of chairman, had brought in professional management, hiring Ed Attebury, an abrasive American retailer from Hawaii’s Liberty House, as the first outside executive, to help grow the business. Attebury brought in his own people and stripped the division presidents, Joe Lyons in Hawaii, Dick Wade in Guam, and John Monteiro in Hong Kong, of much of their autonomy. He centralized warehousing at Geneva and called it Central Buying Office Switzerland (CBOS). It was a nightmare, recalled Monteiro. “The result was that Hawaiian shirts were ending up in Hong Kong, and Hong Kong specialty gifts were going to Waikiki.” Worse, he abused people who had sweated to build the company. “He would belittle us and berate us,” said Monteiro. “Every time I was called to his office, it was a screaming session.” With the regional presidents all threatening to quit, Feeney came to the conclusion that Attebury had to go. Bob Miller and Alan Parker agreed. Feeney told Pilaro, “Fire him!” There was always friction between the corporate head office and where the cash register rang, reflected Pilaro, but Attebury failed to understand the nature of the business and had to go.

  Feeney took the chair at a DFS board meeting in the CBOS office in Geneva, at which he resumed control of the company as chief executive officer. Monteiro remembered that Feeney pulled no punches. With Attebury and his team gone, the owners hired an experienced retailer from Boston, Bob Futoran, to manage the company professionally, and Feeney stayed on for some months to make sure the new man understood the culture of DFS. Under Futoran’s management, CBOS was wound down, the regional presidents became barons again, and DFS continued to expand.

  As the flow of cash into the owners’ pockets increased, some DFS executives thought they were being too greedy. Thomas Harville, who had been promoted to DFS vice president for planning and administration, quit in disgust in June 1977. He sent the owners a letter that made clear his problems with the ethics of what they were doing. He left, he explained diplomatically many years later, because of his “philosophical distaste for devoting the prime years of my business career to the sole benefit of four shareholders who seemed to be accumulating a quantum amount of wealth beyond their needs.”

  With the company under Futoran’s management, Feeney stepped down again from active involvement and distanced himself further from his co-owners. Without a majority shareholding, he could never guarantee that he would get his way on policy matters, and friends thought that this troubled him. In late 1977, he stopped attending board meetings, nominating George Parker, a friend and a U.S. Navy comrade of Jeff Mahlstedt, to represent him instead on the DFS board. In future he would only see his partners when necessary, such as when they gathered to decide on the renewable concession bids on which the company’s survival depended. On November 24, 1977, he wrote to Jean-Paul Camus, who had taken over the cognac business from his father, Michel Camus, that he was stepping back “to devote more time to my fast-growing family.”

  Feeney was clearly frustrated that he did not control the destiny of the company he had co-founded and built up. “I frankly wanted out, for one because I said if I am going to do things, I am not going to do them as I did them before where I do all the work, and people pick up their share of the action,” he said. He regarded Tony as “a hardworking guy” who did his share, and Alan as “a good accountant.” But the old problems with Bob festered.

  “In the early days they had a good partnership,” recalled Farid Khan, a Hong Kong-born Pakistani who bought opals in Mexico and Australia for DFS, often at great personal risk from thieves, and who had become a family friend of the Feeneys. “They got a printing machine to print money. Chuck was the spearhead, the mastermind, and Bob the tough driver. But Feeney became angry when the other owners tried to control him more. He was the founding member, and these little guys were ganging up on him. Chuck alone could not sign approval of the contracts. He drifted away. He could not take defeat any more.”

  Tony Pilaro recalled a comment made by Feeney: “Tony, you are foolish; you put 100 percent of
yourself into the company and take only two and a half percent out. I’m not going to put in 100 percent and only take 38.75 percent.”

  Feeney had meanwhile been looking around the Pacific for his own investment opportunities. He flew to Tahiti, the French-speaking island in the southern Pacific Ocean that promotes itself as the Island of Love, and invested in a $12-million commercial complex called the Vaima Center, with shops, apartments, and offices on the waterfront in the capital, Papeete. The Vaima Center got the concession to operate a duty-free store specializing in French perfumes. When they heard about this, Feeney’s DFS co-owners became upset, as they felt he was interfering in the core business of DFS, but it was so small an operation they did not kick up a fuss. It was hardly a top tourist destination for the Japanese, who faced a ten-hour flight from Tokyo to reach the Polynesian Islands. “This was peanut stuff, it didn’t become an issue,” recalled Feeney. Miller agreed it was “sort of irritating, but not harmful.” Nevertheless, the issue led to the signing by all four owners of a non-compete clause that prohibited an individual owner from bidding on a duty-free concession in any airport in the world that was a hub for Japanese tourists. That right they agreed belonged to DFS.

