Do You Sincerely Want To Be Rich? (27 page)

    What happened was that in the autumn of 1967 a savings bank in Barcelona, the Caja de Credito Popular, had failed. A routine examination of its books showed irregularities, and the books were passed to the Special Judge's investigators. This is one of the most feared arms of the Spanish State, at least for those members of the business and professional classes who have opportunities of salting away money which they would like to take abroad. (The peseta is now convertible, but in 1967 convertibility was still forbidden under the draconian laws passed during the civil war.)

    The special Judge has his own fraud squad of trained accountants, and its head, Don Antonio, has a reputation for total impartiality and an invincible determination to ferret out the truth, IOS, its defence lawyer told us, 'had run foul of the toughest law in Spain.' In January 1968 the judge announced that there was 'a strong preliminary indication of criminal liability' on the part of Giubelli. The court eventually found that he had illegally converted no less than fifty million pesetas into dollars through a bank in Andorra. Some of his sales force had cottoned on and done the same, though on a smaller scale, IOS, in the meantime, found that Giubelli had cheated them too. On March 15,1968 Ed Cowett complained formally to the public prosecutor in Geneva that Giubelli had:

    'Caused to be remitted sums amounting to at least us $132,785 by divers clients of our company, on the pretext of transferring them to IOS in Geneva. He then drew seventeen cheques on his own accounts with the Societat de Banca Andorrana, situated on the territory of the Principality of Andorra, representing a total of only us $21,715, which he remitted to Geneva. These cheques… were subsequently returned for insufficient funds… The balance of us $111,070 remains unpaid.'

    Giubelli left his wife behind in Spain to face the music but she was found not guilty. His disappearance and the judge's preliminary finding of guilt induced consternation in Geneva. What frightened IOS most was that the Spanish authorities might take action against IOS’s gigantic real estate holdings, Playamar and El Rosario, on the south coast.

    By the summer of 1968, James Roosevelt was down in Madrid in person, to see if he could work things out with a little chat with the boys at the top. This time he was out of luck.

    In July 1970 the verdict was finally handed down. Giubelli and seventeen other salesmen received heavy sentences, but IOS itself got off relatively lightly. It had to pay ten million pesetas (roughly $150,000) in fines unpaid by the salesmen. And 44 million pesetas which had been illegally converted was quietly returned by IOS to Spain in dollars which were officially changed back into pesetas and returned to the original Spanish investors.

    Giubelli was expelled from Switzerland and briefly jailed in Nice. But he talked his way out of being extradited back to Spain, and is said now to be working for a rival mutual fund group. In his fashion Giubelli, too, seems to have mastered the offshore idea.

    

    

    

    
In which Cornfeld gives some views of sexual codes, and some of his followers show how to suppress a scandal in the Court. Some examination of the loyalties of Cornfeld's old friends.

    Geneva summer is green, and sparkling blue: the green of the cool parkland that rims the lake, and the blue of its waters moving slowly south to join the Rhone. The sun lasts a long time into the autumn. Sails gleam on the lake till evening, and swans move quietly along the shallows.

    The air is fresh and brilliant, banking being an industry that produces very little pollution. The Rue de Lausanne curves along the lakeside past demure eighteenth-century villas, new office buildings that glint with glass and metal, and open air restaurants where boats sway gently alongside the tables.

    Volkswagens, Cadillacs and Fiats make orderly processions through the streets, and in the great days of IOS, salesmen visiting hq could look out for Ed Cowett's blue Maserati, or perhaps the yellow Lamborghini of Ossie Nedoluha - one of the great chieftains of the German override system - or for any one of Bernie's cars, the Rolls, the custom built Lincoln, the Cadillac, or the Sting-Ray.

    Almost incredibly, Geneva has the motor car without the traffic problem. Superb autoroutes curl away from the city towards Zurich, Paris, Munich and Rome, and ten minutes away on the French border is Cointrin airport, with three planes leaving every day for New York. Perhaps no other place conveys so vividly the impression of having the pleasures of Europe at one's feet, with the convenience of America within easy reach.

