GENEROUS TO A FAULT? Among the many, many checks Huguette Clark gave to those who tended her was this one to her nurse.
IRS Hovers over Bellosguardo
Will Millions Go to Feds Instead of Arts?
Wednesday, January 21, 2015
MANSION’S FATE: The future of Huguette Clark’s Cabrillo Boulevard mansion depends largely on what happens in some office at 1111 Constitution Avenue, Washington, D.C.
That’s IRS headquarters. So how are the folks with green eyeshades feeling these days? Charitable? Willing to forgive the $16 million-$18 million in penalties on gift taxes Huguette’s attorney and accountant neglected to pay? So far, the green-eyeshade people have given no signal to impatiently waiting Bellosguardo Foundation folks in Santa Barbara.
Unless all or most of the penalties are waived on grounds that the foundation is a nonprofit entity and because other charities are involved in the Clark estate settlement, the property might have to be sold, knowledgeable people say. But you can expect Santa Barbarans to fight to the last drought-browned blade of Bellosguardo lawn to avoid that.
The late Huguette Clark’s estate started at $300 million in a New York court last year, but after vicious settlement squabbles began, huge chunks were torn out of it, as if from a savory roast by greedy animals.
Huguette’s distant relatives, many of whom had never met her, went to war and gouged out $34.5 million. They even insisted that the mansion be sold. (The attorney general said no.) In one of her two wills, she’d insisted that they not get a penny.
Attorneys slashed off millions more. But if the lawsuits had gone to trial instead of a midnight settlement, legal fees might have eaten up much or all of what was left, by some estimates. The settlement that avoided a trial saved Huguette’s summer home, Bellosguardo, its value estimated at $85 million. But, earmarked by Huguette as an arts foundation, only a few million dollars are left on Bellosguardo’s side of the balance sheet.
“If the IRS insists on collecting the penalties, that will lower the amount flowing to the Bellosguardo Foundation and could require it to sell the California property,” wrote journalist Bill Dedman, author of the book Empty Mansions, about the Clark family.
Huguette, who died at 104 in 2011, was wildly generous during her later years, bestowing millions hither and yon and said to be nearly blind but lucid. Huguette paid Hadassah Peri, her immigrant nurse-companion, $131,000 a year and gave her $31 million in gifts along the way. Peri was also in line to get a $30 million bequest, but under the settlement terms hammered out, she got nothing more and even had to kick back $5 million.
As for the IRS, “The board is still awaiting word from the [New York] public administrator on whether the IRS will waive the tax penalties,” says Mayor Helene Schneider. The settlement gave her the right to choose most of the current 19-member Bellosguardo Foundation board.
As for the hilltop mansion’s future, the board has the task of figuring out what kind of arts-related use to put it to. A museum or what? “The board is also talking about potential partnerships with other arts institutions,” Schneider emailed me.
Jeremy Lindaman, Schneider’s political guru and great good friend, is president of the nonprofit Bellosguardo Foundation, a board appointment criticized by some. Board chair Dick Wolf said in a statement that the board appointed Lindaman as president but that he is “not a board member but answers directly to the board.
“Once the IRS issue is successfully resolved and the full potential of the property as a world-class institution becomes clearer,” wrote Wolf, “the board will move forward with finding a permanent executive director who will guide the Foundation in achieving its full promise.”
The inscrutable IRS having a mind of its own, no one can figure out (or is willing to speculate in public) which way it’s going to go.
WATERGATE REVISITED: Bob Woodward of Watergate fame, now a Washington Post investigative reporter and author, delivered zingers to a Coral Casino audience Friday, sponsored by Westmont College’s Mosher Foundation. After quoting shocking taped remarks by President Richard Nixon urging the infamous break-in, Woodward said that after interviewing President Gerald Ford, he came to understand Ford’s reason for pardoning Nixon: saving the nation the pain of seeing a president on trial and convicted. When fellow Watergate reporter Carl Bernstein heard the news, he phoned Woodward: “The son of a bitch pardoned the son of a bitch.”
NIGHT OF SURPRISES: Camerata Pacifica’s Adrian Spence had all kinds of musical surprises in store for us Friday night at Hahn Hall: a marimba, a harp, an Australian didgeridoo played by flutist Spence, and a haunting Asian drama featuring violist Richard Yongjae O’Neill.