I Survived Hurricane Bernie
The reversal of fortunes Madoff caused in Palm Beach society will be felt for years to come in local real estate, philanthropy—and especially the Chanel boutique.
Here I write from my perch in this town that is my second home and thank the Patron Saint of Investments that what is possibly the greatest financial fraud scheme in history has mercifully passed over my house.
I arrived here last Friday not fully comprehending that I was walking into Bernie’s aftermath. That evening the town had its usual raft of parties both private and charitable. Only two nights before, on the eve before the disaster, Graff Jewelers had a kickoff cocktail reception for the Dana Farber Cancer Institute’s annual gala, scheduled in February, for which Robert Jaffe is the gala chair along with his wife, Ellen. Jaffe is no longer just a mere fixture on the Palm Beach charity/society circuit. He’s received national coverage in these past few days for his job as the Palm Beach shill for Bernard Madoff Security Investments—it was Jaffe who manned the velvet rope at the P.B.C.C. Any member who wanted to open an account with Bank Madoff had to go to Bob “The Recruiter” Jaffe, who, by the way, looks liked a cosmetically enhanced Count Dracula. If you based your investment decision on looks, trust me, you would have headed straight to your local savings and loan, and settled for a far humbler return. But The Recruiter had his father-in-law, Carl Shapiro, the much beloved and respected apparel magnate, for credibility.
Sunday afternoon there were supposedly four multimillion-dollar condos at Breakers Row already put up for sale by Hurricane Bernie casualties forced to evacuate.
Now 95, Shapiro gave Madoff his start 48 years ago when he gave him $100,000 to invest. Shapiro reportedly lost nearly $500 million last week, and another $145 million of his foundation’s endowment went bye-bye, as well. “I always heard Shapiro got Jaffe the job with Madoff so he would have something to do,” a Palm Beach insider told me.
Scandals come and go in this town, most of which are of the domestic nature. By the time the social season ends in mid-April and the new one begins at Thanksgiving, most have been forgotten, thus creating room for a new round of juicy tropical dish. But the word everyone is using to describe this scandal is “tragedy.”
Tragedy aside, by mid-Saturday afternoon stories were already traveling back and forth between the north and south ends of town— contrary to the New York Times article on December 15, there is no “downtown” Palm Beach. Did you hear, the Caddie Retirement Fund at the P.B.C.C was invested with Madoff and is now wiped out? But it turned out to be a false rumor, apparently circulated by another caddie at a predominantly Gentile club. Perhaps he was dropping a hint.
On Saturday night at a black-tie 60th birthday party held at Mar-a-Lago for some 50 people, heated words were supposedly slung at Recruiter Jaffe by Jerome Fisher, founder of Nine West, who is said to have lost $150 million with Madoff. One guest says it didn’t happen. Another said it did but she wasn’t within earshot herself. Yet another absolutely overheard it. Apparently it was along the lines of: I hope you suffer terribly for the way you’ve made others suffer. The party, said one guest, definitely had an air of forced joviality. “I would say 30 percent of the guests there were involved with Bernie ,” says one invitee. “It’s what everyone was talking about.”
Sunday afternoon there were supposedly four multimillion-dollar condos at Breakers Row already put up for sale by Hurricane Bernie casualties forced to evacuate. Partly true. A real estate broker pal of mine told me on Monday morning there were actually only two on the market, one at $7.6 million and the other at $8.6 million.
By Monday, one charity fundraiser scheduled for late January was canceled. The two co-chairs, who are members of P.B.C.C., didn’t feel comfortable asking their friends for money.
That night at the Palm Beach Grill, a favorite hangout for just about everyone in town, I happened to see a few who are part of a new club where the only entry requirement is having been defrauded by Madoff. One fellow I know, who lost a sizable portion of his nest egg and lives off his investments, was a paragon of cheer and lightness. His wife said sanguinely, “We’re just going to learn to live with less.”
Though many familiar names have been listed as Madoff casualties, more keep surfacing and who knows what’s true. It’s now been reduced to sound bites: I heard Mr. X lost $500 million. The Ks lost $300. Mrs. Y lost everything. The Ms lost close to a billion!
At the Publix supermarket, it was overheard that the Dana Farber gala may be canceled as well and that a few wives of Madoff investors were numbing themselves with tranquilizers and wine. I hope not. It’s a hurricane and not a tsunami—and no one has died. At my favorite Italian pizzeria, I heard someone say they thought Chanel and Armani might have to shut. It seems those shops, like most of the cultural institutions and a wide range of not-for-profit organizations, were heavily funded by Palm Beach Country Club wallets. Without Jewish philanthropy down here, the town would be a cultural wasteland—the Norton Museum of Art, the Kravis Center among them.
By Tuesday morning it was good news for both broker and seller of the Breakers condos. Both were under contract at almost their full asking price. Somewhere, someone has some dough left. What happens next I do not know. But the damage is wide. There will be many more stories, both true and false. There will be much debris. What is true is that Hurricane Bernie will have a long-term effect on the fabric of Palm Beach life—financially, socially, and philanthropically.
Annette Tapert has written several books on society, fashion, and beauty, including The Power of Style and The Power of Glamour. She has co-authored the autobiographies of Slim Keith, Swifty Lazar, and Siegfried and Roy, among others. She divides her time between New York and Palm Beach.