Authors: Bill Dedman
Empty Mansions (43 page)
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.
Was this a good deal?
There were more cons than pros to the proposal.
The annuity would serve Huguette’s desire to support Beth Israel, and would have provided her some income and a tax deduction. But an annuity is a very unusual financial instrument for a person of her age, and a charitable gift annuity is a blunt instrument for someone of Huguette’s high net worth. It wasn’t the most flexible way for her to donate to the hospital or to solve her cash flow problems. She would have no say in what happened to any property that she gave to the hospital, which it could sell as it wished.
And the deal was irrevocable. If the hospital, already in trouble financially, filed for bankruptcy, she might not get anything back. If she later became dissatisfied with the way the hospital was treating her, that would be too bad; the hospital would already have her money. And there was an inherent risk in trusting her healthcare to an institution that would enjoy the benefit of stopping paying her money as soon as she died.
Huguette didn’t fall for the proposal.
The hospital may have been somewhat relieved that she hadn’t jumped at its offer. Huguette would, in fact, blow away the actuarial charts, living 7.2 years more. Over that time, for every $1 million she would have
given the hospital, the hospital would have paid her back nearly $800,000, diminishing the gift.
• • •
A crisis presented the hospital with one more chance to strike Clark copper. In early 2004, there were rumors that the Doctors Hospital building would be closed. A developer wanted to buy the hospital and tear it down to put up a high-end apartment building. Dr. Newman suggested to the chairman, Hyman, that they use this opportunity to get a “super-mega gift” from Huguette.
On May 11, 2004, Dr. Newman and Hyman visited Huguette. Dr. Newman wrote a note documenting his visit. He told Huguette that Beth Israel was almost sure to sell the building and that offers were in hand. The hospital wasn’t for sale, wasn’t being shopped around, but these offers were just too lucrative to ignore. Beth Israel would have to sell the hospital, and the patients would have to move.
Huguette asked to see a copy of the hospital’s financial statement. And she said she didn’t want to move.
There was one way she wouldn’t have to move, Hyman told Huguette. “
A contribution in the neighborhood of $125 million would obviate the need to sell.”
The next day, in her medical chart, Dr. Singman wrote, “
Expressing concern about having to leave her room here in the hospital.” Hadassah explained Huguette’s anxiety: “
She don’t want changes. She used to that place. She loved that place. She liked the place. It is comfortable, she knew all the people there, all the nurses, and she is really happy in that place.”
Huguette’s choices as presented by Hyman and Dr. Newman were clear: If she did nothing, she would have to move. If she gave the hospital $125 million, or bought the building for that amount, she could stay.
This was a shakedown. On the street, such a payment is called protection money. In nonprofit hospital management, it’s called major donor development.
• • •
Beth Israel staff, from janitors to doctors, receive annual notices of the
hospital policy on conflicts of interest. Gifts from patients are strictly forbidden. Accepting a tip is grounds for termination. Yet Huguette’s doctors and nurses were receiving millions in checks, and now the hospital’s leaders were holding up one of their most vulnerable patients for $125 million.
Beth Israel officials won’t answer questions about the hospital’s efforts to procure gifts from Huguette, or about their decision to let a healthy woman live in the hospital for twenty years. Attorney Marvin Wexler offered a general statement that the hospital acted in its patient’s best interests. Indeed, Huguette thrived at the hospital much more than she had in her last years at home. “
The indisputable reality is that Beth Israel rescued Mrs. Clark from a secluded and extremely unhealthy existence that endangered her life,” Wexler said, “and then provided her a well-attended home where she was able to live out her days in security, relative good health and comfort, and with the pleasures of human company.”
Huguette’s reply to the $125 million request was “
That’s a lot of money.” Hyman and Dr. Newman assured her they’d “
never abandon her and that somewhere in the Continuum empire she’d find a home if she needed.” She told Dr. Newman that she would have to talk with her lawyer, that she’d have to think about their request.
Yet her answer gave them hope. Dr. Newman wrote to his staff that he’d gotten a similar answer when he’d asked her for a painting: “
She came through with the Manet. So we’ll see this time.”
She did consider it. Two days later, she called Bock to ask if she could sell her Connecticut home to “buy Beth Israel.” He told her the property, worth perhaps $20 million, wouldn’t bring nearly enough for that.
She could have raised the money. She had more than $150 million in stocks, bonds, paintings, jewelry, and cash, in addition to more than $150 million in real estate. But she withstood the pressure. The shakedown failed. As desperately as she wanted to stay in the hospital, in that very room, she agreed to move.
Indeed,
Huguette’s last donation to Beth Israel was in 2002, not counting money she left in her will. For the last nine years of her life, she repeatedly said no to its implorations. She gave nothing when Dr. Newman
wrote her a letter asking for an annual donation in 2003. She gave nothing when he wrote again in 2004. She said no when they asked her to buy the building in 2004. She gave nothing when the new president of the hospital wrote to her in 2007 asking for $255,000. Beth Israel’s leaders had tried their best to exert their influence on Huguette Clark, but W.A.’s daughter stood firm.
