What Price Vanity? $14 Million For License Plate

No. 1 tag auctioned off for charity

Emirati Saed Abdul Ghaffar al-Khouri (L) speaks on the phone as he poses with the most expensive car number-plate after he won it in an auction in the oil-rich emirate of Abu Dhabi on February 16, 2008. Al-Khouri won the plate after bidding 52.2 milion dirhmas (14.2 million dollars) to become the most expensive single-digit car registration plate in the world.

The AP reports:

A license plate with nothing but the number "1" on it went for a record $14 million at a charity auction Saturday.

Saeed Khouri, a member of a wealthy Abu Dhabi family, wouldn't say how many automobiles he owned or which of them might carry the record-breaking single-digit plate.

"I bought it because it's the best number," said Khouri, whose family made its fortune in real estate. "I bought it because I want to be the best in the world."

The oil-rich UAE began auctioning off vanity license plates last May.

Saeed Khouri, foreground, and others bid on a No. 1 vanity license plate during a charity auction in the Emirati capital of Abu Dhabi on Saturday. Khouri won with a bid of $14 million.

Ordinary automobile license plates issued to drivers here — and even most other vanity series plates — carry both Arabic and Western numerals and script, defining the issuing city and country.

Khouri's plate, however, has only the Western numeral and no letters.

The record sale surpassed the $6.8 million that was paid for an Emirati license plate at an earlier auction with the Western number 5 on it — also without Arabic numerals or letters.

The license plate sits in a display case before the start of the charity auction Saturday in Abu Dhabi.

Proceeds from the auctions, which are held in a lavish hotel here, go to a rehabilitation center for victims of traffic accidents.

On Saturday, 90 license plates were auctioned off in all, raising a total of $24 million. The previous five such events raised more than $50 million.

A New Old Faberge Egg

The Associated Press reports:

A previously unrecorded Faberge egg valued at up to $18 million is going up for sale next month, Christie's auction house said Thursday.

The pink enamel-and-gold egg is one of only a dozen designed to the highest standards for clients other than Russia's ruling family. It has been in the Rothschild banking family since 1902, when it was given as an engagement present.

The egg contains a diamond-set cockerel which pops up every hour and flaps its wings, nods its head and opens and closes its beak.

It will go on sale Nov. 28 at Christie's in London, where it is expected to fetch $12 million to $18 million. If it reaches the top price, it will break the existing record for a Russian artwork, the US$9.6 million paid for a Faberge egg in New York in April 2002.

"The discovery of this masterpiece is the most exciting of my 40-year career," said Anthony Philips, International Director of Silver and Russian Works of Art at Christie's. "Although few examples exist, The Faberge egg is known around the world as one of the most impressive and exclusive works of art ever made."

Craftsmen Peter Carl Faberge created more than 50 of the eggs for Russia's imperial family, though not all survive. Czar Alexander III commissioned the first as an anniversary present for his wife, Empress Maria Fedorovna, on Easter Day 1885. The Empress was so enamored of the enameled egg, with a golden yoke, golden hen, miniature diamond crown and ruby egg inside, that the czar ordered that a unique egg be made for her every Easter Day after.

After the Czar died unexpectedly in 1894, his son Nicholas continued the tradition until the Russian Revolution in 1917. Nicholas and his family were executed on July 17, 1918.

After the revolution, the communist government sold off many of Faberge's creations, which found their way into Western collections.

The Rothschild egg was presented as an engagement gift to Edouard de Rothschild and Germaine Halphen, who married in 1905, by Edouard's sister Beatrice Ephrussi.

Miners Unearth World's Biggest Diamond

South African find is twice as big as the Cullinan · Expert predicts feverish bidding on huge stone

The Guardian reports:


The world's biggest diamond, believed to be twice the size of the Cullinan, has been discovered in the North-West Province of South Africa. The find has electrified the diamond community, but the circumstances of the discovery are shrouded in mystery.
The diamond is expected to attract furious bidding from buyers worldwide and could fetch up to £15m.

A spokesman for the mining house which made yesterday's find, Brett Joli, said the diamond was being rushed to a bank vault in Johannesburg and would be kept there for a couple of days "until we calm down and decide what we are going to do". A security company was being hired to protect the precious stone.

The mining company which made the find has not been identified.
The South Africa Broadcasting Corporation said the stone was said to be twice the size of the Cullinan diamond.

Fred Cuellar, the founder of Diamond Cutters International and author of How to Buy a Diamond, said he first heard about the find a few days ago. "I get a phone call when any rare stone around the world is found and when I heard about this one it was stunning news.

"It caught everybody in the diamond industry offside. There will be a lot of mad bidding from a lot of private individuals as to who is going to buy this stone."

The Cullinan, which was found near Pretoria more than a century ago, was until recently acknowledged to be the largest cut diamond in the world, weighing in at 530.20 carats. In 1985 it lost the record to the Golden Jubilee, which was found in the same mine as the Cullinan and weighed 545.67 carats.

In its rough state the Cullinan weighed 3,106.75 carats. It now forms part of King Edward's sceptre and is in the Tower of London.

The Cartier diamond, famous as a gift from Richard Burton to Elizabeth Taylor, weighed a mere 240.80 carats rough and 69.42 carats cut.

Mr Cuellar said the most important information about the latest find was yet to be forthcoming, including whether it is colourless. "The reported size of the stone is accurate, but there are all these other factors we still don't know and what matters now is how wide, how clear and how well cut it will be.

"Will this diamond rank above the best quality diamonds in the world? I can tell you right now, no. But in as far as the list of the largest diamonds ever found in the world goes, would it make that list? Yes it would."

He said the first seven people who looked at the stone thought it was industrial grade, but that view has changed and it now appears to be a stone that will be cut into a piece of jewellery.

The quandary facing the owner of the diamond now is how best to cut the stone he said. "The thinking usually is with these types of things, we know how big we could get it but we don't know how much it will hurt us on the quality side."

The Cullinan, also known as the Star of Africa, was thought by some to be part of a larger stone which still lies somewhere undiscovered.

There will be interest in who made the find and how they will be rewarded. The black miner who discovered the Excelsior, said to be the second largest uncut diamond ever found, received a horse and saddle, and a sum of money.

Rock stars

· The Cullinan Diamond was discovered in 1905 and at 3,106 carats was the largest gem-quality rough diamond ever found. Cullinan I, or the Great Star of Africa - at 530 carats formerly the largest cut diamond - was one of the 105 gems cut from it.

· The Koh-i-noor is part of the British crown jewels. It originated in India but seized by Britain as a spoil of war in 1849. The diamond supposedly brings good luck to female owners and misfortune or death to any male who wears or owns it.

· The Hope Diamond is a large (45.52 carat), deep blue diamond. It is legendary for the curse it supposedly puts on whoever possesses it. Previous owners include Kings Louis XV and XVI and Marie Antoinette.

The Richest of the Rich, Proud of a New Gilded Age

Sanford I. Weill, chairman of Carnegie Hall, sees similarities between his life and that of the hall’s first patron.

The NYTimes reports:

The tributes to Sanford I. Weill line the walls of the carpeted hallway that leads to his skyscraper office, with its panoramic view of Central Park. A dozen framed magazine covers, their colors as vivid as an Andy Warhol painting, are the most arresting. Each heralds Mr. Weill’s genius in assembling Citigroup into the most powerful financial institution since the House of Morgan a century ago.

His achievement required political clout, and that, too, is on display. Soon after he formed Citigroup, Congress repealed a Depression-era law that prohibited goliaths like the one Mr. Weill had just put together anyway, combining commercial and investment banking, insurance and stock brokerage operations. A trophy from the victory — a pen that President Bill Clinton used to sign the repeal — hangs, framed, near the magazine covers.

These days, Mr. Weill and many of the nation’s very wealthy chief executives, entrepreneurs and financiers echo an earlier era — the Gilded Age before World War I — when powerful enterprises, dominated by men who grew immensely rich, ushered in the industrialization of the United States. The new titans often see themselves as pillars of a similarly prosperous and expansive age, one in which their successes and their philanthropy have made government less important than it once was.

“People can look at the last 25 years and say this is an incredibly unique period of time,” Mr. Weill said. “We didn’t rely on somebody else to build what we built, and we shouldn’t rely on somebody else to provide all the services our society needs.”

Those earlier barons disappeared by the 1920s and, constrained by the Depression and by the greater government oversight and high income tax rates that followed, no one really took their place. Then, starting in the late 1970s, as the constraints receded, new tycoons gradually emerged, and now their concentrated wealth has made the early years of the 21st century truly another Gilded Age.

Only twice before over the last century has 5 percent of the national income gone to families in the upper one-one-hundredth of a percent of the income distribution — currently, the almost 15,000 families with incomes of $9.5 million or more a year, according to an analysis of tax returns by the economists Emmanuel Saez at the University of California, Berkeley and Thomas Piketty at the Paris School of Economics.

Such concentration at the very top occurred in 1915 and 1916, as the Gilded Age was ending, and again briefly in the late 1920s, before the stock market crash. Now it is back, and Mr. Weill is prominent among the new titans. His net worth exceeds $1 billion, not counting the $500 million he says he has already given away, in the open-handed style of Andrew Carnegie and the other great philanthropists of the earlier age.

