Maxwell: The Final Verdict

Capitman’s assumption that the £135 million was drawn from the Liechtenstein billions was erroneous. The true source of the £400 million Maxwell required to buy a succession of companies in similar deals from MCC during the following year was his own private loans – an unsustainable burden on his finances.

Among his most important lenders was Goldman Sachs, the giant New York bank. Of the many Goldmans executives with whom Maxwell spoke, none seemed more important that Eric Sheinberg, a fifty-year-old senior partner and graduate of Pennsylvania University. Sheinberg arrived in London in 1987 after a profitable career in New York and Singapore. For the hungry young traders in Goldman Sachs’ London office, which was sited near Maxwell’s headquarters, Sheinberg not only provided leadership but inspired trust. Trained by Gus Levy, a legendary and charismatic Wall Street trader, he was renowned for having made a killing trading convertible equities. ‘Eric’s a trader’s trader,’ was the admiring chant among his colleagues. Eric, it was said, had once confided that Goldmans was his first love: his formidable wife had to take second place. After losing successive internal political battles and suffering some discomfort after a colleague had been indicted for insider trading, Sheinberg, an inventor of financial products for the unprecedented explosion in the bull market, was now seeking the business of London’s leading players in the wake of the City’s deregulatory Big Bang. Few were bigger than Maxwell.

Goldmans already enjoyed a relationship with Maxwell. In 1984, the bank had rented office space from him in Holborn, and Sheinberg had organized the financing of his purchase of the Philip Hill Investment Trust in 1986. Despite some misgivings, Goldmans had also welcomed the business of floating 44 per cent of Berlitz in 1989, although the negotiations over the price had provoked deep antagonism, especially against Kevin. To prove his macho credentials, the son had telephoned the banker responsible at 4 a.m. New York time, to quibble about the price. ‘Both Maxwells behaved appallingly,’ recalled one of those involved. ‘Kevin worst of all. We soon hated them.’

Yet Maxwell’s business was too good to reject. The echo of the lawyers’ cries in Maxwell House – ‘Bob’s been shopping!’ – whenever the Chairman’s settlement agreements arrived from stockbroking firms, encouraged brokers like Sheinberg to seek his lucrative business. Although Sheinberg was renowned for his dictum, ‘There are no friends in the business, and I don’t trade on the basis of friendship,’ his staff in London noticed an unusual affinity between him and Maxwell. Some speculated that the link lay in their mutual interest in Israel, while others assumed it was just money. Maxwell was a big, brave gambler, playing the markets whether with brilliant insight or recklessness for $100 million and more a time, and Sheinberg was able to offer expertise, discretion and – fuelling his colleagues’ gossip – the unusual practice of clearing his office whenever Maxwell telephoned. Their kinship extended, so the gossip suggested, to Sheinberg’s readiness to overnight in Maxwell’s penthouse, to ride in Maxwell’s helicopter and even to use Maxwell’s VIP customs facilities at Heathrow airport – suggestions which Sheinberg denied.

Acting as a principal and occasionally as an adviser, Sheinberg had already undertaken a series of risks which had pleased Maxwell. On the bank’s behalf, the broker had bought 25 million MCC shares and, in controversial circumstances in August 1990, as MCC’s price hovered around 170p, he had bought another 15.65 million shares as part of a gamble with Maxwell that the price would rise. Maxwell had channelled the money for that transaction through Corry Stiftung, one of his many Liechtenstein trusts. In the event, the Publisher had lost his gamble and Goldman Sachs had been officially reprimanded for breaking the City’s disclosure regulations. That, however, Sheinberg blamed upon Goldmans’ back office, since fulfilling the legal requirements was not his responsibility. Nevertheless, by November 1990, the bank was holding 47 million MCC shares, a testament of faith which could be judged as either calculated or reckless.

As the pressure on Maxwell increased, rival traders in London watched on their screens as, at precisely 2.30 p.m. every afternoon, Goldman Sachs ‘hoovered up all the available MCC shares’. The bank’s commitment went further than was normal for a market-maker. In gratitude for the vast speculative foreign exchange deals bestowed by Maxwell on John Lopatin, a Goldman Sachs foreign exchange executive, and for Maxwell’s considerable share trading, the bank’s loans were mounting. ‘I don’t promise what I can’t deliver,’ quipped Sheinberg to the Publisher, keen to emphasize his blue-sky honesty. To Sheinberg’s staff, though, it seemed that the American was close to Maxwell, more like a colleague than a pure broker. But Sheinberg, privy to so much, knew only what suited his secretive client. The Chinese walls throughout Maxwell House were so thick that only Kevin and a handful of accountants and investment advisers in his private office were permitted to transcend the deliberate compartmentalization. Inevitably, the secrecy bred loneliness.

