“If they ask you how you came into the country—was it through the window?—your answer is ‘No,’” the friend said. “Just no. Not, ‘I came in through the door.’”
Edmond searched for a stable country where he could easily come in through the door and establish a family business that would grow and prosper for centuries. “I’m in no hurry to make money,” he told BusinessWeek in 1994. “I want to build a bank that will last 1,000 years.”
After visiting a client’s paper mill in Brazil, Edmond wrote his father a long letter urging him to settle in the resource-rich, then stable, and prosperous country in the Southern Hemisphere. The Safras moved to Rio de Janeiro, arriving just after the annual Carnaval celebrations, on March 3, 1954. While the seaside cosmopolitan city must have reminded them of their home in Beirut, Jacob, the sixty-three-year-old patriarch, was not impressed. He quickly determined that Rio de Janeiro was not a serious capital of international finance. He uprooted the family and moved to São Paulo, where they joined a large wave of Sephardic Jews escaping violence and anti-Semitism in the Middle East.
The Sephardic clans kept to themselves in São Paulo and had little to do with the more established Ashkenazi Jews, from Russia and Poland, who had arrived earlier and established the synagogues and religious schools in the region. As they had done for centuries, the Sephardim created their own religious communities, which continue to function independently of the Ashkenazi Jews. For centuries, the two groups have regarded each other with some mistrust. Ashkenazi Jews from Europe, some of whom consider themselves to be the more enlightened and educated of the two groups, often view their Sephardic counterparts as poorly educated, extremely clannish, conservative, and prone to superstition. The Sephardic label was first applied to Jews who were expelled from Spain and Portugal after 1492, but later came to include Jews who lived in the Middle East and North Africa. Within the Sephardic community, the Halabim, like the Safras, set themselves even further apart. In São Paulo, the Syrian Jewish immigrants founded their own closely knit synagogues and schools, and generally married within their own tight circle. By the mid-1980s, there were 50,000 Sephardic Jews in Brazil, the second largest community outside France.
In 1957, three years after arriving in Rio de Janeiro, Edmond, just shy of his twenty-fifth birthday, became a Brazilian citizen. But his ambitions lay elsewhere, for even as he was petitioning for citizenship, he was flying off to Geneva to establish a new bank. Borrowing money from family and a group of Brazilian investors, Edmond had laid the groundwork in 1956 for what would become the Trade Development Bank—a financial institution that did what generations of Safra banks had done in the past: protect Sephardic and Arab investments. When it officially began to accept deposits, the bank attracted hundreds of wealthy Halabim and other Sephardic Jews who had fled the Middle East and Africa to re-establish themselves in Milan, Rio, São Paulo, Paris, Buenos Aires, and New York. The bank also welcomed Arab depositors. Those who needed a safe place for their funds knew that they could trust the Safra name, especially now that it was behind a bank in the primary haven for flight capital from around the world.
For the Halabim, Safra’s new business venture in Switzerland, with its strict laws ensuring secrecy, was simply irresistible. In an early advertisement in a Brazilian newspaper for the Banque Pour le Developpement Commercial, as the bank was known in French, Safra offered “accounts in any currency; investments; and buying and selling of shares in all international markets.” For clients in Brazil and Argentina, countries that forbade offshore investments, the TDB offered numbered accounts to protect their assets. There were also so-called hold-mail accounts that forbade any correspondence between the bank and the account holder. Discussions were carried out with the depositor in person or by telephone. “The rules on hold-mail accounts were considered sacrosanct, since a single errant letter could well get a depositor thrown into prison.” According to the ad, the representative in Brazil for the TDB was Joseph Safra in São Paulo.