At 74, just over a year into retirement as Citigroup chairman, Mr. Weill sees in Carnegie’s life aspects of his own. Andrew Carnegie, an impoverished Scottish immigrant, built a steel empire in Pittsburgh, taking risks that others shunned, just as the demand for steel was skyrocketing. He then gave away his fortune, reasoning that he was lucky to have been in the right spot at the right moment and he owed the community for his good luck — not in higher wages for his workers, but in philanthropic distribution of his wealth.

Mr. Weill’s beginnings were similarly inauspicious. A son of immigrants from Poland, raised in Brooklyn, a so-so college student, he landed on Wall Street in a low-level job in the 1950s. Harnessing entrepreneurial energy, deftness as a deal maker and an appetite for risk, with a rising stock market pulling him along, he built a financial empire that, in his view, successfully broke through the stultifying constraints that flowed from the New Deal. They were constraints not just on what business could or could not do, but on every high earner’s take-home pay.

“I once thought how lucky the Carnegies and the Rockefellers were because they made their money before there was an income tax,” Mr. Weill said, never believing in his younger days that deregulation and tax cuts, starting in the late 1970s, would bring back many of the easier conditions of the Gilded Age. “I felt that everything of any great consequence was really all made in the past,” he said. “That turned out not to be true and it is not true today.”

The Question of Talent

Other very wealthy men in the new Gilded Age talk of themselves as having a flair for business not unlike Derek Jeter’s “unique talent” for baseball, as Leo J. Hindery Jr. put it. “I think there are people, including myself at certain times in my career,” Mr. Hindery said, “who because of their uniqueness warrant whatever the market will bear.”

He counts himself as a talented entrepreneur, having assembled from scratch a cable television sports network, the YES Network, that he sold in 1999 for $200 million. “Jeter makes an unbelievable amount of money,” said Mr. Hindery, who now manages a private equity fund, “but you look at him and you say, ‘Wow, I cannot find another ballplayer with that same set of skills.’ ”

A handful of critics among the new elite, or close to it, are scornful of such self-appraisal. “I don’t see a relationship between the extremes of income now and the performance of the economy,” Paul A. Volcker, a former Federal Reserve Board chairman, said in an interview, challenging the contentions of the very rich that they are, more than others, the driving force of a robust economy.

The great fortunes today are largely a result of the long bull market in stocks, Mr. Volcker said. Without rising stock prices, stock options would not have become a major source of riches for financiers and chief executives. Stock prices rise for a lot of reasons, Mr. Volcker said, including ones that have nothing to do with the actions of these people.

“The market did not go up because businessmen got so much smarter,” he said, adding that the 1950s and 1960s, which the new tycoons denigrate as bureaucratic and uninspiring, “were very good economic times and no one was making what they are making now.”

James D. Sinegal, chief executive of Costco, the discount retailer, echoes that sentiment. “Obscene salaries send the wrong message through a company,” he said. “The message is that all brilliance emanates from the top; that the worker on the floor of the store or the factory is insignificant.”

Name Robert Crandall Age 71 Assets Under $100 Million Source Airline Industry Current Job Retired Philosophy “The way our society equalizes incomes is through much higher taxes than we have today. There is no other way.”

A legendary chief executive from an earlier era is similarly critical. He is Robert L. Crandall, 71, who as president and then chairman and chief executive, led American Airlines through the early years of deregulation and pioneered the development of the hub-and-spoke system for managing airline routes. He retired in 1997, never having made more than $5 million a year, in the days before upper-end incomes really took off.

He is speaking out now, he said, because he no longer has to worry that his “radical views” might damage the reputation of American or that of the companies he served until recently as a director. The nation’s corporate chiefs would be living far less affluent lives, Mr. Crandall said, if fate had put them in, say, Uzbekistan instead of the United States, “where they are the beneficiaries of a market system that rewards a few people in extraordinary ways and leaves others behind.”

“The way our society equalizes incomes,” he argued, “is through much higher taxes than we have today. There is no other way.”

The New Tycoons

The new Gilded Age has created only one fortune as large as those of the Rockefellers, the Carnegies and the Vanderbilts — that of Bill Gates, according to various compilations. His net worth, measured as a share of the economy’s output, ranks him fifth among the 30 all-time wealthiest American families, just ahead of Carnegie. Only one other living billionaire makes the cut: Warren E. Buffett, in 16th place.

Individual fortunes nearly a century ago were so large that just 30 tycoons — Rockefeller was by far the wealthiest — had accumulated net worth equal to 5 percent of the national income. Their wealth flowed mainly from the empires they built in manufacturing, railroads, oil, coal, urban transit and mass retailing as the United States grew into the world’s largest industrial economy.

Today the fortunes of the very wealthiest are spread more widely. In addition to stock and stock options, low-interest credit has brought wealth to more families — by, for example, facilitating the sale of individual businesses for much greater sums than in the past. The fortunes amassed in hedge funds and in private equity often stem from deals involving huge amounts of easy credit and vast pools of capital available for investment.

The high-tech boom and the Internet unfolded against this backdrop. The rising stock market multiplied the wealth of Bill Gates as his software became the industry standard. It did the same for numerous others who financed start-ups on a shoestring and then went public at enormous gain.

Over a longer period, the market lifted the value of Mr. Buffett’s judicious investments and timely acquisitions, and he emerged as the extraordinarily wealthy Sage of Omaha, in effect, a baron of the new Gilded Age whose views are strikingly similar to those of Carnegie and Mr. Weill.

Like them, Mr. Buffett, 78, sees himself as lucky, having had the good fortune, as he put it, to have been born in America, white and male, and “wired for asset allocation” just when all four really paid off. He dwelt on his good fortune in a recent appearance at a fund-raiser for Hillary Rodham Clinton, who is vying for Mr. Buffett’s support of her presidential candidacy.

“This is a significantly richer country than 10, 20, 30, 40, 50 years ago,” he declared, backing his assertion with a favorite statistic. The national income, divided by the population, is a very abundant $45,000 per capita, he said, a number that reflects an affluent nation but also obscures the lopsided income distribution intertwined with the prosperity.

“Society should place an initial emphasis on abundance,” Mr. Buffett argued, but “then should continuously strive” to redistribute the abundance more equitably.

No income tax existed in Carnegie’s day to do this, and neither Mr. Buffett nor Mr. Weill push for sharply higher income tax rates now, although Mr. Buffett criticizes the present tax code as unfairly skewed in his favor. Like Carnegie, philanthropy is their preference. “I want to give away my money rather than have somebody take it away,” Mr. Weill said.

Mr. Buffett is already well down that path. Most of his wealth is in the stock of his company, Berkshire Hathaway, and he is transferring the majority of that stock to the Bill and Melinda Gates Foundation so the Gateses can “materially expand” their giving.

“In my will,” he has written, echoing Carnegie’s last wishes, “I’ve stipulated that the proceeds from all Berkshire shares I still own at death are to be used for philanthropic purposes.”

Revisionist History

The new tycoons describe a history that gives them a heroic role. The American economy, they acknowledge, did grow more rapidly on average in the decades immediately after World War II than it is growing today. Incomes rose faster than inflation for most Americans and the spread between rich and poor was much less. But the United States was far and away the dominant economy, and government played a strong supporting role. In such a world, the new tycoons argue, business leaders needed only to be good managers.

Then, with globalization, with America competing once again for first place as strenuously as it had in the first Gilded Age, the need grew for a different type of business leader — one more entrepreneurial, more daring, more willing to take risks, more like the rough and tumble tycoons of the first Gilded Age. Lew Frankfort, chairman and chief executive of Coach, the manufacturer and retailer of trendy upscale handbags, who was among the nation’s highest paid chief executives last year, recaps the argument.

“The professional class that developed in business in the ’50s and ’60s,” he said, “was able as America grew at very steady rates to become industry leaders and move their organizations forward in most categories: steel, autos, housing, roads.”

That changed with the arrival of “the technological age,” in Mr. Frankfort’s view. Innovation became a requirement, in addition to good management skills — and innovation has played a role in Coach’s marketing success. “To be successful,” Mr. Frankfort said, “you now needed vision, lateral thinking, courage and an ability to see things, not the way they were but how they might be.”

Mr. Weill’s vision was to create a financial institution in the style of those that flourished in the last Gilded Age. Although insurance is gone, Citigroup still houses commercial and investment banking and stock brokerage.

The Glass-Steagall Act of 1933 outlawed the mix, blaming conflicts of interest inherent in such a combination for helping to bring on the 1929 crash and the Depression. The pen displayed in Mr. Weill’s hallway is one of those Mr. Clinton used to revoke Glass-Steagall in 1999. He did so partly to accommodate the newly formed Citigroup, whose heft was necessary, Mr. Weill said, if the United States was to be a powerhouse in global financial markets.

“The whole world is moving to the American model of free enterprise and capital markets,” Mr. Weill said, arguing that Wall Street cannot be a big player in China or India without giants like Citigroup. “Not having American financial institutions that really are at the fulcrum of how these countries are converting to a free-enterprise system,” he said, “would really be a shame.”

Such talk alarms Arthur Levitt Jr., a former chairman of the Securities and Exchange Commission, who started on Wall Street years ago as a partner with Mr. Weill in a stock brokerage firm. Mr. Levitt has publicly lamented the end of Glass-Steagall, but Mr. Weill argues that its repeal “created the opportunities to keep people still moving forward.”

Mr. Levitt is skeptical. “I view a gilded age as an age in which warning flags are flying and are seen by very few people,” he said, referring to the potential for a Wall Street firm to fail or markets to crash in a world of too much deregulation. “I think this is a time of great prosperity and a time of great danger.”