  Chuck Feeney’s next significant investment, which would cause much more dissension, came about by chance. In December 1976 in Hawaii, he met an elderly retailer named Dick Wheeler, who with his wife, Sylvia, owned Andrade, a sleepy old Portuguese company that had thirty-four general retailing and resort shops in the Hawaiian Islands. Wheeler, who was dying, told Feeney he wanted to sell Andrade but would prefer that it were run by a single proprietor and not a corporate group. Feeney agreed to buy the company from him for $2 million. He took over Andrade’s outlets. They didn’t sell duty-free items, but the customers included some of the Japanese tourists that DFS specialized in corralling into the duty-free store.

  Feeney moved his family to Hawaii for a year while he took over the Andrade retail chain. He founded a company there to run the stores and develop and operate other ventures in the Pacific Basin. He called it General Atlantic Pacific (later InterPacific) and recruited Mike Windsor to run it from Honolulu. One of Windsor’s earliest memories is of entering the duty-free shop in Tahiti and finding Feeney alone behind the counter conducting a sale with a Japanese tourist—in Japanese. Windsor found Feeney very focused and serious about business. “He brings a focus on business that I hadn’t experienced before. If something doesn’t work, he has four or so different thoughts. He has a multifaceted way of looking at business. He is detail oriented in his approach. Chuck would fly in to Honolulu in late afternoon, and before he went to bed, he would visit the main store. He would talk to the salespeople and check on display and pricing. The following morning, he would have a list of things to discuss. A lot of managers like to talk down and don’t really listen. Chuck listened to the salespeople.”

  The next year, when back in France, Feeney engaged George Parker to group all of his investments together in a holding company. Parker identified Bermuda as an ideal location, as the U.K. territory did not tax company profits or individuals. They decided on the name General Atlantic Group Limited, or GAGL, which they pronounced “gaggle.” GAGL was registered in 1978 in Bermuda as a private holding company for Feeney’s 38.75 percent of DFS, plus his burgeoning investments in real estate, retail stores, and other businesses. As Feeney was a U.S. citizen and subject to the attentions of the Internal Revenue Service, everything was registered in the name of Danielle Juliette Feeney, French citizen. Chuck Feeney assumed the role of chairman and chief executive, with George Parker, Mike Windsor, Jack Moore, and Jean Karoubi as directors. Karoubi, a cousin of Danielle, was a former president of Duty Free Shoppers in Paris and would later head the Feeney family office.

  The vagueness of the title suited Chuck, with his penchant for keeping a low profile. Many companies used generic words like “General” and “Atlantic,” but nobody had both. The name sounded familiar to the public, but it gave nothing away. When they held a staff conference in a Bermuda hotel, a man in the lobby, spotting a notice saying, “Meeting of General Atlantic,” asked Feeney, “Aren’t they the people who own General Electric?” “Yeah, they’re the ones,” Feeney assured him with a straight face.

  GAGL grew fast. Within a couple of years, Feeney’s private company had established or invested in over twenty enterprises across the world in a bewildering array of locations: New York, Delaware, Texas, Illinois, Bermuda, Hawaii, the British Virgin Islands, the Netherlands Antilles, and Guam. Investments ranged from Royal Hawaiian Perfumes Inc. and Pacific Resorts Ltd. to G.A. Land Development of Texas, Inc. and Société Civile General Atlantic of Paris. They varied in size from the Andrade retail chain in Hawaii to Ian McClean Antiques Inc. in New York. Feeney invested in a six-store retail company in San Antonio, Texas, called Solo Serve that was successful for a time selling seconds merchandise, and in Carl’s, a small chain of department stores in upstate New York. He got a multi-million-dollar contract to renovate and manage the Richmont Hotel in Chicago, and he had an interest for a time in a chain of motels in France called Mini-Mote.

  Some early opportunistic ventures flopped. The mall with its duty-free store in Tahiti never really worked economically. The China Import Store in the Royal Hawaiian Shopping Center in Waikiki, modeled on the big Friendship Store for tourists in Beijing that Feeney saw on a visit to China in 1979, never caught on, despite the promotional antics of his teenage daughter Caroleen. During her college vacation, she put on a panda suit and handed out leaflets to entice customers to enter. She became such an attraction that Japanese vacationers began asking the tourist office when her performance began, and she was required to stop as she was causing “congregating in a public place.” Feeney closed the store after three years, with losses of $4 million.

