Chuck Feeney: Fight for his fortune
A recent boardroom dispute at Atlantic Philanthropies, the charitable foundation set up by Chuck Feeney, ‘almost killed’ the Irish-American billionaire. What happened behind the scenes?
Feisty philanthropist: Chuck Feeney, founder and funder of Atlantic Philanthropies, which has donated more than €7 billion globally. Photograph: Shane O’Neill/Fennell
The crisis in Atlantic Philanthropies began to simmer in the spring of 2009. As he turned 79, Chuck Feeney, the Irish-American billionaire and philanthropist who had set up and funded the charitable foundation, should have been looking back on his record of great achievements. They included donations of more than €1.5 billion to Irish educational and social causes, and more than €6 billion globally. Instead he entered the most stressful period of his philanthropic life.
Feeney became engaged in a bitter struggle with his board of directors about control of the remaining funds in the foundation. The conflict almost killed him, and it would severely compromise his long and complex relationship with Harvey Dale, a founding president of Atlantic.
At its core was the question of how best to dispose of the remainder of Feeney’s endowment, then standing at €2.25 billion, of which about €600 million was committed to cover previous grants.
Feeney fully supported progressive causes but was always more enthusiastic about the provision of seed money for medical research centres and hospital and university buildings. Only a foundation such as Atlantic Philanthropies, with its huge resources and limited life span, and with a leader of the calibre, vision and global reach of Feeney, could make the big bets this required.
However, the strategy of the chief executive, Gara LaMarche, and the board at Atlantic Philanthropies evolved to a point where Feeney feared the foundation was losing sight of his vision and would jeopardise his ability to make large gifts for bricks-and-mortar projects.
Such investments ran counter to LaMarche’s strategy of creating multiple programmes for social justice and advocacy, which inevitably meant a committed grants amounting to several hundred million dollars at any time.
Feeney’s large and unpredictable grant-making was taking chunks out of the remaining endowment. Who knew when Chuck would come along with another nine-figure pledge?
LaMarche was strongly supported in his grant-making focus by three of the longest-serving directors of Atlantic Philanthropies, Frederick AO “Fritz” Schwarz jnr, a top-class New York lawyer; Elizabeth McCormack, a doyen of the philanthropic world; and Michael Sovern, a former president of Columbia University. The three had been recruited by Harvey Dale before the 1996 sale of Duty Free Shoppers, mainly to give Atlantic respectability.
The election of Barack Obama as president of the US in November 2008 created opportunities for LaMarche to increase the involvement of Atlantic Philanthropies in advocacy and social-justice causes. The foundation contributed €101,000 to cosponsor the Huffington Post eve-of-inaugural ball at the Newseum in Washington DC on January 19th, 2009, with the theme “Countdown to a New Day”. LaMarche mingled with Ben Affleck, Larry David, Jamie Lee Curtis, Sharon Stone and other celebrity guests as they were serenaded by Sheryl Crow and Sting.
LaMarche’s support for Obama soon translated into significant funding for the White House’s political initiatives. LaMarche recommended, and the board approved, a grant of €7.5 million to the campaign even before Obama was elected. In time the grant rose to €20 million.
Never keen to blow his own trumpet, Feeney was uneasy with the high profile that Atlantic and its leadership were gaining in the political and social-justice arena. Before this Feeney himself had been the thinker and spirit of the foundation. LaMarche, the anti-Chuck Feeney, was becoming a rival ideologue.
Feeney first voiced his unhappiness with LaMarche’s leadership in a letter to his fellow directors before a board meeting in Bermuda on June 23rd and 24th, 2009. He expressed doubts about the direction the foundation was taking and the rising costs involved.
As chairman, Schwarz saw his role as supporting the staff of the foundation in their work. He admired LaMarche immensely for his record and ideals. Atlantic was doing great things by investing in advocacy and social justice, which everyone, including Feeney, supported, he said. Atlantic was encouraging reconciliation in Northern Ireland, campaigning against the death penalty in the US, changing the perception of HIV and Aids in South Africa, enhancing healthcare practices and the wearing of crash helmets in Vietnam, and transforming end-of-life care in Ireland.
Schwarz got a consensus from the directors that they were proud of the strategic direction of the organisation and the leadership of LaMarche and his team. Feeney was rebuffed. He could do nothing. He might be the moral leader and source of all the foundation’s assets, but he had only one vote on an independent board.
It took special care, interpretive skills and patience to work with Feeney. Like many persons of creative genius, he had an idiosyncratic way of conducting his affairs. He worked things out in his mind rather than on committees. He was on a different wavelength. His movements were unpredictable. He might get up and leave a board meeting while it was going on. “When he showed up at meetings he could be very articulate and focused, but other times, especially when he got push-back, he could be gruff, critical, intense, elliptic,” says an Atlantic insider and fan of Feeney’s.
As his frustration grew, Feeney turned to the person who had been at his side in difficult periods. In January 2010 Chris Oechsli agreed to get professionally involved. Oechsli had a rare gift among Feeney’s associates. Trained as a lawyer, he could interpret Feeney and articulate his thoughts and concerns in precise language.