    Bernard Cornfeld was certainly not the first man with to find Geneva a convenient base - he was preceded, among others, by Louis Napoleon. But few have played the imperial role with more enthusiasm than Cornfeld did. From the take-off of the Fund of Funds, through to the final crisis, none of the alarms and triumphs of IOS affected the level of Cornfeld's personal existence (one that 'a maharajah might envy', said
Time),
or the awe in which his followers held him.

    Although Geneva remained a constant, the emphasis frequently shifted between alternative seats, of which there was an impressive number: the Villa Elma in Geneva, which belonged to Cornfeld; Bella Vista, which was the IOS villa; the Chateau de Pelly in the Haute Savoie; the house in Paris; the London town house in West Halkin Street; the apartments at the Carlyle Hotel and on Park Avenue in New York and a terrace house downtown. And towards the end, a second chateau, the castle of Prangins, in Switzerland. And, as he acquired new environments, Cornfeld spent his time with rather different kinds of people. Mutual fund salesmen became less prominent.

    Cornfeld was seen more with dress designers such as Guy Laroche and Oleg Cassini, with actors like Laurence Harvey and Tony Curtis, Las Vegas casino promoters like Delbert Coleman, fast-moving us businessmen like Gene Klein and Charlie Bluhdorn. The emperor's tastes changed, and although he always liked to claim that 'a good meal for me is at a hot-dog stand', he favoured the Club dell' Aretusa in Chelsea, where they have better things to boast about than their hot-dogs. But however it varied, the High Cornfeld style was always well suited for recording in the media. He was usually depicted making luxurious informal progresses, at high speed, but receiving petitions and dispensing wisdom en route. Always, Cornfeld appeared as a man of imperative whim and incessant movement. Over and over again, he was seen converting the sceptical. The imperial pronouncements of the period make, in retrospect, strange reading:

    'What I have done is apply socialist ideas about redistributing wealth in a free enterprise context.'

    'We're in the business of literally converting the proletariat to the leisured class painlessly… It's revolutionary and goddam exciting.'

    There were prophetic forecasts:

    'I'm convinced that IOS is going to become the most important economic force in the private sector in the free world.'

    There were witticisms:

    ‘I met a guy I trained with as a social worker, and he asked me what agency I'd gone into. I said: "A preventive agency. We find our people before they're destitute, and do something about it".'

    There were excoriations of the heathen:

    'Government agencies are full of halfwits and political appointees who can't get a decent job anywhere.'

    And there were, naturally, extravagant praises of the emperor himself. John M. King, who helped Cornfeld and Cowett dispose of nearly a hundred million dollars of the customers' money in 'natural resources investment', declared that Bernie possessed 'one of those types of minds that has an instantaneous grasp of any subject he chooses to be interested in'.
Business Week
described him as, 'King of Europe's Cash', and said that the judgement of the financial world was that 'Cornfeld can take IOS just about anywhere he wants'.
Time
said that he was 'part Peter Pan, part Midas'.

    Eli Wallitt, court member of much standing, and another ex-campaigner for Norman Thomas socialism, put the whole business on a less grandiloquent level in personal reminiscence. 'Did you ever go to one of those parties?' he said. 'There were heaps of caviare
(a shaping gesture with the hands)
like
this.'

    The awe in which Cornfeld was held derived very largely from the frequently published tabulations of his wealth and his possessions, and the constantly growing estimate of his financial power. It was said that he was responsible, on some days, for 4% of all the trading on the New York Stock Exchange, and that he was an important item in the American balance of payments. But the scarlet glow of his sexual reputation, although less often discussed publicly, also helped make him an object of fascination. 'He certainly wasn't a one-woman man,' said his cousin Hubert. It was a notable understatement.

    Two women have had durable relationships with Cornfeld: Sophie, his mother, who moved to Geneva in 1962 after a spell in Los Angeles, and his secretary, a red-haired German girl named Didi Fischer. But, by his own account, none of his sexual relationships have been designed to be so durable - and in the latter phase especially, there was a tendency for them to be conducted in parallel as well as series. A survey can only illuminate a few highlights.

