The Billionaire Who Wasn't (50 page)

“Maybe too much wealth can be a burden, but not if you know how to deal with it—and I think I am quite comfortable with it,” he said. “In one way you want to do good works with your money. By the same token you have to plan for a succession and transfer the responsibility to the next generation. And obviously you have to train your children on how to govern wealth management and to do something productive with it. This is one of the most important things that you can do in your lifetime, passing it on constructively and productively. You have to leave instructions to your children and grandchildren and establish standards for them which they live up to and make their life productive so that they can enjoy themselves and enjoy the wealth.”

One could of course give it all away like Chuck Feeney, said Miller, but he planned to give more responsibility to his three children and ten grandchildren to let them get more involved in charitable work. “Making money is difficult enough, but keeping it after you have made it can be even more difficult. I think making it and trying to give it away at the same time is almost impossible. You either have to do one thing or the other. Obviously if you are giving away huge sums of money, you have to do a great deal of due diligence to make sure that the money is being used properly and that takes a lot of time and you need people to help you. You want to make sure that it's put to good use, and that somebody is not fucking you.”

Miller believes that Feeney had a “guilt complex” about making so much money. He said he told him once that he would have been a good Catholic priest because making money seemed to bother him so much.

Of the four DFS owners, Alan Parker currently has the most wealth and maintains the lowest profile. Tall and courtly, the former accountant is one of the richest people in the world, but he has not been written up in glossy magazines or celebrity columns and his lifestyle is notably lacking in ostentation. Little has appeared about him in print anywhere. He was described by the London
Times
as an “ultra-secretive” multimillionaire, worth some $2 billion in 2006. The wealth held in his family trusts and philanthropic foundation is in fact almost certainly more than three times that. Parker built up his fortune by carefully compounding his money, including the $840 million for his 20 percent of DFS, and he has made a lot more in the investment world than from DFS.

The Parkers live in a historic mansion overlooking Lake Geneva in Switzerland. Here he proudly produced from a box some of the hundreds of “thank-you” letters he received for the gifts he and Chuck Feeney sent to DFS employees after they sold their shares.

When he embarked on his career as an accountant, Alan Parker never expected to make a million dollars, much less a billion. He was born a British national in Zimbabwe, then known as Rhodesia, the son of a colonial civil servant of modest means. He was always tight with money, he conceded. He pointed out that like Feeney, he flew economy class for his first ten years with DFS, even when he had become a multimillionaire. He didn't fly first class until 1976, and then only because the lawyer accompanying him from London to the Bahamas on a legal matter said, “If you want to talk to me you will have to travel first class: We lawyers only travel first class.”

Chuck Feeney impressed upon him by his example that philanthropy was something to take account of in one's life, and his views on giving evolved as he saw how big a role philanthropy played in the culture of the United States. He and his wife, Jette, created one of Europe's big charitable foundations, the Oak Foundation, with headquarters on the sixth floor of a nondescript office building on Geneva's Rue de Leon and offices in London, Boston, and Harare, Zimbabwe. Jette Parker chairs the five-member trust that governs the foundation, Alan Parker is vice chairman, and the other three trust members are their children: Caroline, Natalie, and Kristian. Parker admitted that he sometimes felt weighed down by the responsibilities of great wealth, and his obligation to the charitable foundation can take precedence at times over a round of golf. Being a billionaire has its limitations, too—he waited more than ten years to get membership in a golf club near his home.

The Oak Foundation focuses on the environment, homelessness, human rights, women's issues, learning disabilities, and philanthropy in Denmark and Zimbabwe. Jette Parker, who is from Denmark, has directed funds to the International Rehabilitation Council for Torture Victims, based in Copenhagen. After would-be philanthropist Alberto Vilar was arrested in New York in 2005 on fraud charges, Jette Parker took over his sponsorship of the Royal Opera House's young artists' program in London.

While his family name is not associated with the 200 or so grants a year varying from $25,000 to $10 million paid by the Oak Foundation, Parker doesn't work anonymously, nor does the Oak Foundation impose strict
confidentiality. In May 2006, he and Jette accepted honorary Doctor of Law degrees from Colby College Maine, where in 1998 they established the Oak Institute for the Study of International Human Rights and endowed the Oak Chair in Biological Sciences. Here the Parkers also founded the Parker Institute and Muscle Laboratory.

