The Trouble with Harry Winston

“I probably should have become a chemist,” says Ronald Winston. Deep sigh. It’s hard not to feel a little sorry for him, even though he was born a millionaire and still is one. He certainly invites pity, sitting forlornly in his office above the famous Harry Winston flagship store on Fifth Avenue pondering his fate. In his late fifties, Winston has thinning gray hair, a perpetually pained expression, and the insistent but subtle charm of a man capable of selling a single piece of jewelry for several million dollars. A pair of gold-rimmed glasses, fortified with a few extra vertical and horizontal wires, are perched like pickup sticks on the bridge of his nose. They seem appropriately precarious for a man trapped between filial piety and sibling envy.

Downstairs, the diamond necklaces float like fish in the vitrines, priced to sell for more than it costs to buy a country estate. In the fifties and sixties, Harry Winston was the preeminent jeweler in the world: the destination of choice for both Hollywood and high society. These days, according to its chief designer, its most loyal clients are Arab oil princes who buy several baubles at a time for their wives to wear underneath their chadors. On the flagship’s main floor, the scene is extravagant but strangely sterile; security is tense. During a guided tour, a guard accustomed to seeing women in sleek Chanel suits briskly ran his hand down the sides of my rumpled trench coat.

Ron Winston’s private office is much more inviting – a cozy jumble of clocks, paintings, photographs, and deluxe curiosities. Perched on a small pedestal is a lucite block with a current of electricity frozen inside it like a gold feather. A table packed with World War II model airplanes almost obscures a second table crammed with family photographs. Here’s Ron Winston standing beside a grinning Nancy Reagan at the White House. There’s Ron Winston nuzzling his beautiful young wife. A hipper Ron Winston, circa 1978, his longish hair still brown and still covering the top of his head, is pictured walking in a garden next to his dad. Ron’s mother, Edna, a dark-haired woman in a red strapless evening gown and ruby necklace, smiles down from the wall behind Ron’s desk. Only one family member is not represented: Ron’s brother Bruce.

His absence is not accidental. For the past decade, Ron and Bruce Winston have been locked in an increasingly vituperative feud, one that has sapped the resources of the family-owned company and tarnished its image, culminating in its sale to the highest bidder.

Last month, as the brothers were accusing each other of fraud and worse, the last of the sealed bids for the company came trickling in from around the world. Once valued at $150 million, the company, by some estimates, is now worth a third of that amount. And while both Ron and Bruce have vowed to retain control of the store, many observers have watched in horror as their squabble has diminished a company their father painstakingly built over 40 years. “They are spoiled boys who didn’t work hard and who didn’t know what to do when they inherited the millions,” says jeweler Bernard Hammerman, the president of Hammerman Brothers and a lifelong friend of Harry Winston’s. The crack-up of the House of Winston, he says sadly, “is one of the big heartaches of the business.”

Ron and Bruce Winston grew up rich and secure in Westchester and on Fifth Avenue. Even as children, the boys had markedly different personalities. Ron, the first-born favorite son, was gregarious and ambitious. He showed an early aptitude for business and often accompanied his father to the salon. Bruce was a moody dreamer, less outgoing, less athletic, less motivated, and, many claimed, less bright than his overachieving brother. The boys’ aunt Lillian Winston expressed it most tartly when she told the Wall Street Journal a few years ago that Harry Winston never had much regard for Bruce’s brains. ” ‘I have two sons,’ ” Harry reportedly complained to her; ” ‘one is a genius and one is a moron.’ ” One of Bruce’s friends says Edna was even more disappointed in her younger son than Harry was. Soon after he dropped out of college in Massachusetts, Bruce disappeared for eight weeks, resurfacing in Florida only after the family called in the FBI.

Growing up, the brothers maintained a fragile peace; as adults they appear to have more in common than many siblings. Both are middle-aged, married, and eccentric. Both inhabit country homes and city apartments. Both love dogs, travel, and diamonds. And each despise the other.

