The Billionaire Who Wasn't (4 page)

But Feeney wouldn't let him. “No,” he said. “We're through.” They cashed in their chips and left. They still ended up well ahead, by $1,600 apiece. Feeney got his typewriter and camera out of the pawn shop, and the pair drove on to California, where with two other friends they rented a cottage for the summer in Santa Monica, on the outskirts of Los Angeles. They spent some idle days playing volleyball on the sands. Rolles remembered
Chuck slipping off in the mornings to take a course at UCLA. “Three of us would kind of sleep in, but Chuck would go off to summer school in the morning to take lessons in Russian.” At Cornell, Feeney had taken extra credit hours in French and Russian. At the time, he had half a notion that he might end up in intelligence. The National Security Agency had tried to recruit him at a debriefing on his discharge. An official told him, “People like you can continue to serve your country. Just sign here.” He thought about it for a few seconds, then said, “No, thanks.”

After a month, Chuck Rolles, who hadn't done his military service, got his draft notice to report to Pensacola, Florida, and the pair set off on the long car journey back to the East Coast. They drove through Nevada again and stopped at a little casino by a remote gas station. It was now Feeney who wanted to test the system a bit further. Rolles told him that he had had it, and he would wait in the car. He settled down to sleep as Feeney disappeared into the casino. He came back after thirty minutes and said, “Let's get the hell out of here.” “He never told me how much he lost,” said Rolles.

Feeney never played games of chance again. “I have always been down on gambling since then,” he said. “We had the good fortune to make $3,200 divided by two before our system went belly-up, and to stop playing before we lost all of that.”

The word went back to the tavern in New Jersey that Feeney and Rolles had made big money on the roulette wheel and that the system worked. The guys there put their money together and sent two representatives out to Nevada to cash in. They lost everything.

CHAPTER 3

Banging the Ring

By midsummer of 1956, Chuck Feeney still had no idea what to do with his diploma. But after Cornell he felt confident he could go anywhere in the world. He had a bankroll of $2,000 based on his casino winnings, and he still had four months left of the thirty-six months of government money from his GI scholarship. To claim the remainder, however, he had to enroll in a course, either in the United States or abroad. Many hours spent in the Hotel School library reading books on tourism and travel had stimulated his urge to see the world. He had always wanted to go to Europe, and the bankroll was burning a hole in his pocket. He went to the French consulate on Fifth Avenue and Seventy-fourth Street in Manhattan to inquire about tuition fees in French colleges. To his surprise, he learned that university education in France was free. That was even better. He bought a cheap ticket for a Cunard liner and within a few weeks he was in Paris. After signing up for a month's intensive course in French at the Sorbonne, he wrote off to colleges in Grenoble and Strasbourg asking for admission.

In early September 1956, the secretary in the admissions office of Grenoble University in southeast France looked up to find the twenty-five-year-old crew-cut American in her office. “Here I am, I want to register for the school, for the political science department,” said Feeney in heavily accented French. “The dean sees no one,” she replied stiffly. “Well, I'm here,” he said.

“I kept sitting there reading my magazine and this guy kept shuffling in and out of the room,” recalled Feeney. Finally, in some exasperation, the secretary
said, “The dean will see you.” “
Naturellement
,” replied Feeney. In his office the dean said, “Monsieur Feeney, you are an interesting candidate.” “Yes, I appreciate that!” “You see, you are the first person to request admission to the political science school of Strasbourg and send the letter to Grenoble!” Feeney had put his application letters in the wrong envelopes. He shot back. “Yes, but it's evident I'm here and it's here I want to be. If I wanted to go to Strasbourg I would not be in Grenoble.” The dean threw up his hands. “Why not!” he said. He admitted Feeney for a master's course in political science at the fourteenth-century university. The Cornell graduate was the only American in the department, something of which he was always proud.

Life was cheap in Grenoble, spectacularly sited in a broad valley surrounded by the snow-capped French Alps. Feeney's basic living costs came to about $15 a month. His French, tennis, and skiing improved considerably. The U.S. government inexplicably sent him $110 scholarship checks for six months rather than four.
Someone up there likes me,
thought Feeney.

