The last tycoons: the secret history of Lazard Frères & Co (53 page)

And they have the requisite shingle-style mansion less than a mile from the beach on South Main Street in Southampton, where he invited McClintick to witness his annual, boldfaced-name Easter egg hunt. Another house they own in Southampton, which used to be where Liz summered, occasionally gets rented out to the likes of Barbara Walters. The Rohatyns also own a beautiful, intricate--and huge--log cabin home, designed by Liz's nephew, some seventy-two hundred feet above sea level, outside Pinedale, Wyoming, where they spend most of August and enjoy fishing and bird-watching. "Modest" is not the word that best describes these various real estate holdings but neither is "ostentatious." For his part, Felix has a number of fine paintings in his Fifth Avenue apartment. Jane Engelhard, the socialite wife of his former client Charles Engelhard, gave him a lovely Vuillard portrait of a woman. Andre Meyer gave him a wedding gift of an extraordinary Monet landscape painting of a small town in Provence nestled in and around a hillside, all seen from a distance. He also gave Felix a Bonnard painting of a seated woman who appears to be preparing to wash some clothes. Felix also has a few Canalettos here and there. But one has the sense that art is not his passion.

THE ROHATYNS' FACILE command of the New York social scene in 2006 makes it easy to forget that in 1985, Felix and Liz were at the epicenter of a self-inflicted if well-intentioned social faux pas. In a November 1985 speech at the City Club of New York about mass-transit financing, Felix made some comments about New York socialites, partially in response to a recent speech by Senator Pat Moynihan about the growing disparity between rich and poor in New York City. Felix chastised the city's upper crust by claiming that "while dazzling benefit dinners are attended by our richest and most elegant New Yorkers, and millions of dollars are raised for our golden institutions, it is increasingly difficult to find money for less glamorous needs. If our wealthiest institutions were to exercise more restraint over the proportion of charitable funds they try to absorb; if our most energetic, glamorous, and wealthy citizens were to become involved with community houses, the 'Y,' shelters for the homeless and programs for unwed mothers, then New York would be a much better place for her citizens." Sitting in the audience at the City Club that day was Kathleen Teltsch, the
New York Times
reporter who covered charities. She dutifully reported Felix's concerns. In separate remarks to Liz Smith of the
Daily News,
Elizabeth Rohatyn echoed her husband's concerns.

The Rohatyns' comments fell with a thud on their intended recipients. But they weren't done roiling the waters. In January 1986, Felix told the
New York Times
, "There is so much concentration on the gala and on catching a glimpse of the gala-goers, we are losing sight of the purpose of the exercise. The opulence of some of these affairs becomes an embarrassment when one remembers the misery the charity is trying to alleviate." Then followed Ron Rosenbaum's definitive take on the matter in a
Manhattan Inc.
cover story, which, though a bit of a send-up, explored not only the reaction from New York society but also some of the Rohatyns' proposed solutions. Rosenbaum interviewed the Rohatyns at 770 Park, surrounded by "porcelain and damask," and during his interview they all enjoyed "sherry and biscuits." He asked them about the firestorm of reaction from their socialite friends.

"They said they were pleased that two people have stood up and said much of what they were thinking about," Liz replied.

"But sweetheart," Felix interjected, "I think in fairness that what was equally important is how many people in our circle of friends who are involved in these things didn't really speak to you. It's a very eloquent silence."

"It's a pregnant silence," Liz said.

When told by Rosenbaum that his article would be published in the magazine about six weeks after the interview, Liz said to Felix: "We'll just have to plan to be out of town then, dear."

The coup de grace was a nasty, unsigned May 1986 article in the fashion industry bible,
W,
ominously titled "Felix the Cat and Snow White vs. the Social Sisters," which recounted the Rohatyns' battle with the then-all-powerful social doyennes Brooke Astor, Annette Reed, and Pat Buckley. The article suggested Felix had raised the issue to curry favor with New York's governor, Mario Cuomo--with whom he shared an interest in Sir Thomas More, the sixteenth-century statesman and martyr--in hopes of becoming Cuomo's secretary of the Treasury should Cuomo be elected president, or decide even to run. (Felix's later response: "Ludicrous.") The
W
article included this tasty morsel from one "Socialite B": "How dare they? The Rohatyns have a right to spend their money--if they spend any--with any charity they like. And so do I, and so do you. It amazes me that someone who works at Lazard Freres, which is not a place that you put your money if you're in a charitable mood, thinks he has the right to dictate how Annette or Pat or any of the others spend their time and effort. These women have gotten into the trenches for the Met and the Library and AIDS and everything else. So some of the parties were fancy. Some of RCA and GE's profits are fancy too. Does Felix criticize them? You bet your life he doesn't."

In the face of this controversy, a quite normal urge would be to lie low for a while and keep out of the press, especially if the new matter doesn't juxtapose particularly well with all that had just transpired. Felix, though, chose not to follow this path. Instead, he remained true to his unarticulated philosophy that there is no such thing as bad publicity. A week after a
Newsweek
article rehashed the charity ball debate, he was quoted in the
New York Times
talking about the quality of the
wines
in the Lazard wine cellar and engaging in some polite banter with Robert Pirie, the CEO of Rothschild in North America, whose office was three floors below Felix's in Rockefeller Center. "What we serve," Felix said, "is not the crown jewel of our escutcheon." To which Pirie observed, "I've drunk Felix's wine, and he's right." Pirie, of course, could boast of the finest corporate wine collection and select simply from among the "homemade reds," including the Rothschilds' Chateau Duhart-Milon and Moulin des Carruades. "He gave me a Lafite-Rothschild," Felix told the
Times,
referring to one of the world's most expensive wines, "and I almost went to work for him as a result."