Ron, 58, graduated from Harvard with a chemistry degree in 1963, and after a stint at NYU, where he studied rocket propulsion, he went into the family business. A committed bachelor, he finally settled down ten years ago with a striking blonde named Heidi Jensen, a 34-year-old film student who recently fled the East Coast to pursue a career as a producer. “She lives in L.A. now,” Ron says sorrowfully. “She just got tired of all the fighting here.” He spends his time shuttling between his Manhattan townhouse and houses in Santa Barbara and Westchester. A self-described workaholic, he is a cultivated businessman who writes poetry and dabbles in the sciences. He fancies himself a Renaissance man. He is also obsessed with Japan: He studied Zen philosophy, speaks Japanese, and devotedly tends to a small Japanese garden at one of his homes. Despite such exotic sidelines, Ron says he believes strongly in “the Protestant work ethic,” and charges that his brother behaves like an immature member of the sixteenth-century feudal aristocracy.

Bruce, 54, briefly attended American International College in Springfield, Massachusetts, but dropped out to pursue a life of relative leisure. He was involved for years with est and has undergone intensive psychoanalysis. These days, he divides his time between a Fifth Avenue apartment and a sprawling country house in Katonah that he shares with his second wife, Barbara, a homemaker who keeps a low profile. Barbara has three children from a prior marriage, two of whom Bruce has adopted. Bored with business and notoriously laid-back, Bruce spends his days puttering around Katonah, driving his collection of sports cars, and sailing on the Atlantic.

“Bruce is a very sweet guy, one of those people who may be too trusting,” says an acquaintance of both brothers who is prominent in the New York jewelry industry. “Ron is the exact opposite, very secretive. You never really know what he is up to. He sets his own objectives very carefully with very long-range thinking. Bruce is a spontaneous guy.”

By all accounts, relations between the Winston brothers were sometimes strained but always civil while their father was still alive. After all, Harry Winston was not a man who easily tolerated dissent. Though he never had any formal schooling, he was a shrewd and commanding figure, the child of dirt-poor Ukrainian immigrants. He loved diamonds so much that his own father warned him the jewels might someday take him over. By 1932, he had opened Harry Winston, Inc., and with a blend of moxie and marketing turned it into a resounding success. During the Depression, Harry Winston singlehandedly kept the New York diamond industry afloat. At one point in the fifties, his diamond-buying power rivaled that of diamond behemoth De Beers.

Harry Winston was a master showman and a fanatical jewelry collector who eventually donated a large chunk of his diamond collection to the Smithsonian. His old-world aura still pervades the Winston salon, where elderly designers painstakingly draw and craft the lavish necklaces and earrings Harry made his trademark. One oft-told tale has Harry mailing the Hope diamond to Washington via registered U.S. mail, saying it was the most secure means of shipping. Others remember Harry and Edna rescuing millions worth of diamonds from the Nazis in the South of France just after the outbreak of World War II. Edna concealed the jewels in her girdle before boarding a ship out of Europe.

The trouble began with the patriarch’s death in 1978. Harry recognized that his sons had different temperaments, and his will acknowledged Ron’s greater business acumen while ensuring that his bounty would be fairly divided. Though Harry left Ron to run his company with the help of two independent trustees, he decreed that both his sons would receive equal shares of the company’s proceeds. The brothers co-existed peacefully under the terms of the will for eleven years, from the time of their father’s death until 1989. During that time, Ron ran the company with the two trustees. In the early years, both he and Bruce drew roughly the same amount from the business: Their salaries and perks amounted to around $350,000 a year. The brothers jointly inherited the Fifth Avenue edifice that houses the store, and they split the additional $700,000 a year they received for rent.

But while Bruce’s salary from the company remained unchanged until Ron cut him off in 1994, between 1980 and 1990 Ron steadily increased his own salary to $1.13 million, arguing that since he ran the company he was entitled to greater remuneration. (He later lowered his take to $400,000, after his brother’s suit.) During the years he occupied a position on the Winstons’ board, Bruce showed almost no interest in the company’s day-to-day operations. Whenever a decision required both brothers’ approval, Ron sent Bruce the papers and Bruce signed them without even bothering to read them.

