A few years later, Andre asked Supino to go help fix a company, Republic Intermodal Corporation, in Lake Success, New York, in which Lazard had an investment. Supino was "seconded" to Republic for two years, turned the company around, and arranged for its successful sale. Before the sale closed, Andre summoned him to the Carlyle.
"I went to the Carlyle and up to Andre's suite," Supino recalled. "I walk into one of the libraries and see partners Frank Pizzitola, Tom Mullarkey, Peter Corcoran, and Andre. I walk in and see all these faces facing me, and Andre says, 'So, David, tell me what you are going to do now that we are selling Republic?' And I said, 'Mr. Meyer, I've given that no thought at all. Mr. Meyer, I am just trying to get this deal closed.' 'Well,' he said, 'why don't you come back to Lazard and we will pay you some thousands of dollars plus a bonus?' And I said, 'Well, I don't think I can do that, Mr. Meyer. I am sorry but I've been associated with Lazard for six years, and if you don't know by now whether I'm partner material or not, you'll never know.' And, anyway, I told him, 'Who knows? The deal may not close, so I may have to stay at Republic.' And he got furious at me, absolutely furious in front of all these other people. So he started shouting at me. 'You are an arrogant, brash young man!' And he said, 'Look, you go talk to my partners. I did not decide this. My partners decided this.'"
About a week later, Supino remembered, Andre called him up and asked him to come to the Carlyle at 10:00 the next morning. One "always had fear and trembling going to see him," Supino said, but he duly appeared at the appointed hour. "I went back to the Carlyle, and this time there was nobody there but Andre," he recalled.
"It is good to see you, David," Andre said. "How are you?"
"Very well, Mr. Meyer," Supino responded.
"David, I have decided I would like you to come back to Lazard as a partner," Andre said.
"Oh, Mr. Meyer," Supino recalled saying. "Enormous honor, Mr. Meyer. Enormous honor."
"Yes, I would like to give you a 1 percent interest," Andre continued.
"I said, 'Mr. Meyer, whatever you say is perfectly acceptable,'" Supino recalled. "'You could give me a quarter of a percent. It is a great honor to become a partner of Lazard.'" Supino got his 1 percent share of the profits.
FELIX WAS UNQUESTIONABLY Andre's protege, a mantle he assumed with less and less angst as Andre's health deteriorated throughout the 1970s and as it benefited Felix more and more in the marketplace. They spoke French to each other, even in New York. No one else at Lazard ever came close to achieving the level of intimacy Felix had with Andre--and those who tried quickly came to regret the attempt. "In some sense, Felix was Andre's son," explained one partner. "They had a very close and very frank relationship." Andre's obituary mentioned Felix--and Felix alone--as his heir apparent. What Felix was able to accomplish as an adviser requires the proper homage to Andre. Andre was said to have loved three things only: stunning women, priceless art, and complex deals. When asked about this, Andre told a reporter, "The first two are really one and the third is not always the case." The sort of service Meyer provided to his clients differed from that of Felix. Meyer saw himself as much more of a principal than as an adviser. True, he was the ultimate confidant, of David Rockefeller, William Paley, David Sarnoff, and Jackie Kennedy among others, but he saw them as peers, and they saw him as charming, effervescent, and exotic.
Meyer's introduction to the First Lady came through Stephane Boudin, the diminutive Parisian interior designer and head of Jansen, who worked with them both. "He was a great womanizer," said Paul Manno, Boudin's New York representative. "Boudin and I went to see him and said, 'How would you like to meet Jacqueline Kennedy?' His eyes popped out of his head. I said, 'It will cost you $50,000.' He said, 'For what?' I said, 'For a rug.'" At Manno's instruction, Meyer bought for the White House a nineteenth-century Savonnerie rug for the Blue Room. The introduction was made, and later Andre would become Jackie's financial adviser and close friend. In 1967, he accompanied the former First Lady to a gala at the Wildenstein gallery to raise money to help restore Italian art damaged in a flood in Florence. Arm in arm they made a grand entrance to the gallery as the paparazzi surged.