Felix was also being urged to challenge the U.S. senator Alfonse D'Amato, Republican of New York, in the 1986 election. He declined. "It's just not something I could do well or be comfortable doing," he said at the time. "Besides which I promised the Mets I will play shortstop for them next season." Upon hearing this, Frank Cashen, then general manager of the Mets, wrote Felix a letter. "Having followed your career with great interest, I was pleased to learn that you are now committed to playing shortstop for the Mets during the pending season," Cashen wrote. "To this end, I have enclosed your official 1986 Uniform Player's Contract and trust the terms are satisfactory." Felix declined Cashen's offer, too. "I was thrilled to get your letter with the contract for next season," he wrote back.

Imagine my dismay when, upon closer reflection, it now appears that I will not be able to play for you in 1986 for the following reasons: (1) My arrangements with Lazard Freres include noncompetitive clauses. It seems to me there is not much difference between a hostile corporate takeover raid and a high inside fastball thrown at somebody's ear. We are both in show business and I am afraid that our lawyers would feel that I should stick to our kind of show biz. (2) I am sure that Rafael Santana is a serious hard-working young man with a great future with your club. I shudder to think what would happen to his morale if, all of a sudden, he found a 58-year-old, left-handed shortstop on your roster. I don't want to risk creating such unrest. (3) Last, but not least, I must come to the issue of money. Your proposed contract at $75,000 per year seems to me somewhat on the skimpy side even though I recognize that my fielding has been erratic and that in my last full season (fraternity college in 1949), I hit only .089. In addition, I should point out that your proposal is way below the minimum wage scale set by the Investment Bankers' Benevolent Association and that $75,000 is what one of my very junior partners earns in one weekend, working on a deal that doesn't even go through. Nonetheless, I do appreciate that, under the circumstances, your proposal undoubtedly appears generous to you.

In response to Felix's letter, Cashen said, "I really didn't feel I wanted to give him the minimum, because of who he is"--major-league rookies in 1986 received a minimum of $60,000. "But his experience seemed a little thin." Felix's decision may have saved him from a salary cut of 99 percent, but it also cost him a World Series championship ring.

Felix's growing fame, though, could not insulate him and his family from the randomness of big-city life. Three times over the years, Liz Rohatyn was mugged on the streets of the Upper East Side. First, a bicyclist ripped a gold chain off her neck on Madison Avenue, then her wallet was stolen on Fifth Avenue, and, finally, her Hermes handbag was grabbed after she and Felix left a friend's Passover seder on East Sixty-second Street and were almost home. Felix said a waiter at Arcadia, a nearby restaurant remarked, "God, how can they do this to you? You saved the city."

Around the time Felix was joking around with the Mets, Michel, previously quite press shy, chose to announce his arrival on the international social scene. In the summer of 1986, while on his annual flight from Lazard, he permitted both the fashion reporter Christa Worthington and a photographer from
W
to visit him and his family at Sous-le-Vent, his aerie in the French Mediterranean town of Cap d'Antibes, near the Italian border. The resulting three-page color spread on the oversized pages of the mid-August issue of the magazine featured large pictures of many of the rooms and charming gardens of his "summer retreat," described as a "pink stucco wedding cake of a mansion with cool marble stairways, grand Moorish archways, potted lemon trees on its myriad of terraces and so many servants that one rarely sees the same domestic face twice in the course of an afternoon." There were revealing pictures of "Monsieur," clad only in his bathing suit, "conducting business" on the phone at the beach, thanks to a telephone cord that snaked throughout the vast property (it was before the days of commercial use of cellular phones). Right on the first page,
W
got in an ironic dig at Felix, which of course was the point of Michel agreeing to the article in the first place. After explaining that Michel made $50 million in 1985 as the "world's best-paid banker" (and supposedly $125 million in 1986), Worthington wrote: "But when it comes to personal publicity, the kind that one of David-Weill's employees, Felix Rohatyn, routinely attracts, this wheeler-dealer couldn't, frankly, give a damn. 'I don't know who you are. I don't know what you do, but I know you are famous,' is the punchline of the New York anecdote that makes him guffaw."

The reaction inside the firm to the
W
article about Michel was one of stunned amazement. "This was just a terrible article in
W,
a terrible article," remembered Damon Mezzacappa, himself no stranger to the society pages. "It was kind of silly. It showed Michel sitting in his bathing suit with a big cigar"--actually it was one of the few times Michel was pictured without his cigar--"and it was pretty unflattering, pretty unflattering." In retrospect, Mezzacappa viewed the
W
article as the distinct point in time when Lazard began to change, and not necessarily for the better. Michel had decided he now wanted some of the recognition that for years had been Felix's exclusively. "Michel really started to love the press attention," Mezzacappa said. "And Felix got pretty angry about it because the roles had changed, and a tension developed between the two of them." Michel's comings and goings began to show up in the society pages, and his picture graced, among others, the pages of
Forbes, BusinessWeek,
the
New York Times,
and the
Wall Street Journal.