The Bronfman Enigma

There have been lots of conversations among Seagram alumni since it was announced on Friday that Edgar Bronfman Jr. was convicted of insider trading in a French court.

The news reports I read raised a number of questions. According to Crain’s NY Business, “The conviction came even though the prosecutor had recommended acquittal…” That’s curious.

The report went on to say that “the prosecutor felt the executives did not have enough information themselves about the company’s health.” What? Are we talking Edgar Jr. here? Didn’t have enough information after having bet the heritage and fortune on a guy who referred to himself as Master of the Universe?

I wonder what the judge heard and saw that the prosecutor missed.

Edgar Jr. sometimes referred to the ease and depth with which people in Hollywood were capable of lying. He described studio executives as people who can swear on their mother’s life that it is raining outside when you and they know it’s a beautiful sunny day. Yet, he couldn’t wait to do business there.

Every year since the 1950’s, Seagram ran the Seagram Family Association (SFA) meeting, an annual session for senior managers and distributor principals. At what turned out to be the last SFA, while it wasn’t known at the time, the deal to sell the company was in the works. Rumors were widespread and felt to have more than the ring of truth. Every conversation, among distributors and management alike, dealt with the speculation. Junior was at the event but hardly visible. Stayed in his suite the entire time, and based on subsequent events, was probably cutting the deals.

He showed up at the last session where customarily the owner addressed the distributors to remind them that Seagram was a family in both the literal and figurative sense of the word and to provide remarks on the state of the business and the future.

When he walked into the back of the room, he stopped and asked what we thought he should touch on in his remarks. What was the tempo, what were the top issues, what’s on their minds?

The answer was candid. “What’s on everyone’s mind is — are we going to be sold?” “The concerns are palpable…they, we, all want to know what’s going on.”

He just looked at us and went on the stage. Immediately, he began to address the topic of a sale in no uncertain terms. He said emphatically and repeatedly that Seagram was not for sale. He didn’t say this — but it was almost as though he swore on his grandfather that would not happen. Less than a month later the announcement of a sale was made.

It was a sunny, beautiful day in southern California but inside the meeting room the rain was pouring down.

In a previous blog on the Bronfman’s I wrote about pity or scorn. This is another occasion for pity. Junior orchestrated the end of his family’s spirits and wine business in favor of the idea of integrating media, entertainment, information and communications in one hand held device. The Smartphone. The idea he had was ahead of its time and with the wrong people.

Quel dommage.

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Pity or Scorn

Lots of readers have commented on the last posting about the Bronfman sisters and their $150 million problem with what has been described in the press as a cult. If you didn’t work there and experience the good, bad and ugly, it’s unimportant. But for those of us who were at Seagram it’s at least interesting to try to figure it out. (The rest of you can hit the back button.)

Comments I received ranged from glee at the 3rd generation’s continued problems, with many references to “shirt sleeves to shirt sleeves”. (See March 13, 2010 posting.)

One reader took me to task for passing the article along:

Unnecessary to kick them now after all the years they were the Liquor business…it’s not news it’s GOSSIP!

The most interesting comment was this one:

The third generation Bronfmans seems to have a spectacularly pathological need to piss away their fortune. Amazing.

So, after much thought and consideration, I’ve come to the conclusion that what they have done with their inheritance — the company or their personal fortunes — is their business and probably more to pity than to scorn. I found this online in an article from the New York Observer (Aug 10, 2010):

Inherited millions are often fraught with an array of pathologies and dysfunctions. In 1987, Joanie Bronfman, then a Brandeis philosophy doctoral candidate and the daughter of Edgar Bronfman Sr.’s cousin Gerald, investigated the peculiar psychoses of the rich in her dissertation The Experience of Inherited Wealth: A Social-Psychological Perspective. In the course of her research, she attended “wealth conferences” and interviewed heirs and heiresses. Drawing from her own experience of growing up “visibly wealthy” and full of “shame” as a result of it, Ms. Bronfman argued that inheritors of massive wealth tend to be emotionally stunted. They adopt paranoid worldviews and come to see humans as radically selfish. They perceive relationships to be transactional. Their misanthropy derives from the attempts of absentee parents to buy their affections as compensation for outsourcing their rearing to hired professionals. These feelings are reinforced when they interact with the world outside their class and are alternately solicited for donations or mocked as dilettantes by the media. It was that last many-tentacled villain she accused of promulgating a destructive bias toward inheritors, one that she termed “wealthism.”

Could also explain the Busch family.

Maybe it should be called the un-lucky sperm club but I don’t think so.

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Bronfman Troubles

I’m away this week but saw this lead story in Wine & Spirits Daily today. I’m sharing it with you with permission from Meghan. My comments will be posted soon.

Wine & Spirits Daily

October 13, 2010

How a Cult Allegedly Swallowed $150m of the Seagram Fortune

Dear Client:

Vanity Fair has published a detailed, fascinating account of the Bronfman sisters’ alleged involvement with a so-called cult, resulting in a loss of roughly $150 million over the past 6 years.  The article sums up how the heiresses to the Seagram fortune, Sara and Clara Bronfman, became involved with nxivm (pronounced Nexxium) and its founder Keith Raniere.  It also speculates about their relationship with their father and how Raniere “seems also to have tapped into a complex emotional rift between the sisters and their father, billionaire philanthropist Edgar Bronfman Sr.”  Note that Raniere, Edgar Bronfman Sr., Sara and Clare did not comment for this story.

“What seems clear, from court documents and interviews with ex-nxivm members–and those who have come into conflict with the group and its mysterious guru–is that Sara and Clare Bronfman could be in serious trouble,” says the article.

The author, Suzanna Andrews, says that as much as $150 million was taken out of the Bronfmans’ trusts and bank accounts over the past 6 years, according to legal filings and public documents.  $66 million was allegedly used to cover Raniere’s losses in the commodities market, $30 million to buy real estate in Los Angeles and around Albany, $11 million for a private jet, and millions more to fund “a barrage of lawsuits across the country against nxivm’s enemies.”

A number of people have reportedly come forward in recent months with stories about nxivm regarding “private detectives allegedly obtaining bank and phone records of nxivm opponents; stories of its critics being followed and threatened and, in one case, reportedly run off the road by a black limousine; accounts of a motherless three-year-old boy, brought into the group as a newborn under mysterious circumstances, and about the circumstances behind the Dalai Lama’s visit to Albany.”  In all, there are “multiple lawsuits” today involving the Bronfman sisters, with allegations of possible blackmail, perjury, theft and “a conspiracy to forge documents.”

Here’s a link to the full article: http://www.vanityfair.com/culture/features/2010/11/bronfman-201011?currentPage=1

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