Gilded Lily (21 page)

The Gutfreunds were probably on a par with Lily when it came to unbridled extravagance. They thought nothing of renting an industrial crane to lift an enormous Christmas tree into their duplex apartment along the East River in the days shortly after their 1981 marriage, and before they moved to their massive sixteen-room apartment on Fifth Avenue. Years later, when they wanted to impress the Safras, they rented Blenheim Castle, the Churchill family's ancestral home in Oxford, to throw a party for them and several hundred other invited guests.

The statuesque Begum Aga Khan, the elderly widow of Aga Khan III and for decades a high-society fixture in the south of France, towered over Edmond in a photograph that appeared in
O Globo
's society section a week after the wedding. Edmond, who was a few months away from celebrating his fifty-first birthday, is almost completely bald, and appears stiff and ill at ease posing for an unseen photographer in his tuxedo. Maybe the ostentation of the event proved a little bit too much for Edmond. He would probably have much preferred a smaller gathering of close friends and family.

Lily would have none of it. The budding socialite, who was nearly forty-nine, looked resplendent, although extremely thin, in a cream-colored gown with a sheer back. Her blonde hair was discreetly pulled
back into a conservative but very tasteful bun. Friends say she positively glowed when the cameras were pointed in her direction.

“There were moments of great emotion, and such great luxury,” noted Perla Sigaud, one of
O Globo
's society columnists, who attended the wedding.

Even those used to the excesses of the Brazilian upper classes were impressed. “The wedding was truly spectacular,” recalled Ricardo Stambowsky, a leading wedding planner for Rio's high society. “The entire theater in the
Manchete
building was turned into a huge synagogue. A bridge was built over the pool. People talked about that wedding for years afterwards.” And to make sure nobody forgot about the event, Bloch ordered his editors to devote eight pages of photographs to the ceremony and the reception in the next issue of
Manchete.

On stage, Claudio, who was just shy of his thirtieth birthday, stood stock still and somewhat ill at ease in front of so many important guests. In a newspaper photograph of the ceremony, Claudio is shown clasping his bride's hand. The caption says he is surrounded by family, but curiously Edmond is the only family member who is visible in the photograph. Lily, who is standing at attention next to her husband, is obscured in the photograph by a white piece of paper from which the rabbi is reading.

Switching from Aramaic to Portuguese towards the end of the ceremony, the rabbis blessed the bride and groom. “A couple with such good roots will quickly bear good fruit,” said the rabbi from Rio. Later, Claudio awkwardly moved to kiss the bride after removing her veil.

The auditorium echoed with applause as the bejeweled and black-tied guests began to form themselves into a long line to wish the happy couple well. On the penthouse level of the Bloch Editores building, waiters polished crystal goblets, popped champagne corks, and readied hors d'oeuvres for the throngs of designer-clad luminaries who began to make their way up to the top floor. Dinner would
be served later, in the restaurant, which was several floors below. In the wee hours of the morning, as the partygoers began to file into their chauffeur-driven black cars, they congratulated Adolfo Bloch and Lily Safra for putting on a great party.

None of the revelers could have imagined that they would all meet again, hours later, to attend a funeral.

 

THE WINDING ROAD
that circles the Pontifical Catholic University in Rio de Janeiro's upscale Gavea neighborhood on a lush mountain overlooking the city is difficult to negotiate at the best of times—on a sunny day with almost no traffic. There are large yellow warning signs proclaiming “Dangerous Curve” in Portuguese, and most experienced drivers know to proceed with caution.

Claudia Bloch Sigelmann, Evelyne's twenty-two-year-old sister, must have rounded that curve in her tiny Fiat dozens of times as she made her way from Claudio's sprawling house, where she frequently escaped with her boyfriend when no one was around to use the pool and smoke pot. On the night of Evelyne's wedding, Claudia left the party at her uncle Oscar's building in Gloria and drove with her boyfriend to Claudio's house on the Gavea mountainside. Claudia's boyfriend was so drunk that the bartenders at the wedding reception refused to serve him. At one point, the chef, Severino Dias, asked him to leave at once. Determined to have a few more drinks before heading to the Gavea house, Claudia and her boyfriend headed to the Hippopotamus bar. But they were eventually kicked out when the boyfriend became unruly.