It’s Not the Money, or Is It?

Name Leo J. Hindery, Jr. Age 59 Assets $150 Million Source Cable TV Current Job Manager, Private Equity Fund Philosophy “I think there are people, including myself at certain times in my career, who because of their uniqueness warrant whatever the market will bear.”

Not that money is the only goal. Mr. Hindery, the cable television entrepreneur, said he would have worked just as hard for a much smaller payoff, and others among the very wealthy agreed. “I worked because I loved what I was doing,” Mr. Weill said, insisting that not until he retired did “I have a chance to sit back and count up what was on the table.” And Kenneth C. Griffin, who received more than $1 billion last year as chairman of a hedge fund, the Citadel Investment Group, declared: “The money is a byproduct of a passionate endeavor.”

Mr. Griffin, 38, argued that those who focus on the money — and there is always a get-rich crowd — “soon discover that wealth is not a particularly satisfying outcome.” His own team at Citadel, he said, “loves the problems they work on and the challenges inherent to their business.”

Mr. Griffin maintained that he has created wealth not just for himself but for many others. “We have helped to create real social value in the U.S. economy,” he said. “We have invested money in countless companies over the years and they have helped countless people.”

The new tycoons oppose raising taxes on their fortunes. Unlike Mr. Crandall, neither Mr. Weill nor Mr. Griffin nor most of the dozen others who were interviewed favor tax rates higher than they are today, although a few would go along with a return to the levels of the Clinton administration. The marginal tax on income then was 39.6 percent, and on capital gains, 20 percent. That was still far below the 70 percent and 39 percent in the late 1970s. Those top rates, in the Bush years, are now 35 percent and 15 percent, respectively.

“The income distribution has to stand,” Mr. Griffin said, adding that by trying to alter it with a more progressive income tax, “you end up in problematic circumstances. In the current world, there will be people who will move from one tax area to another. I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard.”

Creating Wealth

Some chief executives of publicly traded companies acknowledge that their fortunes are indeed large — but that it reflects only a small share of the corporate value created on their watch.

Mr. Frankfort, the 61-year-old Coach chief, took home $44.4 million last year. His net worth is in the high nine figures. Yet his pay and net worth, he notes, are small compared with the gain to shareholders since Coach went public six years ago, with Mr. Frankfort at the helm. The market capitalization, the value of all the shares, is nearly $18 billion, up from an initial $700 million.

“I don’t think it is unreasonable,” he said, “for the C.E.O. of a company to realize 3 to 5 percent of the wealth accumulation that shareholders realize.”

That strikes Robert C. Pozen as a reasonable standard. He made a name for himself — and a fortune — rejuvenating mutual funds, starting with Fidelity. In one case, he said, the fund he was running made a profit of $1 billion; his pay that year was $15 million.

“In every organization there are a relatively small number of really critical people,” Mr. Pozen said. “You have to start with that premise, and I made a big difference.”

Mr. Weill makes a similar point. Escorting a visitor down his hall of tributes, he lingers at framed charts with multicolored lines tracking Citigroup’s stock price. Two of the lines compare the price in the five years of Mr. Weill’s active management with that of Mr. Buffett’s Berkshire Hathaway during the same period. Citigroup went up at six times the pace of Berkshire.

“I think that the results our company had, which is where the great majority of my wealth came from, justified what I got,” Mr. Weill said.

New Technologies

Others among the very rich argue that their wealth helps them develop new technologies that benefit society. Steve Perlman, a Silicon Valley innovator, uses his fortune from breakthrough inventions to help finance his next attempt at a new technology so far out, he says, that even venture capitalists approach with caution. He and his partners, co-founders of WebTV Networks, which developed a way to surf the Web using a television set, sold that still profitable system to Microsoft in 1997 for $503 million.

Mr. Perlman’s share went into the next venture, he says, and the next. One of his goals with his latest enterprise, a private company called Rearden L.L.C., is to develop over several years a technology that will make film animation seem like real-life movies. “There was no one who would invest,” Mr. Perlman said. So he used his own money.

In an earlier era, big corporations and government were the major sources of money for cutting-edge research with an uncertain outcome. Bell Labs in New Jersey was one of those research centers, and Mr. Perlman, now a 46-year-old computer engineer with 71 patents to his name, said that, in an earlier era, he could easily have gone to Bell as a salaried inventor.

In the 1950s, for example, he might have been on the team that built the first transistor, a famous Bell Labs breakthrough. Instead, after graduating from Columbia University, he went to Apple in Silicon Valley, then to Microsoft and finally out on his own.

“I would have been happy as a clam to participate in the development of the transistor,” Mr. Perlman said. “The path I took was the path that was necessary to do what I was doing.”

In contrast to many of his peers in corporate America, Mr. Sinegal, 70, the Costco chief executive, argues that the nation’s business leaders would exercise their “unique skills” just as vigorously for “$10 million instead of $200 million, if that were the standard.”

As a co-founder of Costco, which now has 132,000 employees, Mr. Sinegal still holds $150 million in company stock. He is certainly wealthy. But he distinguishes between a founder’s wealth and the current practice of paying a chief executive’s salary in stock options that balloon into enormous amounts. His own salary as chief executive was $349,000 last year, incredibly modest by current standards.

“I think that most of the people running companies today are motivated and pay is a small portion of the motivation,” Mr. Sinegal said. So why so much pressure for ever higher pay?

“Because everyone else is getting it,” he said. “It is as simple as that. If somehow a proclamation were made that C.E.O.’s could only make a maximum of $300,000 a year, you would not have any shortage of very qualified men and women seeking the jobs.”

Looking back, none of the nation’s legendary tycoons was more aware of his good luck than Andrew Carnegie.

“Carnegie made it abundantly clear that the centerpiece of his gospel of wealth philosophy was that individuals do not create wealth by themselves,” said David Nasaw, a historian at City University of New York and the author of “Andrew Carnegie” (Penguin Press). “The creator of wealth in his view was the community, and individuals like himself were trustees of that wealth.”

Repaying the community did not mean for Carnegie raising the wages of his steelworkers. Quite the contrary, he sometimes cut wages and, in doing so, presided over violent antiunion actions.

Carnegie did not concern himself with income inequality. His whole focus was philanthropy. He favored a confiscatory estate tax for those who failed to arrange to return, before their deaths, the fortunes the community had made possible. And today dozens of libraries, cultural centers, museums and foundations bear Carnegie’s name.

“Confiscatory” does not appear in Mr. Weill’s public comments on the estate tax, or in those of Mr. Gates. They note that the estate tax, now being phased out at the urging of President Bush, will return in full in 2010, unless Congress acts otherwise.

They publicly favor retaining an estate tax but focus their attention on philanthropy.

Mr. Weill ticks off a list of gifts that he and his wife, Joan, have made. Some bear their names, and will for years to come. With each bequest, one or the other joins the board. Appropriately, Carnegie Hall has been a big beneficiary, and Mr. Weill as chairman was honored at a huge fund-raising party that Carnegie Hall gave on his 70th birthday.

The Weills — matching what everyone else pledged — gave $30 million to enhance the concert hall that Andrew Carnegie built in 1890 in pursuit of returning his fortune to the community, establishing a standard that today’s tycoons embrace.

“We have that in common,” Mr. Weill said.

[See here for "The Wealthiest Americans Ever"]

Gas Money

The Sydney Morning Herald reports:

Two thieves showed up at London jeweller in a flashy car and made off with an even flashier haul, stealing about STG10 million ($A23.6 million) worth of diamonds and gems, the jeweller said on Wednesday.

The well-dressed pair stepped out of a Bentley Continental Flying Spur - a car valued at about STG125,000 ($A295,000) - and into the west London branch of Graff jewellers on Wednesday afternoon.


They chatted with staff as the car drove off, pretending to be customers, before brandishing handguns and stealing diamonds and precious stone-studded rings, necklaces, pendants and earrings. The two escaped on foot.

Graff spokeswoman Fiona Spence said in an email statement: "One of the items taken was a necklace weighing more than 155 carats which alone was worth more than STG1 million," or $A2.36 million.

Police appealed for help identifying both the robbers and the vehicle in which they were driven to the store.

"It is not everyday that people use a Bentley to arrive at a premises they intend to rob," Detective Sergeant Sarah Staff said.

Conspicuous Consumption: The House That Yellow Journalism Bought

The Beverly House, built in 1927, was designed by Gordon Kaufmann, who also was the architect of the nearby Greystone mansion, considered by many to be the finest home in Beverly Hills. Hearst paid about $120,000 for the estate in 1947.

The LATimes reports:

Priced to sell: $165,000,000
The Beverly House, former mansion of newspaper tycoon William Randolph Hearst and actress Marion Davies, four homes plus apartment and security staff’s cottage on 6.5 acres north of Sunset, 29 bedrooms, state-of-the-art theater, three swimming pools. Up-and-coming neighborhood. List price: $165 million.

The rich are getting richer, and their properties are getting pricier.

The 1920s-era Beverly Hills mansion of William Randolph Hearst and Marion Davies was put on the market Monday for $165 million, making it the nation's most expensive residential listing.

The pink stucco, H-shaped estate, dubbed Beverly House by the late newspaper magnate, is spread across 6.5 acres north of Sunset Boulevard. It has just about everything a billionaire could want — including three swimming pools, 29 bedrooms, a state-of-the-art movie theater and even a disco.