But in 1990, Bruce filed suit against Ron at the Surrogate’s Court in Westchester, which oversaw Harry Winston’s estate. His suit demanded that Ron provide him with a thorough accounting of the company. Two years later, he went to court again, charging that his brother had taken advantage of his financial naïveté, seriously mismanaged the family firm, and used company assets “for his own personal benefit.” “I don’t know who to trust anymore,” he complained during one deposition.

The litigation has been fed by a growing army of high-powered lawyers.The company’s independent trustees, fed up with the internecine warfare, have adopted a strictly neutral position. “It’s a street fight!” sighs Ron Winston. “I can’t walk away now.”

In 1995, the Westchester surrogate sided with Bruce, ruling that it didn’t matter whether Bruce had actively participated in the operations of his company – Ron had a duty to take care of him as set out in their father’s will. In a scathing criticism of Ron, the judge noted that the “downward spiral of loss from the operation” since Harry Winston’s death was well documented. He wrote that Ron “evinces an abject disregard for his paramount obligations as a fiduciary and paramount concern for his personal welfare… .” Conceding that the differences between the two siblings seemed irreconcilable, he suggested that the company be sold and proceeds from the sale be divided between the two brothers.

The legal documents generated by the case now fill seven massive file cabinets in the Westchester court, chronicling the interminable haggling over the value of the company and bitter debate over Ron Winston’s management of it. Ron has offered his brother ever-increasing sums to settle the case: first $4.5 million, then $17 million and, most recently, $28 million. Bruce has spurned all the offers, insisting that his brother continues to massively underestimate the company’s real worth.

Last year, the trustees hired Credit Suisse First Boston to oversee the sale of Winston. The bank privately released its independent assessment of Winston’s value last fall, making it more likely the company can be sold before the end of 1999. But there is still no end in sight to the litigation.

Bruce Winston steadfastly refuses to speak to reporters, although he has been known to pose silently for photographs to go with articles about his lawsuit. He speaks to the press only through his friend Edward H. Wohl, a white-haired, avuncular attorney whom some paint as a manipulative Svengali who holds Bruce in his thrall.

Wohl was working as a divorce lawyer when he befriended Bruce at a Manhattan party in 1975; two years later, his firm handled Bruce’s divorce from his first wife. Since then, he has regularly played squash, dined, and vacationed with his client, nurturing a close friendship. Wohl says Bruce shuns the media because he doesn’t want to be quoted saying nasty things about his brother (he is still said to be appalled over his Aunt Lillian’s remark). Instead, Bruce supplies Ed Wohl with handwritten notes to read to reporters. In response to some questions I had for Bruce, Wohl read me the following:

“Bruce Winston was married for the first time at the age of 26. His mother and father made the wedding at Claridge’s Hotel in London. Many influential people were there: Harry Oppenheimer of De Beers, the Maharani of Jaipur, et cetera. Bruce’s intended wife was a professional ballerina and the daughter of a famous general who served under Mountbatten in India. Bruce believes it is necessary to make this statement because his first wife has been described otherwise. Contrary to many stories, Bruce does not gamble and never has. His desire is to bring the Winston companies back to their former famous glory.”

Ron and his supporters see Wohl as a shrewd puppet-master who manipulates Bruce for his own benefit. “Bruce doesn’t take a piss in the morning without first calling Ed Wohl,” says one of Ron’s lawyers. “He’s Ed Wohl’s golden egg.” In fact, it was Wohl who first informed Ron Winston in October 1989 that his brother was no longer happy with the status quo. “I remember Ed Wohl called me and said he was coming over,” says Ron. “He walked into the room and said to me, ‘You are going to sell that company now or we will make you pay.’ “

It is still unclear what provoked Bruce to initiate legal proceedings against his brother. Wohl simply says that about a decade ago, Bruce was “tipped off” that Ron was seriously mismanaging the company. “We believe that we can prove that tens of millions of dollars have disappeared from the company since Harry Winston died,” he claims. In 1995, a court-appointed appraiser found that the company’s value had dipped by about $100 million since 1978. Though Bruce blames Ron’s mismanagement for the precipitous decline, Ron insists there is a more innocent explanation. He points out that when his father died, prices for a top-of-the-line diamond were at an all-time high. “They were $62,500 a carat, compared to $22,500 now,” he says. “Am I to be blamed for that?”

