Empty Mansions

at $6 million, and she instructed Chris Sattler to deliver it to Dr. Newman’s apartment, insisting as always that her gift be anonymous. Yet the hospital was foiled again. Only $3.5 million was bid at Christie’s in November 2000, including the commission for the auction house; the hospital declined to sell it at that price.
    In Huguette’s hospital room, Dr. Newman discussed with her what to do with the painting. It was mid-November 2000, as the disputed presidential election between George W. Bush and Al Gore remained in doubt. Huguette lamented the “terribly confused political situation,” telling Dr. Newman she was strongly for Gore. (She was a Democrat, just like her father, though in the intervening years the Republicans and Democrats had switched sides on nearly every political issue.) She also spoke of the volatile situation in the stock market, which was falling, and of the generally poor results in art auctions. The Picasso that had recently sold for $50 million, she told Dr. Newman, was “ugly.” When he stressed that the hospital needed the money from the Manet painting, Huguette urged him to wait until the political situation resolved and to see what the market was doing before making any decisions. He said waiting could cost the hospital money if art prices continued to decline.
    But the hospital did wait, to keep her happy. The next summer, it tried the auction again, accepting the same $3.5 million that had been bid previously and pocketing $3.1 million after paying the commission. Huguette’s market advice had not been bad: Though the price hadn’t gone up, it hadn’t declined either.
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    It was time for the hospital to go for the big score.
    In March 2004, Dr. Newman proposed to Huguette that she transfer $106 million of her wealth to the hospital. His pitch emphasized that she would be the beneficiary, receiving “an unconditionally guaranteed cash payment” of $1 million per month for life. That number seemed to catch her ear, and she said she would think about it.
    Of course, Huguette would have had to hand over all her stocks and bonds, as well as the Connecticut house and perhaps a few more paintings. Dr. Newman emphasized how such a gift would be a blessing, “freeing you from the considerable burden” of having to arrange the sale of property herself.
    The type of contract proposed by Beth Israel is called a charitable gift annuity, which universities and other nonprofits tout to their donors, sometimes without fully explaining the pitfalls. Huguette was nearly ninety-eight years old, with a life expectancy of only 2.9 more years, based on actuarial tables, not on her medical history. According to the proposal she was given, for every million she gave the hospital, she would receive about $100,000 back each year, for a total of $310,750 over those 2.9 years of remaining life. She’d get a charitable deduction of $718,010 for the rest.
    Was this a good deal?There were more cons than pros to the proposal.
    The annuity would serve Huguette’s desire to support Beth Israel, and would have provided her some income and a tax deduction. But an annuity is a very unusual financial instrument for a person of her age, and a charitable gift annuity is a blunt instrument for someone of Huguette’s high net worth. It wasn’t the most flexible way for her to donate to the hospital or to solve her cash flow problems. She would have no say in what happened to any property that she gave to the hospital, which it could sell as it wished.
    And the deal was irrevocable. If the hospital, already in trouble financially, filed for bankruptcy, she might not get anything back. If she later became dissatisfied with the way the hospital was treating her, that would be too bad; the hospital would already have her money. And there was an inherent risk in trusting her healthcare to an institution that would enjoy the benefit of stopping paying her money as soon as she died.
    Huguette didn’t fall for the proposal.
    The hospital may have been somewhat relieved that she hadn’t jumped at its offer. Huguette would, in fact, blow away the actuarial charts, living 7.2 years more. Over that time, for every $1 million she would havegiven the hospital, the hospital would have paid her back nearly $800,000, diminishing the gift.
    • • •
    A crisis presented the hospital with one more chance to strike Clark copper. In early 2004, there were rumors that the Doctors Hospital building would be