The compound boasts six separate residences — four houses, an apartment and a cottage for the security staff.

"This is the kind of home that comes on the market once in a generation," said Jeff Hyland, a Beverly Hills real estate broker and author of "The Estates of Beverly Hills."

The seller, attorney-investor Leonard M. Ross, bought the property in 1976 and is now seeking "a lifestyle change," said his real estate broker, Stephen Shapiro.

The asking price surpasses the $155 million being sought by developers of an estate in Montana's Big Sky country, and the $135-million price of an Aspen, Colo., compound being sold by Prince Bandar bin Sultan of Saudi Arabia.

In the last two years, six U.S. residences have come on the market with nine-digit price tags, according to Rick Goodwin, publisher of Ultimate Homes magazine, an annual compendium of the world's hottest properties.

Yet, so far, no U.S. home sale has broken the $100-million mark. (None of the six noted by Goodwin has sold.) The record remains the $94 million paid by former telecom mogul Gary Winnick for a Bel-Air estate in 2001.

"It's only a matter of time" before the record falls, Goodwin predicted.

With its breathtaking asking price, the latest Beverly Hills listing adds more luster to the region's Platinum Triangle, the neighborhoods of Beverly Hills, Bel-Air and Holmby Hills, where the pace of multimillion-dollar sales has outshone the rest of Southern California's slumping housing market.

From January to May, the number of homes in the Platinum Triangle that sold for at least $10 million more than doubled compared with the year-earlier period. In contrast, Los Angeles County overall saw a 19% decline in sales for the same period.

New homeowners in the Platinum Triangle include actor Tom Cruise and his actress wife, Katie Holmes, Amazon.com Chief Executive Jeff Bezos and soccer star David Beckham and his wife, Spice Girl Victoria Beckham.

Experts say the high-end trend reflects the growing ranks of the wealthy, who so far have been immune from the troubles besetting the lower rungs of the housing market.

"There are many more people with much more money, and they are all chasing the elusive 'great estate' that is hard to find," said Shapiro, co-owner of Westside Estate Agency. "And they are especially hard to find in an area like this that's completely built out."

Built in 1927 for banker Milton Getz, the estate was designed by Gordon Kaufmann. Kaufmann was also the architect of the nearby Greystone mansion, considered by many to be the finest home in Beverly Hills.

Hearst bought the Getz property in 1947, paying about $120,000. He promptly moved in his paramour, Davies, as well as life-size paintings of the actress and statues from the gardens of his landmark Hearst Castle in San Simeon.

The power couple were renowned for their frequent parties attended by the toast of Hollywood, politicians and media bigwigs.

But Hearst's time at the compound was short-lived. He died there in 1951 at the age of 88.

Davies married movie extra Horace Brown 10 weeks after Hearst's death and continued to play host to the glitterati.

John F. Kennedy and his bride, Jacqueline, spent part of their honeymoon at the estate in 1953, and later returned when the mansion was used as the West Coast headquarters for Kennedy's presidential campaign.

Davies died in 1961 and Brown subdivided and sold the property in 1966.

Ross, the current owner, bought it in 1976 and restored the structures, gardens, fountains and bought back some of the subdivided acreage.

The estate was used in the film "The Godfather," including for a scene in which a movie producer awakens to find a severed horse's head in his bed.

The house was on the market 20 years ago with an asking price of $25 million, one of the highest listings of the time, but was taken off the market without being sold.

Until Monday, the highest-priced local listing was the $125 million sought for the Beverly Hills estate known as Fleur de Lys, which came on the market in April and is located a mile from the former Hearst mansion.

"It's nice to see L.A. get into the high-end luxury game this way," Goodwin said. "L.A. has not only just become the game but is the leading player."

Still, Goodwin said he was holding off any celebration until there was a "sold" sign in sight. It's not unusual for multimillion-dollar properties to take years to find the right buyer.

"It's all fun and interesting, but the real excitement will be the day when something sells for $100 million or more," he said.

UPDATE: The Rich Are Different

A Hedge Fund Manager's Family Values

Broward-Palm Beach News reports:

After publishing Kelly Cramer's remarkable story "Daddy's Girl" two weeks ago, the most frequent question I've been asked about the tale of a Wall Street millionaire who married his own daughter is: How could Linda Schutt, a grown woman with a PhD in psychology, succumb to the seduction attempts of her father, hedge-fund manager Bruce McMahan, and participate in a years-long incestuous relationship with him?

Setting aside the curious notion that people don't seem nearly as puzzled by a filthy-rich financier sleeping with his own spawn, I have to admit that the question is a good one. Watching Linda in her video deposition, portions of which we made available on our website, browardpalmbeach.com, she appears to be telling the truth; she comes off as someone who was genuinely victimized. But we also published her e-mails, and in some of them, she sounds pretty enthusiastic about bedding her own dad.

Let me refresh your memory. Just a few days after their June 2004 "wedding" at Westminster Abbey, Bruce e-mailed: "Miss you W. Think nasty things about you all the time." Linda responded promptly, also using their cute abbreviations for husband and wife: "Mmm yeah, nasty is so good. You must have read my mind. What else can we say, we're H & W — that's the beauty."

Yes, eww. And for the lawyers among you, let me point out that those e-mails were entered as exhibits in a court document.

But getting back to our question: What was it about Linda that allowed her to participate in this kind of behavior? Oddly, a possible answer to that question may have come from Linda's half-sister, Heather McMahan, who jumped to the defense of her family's honor in a story in the New York Post last week.

"[Linda] was a very sexual person, like most McMahans tend to be. We have a pretty strong libido — all of us," Heather told the Post in a story in which she went on to describe her beloved half sis as a sexual freak show. At a party, for example, Heather said that Linda turned a goodbye peck into a Girls Gone Wild moment.

"She put her hands on both my cheeks and goes right for my mouth," Heather told the Post. "I pulled back, and she said: 'Wait a minute. If you don't let me kiss you on the lips, how are you going to let me kiss you down there again?'"

Now, keep in mind Heather told these things to the Post because she wanted to convince the American public that Linda and her father would never, ever engage in an incestuous relationship.

Let's break down Heather's reasoning: Heather assures us that Linda would never sleep with Dad — and she knows this how? Because Linda made sexual come-ons to her own half sister.

I guess that's the kind of logic that makes sense only in families who control more money than the gross national product of Uganda.

The Post featured Heather in two follow-up stories to their own splashy rewrite of Cramer's story, which they plugged on page one and slapped across pages 12 and 13 of their September 28 issue. (Although dated September 28, our story actually hit our website on Tuesday, September 26.) In both Post follow-ups, Heather questioned Linda's motives and suggested that Linda was lying when she testified, under oath, about sex with her dad and the wacky wedding at England's big church. (And the Post also mentioned that Heather, 44, is a sculptor, but I don't know how the venerable tabloid resisted mentioning that her short list of film acting credits includes appearances in Class of Nuke 'Em High and The Toxic Avenger IV, in which she played a character named — I shit you not — The Vibrator.)

The Post presented Heather's accusations as news, even though Cramer, in her original story, had already pointed out that family members said they doubted Linda's story. Heather didn't return Cramer's e-mail, but older sister Alison did. Cramer's story quoted not only Alison but also Melinda Ewell, one of McMahan's ex-wives, as doubting Linda's account.

Not that those doubts matter much. Go back and read the opening of Cramer's story in which she makes the point that Linda and Bruce kept their relationship secret from the rest of the family. When the clan gathered for holiday parties, for example, Linda moved the Cartier Trinity ring Daddy had given her to a nonwedding-ring finger, for the sake of appearances.

So it's little wonder that other family members are emerging today, saying they didn't know about Bruce and Linda's naughty nuptials. They weren't invited.

According to an e-mail we received, McMahan family members are telling one another in the wake of our story that Linda made up her testimony about the Westminster Abbey ceremony. As for the photo we printed of Bruce and Linda snuggling with the Eiffel Tower in the background, the e-mailer tells us it was from "a family outing with all of the McMahans in Paris."

But rest assured, Bruce and Linda were at Westminster Abbey, posing in photos with their new wedding rings.

We have an entire series of these shots, which we were able to confirm were taken outside the Little Cloister garden at the Abbey. In our original story, we printed only the most dramatic image: the close-up of Bruce's hand on Linda's, showing off their rings. To aid those McMahans who still doubt the truth, we've reproduced some of the other photos from the happy occasion on this page.

Bruce never got around to testifying in the five lawsuits resulting from this strange case, but if he had, it would have been interesting to see him answer for these photos. If Linda is lying about the wedding ceremony, why were father and daughter posing outside Westminster Abbey with expensive wedding rings on their ring fingers?

Bruce made sure he would never have to answer those and other uncomfortable questions. (Like, for example, what his sperm cells were doing on a vibrator encrusted with dried bodily fluids, pubic hairs, and skin cells that turned out to match Linda's DNA.) On September 13, as Cramer was finishing her reporting, all five lawsuits were tentatively settled. We don't know all the terms, but we do know that one of the conditions for the settlement was that all the lawsuits be permanently sealed. When that was accomplished, McMahan would write checks — somewhere, we believe, in the range of $7 million to $11 million.