Ron Winston has his own complaints about Ed Wohl. He claims the attorney has tried to bribe his former employees to testify against him. Last February, Ron filed formal charges against Wohl with New York’s attorney-disciplinary committee, claiming Wohl lured his former personal executive assistant to Bruce’s side with a $500-an-hour consulting fee and the promise of a million-dollar bonus if Ron loses in court, then listed her as a potential witness, which is an ethical infraction. (Wohl insists Bruce Winston himself cut the deal with the secretary.)

In September, the two brothers briefly appeared together in a Florida courtroom, where Bruce continued to wage his civil suit against Ron. The trial judge there brought the brothers into his chambers one at a time and quizzed each for an hour. “It was the first time any judge has done that,” says a friend of Ron’s. “And Bruce cried out for his lawyer! He exhibited an inability to understand or discuss what was going on beyond the psychology. The judge made some progress in his understanding of what is going on. It’s not really about stolen jewelry or estate planning; it’s a mass feed for lawyers. Bruce is bent on fratricide.”

Ron’s friend and attorney Jay Lewin may be the last person to have seen Ron and Bruce Winston speak to each other outside a courtroom. Two years ago, Lewin arranged for the brothers to meet at his log cabin near Candlewood Lake, Connecticut. Ron brought in deli food from Manhattan; Bruce arrived promptly at 10:30 in the morning with Barbara at his side. But the summit was a disaster. “We all sat there for two or three hours,” Lewin recalls. “All Bruce wanted to do was see his brother be as contrite as possible and admit he was responsible for all of Bruce’s angst. Ron wouldn’t do it. Bruce finally got bored and left.” Lewin says the meeting turned truly acrimonious when Ron asked Bruce what he wanted from him. “Bruce got furious and said, ‘Never ask me that!’ And Barbara started yelling at Ron, too, saying, ‘You know you’re not supposed to ask him that!’ “

More recently, an ex-girlfriend of Bruce’s also tried to negotiate a rapprochement. But a week after agreeing to a meeting, Bruce backed out. According to Ron, his brother felt that because his ex-girlfriend was of Chinese extraction and because Ron Winston often traveled to China, she couldn’t be impartial.

“That is the level of paranoia we’re dealing with here,” Ron snorts. “She’s not Chinese. She’s Brazilian-Chinese!”

But paranoia seems to run in the family. Ron Winston, camera-shy to the point of absurdity, has appeared at videotaped depositions wearing plastic pig masks and a Lone Ranger costume. He is mortally afraid of being kidnapped. “Look what happened to Gucci,” he says. “And Versace.”

Ed Wohl says that Ron’s polished if eccentric veneer belies a dangerous malevolence. “Ron Winston is intelligent, well-spoken, and seductive, and it’s important to … know this other side of him,” says Wohl. In depositions, Bruce’s legal team has alleged a long list of abuses, charging Ron with borrowing $845,000, interest-free, to purchase his Manhattan townhouse, and with using company funds to underwrite his ill-fated bid for the Olympics. (Then 47, he was training for the 100-meter sprint.) Ron denies both charges. “We are not talking about mismanagement,” Wohl says ominously. “We are looking for wrongdoing.”

Ron Winston retaliates in kind. During the three months I spent reporting this story, I became an emissary between the feuding brothers, a vessel through which they passed charges and countercharges to each other. As the exchanges grew increasingly heated, Ron Winston brought out the heavy artillery. Calling from Japan, he decided it was time to let me in on an ugly family secret. “You know,” he said casually. “My brother killed a man.”

