He made billions selling in bulk to tourists – but Chuck Feeney sees

Story Mike Colman Photography David Kelly
A
player Ken Fletcher, on a trip to Fletcher’s home
town of Brisbane. Which is how I find myself
seated across a desk from the little guy in the
cardigan. For all he’s given away over the past 30
years or so, one thing Feeney has not given freely
is interviews. “Chuck’s not big on interviews,”
says David J. Kennedy, head of Atlantic’s
Australian operation, with some understatement.
Between the establishment of the philanthropic
trust and the sale of his 38.5 per cent share of DFS
to Louis Vuitton Moët Hennessy 12 years later, so
publicity-shy was the Irish-American billionaire
that recipients of anonymous Atlantic grants were
required to sign a commitment to not try to trace
the source of the funds. Those who knew the
secret were warned not to mention Feeney’s
name or risk jeopardising future donations.
In Vietnam, Feeney’s generosity reached
legend status. With villagers not knowing the
name of their anonymous benefactor, they made
one up. Plaques began appearing on Feeneyfinanced schools declaring they had been funded
by “Golden Heart”. But when Atlantic executives
saw them, the practice was promptly eradicated.
▲
s the security door is unlocked
and I enter the suite of offices
above a pub in Brisbane’s CBD,
a little guy wearing a cardigan
and a plastic watch shuffles
towards me. “Hi,” he says,
grasping my hand and continuing straight past
me into the hallway. “I’m Chuck Feeney …
and I’m going to the men’s room.”
Like the man himself, Feeney’s office is small
and, at first glance, unremarkable. Nothing on the
walls, just a set of shelves, a computer, printer and
a desk covered with neat piles of photocopied
press articles and brochures extolling soon-tobe opened educational and medical research
facilities. But again, as with the man himself,
appearances are misleading. This office is part of
a multibillion-dollar operation with the potential
to affect millions of lives, and Chuck Feeney is
arguably the most generous man in the world.
Feeney, 81, made the bulk of his money
selling duty-free to Japanese tourists. Now he is
in the business of giving it all away. In November
1984 he placed all his assets, valued at the time
at about $700 million, into a philanthropic trust
to be invested, expanded and distributed to
worthy causes during his lifetime. In 1996,
he sold his share of the business Duty Free
Shoppers for almost $1.7 billion cash and threw
that into the pot. Everything going to plan, by
the end of 2016 it should all be gone. About
$7 billion in total. The majority will have gone
to projects in the United States and Ireland,
the countries to which he holds dual citizenship.
A few weeks before our meeting, Feeney was
revealed as the mystery man behind a gift of
$350 million to his alma mater, New York’s
Cornell University, to build a hi-tech graduate
school. Active in seven countries, his organisation,
Atlantic Philanthropies, funded the transformation
of Ireland’s higher education system, has built
a university, schools and hospitals in Vietnam and
when it closes its local operation later this year will
have donated some $500m to medical research in
Australia – half of it in Queensland, one of four
home bases he has across the world (the others
are Ireland, New York and San Francisco).
Feeney’s love affair with Queensland began
in 1993 when he accompanied the man he calls
his “mate”, former champion Australian tennis
He made billions
selling in bulk to
tourists – but
Chuck Feeney sees
it as his duty to
give it all away.
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philanthropists
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philanthropists
With to-ing and fro-ing among its four
shareholders over the sale of DFS attracting
the interest of journalists, Feeney accepted the
inevitability that his name would soon hit the
headlines and in January 1997 gave a brief
newspaper interview from a public telephone at
San Francisco airport. Since then he has released
short statements regarding Atlantic-funded
projects and on rare occasions allowed himself to
be photographed. He authorised a biography, The
Billionaire Who Wasn’t, by Irish journalist Conor
O’Clery – proceeds to the trust – and in 2004
agreed to an interview with Irish America magazine,
much of it about Atlantic’s funding of Irish
universities and Feeney’s own involvement in the
Northern Ireland peace process in the late 1990s.
