They were, for a time, the reigning couple of American real estate, and New York was their kingdom. Harry Helmsley, now 79, had amassed a $1.4 billion portfolio studded with such Manhattan gems as the Empire State Building. Leona, 67, his second wife, served with obvious relish as "queen" of the couple's empire of 26 hotels—an exacting monarch (some would say despot) who would imperiously dismiss a chambermaid for improperly folding a sheet.
They lived luxuriously, and the press dutifully reported their extravagances: the $45,000 silver clock in the shape of the Helmsley Building, which Leona gave Harry as a birthday present; the 28-room, 26-acre estate, Dunellen Hall, that they purchased for $8 million in Greenwich, Conn.; the condo in Palm Beach; the closets stuffed with handbags and rows of designer gowns.
The ad campaign for their flagship Helmsley Palace hotel was also regal. "The only palace in the world where the queen stands guard," trumpeted the copy, accompanied by photos of the immaculately coiffed Leona scrutinizing a hotel room or overseeing the chef. Alas, now it has been charged that Queen Leona was doing more than supervising the kitchen staff—she and her consort, it was alleged, had also been cooking the books.
As the result of a 16-month investigation by state and federal authorities, the Helmsleys were hauled into court in Manhattan two weeks ago and arraigned for allegedly evading more than $4 million in income taxes. The indictment claimed that they listed as business expenses such personal fripperies as a $130,000 indoor-outdoor stereo system for their home. It said they even listed that $45,000 silver clock Leona bought Harry for his birthday as an expense for the Park Lane Hotel. A pink satin dress and jacket, the indictment said, was charged to the same hotel, described as "uniforms." And $500,000 worth of jade ob-jets that now adorn Dunellen Hall, were falsely charged off to four different hotels. Leona was also indicted separately for extorting money from suppliers and for defrauding Helmsley stockholders by paying herself $83,333.34 a month in undisclosed "consulting fees."
The Helmsleys pleaded innocent to all charges and have refused to be interviewed. Their lawyer has insisted that they will be exonerated. But the feeling around New York is that the couple's goose might be cooked, their reputations permanently damaged even if they were legally cleared. Many were confounded by the spectacle of billionaires who lacked for nothing allegedly risking jail—the charges carry penalties of four to 20 years—for small change. But people who know the couple well expressed little surprise. They say the Helmsleys have always been compulsive—even obsessive—about money, and the more they had, the worse the compulsion got. Their behavior was erratic. They could be generous with family and extravagant with charities, one year giving a breathtaking $33 million to New York Hospital. But they also seemed to suffer bouts of mind-boggling stinginess and a corrosive paranoia, believing that everyone was out to cheat them. When Leona's only son, Jay Panzirer, died of a heart attack at age 40 in 1982, Harry sued his estate to recover the cost of shipping the body to New York. Then Leona stepped in, trying to claim the lion's share of her son's small patrimony. In the end, his four children got only $432 each.
"Money triggered a hot button with Leona," said one former employee, "Once, a secretary who had spilled something on her dress sent her clothes to be cleaned at the Helmsley Palace's dry-cleaning service. Leona became enraged, said she'd cheated her, and fired her. The secretary had worked there eight years."
Few Helmsley staffers lasted so long after Leona became lady of the mansion. "The Helmsley house in Greenwich is a boot camp for servants," says one employee. "If you last six months working for her, you can get a job anywhere because people figure you must be the best." Meanwhile, back in town, Leona tyrannized the hotel staff. "I remember walking to her office and saying, 'Hail Mary, full of grace, please let her not yell at me,' " says one ex-employee. "She was so icy and without compassion. Harry's oldest and dearest employees, mostly men who had been with him for 30 to 40 years—she would pick at them and pick at them until Harry would say, 'Yes, Leona, I will fire them.' She was remorseless. A bird of prey."
Indeed, it's popular around the city—where Leona once made the 10 Pushiest Women in New York list of a local newspaper—to blame the missus for all the pettiness, double-dealing and animosity that now threaten to bring down the house of Helmsley. In this view, Harry Helmsley was a decent man before this tough little Brooklyn broad came into his life.
"I think Harry's a different person. He married a different type of wife," says Harry's ex-wife, Eve, a Quaker who throughout their quiet 33-year marriage devoted herself to charitable work. She says she's never met Leona, but adds, "I've heard she's hated."