But Edmond needn’t have bothered with any advertising. As with his father and uncle before him, clients were brought in to the Safra universe by the current account holders. The bank’s reputation for utter discretion and secrecy spread largely by word of mouth. Correspondence was sent to account holders in unmarked envelopes and new depositors had to be vetted beforehand. The standing joke among bankers in Switzerland was that the switchboard operator at the TDB would answer the phone with a cautious “hello” rather than reveal the name of the bank. No one simply walked into the bank, located on the rue Chantepoulet before moving to more permanent headquarters at the elegant place du Lac. Clients had to make an appointment and show proper identification when they arrived. Most clients in far-flung places around the world preferred to speak by phone, but account officers, known at the bank as garants, were only allowed to speak to the depositor at the other end if they knew their voice. Often, phone calls were conducted in code, with depositors only speaking in numbers. Later, Edmond opened branches of the TDB in Nassau, London, and Chiasso, on the Italian-Swiss border.
Discreet and extremely low-key, the Trade Development Bank, which Edmond started with a loan of $1 million, would explode into an enterprise worth $5 billion by 1983, the year of its sale to American Express. By 1962, as the TDB began to take in increasing numbers of Halabim depositors fleeing Arab discontent in the Middle East, Edmond had decided to concentrate full time on his Swiss venture. He sold his Brazilian holdings to Moise and Joseph. A year later, Jacob died, and Edmond’s younger brothers took over control of the family business in Brazil.
Grief-stricken at his father’s death, Edmond took stock of his position in the world. He was thirty and already one of Europe’s most successful bankers. But he was clearly dissatisfied. True success, he felt, still eluded him. He left Geneva and decided to use the money from the sale of his Brazilian holdings to finance his boldest venture—a bank in New York City, the world’s financial capital.
It’s not clear why Edmond chose the Knox Hat Company townhouse in midtown Manhattan to house the Republic National Bank of New York. The ten-story beaux-arts building on Fifth Avenue, across from the New York Public Library, was far from the banking hub of Wall Street and surrounded by retail stores. But there was something about the building that appealed to him. “He went there to buy a hat, liked the building and bought it,” recalled one of his aides.
But perhaps Edmond was familiar with the history of the Knox Hat Company, which, like the Safra empire, had started out as a nineteenth-century family business.
Charles Knox initially established the hat company on Fulton Street in lower Manhattan in 1838, but the company fell on hard times following damage from a nearby fire and protracted litigation over a dispute over trademarks. Following the Civil War, the business was taken over by his son Edward, a war hero who was wounded at the battle of Gettysburg. After a long rest cure in Geneva, Edward returned to New York “with the intention of making his name known wherever a hat was sold.” With this in mind, he purchased the land on the southwest corner of Fifth Avenue and Fortieth Street, across from the site of the recently vacated reservoir where the New York Public Library was under construction. He hired John Duncan, one of the city’s finest architects, and commissioned him to design the building, which was built between 1901 and 1902 and soon became the show-place for New York’s finest hats.
It’s hard to believe that a man as superstitious as Safra didn’t know the history of the building and the Knox family’s similarities to his own before he began the process of transforming the townhouse into his showpiece bank in Manhattan. Here was the site where Edward Knox, recently arrived from Geneva, was determined to become successful. And here was Edmond, the displaced Lebanese-Brazilian Genevois, some six decades later, determined to conquer the financial world.
“He knew more about the history of the Knox building than I did,” said Eli Attia, the architect who would later be commissioned to design an addition to the building. “There were n
o banks in that area, but Edmond was more intelligent than most developers and he had a vision.”
Whatever his reasons for buying the Knox Hat Company building, the townhouse at 452 Fifth Avenue was a perfect fit for him. Nevertheless, he spent $2.5 million converting the retail space for a bank, removing the mezzanine, installing plate glass windows and wood paneling, and decorating the lobby with Louis XIV antiques, of which he had become an avid collector. The Republic’s refurbished lobby was without a doubt the most opulent of any bank in New York at the time. On the ninth floor, Attia created a small apartment with space for separate quarters for Edmond’s valet. Later, when he became even more successful and his thriving business outgrew the confines of the ten-story structure, Edmond commissioned Attia to add a gleaming glass tower to the original building, and a palatial 13,000-square-foot apartment for himself on the twenty-ninth floor.
