“Jail wasn’t really as bad as most people thought,” says Bernie Cornfeld with a sanguine shrug. “Everyone was very nice.” Nonetheless, Cornfeld, the king of the chutzpah financiers, is glad to be out of Swiss prison, after 11 months awaiting trial for fraud, and back in the lap of luxury. Sprung on a $1.6 million bond, the 46-year-old millionaire has plopped his paunch into Grayhall, the exquisitely appointed, 40-room mansion in Beverly Hills that he bought five years ago from George Hamilton. (It was originally built by Douglas Fairbanks Sr.) Cornfeld has promised that he will clear himself of the Swiss charges and pay back the investors in the now-defunct Investors Overseas Services, a mutual fund empire that at one point controlled $2.5 billion in assets.
The Swiss claim Cornfeld manipulated IOS. “He promised these people everything,” the Swiss prosecutor said, “and led them up the garden path.” Cornfeld contends that fraud was committed only after he was ousted as IOS chairman in 1970 and Robert Vesco took over. The mere mention of Vesco, who, among other things, is wanted for making an illegal contribution to President Nixon’s 1972 campaign, makes Cornfeld’s beard bristle with uncharacteristic anger. He says he has already taken legal steps to obtain some $180 million in IOS money stashed away in foreign countries that he wants to return to investors. He says he plans to file at least eight lawsuits to “clear up the IOS wreckage.”
In spite of all his legal hassles, Cornfeld is remarkably serene. When he takes calls on a telephone that never seems to stop ringing, he finds time to run his finger up and down the back of one of the stunning, bikini-clad women who inhabit his home. “I didn’t miss sex at all in prison,” he says, almost surprised. “But unlike some of the other prisoners, I never really doubted that my interest would return once I was out.” His kosher leprechaun appearance notwithstanding, Cornfeld has never had trouble attracting lovely women in astonishing numbers. The money helps.
Even with the collapse of IOS, Cornfeld has emerged with a personal fortune in the neighborhood of $20 million. And he is still the grand seigneur of five mansions strategically placed around the world. Critics have suggested that if he really wants to pay back those he once bilked, he could start by using his personal assets.
A self-made tycoon who grew up in poverty in Brooklyn, the son of immigrant parents, Cornfeld describes himself as a “radical socialist youth.” He studied social work in college, earning a master’s degree from Columbia University, and spent a year as a social worker in Philadelphia. In the 1948 presidential election, he circulated petitions for Socialist candidate Norman Thomas. Even after he became a mutual fund salesman in Europe, following a 1955 vacation trip, he talked about how he was “democratizing capitalism.” To him, that meant making it possible for all IOS investors to become rich.
But in pyramiding IOS into a complex web of investments and sub-investments, Cornfeld became less known for his compassion than for his dogged sales drive. Cornfeld chroniclers like to recall an occasion in 1960 when an IOS salesman in the Belgian Congo got caught in the middle of that country’s bloody revolution. “Insurrection, sadism, rape,” cabled the hapless salesman, in describing his plight. Cornfeld looked blankly at the message. “OK, OK,” he finally said, “but is he doing any business?”
As IOS prospered during the ’60s, Cornfeld and his partner, Edward Cowett, had visions of expanding to a $15 billion operation by 1975. But then the intricate organization began to disintegrate, and by 1970, when Cornfeld was dislodged, IOS shares were plummeting in value. Its one million stockholders started to bail out. Cornfeld was arrested when, against legal advice, he returned to Geneva, the site of IOS headquarters, in 1973.
Although his reputation as a wheeler-dealer nonpareil is shattered, Cornfeld still has influential friends. He says he received 7,000 letters during his stay in prison, some of them from such people as actors Tony Curtis and the late Laurence Harvey, and Playboy potentate Hugh Hefner. He credits these letters, reading, and writing his autobiography with helping him endure imprisonment.
“Virtually everyone is in prison,” he muses now. “People are prisoners of their circumstances—their marriages, responsibilities, habits, ambition or lack of ambition. Mine just happened to have bars.”
Marrying one of the live-in beauties (who act as secretaries and housekeepers) is a potential “prison” Cornfeld says he would sooner avoid. Even so, his doting 86-year-old-mother Ida, who also lives in the mansion with him, has publicly expressed the hope that he will settle down.
“Marriage tends to exclude too many other people,” he says, “and if it doesn’t become dull and routine, it becomes psychiatric in its intensity, the quality of intensity that borders on hysteria.” None of that for the newly freed spirit of Bernie Cornfeld. “I try to maintain relationships that are friendly,” he says, “friendly and playful.”