Others blame them equally. "Harry was just as bad as she was. He permitted her to fire people—he permitted her to run rampant. It was 'Get rid of this one'; 'Get rid of that one.' And he permitted it." Helmsley, after all, is the man once dubbed by a writer 'Hungry Harry,' famous for the shrewdness with which he snapped up properties with other people's money, but also for his tightfistedness when it came to upkeep on his buildings. "I would have included him on the Village Voice's 10 Worst Landlords list," says investigative reporter Jack Newfield. "But he was so infamous, there was no point. This goes back before Leona."
It was Harry's mother who first steered him into real estate. (The daughter of a successful landlord, she had married a notions buyer.) His first job, at age 16, was not cushy, and it was not pretty: He made $18 a week collecting rents in the rough-and-tumble Manhattan neighborhood of Hell's Kitchen. By age 27, Harry had scraped together the $1,000 needed to buy his first building.
For 20 years Helmsley worked his way up through the real estate management firm and steadily acquired commercial properties. But he didn't really begin to make his mark in New York City real estate, reported the Wall Street Journal, until the age of 40, when he joined forces with real estate attorney Lawrence Wien. In their partnership, now dissolved, Wien got the funding, Harry found and made the deals. Their first big splash was buying the Empire State Building in 1961 for the then-record sum of $65 million.
Helmsley, says Wien, "was the best negotiator I've ever known." But he had other skills, too, which are of particular note in light of his current problems: With Wien, Helmsley pioneered a method of buying leases, rather than buying properties outright, that eased investors' tax burdens. And he could be an inspired penny-pincher. When Helmsley bought the New York Central Building, according to the Wall Street Journal, and was contractually obligated to change the name, he settled, after much thought, on the New York General Building. That way, he figured, he would only have the expense of chiseling two new letters, rather than an entire new name, onto the building's façade.
Leona Helmsley, as befits a woman who loves both Charlotte Brontë and Julio Iglesias, embellishes her own rags-to-riches tale with enough romantic flourishes to make Scarlett O'Hara trip on her hoops. The daughter of a milliner, she was raised in Brooklyn in a family that she says "was very, very close." She modeled briefly after high school to make a living and then married lawyer Leo Panzirer, she says, at her parents' urging. They had one son, divorced after the war, and then Leona went to work as an apartment broker. "I was the best," she says. Usually un-mentioned in this American success story is a second husband, a garment industry executive named Joseph Lu-bin, whom Leona Rosenthal Panzirer married—and divorced—twice.
By 1970 Leona had a thriving career as a hard-charging real estate broker whose tenacity caught the attention of Harry Helmsley. She was working for one of Helmsley's brokerage firms on the conversion to cooperative apartments of a rental building on exclusive Sutton Place when her overzealous efforts to persuade tenants to buy their apartments resulted in her being charged with "fraudulent practices." That conversion was eventually halted. But Helmsley kept Leona—by now a millionaire in her own right—on in a high-paying job. In 1972 they were married.
Suddenly money was no impediment to the fulfillment of dreams. "All my life I wanted to go on a cruise in a chiffon dress with my hair blowing," Leona has said. For a romantic honeymoon the Helmsleys cruised to Cannes on a 136-foot yacht and then launched a lavish new life in New York. A quiet 6'3" man with a soft chin and prominent eyes who was once described as a large, white-haired rabbit, Harry underwent a dramatic change. Leona once said Helmsley "had two suits when I met him, one for winter, one for summer, both black. Now he's having fun." The couple hit the party circuit, and even detractors admit they seemed very much in love.
In 1980 Harry made Leona president of his hotel domain, and her passion for detail became a legend. But it was no myth. "We saw her pick up the phone and call somebody in Iowa and say, 'I'm Leona Helmsley, the president of Helmsley hotels, and I'm sorry the air-conditioning in your room was noisy. It will never happen again,' " said the woman who ran her ad campaign. "She really would read every complaint."
But the obsessiveness that endeared her to weary travelers grated on the staff. Chauffeurs at her home estate were put on beepers, according to one worker, the better to be at Leona's beck and call. "Mrs. Helmsley," said one, when he called in response to a beep, "I'm in church." To which she replied, "You work for me now. You don't go to church."
For the press, Leona would put on her grand mask. When CBS' 60 Minutes came to call some years ago at the couple's Connecticut mansion, the TV crew was treated to a bucolic Fragonard tableau worthy of Marie-Antoinette—Leona was gamboling on the great lawn with four sheep.