Once they arrived at Claudio's home, they went for a moonlight dip and smoked a few joints. The drugs mixed with the alcohol that was already in her system from the party must have clouded Claudia's judgment. The next thing she did was to get in the passenger seat of the Fiat with a man in the driver's seat who was not only drunk, but now stoned. They were heading to an all-night
club in Baixo Gavea, a bohemian neighborhood at the bottom of Gavea mountain that was a frequent haunt of university students and artists.

In the pitch dark, Claudia's boyfriend drove recklessly down the cobblestone streets that wound their way past the dense tropical vegetation with its bursts of colorful hibiscus flowers that hid the gated mansions and exclusive private schools nestled in the elite hillside neighborhood. By the time the driver could make out the myriad lights of the city down below, he was driving much too fast to negotiate the infamous curve that circled the university, which locals refer to by its acronym, PUC. Claudia may have tried to take the steering wheel when he lost control of the car. But it was too late. The Fiat crashed into a wall. Claudia was pronounced dead when the paramedics arrived. The boyfriend miraculously survived, with only a sprained ankle and a few scratches.

It was dawn when Guilherme Castello Branco got the call. He had just drifted off to sleep after spending most of the night at Claudio's wedding when the telephone jerked him awake.

“It was Magna, Claudio's secretary, on the other end, and her voice sounded terrible,” recalled Castello Branco. “She told me to call all the newspapers, radios, television stations, and anyone else I could think of to block the story. Claudio did not want the story in the press.”

But the bleary-eyed Castello Branco had no idea what she was talking about. “What story?” he asked. After being told of the tragedy, he hung up the telephone and, for the second time in a week, called every media outlet in Rio to keep a story from reaching the press. Again, he claims he paid no money to censor the news. A simple phone call was enough to halt any bad publicity.

The censorship seemed to have worked because while just about every media outlet in the city gushed about the wedding, there were only fleeting references to the terrible accident and the funeral, and they only appeared a week after the events.

According to an editor who was close to both the Bloch and Safra families, they went out of their way to make sure that the story did not end up in the press, partly because Claudia “was either drunk or on drugs or both.”

“The whole thing was simply too embarrassing for the families, and really too tragic,” said the editor, who did not want to be identified. “Can you imagine? On Saturday night you have the wedding, and then on Sunday morning the funeral?”

The families clearly did not want bad publicity to upstage what had been a very glamorous and important “happening” in Rio high society. On top of that, in a Catholic country under a military dictatorship, it would simply not do to reveal that the niece of one of Brazil's most important tycoons had died because she had been under the influence of drugs and alcohol.

Edmond and Lily heard the news as they made their way to their luxurious suite at the Méridien in the early hours of Sunday morning. Edmond, still in black tie from the wedding, immediately called his chauffeur and drove to the morgue to offer his support to the Bloch-Sigelmann families. He also took it upon himself to make the funeral arrangements. After the body was released from the morgue, the funeral was immediately scheduled for that morning. Many of the guests who had attended the wedding now found themselves at a wind-swept Jewish cemetery on the industrial outskirts of Rio de Janeiro, presiding at the burial of a young woman whose sister had just celebrated what should have been one of the happiest days of her life.

Inês Sigelmann, the mother of the bride, her tear-stained face hidden behind large sunglasses, had worn a flowing gown the color of pink hydrangeas for her eldest daughter's wedding but was now dressed in a sober suit to bury her younger daughter. Most of the mourners were dumbstruck: They shook their heads in disbelief; they had no explanation for such a senseless tragedy.

“Life sometimes sends us difficult times, and I know that none of
the well-wishers at the wedding had the words to express their sadness for what happened right after,” wrote Perla Sigaud in her society column on the Cohen-Bloch wedding, which appeared the following week. “I was hesitating over whether in the face of so much pain I should write about the happiness that occurred on the eve of so much tragedy. It was climax and anticlimax; euphoria and extreme sorrow. Life sometimes forces us to deal with the most dramatic contrasts. And we must learn to take from every difficult experience an important lesson in humility.”