Unlike Feeney's Atlantic Philanthropies, Parker's philanthropic foundation is structured to continue indefinitely as a family concern. Joel Fleishman, whom Parker has consulted, said it was considered to be one of the most successful family-run charitable foundations. For his part, Alan Parker said he believed that Chuck Feeney was mistaken in excluding his children from running his foundation.

Just as in the duty-free business, where Parker held the middle ground between Feeney and Miller, his views on inheritance fall somewhere between those of his erstwhile partners.

“There has to be a balance, because I don't think you can ever get yourself into a situation where your children resent the fact that all your money, or a large percentage of your money, has gone to charity,” he said. A large proportion of his family wealth “is irrevocably in a charitable foundation and the rest is in a trust which is both charitable and family.” His children, he said, would still be wealthy by any standard. At the same time, he believes that too much money “ruins more children than it saves.”

“I guess I start from the basis that nobody really needs more than $10 million,” he said as he sifted through letters and photographs from DFS days, adding with a wry smile, “I say that in a house that cost more than $10 million.” He also thinks Feeney's policy of almost total secrecy was unnecessary. When the story first came out that Parker himself was very rich, he received only fourteen phone calls, mostly from cranks.

Tony Pilaro, who got $110 million for his 2.5 percent of DFS, today lives much of the time in his spacious wooden chalet on the slopes above Gstaad in the Swiss Alps. He also has homes in New York and Southampton on Long Island, and his investment company, CAP Advisers, is based in Dublin, Ireland. Like Miller, Pilaro has given up his U.S. citizenship. He got Irish—and thereby European Union—citizenship in 1993 under an Irish government “investment for passport” scheme. He walked into the U.S. embassy in Dublin the next day and turned in his American passport to a disapproving official. The dark wood of the chalet walls in Gstaad are hung with his extensive collection of contemporary art, chronicled in a hefty private volume
called
CAP Collection
. Pilaro created the CAP Charitable Foundation, dedicated to “education, the arts and the environment,” and conceived and established the Ron Brown Scholar Program in 1996 for the “next generation of African American leaders.” It is named after the former U.S. secretary of commerce, Ron Brown, who died in a plane crash in the Balkans.

Although he had the smallest shareholding, Tony Pilaro played an important role in making the DFS owners rich. As the tax expert in the company, he ensured that none of the multi-million-dollar cash dividends were taxed before distribution to the shareholders. Feeney always said Pilaro was the smartest of the four. His own attitude to wealth, Pilaro explained, was that if a person could earn income free of tax, that person could invest it at a higher rate than the government, and then if the object of his largesse were his family and his charities, there would be more to distribute to the family and the charities.

“Chuck's attitude to tax is not dissimilar to my attitude to tax,” he said in a living room of his chalet, where the framed photographs on the shelves included snapshots of himself with Paul Newman, the film actor and patron of the Hole in the Wall Gang camps, the residential summer camps for seriously ill children, with which Pilaro is also associated. “I think there are two approaches. An entity can pay tax to the government and then the government can spend the money. I think Chuck's view and mine was that the U.S. government is probably the most inefficient expenditure of these monies. So therefore if you could give it to yourself and spend it the way you want on your own charitable endeavors, and invest it at a higher rate of return than the government would get, you could do more for the world.” It was a point Chuck Rolles also made about Feeney. “Chuck hates taxes,” he said. “He believes people can do more with money than governments.”

In the early 1960s, Pilaro joined Butler's Bank in Nassau for a time and this brought him into contact with Robert Vesco, one of the most notorious corporate villains in history. Allan Butler provided Vesco with the $5-million loan in 1970 that enabled him to take over Bernie Cornfeld's Investors Overseas Services in Geneva. Pilaro became a tax consultant to Vesco after his buyout of the mutual fund, from which the crooked financier extracted $242 million. While this is often mentioned in media references to Pilaro, he pointed out that he was also a tax consultant to the Dalai Lama and other highly reputable figures. In 1996, Pilaro bought a majority shareholding in an American company called BriteSmile, which
has a chain of clinics promoting BriteSmile as a professional teeth-whitening solution.

