The Billionaire's Club
(page 4 of 4)
One of the disadvantages of being outted by Forbes, of course, is that overnight the entire world knows your business and how much you’re worth. That leads, unavoidably, to unwanted attention.
“These people don’t really have a choice of whether they’re on the list or not,” says tax attorney Sheiman, “but for a lot of reasons there are advantages to having a lower profile and not attracting attention. The greatest disadvantage to being an ultra high-net-worth individual is a loss of privacy. Big time.”
There is no file card in the Greenwich assessor’s office for Edward Lampert, the 48-year-old founder of ESL Investments who’s worth an estimated $3.1 billion. Nor will real estate agents, normally as talkative as mynah birds, discuss him or his property.
And with good reason. In January 2003, Lampert was kidnapped outside his office by four men, taken to a Days Inn Hotel, and bound and gagged while the men called his wife, demanding—in a Dr. Evil moment—$1 million. Aside from not asking for more, the kidnappers used one of their captive’s credit cards to order pizza. Lampert pointed out this flaw in the plan and suggested they get away while they could. After 30 hours, he was released and they were caught. According to police reports, they confessed to targeting Lampert after researching fat cats online.
To offset negative reaction to their outrageous fortunes—or perhaps from a genuine spirit of generosity and social responsibility—Connecticut’s billionaires donate their time and money to their alma maters and local charities. Many, in fact, start their own.
In 1995, Karen Pritzker, the Hyatt heiress, founded the My Hero Project, which provides a curriculum for teachers and after-school personnel to bring heroic role models into the classroom. The project also sends teams to Kosovo and Bosnia, among other regions, to run free media and video workshops.
Paul Tudor Jones has made generous donations to the University of Virginia, his alma mater, including funding for the $35 million John Paul Jones basketball arena in honor of his father. He also founded the Robin Hood Foundation, a charity supported by the hedge-fund community, including Steve Cohen, who is a director; the Excellence Charter School, the country’s first all-boys charter school; and the Bedford Stuyvesant I Have A Dream Foundation, which helps place inner-city students in colleges.
Politically, the state’s wealthiest residents are all over the map. Not surprisingly, some hedge parties the way they play funds. Cohen, for example, reportedly played both sides by contributing $59,000 to the Democratic Senatorial Campaign Committee’s coffers in 2006 and 2007, and another $58,900 to the National Republican Senatorial Committee in 2007 and 2009.
So what is it that most distinguishes the members of Connecticut’s billionaires’ club (besides their money, of course)? With the exception of the lone heiress, Pritzker, it’s their love of the game, of competing and winning. Most people would likely think of retiring after their first billion, but these guys don’t. They keep pushing, keep fighting for more, no matter what problems huge money brings with it.
“The outside view of high-net-worth individuals differs greatly from the reality of their lives,” notes Sheiman, the attorney and financial adviser. “They have obligations and issues that arise in their lives that are very different from the average person’s. There are problems involved in monitoring the funds, monitoring investments, monitoring people who are hired to watch over the funds and maintain some stability. These things amount to work.”
The most compelling characteristic of people with great wealth, according to Sheiman, is that the money does not necessarily put them at ease.
“They have financial comfort, they have physical comfort, but that does not mean that their social relationships are comfortable, or that their business relationships suddenly are devoid of acrimony or contentiousness.” Beyond the $50 million mark, he observes, “Money becomes largely irrelevant. The quality of their lives and their relationships is what receives heightened attention.”
On the other hand, probably not. Recently, the billionaires’ club’s attention has no doubt been riveted on a widening federal probe of alleged insider trading that so far has included two hedge funds with Connecticut ties. In late November, FBI agents raided the offices of Stamford-based Diamondback Capital Management and Level Global Investors, which has offices in Greenwich. Both funds are run by former managers of Steve Cohen’s SAC Capital Advisors. The raids came a month after U.S. Attorney Preet Bharara told the New York City Bar Association that many on Wall Street consider illegal inside information “a performance-enhancing drug that provides the edge to outpace their rivals and make even more money. Disturbingly, many of the people who are going to such lengths to obtain inside information for a trading advantage are already among the most advantaged, privileged and wealthy insiders in modern finance.”
Sounds like if they’re not already in Greenwich, the could be moving there soon.