Citizen cane: Wealth and the sweet life are hanging heavy on rum baron Luis del Campo Bacardi, left, stirring concern in the family. Jason Nisse looks at dynastic strains in a proud company
His offence was failing to pay the dollars 50,000 a month maintenance awarded to his wife, Danielle, by the Geneva court last year. Four hours later his Geneva-based lawyer, Louis Mudry, had drawn up a cheque for dollars 70,000 which secured Mr Bacardi's release and shortly afterwards he was on a fast train to his dollars 15m house in Monte Carlo.
Four months later he was back in the Palais de Justice. Mr Bacardi's lawyers had been attempting to have the maintenance award thrown out of court, on the basis that the Bacardis were married in Monaco not Switzerland. The appeal court in Lausanne threw out the application, so opening the gates to a legal action that threatens to bring great embarrassment to the Bacardi family and the Bacardi company.
In the staid courtrooms of Geneva, a picture is emerging of the lifestyle of one of the world's wealthiest men, bearing one of the world's most famous names. It is a life beyond the comprehension of most people, funded by the dividends of the Bacardi liquor empire and hardly touched by the tax authorities. Already accusations of tax evasion, manipulation and drunkenness have surfaced, and the scene in the Palais of Justice on 22 June did nothing to dispel this.
Luis del Campo Bacardi arrived with his two lawyers at 2:20, shortly before the hearing was about to start. He was drunk. When the hearing started, Mr Bacardi walked into the courtroom, stayed for a couple of minutes to, in his words, 'say hello to the judge' and walked out again.
Just after the hearing started, Danielle Bacardi arrived. She talked briefly to her husband about the traffic and an accident she nearly had on the way, and then she went in. Shortly afterwards, the hearing ended. Mr Mudry and the other lawyer appeared, then Danielle Bacardi and her lawyer.
As she went to speak to her husband again, his two lawyers pulled him away. Mr Bacardi began shouting that they were kidnapping him, and a fracas ensued. The lawyers called Mr Bacardi's bodyguard, who dragged Mr Bacardi away from his wife as she pushed and shoved the bodyguard. All the time she continued shouting: 'Look what they've done to my husband' and 'Stand up for yourself, Luis.'
The incident was the most public of a series of attacks Mrs Bacardi has launched on her husband and, more particularly, Mr Mudry, whom she accuses of manipulating the Bacardi heir. Mr Bacardi is being painted as a weak-willed character, constantly moving from home to home to keep ahead of the tax authorities. There is even talk of an application being made to the Swiss courts for Mr Bacardi to be placed under 'guardianship' - a status under Swiss law in which a court- approved person can be placed in charge of the affairs of an adult who is deemed not to be responsible for his or her actions.
Documents obtained by the Independent on Sunday show co-operation between Mr Bacardi and his advisers - including a leading British lawyer - to allow one of the world's richest men to avoid paying taxes. Other documents show that British officials were aware of Mr Bacardi's success in obtaining British nationality despite having been born in Cuba of Cuban parents and never having lived in the UK or visited it for more than a few weeks at a time.
The Independent on Sunday asked Luis del Campo Bacardi for an interview. At first he seemed willing, and then he asked Mr Mudry for his view. The interview was refused.
Bacardi, the eponymous white rum, was invented in 1862 in Santiago de Cuba, the second largest city on the island, by a 47- year-old Spanish distiller called Facundo Bacardi y Maso. Up until then rum had been a rough drink, beloved of pirates and plantation workers. Using the skills of Spanish wine-makers, however, Mr Bacardi y Maso distilled the sugar cane more carefully to produce the clear white rum that made Bacardi famous. It soon became a fashionable drink, not only in Cuba but also in the US.
The empire grew quickly and Bacardi was internationally famous by the time the business passed to Facundo Bacardi y Maso's children, three sons and a daughter, in the latter part of the 19th century. One son, Jose, showed little interest in the business, though in family tradition he was still left with a 10 per cent share. The other three children, Emilio Bacardi Moreau (who became a famous proponent of Cuban independence from Spain), Facundo (who ran the distillery) and Amalia, whose husband, Enrique Shueg, played a key role in building the empire, each took 30 per cent of the company, eventually incorporated in 1919 as Compagnia Ron Bacardi SA.
By the time Facundo Bacardi Moreau, the grandfather of Luis del Campo Bacardi, died in 1926, Compagnia Ron Bacardi had annual revenues of dollars 50m, boosted by its alleged remedial qualities for the son of the King of Spain and the alleged restorative qualities for Teddy Roosevelt's Rough Riders in the Spanish-American war. It thrived through Prohibition in the United States and, under the guidance of Pepin Bosch, the son-in-law of Amalia Bacardi Moreau, grew on the prosperity that followed the Second World War to become a billion-dollar corporation.