Three months before he filed his first suit against Ron, Bruce Winston was driving down the Taconic Parkway near Peekskill. It was two days after Christmas 1989, and a man named Seaton Fisher was outside his disabled vehicle, which had its hazard lights flashing. Bruce’s Mitsubishi struck Fisher, sending him 150 feet over an embankment. Fisher’s 10-year-old son witnessed the accident from inside the car. There were no skid marks on the road prior to the point of impact, and Winston was estimated by witnesses to have been traveling at 75 miles per hour.

Westchester County Assistant District Attorney Gerald W. Connolly determined that the elements for a charge of criminally negligent homicide were not established, and Bruce was charged only with speeding. Bruce’s insurance policy eventually paid out $1 million to cover the Fisher family’s loss.

Although he believes his brother’s vendetta is motivated more by emotion than by money, Ron wonders whether the accident may have precipitated the battle. In interviews, he insinuates that Bruce, who ran up giant legal fees in the aftermath of the accident, soon found himself short of cash and decided to hit up his brother. Ed Wohl vehemently denies the accident had anything to do with the filing of the lawsuit. In any case, Bruce never stopped driving and has continued to rack up moving violations. For a while, he held a Pennsylvania license, which he traded in three years ago for a New York license. Since then, he’s received two more speeding tickets and has enrolled in an accident-prevention course.

“He just likes to drive fast,” Wohl explains with a shrug. He denies that Bruce had ever had his license suspended, though. Why, then, did he need a Pennsylvania license although he lived in New York?

Wohl calls and dutifully reads me another statement from his client. “Bruce says he got a Pennsylvania license because his brother always had a second, Massachusetts, license, in case he got too many tickets. He just wanted to do what his brother did. Oh,” Wohl adds, upping the ante yet again, “Bruce wants you to ask Ron about the time he almost got kicked out of Harvard for using drugs and his dad had to bail him out.”

Ron laughs when told of his brother’s latest accusation. “Yes, I knew Tim Leary. I experimented with LSD as an outgrowth of my chemistry studies,” he says. “Tim got in trouble at Harvard because he was going beyond conventional scientific experimentation, into something else. I don’t recall my father having to get involved, but he was very nervous about it.”

Ron says he is proud of his connection to the acid guru and that he visited Leary on his deathbed in 1996. In the sixties, he says, he even wrote a very personal novel about his acid experiences called Re-Entry, which he sold to Random House but never saw published: “I bought it back. I decided it just wasn’t good enough to publish.”

He yearns for the simpler days when he was a scientist. “But I can’t go back to being a chemist. I am a jeweler,” Ron says, looking back wistfully. “You know, there is an ancient connection. The alchemists were trying to make gold. I just like diamonds. Diamonds to me are tangible stars. It is natural for living creatures to be drawn to light and scintillation. You know, even termites are fascinated with crystals. They carry them up from deep in the earth and collect them in their nests. No one really knows why.”

Last week, Credit Suisse notified potential buyers about their viability. Ron Winston made the cut. There are also rumored to be a half-dozen other bidders left in the mix, Bruce and his backers among them. An Arab jeweler, an Asian firm, and a Minnesota-based outfit called TomKat, Inc., have also expressed interest in buying the company, although the Asian firm has since gone bankrupt. Other, more confidential investors are lurking as well. Because Ron controls the flow of information and doesn’t want to sell the company, interested buyers face a hostile-takeover situation. But the company’s actual value remains unclear. In 1978, at the time of Harry Winston’s death, court documents said the company was worth $150 million. In 1995, court appraisers valued it at $50 million. But the numbers may be meaningless. Because the company’s value is constructed around both inventory and common and preferred stock, and because Ron Winston has been intensely protective of his books, Winston could be worth far more – or far less – than estimated.

