PETER C. NEWMAN September 11 2006


PETER C. NEWMAN September 11 2006



Conrad Black’s property lists for $35.5 million. A house just down the road went for $70 million. Welcome to Palm Beach.


From the cobbled driveway, all I can see of Conrad Black’s pad, in the ritziest precinct of Palm Beach, Fla., is an unusually high fence. It consists of densely spaced black iron bars, 20 feet high, armed with gold-plated spikes, strong and deadly enough to stop a charging elephant. That and the stone eagles perched on the gate’s sturdy ramparts guard the mysterious mansion that, as his main source of bail, is the security deposit that has allowed Conrad Black to enjoy his pre-trial freedom. Reportedly listed for $35-5 million (all figures US$ except where noted), the storybook castle has become the object of more litigation than envy, more speculation than reality. Linda Gary, the Palm Beach realtor who holds the listing, described the property as “spectacular. It truly is an eloquent home—one of the three most luxurious in Palm Beach.” That is saying a great deal: a nearby vacant lot half the size is listed at $18 million; a house just down the road sold for $70 million; teardowns fetch somewhere in between.

The value of the mansion was never in dispute. The problem is how much of it Black still owns, because according to attorneys in the U.S. Justice Department, his equity position had been seriously eroded (down to $8 million at one point, according to some reports), not nearly enough to cover his $20million bail. The prosecutors charged that, back in June, Black defaulted on a $10-million mortgage he had taken out on the house

from Laminar Direct Capital—an allegation Black denies. (He also denies any need or desire to sell the house now, though the listing remains.) Revenue Canada also held a C$14million lien against the property. To add to the confused bookkeeping, prosecutors claimed Black’s wife, Barbara Amiel, had an undisclosed interest in the property.

The bail dispute has since been more or less settled; the government lien has been paid off, while Black agreed to raise his bail guarantee by $1 million in cash. To those of us who have followed the Perils of Conrad and Babs over the past few years, the bail issue has always been a puzzlement. The $21 million Black was forced to cough up has no equal in the annals of American corporate prosecutions. Kenneth Lay, for example, who drove Enron into the ground with his unethical dealings, was dunned only $500,000, while the bail for Bernie Ebbers, the ex-CEO of WorldCom Inc., who was responsible for the largest, self-inflicted bankruptcy in American business history, was set at $10 million. Black has been accused of many crimes and misdemeanours, but there’s no reason to suspect he intends to skip town. He genuinely believes he is innocent and can’t wait to prove it, so that

Beach honchos he regards as his peers.

His ownership of the Telegraph and connections to Maggie Thatcher assured his social standing in England, and before his current troubles, he was the grand fromage among Toronto’s elite. But in New York, where he longed for the kind of clout that would get Barbara and him on “A” invitation lists, they didn’t count. He even tried, unsuccessfully, to buy a Gotham newspaper to increase their influence. In 1997, they decided that Palm Beach was where they could exercise the maximum impact. Becoming one of the Right People in that stratospheric Establishment environment depended on where and how you lived. Thus they chose their home carefully, and settled on 1930 S. Ocean Blvd.

Having visited Black in Palm Beach during his glory days, I decided to return, and did so earlier this month. The American Establishment’s tranquility base, the giltedged community sits on top of a barrier reef, some 22 km long and less than a kilometre across, at its widest. It is linked to the mainland by three drawbridges that have been raised to apprehend burglars.

Canada has no equivalent to Palm Beach. New Brunswick’s St. Andrews by-the-Sea and Chester, N.S., come the closest, but their scale


and good taste remove them from contention. Palm Beach was and remains the bastion of Old Yankee Money. Names like DuPont, Kennedy, Phipps, Dodge, Cluett, Guest, Woolworth, Hutton and Vanderbilt no longer dominate. But their progeny and prototypes remain. Their skin belongs to the afternoon sun. They hold common assumptions, com-

municate through raised eyebrows and seldom experience any conflicts of interest, since their interests so seldom conflict.

