By Peter Carlson
Updated July 08, 1985 12:00 PM

On June 9 Helene von Damm, U.S. Ambassador to Austria and former personal secretary to Ronald Reagan, realized a painful decision could be delayed no longer. The gossiping tongues in Washington and Vienna had to be stilled. The conflict between her private life and public duty had to be resolved. She picked up a black felt tip pen and a yellow legal pad and, fighting back tears, stayed up most of the night writing, through 20 drafts, a letter of resignation. “I must recognize there are voices that continue to assert a conflict of interest between my professional responsibilities and my personal situation,” she wrote to Reagan. “These circumstances have led me to the conclusion that the interests of our country…are best served by your appointment of a new Ambassador to Austria.” The letter acknowledged what von Damm’s friends had been telling her privately—that the scandal over her love affair and marriage to a dashing Viennese hotelier had hopelessly compromised her role as ambassador. Says one friend, “Helene was just trying to play it both ways, and this time it didn’t work out.”

When Peter Gürtler, the wealthy owner of Vienna’s famous Hotel Sacher, first met Helene von Damm, he was immediately smitten. What struck him, at that party in June 1983, were “her brilliant eyes, her clever eyes, her active eyes.” However, von Damm, then 45, was less impressed with Gürtler, then 37 and recently separated from his first wife. In her brilliant, clever, active eyes he was merely “another wealthy playboy.” Besides, she was married (for the third time) and eight years older than he.

Gürtler persisted. When von Damm and her husband, millionaire businessman Byron Leeds, 52, went on a ski trip, Gürtler showed up on the slopes, too, bringing along a 24-year-old girlfriend for cover. When von Damm took horseback riding lessons, Gürtler arranged for lessons at the same time. By the spring of 1984 they were lovers, trysting surreptitiously. Finally, von Damm decided to divorce her husband and marry Gürtler. The lovers convinced Leeds to arrange a secret divorce, which became final in January 1985, and then, on February 2, they wed in a civil ceremony in Kitzbühel.

But they did not just live happily ever after. The marriage took Vienna by surprise. Tongues wagged and Austrian cartoonists had a field day. Back in Washington some of the Ambassador’s political enemies in the White House and the State Department began to tattle about von Damm’s flouting of diplomatic protocol and about the conflict of interest inherent in an American ambassador marrying a foreign national. She says she found herself battling against “the nameless faces, the unidentified sources, the innuendos.” She had hoped to ride it out, remaining as ambassador until the end of Reagan’s second term. She finally decided to quit because, she says, “I was not prepared to play their ugly game. I was not prepared to make a scene or carry on at any price. I could have hung in there and fought but didn’t in order to avoid embarrassment to the President.”

Von Damm, who plans to continue serving as ambassador until December 31, is philosophical about the whole affair. “I have always done what was expected of me in my work and career. I now realize that one’s private position is what life is all about and that everything else is just a trimming.”

Gürtler played no part in von Damm’s decision, and he is not even sure she made the right choice. “Those people who were talking and whispering might be happy now, but for the two countries, the decision is very sad. Never before has the U.S. had an ambassador like Helene.” Obviously, though, he is happy his wife chose him over her career. “We not only have common interests but an understanding of each other,” he says. “Helene is very successful at her job but never acts like a man.”

Von Damm’s sudden resignation (she had not even discussed the matter with Reagan when she met with him at the White House on June 3) has cast a pall over what had been a triumphant return to her homeland. Born Helene Winter in Linz, Austria in 1938, Helene had a “hard and unhappy” childhood, scarred by the Second World War, the subsequent Soviet occupation and her father’s death by tuberculosis when she was 12. “I had a difficult time digesting the things I witnessed,” she says. “I started daydreaming of a better life in places far away. But how? I didn’t have the vaguest idea.”

Her ticket out of war-ravaged Europe turned out to be marriage to Charles McDonald, a U.S. Army corporal from Detroit. Today she readily acknowledges that the opportunity to come to America was a “contributory factor” in her decision to marry McDonald in 1958. “When you are desperately looking for a new life, you say, ‘Hey, gee, here’s my chance to make my life.’ ” In 1959 the newlyweds settled in Detroit where Helene worked as a typist, but within five years she was restless in the marriage. “He was a very nice individual but had no ambition,” she says. “He was more into solitude and fishing.” They split up in 1964.

Helene settled in Chicago and worked as a secretary for the American Medical Political Action Committee—the political arm of the AMA that was, in those days, fighting Lyndon Johnson’s Medicare bill. It was in that capacity that she met Ronald Reagan. “It was at the height of the Great Society,” she says, “and Reagan was one of the few people who spoke totally differently. He made a lot of sense to someone who had just come from socialism. Johnson wanted to change things back to what I’d left. I resolved that if Reagan ever ran for office, I’d try to get on his team.”

In 1966 she did just that, working as a scheduling assistant in Reagan’s California gubernatorial campaign. After he won she followed him to Sacramento, and she’s been working for him ever since. In 1969 she became his personal secretary; in 1975, his executive assistant; in 1979, head of his fund-raising drive in nine northeastern states. After he took office in 1981 she served as his personal secretary, then as deputy director and eventually director of presidential personnel. He appointed her ambassador to Austria in 1983.

Her career had taken its toll on her personal life. In 1971 she married German-born banker Christian von Damm, whose name she kept after their divorce four years later. “He was all for my carrying on with Ronald Reagan,” she says, “but couldn’t adjust to my not being home at 5:30 to prepare dinner.”

After that divorce she renewed an old friendship with Leeds, whom she had met in Germany in the late ’50s. They married in 1981, but continued to live apart—she in Washington, he in New Jersey. When she went to Austria he followed, but he was not happy. “He kept going back to the U.S. for longer and longer periods,” she says. “We gave each other so much space that we just drifted apart.”

Into that void stepped Gürtler, who was in the midst of his own divorce from first wife Elisabeth (he sees their children, Alexandra, 9, and Georg, 6, frequently). Gürtler was thrown into the management of the Hotel Sacher—home of the famous chocolate Sachertorte—at the age of 24, after his grandfather died and his father committed suicide. He soon immersed himself in the task of restoring the hotel at a cost of $10 million. “I was nearly married to the hotel,” he says.

Meeting von Damm in 1983 altered his priorities. “There were so many so-called beautiful young girls,” he says, “but that’s not the partner I was looking for. Sometimes I feel older than I am because I took over the hotel at 24. And because of her activities and her enthusiasm, Helene seems more like 35 than 47.” After Gürtler’s determined wooing, von Damm changed her original opinion of him. “He was not like the image he portrayed, but a very sensitive person,” she says. “We shared the same basic outlook on life.” Since both were very well known in Austria, they found it difficult to meet secretly. That problem—and the subsequent brouhaha—served to solidify their relationship, says Gürtler. “If you go through such a hard time, when you can’t meet without risk of exposure, your minutes together become more valuable.”

Now that von Damm’s resignation has ended the controversy, the couple are enjoying the good life—jogging, tennis, riding horses and touring on Gürtler’s metallic red BMW motorcycle. As for the future, after von Damm’s tenure as $73,600-a-year ambassador ends, they have no specific plans. Von Damm might help her husband expand the Sacher business in other venues—the U.S. perhaps—or she might try another field.

She regrets that events forced her to make a difficult choice. “It’s ironic,” she says, “that whereas I never got my private life together before, when I did put that first, the price was my career. But we do seek fulfillment, and this ultimately was stronger than the other considerations. It’s better to take risks.”