Lunch with the FT

December 27, 2008 1:30 am

Lunch with the FT: Ronald Lauder

The Dow is plunging yet again as Ronald Lauder walks into the calm of the Neue Galerie, his New York collection of early 20th-century German and Austrian art, but he appears relaxed and oblivious to the financial carnage outside. The cosmetics heir, media mogul, campaigner for Jewish causes, collector, power-broker and restaurateur seems to have time to spare.

He insists on giving me a pre-lunch tour of the former Vanderbilt mansion that houses his collection, ushering me up the curving staircase and into Mrs Vanderbilt’s former music room. “Look at this picture! Klimt’s masterpiece,” he says as we admire the shimmering gold portrait of Adele Bloch-Bauer that is familiar from too many students’ posters.

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Lunch with the FT

This picture sums up the story of a troubled century’s relationship to its treasures, combining art, politics and money in much the same way as Lauder himself does. Commissioned by a wealthy Jewish industrialist, it was seized by the Nazis in 1938 and only restituted to the industrialist’s niece in 2006 after a battle with the Austrian government. Within months of its return, Lauder snapped the picture up for the then-record sum of $135m.

Now the portrait is framed by two George Minne sculptures, as it once was in the Bloch-Bauer household. The wall on which it hangs, Lauder enthuses, is covered with plaster made to the same formula used in Vienna at the time.

Reclaiming the past is a recurring theme for Lauder, 64, who has used his fortune to prevent piles of shoes at Auschwitz from decaying, to rebuild synagogues from Tunisia to India, and to restore Gundel, Budapest’s grandest restaurant, to its former splendour. His wealth, estimated at $3bn in a pre-crunch edition of Forbes last year, has been built up from his mother’s cosmetics empire, Estée Lauder. Although he went to work in the business at the age of 20, he has not been as involved in it as his older brother Leonard, the former chief executive and now chairman.

His parents are of central European extraction and his fascination with the artistic past of Austria and Germany began early as a precocious child living not far from where we now stand. As he pauses in front of a 1910 self-portrait of an emaciated but electric Egon Schiele, he says that he bought his first Schiele 50 years ago, aged 14. He paid $700. Now, given the erotic subject matter on display, children are not allowed to visit the Neue Galerie.

After nearly an hour’s tour, we arrive at the gallery’s Café Sabarsky. “Now, is this Vienna?!” the proprietor asks as he surveys the wood-panelled room, with its desserts, German-language newspapers, tables collected from Viennese cafés and reproductions of the Adolf Loos chairs we have seen upstairs.

“I created something here that is better than I expected,” he says, steering me to a corner bench with a good view of the bustle.

Turning to our menus, I opt for a chilled cucumber soup as a starter, spiked with dill and a swirl of crème fraîche, while Lauder chooses the Palatschinken – crêpes with smoked trout and a horseradish crème fraîche. I follow his lead in picking Weisswurst mit Kartoffelsalat for the main course.

When he opened the gallery in 2001, he knew there were risks attached, he says: “We didn’t know if it would be seen as a wealthy person trying to show off his collection but now people stop me in the street and say, ‘Thank you’.” The museums he is fondest of in New York, he admits, are other wealthy men’s collections: the Frick and the Morgan Library.

The morning’s (US) papers are full of news of a pact between two modern-day equivalents. Lauder has spent millions of dollars defending the rules that force New York mayors to stand down after eight years, but he has just surprised everybody by lending his support to Mike Bloomberg’s bid for a third term.

Some of the coverage is critical, I note, accusing the two billionaires of stitching up the city’s affairs over the heads of ordinary residents. “We are two people who love New York City,” he replies. “The thing I find fascinating is people use the word billionaire as a negative. One of the things that made New York City so powerful is the men and women who had the drive to make New York City what it is.”

Lauder breaks off to ask for a new plate on which to share his crêpe. “We’re sitting in a Vanderbilt mansion and looking at art commissioned by wealthy people. I’ve seen cities when there have not been wealthy people and the cities show it.” New York was one such city in the 1970s, he says.

“It was very obvious to me the problems we face now are not going to be solved with one bailout,” he continues. “I had to make a choice between my principles on term limits and the fact we have a unique person [Bloomberg] in office.”

Lauder’s unofficial role as guardian of the two-term rule put him under similar pressure after September 11 2001 to allow Rudy Giuliani to stay on. He chose differently then, believing that the city would bounce back quickly. “This time, it’s not a broken arm, it’s a sick body.”

His concerns about the impact of the financial crisis go well beyond the five boroughs. As president of the World Jewish Congress he is wary of a repeat of the anti-Semitism fomented by an earlier depression. “I can’t tell with 2008: is this like 1938, the beginning of Hitler’s rise, or is this 1988, where you have the beginning of the end of communism? I’m afraid it looks more like 1938.”

