Was the 'Queen of Mean' a Victim?

Billionaire real estate icon Leona Helmsley's fraud conviction overshadowed her.


Aug. 20, 2007 — -- Leona Helmsley will go down in history for being rich, mistreating her employees and cheating on her taxes.

But did the "Queen of Mean," as the New York tabloids dubbed her, really deserve the reputation?

The billionairess died this morning of heart failure at her summer home in Greenwich, Conn. She was 87. Over the last two decades, she always maintained that she had been vilified, and ultimately prosecuted, for her wealth.

Along with husband Harry B. Helmsley, she oversaw a real estate empire that included the Empire State Building, the Tudor City apartment complex, the Park Lane Hotel, the New York Helmsley Hotel and the Helmsley Palace Hotel.

But Helmsley's real estate acumen and charity — she contributed $25 million to New York Presbyterian Hospital and $5 million after Sept. 11 to help the families of firefighters — will inevitably be overshadowed by her criminal conviction and her reputation as a tough boss with a temper.

She made tabloid headlines during the 1980s and seemed to personify the greed of that decade during her two-month trial in 1989, during which one of her housekeepers testified that Helmsley told her, "Only the little people pay taxes." Her defense lawyer once described her as "one tough b----."

Eventually, she served time in prison for tax fraud from 1992 to 1993 and was released from home confinement in 1994. She was acquitted of scheming to extort kickbacks from contractors and suppliers.

Most of her legal problems stemmed from allegations that she had an abrasive attitude toward employees and an aversion to paying taxes.

Court records from 1986 show that she failed to pay $40,000 in taxes on jewelry she bought at Van Cleef & Arpels. She and her husband were indicted in 1988 on charges that they had evaded more than $4 million in income taxes by claiming luxuries as business expenses. Later, the couple were accused of bleeding the budget of their real estate empire by buying such indulgences as a $1 million marble dance floor above a swimming pool and a $210,000 mahogany card table in addition to clothing such as her bras and dresses.

Some legal scholars and economics experts say that Helmsley's conviction was unfair and that the evidence presented at trial was flimsy.

"She was framed by [then federal prosecutor Rudy] Giuliani," said Paul Craig Roberts, a former assistant secretary of the treasury in the Reagan administration. "She was innocent of that tax fraud charge... That was a made-up charge and prosecutors prejudiced juries against her with all this propaganda -- 'rhymes with rich' and the testimony of the hotel maid. In reality, those hotels were conservatively managed."

A Boss to Fear and Respect

Helmsley inspired fear and respect in her employees. Although Helmsley Palace staffers were well paid and given generous bonuses, some claimed that they lived in fear of her excessive temper.

"Around the time of the trial, she walked in visibly intoxicated and asked me, 'What is that smell?'" said Steve Peacock, who was a security guard at the hotel and author of "Hotel Dick: Harlots, Starlets, Thieves and Sleaze."

"When I told her that someone had been smoking in the lobby a few moments ago, she started screaming, 'Don't ever let them smoke that s--- in the lobby of my palace again. … Do you hear me?!'"

The hotel staff even set up an early warning system to alert each other to the arrival of Helmsley.

Former employee Charles Bell sued her in 2002, claiming that she fired him for being homosexual. He was paid $554,000 in damages.

Donald Trump, who often tangled with Helmsley and once called her "a horrible, horrible human being," was more gracious in his remarks at her passing. "Leona Helmsley was definitely one of a kind," said the real-estate mogul in a statement. "Harry loved being with her and the excitement she brought -- and that is all that really matters."

Born Leona Mindy Rosenthal, she was raised in working-class Coney Island and worked as a teenage model. Ever ambitious, she changed her name to Leona Roberts and started working as a receptionist at a real estate company, but quickly became a broker selling condominiums. After two failed marriages, in 1968 she met real estate magnate Harry B. Helmsley, who left his longtime wife to marry her in 1972.

"Leona was a great businesswoman in her own right who created a tremendous brand and success with Helmsley Hotels and was a wonderful partner and wife to Harry Helmsley," spokesman Howard Rubenstein said in a statement, adding "I was very proud to represent her for so many years."

She is survived by her brother, Alvin Rosenthal, four grandchildren and 12 great-grandchildren. Her only child, son Jay Panzirer, died in 1982 after suffering a heart attack. According to Rubenstein, there will be a private service in New York soon and a public memorial in a month.

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events