Then came a bombshell. Feeney asked Dale to meet him privately. He instructed his longtime ally to tell Schwarz, McCormack and Sovern that they should step down from the board and end their service to Atlantic Philanthropies. Dale had brought them in when they needed directors with experience and respectability. Now Feeney saw them as obstructionist.
Dale tried to talk Feeney out of it, telling him it was a bad idea because they would refuse and would become antagonised. It was one of the most distinguished boards in philanthropy, and he could not have persuaded the three to join years earlier if they were simply going to be “agents”.
But Feeney was adamant. Dale bit the bullet and approached the three individually to convey Feeney’s request that they resign. They refused, as he expected. Feeney was furious. He told Dale, “You have failed.”
Later Feeney confronted McCormack just before a board meeting and told her she should step down. Her reply, he recalled, was: “You will have to carry me out on a stretcher.”
The episode brought about a deterioration in Feeney’s relationship with Dale, whom he had declared only a few years previously to be the most influential person in his life. At stake was Feeney’s role in his own foundation. It seemed no longer the case that the directors never lost sight of the fact that it was “Feeney’s money”. Feeney had to change tactics. Confrontation and anger hadn’t worked. He needed to bring a majority of the directors around to his way of thinking, to make a definitive statement of his philosophy and a cogent argument for the board to change course.
For several months Feeney worked with Oechsli and Jim Downey on a 2,000-word manifesto, “Reflections and Comments on Philanthropy and the Atlantic Philanthropies.” Feeney presented it to a gathering of the directors in New York in September 2010.
After reading the documents, a board member remarked to me that the foundation was now facing a crisis that could tear it apart. At its heart, the director said, was a fundamental question: Whose money is it, anyway?
The toll on Feeney’s health had become almost intolerable, and his restlessness was not helping. After the New York meetings he and his wife, Helga, flew to Dublin. Shortly after arriving, Feeney got a chest infection and was treated at St James’s Hospital. Not long afterwards Feeney was admitted to the same hospital when he became ill on another visit to Ireland. This was more serious. His heart had stopped briefly, and he had a pacemaker inserted. Friends and family feared that the crisis was destroying him.
Feeney returned to New York in late spring, and on May 3rd Dale made a pilgrimage to his residence. Their long and close relationship had now almost completely unravelled. For months Feeney hadn’t responded to communications from his former eminence grise.
Papers sent by Dale that Feeney usually would have perused with interest piled up on his table unread. He and Helga no longer went out for dinner with Dale and his wife, Debra LaMorte, a senior vice-president for development and alumni affairs at New York University.
Dale had written recalling what they had done together over the years and saying that, if he had been the cause of the breach between them, he profoundly apologised. Feeney had not replied. The encounter took place in a tiny apartment adjoining the flat Feeney used on East 61st Street. Their 90-minute conversation did not soften Feeney’s attitude toward his former confidant. Nothing changed.
With the foundation in turmoil, the dynamic of the board changed. There was a greater appreciation of Feeney’s role as the figurehead and spirit of the organisation. Tom Mitchell was at last in favour of change. So too were three directors, Christine Downton, Cummings Zuill and Billy Hall.
The outcome for LaMarche was inevitable. On a business trip to London on May 16th, 2011, he met Peter Smitham, a board member. Afterwards, Atlantic directors learned what happened. LaMarche insisted that he was going to hang on, that he had never done anything that was a firing offence, and that he was going to win the battle against Feeney. Smitham reportedly asked what it was that he would win. Staff criticising his management was not a win. An inability to make up with Feeney was not a win. It would be a Pyrrhic victory, a booby prize.
At no point, friends said, did Smitham advise or tell LaMarche that he should leave. But as LaMarche was about to get into a taxi, he turned back and said, “I’m going to resign.”
The next time Feeney returned to Ireland he told me he was sleeping at night now and felt better than he had for years, and for the first time he was somewhat optimistic about the way things were going.
He took a train to the University of Limerick and recounted with humour that it had broken down and the conductor had come through the carriage to announce cheerfully that “the engine’s banjaxed”.
He had inspected his most recent projects in Limerick, which included a beautiful “Living Bridge” walkway over the River Shannon and an Irish World Academy of Music and Dance to be run by his pal Prof Mícheál Ó Súilleabháin.
Feeney had commissioned his artist friend Desmond Kinney to create a magnificent €1.1 million mosaic representing the River Shannon as a woman, which took up two floors of the academy’s entrance hall and could be seen from outside at night.
The Chuck Feeney that weekend in Limerick was the old Chuck Feeney: friendly, benign, wisecracking, self-deprecating, surrounded by admirers and appreciative friends, and enjoying chicken and white wine at Castletroy Park, the hotel he had built two decades earlier.
This is an edited extract from the new edition of The Billionaire Who Wasn’t: How Chuck Feeney Secretly Made and Gave Away a Fortune, by Conor O’Clery, published by Public Affairs, New York