Harriman 'betrayed' the family trust: Pamela's stepdaughters sue for dollars 30m

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ONE of America's most celebrated family feuds - between Pamela Harriman, Winston Churchill's daughter-in-law and currently US ambassador to France, and her two step-daughters - erupted in court last week when Mrs Harriman was sued for allegedly squandering more than dollars 30m ( pounds 20m) of her late husband Averell's fortune.

The suit states that Mrs Harriman and two high-powered Washington lawyers, Clark Clifford and Paul Warnke, completely breached their obligations and severely depleted the family trust through a series of bad investments. The sisters are asking for more than dollars 30m in damages 'from the faithless fiduciaries who betrayed a trust and squandered the family's inheritance'.

Harriman, who was ambassador to London and Moscow under presidents Roosevelt and Truman, died at the age of 94 in 1986, leaving an estate valued at dollars 65m. His two daughters, Mary Fisk, 77, and Kathleen Mortimer, 76, have filed the suit against their stepmother, Pamela, who is 74.

Harriman's offspring had been amply provided for by personal trust funds. They also benefited, the court documents imply, to the tune of dollars 200,000 a year from the part of the fortune administered by Mrs Harriman and the two lawyers. But the sisters have now lost that substantial extra fillip on account of a single stunningly bad investment, the papers say.

The family trust, which stood at some dollars 13m at the time of Harriman's death, had grown by 1989 to dollars 25m. It was then, according to the complaint, that Mrs Harriman and the lawyers put dollars 21m into a New Jersey hotel and beach resort, formerly owned by Playboy.

The suit maintains that the money was invested even though the trustees were aware that one of the resort's owners had six felony convictions and another was being investigated by the Securities and Exchange Commission. Further, part of the land next to the 27-acre resort was tainted with asbestos and the rest was environmentally protected wetlands that could not be developed. The resort project failed.

The suit also charges that Mrs Harriman, in order to support her 'lavish life-style', attempted to reorganise part of the estate so that she personally received more funds. In recent years, Mrs Harriman has evolved into a veritable matriarch of international high society and a major fund-raiser for the Democratic Party.

Pamela Digby, as she then was, married Randolph Churchill when she was 19. A son, Winston, was born the next year, but the marriage proved a disaster. There famously followed a series of grand affairs with wealthy and powerful men, including the Aga Khan, Gianni Agnelli, Elie de Rothschild and Stavros Niarchos.

'Everyone always talks about the rich men I've slept with,' she once complained, 'but no one ever asks about the poor men I have slept with.'

In 1960 she married theatrical producer Leland Hayward. After his death she 'almost certainly had sport sex' with Frank Sinatra, according to a new biography of her by Christopher Ogden, Life of the Party: The Biography of Pamela Digby Churchill Hayward Harriman.

She married Harriman in 1971. He left her one of the wealthiest widows in America, with houses in Washington, Virginia, Barbados, Sun Valley and the New York suburbs. But she never got along with his daughters by a previous marriage, or his grandchildren.

Startling evidence of the family feud came on the day of Harriman's funeral.

While his two daughters and the rest of the family went to a grave at the family plot in Arden, New York, and attended a reception, it later emerged that Harriman had actually been buried in a plot four miles away, which he and Mrs Harriman had selected.

Mrs Harriman was not available to comment on the suit. Mr Clifford, who is 87 and served as secretary of defense under President Johnson, said the affairs of the estate had been 'conducted honestly these many years, and we do not believe there is a basis for the heirs to complain about the management of the trust'. In 1992, Mr Clifford was charged with fraud in connection with the BCCI bank scandal, but the charges were dropped when the judge ruled that he was too ill to stand trial.

Mr Warnke, who was Jimmy Carter's chief arms control negotiator, said he was reading the 181-page suit, and did not know of any monies invested in the New Jersey resort.

(Photograph omitted)