The last tycoons: the secret history of Lazard Frères & Co (32 page)

They lived at the Alrae together for around five years, beginning in 1970. Streit and their three sons lived a mile farther uptown on Park Avenue. In 1972, Felix's wife asked for a separation, and Felix acceded to her wishes. He said publicly at the time that the papers he signed gave her much of his modest fortune. (But he did not divorce Streit until 1979, just before he married his second wife, Elizabeth Vagliano.) Needless to say, his separation from his first wife would take its toll on the previously close relationship he had with his three sons, Pierre (a glass artist living in the south of France), Nick (a financier and New York socialite, like his father), and Michael (a composer and screenwriter in Manhattan). For years, the family had enjoyed weekends together at their country home on six hilly acres in Mount Kisco, in Westchester County. The house abutted a lake that would freeze in the winter, and Felix and his sons would play hockey on it. "These things happen without being anybody's fault," Felix explained about his separation. He and Gaillet rented a house one summer in Ridgefield, Connecticut, to be near Felix's children in Mount Kisco. But Felix grew bored with Fairfield County, and he and Gaillet decided thereafter to rent a "summer shack on the beach" in the Hamptons, where they hung with his artsy friends and enjoyed intimate dinners, where the ideas of Felix's favorite writers, among them Thomas More and Montaigne ("civilized skeptics, not ideologues"), were discussed.

Gaillet said she and Felix were incredibly happy, living a carefree life and enjoying each other's company without any strings attached. They would go on ski vacations together in Alta, Utah, and Felix's three sons and Gaillet's two daughters would be there as well. (Much later, one of Gaillet's daughters dated Pierre Rohatyn for about a year.) Gaillet lived with Felix at the Alrae throughout the ITT-Hartford fiasco, through his testimony in front of the Senate Judiciary Committee, through his daily vilification in the press, and through the numerous investigations by the IRS, the SEC, and the lawyers pursuing shareholder lawsuits. "I was very much on the sideline of all this all the time," she said, "because I went to dinner with him every night. Every night we had drinks with somebody. He didn't drink. He would never drink more than a glass of wine in one evening, always a glass of red wine. He would never drink a second glass of wine. We first would meet people for a drink someplace, and then we would go to dinner with someone else, and then we would go possibly have an after-dinner drink with someone else. He would drink water, soda, or a juice." She never saw him betray any concern whatsoever about being at the center of the ITT controversy. "This man never showed his emotions on his sleeve," she said. "This is a man who kept everything in his brain, and he kept it all churning all the time. You would never have known that he was under so much pressure. It was more like, 'I have to go to Washington. Do you want to go with me?' And he was at the hearings. And then he would come back at night, and we would have dinner. He would never complain about something or share about the pressure."

Felix was becoming more and more famous. He was on the precipice of superstardom, thanks to his work with MAC and New York City. Helene, too, had developed a fine reputation as a photographer. "What happened was, as my career as a photographer progressed, his career as a well-known financier-politician developed at a fast clip," she explained. "Both our careers developed at a fast clip. And what happened during the last year to two years of our living together, we started seeing each other less and less, because I had more and more bookings, more and more travels for my photography. He had more and more demands on his time. And he was getting to be a very famous person. He was always in the papers. He no longer was as interested in me as he had been to start with. And I have to tell you, when you look at the psychology and the development of our affair, our getting together and then breaking up, it is exactly the stepping-stone situation of a man who is in a marriage, which is extremely dull, who finds an exciting woman, who lives with her for a while, and who then finds another woman who's going to get him completely out of his first marriage, then affair, and then into it. And that's what happened when he met Elizabeth Vagliano, who he's married to still today." On their regular skiing trip to Alta, in January 1975, they met Vagliano, who was there with her children. Gaillet thought nothing of the chance encounter, even though she does recall Felix commenting on her. "I was the stepping-stone that allowed him to end his marriage, to walk out of it, to leave his children, and to develop this whole side of his life, which was so exciting and different from being just a banker at Lazard," Gaillet continued. "And then he met Elizabeth, who pulled him out from living with an artist. What do you want with this artist? What do you want with this photographer? She'll never get you to where I can get you. And Elizabeth got him there, which was the society, the big boards, the big thing. You know, the entire spectrum of life that they started living, which I would never have gotten there, because it's a kind of life I'm totally not interested in."

In December 1975, there was a major show of Gaillet's photographs in Paris. She had photographed famous people the world over, from Louise Nevelson to Mick Jagger to Aristotle Onassis, with whom she had had a brief affair on his Greek island, Skorpios, four months before his death in March 1975. (Gaillet had first met Onassis with Felix and Andre over dinner in New York. And Onassis gave Gaillet an open invitation to visit Skorpios, either with or without Felix. One day, some months later, Gaillet was in Paris on her way to Kinshasa to photograph the 1974 Muhammad Ali-George Foreman fight. She was speaking to Felix on the phone when he told her that the fight was postponed for some five weeks. She asked him if she should instead go to the Greek islands. Why not? Felix replied. Felix called Onassis on Skorpios, and with Onassis's approval gave Gaillet his number. Onassis encouraged her to come to his island, and the rest is the stuff of history.) Gaillet had also taken a series of erotic photographs. "Clay Felker said it was the best hung show in New York," she said with a laugh. She went over to Paris several weeks before the big opening to help out at the gallery. She ended up being in Paris for around five weeks.

