Sept. 9, 2010— -- The details of the deeply private life that heiress Huguette Clark so fiercely protected are being exposed in an ugly legal fight over her $500 million fortune.
The reclusive Clark, who inherited riches amassed by her father in Montana's mining industry at the turn of last century, has spent the past 20 years living in a New York Hospital room.
The fragile 104-year-old has largely shunned visitors and has for years left decisions touching leaving every facet of her life in the hands of her longtime lawyer -- from bidding on vintage dolls at auction on her behalf to settling disputes among her personal nurses.
"Ms. Clark has always been a strong-willed individual with firm convictions about how her life should be led and who should be privy to her affairs," said in an affidavit filed in court from her lawyer, Wallace Bock, who finds himself embroiled in a legal dispute over the alleged mismanagement of Clark's fortune.
Though Clark has a 42-room apartment on Manhattan's Fifth Avenue and sprawling estates in California and Connecticut, she has lived quietly for decades in a hospital room, most recently at Beth Israel Medical Center. The legal wrangling over her fortune, meanwhile, has exposed snippets of her once shrouded life.
In a state court, two of Clark's nieces and a nephew last week asked a Manhattan judge to appoint a guardian to oversee her personal and financial affairs. The petition also asked the court to bar Bock and certified public accountant Irving Kamsler from visiting or representing Clark.
In federal lawsuit, two former trust officers accuse Citibank of costing the heiress up to $80 million by failing to properly invest her money. The bank has denied the allegation in the case, which is unrelated to the guardian petition filed by the relatives.
The former trust officers met Wednesday with Manhattan prosecutors, who are investigating whether Bock and Kamsler mishandled Clark's finances. No criminal charges have been filed.
Sources say prosecutors will likely look into the sale by Bock and Kamsler of Clark's Stradivarius violin for $6 million and a Renoir painting valued at $23 million.
Trust Fund Has No Return in 70 Years
In their Federal wrongful termination suit, former Citibank trust officers John Cullen and Veronica Juliano claim that more than 70 years after a $3 million fund was established for Clark, the value of the fund remained the essentially the same because it was never invested in stocks.
The fund was set up by the heiress's mother, Anna, one year after the death of Clark's father, U.S. Sen. William Clark of Montana, who died in 1925 at age 86 and was one of the richest men in the nation. Established with $3 million during one of America's periodic stock market booms, the money was invested entirely in bonds for decades, according to the lawsuit. Cullen said he was fired by Citibank after insisting that the bank look into the matter.
"She might be a private person but the bank as fiduciary has a higher duty," Cullen said. "I'm not saying at this moment that it was a fraud. I'm saying it should be investigated. The bank was unwilling to do it."
In a statement released through spokesman Michael McKeon, Bock said he "has and continues to act in the best interests of Ms. Clark. Any allegation to the contrary is without support."
A spokesman for Citibank's corporate parent, Citi, said the bank has "acted appropriately in carrying out our fiduciary responsibilities in this matter and the allegations first made several years ago by a former employee are entirely baseless."
The bank spokesman, Mark Costiglio, stressed that the 2008 lawsuit was filed by two former employees who are now seeking damages and did not directly involve the dispute over Clark's fortune.
In a state court in Manhattan, a petition filed last week by Ian Devine and Carla Hall Friedman of New York and Karine Albert McCall of Washington, D.C., says they are descendants of three of William Clark's children from his first marriage and are among Clark's closest living relatives. They claim t that if a guardian isn't appointed, "Ms. Clark is likely to suffer personal and financial harm because she remains at risk from her purported fiduciaries, Bock and Kamsler."
A Bomb Shelter in Israel
In a statement, Kamsler's attorney, Elizabeth Crotty, said her client has "acted both professionally and diligently. It is unfortunate and questionable that Ms. Clark's distant relatives are ignoring her decision to live a private life and now seek to make her personal matters public."
A lawyer for the relatives declined to comment but the petition alleges that Bock and Kamsler have kept family members and others from visiting Clark by falsely claiming she does not want to see them. It also states that Bock received $1.5 million from Clark to build a bomb shelter for a settlement in Israel where Bock's daughter lives.
In a court filing in response to the relatives' petition, Bock said the shelter would protect the community from terrorist activities, that he informed Clark of a fund-raising effort at the time and asked her in a letter to consider making a donation. "Ms. Clark decided on her own, outside of my presence, to make a significant donation," he said.
Bock also denied persuading Clark to present his family with gifts, including a custom-designed dollhouse worth more than $10,000 for his then-6-year-old granddaughter. "Over the years, Ms. Clark frequently made gifts of dolls or dollhouses to the children or grandchildren of her friends and employees," he said.
Bock stressed that Clark, while physically frail, is sound of mind and has asked him to shield her from visitors, including relatives.
"Ms. Clark has explicitly instructed me on many occasions that she does not want visitors and does not want anyone – including her relatives – to know where she resides," he said in his filing. "I have not 'controlled' Ms. Clark's affairs; I have managed then in accordance with her wishes," he said.
Bock said over the course of their fifteen years as Clark's lawyer, she gave him increasing authority over her affairs, including details ranging from the sale of her properties to the arrangements for her burial. He said the two nieces and a nephew named in the petition are "very distant relatives of Ms. Clark, who have only recently appeared on the scene."
In his affadavit Bock insisted all decisions were made in accordance with Clark's wishes adding, "Ms. Clark has been a very private person for as long as I have known her. She has often expressed to me her desire to maintain her privacy."