His formula for success was little changed from his days in Geneva. He still extolled the conservative banking formula he had learned from his father: “security, seriousness, hard work, careful lending, and controlling expenses.”
“You can take a chance in life, but not with a bank,” Edmond was fond of telling his aides. “A bank is not a playground. Banking is conservatism. And it has been the same for a few thousand years.”
In New York, as in Geneva, he offered discretion to a client base of wealthy Sephardic refugees and royal families from Saudi Arabia and the Persian Gulf, many of whom had banked with Safra Frères for generations.
But doing business in America was markedly different from doing business anywhere else in the world. For one thing, the media-shy Edmond felt he needed to be much more public if he was going to be as successful as he wanted to be. This is why he needed to open with a splash. He told his friends that a relatively unknown swarthy Lebanese banker with thick eyebrows was not going to pass muster among New York’s elite, with their Harvard pedigrees and their connections to the Kennedy clan.
So, at the bank’s grand opening on a frigid morning in January 1966, Safra made sure he had all the elements that would make New Yorkers sit up and take notice. Robert Kennedy, New York’s junior senator, cut the yellow ribbon officially opening the city’s newest bank and mingled with the new officers and organizers—themselves a who’s who of New York business and legal circles. There was the prominent lawyer Theodore W. Kheel, the mediator of many New York labor disputes who had strong ties to the city’s Democratic political machine. Kheel, who was extremely well connected in New York power circles, was Republic’s new chairman, although his authority was nominal. Peter White, a former senior vice president of the Manufacturers Hanover Trust Company and Republic’s new president and chief executive officer, was also on hand at the ribbon cutting. In the New York Times article that chronicled the opening, Edmond was mentioned almost as an afterthought and was described as “a Lebanese banker whose family controls 36 per cent of the new bank.”
Of course, Edmond, who hated publicity, didn’t mind receiving only a fleeting mention in the third paragraph of the New York Times story, which went on to marvel that the bank’s initial capital—$11 million—was the largest of any other private commercial bank in U.S. history.
Still, the newspaper was skeptical about the bank’s chances at success: “Republic, of course, will be a pygmy among New York City’s banking giants,” noted the New York Times reporter, adding that the largest, Chase Manhattan Bank, had assets at the end of 1965 of $15.3 billion.
With his obsessive attention to every detail of his new business, Safra set out to prove them all wrong. By 1969, he had come up with an ingenious way to lure more depositors. He offered account holders who brought in new depositors free color television sets and Singer sewing machines for every three-year deposit of $10,000 or more. U.S. commercial banking rules limit the use of gifts as a way to attract new depositors, but the rules do not apply to account holders bringing in a new customer. “If someone brings a friend to the bank to open a deposit, the sponsor gets a color TV,” noted the Wall Street Journal. Soon depositors crowded Republic’s lobby to open accounts.
“Stockholders of Republic National Bank of New York, trooping in for the annual meeting, had to weave their way through throngs of customers shoveling money into the bank,” reported the Wall Street Journal. “Crowds of customers milled around temporary work tables set up to handle the overflow from tellers’ positions, and bank clerks were opening new accounts as fast as they could type up the forms.”
It didn’t seem to matter that they were locking themselves into long-term deposits that offered extremely low interest rates or that they could have probably gotten a better rate elsewhere. But even as the free sixteen-inch Zenith sets were drawing hundreds of new account holders, some of the bank’s own stockholders were urging Edmond to undertake a more aggressive public relations campaign. “As it is,” quipped one stockholder, “all anyone knows about us is that we sell more TV sets than anyone else in New York.” The giveaways soon earned the bank the derisive moniker “TV bank” in New York business circles.
