Gilded Lily (12 page)

“I was completely shocked,” she admitted shortly before her own death nearly four decades later.

Could Alfredo, known for his goodwill and generosity, have been so ungenerous to his own family in his last will and testament, leaving nearly everything to his most recent wife? Although the will was signed by five witnesses, among them Conrado, Alfredo's good friend Paulinho, and some of Alfredo's most trusted associates, there was something not right about it, at least for Alfredo's closely knit family.

For Regina, Alfredo's death would dominate the rest of her life, and she would use every available legal means to try to thwart Lily's efforts to take over her son's business and inheritance.

For Lily, Alfredo's death marked the beginning of a new life. Two months shy of her thirty-fifth birthday, she began her transformation into one of the world's richest and most glamorous women.

“After Fred's death, she wanted to remake her life,” said her former schoolmate, Ana Bentes Bloch. “And she clearly transformed herself into a major high-society figure.”

Remarkably for someone unschooled in the ways of international finance, Lily acted swiftly and with great efficiency in the hours after Alfredo's death to secure the Monteverde family fortune.

But the speed and alacrity with which this grieving widow set the next phase of her life in motion surprised even her closest friends. Shortly after Alfredo's death, Ponto Frio executives canceled the powers of attorney that Rosy and her husband held on Alfredo's accounts at banks in Switzerland and Lily began making arrangements to leave Brazil.

She was in such a hurry to leave the country that she didn't bother to pack any of her clothes. When Lily's friends Marcelo and Klara Steinfeld bought the Icatu house from Lily in January 1973, they found everything intact—her clothes were still hanging in the closets and the family's furniture was still in place. Everything, except a few valuable paintings, was left at the house on Rua Icatu under the watchful eye of Waldomiro Alves and the Irish wolfhounds. Lily took the four children, moved into a suite of rooms at the Copacabana Palace, and began the mad preparations to settle in London.

At one point, Lily asked Laurinda if she wanted to accompany her to England. Laurinda declined, saying that she needed to remain in Rio to look after her two boys, Ademir and Adilson.

“That's when I told her about my dream, and the macumba on Seu Alfredo's shirt,” said Laurinda. “I felt it was important for her to know what might have happened to Seu Alfredo.” Laurinda also told her that a recent tarot card reading had shown her that Lily would end her life as a widow in mourning.

Laurinda thought she was imparting important information to her employer at what must surely have been the most difficult moment of her life. Lily smiled weakly and thanked the housekeeper for her concern. But she wasn't superstitious, she informed Laurinda. She didn't believe in dreams, in tarot cards, and certainly not in macumba curses, she told Laurinda.

But Laurinda's warning—that she would be doomed to wear mourning for the rest of her life—would come back to haunt her.

“I tried to warn her because I saw that she was really suffering, and she just kept losing weight,” said Laurinda. “You could tell that Seu Alfredo's death had really knocked her out.”

Or pushed her forward. On September 15, less than a month after Alfredo's death, the grieving widow was on her way to London, where she would move quickly to ensure by every legal means available to her that she was in complete control of the entire Monteverde family fortune.

In England, she executed several brilliant tactical, legal, and investment strategies that would duly catapult her into the exclusive billionaires' club. There would be other strategies too, of a much more personal kind, all of them engineered by a short Lebanese-Brazilian banker.

Edmond Safra was one of Alfredo's most trusted bankers, and, after his untimely death, he would become the most important man in his widow's new life.

E
DMOND WAS, OF
course, well known to Alfredo. Like other wealthy Jews who had fled to Brazil during the war years, Alfredo had entrusted a large part of his assets to the Safra bank in São Paulo, which Edmond founded shortly after immigrating to Brazil in 1954. Later, when Edmond's Trade Development Bank in Geneva officially began to accept deposits, Alfredo was among the largest account holders. Fearing endemic corruption and political instability in Brazil, Alfredo had also scattered his assets in other Swiss banks and invested in property abroad.