Was he now or was he ever a billionaire? He didn't answer, but the next morning he said, “I reflected last night on the ‘B' word. God knows how much I have made in life, but I have had a wonderful lifestyle, fantastic. If I wake up and want to do something that day, I do it. The freedom, the power to do, is enormous. I lead a good life.” He cheerfully acknowledged that a disproportionate amount of his income generated by his assets goes to “living” and “giving,” so he never did become a billionaire.

Pilaro expressed regret at the idea that there was any “direct causal connection” between the lawsuit that he and Miller brought to stop the DFS sale and the unveiling of Feeney's secret philanthropy. “I was shocked when our relationship became fragile because this was attributed to me,” he said. Feeney's giving wasn't exposed by the legal action, he said, but through the letter Harvey Dale sent to dozens of people in January 1997 revealing everything about Chuck's philanthropy. “Why the hell did Harvey tell the story?” he asked with some agitation.

In 2003, a mutual friend of Feeney and Pilaro, Irish film producer Noel Pearson, invited both to lunch, but Feeney declined. Pilaro remembers being told that Chuck said, “I'd love to have lunch with Tony but tell him to say sorry, and he knows what he has to say sorry for.” Pilaro wrote to Feeney, saying, “‘If that's the case, Chuck, then I apologize profusely.'” Feeney said, with a cackle, “I'm Irish, I hold a grudge to the end.” But he didn't. Late in 2005, Feeney and Pilaro met for lunch at a Dublin restaurant, Les Frères Jacques, and they agreed to let bygones be bygones.

CHAPTER 33

No Pockets in a Shroud

Anonymous giving, the hallmark of Feeney's philanthropy, was finally abandoned by Atlantic Philanthropies as the new century began. It was Feeney's wish from the beginning not to “blow his horn,” but many of his other reasons for secrecy, to do with business and his children, had passed with time. Moreover, friends and beneficiaries found it a bit ridiculous adhering to a code of
omerta
when everyone
knew
. “The idea of anonymous giving was good, but eventually we became synonymous with anonymous,” said Feeney. “It became evident that we were kidding ourselves.” He also could not promote his example of giving while living, if nobody knew about it.

As the anonymity policy unraveled, Harvey Dale and foundation director Fritz Schwarz drew up a list of the pros and cons of continued secrecy and in June 2001 recommended that Atlantic Philanthropies drop its policy of enforcing absolute confidentiality. All grantees that year were told they were no longer bound by secrecy. Those who got gifts earlier than 2001 were informed they were free to identify Atlantic Philanthropies as the source of the grant, but “as we imposed these conditions on you we are not ourselves going to identify you as our grantee.”

In September 2002, under John Healy, who took over as CEO when Harvey Dale retired in September 2001, Atlantic Philanthropies went
further and launched a Web site for the first time. “Understanding that a policy of public access to our grant-making work would extend significant benefits to our grantees, we are no longer pursuing a policy of anonymity,” it announced. “However, we remain committed to keeping a low profile and not seeking publicity for our organization.” It announced that up to that point, the fund had secretly awarded approximately 2,900 grants totaling $2.5 billion. In future it would list every grant it made. From being the most secretive of philanthropies, it was now one of the most transparent, though not subject to U.S. disclosure laws, so that its salary structure stayed confidential.

One of the reasons for dropping anonymity related to the future of the foundation. Greater transparency would be needed for Atlantic to promote collaboration if it decided to wind down and go out of business. Feeney had deliberated on this question of “to be or not to be” with Hamlet-like uncertainty for years. His consigliere had favored a perpetual foundation. In a key report to the board in 1993, Harvey Dale had stated: “I think we should aim at creating our own institution as a perpetual source of funds for charitable purposes, rather than choosing to spend it out of existence.” Spending down, he warned, would require turning over considerable resources to donees who might not do as good a job as those running a permanent foundation.