The Lucky Gambler: Sir James Goldsmith Is a Billionaire Buccaneer

Luck, be a lady tonight. When Jimmy Goldsmith’s first son was about to be born, in 1959, he insisted on getting a private room at the best clinic in Paris, even though he didn’t have any money to pay for it. Then he went to the Travellers Club on the Champs Elysees and found a rich man whom he could entice into a game of backgammon. “He finally got me out of the clinic,” says Ginette Goldsmith, whom Goldsmith married four years later, “with his winnings from that game of backgammon.”

Their son Manes is 28 now, working in Mexico City for the Mexican national football team, and Jimmy Goldsmith, officially Sir James Goldsmith, is not exactly penniless anymore. His net worth is estimated to be more than $1.2 billion, including holdings ranging from the Grand Union grocery chain to a publishing house in Paris to some oil wells in Guatemala to about 2.5 million acres of rich timberland in Washington, Oregon and Louisiana. And because he liquidated most of his French and British holdings in recent months — “I’ve got my bundle,” he likes to say in these postcrash days — he has $300 million in cash and short-term securities. That success not only makes him a potentially major predator in today’s markets but gives him the freedom to lecture the world on his views.

Goldsmith also still has Ginette, after a fashion. Now 51 and divorced ! since 1978, she lives in one wing of Goldsmith’s Tudor-style Paris mansion, originally built for the brother of King Louis XIV. In the other wing of the same estate, across a courtyard bright with impatiens, lives Goldsmith’s companion, Laure Boulay de la Meurthe, 36, a slim beauty with waist-length brown hair, and their four-year-old daughter Charlotte. De la Meurthe is the editor of a monthly style section in L’Express, the weekly newsmagazine that Goldsmith controls. There is also Goldsmith’s legal wife Lady Annabel, who lives in a Georgian mansion outside London, where Goldsmith spends a few months every year. Asked how he manages to keep three menages (there are seven children in all) in such a state of contented coexistence, Goldsmith said, “Money helps.”

Goldsmith not only likes making lots of money, he likes spending lots of money. “I don’t understand people like Warren Buffett,” he says of the parsimonious Nebraskan financier, “who pride themselves on living in their first house and driving a used Chevy to work, despite being billionaires.” Aside from Goldsmith’s Paris home and his town houses in New York and London — all filled with antique furniture, paintings, statues, silk hangings — he has just acquired a 16,000-acre hideaway on northwestern Mexico’s Gulf of California. “It’s the most beautiful place I’ve ever seen,” he says. “It’s got the sea, mountains, rivers, lakes. Most of the land is being turned into an ecological reserve, so we can bring back the animals that have always lived in that forest. But I’m building a house there, and I’ll be able to give a house to each of my children.”

Goldsmith is eating quail as he speaks, washing it down with a vintage claret. He is entertaining a visitor at Laurent, an elegant one-star restaurant off the Champs Elysees. He happens to own the place. He bought it on impulse more than ten years ago, after a late-night party there.

“My roots and my heart are in France,” he says as he lights a Monte Cristo. But though he holds citizenship in both Britain and France, he doesn’t want their official honors and no longer has any interest in being Sir James. “I wouldn’t accept that title today,” he says, “nor any other decoration from a government, such as the French Legion of Honor. I want to be free. I guess that’s what having money really means to me.”

This is not a tale of rags to riches. The Goldschmidts, like their neighbors and relatives the Rothschilds, had been prosperous merchant bankers in Frankfurt since the 16th century. When Jimmy’s grandfather Adolph came to London in 1895, he came as a millionaire and bought a mansion off Park Lane. Jimmy’s father Frank, who changed his name to Goldsmith, went to Oxford, fought at Gallipoli, sat in Parliament, but found London’s wartime anti-German emotions so painful that he moved to France, married a French wife and prospered in the hotel business. He lived in a world of yachts and limousines and casinos, and so did the son born in 1933, Jimmy. When he was six years old, according to a new biography by Geoffrey Wansell, Tycoon, a woman gave him a 1-franc coin. He put it in a slot machine and was inundated by a shower of coins.

By the time Jimmy went to Eton, he devoted much time and thought to playing the horses. At 16, he invested (pounds)10 in a three-horse parlay and collected (pounds)8,000. He decided that Eton was no longer worthy of his time. He bought himself a car and headed for Oxford, where although not enrolled as a student, he learned about chemin de fer and girls. When the subject of a career eventually came up, Jimmy served a brief stint in the Royal Artillery. He later went to Paris and joined his older brother Teddy in a tiny pharmaceutical business.

Jimmy at 20 was big and tall, 6 ft. 4 in., with bright blue eyes, and his pursuit of romance soon led him to Maria Isabella Patino, 18. She was the beautiful daughter of Bolivian Tin Millionaire Don Antenor Patino, who had brought her to Paris to meet a prospective husband. Instead, she met and fell in love with Jimmy Goldsmith — not exactly the sort of son-in-law Patino had in mind. “Young man, we come from an old Catholic family,” said Don Antenor when Jimmy went to ask his consent for the marriage.

“Perfect, we come from an old Jewish family,” said Jimmy.

“It is not our habit to marry Jews,” said Don Antenor.

“It is not our habit to marry Indians,” said Jimmy.