  His multi-million-dollar investment in an 800-room luxury hotel in Guam in 1978 proved much more profitable. It was run in such a way that Japanese tourists checked out for a late-night flight as incoming groups checked in for the same bed night.

  Meanwhile, the cash dividends from DFS kept getting bigger. In 1978, Feeney banked $18 million in cash. By the first year of the new decade, his share of the DFS dividend had risen to $23 million. Rarely in corporate history did owners receive such an abundance of dollars, in cash, on a regular and ever-growing basis.

  As his own businesses generated a separate cash flow, Feeney set up a subsidiary capital investment company in New York in 1980, naming it General Atlantic Inc. It was headed first by former McKinsey & Company partner Ed Cohen, and then by former U.S. Navy officer Steve Denning. It invested in new ventures such as real estate, software, and oil and gas interests around the world. Wall Street was recovering from a long spell in the doldrums, and there was money to be made on speculative investments and acquisitions. Its first investment of $4 million in a company called Transportation Management Systems was a disaster, but it was to prove an exception. A $5-million investment in Universal Health Services tripled in value in three years.

  Feeney continued to acquire property. Despite his unease with wealth, his lifestyle was characterized by fine family houses. In Saint-Jean-Cap-Ferrat, he bought two neighboring properties on the same road as the family home, at the behest of their elderly cash-strapped owners, who continued to live in the houses. The Feeneys kept their residence in Hong Kong until 1980. They acquired a house in the fashionable Paris suburb of Neuilly-sur-Seine, a villa in a beachside suburb of Honolulu, and a rented apartment in Manhattan. Feeney often made real estate purchases on the spur of the moment. He saw a townhouse on Fifty-fifth Street in Manhattan for sale while in a taxi stuck in traffic and bought it for offices.

  On a family car journey to New York after the Olympic Games in Montreal in August 1976, he bought a mansion in just such an opportunistic fashion that would become the family holiday home for many years. Feeney had made a detour to Salisbury in northwest Connecticut to visit a Cornell classmate, John Harney, of the company Master Tea Ble
nder. They stayed at the nineteenth-century White Hart Inn, and in the evening enjoyed cook-outs in the Harneys’ yard. The children loved it so much they kept pleading for one more day. At the end of two weeks, Chuck drove them to nearby Lakeville, a village on Lake Wononskopomuc, and stopped at a big white lakeside house at 9 Elm Street where a town mayor used to live. “I’m just going in to do some business,” he said, leaving them in the car. He came back to say: “So what do you think of your new house?”

  Lakeville became the Feeneys’ summer home, where the children could bring their friends during school vacations, and where Chuck and Danielle could entertain. They often had two dozen kids in bunk beds in the front room. When Cornell friends like Chuck Rolles came to stay, the Sandwich Man would make the sandwiches. Feeney would go walking and running every day and read books and four or five newspapers spread out on a long picnic table on the back porch. It became part of the summer vacation ritual at Lakeville that he would take the kids aside for serious talks about goals and budgets, about being thrifty and sharing everything with other people. When Caroleen got a part in a play at college, he suggested that she share the role with her understudy and give the second understudy a chance—she had to tell him that the theater didn’t work like that.

  Both Danielle and Chuck were aware of the dangers of too much money in bringing up the children: Danielle knew she tended to spoil them more, but she saw that Chuck gave them a strong backbone of selflessness and self-reliance, and taught them to value knowledge. Like his father before him, he insisted on taking them to public libraries.

  Wherever he was, Feeney liked to jog. His mother, Madaline, who had been overweight, died in 1964, aged only sixty-two, and he lectured his family on keeping slim and fit. As with everything else, he pushed himself to excel, and in 1979 he resolved to complete the Boston Marathon, one of the world’s most prestigious running events. To enter, competitors had to complete a standard marathon elsewhere. Chuck and Danielle flew to Hawaii so Feeney could enter the Honolulu Marathon. He was in great shape but found the hilly twenty-six-mile course and high temperatures too much for him. Near the finish, he began to run erratically from one side to the other, bumping into other runners who shouldered him back out of their way, until he finally collapsed at the side of the road, not far from his house. Danielle and Jean Gentzbourger, who was staying with the Feeneys, saw what was happening and ran to help. Feeney was in a state of shock and quite rigid. He was rushed to the hospital by ambulance with an intravenous drip in his arm. The cardiologist told Danielle that Chuck had been very close to a fatal heart attack, due to lack of fluids and food in his body.