Andre was a notorious ladies' man, despite being married throughout his adult life to Bella Lehman. "Oh yes, Andre had a wandering eye," explained one of his friends. "And he made no secret of it. Even to his wife. They were almost members of the family. It was taken for granted. If the women wanted it and he wanted it, and Bella didn't object--who could make a big deal out of it." Soon after arriving in New York during World War II, he began a long romance with Claude Alphand, the wife of the French diplomat Herve Alphand. Alphand had been assigned to the French embassy in Washington at the time France fell to the Nazis and immediately left for London to join the Free French. Claude was left behind in New York, where she began a career as a chanteuse at nightclubs such as the Blue Angel. She was said to resemble Marlene Dietrich. Their affair was "very common knowledge," one New York socialite recalled. After the war, the Alphands got back together, and then divorced. But Herve, by now the French ambassador to Washington during the Kennedy administration, never blamed Andre. Claude moved back to New York and became a fixture at the Carlyle. "She would get away with it because he adored her," Andre's granddaughter Marianne Gerschel explained. "Absolutely adored her. She was just bohemian enough to appeal to his own sense of creativity. He enjoyed that in a woman."
Andre also had a long relationship with Henriette Bloch, another French emigree, who was the wife of Maurice Bloch. Like Alphand before him, Bloch accepted his wife's affair with Andre. "I think my grandfather was the one true man in her life," Marianne Gerschel said. "As far as she was concerned, he could do no wrong." She also became one of Bella's closest friends. And, according to Andre's grandson Patrick Gerschel, Andre had an affair with Felix's mother, which may in part explain how Andre came to know Felix. "It's very possible because Andre Meyer was quite a flirt and so it's quite possible," Michel explained. "But it's also quite possible that it's not true."
Then, of course, there was Jackie O. Andre and Jackie were together constantly during the years after President Kennedy's death and before her marriage to Aristotle Onassis. "Jackie opened up his life," Gianni Agnelli once said. "She was part of those aspects of life that he didn't really know. And he absolutely adored being with someone that important." She seemed taken with him, too, for a time. "His name constantly came up in conversations with her," a friend of Jackie's said. "It was always, 'I'm going to talk to Andre about this, see Andre about that.' But she never actually talked about the relationship. You just sort of knew it was there." Andre was said to have advised Jackie on the $200,000 purchase of her penthouse apartment at 1040 Fifth Avenue. And she was a frequent guest, along with Caroline and John, at Andre's suite at the Carlyle. (When the Kennedys came to New York from the White House, they stayed in the Carlyle, one floor above Andre.) The Kennedy men were also quite taken with Andre, and thanks to Sargent Shriver, he became one of the trustees of the family's vast fortune. Andre became close not only with Sargent Shriver but also with Bobby and Teddy Kennedy. "These Kennedys," he once told his friend David Lilienthal, "are difficult people to do things for. Bobby has such energy, is moving about constantly. The other evening we had dinner together on Third Avenue in a small restaurant. During the meal he had to go to put in appearances at three dinner meetings; three times."
Andre was disappointed that Jackie married Onassis, even though, in the end, he helped her negotiate their financial arrangement. "I think he was probably upset because she had really played the little girl to the hilt, OK?" Marianne Gerschel said. "And, you know, no man wants his little girl to get married--it's that sort of feeling. If you're going to play the little girl, you will always be the little girl, and therefore you're not allowed to get married. You're not allowed. And there's also this feeling, 'If she's going to marry somebody, why can't she marry me?' I mean it's totally illogical, but it's totally the way fathers behave." Despite Jackie's marriage to O
nassis, Andre remained close to her and would often go to her parties at 1040 Fifth. But it seems unlikely he ever had an affair with Jackie. Jackie attended Andre's memorial service at Temple Emanu-El on Fifth Avenue, in October 1979. Afterward, walking home up Fifth Avenue, "she was very sad," remembered Roswell Gilpatric, a longtime Kennedy aide and friend of Jackie's. "She felt that in her life there was nobody else to take his place."
Andre also liked to mix it up with the likes of William Zeckendorf, whom he bankrolled whenever the developer was desperate for cash. Meyer and Lazard made a bundle backing Zeckendorf in the purchase and relatively quick sale of both the Chrysler Building and the Graybar Building in Manhattan. Zeckendorf and Lazard bought a 75 percent interest in the buildings for $52 million, in 1953, and sold the interest, in 1957, for $66 million, making the deal the largest in New York real estate history at that time.