In the late 1950s, feeling the wind of change as Fidel Castro assumed power in Cuba (via a revolution originally supported by the Bacardi family), Mr Bosch moved the domicile of the main Bacardi company to the US territory of Puerto Rico. After a Cuban challenge to the Bacardi name in the 1960s, the rights to the brand were transferred to a trust registered in Liechtenstein.
Mr Bosch also secured a marketing coup in the 1960s. Coca-Cola had launched its 'Things go better with Coke' advertising campaign and in 1965 Mr Bosch was able to persuade the rather strait-laced Coca Cola board to sanction a dual marketing campaign. This also had the effect of changing the name of the combined drink from Cuba Libra, with its connotations of revolution and unrest, to Bacardi and Coke, one of the signpost drinks of the upwardly mobile.
By the mid-1970s, when Mr Bosch finally retired (having retired once before and returned), the group was literally churning out cash. Despite unsuccessful diversifications into electronics and re-insurance in the early 1980s, it had secured a position as one of the world's largest drinks companies, albeit a group with just one brand. But that brand sells nearly 22 million nine-litre cases a year - seven million more than its nearest rival, Grand Metropolitan's Smirnoff vodka.
All through this growth, Bacardi was controlled by the family. Pepin Bosch had decided that one of the group's companies should be floated in the US market, but only 10 per cent of the shares were actually traded. Mr Bosch once sold his 12 per cent stake in the empire to Hiram Walker, the Canadian drinks giant that is now part of Allied-Lyons, but Hiram Walker sold the stake back to Bacardi for dollars 200m in 1987 - a deal that in effect valued the group at dollars 1.66bn.
In the late 1980s, Bacardi's president, Manuel Jorge Cutillas, launched a scheme to buy back the few publicly held shares and take the company private. This was opposed by some members of the family, primarily the progeny of the first marriage of Eduardo Bacardi Moreau. Mr Cutillas responded by sacking four members of the family from positions within the empire. Five years of intra-family warfare ensued, with a deal finally being struck last year that enabled Bacardi to go private. The row brought much bad blood and ill feeling to the surface, but it was soon hidden under the cloak of secrecy that surrounds the group.
Shortly after going private, Bacardi paid over dollars 1.5bn for the Geneva-based General Beverage Corporation, the group that owns Martini & Rossi. The coming together of the two private companies created one of the biggest drinks groups in the world.
As a grandson of Facundo Bacardi Moreau, Luis del Campo Bacardi is one of the most important shareholders in the group. He and his sister Elena control around 10 per cent of Bacardi's shares, and, along with three cousins, their branch of the family holds sway over 30 per cent of the group. According to Peter Foster, author of the history of the Bacardis, Family Spirits, Luis del Campo Bacardi joined the board of the main company in 1943, although this is hard to understand as he would have been 10 at the time.
What is certain is that Mr Bacardi joined the board when he was relatively young, being appointed with his cousin Aldolfo Danguillecourt Bacardi as custodians of the family's 30 per cent stake at the behest of their uncle, the powerful and influential Luis J Bacardi Gaillard. But he has not become involved in running the Bacardi empire, something which is totally at odds with the way the business has operated for the last 130 years. Scions of the family are found jobs within the group, and although there are too many for them all to have senior positions, it is rarely the case that these jobs are junior. Almost all the top jobs within Bacardi are taken by family members, and when relatives by marriage, such as Pepin Bosch, rise to senior positions, they are seen as 'outsiders'.
The fact is that Luis del Campo Bacardi never sought a job in the company. Little is known about his life before he left Cuba at the age of 29, though in the five or six years before his departure Cuba was in upheaval, with the corrupt Batista regime collapsing and being replaced by Fidel Castro.
After leaving Cuba Mr Bacardi took up the life of a flamboyant playboy, flaunting the Bacardi name at Royal Ascot, Longchamp and other events in the social calendar. The Bacardi name gave him an entree to the top echelons of society - he rubbed shoulders with the likes of King Juan Carlos of Spain and Frank Sinatra. He was known for his charm, his wit, and his fiery temper.
In 1988 he decided to buy himself a title. He purchased from the Earl of Kimberley the rights to be called the Lord of the Manor of Bayfield Hall cum Coston. The manor in Norfolk has yet to see a visit from its lord.
Early on, the family viewed Mr Bacardi's lifestyle favourably, with his appearances in the social pages encouraged as good publicity for the rum. For years, things went relatively smoothly. In the 1980s, they started to go wrong. Somewhere along the line, what had been social drinking turned into something more. By the 1980s, Mr Bacardi's drinking was bringing him embarrassment. Three years ago, he collapsed under a table at a Red Cross gala evening in Monte Carlo, in front of Prince Rainier of Monaco. On another occasion he interrupted a speech by Prince Philip at a World Wildlife Fund dinner by calling aloud for the waiter.