Maxwell’s loneliness was aggravated by the absence of Andrea Martin, his small, demure personal assistant whose unexpected promotion from receptionist had been won after she spoke impressive French during a trip to Paris. For nearly four years until May 1990, the blonde Martin had uncomplainingly worked arduous hours, travelled extraordinary distances and loyally kept those secrets which Maxwell divulged. At the end of the working day, when he retired to his bedroom in the penthouse, Martin would enter, kick off her shoes and sit on the sofa while her boss ordered refreshments from Douglas Harrod, his entertainment manager: ‘Let’s have never ending champagne, Douglas, and smoked salmon and caviar.’ The tall, benign, well-dressed butler, whom Maxwell had gleefully poached from Rupert Murdoch, would oblige with an obedient smile. After supervising the delivery of his master’s order, he would close the heavy double doors. Maxwell, he realized, was ‘besotted by Andrea’. Harrod was less clear what Andrea Martin ‘could see in someone like Robert Maxwell except a high salary’. But he had noticed a special relationship of ‘endearments and those sort of things’. However, those days had sadly passed. In the aftermath, Andrea Martin always insisted that their relationship had been strictly professional.

A few months earlier, Maxwell had summoned John Pole, his head of security. A former detective chief superintendent employed for thirty years at Scotland Yard, where he had earned sixteen commendations, Pole had become accustomed, like all Maxwell’s staff, to responding unquestioningly to the summons day and night, regardless of the inconvenience. ‘We need to talk,’ growled Maxwell as he replaced the telephone receiver. Minutes later Pole was sitting erect and attentive opposite his employer, ‘I’m concerned about Andrea Martin’s loyalty,’ sighed Maxwell. Pole had noticed the millionaire’s infatuation with the young woman. ‘She knows a lot of confidential information and I fear she’s having an affair with Nick Davies. She has promised me that it’s over, but I don’t trust him and she might be telling him more than is healthy.’

Davies was the snappy foreign editor of the Daily Mirror, a journalist generally disliked by his colleagues, who had given him the sobriquet ‘Sneaky’. Maxwell suspected Davies’s loyalty, but was uncharacteristically unsure how best to neutralize an employee who had invaded the heart of his private territory. He then uttered the phrase which preceded his most intimate instructions to Pole: ‘I need to know if this person is being loyal to me.’ It was Maxwell’s euphemism for instructing that he wanted Andrea Martin’s telephone tapped.

Maxwell had long enjoyed the use of listening devices or bugs. His black briefcase contained a concealed tape recorder operated by a turn of the lock, and a bug had been inserted into a table lamp in his home. During the 1984 negotiations with the Mirror Group’s trade unions, he had used crude tape recorders to monitor his adversaries’ negotiating position. In later years, another former police officer in his employ was regularly to bring him cassettes of taped telephone conversations among his own executives. Sitting in his apartment at the end of the day, the congenital eavesdropper would race through the tapes listening for clues to disloyalty, weaknesses or hidden mistakes. In an atmosphere reminiscent of Stalin’s Kremlin, Pole had supervised in 1988 the concealment of two microphones in Maxwell’s own office – activated by a switch under his desk – and one in the conference room in the Mirror building. A microphone was also secreted in Kevin’s office in Maxwell House. This followed the disappearance of the banker’s draft worth £4.7 million (see p. 10), Telephone taps on the suspect revealed nothing. The draft had never been cashed.

Maxwell’s ruse was to invite guests to remain in Kevin’s room or the conference room while he excused himself briefly to tend another chore. Lumbering along to his own office, he would unlock the cupboard behind his desk and activate the recording machines, which Pole had rendered foolproof to accommodate his ‘banana fingers’. Having eavesdropped on the conversations to glean his competitors’ secrets, he would return at the appropriate moment to exploit his advantage. The subterfuge had won him undeserved acclaim as an outstanding negotiator, Pole’s tap on Andrea Martin’s telephone produced different results.

