Decorated for gallantry in areas under fire, he was promoted to first lieutenant and transferred to the economics section of the French Military Mission in Berlin. He served just over 17 months before returning to Monaco to see firsthand how the war had taken its toll.
His grandfather was ailing and the Nazis were in charge.
GqH
World War II was not one of Monaco’s more glorious moments.
Although the Monegasques did not capitulate the way the French did, they remained officially neutral.
But because the French had come into Monaco at the start of the war to build defense installations along the coast, the moment France fell the Italians took the principality on the pretext that it had been previously occupied by France.
The next wave of soldiers came from Germany.
In 1943, Berlin sent a Consul General and a military commandant to Monaco. A Gestapo unit took up residence at the Hotel de Paris and a Panzer division moved into the Hotel Metropole.
The Germans weren’t in Monaco long before the tide started to turn in the Allies’ favor. Increasingly short supplied, Berlin ordered that the copper roof of Monte Carlo’s casino be removed so that the metal could be used in the war effort. The Panzer general, himself a frequent visitor to the casino, refused to comply. He even used his influence to have the casino listed by the Nazis as “a cultural and historic monument,” thereby saving it from the war.
The Americans landed way down the beach at St. Raphael in August 1944, and walked into the principality five weeks later.
The Nazis had already left.
Once the GIs had secured the region, barbed wire was taken down, work began to de-mine the port, gun emplacements were dismantled, and collaborators were arrested.
The American general in charge of the region decided Monte Carlo would be the ideal R&R spot for his troops.
But Louis said no.
The prince claimed there wasn’t enough room in the country for so many soldiers plus the regular visitors who, now that the war was over, would soon be coming back.
Insulted by Louis’s attitude towards the liberators, the US Army placed Monaco off-limits to all US service personnel. Even General Eisenhower, who toured the region in the summer of 1945, refused to set foot in Monaco, staying instead on Cap d’Antibes.
Not only was Rainier’s sense of honor offended by Louis’s conciliations—he felt that his grandfather, under the influence of several people in his entourage, had failed in not taking a forceful position against the Germans—but he now found Monaco desperately bleak.
The entire country needed to have the Nazi occupation washed and painted and wallpapered away.
Rainier was also concerned that SBM maintained a stranglehold on the nation’s economic power and tried to explain to his grandfather that changes were necessary. But Louis had other things on his mind.
In 1946, and in failing health, he married his longtime companion, a Parisian actress named Ghislaine Marie Dommanget, and altered his will accordingly to provide for her. His only interest was in spending his remaining years with her. He simply didn’t care what Rainier thought.
So, in great frustration, Rainier walked out of Monaco.
He bought that small villa at St. Jean-Cap-Ferrat and lived there, spending the years between the end of the war and his accession to the throne racing cars in the Tour de France Rally, skin-diving, fishing, sailing, occasionally writing poetry, going to exhibitions and otherwise quietly meeting his obligations to the principality.
It was May 9, 1949 when Louis II passed away.
Rainier was three weeks short of his 26th birthday.
But now, finally in charge, Rainier found himself alone.
He set about trying to put his own stamp of authority on the ruling Prince’s office and one of the first things he did was to bring his father back from exile.
There were then renewed mutterings from that cousin who’d once tried to claim the throne.
At 79, the pretender reasserted his protest that Charlotte’s adoption and later admission to full hereditary rights contravened the constitution. The best Rainier could do was ignore him, secure in the knowledge that this particular annoyance couldn’t go on forever.
Next he struck a deal with Princess Ghislaine, Louis’s widow.
In his will, the late sovereign left 50 percent of his estate to Rainier, 25 percent to his granddaughter Antoinette, and 25 percent to Ghislaine. But included in the estate was property that Rainier claimed belonged to the crown, property that was not Louis’s to give away.
The case was heard by the specially convened Court of Revision, a secretive tribunal created specifically to settle Monaco’s dynastic disputes. Consisting of ten attorneys chosen by the French Foreign Office and whose names are never disclosed, they were flown clandestinely to Monaco where they ruled in Rainier’s favor.
Ghislaine appealed but, in the end, there was nothing she could do except refuse to leave her one room at the Palace.
Rainier’s accession to the throne had been welcomed by the Monegasques, but his honeymoon with the otherwise cantankerous National Council was short lived. They picked up with him where they’d left off with his grandfather and made demands that Rainier found unacceptable.
Led in part by a local lawyer named Jean Charles Rey, the Council regularly tried to compete with Rainier’s authority. Rey later married Princess Antoinette and together they claimed that because the law did not limit succession to males, Princess Charlotte’s first born was therefore Monaco’s rightful heir.
Years later, Rainier insisted they never actually posed a serious threat, that it was just vague talk, that everything was “up in the air.”
Be that as it may, the two were quickly rebuked and, if nothing else, the affair was an embarrassment.
