When my trust fund imploded, I headed to Monte Carlo, where people still have money.

Notes from different corners of the world.
Feb. 12 2009 6:53 AM

The Meaning of Monaco

When one's trust fund implodes, there's no better place to run than a gathering of the still-rich in Monte Carlo.

View from hotel room. Click image to expand.
The view from a hotel room

My small but helpful trust fund lost 40 percent all at once, and then another 20 percent, leaving me, practically speaking, destitute. I suddenly needed something more than an Internet writing job (Internet writers need trust funds) at the exact moment when there were no jobs. Either that or a man of means.

Part of the beauty of a trust fund has been the freedom to avoid such a man, those incredibly rich but invariably dull hedge funders and private equity guys, bean counters and bureaucrats, so available in New York and urged on all single girls. But now not only did I not have a meaningful trust; there was no longer a surplus of boring young men with instant fortunes and tedious hours at Blackstone or Goldman or Morgan Stanley.

That is how I recently found myself in Monaco, "a sunny place for shady people," as Somerset Maugham described it.

Prince Albert. Click image to expand.
Prince Albert II of Monaco 

His Serene Highness Prince Albert was hosting a conference, meant to attract investors to the principality, to which my friend Ian—a much too earnest and, I detected, slightly panicked money manager—had been invited. Understanding my situation (he had urged me to sell the WaMu shares that made up the last 40 percent of my holdings), he proposed that I come along as his factotum and keep careful notes on every detail of every conversation so that he could follow up knowledgably. "This is an incredibly important group of people," said Ian.

"In what way?"

"They still have money."

Monaco is best remembered as it was portrayed in To Catch a Thief, one of my favorite movies, in which a languorous Cary Grant lives an idyllic life with the spoils of his former career as a cat burglar and in which Monte Carlo is a place of scenic and treacherous roads overlooking the Mediterranean. When Grace Kelly's husband Prince Rainier (whose mother really did run off with a jewel thief) came to power in 1949, the state coffers were empty because the casinos, which then brought in 95 percent of the national revenue, had been abandoned by the clients hit hard by World War II. It was Rainier, aided by Aristotle Onassis' aggressive backing, who rebuilt the economy by promoting Monaco as a tax sanctuary and, otherwise, a safe and hospitable place for the wealthy. It reached its height of glamour in the 1960s, when, in the fond recollection of Taki, the chronicler of wealth's true hierarchies, Monaco was "not only Russian- and vulgarian-free … but also looking like Ruritania-sur-mer rather than Las Vegas-on-the-sea."

During the age of international deregulation and liquidity and great public fortunes that began in the 1980s and continued for two decades, Monaco's reputation suffered. As the world became rich, Monaco chic-ness and élan fell on hard times—it became, at best, a mail drop and, at worst, with its teetotal sheiks, a kind of Riyadh on the Riviera (as boring as the desert one). Along with its glut of bad condo developments, the two signpost events of its decline have been the death of Princess Grace in 1982 and the death of banker Edmond Safra in an arsonist's fire in 1999. The latter was an event so unappealing and macabre that, after many efforts to imbue Safra's death with a note of mystery and glamour, Dominick Dunne was banned from writing about it in Vanity Fair. Nobody was interested.

The conference, attended by a few hundred men in Brioni suits, was held in one of the prince's hotels. (He owns the choicest ones in Monaco.) He arrived midway through the first night's buffet dinner. Albert II is 50 and never married, though he has at least two illegitimate children. Albert and his sisters Stephanie and Caroline are "train wrecks with very good handlers," said Ian, meaning it as a kind of compliment.

In fact, Albert did not seem in the least flamboyant or out of control—he appeared to be shy and somewhat awkward. He delivered a mumbled welcoming speech in a flat American accent. The person next to me whispered that Albert had been a camp counselor for many summers at Lake Winnipesaukee. "Your highness," I said, when he took my hand, then I involuntarily added something like a curtsey. He exchanged a few words with Ian about London nightclubs and—this was several weeks before he became a household word—a New Yorker named Madoff. ("So the prince knew Madoff," I marveled to Ian after Bernie's larceny was revealed. "Well, he would, wouldn't he," Ian replied, unimpressed.)