At the end of the week, Pole returned with a tape: ‘You’d better listen to this, Mr Maxwell.’ For twenty minutes Maxwell sat motionless as the recognizable voices of Andrea and Davies giggled over their previous night’s romps in a car. When Davies mentioned details of Andrea’s underwear, Maxwell flinched. Pole noticed his hurt: ‘Heartbroken, even shattered.’ The woman with whom he was in love had lied. Despite her promise that her affair with Davies had ceased, it was in full flow. Emotionally, Maxwell was vulnerable. Estranged from his family, he had lost the one person upon whom he felt he could rely. He had paid for her loyalty with an annual contract worth £36,000, a considerable sum for a secretary, but after that betrayal there was no alternative but her dismissal, which followed in July 1990, Douglas Harrod noticed the result. ‘Maxwell went down in the dumps. He was a very unhappy man.’

Ever since, there had been no one with whom Maxwell could relax at the end of the day. Besides that emotional deprivation, he was also losing control of his private office. Having failed to replace Peter Jay, his self-styled chief of staff in the years 1986–9, he no longer employed anyone as competent to arrange his papers and organize his diary. As his moods and sympathies oscillated violently, secretaries and personal assistants in his private office changed with damaging regularity. Gradually, despite his roared demands for efficiency, his private office was becoming chaotic.

By contrast, the management of his tenth-floor penthouse was immaculate. Normally waking at 6.30 after fitful sleep, Maxwell would find his staff ready to fulfil his every whim, especially the most unreasonable. Deprived of his family’s company and support, he had thrown himself into a routine which had moved from hectic into frenetic. Increasingly cancelling invitations at the last moment, he would collapse into bed in the early evening to be served dinner while channel-hopping on television or watching a video.

Martin Cheeseman, his chef, had been recommended four years before by Harrod. ‘He’s worked in Downing Street,’ boasted the butler. ‘But can he cook?’ retorted Maxwell. He had proved to be a devoted servant. ‘I knew my customer and gave him what he wanted,’ explained Cheeseman, a thirty-seven-year-old south-east Londoner who served ‘mostly salmon, roast chicken and avocados’. Sufficient food was always prepared for Maxwell’s night-time feasts, especially melons filled with berries and cornflakes. Improbably Cheeseman insisted, ‘I only fed him healthy food. He didn’t pig out. He was that shape when I arrived.’ Their relationship flourished because Maxwell tended to treat his servants like directors and his directors like servants. He had warmed to the young man’s unassuming conversation, inviting him to accompany him on longer journeys so that he could avoid eating unwelcome dishes.

Alongside Cheeseman were Juliet and Elsa, the Filipina maids. Their predecessor had been fired after accusations of stealing television sets, clothes, food and cases of wine. In any event, Maxwell had not prosecuted. But the maids were obliged to tolerate an unfortunate development in his personal habits: his obesity had spawned filthiness. Not only were his soiled clothes and half-eaten food thrown on the floors, but the lavatory after use was abandoned unflushed and the bed linen was occasionally oddly coloured. ‘We’re short of face towels,’ Terry Gilmour, a chief steward, once told the Publisher’s wife Betty. Puzzled, she reminded him that twenty-four Valentino flannels had been delivered just weeks earlier. ‘Mr Maxwell’s using them instead of toilet paper,’ explained Gilmour expressionlessly, ‘and discards them on the floor.’ To save the staff the indignity, Betty Maxwell arranged for the towels to be brought in sealed plastic bags to the family home in Oxford, for washing. All these members of Maxwell’s personal staff shared one quality: their ignorance of his business activities. Although his bedroom was occasionally turned into an office with documents piled beneath a computer screen, none of those in such close proximity would have understood his orders to move money and shares.

Similar ignorance infected Sir John Quinton, chairman of Barclays Bank, who lunched with Maxwell on 7 November, the day after the Berlitz share certificates had been hidden in the safe. Britain’s biggest bank had lent Maxwell’s private companies over £200 million, and Quinton, who deluded himself that he could understand London’s more maverick entrepreneurs, was easily persuaded by his host of the health of MCC’s finances. As Quinton drove back into the City after lunch, the Publisher climbed the metal staircase to the roof of Maxwell House, walked across the astroturf and boarded his helicopter for Farnborough airport.