Unlike their lesser cousins in lesser venues, the Palm Beach rich infrequently hunt for salvation in the fine print of 1RS tax manuals. Although most of them earned their original fortunes through some form of insider trading, which was probably invented among the sand dunes here, they regarded themselves as walking proof to an invidiously competitive society that ability and application can be spectacularly rewarded. The capricious castles in which they live are monuments to their self-indulgence. The fortunes of Palm Beach’s fortunate inhabitants are too massive, too cleverly diversified, and much too carefully husbanded to be affected by mere swings in the business cycle. About the worst that happens during recessions is that, for a year or two, they live on the interest generated by their fortunes, instead of the interest on the interest, as they usually do.

Palm Beach is one of the last places on earth where there still exists a social season—from Thanksgiving to Easter. Invitation lists to the winter cycle of house parties and fancy-dress balls mercilessly delineate individual status. Social climbing remains the favourite indoor sport. The point was made most dramatical-

ly by Arthur Somers Roche, an American millionaire who spent most of his life in Palm Beach, when he appeared at an Everglades Club costume ball dressed as a social climber. He had a miniature ladder tied to his back, its four rungs labelled, in ascending order, “Common People,” “People,” “Nice People” and “Right People.” Palm Beach may well be the most assiduously zoned community on earth. Local bylaws forbid hot dog stands, laundromats, billboards, billiard halls, neon signs, aluminum siding, hippies, and public demonstrations, as well as funeral parlours and hospitals—the dead and dying are discreetly carted across the causeways to West Palm.

The locals treat themselves as

privileged citizens who inhabit an earthly paradise of conspicuous consumption. A mansion owned by the Stotesbury family actually had a 40-car garage; there are private petting zoos for the kids, and art collections that no museum could afford for the adults. Court tennis, an adaptation of tht jeu de paume originated by the kings of France, with its sag-

ging net and loose racquets, is still played, as are polo (champagne is sold at the concession stands) and croquet (“You don’t need much physical strength to play croquet, you just have to be a killer,” one aficionado once said). The place swarms with eccentrics. One of the Palm Beach DuPonts imported tame iguanas from Cuba and trained them to stand at attention, as a kind of honour guard, whenever he called them on a special whistle. The prevailing proprietary ethic of the place was best summed up by the wife of multi-millionaire Stephen “Laddie” Sanford: “I have been blessed with one of the most beautiful homes in the world,” she said, gazing out through her leaded windows at the Atlantic Ocean, “and I can’t help feeling it’s mine.”

Palm Beach has become considerably more egalitarian since its pre-war heyday. Its wealth is most visible during the daily parade of the wives and daughters of its regulars along Worth Avenue, a cornucopia of glam-shops, more glitzy than whimsical. Tiffany & Co., Hermès, Giorgio Armani, Neiman Marcus, Gucci, Cartier: they’re all here. White shoes for men who attend tea dances are still available, while Grande Armee stocks armies of toy soldiers belonging to a dozen nationalities. The Austrian Clockshop’s timepieces track the path of the sun, the moon and most

of the planets, as well as earthly hours and minutes—including Newfoundland’s rogue time zone. The

women who patronize these specialty boutiques appear to be finalists of a Meryl Streep look-alike contest—and behave like the killer shark she so brilliantly portrayed in her recent movie, The Devil Wears Prada.

The current crop of Palm Beach inhabitants includes a riptide of nouveau riches, including Revlon CEO and Wall Street über-raider Ron Perelman, who in 2004 sold his six-acre oceanfront estate for $70 million. Palm Beach is home to such off-the-wall characters as professional wharf rat Jimmy Buffett, broadcaster Rush Limbaugh, fashion designer Arnold Scaasi, super rock star Rod Stewart, and Donald Trump, the guy with the world’s most obvious comb-over, so much so that his hairdo resembles a bird’s nest. (Trump trumped his rivals by purchasing Mar-aLago, the island’s grandest estate, once owned by Marjorie Merriweather Post. He has turned it into a private residential club that boasts 58 bedrooms and 22-karat gold-leaf ceilings.)

Canadians who call Palm Beach their winter home include Paul Desmarais, Gerry Schwartz and Heather Reisman, the Asper family, Brian Mulroney, and Jonathan Deitcher, who was the former prime minister’s financial adviser, as well as a sprinkling of Bronfmans. But no Canadians caused a greater stir than Conrad Black


and his glamorous wife, Barbara Amiel.