In the summer of 1955, the heavily government-subsidized Monaco Banking and Precious Metals Society went bankrupt. The Council pointed a finger at four close aides of the Prince and demanded their resignations. Questions of mismanagement and conflicts of interest were raised. At first Rainier stayed loyal to his aides. Then, faced with a mass walk-out by the Council, he accepted the resignations.
A few months later he reappointed the four to other posts and almost immediately eleven members of the Council quit in protest.
Rainier made little effort to appease the Council. Legally, he held the power. All they could do, all they were supposed to do, was advise.
But they were undeterred in their opposition. Rey, especially, sought confrontation wherever possible, like in the Council’s bizarre stance against Rainier’s plan for covering the railroad.
Running straight through the center of Monte Carlo, with tracks sunk into an open ditch, trains from Nice to Italy literally sliced the country in half. Rainier proposed to cover the tracks and build on top of them. The council said no and tried to withhold the money that was required.
It was idiotic because the plans were not only sound, they were paramount to the further development of Monte Carlo.
But then Rey and the Council also fought him on making funds available for the Oceanographic Institute to afford its newly appointed director, Jacques Cousteau. There’s no doubt that Cousteau’s appointment was a world-class coup for Monaco. Yet the Council wouldn’t accept that.
In the end, of course, Rainier got the money to cover the railroad and to bring Cousteau to Monaco. But at times it appeared almost as if the Council—driven by Rey—was engaged in nothing short of a personal vendetta.
By 1959, things had gotten so out of hand that Rainier decided he had no option but to suspend the constitution and take rule by decree. “There was no doubt that changes were needed. We couldn’t go on much longer the way we were. It hadn’t yet reached the stage where anyone was making serious threats but there was discontent with the old constitution. I decided I wanted to create a genuine constitutional monarchy. Not because I was being pressured into it but because I felt it was better to do it voluntarily t
han to wait until the National Council or various political figures in the community started making specific demands. So I approached the National Council and we worked it out together. I gave up some power but it wasn’t necessarily a difficult thing to do because responsibilities were split too.”
Under the new Constitution, dated 1962, executive power would remain in the hands of the Prince, who appoints a Minister of State to run the government. The Minister also represents him in matters of foreign affairs and with the Monegasque parliament.
Because everything is done in the name of the Prince, it is only done with his approval.
But legislative power is split between the Prince and the National Council, made up of 18 native Monegasques elected by universal suffrage to a five-year term.
Rainier explained, “They vote the budget. They debate the laws. They vote the laws. Or they can veto the laws. They’re not supposed to interfere with the executive and his duties but in reality we have clashes, especially when they make judgments about how I’m doing my job or say things like, building permission should never have been granted for such and such a project. It’s difficult for elected men to look after that kind of stuff because you never really know where their own interests are. The National Council discusses each chapter of the budget and each department of the government must defend its own requirements. If the National Council isn’t satisfied, it can reject what it doesn’t want. So because it votes the budget it can, if it wants, block the whole system.”
Keeping a tight rein on the Council would prove to be a constant challenge for Rainier. But there were others just as difficult. He also had to do battle with a wily Aristotle Onassis, the all-powerful SBM, and the ever formidable President of France, Charles de Gaulle.
Chapter 11
Taking On Onassis
One morning in 1951, while casually strolling through the streets of Monte Carlo, a shabbily dressed Greek multi-millionaire bearing thick black-rimmed glasses, noticed that the old Sporting Club was boarded up.
Aristotle Socrates Onassis was born in Smyrna in 1906, but was forced to flee at the age of 16 when the Turks ravaged the village and murdered his father, a successful tobacco broker. He found a ship bound for South America, jumped on board, and headed for Buenos Aires with just $60 in his pocket. To avoid being sent home when he got there, he lied to the authorities that he was 21. To buy food once he settled there, he worked at night as a telegraph operator.
Even as a young man, Onassis showed the keen eye of a world class opportunist. When he noticed that tobacco was in short supply he became a broker and later parlayed that into a factory. When he saw tobacco ships leaving empty for the return trip, he became an exporter and made a fortune by filling their holds with leather and grain. He soon took over a small fleet of old freighters, negotiated a commercial treaty between Greece and Argentina, and got himself appointed Greek Consul General. He used his title to build up his freight business, which he then diversified into whaling and a fleet of oil tankers. After World War II, when he bought 20 former American Liberty ships at knock-down prices and changed their registry from the US to Panama, the Americans said he was in breach of his purchase agreement and fined him $7 million. But Onassis was such a natural wheeler-dealer that, while paying the fine, he actually convinced the Americans to offer him a $14 million loan to build himself 20 more ships.
If he wasn’t yet the wealthiest man in the world in 1946, when he married 17-year-old Tina Livanos and honeymooned in Monaco, he was fast becoming that.
In those days, his Olympic Maritime empire—consisting of 91 ships, of which 70 were oil tankers—had its headquarters in Paris. But French taxes were killing him.
Now, seeing the Sporting Club boarded up, it dawned on him that a building like that would suit him very well, all the better considering Monaco’s no-tax politics. So he asked around, discovered that the place had been empty for some time and went to see the company that owned it, SBM, hoping he could rent it.