“Every Jew had money outside the country because we were a generation of refugees, and you never knew when we would need to leave in a hurry,” said Marcelo Steinfeld, whose father had the distinction of being one of Edmond's early depositors after he started building the Swiss arm of his banking operations in 1956.

“For years, Fred was Edmond Safra's biggest account, and I know that they worked together for many years while Edmond was in São Paulo,” said Maria Luisa Goldschmid, who worked as Alfredo's assistant between 1954 and 1957.

In the early days, at least, Alfredo seems to have put a great deal of confidence in the Safra bank. Joseph Safra was a close friend and frequent visitor to the Ponto Frio offices in Rio de Janeiro, recalled many of Alfredo's business associates. And Edmond's new enterprise in Switzerland, the cradle of private banking, was the perfect place for Alfredo to safeguard a big chunk of the family fortune.

But Alfredo probably never imagined that Edmond would take care of him in other ways. For years the Monteverde family has wondered just what role Edmond played in the series of events that led to some of Alfredo's ill-conceived business decisions just before his death.

It's not clear how Lily met Edmond. Some claim that the two met at his brother Joseph Safra's wedding in São Paulo in the late 1960s. Others insist that they met immediately after Alfredo's death, when the distraught widow needed financial advice on how to run Ponto Frio. Still, others insist that Edmond and his brothers were frequent visitors at the Monteverde home on Rua Icatu. Alfredo's business associates recall that the Monteverdes had invited the Safra brothers for dinner on several occasions. On one of those occasions, Edmond was visiting from Switzerland and might have tagged along with his brothers.

“We all encouraged Edmond to visit Lily and give her his sympathies after Alfredo died,” recalled a Safra family member in São Paulo who did not want to be identified. “That's when they met for the first time.”

But wherever that first meeting took place, Edmond Safra fell hard for Lily Monteverde.

Their friend Albert Nasser swears that his friend the Lebanese banker locked eyes on Lily at Joseph's São Paulo wedding, where Alfredo had been asked to be the best man. Lily, in a green satin dress, her hair in a chignon studded with diamonds, looked absolutely beautiful, he recalled. When Joseph introduced Lily to Edmond, “they looked at each other as if the world did not exist around them,” re
called Albert, who was also a guest at the wedding. “Edmond fell in love with her instantly,” he said.

Nasser says that he is certain the love affair only started months after Alfredo's death in 1969. The way Nasser remembers it, a mutual friend in Rio, businessman Samy Cohn, who had also introduced Alfredo to Lily years earlier, had suggested that Lily call Edmond in New York to help her with some of the financial issues after Alfredo's death. Nasser says that within a few weeks after the funeral, she flew to New York for a meeting with Edmond, telling him that she had no one to help her with the business she had just inherited. It was only then that the two became lovers, Nasser insisted.

“Edmond said he would fix everything,” said Nasser.

But Nasser's version of events does not coincide with accounts of those who were much closer to Lily and Alfredo at the time. According to family friends, Alfredo's business associates, and servants at the house on Rua Icatu in Rio, Lily traveled almost immediately to London, not to New York, after Alfredo's death. “We all thought that when Fred died, Lily would marry Safra,” said a Rio socialite who knew the couple.

The careful planning that saw Lily take almost instant control of Alfredo's entire fortune may have been executed by Edmond himself. After all, he was one of Alfredo's bankers. Many marveled at how rapidly a grieving widow with little experience in the ways of international finance was able to so quickly secure her late husband's assets.

“My son died on August 25, 1969,” said Regina Monteverde in court papers filed against Lily and Edmond in England in 1971. “On the 26th of August, my power of attorney on a joint bank account was canceled. I returned to Rio on September 1, and only then did I realize how miserable my life had become.”

According to some business associates of Alfredo and his family, it was Edmond who took immediate control of Lily's business affairs—surely an arrangement that could only have been possible if a rela
tionship of deep trust had already existed. It was Edmond and a team of his most trusted lawyers and international financial advisers who instructed Lily to move to London where she could take advantage of favorable tax loopholes for foreigners. They also guided her through the important process of adopting Alfredo's son, Carlos. Under Brazilian law, children are automatically heir to half of the deceased's estate. As a result of Carlos's adoption, Lily could control the entire Monteverde fortune.