Don Antenor shipped his daughter off to North Africa with a chaperone. Jimmy chartered a plane and pursued her. The Patino menage doubled back to Paris. Jimmy found her there and persuaded her to elope with him to Scotland, where no parental consent was needed after the age of 18. Don Antenor chased the fugitives to Edinburgh and hired detectives to find them. By now reporters were also in hot pursuit of the couple they continually referred to as the playboy and the heiress. The fugitives hid in various friends’ houses for the < three weeks required to establish Scottish residence, then got married. Don Antenor went to court to have the marriage annulled, but lost. “They can expect no financial assistance from me,” said Don Antenor as he disinherited his defiant daughter.

She was by now pregnant, but just before the birth, she suffered a massive cerebral hemorrhage. Shortly after the baby was delivered by Cesarean section, she died, at 18, having known Jimmy less than a year. The grief-stricken widower went on a short trip to West Africa, and when he returned, he found that the Patino family had kidnaped the baby, claiming Jimmy was an unfit father. He went to court and got the baby back.

Despite Goldsmith’s youthful reputation as a scapegrace playboy, there are other patterns here: a determination to do exactly as he pleased, an insistence on living well, a readiness to fight anyone who opposed his wishes, a willingness to take risks, a confidence that more money could always be found. Such patterns, combined with shrewdness and luck, make a success in business all but inevitable. His pharmaceutical business grew rapidly, too rapidly. At one point, he was on the verge of bankruptcy, then discovered on the day that his notes came due that the Paris banks had all gone on strike, thus giving him time to raise more money.

He invaded Britain in 1957, gained control of the British food company Bovril in 1971, reorganized it, moved on to the U.S. in 1973, acquired the ailing Grand Union chain for $62 million, reorganized it, launched a raid on Diamond International, began eyeing St. Regis, the Continental Group, Colgate- Palmolive, Crown Zellerbach, Goodyear Tire & Rubber, Pan Am. He operated through a network of Panamanian and Caribbean holding companies, all ultimately controlled by an organization called the Brunneria Foundation, headquartered in Liechtenstein and entirely owned by Goldsmith and his family.

“People in America were willing to work much harder than in Britain,” Goldsmith says, rubbing a lemon-size piece of amber as he paces up and down in an almost bare penthouse office, which overlooks the Arc de Triomphe in Paris. “Most people forget that America’s strength is not its culture but its ideology, and that ideology is freedom.”

Goldsmith’s takeover strategy was simple. His targets were almost invariably old companies that had strayed from their original purpose through diversification, acquired too many senior managers, and were selling at a good deal below their breakup value. He would break them up, sell off the odds and ends, streamline the core and move on to the next project. Goodyear, which Goldsmith tried to acquire last year, provides a good example. The company’s original purpose, he told a congressional committee, “was to build better tires, cheaper, and sell them harder,” but it diversified into oil and gas, started building an expensive pipeline, dropped $214 million and was losing tire sales to the South Koreans. Goodyear survived only with the help of favorable legislation, and when the battle was over Akron’s mayor expressed the local sentiments by saying, “We kicked that slimy bastard out.” But Goldsmith ended with a profit of $93 million, and Goodyear adopted many of his ideas for a return to profitability.

Goldsmith can be ruthless in his pursuit of profits. “There is a lot of internal rage in Jimmy,” says John Train, a New York financier who knows him well, and Goldsmith himself acknowledges, “When I fight, I fight with a knife.” Yet he is rather different from the standard buccaneer. When Ivan Boesky moved uptown from Wall Street in 1985, he rented a suite of offices in the same building that housed Goldsmith’s New York headquarters, 630 Fifth Avenue, and then asked for a meeting. “He spent most of his time telling me about all the contributions he was making to charity,” Goldsmith recalls. “That put me off right there.” He refused to have any further business or social contact with Boesky, and when Boesky subsequently admitted to insider stock trading, Goldsmith remarked of his neighbor, “Boesky crawled out of a drain.”

Goldsmith is fiercely anti-Communist, extravagantly so. “Jimmy believes,” says an old friend, “that the KGB is using the global media to destabilize public opinion and spread lies.” Goldsmith is just as fiercely critical of the business establishment, which he calls corpocracy. Big companies, he says, are in league with big government and big unions to stifle change and progress. “With the return of the Democrats to power over both houses of Congress,” he says, “you are once more suffering the outrages of that triangular alliance.”

And then there is AIDS. Goldsmith repeatedly brings it up in conversations. He believes it threatens to kill most of the human race — “it could be up to 98% of mankind.” This champion of individual enterprise urges that the U.S. join with the despised Soviets and “pool their resources in a massive research effort to find a way to prevent the spread of AIDS.” “The thing about Jimmy,” says Olivier Todd, whom Goldsmith fired as editor of L’Express for favoring the Socialists in the 1981 election, “is that he’s an English eccentric in the best sense of the term. He’s sometimes downright reactionary, but he is also ferociously anti-Establishment, left, right and center.”

As he looks ahead, Goldsmith sees grim possibilities. He thinks the U.S. leaders may be “surrendering their economic power to Japan and military power to Moscow.” But then doubts recur. He clutches again at his amber and gnaws on the butt end of a cigar. “I used to be so sure,” he says. “Now I’m in a period of total lack of certainty.”

What will Goldsmith do with his billion or so in these uncertain times? Perhaps Goldsmith himself does not know. “He’s very superstitious,” says a colleague who knows him well. “He won’t open an umbrella inside the house. He believes in luck. He believes in fate. From all that has happened, he has good reason to.”