All of that cash, however, couldn't take the court records we were already holding out of our hands. McMahan was simply too late to prevent our story from being published. But his throwing in the towel on the lawsuits and sealing the record would prevent other news organizations from culling records from court files themselves, which may be why more outfits haven't followed the Post's example and done their own stories. (Not that there's a lack of interest. Newsies from Australia to Greece have been asking us to send photographs of Bruce and Linda. Major daily newspapers, glossy magazines, supermarket tabloids, foreign press syndicates, and network television news organizations have all contacted us, asking for a piece of the amazing tale. But I suspect their uptight lawyers are holding them back, since they can't get the lawsuits directly from courthouses on their own.)

Bruce and his money are winning that battle. But he wasn't so fortunate when he tried to rush New Times into court the week our story hit the streets.

Thursday afternoon, the week our story appeared, we received a 37-page fax and a phone call from an attorney telling us that McMahan had convinced a federal judge in Miami to hold an emergency hearing the next morning to consider McMahan's motion for injunctive relief.

McMahan wanted the judge to force us to remove Linda's video deposition from our website, as well as other court documents we posted there, like the 1990 paternity test showing with 99.7 percent certainty that Bruce is Linda's biological father. (But we suspected it was the video that was really giving him indigestion.)

One of our intrepid lawyers, Sandy Bohrer, responded by calling McMahan's people and asking them about their filing. He mentioned that after reading it, he got the impression that they had never heard of something called the First Amendment.

That must have been some phone call. Within minutes, McMahan folded. He withdrew his motion, and the emergency hearing was canceled.

That should be the end of Bruce's legal moves. At this point, only the New York Post has done stories based on Kelly Cramer's reporting, so it's in McMahan's interest not to open another legal can of worms. If he did, he'd have to expose to public view those five sordid court cases that he's paying so much money to seal, and the rest of the news biz would be on them like hounds on a hambone.

The Rich Are Different

A secret sexual relationship with his daughter was not enough for Fisher Island multi-millionaire Bruce McMahan. He loved her so much, he married her.

_{[Photo by Colby Katz]}

Broward-Palm Beach News reports:

There had to be a wedding.

And it had to be a grand celebration befitting a Fisher Island multimillionaire who controls billions from Wall Street to Bermuda, from London to Dubai.

So on a sunny June day two years ago, father and daughter exchanged rings at Westminster Abbey.

They couldn't follow convention by inviting friends or family, and they couldn't make an announcement that they'd eloped.

There was no white dress and no officiant.

D. Bruce McMahan, then 65, and his daughter Linda Marie Hodge McMahan Schutt, then 35, pronounced themselves husband and wife on June 23, 2004.

It was their secret.

Except for a few traditional photographs, it was a wholly unconventional and unholy union.

Several shots show off their new Cartier Trinity rings — hers diamond, his three shades of gold. In other frames, they look the happy couple — cheek to cheek, faces glowing, and the Abbey's Little Cloister garden a royal backdrop.

The photo of Bruce's hand on Linda's, with their wedding rings, that they titled "Says it ALL"

Afterward, she flew home to her legal spouse in Mississippi and he went home to his compound on Fisher Island, a ferry ride from Miami.

From different states, they traded their wedding photos back and forth over e-mail.

He talked about touching up her redeye. She declared her favorite the photo of their hands wearing their new rings, his hand on hers, which they had titled: "Says it ALL." Using codes, they addressed each other in the e-mails as husband and wife.

"They are great pictures," McMahan wrote in one of their daily exchanges. "But they tell a story, so pay attention to what happens to them."

With their secret still safe, McMahan filed to divorce his fifth wife, and Linda moved out of the home she shared with her husband.

McMahan began spending more time at the plush Fisher Island retreat he'd built for his hedge-fund clients. Linda moved into a nearby condo, leaving behind her career as a psychologist.

Linda enjoyed the trappings of life with one of America's richest money managers, racking up a $74,000 bill at Barney's New York.

He enjoyed lavishing her with jewels, a Bentley Continental GT, and a Versace Club membership.

He put her on his corporate payroll. They celebrated regularly with bottles of expensive Opus One wine.

But when Christmas 2004 came along, they resumed roles as father and daughter. They needed to keep up appearances, for the sake of their families and to protect their secret.

Family snapshots show their return to normal. She put her legal husband's rings back on her left hand and moved the Trinity ring to her right hand.

They didn't know it then, but their secret was safe for only a few more days. McMahan was right: The photos do tell quite a story.

What followed was a breakup on an even grander scale than their wedding and a legal battle every bit as obsessive as each has been about the other.

For more than a year, attorneys have been kept busy in Miami, New York, Mississippi, and San Diego with the fallout over the breakup of McMahan and Linda in five lawsuits involving not only father and daughter but also their legal spouses, as well as Linda's current boyfriend and soon-to-be father of her child. Details of McMahan and Linda's extraordinary wedding at Westminster Abbey and their years as lovers come from court documents as well as Linda's videotaped deposition, which New Times has made available on its website, browardpalmbeach.com.

In court papers, McMahan denies that he ever had a sexual affair with his daughter. But he doesn't explain how his and Linda's DNA turned up on a vibrator that Linda's husband uncovered in her luggage. McMahan also hints that Linda may not be his biological daughter, despite a DNA test he paid for showing with 99.7 percent probability that he is her father.

When New Times began gathering court records and calling individuals involved in the lawsuits several weeks ago, McMahan declined to comment for this article. He hired a Los Angeles public relations firm to field New Times queries. He also made three requests to seal court documents in Miami and San Diego that three judges denied.

Then, on September 13, as this article was being prepared for print, all five lawsuits were settled on undisclosed terms. As part of the settlement, a federal judge in San Diego sealed the files of the California lawsuit and took the rare step of wiping out any record that the lawsuit had ever existed.

Through McMahan's L.A. public relations firm, the parties sent a statement to New Times, describing the matter as a mere "family dispute," and alluded to taking legal action if this newspaper published this article, which is drawn from the information in the court cases that McMahan has gone to such lengths to hide from public view.

Bruce McMahan began the seduction of his daughter one evening in the spring of 1998 by having her look over his business writings in the library of his lavish Pelham, New York, estate.

Bruce McMahan with Linda, who is misidentified as his fifth wife, Elena, in a fraternity newsletter

Linda Schutt described the events of that evening earlier this year in a deposition that was taken in Jackson, Mississippi, on April 6. McMahan declined to comment when New Times reached him on the telephone, and he never testified in any of the litigation. But according to Linda's testimony, that night in 1998, McMahan's fourth wife, Cynthia, was at a spa, and a housekeeper was somewhere on the premises.

"He opened a bottle of wine. He poured me a glass of wine, and we drank together."

While they leafed over his writings, he began to tell her of his sexual relationships with past women. He preferred them slender with wide cheekbones. "He told me he liked to buy furs for women and have sex with women on mink coats."

McMahan, who was then around his 59th birthday, asked his daughter, 29, to move to his bedroom and watch the first 30 minutes of the movie Braveheart. He wanted her to see the love story and clandestine wedding that unfolds in the opening act of Mel Gibson's film because, Linda testified, it reminded him of his relationship with her.

Then McMahan really started to lay it on thick. Linda testified he told her he believed they'd been married in a previous life. Earlier in the evening, she remembered, he had pointed out that her legs were a "very sexy version" of his own.

"He asked me what it would be like to kiss me."

Later that night, he found out.

On his bed, he kissed her and ran his hand over her body, on top of and inside her clothes, she testified. The petting session lasted two hours, she recalled. When Linda said she was tired, McMahan suggested they sleep in separate bedrooms. After Linda returned to California, her father asked if she was OK. She said she felt confused.

Their first episode of actual sexual intercourse wouldn't take place for several months. For that encounter, McMahan arranged a fairly dramatic setting — a hotel suite in London after a transatlantic flight.

Father and daughter in Paris in an undated photo

But then, McMahan had the cash for that kind of extravagance. Born into a family of entrepreneurs, he set about building his own wealth early on. His father ran McMahan's Furniture, a well-known California retail chain, but Bruce's own ideas were less conventional. Six years after graduating from the University of Southern California in 1960, the young magnate set out with some friends to create their own country.

According to newspaper articles published at the time, the plan involved sinking a mothballed World War II ship 220 miles off the California shore, then piling on concrete, clay, and garbage. The resulting island would be in international waters and outside the jurisdiction of American law. McMahan's group planned to corner the market on abalone fishing.

The plan failed, and his business biographies today don't mention it.

McMahan then moved into the financial services market. After his first wife, Jill Harvick, died of cancer, he married Melinda Headley Ewell in 1969 and moved to Spain. After six years abroad, he moved his family to New York and created the Institutional Options Department at PaineWebber Inc. He moved to Bear Stearns & Co. in 1977 and branched out on his own in 1980.

But McMahan has always been quiet about his money. Until their divorce, which ended in 1984 after three years of legal wrangling, Ewell tells New Times, "I didn't realize how much money he had... We were young, raising children. Bruce was building his business."

Today, McMahan has the reins on more money than some heads of state. On Wall Street, he heads McMahan Securities, a convertible securities firm with a trading volume third only to UBS and Thomas Weisel Partners. Through other corporations, he also owns hedge funds that he invites people to invest in. He sits on the board of the National Committee on United States-China Relations, a private nonprofit with 750 members funded by government grants and corporate gifts.

His London-based Argent Financial Group Ltd. controls billions of investment dollars in the Middle East. According to Dr. Omar Bin Sulaiman, director general of the Dubai International Financial Centre, Argent Financial is the first group in the region licensed to manage wealth-building funds, estimated at a whopping $1.9 trillion.