Lily rented temporary quarters at 6 Hyde Park Gardens, a “good address” in high-society parlance, across the street from Hyde Park and in the neighborhood of Kensington Palace. The flat itself was expensively furnished but by no means opulent, not in the grand style for which Lily would later become famous. There was an apartment below for the three boys, which also seemed to be expensively furnished, “but in the manner that a railway baron would buy leather-bound books by the yard,” recalled one visitor. Lily immediately enrolled Carlos and Claudio at Millfield, Alfredo's old boarding school in Somerset. Eduardo chose to live in Buenos Aires with his father. Adriana lived with her mother in the upstairs flat and attended a day school in London.

Of course, these were only temporary rented quarters, hastily arranged in the frantic days after Alfredo's death in Brazil. Lily tried to make the best of slight inconveniences. Her bedroom, for example, was too small, and did not have enough space to accommodate her extensive wardrobe. The solution was to keep her clothes in an adjoining bedroom. An opening between the two rooms had been constructed to make it appear en suite. But it was awkward. The opening was only five feet high, forcing her to duck whenever she moved from one room to the other.

Still, she pampered herself now that she was a wealthy widow. She leased a Rolls-Royce and a Mercedes convertible, and hired a driver to take her on frequent shopping forays in Knightsbridge. She also bought herself exquisite new clothes, and began to jet to
Paris to order her wardrobe for each season from the finest couture houses.

Lily lived quietly in London, although she frequently threw dinner parties for visiting friends from South America, and dined often at such elite restaurants as Annabel's, especially when Edmond was in town. Lily also traveled frequently to Geneva to see Edmond and take care of her financial affairs, recalled Ponto Frio executives who were summoned to Edmond's offices in the Swiss city for regular business meetings. Lily was careful not to declare herself a resident of London so that she wouldn't be taxed on the inheritance until all of it was squirreled away in Switzerland. Instead, in the fall of 1969 she maintained her Brazilian citizenship and established residency in Switzerland, using Edmond's address on the rue Moillebeau in Geneva as her own.

The intricacies of such artful tax maneuvers would have been lost on a Brazilian socialite with limited experience of the world of high finance, but Lily clearly had the best legal and tax advice money could buy.

“She wasn't exactly an intellectual, but it's fantastic how quickly she learned,” said Rosy. “You really have to admire the unemotional part of Lily. She's coolheaded. The day after the death of her husband, she immediately canceled all his bank accounts.”

While she was in London, Edmond gave Lily a generous weekly allowance in cash and forbade her from buying property or applying for a credit card until her residency was formalized. In many ways, Lily's legal and financial issues became his own, for Alfredo's fortune must have represented one of the most important assets in his own growing banking empire.

In a series of expensive legal actions that played out for years in British courts, Alfredo's surviving family tried to establish a strong professional and personal link that they believed existed between Lily and Edmond.

For Lily, Edmond Safra was not only a future marriage prospect,
he was the ultimate repairman, fixing all the tangled legal and financial details that emerged soon after Alfredo's death and threatened her newly acquired fortune.

Edmond said he would fix everything.

And, in many ways, he did.

 

EDMOND SAFRA WAS
born into a tight-knit clan of renowned Sephardic bankers and currency traders in Beirut on August 6, 1932. But his origins can be traced to Aleppo, the Middle East's most important ancient trading center, where the Safras, a prominent clan of Syrian Jews, first carved out their banking empire nearly a century before.

Located midway between the Mediterranean and the Euphrates—the crossroads of Europe and the Middle East—Aleppo was a thriving business capital where for hundreds of years merchants conducted a bustling trade in the world's finest spices, textiles, and precious metals deep inside the city's fabled souks. Commerce was traditionally dominated by the Halabim, as the Syrian Jews from Aleppo were known, who were skillful traders and financiers.