Andre was also behind one of the greatest deals in the Lazard lore. In 1950, he fell in love with the complexity of trying to wrangle a massive windfall from Matador Ranch, some 800,000 acres of land in the Texas Panhandle between Fort Worth and Amarillo, on which grazed some forty-seven thousand head of cattle. A publicly traded Scottish company had owned Matador since 1882. Andre decided he wanted the whole operation, including its potential for finding oil and gas. With the Matador stock then trading at $6 per share on the London Stock Exchange, Lazard offered the Matador shareholders a whopping $23.70 per share, or just under $19 million, a premium of astronomical proportions. The massive Matador Ranch, second in size only to the King Ranch (at 950,000 acres), was some fifty-six miles across. Andre decided to divide it into fifteen separate "cattle and ranch" corporations and sell them off individually during the next nine years. Lazard even outlasted a three-year drought in the mid-1950s that almost killed off all the cattle. But in the end, after some clever tax arrangements, the for-once-patient Andre persevered, and Lazard and its investment group made between $10 and $15 million on their original investment. Remembered George Ames: "It was a monster of its kind. It started in Edinburgh, kept going in New York, and wound up in Amarillo."
In 1948, Lazard observed the firm's one hundredth anniversary, with Andre doing as little as possible to celebrate. He refused to pose for newspaper photographers and shunned all press coverage. He was simply too busy focusing on his deals to worry about anniversaries. On October 23, 1948, Andre had arranged for Lazard in New York to buy 20 percent of Les Fils Dreyfus for $153,300 directly from the founding Dreyfus family. When Henry Plessner, Felix's stepfather, then working with Les Fils Dreyfus, saw Andre in Paris at the start of the summer of 1949, he said to him, "I have this stepson who's really not very smart, but he's looking for a summer job, and it would help me if you could [help him out]."
The job, dealing with brokerage confirmation slips, paid $37.50 a week. Felix recalled, "I said to myself, 'Sure, why not? It will give me a chance to think about what I would like to do with myself.'" He worked the whole summer in the dingy offices at 44 Wall Street. Andre was not there; he spent much of each summer working from his chalet high in the Swiss Alps at Crans-sur-Sierre. The Lazard partners appreciated Felix's work and raised his salary to $50 per week, and his responsibilities shifted to valuing the accounts of the firm's rich customers every month. When Andre returned from Switzerland after Labor Day, Felix was ushered in to meet him, finally. But, as advised, he made no mention of his increase in pay. "Andre yanked me in [to his office] and said, 'I understand your pay has been increased, and I would've thought you would have had the good manners to thank me.' And I said, 'Well, Mr. Meyer, I was told not to say anything to anyone.' I thought, 'Here's the end of my career, before it starts.'"
Felix told the The New Yorker about this incident with Andre:
He made it crystal clear to me that nothing in the firm, however small, happened without his approval, and that he expected both recognition and gratitude. Anyway, he was an extraordinary man, a powerhouse; he had just gigantic energy, power and will. Andre could make people do things. He had volcanic, towering temper tantrums. He was very complicated. He had enormous complexes. He wanted to be loved. He had a great sense of buying and selling--things and people. He was the most ruthless realistic analyst of human character I have ever met. He could peel people and find their strengths and weaknesses. He was absolutely merciless in criticizing sloppy work. I fought him every day for twenty years. You had to. If you didn't fight him, you were finished. I am sure this is the only reason we got along. He destroyed a lot of people. But he could also be exceedingly generous. He made the fortune and the career of as many people as he destroyed--sometimes they were the same people. On balance, I owe him a great debt of gratitude, although I bear many scars.
Years later, Felix elaborated on his mentor: "Andre also had a Great Idea about Lazard. He looked at Lazard the same way de Gaulle looked at France. De Gaulle once said, 'I have a special idea of France.' And Andre had a special idea of Lazard as a kind of unique firm with unique qualities. And even if those qualities were not always as real as he thought they were, or as he wanted them to be, creating that image was certainly very good business."
But at this initial confrontation with Andre in 1949, Felix said he didn't care all that much what Andre thought, since he was thinking about leaving Lazard anyway in search of his coveted job in Oak Ridge or some other technology haven. He thought the Lazard job was a temporary one. Felix explained what happened then: "Andre said to me, 'Well, you know you're doing good work. Why don't you think about this business?' And I said, 'Well, Mr. Meyer, I know nothing about this business, you know.' 'Well,' he said, 'we'll send you to Paris and we'll send you to London and we'll send you to Basel, then you can see whether you like it.' So I thought, 'A free trip to Europe, why not?'"