When Albert acceded to the throne after his father died in 2005, he announced that he wanted to rid Monaco of its reputation as a "pariah state" of money launderers and crooks by making its banking more transparent. This conference was part of that effort to emphasize the legitimate and positive aspects of Monaco's role in the international finance community. And yet I had the feeling something else was being said at levels my ears could not necessarily register.

It was a lot of boring banker talk—two days of PowerPoint presentations about capital flow and tax treatments and exchange limitations—yet it was hard not to ask the question: With the world's financial system collapsing, what, exactly, were these men in their very good suits doing here? So I asked it.

"Well, not everyone loses their money in bad times," said a tight-lipped Londoner, sitting next to me at luncheon.

"How so?" I pressed, thinking about my own devastated accounts.

"They went into cash. Or have been in cash."

"And they would have been that smart, whereas the rest of us were so dumb, because …?"

Mr. Cryptic elaborated, with what seemed like a little braggadocio: "There are people who maintain high levels of liquidity, because their main mission, after having gotten their money, is not to lose it." That either sounded like a definition of prudence or of a sub-rosa world of Bernies. If there was one Bernie, there ought to be more—many, many more—with cash to stash. To the point: Where was Bernie's dough?

Indeed, it was obviously more and more of an awkward predicament to have money now when nobody else had it. Escaping, on the second day, to lunch with Ian and a few other Brionis at La Chèvre d'Or in the village of Eze way up in the hills, it was hard to believe in the apocalypse looking over the Cote D'Azur. But everybody agreed that the apocalypse was real—and good news for Monte Carlo.

The point of Monaco, and its sister tax havens, was to be a sanctuary for the rich in a world where the rich needed to hide from the nonrich—from hungry tax and other legal authorities. But just as being rich had become a common and banal state, so had Monte Carlo. Except now, once more, with everybody going broke, rich might become an exclusive condition.

I confess to a sudden sense of excitement. For so long, the boring rich, so conventional and so predictable, have been the Mr. Rights of our time—I don't have a girlfriend whose mother hasn't urged her, all things being equal, to choose a hedge funder. (My own mother, in Atlanta, seems to have had only one thought since I arrived in New York.) But clearly, here I was now in a roomful of Mr. Wrongs. (A further confession: Bernie Madoff seems much more interesting to me as a crook than he appears to have been as a pillar of the community.)

The world was turning: Having lots of money, rather than being the natural state—something we've come to expect everyone to have or be able to get—is an unnatural one. If you've got it, there's something not too nice about you. Of course, that attracts some girls.

I let my hair down for the gala dinner that the prince was throwing for these new potential "investors" at the Hotel de Paris and wore a white chiffon dress. In Daphne Du Maurier's novel Rebecca, it was at the Hotel de Paris that the impoverished, young, paid companion stayed with her employer, Mrs. Van Hopper, before she met and married the wealthy and mysterious Maxim de Winter. In the lobby was the echo of Mrs. Van Hopper harrumphing, "Most girls would give their eyes for the chance to see Monte."

Before dinner, as we mingled in the ballroom waiting for the prince's arrival, I caught the attention of a smooth looker of unclear provenance who now resides in Dubai, who seemed, gratefully, to want to talk about anything other than money. When I went to sit down, I discovered that the place cards had been changed. I was no longer seated next to a man safely accompanied by his wife, but to the smoothie—dark, slippery, witty, and, no doubt, far from aboveboard—who, I felt deeply pleased, my mother would definitely not approve of.

By way of further intimacy, he ticked off the locations of his homes around the world, pointing out that now was not a time to be spread too thin or too expansively. It was a time, he said, to take one's profile down a notch or two. Didn't I agree? He was, he thought, going to consolidate in a property up in the hills. Had I ever seen To Catch a Thief? Well, right near where that was filmed, he was buying a place.

"Do you like to be treated well?" he asked, putting an arm around the back of my chair.

"Yes, please."

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