Safra Frères et Cie. was a respected firm well-known throughout the Ottoman Empire and as far away as the Persian Gulf. In the days before the opening of the Suez Canal in 1869, the bank financed the camel caravans to Iraq and Egypt. The bank, overseen by Edmond's great-uncle Ezra, also had branches in Istanbul and Alexandria, each of them run by a trusted member of the Safra clan.

Born in Aleppo in 1891, Jacob Safra, Edmond's father, cut his teeth at the family banking house after his own father, a local
sir-eh-feen
, or “money changer,” died when Jacob was a boy. Jacob was taken in by his uncle Ezra, and by the time he was a teenager, was working at Safra Frères in Aleppo. But as the city fell on hard economic times with the decline of the Ottoman Empire and Jews began to be conscripted for military service, Jacob was dispatched by his cousins
to Beirut to open a new branch office of the family bank in 1914. As conditions grew worse in Aleppo, hundreds of Halabim also made the trek to Beirut. Although Jacob tried to resettle in Aleppo at the end of the First World War, he found the city much changed. The Jewish population had dwindled and after the victorious Allies divided up the Ottoman Empire, Aleppo lost its importance as a major trading route. The Safras scaled back their banking operations in Aleppo, and the cousins focused most of their efforts on the branches they had set up in Istanbul, Alexandria, and Beirut.

The Syrian Jews who made their way to Beirut after the First World War became Jacob Safra's most important clients, although he also took in deposits from Arabs and Druse clients when he opened his new bank in 1920. But while the Jacob Safra Bank took in deposits, it did not make very many loans, which was in keeping with the conservative philosophy of banking that has infused generations of Safra bankers. Trading was the main activity of the bank, and Jacob traded commodities, foreign currencies, and especially gold. The gold business soon proved so lucrative that Jacob became one of the wealthiest Jews in Beirut. In 1918, Jacob married his cousin Teira Safra. The couple would go on to have eight children, beginning with the birth of their first child, Elie, in 1922.

Edmond, Jacob and Teira's second son, was born ten years after Elie, and from an early age seemed the natural heir to the family business. A banking prodigy by the time he was eight, he began accompanying his father to the souks of Beirut to check on the Safra bank's depositors. Jacob taught Edmond to look people in the eye, as a person's character was often more important than a financial statement. Would he repay a loan? How well was he doing in business? How much did he give to charity?

Jacob's manifesto for success became legend among the Safra family, and to this day is quoted on the Web site of Grupo Safra, the Brazilian branch of the Safra empire. “You need to build a bank like a
ship, solid to weather storms,” goes the Safra motto. “You also need to maintain a high level of liquidity because sometimes Jews have to flee in a hurry, and never be the biggest because lightning always hits the highest trees.”

In rare interviews given when he was an established banker in Switzerland and the U.S., Safra called banking “a simple and stupid business.” He told one reporter that his father had always said, “May God send you intuition in life.” Jacob also warned him “that you should never take a loan that you cannot afford to have in default.”

“You need honesty and hard work and you don't need intelligence,” Edmond said in an interview with the
Jornal do Brasil
in Rio in 1978. “The more intelligent the man, the more dangerous he turns out to be.”

In another interview, he noted, “My father taught me that if you loan a man too much money, you turn a good man into a bad man.”

These seemingly simple rules of running a bank were drilled into Edmond by his father, who also warned his son that he must always maintain a low profile—never call attention to his family's wealth or business success. Among the Halabim, modesty was considered a necessity. They believed that it was of paramount importance not to tempt the
ayin harah
, or the “evil eye,” which would bring bad luck and hardship. For years, Edmond did what generations of men in his family had done—he carried around shiny blue stones in his pocket to ward off the evil eye. He also avoided becoming too exposed, too prosperous in the banking world. As he noted in a 1994 interview, he had the opportunity in 1990 to buy up Chase Manhattan stock and earn a controlling interest in the largest bank in America, but, the ultimate outsider, he held back. Jews should not own the biggest bank in a non-Jewish country, he told the reporter. “That is what my father taught me. I told that to my brothers in Brazil, too. Never become the largest bank.”