Wednesday, April 12, 2017

How to take $103 million and turn it into $31 million

The rich are different from you and me. And, no, it’s not just because they have more money. They also give their children names like Chauncey Devereux Stillman. And where the rest of us live in neighborhoods or on streets, they have named estates, like Wethersfield.

Wethersfield was the home of Chauncey Devereux Stillman, grandson of James Jewett Stillman, who headed up the bank that eventually turned into Citigroup. So despite the terrible name, Chauncey was born with a leg up. When his grandfather died in 1918, he left his heirs an estate that would be worth $1.6 billion in current dollars. Obviously not much compared to the big bucks numbers that get bandied around these days. We all know that a billion is the new million. Still, $1.6 billion isn’t all that shabby, even when diluted among multiple generations of descendants. There was a Depression in there, but you’d think that $1.6 billion is sort of built to last.

All of the $1.6 billion did not, of course, go to Chauncey. But he scraped together what he could and, as a young man in the 1930’s, bought up a few “depleted” farms north of NYC and created an estate named Wethersfield. (Wethersfield was the town in Connecticut where his ancestors had emigrated in the early 1700’s.)

 He spent more than two decades creating gardens evoking those in 17th century Italy. A room with a vaulted ceiling and frescoes once displayed his most prized artwork, “Portrait of a Halberdier,” a painting by Pontormo that sold at auction to the Getty Museum for $35 million shortly after his [Chauncey Stillman’s, not Pontormo’s] death in 1989.

But by the early 2000s, the Wethersfield fortune began to fade. The foundation’s expenses and grant outlays exceeded revenues for 14 straight years, filings show. Trustees diverted millions of dollars to personal causes, including alma maters and children’s schools, according to admissions they made in connection with Attorney General Eric Schneiderman’s probe.

Homeland’s assets totaled $103 million in 1998. By April 2015, they’d dwindled to $31 million. That year, Schneiderman alleged that former trustees used the foundation as “a piggy bank” and that its ex-president misdirected $701,328 for personal benefit. In an agreement with Schneiderman’s office, seven former trustees admitted they routinely awarded money to “institutions that had nothing to do with the Wethersfield Estate.” (Source: Bloomberg)

I’m not the canniest person on the face of the earth when it comes to finances, but $103 million to $31 million? That’s quite a dwindle in 17 years, especially when they bolstered the coffers with $35 million with the sale of the Pontormo. But I guess that’s what happens when the trustees can tap the foundation for their pet causes and/or their walking around money. Not a lot of oversight going on there. And I’m sure if you’re a trustee with oodles of money just sitting there it’s way, way, tempting to be a showoff and write a big check that’s not coming out of your own pocket. You get the stroking and the kudos, the cultivation and the sucking up, and it costs you zilch. (Then there’s the temptation to outright steal, which was going on a bit with that “misdirection” of funds.)

So now, in hopes of keeping Wethersfield alive (gardens, trails, stables, stately manse, etc.) – it’s been open to the public since Chauncey Stillman’s death in 1989 -  the family foundation is selling off Stillman’s art collection.

On the auction block will be works by Degas, Sargent, and Toulouse-Lautrec. Maybe they’ll go to museums, but it’s more likely that they’ll go into private collections of those with a lot more than $1.6 billion. Where no one will see them ever again in the whole wide world. Unless, of course, the estates of the purchasers turn their billions into millions and need cash.

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