But Sigaud's rather poetic musings seem to have fallen on deaf ears, at least when it came to exercising humility. Here were two extremely wealthy families whose single-minded pursuit of wealth and status had been, and continued to be, ruthless and overreaching. At least that proved to be the case with Bloch. The media baron would famously overextend his reach after making his bold move into television on the eve of the wedding in 1983, and see his whole empire collapse a little more than a decade later. His beloved sparkling glass office building in Gloria where he had pulled out all the stops for the wedding of a lifetime, and where he had entertained some of the most important figures in recent history, would fall into disrepair. In due course, it became the property of the Brazilian courts and was auctioned off to pay the tens of millions in salaries that the company owed to its former employees.

“Everyone said that the death of Evelyne's sister on the heels of the wedding was a terrible omen,” said one of the wedding guests, who also attended the funeral the following day.

It was a curse, others said—a warning of some unimaginable tragedy that would surely befall those families in the future.

For the Safra family at least, that was exactly what it turned out to be.

 

MONTHS BEFORE THE
wedding and the funeral, Joseph Safra warned his brother not to sell the bank. He had even flown from São Paulo to Montreal, in the midst of a January deep freeze, to tell his brother in person that he was making a huge mistake by selling the Trade Development Bank to American Express. The final negotiations were underway at the Four Seasons Hotel in the frigid Canadian city, and Joseph needed to try to convince Edmond that what he was doing was sheer madness.

“You don't even know these people,” pleaded his younger brother, who must have found it hard to believe that Edmond was breaking with family tradition by entrusting one of his beloved “children” to strangers who did not understand the Safra way of doing business.

But Edmond could be stubborn. Despite their heated discussions about the suitability of Lily as a wife seven years before, Edmond had gone ahead and married her anyway, even after the public shame of
l'affaire
Bendahan. Joseph had also pleaded with him not to marry Lily. But in the end, Edmond refused, and for years after their 1976 wedding, the Brazilian Safras had frosty relations at best with Lily, whom they considered an opportunist and an arriviste.

But in many ways, the imminent sale of the bank was far more important than any woman. It must have bothered Joseph and the rest of the Safra clan that for the first time since the death of their father in 1963 Edmond had not consulted them over one of the most important business decisions of his life.

John Gutfreund, chair of Salomon Brothers investment firm, agreed that Edmond was making a terrible move. Gutfreund also took an intercontinental flight—from New York to São Paulo where Edmond was attending a bar mitzvah—shortly before the negotiations with American Express were scheduled to begin. Gutfreund tried to convince his friend to reconsider. A hard-nosed veteran of Wall Street, he knew that Edmond's aristocratic banking methods would be mocked in a huge American company like American Express. American executives at the company simply wouldn't take him
seriously; they would find a way to subvert his power. The experience, Gutfreund warned, would be disastrous.

But Edmond had made up his mind, partly because he had developed the niche market in European private banking so well that he felt there was no longer any space to expand. “It was an economic decision to join American Express because he felt that the private banking market in Europe was going into a downturn,” said one observer familiar with the negotiations. “And here was American Express under Jim Robinson III wanting to develop the private banking market and turn itself into a financial services supermarket. At the time, it seemed like a good fit.”

Edmond also worried about the worsening Latin American debt crisis and the exposure that his Swiss bank faced as country after country in the region showed signs of defaulting on their loans to international creditors and commercial banks. Between 1975 and 1982, Latin American debt to commercial banks skyrocketed, and the region saw its external debt grow from $75 billion in 1975 to more than $315 billion in 1982—a figure that then represented 50 percent of the region's gross domestic product. If Argentina and Brazil—two of the largest economies in the region—began to default as Mexico had done in August 1982, what would become of his own bank, which had made large loans to Brazil and other Latin American economies?