At the end of his eight-month course, Feeney hitchhiked south with his kit and tennis racquet, looking for money-making opportunities. Getting rides was difficult as there were so many people on the roads holding up handwritten signs to show their destination. Outside Antibes, he displayed a notice in large letters on his tennis racket saying, “English conversations offered.” He had no trouble getting a lift after that. On the Mediterranean Coast, Feeney met an American who was teaching children of naval officers from the U.S. fleet based at Villefranche-sur-Mer, a picturesque port of eighteenth-century houses and steep cobblestone alleyways. Villefranche was the home port of the USS
Salem
, a heavy cruiser serving as the flagship of the U.S. Sixth Fleet with a complement of nearly 2,000 officers and enlisted personnel. “I started to realize there were these naval dependents around,” said Feeney. “I asked him [the American teacher] what they did in summertime and he said they were at a loose end, so I decided to start up a program like a summer camp for the navy kids.” Feeney had seen a business opening, and a way of being helpful. He rented a room in a pension in Villefranche and organized a summer camp on the beach. Almost seventy American kids were delivered into his care by grateful navy parents, and Feeney had to hire four other Americans as staff.

In Villefranche, Feeney made a deal with the tennis club manager to sweep the courts in return for playing for free. On the courts he met André Morali-Daninos, a French Algerian psychiatrist on vacation who was intrigued by
the young, educated American doing a job young French students would disdain. Morali-Daninos was a highly decorated war veteran who had joined the French Resistance during World War II and had brought his family to Paris in 1945. They came to Villefranche for their summer holidays, and in those days before mass tourism, the family usually had the beach to themselves. Morali-Daninos's twenty-three-year-old daughter, Danielle, a student at the Sorbonne in Paris, was somewhat disconcerted therefore at the invasion of the beach by dozens of screaming and whistling children with their American counselors. She was particularly struck, however, by the kindness and firmness with which the good-looking group leader treated the children. The vivacious French Algerian and the twenty-six-year-old Irish American got to talking, and a romance started up.

In Villefranche, Feeney came into contact with people making a living from the U.S. Sixth Fleet. Groups of pretty women and salesmen waylaid the sailors and hustled for orders to supply the ship's exchange store. He got to know a money changer named Sy Podolin who had bought up a row of old lockers and rented them to naval personnel so they could dump their uniforms and change into civvies when on shore leave. For a couple of weeks in August, Feeney made some extra money by managing the “navy locker club” for Pudlin in the evenings, opening up the lockers for sailors coming and going to the bars.

As the summer ended, Feeney planned to head north again. He loved the student life and “had enough money squirreled away that I could have gone to a German university.” However, one night in a Villefranche bar he met an Englishman, Bob Edmonds, who was trying to start a business selling duty-free liquor to American sailors at ports around the Mediterranean. He asked Feeney to help him.

The U.S. Navy did not allow the consumption of alcohol on board, but Edmonds had established that sailors could buy up to five bottles of spirits duty free and have them shipped as unaccompanied baggage to their home port. It could be a big market: There were fifty ships in the U.S. Sixth Fleet in the Mediterranean and the crews were rotated three times a year. The savings for the military personnel were huge, and almost every seaman on board could afford to buy a five-pack for collection back in the United States. A five-pack bought duty free in Europe cost $10, including delivery, while the same five bottles in the United States would cost over $30. Edmonds had failed to convince a British military supplier, Saccone & Speed,
to work with him and had gone out on his own. He desperately needed an American to help him.

“There's a big fleet movement, forty ships are coming in,” he told Feeney. “I can only see twenty. I'm looking for a guy that can see the other twenty.” “What do you mean?” asked Feeney. “Go and talk to them about buying booze.”

Feeney and Edmonds started going on board ships to take orders from the crew members, mainly for Canadian Club whiskey and Seagram's VO. They then arranged for the liquor to be shipped to U.S. ports from warehouses in Antwerp and Rotterdam. There was no need for capital, as they did not have to pay for the merchandise in advance. For a period they had the market to themselves, but competitors were quick to arrive. Edmonds went to check out new opportunities in the Caribbean while Feeney went to Edmonds's home in Hythe in the south of England to process orders. Feeney returned to Villefranche in October and was told the U.S. Sixth Fleet was heading for Barcelona. He took the train to the Spanish port, only to discover that the ships had been delayed.