McMahan spends part of the year at his estate on Fisher Island, an exclusive enclave reached from Miami only by helicopter, boat, or a private ferry. The man-made island, once owned in part by Richard M. Nixon, has a population of about 500 and is in a ZIP code that the 2000 census found had the highest per capita income in the country.

While his finances ballooned, McMahan's family also grew large. He'd had six children by three women and was married to his fourth wife when, in 1990, he learned for the first time that he was the father of a grown child he didn't know existed.

Linda Marie Hodge, by all accounts, had a normal, Southern California upbringing with her adoptive parents, Laird and Mary Hodge. When she was 5, the Hodges told her she was adopted. At 18, Linda employed a service to help her find her birth parents.

Three years later and only about 30 miles away, she found her biological mother in Escondido, California.

She wrote to Myra Westphall, telling her that she was healthy and wanted to find out about her heritage. Westphall eventually answered the letter with a phone call. "It was an emotional conversation that led to our meeting," Linda testified in her deposition.

Westphall told Linda that in 1968, she'd had a fling with McMahan while both were living in Southern California. When McMahan married second wife Melinda Ewell on January 3, 1969, Westphall was already pregnant. She gave birth to Linda five months later, on May 29, 1969.

Westphall, who tells New Times she's now in the publishing business, did not want to discuss her relationship with McMahan or her daughter. "I'm just the biological mother," she says. "She has a mother. I gave her up for adoption at birth."

In 1990, though, Westphall did help Linda locate her father. At the time, Linda was a 21-year-old sophomore psychology major at San Diego State University. One day, McMahan telephoned her. She assumed Westphall had given him the number.

In her deposition, Linda described this telephone call as another emotional one. McMahan told his daughter what he did for a living and said he wanted to meet her. When they met, he also asked her to take a paternity test, saying his lawyers were insisting on it. He got the confirmation — with 99.7 percent certainty — that he was seeking.

It was then that McMahan took Linda into the family fold. He helped pay her tuition, set up a trust fund for her, and began including her in family holiday celebrations. He added her name to his list of children in his professional biographies.

Eight years into their relationship, Linda was about to earn her PhD in psychology from the California School of Professional Psychology in San Diego.

That's when McMahan had Linda over to his New York home and asked her to watch the first half hour of Braveheart.

That same spring, in 1998, Linda began dating a man named Sargent Schutt whom she met at a party in San Diego. In only a few months, the relationship had become serious. But that summer, she accepted her father's invitation to fly to London on a business trip.

They stayed in the Sheraton Belgravia for a week. In her April deposition, she described the trip. After their arrival, she testified, a discussion about how Linda could help him with business turned personal as the two sipped wine. He told her he was disappointed in her career choice in psychology.

"He offered me an opportunity for business that would incorporate my interest in brain studies with his interest in psychic phenomena," she testified.

They were still jet-lagged from their trip, so McMahan suggested they take a nap. When she woke up, "he was touching my leg and becoming physical with me." Later in the week, the two had sexual intercourse for the first time, she testified.

After the trip, according to e-mails submitted in court documents, they mailed each other vibrators. Referring to one he sent his daughter, McMahan e-mailed her on September 10, 1998: "I unpacked the toys and checked them out. The thing excites me just looking at it. I promise you have never seen anything like it. Interestingly 'it' is actually smaller than I am! But what moves! I should have been so lucky. They are now packed into their own bag and I am going to make sure we have enough AA batteries to last for the duration."

At the same time that Linda and her father swapped sex toys, her relationship with Schutt continued to deepen.

McMahan wasn't thrilled: "I know you like him. Even though I am truly jealous, I am hardly in position to interfere or even really want to interfere with that part of your life. Don't lock him out if he is important to you. Kisses everywhere," he wrote in an e-mail dated August 15, 1998.

That winter, Linda and Schutt became engaged. But the sexual relationship with her father didn't stop. She continued to sleep with her father through the end of summer 1999 and "up until" her October wedding to Schutt, she testified. Then, with the ceremony approaching, Linda ended the sex with her dad.

"I was in love with my fiancé... I was deeply disturbed with the relationship with my father."

McMahan, she said, reacted with "anger, withdrawal, paranoia."

He asked her what she wanted, what her "perfect life" would be.

"I told him that I would like to live in Sausalito, California. I would like to have a Saab convertible. I would like to have a dog named Pooh, and a sailboat."

She testified that her father answered that he could give her all of those things and financial security for life. But Schutt, he told her, probably couldn't provide that kind of life.

The argument didn't persuade her. Linda and Schutt married on October 2, 1999, in Sonoma. During the event, McMahan gave the couple a toast.

"He made an attempt to quote Winston Churchill... He told all the guests during his toast at my wedding that, 'This is the beginning of the end. '"

McMahan was no doubt cribbing from Churchill's line from a speech he gave in 1942 at a turning point in WWII: "This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

Linda said that McMahan never explained what he meant by it.

McMahan moved on, starting a new romance with a Ukrainian woman who eventually became his fifth wife. And he did provide his daughter employment. He named Linda president and CEO of McMahan Center for Human Abilities, a nonprofit foundation McMahan had created to extend the efforts of his primary charity, the National Cristina Foundation, which provides computers to disabled children and is named after another of his daughters, who has cerebral palsy. Linda was being paid $10,000 a month to run the foundation in the spring of 2002 when family members gathered to have dinner in a Sonoma restaurant.

Linda testified that she was asked in front of the others when she and Schutt planned to have children. "Soon," she replied.

The next day, McMahan asked to meet her in the lobby of a hotel. When she arrived, carrying paperwork for the McMahan Center, she began to speak with him about ideas for the foundation. But he became enraged.

"His face became red. He clenched his fists, and he raised his voice... He told me that having children was not part of the plan."

McMahan told her he was ending the foundation and no longer planned to pay her. (He did cut her off, but the foundation still exists.)

"He told me that I was not able to have children and be committed to the project," she testified.

She returned to her career in psychology and accepted a post-doctoral fellowship at the University of Mississippi. She and Schutt moved to suburban Jackson. She and McMahan didn't speak for months. Then, on May 25, 2003, Linda's adoptive father, Laird Hodge, a retired government contractor, died in San Diego. Linda and Schutt traveled to the funeral in La Mesa, California. McMahan sent flowers and e-mailed Linda his condolences, but they still didn't speak.

The stress of losing both fathers — Hodge to death, McMahan to indifference — weighed on Linda, she testified. It also wrecked her health. From McMahan, she'd inherited a genetic condition called Reiter's syndrome, an autoimmune disorder that causes inflammation of the soft tissues and can affect the eyes and, more seriously, the heart. Linda had a bad flare-up and developed cataracts in both eyes.

"I became very ill. I was experiencing heart problems and the doctors at the University [of Mississippi] Medical Center indicated to me that I would need surgery on my heart," she testified.

McMahan sent one of his two private planes to ferry her from her home in Mississippi to the Mayo Clinic in Rochester, Minnesota. The treatments she received there helped, and she began to recover. Her father insisted that she come to Fisher Island to recuperate so she would have access to a spa and to the Argent Center, a posh retreat McMahan had built to entertain his family and his billionaire clients. McMahan, she testified, didn't want her to go back to Mississippi or her marriage. He wanted her to leave behind the fellowship in clinical and rehabilitative neuropsychology, and he persuaded her to come back to work for him.

"I told him that I had given up opportunities based on his promises to me in the past," she testified. "And I told him that he wasn't to abandon his promise to me and that it was to be a strictly normal father and daughter relationship."

She accepted a position as executive vice president of marketing for two of her father's financial firms, Argent Funds Group LLC and McMahan Securities. But things didn't stay normal for long.

"It changed from a loving, supportive father caring for an ill, vulnerable daughter to a manipulative, contingency-based rewards/punishment relationship that created my dependence on him and gave him control and dominance over me," Linda testified. According to Linda's court complaint, McMahan again initiated an incestuous sexual relationship in April 2004 that lasted for more than a year.

In June, the couple flew to London with a twisted plan: to get married where the kings and queens of England are crowned.

We traveled to London for some business, and during that trip Bruce took me to the Westminster Abbey and we exchanged vows," Linda testified in her deposition.

Besides her testimony, there are the cheek-to-cheek photographs documenting this unusual ceremony.

There is little description in court records of how the couple made their ceremony happen in the very public church on June 23, 2004. Photographs inside the sanctuary are prohibited, so only the two of them would know if there was anything more to it than two well-dressed tourists walking up and performing a little ritual during visiting hours.

They took their photos with the garden of the Little Cloister as a backdrop. In one, they share a chaste kiss.

According to several people close to the litigation, a ceremony at Westminster Abbey made sense because McMahan, they say, is an Anglophile who counts among his heroes Adm. Lord Nelson, the British naval hero who died in the Battle of Trafalgar. Also, McMahan is said to believe that his genes are exemplary and saw in Linda the best match for his own superiority.

Four days after the ceremony, Linda wrote in an e-mail: "You asked me afterwards if I felt different. Near, I don't but at a distance, I do. I am glad about this and feel the insecurities slipping away."

In other e-mails, they began to sign off as "H" and "W," references to husband and wife. In one e-mail, dated June 29, 2004, McMahan wrote: "Miss you W. Think nasty things about you all the time." Linda answered a couple of hours later: "Mmm yeah, nasty is so good. You must have read my mind. What else can we say, we're H & W — that's the beauty."