But attracting new depositors would only prove part of the Republic’s success. Like the other Safra banks, Republic was also involved in the trade of precious metals. It was the first bank in the U.S. to be granted a license to sell gold for industry, and eventually it became the largest seller of gold bullion after the U.S. government stopped selling gold in 1968. Safra, whose name means “yellow” in Arabic, set about buying gold coins and industrial gold around the world. After the U.S. Department of Treasury lifted the forty-one-year-old ban on private ownership of gold, the bank became the leading importer of gold coins. By 1980, the bank controlled one-third of the U.S. market for gold used by dentists and jewelers. Its gold holdings eventually became so vast that Edmond ordered the construction of special vaults in the sub-basement of the bank’s headquarters to store blocks of gold and silver. The vaults were among the most modern precious metals warehouses in North America, with a loading dock capable of handling four armored trucks and two tractor trailers at the same time.
Even though U.S. tax laws forced Edmond, a nonresident for tax purposes, to take on the title of honorary chairman, everyone at Republic knew he was firmly in charge. Nothing escaped his watchful eye; all loans had to be approved by him. When he faced a particularly difficult decision, Safra would lock himself in a boardroom with only his most trusted Sephardic aides, who included Jacques Tawil, who had accompanied him to Milan in 1948; Cyril Dwek, a fellow Halabim whose family had known the Safras for generations; and, later, Walter Weiner, a New York lawyer who would earn his stripes dealing with Lily’s sticky legal issues over the Monteverde estate on two continents. Edmond was so impressed with Weiner’s dedication and intelligence that he later made him Republic president, and then chairman.
Edmond was a man obsessed with his banks, which he often referred to as “my children, my life.” In the early days of Republic, he lived in his small suite of rooms on the ninth floor, rarely leaving the building until it was time for him to jet off to Geneva to take care of affairs at the TDB. He conducted intercontinental business in the mornings while shaving. Later, after he bought a magnificent villa on the Riviera, he regularly received his clients at home. Peter Cohen, a former board member and chair of Republic, recalled that the reception areas of the grand château often resembled a lavish doctor’s waiting room, with elegantly dressed clients awaiting their turn to speak to Edmond.
“His is one of the few banks in the world where the proprietor is at home—the service is that close and personal,” said Cohen.
On the rare occasions that he did take time off, he loved to put on a pair of jeans and ride a bicycle through Central Park.
But Edmond’s obsession with banking eventually paid off in a big way. In the first month of its history, Republic opened 20,000 accounts—a record for a commercial bank in New York City. From that single townhouse on Fifth Avenue, Edmond transformed Republic into the twentieth largest bank in the U.S. Repub
lic had sixty-nine branches in New York, Florida, and California, and 300,000 depositors in the heyday of its success in the mid–1990s.
“I’m now competing with the big boys in their own country,” Edmond told the New York Times, six years after the founding of Republic National Bank of New York. “I must say the Americans have been more than fair to me. Doing business in America is beautiful.”
A little more than a decade later, Edmond’s fascination with America soured as he became enmeshed in a war that nearly cost him his “children” and, even more important to him, his reputation.
EDMOND WAS USED to getting what he wanted in business. But his romantic life was another matter. His single-minded dedication to his banks, especially when he was building his empire in the 1950s and 1960s, left the young banker, who was growing prematurely bald, little time to socialize, although he did have something of the jet-set playboy in him. He kept a fully staffed and equipped 100-foot yacht named Aley after the hillside village in Beirut where he was born and where he operated his first successful venture with the family chauffeur. The yacht was anchored off the coast of Cannes. Friends from Brazil recalled lavish parties and endless backgammon games—which Edmond loved to play—aboard the yacht.
But even as his mother and sisters offered to set him up with marriageable young women from the Levant—Syrian Jewish virgins whose families they knew personally—Safra rarely expressed any interest in marriage. Everything changed, of course, when he saw the blonde in the green satin dress at his brother Joseph’s wedding in São Paulo in the late 1960s.
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