Although their careers started to affect their relationship, Gaillet said, she and Felix had worked things out and had even agreed to get married at a church on the top of Alta Mountain around Christmastime 1975, soon after she returned from Paris. The photography show was a huge hit. Felix came to Paris for it. And both Michel David-Weill and Andre were there with their wives. Some four hundred people showed up. The show began at six at night, and the party did not end until midnight. "We had closed down the entire street around this gallery," she said. "It was a huge success. Felix came for the opening. And we had decided after the show that we were going to regroup. We had decided. In my mind, I thought he had agreed. Because we were going to get married.... He was so excited that I was becoming more of an international scope of person. At the time I did not know that he was then already going out with Elizabeth."

When she returned to the Alrae from Paris, Gaillet discovered that Felix had moved out. She thought she was coming back to America at the height of her artistic success to get married to Felix Rohatyn. And instead, he left her. She was devastated. "I came back to a totally empty apartment," she said. "There was only my clothes left, and the furniture of the hotel. And he had moved out. And I had no forwarding address. So I called up his secretary, Sally, who said to me, 'I'm sorry, but I cannot tell you where Mr. Rohatyn is--he's on a trip,' or some excuse. The emotional impact of coming to this empty apartment, you have no idea. In fact, I never picked up a camera again. I have never done photography again since then."

The following Monday, Felix's secretary asked Gaillet to join Felix for dinner, at 8:00 p.m., at the "21" Club, on West Fifty-second Street. "And so I get all dressed up," she said. "I am completely devastated. I was tongue-tied during the entire dinner. I could not talk. And he said to me, 'I have to move on with my life. I need more space. I love you, but I have to do something else.' Of course, then I was not aware of the fact that he was already getting quite involved with Elizabeth. And so that was the end of the affair. That was it. And I never saw him again. That was it, that night. You have no idea. It took me five years to get over this...it was the worst thing. It was worse than the fire; it was worse than anything else. I mean, it was just absolutely terrible. Terrible, terrible, terrible. It took me five years to get over the breakup with him. And I still have dreams about him. It's so unbelievable. The impact of this life I had with him is so enormous that I still dream of him in my life." Felix paid for her to stay at the Alrae for another year or so, but then she had to move out and start all over again.

She bears no ill will whatsoever toward Felix, in part because that is not her nature and in part because she acknowledges that Liz Rohatyn took Felix to a place and a stature in New York society that she could never have done. But she knows Felix was deceitful throughout their eight years together, carrying on with other women on a regular basis. Even though she no longer knows, she doubts he has settled down. "No, no, no, no," she said. "You don't understand this kind of mentality. This is a person who has to go for the kill every time. I mean, for the win. It's not a matter of having affairs. It's a matter of sexually getting somebody and then, you know, screwing them two or three times and then that's it. That's done. And then no more. And then getting another one and getting another one. I mean, everybody's written about this kind of mentality or character or personality. That's what he's like. He needs to be the conqueror, you know? He needs to conquer women."

Gaillet said that after they broke up, and while Felix was dating Elizabeth, he also had an affair with Jackie Kennedy Onassis, following the death of Aristotle Onassis. "It was all over the papers," she said. "Their picture was in the paper everywhere." Felix and Gaillet, Andre and Bella, and Jackie would often dine together at Andre's apartment at the Carlyle. Felix had been the one who had introduced Gaillet to Onassis, and he knew about their brief affair. Felix's affair with Jackie ended, Gaillet suspected, because even for Felix the glare of publicity around Jackie was too intense, and put less of the limelight on him. "I wasn't there," she said, "but I imagine that it was too much publicity for him to handle at the time. He just wasn't that kind of person. He really preferred to be sort of in the background." She said Felix even dated Marie-Josee Drouin, who is now married to the financier Henry Kravis. Felix's only comment about his time with Helene was: "Look, I was living with a woman for a number of years. And that broke up. And a year or so later I was with another woman, who became my wife, whom I've been married to for twenty-seven years."

FELIX'S SUCCESS AS an investment banker had now been conjoined with his increasingly fawning press notices--whether they were for helping solve the Wall Street back-office crisis or for leading the efforts to solve New York City's fiscal mess--making him "one of the most influential and interesting bachelors around." He was a frequent guest at many of the toniest social gatherings in New York, all the while giving the general public the impression that he was living alone at the supposedly down-market Alrae. "In those days," said a woman who knew him well, "Felix tried to be very counter-Establishment, very tough, smart and independent. He used to say, 'I own only two suits, the one I'm wearing and the one that's at the cleaner's.' The first night we went out, we drove through Central Park in his beat-up car. It was spring, and the apple blossoms were in bloom. 'Do you see those flowers?' he asked me. 'Take a good look, because I'll never send you flowers. I don't believe in things like that.'" He was said to have dated both Barbara Walters and Shirley MacLaine.

Somehow, Felix kept churning out important deals. For instance, in July 1975--in the midst of the intensity of New York's crisis--he recommended that United Technologies, the Hartford-based manufacturer of jet engines, look seriously at buying Otis Elevator Company. United Technologies wanted to diversify its revenue and profitability away from its dependence on fickle government contracts. Harry Gray, UT's CEO, took Felix's advice. United Technologies pounced on Otis by launching, on October 15, a hostile tender offer for 55 percent of Otis's shares, for $42 each. Otis resisted and called in Morgan Stanley to help it find a "friendly" suitor--to no avail, as UT raised its offer to $44, in cash, and Felix and Lazard would add another pelt, and client, to their belt. For not the last time, Felix was favorably compared to Henry Kissinger--at the very moment Kissinger was at his most powerful. "He is the Henry Kissinger of the financial world," Donna Shalala, Clinton's future secretary of health and human services and now the president of the University of Miami, told
Newsweek
at this time. "He's as brilliant as Henry, as European as Henry, makes as many deals as Henry. But he's nicer than Henry."