In 1950, he essentially took an all-expense-paid odyssey through western Europe, using Andre's and his stepfather's relationships as touchstones. In London, he was assigned to Samuel Montagu's daily money market operation, where short-term loans were made and collected. His job was to go around and see who needed money or who had too much. He remembered that everyone wore a black homburg and that he never even owned a hat. "This was summer and I only had this vanilla-ice-cream-colored suit," he said. "And I went out to buy this black hat. It looked totally ludicrous." He met the well-known international banker Louis Frank, then head of Montagu. But he decided the experience in London was not for him. Next up was the newly resurrected Lazard in Paris. He met Pierre David-Weill and his partner Jean Guyot. But the chemistry wasn't right there, either. He found Lazard in Paris very social and not the right fit for a Jewish-Polish refugee. "Well, this was a time when social status was very important," Felix explained. "Paris was very much of a club." Then, a few months after Andre had bought for Lazard a minority stake in Les Fils Dreyfus, Felix went off to Basel to work in that firm's foreign exchange and precious-metals trading operations.
In 1949, Felix achieved his lifelong dream--to that point anyway--of becoming a U.S. citizen. His first act of citizenship was to be drafted, in the winter of 1951, and he was sent overseas to Goppingen, Germany, near Stuttgart. The good news was that on the weekends, he was able to take the Orient Express from Stuttgart to Paris to spend time with his father. He served his two years in the military, without incident, and when he got out in 1953, he worked for Cantrade, a new private bank in Zurich. While Felix remembered that his various whirlwind apprenticeships were not the norm at Lazard, he didn't think they were unprecedented. "It was done--maybe I flatter myself--partly to keep me in the firm and show me broader horizons and opportunities," he said. "At the time I was seriously thinking of going back to Europe and living there."
Instead, he returned to Lazard in New York in 1955 and became a legend. At first, he continued working at Lazard in foreign exchange. And he might very well have stayed doing just that had it not been for a chance weekend invitation from Phyllis Bronfman, the daughter of Samuel Bronfman, to come to the family's estate in Tarrytown, New York. Upon being intro
duced to Felix, Samuel, a great friend of Andre's and the patriarch of the Seagram fortune, asked him what he did. When Felix told Bronfman he worked at Lazard in foreign exchange, he received the invaluable advice to forgo foreign exchange altogether and focus on mergers and corporate finance, since these were the only aspects of the investment banking business that truly interested Andre. At first, Felix resisted making the change, in part because it would likely mean a pay cut and because he had no training in finance, economics, or accounting and could not read a corporate balance sheet. "Take the pay cut and do it," Bronfman insisted. Felix talked to Andre about making the switch. Andre didn't like the idea. "You don't know anything about it," he said. Felix told Andre he would go to business school at night if need be. Andre relented but, as Felix feared, his pay was cut to $15,000 a year, from $22,000.
"I went to work for a man named Howard Kniffin, who was head of corporate finance," Felix told the author of his 1983 profile in The New Yorker.
I also went to night school to learn accounting, and to read Graham and Dodd on security analysis--dreadful, dreadful stuff. In addition, I was doing all the dog work that goes with running numbers on work sheets when one is trying to put companies together. I had a good sense of numbers, and quickly became very, very interested in how to put two companies together. I think that the reason I became quite good at working out mergers--at how to structure them--was that I had a feeling for the symmetry and the dynamics involved; when you get all through, the entity coming out should be stronger and better than what you had before, and the merger should be as seamless as possible. When it comes down to the essentials, you are dealing with greed and power. The greed has to be handled by the financial way that you put these companies together, so that, in the last analysis, everyone's interests are served. The power is a different matter. That requires as much negotiation as the financial side, maybe more. More deals break down on the power side than on the financial. There are valid issues of face, of authority, and of appearance. Of course, when I started under Kniffin I was simply given the task of analysing balance sheets, to determine statistically how best to make a merger or an acquisition. I used to sit through endless meetings of lawyers and accountants and read through contracts and work sheets to understand what was involved. I was kept with the drones and the paper shufflers and would, from afar, watch the principals disappear into Andre's office, and then I'd wait for the outcome to go back to my number shuffling. But that process taught me a very important thing; namely the nitty-gritty of what goes into making one of those deals. I can read a contract. I know what a tax ruling is about. I know what accounting is. I know what accountants can do and what they can't do. I know what is baloney and what isn't baloney. I know what lawyers will tell you and what you can believe and what you shouldn't believe, and I know where to press them. It is very important, at this point, that no technician can frighten me by talking about things I don't understand. I may have to rely on him or her for facts, but I don't have to rely on him for concepts. Too many high-level executives are prisoners of their staffs. They have never really done the nitty-gritty stuff, which is not terribly mysterious once you tackle it. And if you haven't seen these things the technicians can absolutely wrap you up in details, and you never find your way out. There are banking firms that are so big that the staff does all these things, but at Lazard we are so small that's out of the question.
The last tycoons: the secret history of Lazard Frères & Co Page 10