    According to Cornfeld, he had one girl friend in Paris, and another in Vienna, within a few months of his arrival in Europe. Neither of these affairs, however, made a powerful contribution to the legend. In pre-imperial days, in Geneva, he is said to have paid court to a maid of one of his fellow directors.

    After 1962, a more glamorous note is sounded. There was an affair with a Japanese actress, which was brief but dramatic: Bernie met her in Tokyo on a Saturday and invited her to drop everything and fly to Europe with him on Sunday, which she did. 'But in the end,' said Hubert Cornfield, 'she couldn't put up with the all-night business meetings Bernie used to have. Maybe it was because she was different that he liked her. Bernie was always looking for something different.'

    He rather liked to theorize about sexual affairs, claiming to see the effects of Puritanism in the sexual attitudes - both of Hugh Hefner and of most members of the hippy movement. These people, he said, were reacting against a Puritan upbringing, and this was shown by the fact that, although they rejected one code, they were always trying to build others. For himself, he said, he favoured 'the joy of anarchy' in sexual matters. Such discussions tended to include accounts of various tectonic orgasms experienced by the emperor and this or that anarchist sympathizer.

    Cornfeld liked to travel with a convoy of three, four and sometimes more girls - conveying at times a rather harem-like impression. It was not, however, as Oriental as all that. To share the Emperor's aeroplane was not necessarily to share his bed, and he never said that his theories about sexual anarchy extended to multiple congress. So far as one could work out the dynamics of these groups, there was usually one girl who was the sexual partner of the moment, while the others would be along for their own amusement or curiosity.

    The members of Cornfeld's entourage of young women were often associated with sub-divisions of his business ventures, which were not easy to separate from his personal life. At their height, Cornfeld's multifarious interests included an acting and modelling school in Paris, and a piece of a model agency in New York. So when there were 'three lissom girls' in his escort, it might well be some of the girls taking a ride with the boss - innocent enough in itself, though perhaps a rather informal way of running a business.

    The Paris operation, Studio 22, took its name from the address of Cornfeld's first apartment in Paris, 22 Boulevard Flandrin, and it was started after Cornfeld met a Parisian dentist and plastic surgeon named Pierre Albou, a celebrated expert at recapping the teeth and modifying the profiles of aspirant actresses. This business enables Albou to maintain a house in the elegant Rue de Tilsitt, by the Place de l'Etoile: Bernie bought a floor of Albou's house, and installed there a model school which he bought as a going concern with about 25 students.

    Studio 22 had an international flavour, with girls from Sweden, Israel and Germany, and Cornfeld wanted to make it a base for his ambitions in the movies. He got as far as approaching Jean-Pierre Mocky, the maker of
Snobs,
with suggestions that Mocky might like to make a series of movies employing the talents of the Studio 22 girls. But Mocky, while remaining friendly with the emperor, seems not to have wanted him as a patron again. 'Bernie told me,' he recalled of
Snobs,
'that I should make a film that was really way-out and different.' The finished work was a very individual adaptation of William Makepeace Thackeray's book of the same name, and Mocky says that Cornfeld was 'horrified' when he saw it (according to Victor Herbert, Bernie cried: 'Where are the girls?'). Mocky took the view that 'if one acts as a patron and gives money to the artist, then one should accept the work he produces, as the great seigneurs did in the Middle Ages,' and he declined the second offer.

    Whether or not it was Bernie's lack of seigneurial tolerance that was to blame, Studio 22 does not seem to have built up a large show business reputation.

    Talent Management International was a model agency with offices on East 63rd Street, and Cornfeld put some money into it. A deputation from tmi accompanied him on his journey to Mexico to confer with Hugh Hefner in Acapulco just before the crash of IOS. Julie Baumgold, reporting the progress for
New York
magazine, identified 'The Darby', 'Lorna', 'Cedric' - also called 'Rattlesnake' - and 'Jackie, a nineteen-year-old model from a Scottish town'. Possibly, the most revealing cameo from Miss Baumgold's cool report concerned the emperor arranging rooms for the night: