Huguette Clark; William Andrews Clark

Planned Giving Nightmare Finally Winding Down

For longer term followers of this blog, you should recall the Huguette Clark story as one I reported on regularly.  You can read my posts on this story (click here for older posts), or the tons of internet articles, or even the book (and possibly movie)!  Just do a google search on her.

My interest, in brief, was that for a period (apparently the crucial period) of time in the mid-2000s I was the Planned Giving Director for Beth Israel Medical Center in New York, where Ms. Huguette Clark (a reclusive heiress) lived for over 20 years – paying rent and other costs to stay in the hospital.  The youngest daughter of William Andrews Clark (1800s Copper Baron, U.S. Senator, Wealthy Celebrity), Ms. Clark only did her will very late in life, and of course, did two of them within a month or so (at the same time I had her accountant at one of our planned giving events – to see if he would offer any clues as to whether the hospital might be in for a large bequest).  We assumed she had over a billion in assets (she passed away with over $300 million), so she was actually the “great hope” for Beth Israel to rebuild itself, if she, of course, would put Beth Israel in for 10% or so!  Wishful thinking.

In the meantime, the hospital did a wonderful job caring for her as she lived to 104 (even though she was a wreck when she arrived at Beth Israel 20+ years earlier).  And, Beth Israel’s bequest, in her second will, was only for $1 million.

What was worse, though, and why this was the ultimate planned giving nightmare, was that her great, great half nieces and nephews (or whatever distant relationship you can think of), none of whom (or their parents or even grandparents) even met Ms. Clark while she was alive, had orchestrated a campaign to smear her advisors and caregivers, and create a case for challenging her estate (which cut them out, for the most post and left everything to charity and her nurse and some friends).  They only succeeded in wresting $30 million or so from the estate (paltry considering the legal fees they probably incurred). But, they got one last bite at the apple – the settlement with the estate allowed the family to pursue Beth Israel Medical Center for the money they “stole” from Ms. Clark over the years. (Not sure if the Estate was still pursuing Beth Israel or somehow the long lost relatives were)

It is a great story, by the way, and I do recommend checking out Empty Mansions (http://www.emptymansionsbook.com/) by Bill Dedman. But, the planned giving angle has to do with trouble organizations can find themselves in. I am sure that Beth Israel spent millions of dollars in legal fees dealing with this case – just my guess.  And, for what? A million dollar bequest?

Anyway, the case is finally, finally is ending!  Guess what? The family missed the statute of limitations! “A Manhattan Surrogate Court judge, Nora S. Anderson, ruled last week that the statute of limitations had expired for the estate to argue that officials at the hospital, Beth Israel Medical Center, had manipulated Ms. Clark into donating.” That is from the New York Times’ reporting on this one. Click to see that story.

Ironically, Ms. Clark and her case outlived almost everyone involved – even the hospital that took care of her.  Beth Israel Medical Center is now owned by its arch rival Mount Sinai, so as a former Beth Israel guy, it would not have bothered me so much if Mount Sinai took a big hit on this one. Still, it bothered me how dedicated these long, lost relatives were to grabbing money from Ms. Clark (they were descendants – grandchildren and great grandchildren of Ms. Clark’s older half-siblings – all of whom were adults when Ms. Clark was born in 1906 – all descendants of a formerly wealthy family that squandered their wealth along the way).  This was their last chance as getting something.

Anyway, one last quote from Beth Israel’s doctor should send chills up our planned giving spines:

In 2000, Ms. Clark donated Manet’s Pivoines dans une bouteille (Peonies in a Bottle), 1864. When the painting sold far under its expected price, one doctor sent an internal memo that read: “I told her about the disappointing price of the painting, but she didn’t take the bait and offer a half-dozen more.”

Having been on the “inside” at Beth Israel, I can testify that there was no conspiracy to unduely influence Ms. Clark.  She was in charge, not the hospital.  It was only wishful thinking and some rather unpleasant statements that should never have been put to writing.

If you made it this far, you have to see this next post about a stolen painting of Ms. Clark’s that the F.B.I. recoved only to gift it to the purchaser’s favorite museum.  Click here for that one.

Huguette Clark Planned Giving Nightmare Finally Winds Down

If you are interested in one of the most intriguing and perplexing planned giving tales (Planned Giving Nightmare from the pg professional perspective), do a quick google search on Huguette Clark (search this blog, too!). It is a story that spanned over a century, that started in the 1800’s and ended up being one of greatest planned giving nightmares anyone could have ever dreamed up (except that it actually happened).

For those who already know the story, this week’s news about the late Ms. Clark, who lived for over 20 years at Beth Israel Medical Center in NY where I was also the planned giving director/consultant between 2004 and 2007, finally brings the story to a close.

Firstly, the criminal investigations into her attorney and accountant were finally closed!  http://www.nbcnews.com/news/investigations/no-charges-heiress-huguette-clarks-300-million-fortune-n86951

Secondly, they are finally auctioning off all of her interesting possessions  like her Stradivarius violin worth an estimated $7.5 million and a Claude Monet painting valued as high as $30 million. http://www.today.com/news/7m-violin-30m-monet-huguette-clarks-treasures-auction-1D79562788

Lastly, Bill Dedman, the investigative reporter who single handedly brought the story to the light, co-authored a very interesting book!  Not a planned giving book – which does help:  http://emptymansionsbook.com/

Now, all we have left to do is to visit Huguette’s mansion in Santa Barbara, CA, when it is finally opened to the public (hopefully someday soon).

Of course, my thoughts on this story always go back to “thinking twice” before acting – that details of your actions may be revealed someday to the public.  Think about how the NY Post would report your actions!  I suspect the Beth Israel folks, who really saved and extended Ms. Clark’s life, are still wondering if they could done things differently.  Now that Beth Israel Hospital merged into Mt. Sinai, I am sure the nightmare has already faded from the corporate conscience. But, those of us who were in the fundraising program at Beth Israel (and probably the legal staff), will never forget this one.

 

Final, Final Chapter in Huguette Clark Story!!!

As readers of this blog know all too well, I have written many times on Huguette Clark – probably 20 or more blog posts (just do a search on my blog if you are interested).

What we thought was the last piece of the story, the $30 million settlement (i.e. gift to go away) to distant relatives, turned out to be a launching pad for a relatively massive law suit ($100 million) against my old place of employment – Beth Israel Medical Center.

Here is an article from the NY Daily News: 

http://www.nydailynews.com/new-york/huguette-clark-estate-sues-beth-israel-article-1.1524972

I am sure there are many more articles out there.

I have to give credit to the legal strategists on behalf the descendants of turn of the century, U.S. Senator William Andrews Clark.  They settled for 10% of their long, lost, half, great, great, great, aunt’s estate – I thought that was a sign that they really didn’t have much of a case (which I believe is true).  But, now I see that their crazy lawsuit opened up a potential huge can of worms for Beth Israel.  What were they doing letting this woman live in their hospital for 20 years?  She paid “rent” but can they really do this ethically?  Toss in the fundraising efforts aimed at Ms. Clark.  So many questions are raised.

And, the timing of this lawsuit against Beth Israel couldn’t have come at a better time:  Mount Sinai just acquired Beth Israel to become one of the largest health systems in the country.  My guess is that there will be a quick settlement on this one.

This whole case was brilliantly played out by the Clark family.  Create a media story while their long lost, reclusive, great, great, great, half aunt is still alive.  Initiate a lawsuit as a discovery fishing expedition for a next round of lawsuits.  Then, go for the jugular.  Sadly, these long lost relatives had absolutely nothing to do with Ms. Clark and clearly were only aiming for whatever cash they could squeeze out.  It now looks like their gambit will be paying off very nicely.  Too bad it’s mostly at the expense of nonprofit, charitable interests of the late Ms. Clark.