An unmistakable sense of relief always passed through Maxwell’s mass as Captain Dick Cowley, his pilot since 1986, pulled the joystick and the Aérospatiale 355 rose above London, passing directly over the glinting scales of justice on the dome of the Old Bailey. Cowley enjoyed being used by Maxwell as a £250 per hour taxi and would laugh about the gigantic insurance premium paid to cover landing the helicopter on the roof. Maxwell always refused to travel to the airport by car. If the weather was bad, he preferred to wait, meanwhile keeping his aircrew waiting on the tarmac for his arrival. Cowley savoured memories of flying Maxwell through snowstorms to Oxford, peering into the white gloom for recognizable landmarks, and the enjoyment of intimate conversations during those flights. He even tolerated midnight calls, hearing his employer’s lament about Andrea’s departure. Cowley was respected because he was employed to perform one task which Maxwell could not undertake: ‘I stayed and put up with all his nonsense because he paid me well.’

The flight from Holborn to Farnborough lasted fifteen minutes. As they flew that November afternoon, Maxwell could reflect on his growing disenchantment with the technicalities of finance. The excitement had long disappeared; indeed, in recent months his usual exhausting long hours running the empire had become positively unpleasant. Those financial chores he was pleased to delegate to Kevin, who, despite their past quarrels and the estrangement when Kevin decided to marry Pandora Warnford-Davis, he could now trust more than any other person. Father and son were working jointly to overcome their temporary difficulties. As the helicopter whirred down to the airport the strain of the past days was dissolving. Kevin could look after the business problems while his father embarked upon what he enjoyed most – powerbroking among the world’s leaders.

No sooner had he been deposited alongside his new $24 million Gulfstream 4 executive jet, codenamed VR-BOB (Very Rich Bob), than Maxwell was bustling up the steps shedding the last of his tribulations. Captain Brian Hull, the pilot, welcomed his passenger, aware that ‘he always became happy after he boarded. He saw me as home.’ Minutes later, they were flying at 500 m.p.h. towards Israel, a three-and-a-half-hour journey costing £14,000 in each direction.

Few things gave Maxwell more pleasure than his new Gulfstream, capable of flying the Atlantic without refuelling (unlike his Gulfstream 2, which he nevertheless retained in event of emergencies). For hours he had discussed the G4’s interior design with Captain Hull. In the end, he had settled upon a light-cream carpet, six seats covered in light-brown leather and six in cream cloth. The brown suede walls offset the gold fittings. Flying at 35,000 feet, the passenger relished the pampering he received from Carina Hall, the stewardess, and Simon Grigg, his valet. At the merest intimation that his finger might flick, he could be assured of instant service. The food in the plane’s kitchen – cheddar cheese, smoked salmon, caviar and chicken – had been sent ahead by Martin Cheeseman. Krug and pink champagne were in the fridge. Thoughtfully, Hull always provided a selection of new video films – his employer especially liked adventure stories such as The Hunt for Red October. Sometimes, Maxwell would read biographies or work through a case of papers. Music was rarely played. Facing him on this occasion was the empty place where Andrea had sat in the past, her feet often resting on his seat, tucked under one of his massive thighs. Beyond was where the divan could be set up for him to sleep. Captain Hull had noticed on flights across the Atlantic that sometimes both Maxwell and Andrea slept on it – quite innocently, he stressed.

The new Gulfstream was more than a toy. It was a testament to Maxwell’s importance and wealth. The telephone was fixed next to his seat. One night he telephoned Roy Greenslade, then the editor of the Daily Mirror. ‘Where am I?’ he boomed.

‘I don’t know, Bob. Israel? Russia …?’

‘I’m above you!’ Greenslade looked up at the ceiling. ‘I left Montreal this morning. I was in New York this afternoon. Now I’m going to Hungary. Not bad for a pensioner, eh?’

Constant travel was Maxwell’s way of escaping from reality. Over the following twelve months, the Gulfstream would fly 800 hours, more than double an average pilot’s duties. Other than New York, no other destination was more welcoming than Jerusalem’s small airport surrounded by the Judaean hills.

Ever since Gerald Ronson, the British businessman, had taken the Publisher on Maxwell’s own private jet to Israel in 1985 to reintroduce him to his origins, the erstwhile Orthodox Jew had abandoned his repeated, vociferous denial of his religion, which had even prompted him in the 1950s to read the Sunday lesson at an Anglican church in Esher. Considering the anti-semitism still lingering among Britons after the war, that denial had seemed a natural ploy for an ambitious foreigner, dishonest about so much else. But with his recent achievement of financial security and the decline in overt anti-semitism, Maxwell had grown closer to London’s Jewish community.