In any case, Ron Winston insists he will be the eventual buyer. He is growing increasingly furious at the course of events, which he equates to the courts’ “confiscating my property.” “I’m so mad I’m ready to burn my passport and renounce my citizenship and leave,” he says. But for now he stays. He previously sought backing from Cartier (which dropped out) and now claims he has fresh financing in place. At one time Bruce had approached Prince Rainier’s chief investment counselor, a man he befriended during a brief stint in Monte Carlo, but now he, too, has new partners, whose identity Wohl declines to divulge. Even if Ron does gain full control of the company, Bruce can continue to torment him. Since the brothers co-own the Fifth Avenue building that houses the flagship salon, Ed Wohl suggests that if Ron does win control of the business, Bruce may simply evict the company from its digs in revenge.

Jeweler Bernard Hammerman says the downsizing of Harry Winston is already under way. “I have a letter on my desk with a résumé from a twenty-year Winston employee looking for work,” he says. But Ron still acts like a man with big plans. In addition to opening a new store in Osaka, their sixth, he just hired a new marketing director.

New York jewelry-industry experts say Harry Winston’s company will survive with or without the heirs in charge. Despite the long family feud and legal liabilities, it remains a valuable gem, the last of the luxury-jewelry companies – Van Cleef & Arpels, Bulgari, and Cartier among them – that has not gone mass-market, peddling perfume, scarves, and cheap engagement rings.

Unlike Fifth Avenue peers such as Tiffany and Bulgari, Winston will not advertise itself by throwing parties for New York hipsters. Candace Bushnell does not write its ad copy, and Puffy Combs hasn’t, at press time, appeared at Life in the wee hours decorated in Winston diamonds. While he personally shuns the social circuit, Ron Winston has carried on his father’s glittery legacy by outfitting celebrities at events such as the Oscar- and Tony-award ceremonies. But the company selects its mascots carefully, favoring people who radiate not just money but social cachet. Its main target market continues to be the very, very rich: foreign millionaires, domestic dowagers, and homegrown grandees. In a bid to avoid less exalted customers, the company recently slashed its media budget by 20 percent and restricted its marketing efforts to select high-income subscribers to upscale magazines like Town and Country.

Winston also remains a ubiquitous presence on the philanthropy circuit. Last fall, its baubles decorated the necks, wrists, and fingers of the ladies on the board of directors of the tony International Fine Arts and Antique Dealers’ Show. Dripping in donated Winston gems, socialites like Karen LeFrak and Mai Hallingby worked the receiving line at the Seventh Regiment Armory. Nan Kempner was so enchanted by one sparkly necklace that she removed it from the neck of a Winston employee and wore it for the evening.

Industry observers praise Winston for maintaining its first-class reputation. Russell Shor, who covers the diamond industry for a trade publication, says, “Harry Winston associated himself with people of a certain class. He wasn’t into pop culture. The intrinsic value at Winston is still from the gems, not the design or hipness. With Winston, you got rocks. And it’s still that way. Winston and Tiffany were the real anchors of the high-market trade. Today, you could spend a hundred dollars at Tiffany. You can’t spend a hundred dollars at Winston. Whether or not you approve of the way Ron Winston has done things, that part of it has been a wise move.”

In the meantime, the battle between the brothers continues, less wisely. To protest what he sees as unfair court rulings against him, Ron has resorted to theatrical protest. He attended one deposition in New York wearing handcuffs. He and his brother do not communicate privately and have not done so for four years.

“I was really hoping maybe you could talk to him,” Ron says to me one evening after we’ve been sitting in his office for two hours. “He really needs to talk to someone other than his lawyers.”

I tell Ron I’ll keep trying to get his brother to talk to me. Later that night, Ron calls again. He just wants to see whether he can be of further assistance, he says. His friend Jay Lewin gets on the line and asks if I want to join them for dinner. Unfortunately, I have other plans. A week later, Ron is on the phone one more time, calling from L.A. “Something told me you needed to talk to me,” he says.

I tell him I still haven’t talked to his brother.

“I’ve got to ask you,” he says. “What do you think is going on here?”

The Trouble with Harry Winston