SERENDIPITY: Representing Leona Helmsley

"The Queen of Mean"

I’ve had some difficult cases and difficult clients. The representation of Leona Helmsley fits into both categories.

Leona ran into the Manhattan hotel mogul Harry Helmsley at an event. At the time, the very frugal Harry was married to a Quaker who, as is common among Quakers, was heavily engaged in charitable work. During this marriage, Harry devoted himself to acquiring hotels and other trophy real estate properties in Manhattan, with an emphasis on iconic buildings as well as luxury hotels. At one time, he was a half-owner of the Empire State Building, owned the Helmsley Building on Park Avenue, the Flatiron Building along with some 23 hotels plus apartment and office buildings. He set up a management company to run his empire: Helmsley-Spear, Inc. At one point he was worth an estimated $5 billion.

Leona decided to woo Harry. Leona, described as “feisty” and “ambitious,” was a model and then a real estate agent. She was also described as “flirtatious.” She succeeded perhaps beyond expectations. Harry divorced his wife and married Leona, who had divorced her previous two husbands, Leon Panzirer and Joseph Lubin (whom she married and divorced twice). And suddenly Leona entered a world of luxury.

The Helmsleys inhabited a luxurious penthouse suite atop Manhattan’s Park Lane Hotel overlooking Central Park. She was a “trophy wife” of sorts, but that’s precisely what she (not Harry) plotted. They attended elite social events. Leona posed for pictures to accompany hotel newspaper advertisements. A more memorable such advertisement was for The Helmsley Palace Hotel, sporting a photograph of a smartly dressed and bejeweled Leona with the caption: “The Queen is in her Palace.”

But this Cinderella rags-to-riches saga did not have a fairy-tale ending. Despite her enormous wealth, Leona remained what one might call a “cheapskate.” She would order supplies, food, kitchenware and so forth for her and Harry’s personal use but charge it to one of the Helmsley hotels. She once gave Harry a $45,681 silver clock in the shape of the Helmsley Building and listed it as a business expense.

This fatal practice resulted in her and Harry being indicated by both the State of New York and the United States Department of Justice. And just about this time Harry was showing signs of dementia, leaving the full burden of defense on Leona,

Leona hired criminal defense lawyer Gerald A. Feffer, who tried every which way to explain her extravagances at the taxpayer’s expense. However, the defemse was useless. The crowning point in the prosecution’s testimony was a household employee who testified that Leona had said: “Only the little people pay taxes.” After a two-month federal trial, she was convicted. Juge John M. Walker sentences a hysterical Mrs. Helmsley to a term of four years in addition to a fine of $7.1 million.

Leona decided to hire Alan Dershowitz to handle her appeal. Alan by this time was very expensive for clients with substantial assets. He traditionally balanced his finances by taking high-paying clients who thus paid for his free (pro bono publico – for the public good) work.

Dershowitz asked me to work with him on the federal case, along with my Harvard Law School classmate – and Dershowitz’s student – Sandor (“Sandy”) Frankel, as well as his younger brother Nathan. He selected well-known and highly skilled New York criminal defense lawyer Gerald Shargel for the state case. However, the federal prosecution was the lead charge, and hence the more serious challenge.

Representing Leona was not, to say the least, “a piece of cake.” She was an incredibly difficult client, always complaining about being picked on. It might indeed have been a selective and high-profile prosecution to “send a message” to other taxpayers, but the law does not recognize this as being improper, much less unlawful. (Rudolph “Rudy” Giuliani, later of Donald Trump fame, was the United States Attorney at the time.)

In some respects, she treated the members of her legal team royally – providing them with luxury suites (not mere rooms) in the very hotel where she and Harry had the penthouse suite. She treated them to luxurious dinners in the hotel’s dining room where, despite a “no animals, no pets” policy for others, she almost always took her small (and spoiled) dog oddly named “Trouble.” But in fact she made her appellatemlawyers run a gamut of client-and-case-management problems due largely to her unrealistic expectations.

And her personal behavior, all duly reported in the media, did not help. For example, when her only child, Jay Panzirer, died of a heart attack, she served an eviction notice on his widow shortly after the funeral. She even sued Jay’s estate for the return of money and property she claimed he had borrowed from her, winning $146,092.

She was also prone to getting involved in feuds that were widely reported in the tabloid newspapers. He had a bitter rivalry with the other notable New York City real estate magnate, a fellow by the name of Donald Trump, about whom she was quoted in the tabloid press as saying: “I wouldn’t trust him if his tone was notarized.” (Trump, of course, went on to be – twice -- a very controversial occupant of The Oval Office in The White House.)

The federal tax indictment was fodder for the tabloids, with one reporter authoring a biography with the felicitous title The Queen of Mean. The Helmsleys owned a 21-room mansion in Greenwich, Connecticut, as a sort of occasional retreat. The purchase price was $11 million. The couple promptly sought to upgrade the property at a cost of an additional $8 million.

However, Leona was done in by her habit of refusing to pay bills, including those of her contractors. In 1985, during the court proceedings for unpaid contractor bills, it came out that she had charged many of her and Harry’s personal expenses as hotel-related business expenses. The result was a federal tax evasion indictment against Leona and Harry. However, because by this time Harry’s mental capacity made it impossible for him to stand trial, the weight of the indictment was borne by Leona alone.

It was not exactly the simplest representation. One had to represent Leona legally, but it was also essential to seek some means of controlling her. She would criticize the prosecutors mercilessly, not recognizing that they were just doing their job. Yet throughout it all, she maintained an air of regal superiority.

The bottom line is that the Dershowitz team had to admit defeat. She served her sentence, although in order to receive higher quality meals she claimed that she was kosher. One member of the team did land on his feet – Sandor Frankel ended up running the Helmsley charitable organization.