Tears had welled in Maxwell’s eyes on that first trip with Ronson. ‘Thanks for bringing me here,’ he repeated as they toured the country, visiting the major powerbrokers, including Yitzhak Shamir, the prime minister. ‘I want to do things and be helpful,’ Maxwell told Shamir as they posed for the photographer accompanying him. ‘I’m going to be a big investor.’ Ronson smiled at the prospect of collecting millions for charity, ‘I want to be buried here,’ Maxwell confided that night over dinner in the King David Hotel.

Thereafter on Friday nights, Maxwell occasionally travelled to Ronson’s home in north-west London to eat the Sabbath dinner or celebrate Jewish holidays. Gail Ronson, Maxwell acknowledged, cooked like his mother, especially chopped liver. He also appeared at Jewish charity functions, mixing with Trevor Chinn, Cyril Stein and Lord Young, the politician, who had invited Maxwell to his daughter’s wedding. His presence in that community had been welcomed, although some feared that his financing of a Holocaust conference in 1989 signalled an attempted take-over. After all, his urge to dominate was indiscriminate.

The interest in his Jewish background had been encouraged by his wife Betty. Together in Israel they had met Chanan Taub, a childhood friend from Solotvino, Maxwell’s impoverished birthplace on Czechoslovakia’s eastern border with Russia and Romania. ‘Poor, hungry and unmemorable’ was the Publisher’s emotional recollection of the muddy pathways, ramshackle, overcrowded dwellings and suffocating destitution there. Sixty years earlier, he reflected, he had shared a solitary pair of shoes with a sister. In 1939 Taub had swum illegally from a ship ashore to Palestine as a penniless Zionist – unlike Maxwell, who had escaped from his homeland, on the eve of Nazi Germany’s invasion, to make his way overland through Hungary and the Balkans to Palestine and then by sea to Britain as a member of the Free Czech Army. When they met again nearly fifty years later, Taub had become one of Israel’s richest diamond dealers. Yet the contrast between the two former Orthodox Jews was striking. While Maxwell boasted of wealth he did not possess, Taub concealed his enormous bank balance beneath dishevelled clothes and a twenty-six-year-old, dented and dirty Chevrolet. Ever since their first reunion, Taub had been mesmerized by Maxwell’s extraordinary transformation from the thin, small boy with pious ringlets swinging along his cheeks who uniquely arrived at Zionist classes in their village clutching a book and stuttering Yiddish phrases. Now Maxwell was ein Mensch, possessed of riches, power, influence and a large family.

Their childhood reminiscences helped to fill a void in Maxwell’s life. Israel further calmed his turbulent emotions, enabling the refugee to put down roots of a kind. In particular, he would become transformed when he entered the presidential suite of Jerusalem’s King David Hotel. Throwing open his windows, he would gaze at the old city of Jerusalem, mentioned so long ago in his itinerant father’s daily prayers at home in Ruthenia. The serenity evoked by the sunlight glinting from the Dome of the Rock above the Wailing Wall, that sacred shrine for Jews through two millennia, seemed to testify to the historic endurance of the Jews. Even he, the bulldozer, would tremble with emotion as the spectacle reawakened memories of his Orthodox childhood, the history of the diaspora, and stirred the survivor’s guilt for escaping the gas chambers.

That evening, 7 November, Maxwell dined with Ariel and Lily Sharon, the former military commander, minister and leading right-wing member of the Israeli parliament. To Sharon, as to so many other Israelis, Maxwell was ‘a friend – a Jew who had finally come home’. Their conversation concentrated upon politics, especially the question of Israel’s relations with the Arabs. The visitor glowed with pride that his opinions should be taken seriously.

Maxwell’s schedule the following day confirmed his importance in the country. After breakfast with Ehoud Olmert, the health minister and a friend with whom he shared a passion for football, he spent half an hour with Yitzhak Shamir, the prime minister. Their regular meetings were welcomed by the diminutive former terrorist. Maxwell had not only committed himself to substantial investments in Israeli industry, newspapers and football, but he had established a direct link between Shamir and Mikhail Gorbachev, the Soviet leader. The benefit to Israel had been considerable. Through Maxwell’s efforts, 300,000 Soviet Jews had been allowed to emigrate to Israel. He had also flown dozens of Soviet children afflicted by Chernobyl’s 1986 radioactive blast to Israel for treatment. In 1990, he had stood among the guests of honour at a solemn reunion of 1,000 Czech Jews, blessed by the presence of Václav Havel, the Czech president, and senior Israeli politicians.