"It is an attraction that's like no other," says Joe Soll, a New York psychologist and the only expert in the field he pioneered — genetic attraction.

Soll, who has no attachment to the McMahan litigation, has treated a half-dozen patients who had sexual intercourse with a close blood relative who had been separated early in life. An adoptee himself, Soll mediates group therapy sessions where hundreds of participants have talked openly about their physical desires for relatives they've recently reunited with.

"The dad is supposed to be the adult," Soll said. "He should have been responsible enough to say, well, wait. She got taken by something she had no awareness of."

McMahan seemed to be aware of the severity of their transgression.

"Such passions lead men straight to hell," he wrote in an e-mail to Linda titled "Midnight Musings" that was sent just after midnight on August 15, 1998.

Despite its dramatic location, however, McMahan and Linda's "wedding" in London wasn't legal. Each was married to another person at the time.

Linda's court filings claim that after the ceremony, McMahan wanted Sargent Schutt to play a diminished role in her life. He told Linda he'd start paying her "the big bucks" only if she could convince Schutt to sign a postnuptial agreement, which he did reluctantly.

Linda Marie Hodge McMahan Schutt prepares to tell the whole, sordid truth.

"May you have all the money in the entire world to yourself," Schutt penned in a handwritten note he attached to the document. "Too bad love is earned not bought."

McMahan was thrilled.

"Good girl!" he wrote to Linda in an e-mail dated June 29, 2004, that was read into the record at Linda's deposition. "This will change how your life can be lived; thank God. Someday you will understand how truly important that document is to you.

"Lots of Opus needed," he added.

By her own admission in one of several sworn statements she filed during the litigation, Linda's job as vice president of marketing entailed little more than being a companion to her father.

"My fancy title with Argent is not an accurate representation of my employment," she testified. "My salary was only $12,000 per year, whereas most of my resources were in the form of personal gifts from my father."

The chief accounting officer for McMahan Securities and Argent Funds Group, Joseph C. Dwyer, sent Linda tax statements detailing her father's largess. From 2004 to 2005, McMahan spent $649,290.55 on gifts for Linda, including $228,727.23 on cars, $25,209.31 in cash wire transfers, and $37,000 in legal bills.

When she and McMahan went out in public, how they acted depended upon who was around. To some, they were father and daughter; to others, they were a married couple.

One friend, Palm Beach interior designer Hilda Flack, knew them in both capacities, according to court filings. Flack designed the interior at McMahan's Argent Center and was planning a business with Linda — the McMahan-Flack Design Center. But Flack, reached at her Palm Beach Gardens design center, denies that she knew of an illicit relationship between McMahan and Linda.

"She was there when we were decorating with her father," Flack says. "She was his daughter, obviously. Mr. McMahan was a gentleman and treated everyone accordingly."

In an affidavit, Linda said Flack was in the room at the Argent Center when McMahan smashed several computer hard drives containing evidence of their incestuous relationship and their Westminster Abbey wedding.

Flack dismisses Linda's claims.

"I never heard of such a preposterous thing," Flack says of the wedding.

Before he flew to London in 2004 to marry his daughter, McMahan had separated from his fifth wife, Elena. Later that year, he filed for divorce.

In January 2005, Elena filed an affidavit in the divorce case reportedly accusing McMahan of having an incestuous relationship with Linda (the affidavit is under seal but referred to in other court papers). Linda alleged in court records that Elena learned of the affair when she hacked into Linda's Yahoo e-mail account and retrieved the Westminster Abbey photos.

In court papers, Linda says that McMahan showed her Elena's affidavit and asked her to make a sworn statement of her own, denying their incestuous relationship. When she refused, their relationship began to deteriorate.

"This was a difficult if not unbearable time of my life as I continued to be abused and subservient to McMahan's sexual demands while at the same time knowing that I had lost any semblance of my marriage with Sargent," Linda said in a sworn statement this past August.

In July 2005, Linda refused to continue sleeping with McMahan. In her August sworn statement, Linda says McMahan responded to the breakup by saying on the telephone: "I am going to preemptively destroy you. If you want to know how I am going to do it, meet me for lunch."

Two months later, a legal conflagration was sparked that spread like wildfire: McMahan sued Linda through one of his firms, claiming that she'd stolen company computers and trade secrets. Linda then sued her father for the income she would have made as his employee. Her estranged husband, Schutt, sued McMahan in Mississippi, where it's still legal for one man to sue another for ruining his marriage. McMahan then filed another suit against the two of them, as well as Schutt's father, accusing them all of conspiring to extort $10 million from him.

McMahan has a long history of litigating his breakups, both personal and financial. In his divorce from Melinda Ewell, for example, he took the case to New York's appellate court, challenging an order compelling him to turn over tapes and files investigators had made while he had her under surveillance.

Ewell describes him as an egomaniac who lives his life in a series of ongoing sagas. The drama he creates feeds his ego and shapes the story of his life, she says.

"When you live with someone like that, it's not fun when you challenge them," she said.

When Ewell made allegations in her divorce that McMahan had treated her cruelly, McMahan countersued and accused Ewell of engaging in affairs and "attempting to seduce mutual friends and associates," according to an appellate opinion in the case. Ewell tells New Times that one of those men was billionaire Jeffrey Epstein, who has been much in the news lately for allegedly hiring underaged women to strip topless and massage him at his Palm Beach mansion. At the time, in the early 1980s, McMahan and Epstein worked together at Bear Stearns in New York. Epstein didn't return a request for comment.

"Jeffrey Epstein worked with [McMahan]. He was, let's just say, in the divorce proceedings," she says. "I was asked to stop by Jeffrey's apartment to pick up some papers for Bruce. It didn't feel right, so I didn't even go in. I stood outside the door. And then, later, Jeff said I propositioned him. There were always allegations I was having to fight."

McMahan's business relationships have also ended in grinding court battles, some making it to federal appeals courts, creating case law.

Miami lawyer and British barrister Henk Milne represented William Toto, whom McMahan sued in 1996 after the Ohio engineer had lost money in an investment with McMahan.

"He served Bill in Florida at his vacation home," Milne said. "He made something like 49 attempts to serve him because, Bill always believed, he wanted to get him on vacation."

Three and a half years later, a judge dismissed the lawsuit and ordered McMahan to pay Toto $265,000 that he had spent in legal fees fighting the case. Toto died of cancer shortly after the case ended.

"He's basically a very wealthy stalker," Shani Robins tells New Times. Robins had been McMahan's latest target in court and is Linda's new boyfriend. He says McMahan is a bruiser in court "because he has the resources to do it."

In May, McMahan sued Robins in Superior Court in Connecticut, alleging wrongdoing when Robins accepted some donations Linda made from McMahan's National Cristina Foundation. (That lawsuit was also dropped as part of the September 13 settlement.)

Consistent with his litigious past, McMahan fought his daughter and son-in-law's lawsuits aggressively. But they fought back with what appeared to be solid evidence.

Court records show, for example, that in Sargent Schutt's lawsuit against McMahan, his attorney had a "rabbit" vibrator Schutt found in Linda's luggage tested for DNA. According to the test results, skin cells from Linda and sperm cells from her father were found on the device and its black cover. Five other vibrators were also sent to labs for testing.

Through a spokesman, McMahan responded that he believed the evidence was "fabricated" but didn't elaborate. He also made allegations in court that his e-mail had been altered.

Also, after spending more than a decade integrating her into the family, McMahan has now questioned in court records whether he is Linda's father.

Ex-wife Melinda Ewell tells New Times that McMahan never had any doubt Linda is his daughter. "There was never a question," she said. "She looks like some of the other kids. He had no qualms."

Some of McMahan's extended family did have their doubts. His eldest daughter, Alison McMahan, says she never trusted Linda.

"All I can tell you is that nothing Linda will tell you can be believed," she tells New Times in an e-mail. "She is an unreal person who does not even know herself."

Ewell, no fan of McMahan after their nasty divorce in 1984, can't quite believe the man slept with his own daughter.

"How much of this is reality, I don't know," Ewell said. "There is a far greater chance that this is in her head. Way, way back when, I noticed she was very possessive of him. At my son's wedding eight to ten years ago, she really hung around him, and if anyone else was trying to talk to Bruce, she would try and get his attention. She would move in. From what I have observed, money appears to be the motivator."

McMahan makes that allegation in his lawsuit against Linda and Schutt, claiming that he was the victim of an extortion scheme. But he apparently never made a formal complaint to law enforcement about the conspiracy against him. One of his attorneys, Angela Agrusa, says that a San Diego prosecutor considered the extortion allegations while investigating charges that Schutt had hit Linda during a July 2005 argument over who owned the computers containing the e-mails and photos detailing Linda and McMahan's love affair.

But the case was dropped, Agrusa says, because Linda decided not to testify against Schutt.

Sargent Schutt filed to divorce Linda in July 2005, and the proceedings are pending. She is now dating Shani Robins, also a psychology PhD, and the couple is expecting its first child, a son, in January.

McMahan has made up with his fifth wife, Elena.

Three days after New Times called McMahan for comment on August 28, he hired Sitrick & Co., a Los Angeles public relations firm specializing in crisis management and whose logo is: "If you don't tell your story, someone else will tell it for you." In another public response, McMahan launched www.wspdfm.com, a now-defunct website asserting that Schutt and Linda had invented their allegations in an effort to extort money from him.