Black had first visited this chi-chi world in 1969, on his way back from Cuba, where he had gone to watch the celebration of Fidel Castro’s 10th anniversary in power. He hated that Communist whoop-up, and gladly accepted an invitation to decompress at the Palm Beach mansion of Bud McDougald, his mentor and the Godfather of Argus Corp., which became Black’s eventual takeover target and original grubstake. In the winter of 1978, Black rented the Palm Beach house of Neil McKinnon, former president of the Canadian Imperial Bank of Commerce, and shortly afterwards purchased a relatively modest Federalist mansion at 150 Canterbury Lane.

“I’ve never been back to Cuba, but I have often returned here, although Palm Beach isn’t everyone’s cup of tea,” he told me when I visited his digs while writing a book about him. Then he foreshadowed his future wife Barbara Amiel’s legendary quip that her extravagance knew no bounds, when he told me: “Some people are offended by the extreme opulence of Palm Beach. But I find it sort of entertaining. A couple of seasons ago I was standing at the corner of Worth Avenue

and South County Road when I heard a slight rumpus. I turned around and saw that a Silver Cloud II had been struck in the fender by a Phantom V, which had come to such an abrupt stop that a Silver Shadow had bumped into it. So you had three Rollses stuck together. It was hilarious.”

At the time, most of the private clubs on the island still pursued a vicious brand of anti-Semitism that included not only members but their guests. (Bud McDougald snuck me in for uncomfortable lunches at the Everglades Club.) Decades earlier, in The Last Resorts, Cleveland Arnory told the story of a Jewish gentleman trying to register at the Breakers, Palm Beach’s Establishment hotel. Upon being informed that while not actually restricted, the hotel catered primarily to

a Christian clientele, he exclaimed, “Well, I’ll be a son of a bitch!” To which the desk clerk is supposed to

have replied: “If you can prove that, I can get you in anywhere.”

By the time Conrad and Barbara decided on Palm Beach for their next residence, they already owned luxurious manor houses in London, Toronto and New York. But their purchase of 1930 S. Ocean Blvd., formerly owned by Siegfried Otto of Germany, was the most extravagant of all. They paid $9-9 million for the property, then proceeded to rebuild it, which was unusual even by Palm Beach’s overindulgent standards.

Ocean Boulevard, the sliver of prestigious land on which the Black residence squats, is just wide enough to contain their mansion and a two-lane road. What makes the house unique is that, along with the dozen palaces situated along the boulevard, it enjoys twin seascapes:

the heaving Atlantic Ocean at sunrise and the smooth expanse of Lake Worth (hooked into the Intracoastal Waterway) at sunset. But living in such an exclusive enclave presents a problem: after all, one doesn’t want to be seen crossing the highway (“Much too public, darling...”). At the residence purchased by the Blacks, this dilemma was solved by having a tiled tunnel under Ocean Boulevard, which opened up to 300 feet of private oceanfront.

To their already palatial quarters, the Blacks added a private movie theatre, a twostorey guest house, new servants’ quarters, a swimming pool cabana with its own kitchen—in fact, so many new features that their listing is described by real estate agent Linda Gary as “a gorgeous, British Colonial-style estate, completely rebuilt in 2000 for its present owners.” The 21,000-sq.-foot Black residence is a collage of balconies and loggias—Italian arcades that open to the air on one side. The dwelling includes a magnificent wood-panelled library, plus a very special spiral staircase that leads to the Martello tower, which commands a utopian view of most of the island. The double stairwell is carved out of black onyx, a semi-precious stone whose use dates back to Roman times

when it was fashioned into vases and cups. The interior decor features the gold-fringed American flag that once

hung behind Franklin Roosevelt’s White House desk. The mini-palace, which has five bedrooms (decorated with vintage furniture) and eight bathrooms, is set into a lush Versailles-style landscape that includes tennis courts and a heated pool. The renovations were so costly that by 2002, the house the Blacks had purchased for less than $10 million five years earlier was appraised by Palm Beach County officials as being worth $17 million. Currently it is for sale at $35-5 million. When they placed their stately chateau on the market nearly two years ago, the Blacks must have figured that all their other renovations had more than doubled the value of their original investment. That price may well be attainable, once the property’s legal shackles have been removed. Meanwhile, the fate of his extravagant pied-à-terre on America’s Gold Coast will continue to be a pivotal factor at Conrad Black’s criminal trial, due to begin next March. M