At the same time, the 1980s saw a growing turmoil in his private life. The divorce that is now dragging Luis del Campo Bacardi's name through the mud is not his first. His previous marriage, to a fellow Cuban, Rosalia Fernandez Hernandez, ended in divorce in 1984. An amicable settlement was made and she now receives alimony payments of dollars 30,000 a month. The following year he married his second wife, Danielle, a divorcee, half French, half Swiss, who was a public relations executive in the jewellery business. The union did not last long. Danielle has shown her determination to fight her husband, retaining a lawyer who happens to be the wife of the Swiss justice minister. Should Luis del Campo Bacardi lose the case in Geneva, he will end up paying a staggering dollars 1.08m a year in maintenance payments to his ex-wives.
As problems surfaced in his private life during the 1980s, things went little better in his professional capacity as a director of the family business. In October 1985, he was asked to suspend his membership of the board by Edwin Nielsen, then president of the board of the Bacardi companies. Mr Nielsen wrote to Luis del Campo Bacardi asking him to request a leave of absence from his duties as a senior director. In the letter, Mr Nielsen referred to Mr Bacardi's excessive drinking and a 'near-fatal episode in Mexico City several years ago'.
However, because of the power and influence of Luis del Campo Bacardi's branch of the family, he could not be forced to resign from the board. And according to Manuel Jorge Cutillas, the current president, Mr Bacardi did not step down. Certainly, earlier this year Mr Bacardi was maintaining that he was still on the board of Bacardi, although he said he might soon be retiring from it because he does not like flying to board meetings - usually held in the Bahamas or Florida.
Mr Cutillas would not say who is on the board of the Bacardi companies, because since the companies went private it has been their policy not to release such information. However, he told the Independent on Sunday that Mr Bacardi now had no influence over the management of the Bacardi group.
One of the concerns about Mr Bacardi shared both by members of the family and by directors of the company is the influence they claim is exerted over him by his lawyer, Louis Mudry. For at least 20 years, Mr Bacardi has entrusted his affairs to Mr Mudry, a respected Swiss lawyer with offices in Geneva. Mr Mudry's practice is large, yet he handles only a handful of clients, most of whom are exceedingly wealthy. His skill at advising them has made him a wealthy and respected member of the business community in Geneva.
One reasons Mr Bacardi has come to rely on Mr Mudry so much is the skill he has exercised over Mr Bacardi's tax affairs. For many years, Mr Bacardi has worked hard to reduce his tax liabilities. By all accounts, Mr Mudry is an expert in tax issues and has been successful in minimising the tax his clients pay.
Yet some people believe his dealings with Mr Bacardi go further. Close friends and family members have made accusations that Mr Mudry manipulates Luis Bacardi so that the client makes no decisions for himself, becoming a puppet of his lawyer. However, there has never been any accusation of financial impropriety against Mr Mudry.
Senior executives of the Bacardi empire have pressed Mr Bacardi to reduce his alleged reliance on Mr Mudry, but to no avail. It is known that Manuel Jorge Cutillas has expressed concerns about Mr Mudry's role in advising Mr Bacardi. When asked whether he thought Mr Mudry had too much influence over Luis del Campo Bacardi's business affairs, Mr Cutillas made it known that he would not disagree with that view.
The family's concern about Mr Mudry's power over Mr Bacardi has reached such a pitch that it is now considering applying for Mr Bacardi to be placed under guardianship. The moves are still preliminary. For a start it would be very unusual for a 60-year-old man to be placed in control of a guardian, and there is also the question of whether the Swiss courts could make such an order for a British citizen resident in Monaco. Mr Mudry declined numerous requests for an interview.
The wealth of Luis del Campo Bacardi, meanwhile, is difficult to estimate accurately. The true total depends on the value of the Bacardi empire, which is also hard to estimate as only part of it has ever been quoted (and then the shares were infrequently traded). And the income and assets of the group are not disclosed. Even Mr Bacardi's shareholding is not clear. He has a significent share of the 30 per cent stake controlled by his branch of the family, but even he cannot be sure how much. This uncertainty was highlighted by a legal action five years ago, when his three nieces sued him for pledging to a bank some shares that belonged to a trust of which they were beneficiaries. By all accounts it was a genuine mistake, now resolved.
What is unquestionably true is that he is a man of immense wealth. Those who know him say he may be worth as much as dollars 300m. He receives a large annual dividend. At its peak it was believed to be as much as dollars 7m a year. Yet he pays little or no tax on this income, having arranged his tax affairs to avoid becoming a resident for tax purposes in a series of countries - including Britain - where he maintains a home (see above).
Luis del Campo Bacardi has been luckier than most. Born into wealth, prestige and a job for life, he was allowed a broad latitude of behaviour before he began to annoy even his tolerant relatives. It was the kind of life most people only come across in novels. But the story has turned sour. As the evidence emerges in the Swiss courts, it now looks as if Luis del Campo Bacardi's life is not as charmed as once it seemed.-
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