Feeney had read in a Cornell alumni bulletin that Robert Warren Miller, another graduate of the Hotel School, had started work at the Ritz Hotel in Barcelona. With time to kill, he made his way to the Ritz on the tree-lined Gran Via de les Cortes Catalanes. Entering the lobby, he saw the familiar figure of Miller, with a shock of brown hair and cheeky grin, behind the reception desk. They hadn't been friends at Cornell—Miller was a year ahead of Feeney—but Miller recognized the wiry blue-eyed American immediately. “Feeney,” he said. “What are you doing here?” Replied Chuck, “What are you doing here?”

That casual exchange marked the start of one of the most profitable partnerships in international business history.

Miller's journey to Europe had been as haphazard as Feeney's. He was brought up in Quincy, south of Boston, where his father was a salesman for an industrial oil company. Miller got a draft deferment and went to Cornell from high school on a scholarship. Money was tight in his family, too, and he had to work part-time as a waiter and short order cook. A couple of months after graduating in 1956, when he was working as a line cook in Newport Beach, California, he got a message from his father in Quincy that his call-up papers had arrived. Miller drove to Santa Ana, signed up for the U.S. Marine Corps, and was sent to San Diego boot camp. However, a medical examination revealed a scar on his head from a childhood accident, and
a marine captain asked him to sign a waiver releasing the U.S. Marine Corps from liability should he injure his head in combat, adding that if he didn't sign he would be honorably discharged. Miller took the honorable discharge. He was given $78 and put on a bus to San Diego.

Like Feeney, Bob Miller did not want a white-collar job. Having read a lot of Hemingway, the twenty-two-year-old Cornellian had romantic ideas of becoming a writer or a soldier of fortune. He signed on for a three-month trip on an ocean-going tuna boat and while waiting to sail, crossed the Mexican border into Tijuana for a weekend spree. There he got involved in a brawl and was badly beaten and thrown into jail. By the time he was released, with torn shirt and only one shoe, the tuna boat had sailed. It was the low point of his life, and he decided to sort himself out. Miller went back to hotel work in the United States, saved $3,000, and headed for Spain on a Greek ocean liner, the
Queen Fredericka.
He made his way to Madrid, and from there to Barcelona and the job at the Ritz reception desk.

When Miller finished his shift that day, he and Feeney went out for dinner. Miller still had his $3,000 bankroll and was already bored working “in a monkey suit” in the hotel. They decided to throw in their lot together and try to make money from doing business with the U.S. fleet. Miller told the Belgian hotel manager, Juan Vinke, what he was planning and handed in his notice. Vinke laughed and said, “There's no future in that. Stay with us at the Ritz. You could be a great hotel man one day.”

While Miller was working out his notice, Feeney enrolled for Spanish lessons. “He was a hyperkinetic person always charging around, so he figured while he was there he might as well learn to speak Spanish,” recalled Miller.

Miller had already gotten a glimpse of the duty-free rackets that were common in postwar Europe. He told Feeney about a Hong Kong priest in Barcelona who changed U.S. dollars at black-market rates. The priest had shown Miller a small assortment of watches, film, cameras, and cigarettes for sale in his back office that he had smuggled under his soutane from Andorra, a tiny tax haven in the Pyrenees. “Don't worry, all of the profits that I make go to the church,” he said cheerfully, adding that Miller should go to Hong Kong, where almost everything was duty free.

Feeney and Miller made Villefranche their base and started taking orders for liquor from U.S. naval personnel. They needed cars, so Feeney got a little Renault Dauphine and Miller a Simca, and they started driving or taking
trains to ports all along the Mediterranean where the fleet docked: Marseilles, Cannes, Barcelona, Valencia, Gibraltar, Genoa, and Naples. They would not see each other for weeks, then would meet back at Villefranche, agree on what to do next, and go off in different directions. Chuck designed a business envelope to give to people on the naval ships with a price list of whiskies. They found “bird dogs” on board, to whom they promised commission for getting sailors to sign up for the five-packs that they could pick up at their home ports. Receipts for duty-free liquor became so commonplace on board ships they were accepted as stakes in poker games.