• • •
So Huguette would move. But where?
Her first rule: no nursing homes. She told Dr. Newman that she didn’t want to go downtown to Beth Israel’s main hospital. She preferred to remain close to Madame Pierre on the Upper East Side. She sent her attorney and accountant to scour the city for other hospitals. Beth Israel officials did as Huguette asked, reaching out to those other hospitals to try to arrange a room for her. Huguette considered Mount Sinai, where her mother had died, up Fifth Avenue from her apartments. If she moved there, however, she would have to switch caregivers. Dr. Singman told her he “
would have to discontinue my care for her” if she moved to Mount Sinai—it was too far from his home, he said. In fact, Mount Sinai is on the Upper East Side, the same as Doctors Hospital, and was only five minutes farther from his home in SoHo.
Hadassah told her the same: If she went to Mount Sinai, she’d have to get a new team.
The next day, she relented, agreeing to move down to the main Beth Israel hospital. She moved in July, just before Doctors Hospital closed. The next year, it was torn down to make way for multiple-story condo buildings.
The medical records show that Huguette was anxious leading up to the move, but Hadassah talked her through it.
N
OT ONCE
in twenty years did Huguette take a walk or a ride in a wheelchair out to the parks near her hospital rooms. “
We told her,” Hadassah said, “we can have some fresh air outside.… We have a wheelchair for you. Refused.” Her friend Madame Pierre said she urged Huguette to go out, but Huguette always changed the subject.
Huguette went outside the hospital a few times to see doctors and dentists, especially in the early years. But she was mostly in excellent health and was able to get her teeth cleaned inside the hospital.
Her last time outdoors was the day she transferred from the closing Doctors Hospital down to the main Beth Israel. It was a Tuesday morning, July 27, 2004, when
Chris Sattler helped her into the ambulance for the five-mile trip from the Upper East Side. She didn’t take a long look at the old site of the Clark mansion or her apartments on Fifth Avenue or the Spence School. She didn’t see the Empire State Building or Central Park. She didn’t see a single bit of New York City on the fifteen-minute ride. The entire time, her eyes were covered, Chris said, by those big patches that patients wear after eye surgery.
• • •
In her chart on the day of the transfer, Dr. Singman summarized her for the staff at Beth Israel: “
She is terribly insecure, and a hospital room is her home from whence she rarely leaves.” He added one more note: “At present patient not pleased with her new surroundings, and is considering leaving.”
She didn’t leave, and now she had six nurses to watch over her. Hadassah cut back to an eight-hour shift, so more nurses were added. But because Huguette didn’t do well with new people—“
She have to know you first,” Hadassah said—the nurses started doubling up, two per shift, so she would always see a familiar face if someone needed to leave early or take a day off.
Huguette’s room no longer had a view of the river. Her new room
looked out on apartment buildings. She talked about how much nicer Doctors Hospital had been, though her shades were drawn most of the time anyway. Her new room was larger, a double room, though occupied by one patient. It was on the tenth floor of the hospital’s main circular building, called Linsky.
Room 10L04 was decorated in standard late-century hospital tans and browns: wood closet of cheap laminate, tile floor, sink, bathroom, standard hospital bed with curtain for privacy, schoolhouse wall clock, modern armchair, nightstand with three drawers, fluorescent lighting.
Huguette had fewer visitors at Beth Israel than at Doctors. It was much farther from the apartment of Madame Pierre, who now visited only about every four to eight weeks. Though they still spoke on the phone every day, by 2005 Madame Pierre was showing the beginnings of Alzheimer’s, so their conversations became shorter.
Despite having fewer visitors, over these years Huguette became more open with strangers, more conversant. As she passed her hundredth birthday, in 2006, she began to leave her door open more often. She allowed her attorney Bock to visit, as Don Wallace never could. She shared French pastries and childhood stories with the nurses and other staff.
“
She started coming out of her shell,” Chris said. Her time in the new hospital “re-socialized Mrs. Clark. She became less of a recluse.” She even made a new friend, visiting a woman who was a patient down the hall. Chris said Huguette “enjoyed the traffic of humanity for the first time in fifty years.”
Once a year, Huguette also allowed doctors and nurses from the floor to come into her room for little birthday parties for her.
There was a little gathering for her one hundredth birthday on June 9, 2006. Attorney Bock was there, and accountant Kamsler, Chris Sattler, and Madame Pierre.
Someone brought a SpongeBob SquarePants balloon. The hospital delivered a huge cake. As birthday presents, Huguette wrote out checks to her nurses. A week later, Huguette asked a nurse if she could put more air in the balloon.