When Lauder became president of the World Jewish Congress after a close election battle last year, he agreed to stay out of party politics. “It has saved me a lot of money, frankly,” he notes. Despite his spell as deputy assistant secretary of defence in the Reagan administration, a 1989 run for New York mayor, a year as US ambassador to Vienna and hefty donations to the Republican party over many years, Lauder says politics is not really one of his priorities.

“There are basically three themes in my life: art and culture, my Jewish life and, for want of a better word, different types of business,” he says. Although still chairman of Clinique, an Estée Lauder brand, his main business interest is Central European Media Enterprises, a collection of television stations that had until recently been one of the fastest-growing businesses in a struggling industry. Fears of slowing regional growth have brought its valuation down to earth since the autumn.

In a region where large US media conglomerates have made little headway, Lauder built his empire through personal connections dating from his student years, when he first concluded that eastern Europeans were watching “the most boring television in the world” and might be receptive to something new.

I want to know whether Lauder thinks that eastern Europe can be spared the crisis battering the west – but my question is interrupted by the arrival of two fat white sausages, garnished with a mustard sauce and a satisfying potato salad. “Absolutely! People are taking advertising out of Paris and putting it into Prague.” But isn’t Russia’s increasing belligerence also something to worry investors in the region? He reminds me that many eastern Europeans never stopped worrying about Russia: “We in the west tend to live in a dream world.”

As a precocious art lover, Lauder decided at the age of 12 that he wanted to live in Europe and hired French and German tutors without his parents’ knowledge. “My father said, ‘What kind of kid hires tutors?’” By 14, he had begun making regular trips behind the Iron Curtain and by 17 was living in Salzburg and travelling to Prague at weekends to snap up confiscated French antiques that the Russians were then selling off. As well as the mandatory international business degree, he rounded off his education with spells in Paris and Brussels.

Our sausages finished, the waiter returns with a cream-heavy dessert menu. Lauder says we will share an Apfelstrudel and a Milchrahmstrudel half and half – “Halb halb”. How is the meltdown in asset prices affecting his collecting, I ask as he cuts in to the flaky strudel and spoons up the cinnamon-spiced apples beneath. As the hot money from Russia and China cools, will he find better bargains?

“The only time I’ve regretted something I bought was when I got a bargain,” he cautions, but he adds that he has started to receive more letters from private collectors since the credit crunch began, offering to sell him pieces. Where the art world’s new money is investing is not where he’s buying, he adds. “I’ve always been lucky to have an eye for art, and each time I’ve collected I’ve collected before the market moves.” So where is he looking now, I ask? “I’m starting to buy 13th, 14th and 15th-century art because nobody’s buying it. The more scholarship involved the better.”

Lauder judges art collections “by the top and the bottom”, he says: “Businesses also, and people also. I judge them by their deeds: the good and the bad.” In his only reference to his mother over the course of the lunch, he says he learnt “the art of quality” from her. Even when she had little money at the start of her career, “whatever clothes my mother bought, they were the best you could buy,” he says. He takes the same view of furnishings for his gallery and stations for his television empire.

Estée Lauder – whose Upper East Side townhouse the father of two now occupies with his wife, Jo Carole Knopf – also imparted the art of business, he says. He admits, however: “I’ll never be as good a businessman as some people because I’ll not put more than half of my time into business.” While John Pierpont Morgan and Henry Clay Frick devoted themselves to business, and had staffs of people bringing them artworks to consider, “I guarantee you Morgan never got on a plane and flew to see a painting,” Lauder says – well aware that aircraft did not exist back then. “I’m flying Monday morning to see a painting. I’ll be back in the office by 11 o’clock.”

Art, business and politics intersect on the bench where we are sitting, upholstered with fabric copied from an Otto Wagner design. “Many heads of state have lunch here with me. It works. It’s the concept of what the role of a café like this is. The role for most people is a place to eat but its original role was a place to talk about ideas.”

Lauder has not checked his 1913 Patek Philippe watch in the more than two hours we have been here but as I settle the bill he describes such intellectual exchange as one luxury that eludes him. “My life is very different from everyone else’s. I don’t have time to sit down and smell the roses. I can’t. I can’t emotionally do that. But also I can’t emotionally sit down and just talk business.”

My BlackBerry is flashing; business is pressing once more. But after shaking hands at the door of the café, I make time to sneak back upstairs to see the gallery’s exhibition of Alfred Kubin drawings. Their nightmarish hallucinations seem a reasonable preparation for my return to watching Wall Street.

Andrew Edgecliffe-Johnson is the FT’s media editor

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Café Sabarsky
1048 Fifth Avenue, New York

2 x elderflower cordial with sparkling water $7.00
1 x Palatschinken (smoked trout crêpes) $15.00
1 x cucumber soup $11.00
2 x Weisswurst (Bavarian sausages with potato salad) $24.00
1 x Apfelstrudel $8.00
1 x Milchrahmstrudel (white cheese and raisin strudel) $8.00
2 x espresso $8.00

Tax and service $21.78
Total $102.78

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