"The only thing Harry ever indulged me with is sheep," said a flirtatious Leona to Mike Wallace. "One is Bo, one is Pete, one is Baa, one is Baa-Baaa. Come here, Bo! It's your mother!" Alas, shortly after Wallace went bye-bye, so did Baa and Bo and the entire fleecy family. They were ordered slaughtered, according to a former estate employee, and the chops parceled out among the servants, in true manorial style.
Leona came to think that paying bills was beneath her, ex-associates charge. "One time Leona felt her electric bill was too high at their house in Connecticut," says one, "and she said to Joe Licari, their financial adviser [who has been indicted along with the Helmsleys], 'Don't pay it.' Then he went to Harry and Harry paid. When she heard this, she said, 'He wants to pay the electric bill? Then let him sleep with Licari.' "
Leona's mercurial streak was especially evident in her relationship with her only son, Jay R. Panzirer, and Jay's family. Three times married, with four children from his first two marriages, Jay had worked as a salesman in New York and Los Angeles before creating a company that handled purchases for hotels—including the Helmsley chain. After Jay suffered two heart attacks, Harry and Leona, concerned about his health, reportedly asked him to drop his other clients and handle only Helmsley projects. The company he headed, Deco Purchasing and Distributing Co., was a subsidiary of Helmsley Enterprises and would later figure prominently in state and federal indictments of the Helmsleys.
Before Jay's sudden death, says his third wife, Mary "Mimi" Panzirer (now remarried), Harry and Leona were model in-laws. Jay's children by earlier marriages often visited at his home near Orlando, and the Helmsleys, who had a condo in Palm Beach, spent a good amount of time with them. Leona was also very generous with Mimi. "If I bought a pair of shoes that she liked, she'd get me [pairs] in every color," says Mimi. "When we came to New York, they always had a dinner for us and always had our special favorite foods—a particular champagne Jay liked and for me raspberries."
Indeed, Mimi says, Leona's affection sometimes seemed excessive. "You've made my son very happy, which makes me joyous," she remembers Leona writing in one of her "gushy" little notes. "If I could pluck a star from the sky, I would give it to you."
But when Jay died, Mimi says, Leona's feelings for her changed dramatically—and frighteningly. After the memorial service in New York, Leona "looked at me and said, 'I will destroy you,' " recalls Mimi, who had absolutely no warning of this mood swing. Then, she says, "Leona turned to Craig [her eldest grandson] and said, 'You killed your father.' He was 14. He went into hysterics."
Leona was true to her word. Jay Panzirer had died intestate, which under Florida law meant that half of his small estate went to his widow, with the rest to be divided up among his four children. But within months, Leona had filed lawsuits against both the estate and Mimi to recover various valuables and money she claimed Jay had borrowed. Earlier, Harry Helmsley had served an eviction notice on his former daughter-in-law. Deco, it turned out, owned the home where she was living with Craig, then a ninth grader at the local school.
"I asked Harry why he was doing this," recalls Mimi. "He went into great detail about how he could no longer amortize the cost of the house against Jay's salary. His last comment was, 'So you can see I need the money.' " Bending to Mimi's pleas, Harry did agree to stay the eviction until Craig could finish the school year. But, she says, "They did a complete inventory of my home, including my underwear. There's a list on file somewhere of the number of bras and panties, the sizes and colors."
The legal battle between Mimi and the Helmsleys dragged on for five years. (Leona withdrew one suit to recover a topaz ring when Mimi produced a news clip in which Mrs. Helmsley had described the bauble as a gift to her daughter-in-law.) When it was over, the Helmsleys got most of the estate, which totaled less than $200,000. Each of Leona's four grandchildren got $432 and Mimi was awarded $2,020, which was immediately garnished by Deco to cover court costs. Though Mimi won some points on appeal, "I was totally, 100 percent wiped out," by the legal costs, she says. "To this day I don't know why they did it." When her own time of troubles began, the queen wore red to her arraignment. Her consort wore a brown suit. Harry Helmsley had been such a power in New York real estate for so long that a reporter who caught him on the steps of the courthouse was moved to ask him what he considered his greatest accomplishment. And without a moment's hesitation Helmsley glanced at his devoted wife and said, "I married her."
—By Joyce Wadler, with Victoria Balfour and Ned Geeslin in New York and Sandra Hinson in Orlando