Their answer was no.
He asked why not.
No one came forward with any explanations.
So he offered to buy the building.
They said no.
Next, he offered to buy the building and the ground under it.
They said no again.
He increased his offer.
And still they said no.
He asked why they were being so stubborn.
They showed him to the door.
This didn’t sit well with Onassis, a businessman who was simply trying to do a deal with a company that should have otherwise been anxious to realize the benefits of its assets. It bothered him, not just because SBM was being illogical, but also because when he wanted something, he usually got it.
So he bought SBM.
GqH
“As the biggest employer here,” Rainier said, “SBM was always trying to exert their influence. But I felt they interfered too much with the running of the principality. A lot needed to be changed, or at least to be redefined. For example, until I looked into it, SBM’s payment to the government for the monopoly on gambling was very mysterious. During my grandfather’s reign there was always talk about envelopes being passed under tables. It was an unacceptable way of running a business.”
Rainier made substantial changes, but one consequence of the war was that wealth and exclusivity were no longer synonymous. A lot of exclusive people were no longer wealthy and a lot of wealthy people were not very exclusive.
“I knew that Onassis was always looking for interesting places to visit,” Rainier explained, “so I convinced him to come to Monaco as a sort of a super-tourist. He and Tina started spending a lot of time here. He based his shipping company here. And his yacht, The Christina, usually wintered here. After a while he began to think of Monaco as something of a second home.”
Encouraged by Rainier, Onassis used 51 front companies, mostly in Panama, to acquire 300,000 SBM shares which he hid in various portfolios before anyone else in Monaco realized what was happening.
It was a costly exercise that put a strain on his cash flow but then, whenever Onassis was short of cash, he turned for help to Stavros Niarchos, the Greek ship-owner who’d married Tina’s sister.
Niarchos later swore, “I bought Monte Carlo with Onassis. But when it came to a settlement I was out. Oh well, that’s my brother-in-law.”
Onassis assured Rainier that he was going to modernize the company, add rooms to the Hotel de Paris, and build a grill restaurant on the top floor. “I will spend millions and make the place a world cultural and tourist center.”
Obviously, Rainier liked what he heard. “In the beginning I thought Onassis could be useful to SBM even though he had some slightly odd ideas, like tearing down the opera house. A Greek architect he’d hired told him that the sound was bad and the best thing would be to rip it down and put up a huge shell.”
Almost right from the start SBM made money under Onassis, partly because he and Tina were at the heart of the European jet-set—their clique had loads of money to spend—and partly because of a general upturn in French economy. But as the 1950s wore on, Onassis spent less and less on the company.
When Rainier tried to push him into building a new Summer Sporting down the beach, Onassis directed his people to ask the government what their plans were for electricity, roads, sewers, and gas. The bureaucrats took a predictably long time to answer that they’d provide electricity, roads, sewers, and gas based on SBM’s plans for the site. But SBM said they couldn’t proceed without knowing what the government intended. It went back and forth like this until the bureaucrats finally came up with blueprints. Then SBM questioned technical aspects of those blueprints. The government had to answer those questions. And when they did, SBM posed more questions. Onassis generated a massive, nonsensical dialogue with the government because as long as it was going on, he didn’t have to spend any money.
Rainier was both disappointed and troubled by Onassis’s attitude. “During the ye
ars that he was majority shareholder, none of the big investment programs he’d spoken of were carried out. He patched up whatever needed patching up and left the rest. All right, he built the Grill on the top of the Hotel de Paris. He did it because that interested him. And he painted some of the gaming rooms. But he didn’t spend money on things like renewal of the company’s activities or the creation of new activities. I didn’t find the same enthusiasm in the man once he took over the company as I’d expected.”
It’s true that Onassis catered to his jet-set friends while the Prince wanted to cut Monte Carlo into an increasingly important middle-class tourist market. Some people over-simplified the problem by saying that Onassis wanted caviar and the Prince wanted sausages. But that’s not quite true. Onassis merely saw SBM’s assets in a different way. The casino was a kind of big kid’s toy. Like his yacht, it was something he enjoyed telling people he owned.
Anything but amused, Rainier threatened not to renew the lease on Olympic Maritime’s offices.
In response, Onassis objected to Rainier’s interference and in turn threatened to leave Monaco. The Prince didn’t want things to go that far so he backed off just a bit.
Then in 1959 Onassis dumped Tina for the opera super-star, Maria Callas. There was no doubt, Rainier understood, that having Onassis and Maria Callas in Monaco was good for business. Except that by this time, Onassis was thinking of SBM as little more than a real estate investment.
That’s when Rainier learned what Onassis had in mind.
And it frightened him. “I had certain indications that definitely scared me. I was led to believe that one day he might try to sell off part of the property. He was a very intelligent man and terribly tough to do business with. But when it came to running SBM the way I’d hoped he would, it was almost as if he was too busy with other things.”
Grace of Monaco Page 10