On September 13, after the five court cases were settled, Sitrick & Co. e-mailed New Times this statement:

"The parties to this litigation, Dr. Bruce McMahan, Linda Marie Schutt, Sargent Schutt, Major Schutt and Shani Robins, have resolved the differences among them and agreed to dismiss all pending legal actions. This was a family dispute and, as is the case with many family disputes, charges were made in the heat of the moment with little thought given to the pain they might unfairly or unjustly inflict. All of the parties involved and their counsel sincerely hope that there will be no further media coverage of this family matter and have agreed to make no additional comment about the resolution of their differences."

In other words, Bruce and Linda want their trips to London to be their secret again.

Billionaires Rule U.S. Richest List

THE TOP FIVE
Bill Gates - $53bn
Warren Buffett - $46bn
Sheldon Adelson - $20.5bn
Larry Ellison - $19.6bn
Paul Allen - $16bn
_{Source: Forbes}

Bill Gates and Warren Buffett take the top places... again

The BBC reports:

For the first time, the richest 400 tycoons in the US all have a personal wealth of at least $1bn (£526m), Forbes magazine has reported.

Microsoft boss Bill Gates kept top spot for a 13th consecutive year with investment guru-turned-philanthropist Warren Buffett in second place.

Casino and hotel owner Sheldon Adelson has leapt from 15th to third ranking.

The rich list as a whole is worth $1.25 trillion, compared with $1.13 trillion a year ago, Forbes said.

Four of the top 10 came from the Wal-Mart owning Walton family.

'$1m an hour'

Mr Adelson's surge in fortune comes largely from a decision to open a casino in Macau, a pennisula off south-eastern China renowned for its gambling.

Forbes estimates that Mr Adelson has been earning about $1m an hour for the past two years.

Two of the other biggest earners were the founders of search engine Google.

Apple Computers chief executive Steve Jobs was 49th on the list, with $4.9bn.

California is home to 90 of the 400 on the list, while another 44 live in New York.

The American Dream - A Summer Home of Your Own

John Roberts, the chief justice of the U.S. Supreme Court, has bought a seasonal home on an island off the midcoast of Maine.



The Boston Globe reports:

Roberts and his wife bought a house and land on Hupper Island off of Port Clyde from Steve Thomas, the former host of the "This Old House" television show, according to the Knox County Registry of Deeds.

The home sits about 225 feet from shore with a water view toward the Port Clyde General Store on the mainland. It has a right of way to the beach.

The home and the 2.1-acre lot it sits on are assessed by the town at $172,800. The island has 20 to 30 seasonal homes on it.

Roberts, who was confirmed as chief justice last fall, lives in Chevy Chase, Md., outside of Washington.

Rockland attorney James Brannan said the Roberts have also inquired about registering a skiff and purchasing a mooring in town.

Forbes Reports Billionaire Boom

A worldwide economic boom has yielded a record number of dollar billionaires in the past year, according to Forbes.

TOP SIX BRITISH BILLIONAIRES
Philip & Christina Green (retail) - $7bn
Duke of Westminster (real estate) - $6bn
Reuben Brothers (real estate) - $3.6bn
Bernie Ecclestone (Formula One) - $3.4bn
Barclay Brothers (media/retail) - $2.8bn
Richard Branson (Virgin) - $2.8bn

The BBC reports:

Their number rose by 15% to 793 with India taking the lead in Asia and new Russians lining up to fill the gap left by jailed Mikhail Khodorkovsky.

Microsoft's Bill Gates tops the list for the 12th year running, with a net worth of $50bn (£29bn).

The combined net worth of the 793 is $2.6 trillion and US billionaires account for just under half the amount.

TOP FIVE BILLIONAIRES
Bill Gates (US, Microsoft) - $50bn
Warren Buffett (US, investor) - $42bn
Carlos Slim (Mexico, industrialist) - $30bn
Ingvar Kamprad (Sweden, Ikea) - $28bn
Lakshmi Mittal (India, steel) $23.5bn

"A billion just isn't what it used to be," said Luisa Kroll, Forbes magazine's associate editor, revealing the 20th annual list in New York.

But she noted the figures were conservative estimates for different reasons.

A very positive spreadsheet could indicate a desire to sell a business, she told reporters, while somebody about to divorce might seek to downplay their worth.

According to the 2006 list:

the youngest billionaire is a Lebanese woman, 22-year-old Hind Hariri, who inherited $1.4bn from her assassinated father, former Prime Minister Rafik Hariri

India's 23 billionaires have a combined net worth of $99bn, surpassing former Asian leader Japan's 27 billionaires with their total worth of $67bn

Russia's 33 billionaires now have a combined wealth of $172bn, based largely on oil and gas prices, compared to a total of $68bn for oil-rich Saudi Arabia's 11 billionaires.

'Whiff of inflation'

"Russia continues to astound us," said Ms Kroll, as seven new billionaires were recorded from that country.

Khodorkovsky, the former Yukos chief executive convicted of fraud and tax evasion last year, is now in a Siberian prison which allows its inmates to earn less than a dollar a day.

However, Forbes estimates he "still has somewhere below $500m", said Ms Kroll.

While New York has the highest number of resident billionaires with 40, Moscow is second with 25, and London comes third with 23.

Steve Forbes, Forbes' chief executive and editor-in-chief, attributed the global rise in the number of billionaires to an economic boom.

"The global economy has been growing the last two years at rates not seen since World War II, fuelled by a commodities boom with a whiff of inflation," he said.

Mitt Romney's Summer Home

The AP reports:
Like a lot of Massachusetts residents, Gov. Mitt Romney prefers New Hampshire in the summertime. He spends as many summer weekends as he can at his 11-acre Lake Winnipesaukee estate, which boasts more than 700 feet of waterfront, a six-bedroom mansion, stable, guest quarters and a boathouse, which at 2,700 square feet is bigger than most people's homes.

By all accounts, the Romneys are good neighbors — amiable and low key. And Wolfeboro, an old resort town where locals take pride in not fussing over wealthy and celebrity residents, seems to suit Romney, a Republican who made a fortune as a venture capitalist before becoming governor in 2003. Except for the Massachusetts state trooper discreetly shadowing him, he's just another millionaire browsing the hardware store or eating soft-serve ice cream.

That won't be the case if Romney, whose term expires next year, follows through on signs he will run for president in 2008 — and wins.

"Just wait. It will be a massive change," says Donald Fiske, head selectman in Kennebunkport, Maine, which was President George H.W. Bush's summer White House from 1989-92. "I would say to Wolfeboro, you don't really know what the possibilities are of how your town will be affected."

Wolfeboro, population 6,500, has hosted its share of the rich and famous: Monaco's Prince Rainier and Princess Grace, Drew Barrymore, Madame Chiang Kai-shek, and members of the Black & Decker and Marriott hotel clans all have (or had) connections to the area. Former Republican Sen. Bob Dole vacationed in Wolfeboro in 1993. Three years later he lost the New Hampshire primary to Pat Buchanan, though he went on to win the GOP nomination.

But veterans of "Kennebushport," 76 miles to the northeast, say no amount of Hollywood exposure can prepare a town for the crush of security around a summer White House.

George Herbert Walker Bush, known as '41' around Kennebunkport, has spent nearly every summer of his life at his family's oceanfront property there. But the easy familiarity with the boy who played in the summer baseball league was a distant memory by the time he became president, said Fiske, 64.

"Everything ground to a halt if he was going to play golf or if he was on the move to the airport," Fiske said. He remembers the scene: helicopters overhead, Coast Guard cutters offshore, Secret Service snipers watching the town square, media vans everywhere. Locals got used to checklists and traffic stops. Lobstermen, tired of having their boats searched, stopped throwing traps in a cove near Bush's home.

Tourism and businesses benefited, but Kennebunkport also was targeted by activist groups, and it took more than a year for the federal government to reimburse the town for police overtime costs, Fiske said.

He said Kennebunkport gets a reminder of those days whenever '43,' President George W. Bush, pays a visit.

"The town goes into a lockdown form of protectiveness when 43's around," Fiske said. "That is where Wolfeboro will see the major difference. It's going to be the protective walls that are necessary to be around the president of the United States."

The next president won't be sworn in until January 2009, so Wolfeboro officials aren't losing any sleep yet.

"I push it aside, thinking, well, 'I'll wait 'til it happens,'" said Selectwoman Shirley Ganem. "It would be exciting but it would also be a strain — bittersweet."

Police Chief Brian Black said he'll be in touch with Kennebunkport police if Romney becomes a serious candidate.

If he decides to run for president, Romney's Wolfeboro compound would give him a second home in the state with the first-in-the nation presidential primary.

Wolfeboro also is a GOP town: registered Republicans outnumber registered Democrats by a ratio of more than 2-to-1. Democrat John Kerry won New Hampshire in last year's general election, but President Bush won Wolfeboro, 2,343-1,798.

"He's a very nice, amiable fellow," said Gordon Hunt, owner of the hardware store where Romney occasionally shops.

Romney earned some gratitude two years ago when he and two of his sons raced to the rescue of six people whose boat sank in the lake. That same summer Massachusetts State Police marked a 250-foot security border in the water around Romney's property. The markers were removed after people complained to New Hampshire authorities.

"The goodwill was a little bit strained," Ganem said