And now this. Feeney’s most recent trip to
Australia was timed to coincide with the induction
of Ken Fletcher – who died of cancer in 2006 at
the age of 65 – into the Australian Tennis Hall of
Fame. The opportunity to publicise Fletcher’s
connection to the hundreds of millions of dollars
that have flowed from Atlantic’s bank accounts
into Australian projects moved Feeney to agree to
the first major print interview he has ever done
in this country. “If it wasn’t for Ken you wouldn’t
have got through the door,” he says happily.
It was inevitable that when Feeney and
Fletcher met they would become soulmates.
Enormously successful in their fields, they
shared a healthy dislike of convention. Feeney
admits he once owned a Jaguar sedan but points
out he purchased it second-hand. At the height
of his career, Fletcher drove a Volkswagen
Beetle he won in a card game.
“Ken was always fun,” Feeney says. “We first
met in Hong Kong when I was based there about
1982. He was giving tennis instruction to some
people I knew and we got along well. Then
when I moved to London about ten years later,
I heard he was in town so we got together. He was
miserable there. He was always saying he wanted
to go back to Australia. He was an Annerley
boy, he always wanted to go back to Brisbane,
so I said, stop whingeing about it, let’s go.
“Ken always knew someone, he always had
an in. Somehow he got us a free room at
[what is now the] Stamford hotel [in Brisbane’s
CBD], but then the manager found out about
it and we got bounced out of there. We went
up and down the coast, had a lot of fun and
when I left I said to Ken, ‘you stay and look
for opportunities’. That’s how it started.”
Actually, it started about 60 years earlier.
Charles Francis Feeney was born in 1931 in the
blue-collar township of Elizabeth, New Jersey,
the second child of three and the only son of
Leo, an insurance underwriter, and Madaline,
a nurse. (His paternal grandparents had arrived
BQW26MAY12FEE_14-19.indd 16
[Feeney] brought
a culture of giving
to a country that
doesn’t have
a history of it.
in the US from Ireland in 1890.) With two jobs
in the household the Feeneys weathered the
Depression and war years better than most, but
Feeney says: “Things were tough to come by.
If you were driving around in Elizabeth, New
Jersey, you’d keep looking out the window to
see if someone was throwing a brick at you.”
Leo was a devout Catholic and insisted his
family attend Mass regularly but Feeney does
not credit the church for his heightened sense
of generosity. “I was raised as a Catholic, but
I got up to go to church because I thought I’d
be hit by a bolt of lightning if I didn’t.”
If there’s something from his youth that might
have set his life on the path it has taken, it’s the
way his mother treated others. One example,
recounted by author O’Clery, is of Madaline
“happening past” in the family car each weekday
morning and offering a lift to a disabled neighbour
as he walked to the bus stop to get to work. He
never knew that she actually had nowhere to be
and left the house only to drive him. “I’d look
at something like that and I’d think, that’s my
mother. That’s the way she thinks things should
be and she feels better being like that,” he says.
Feeney showed acumen at an early age. As
a boy he caddied at a nearby golf course where
the standard caddy fee was $1.25 for nine holes
or $2 for 18. He avoided 18-hole players, figuring
he could squeeze two nine-hole players into
the same time span and pocket an extra 50¢.
In summer he stayed at the beach and rented
towels and umbrellas. When business was slow,
he sat in an amusement pier dunking machine
for a few cents a throw.
On graduation from high school in 1948, the
17-year-old joined the US Air Force. His fouryear stint saw him trained as a radio operator and
posted to Japan during the Korean War. More
importantly, it earned him the right to a university
education under the US government’s “GI Bill”.
After reading a Reader’s Digest article about
Cornell’s School of Hotel Management, he
applied and was accepted. Covering his living
expenses by operating a door-to-door sandwich
service for students (he estimates he made 700
sandwiches a week), Feeney graduated in 1956
with four months still to run on his government
scholarship. He headed to France for a semester
of political science at Grenoble University.
It was in Europe that Feeney took the first
steps towards making his enormous fortune. His
initial business venture was operating a summer
camp for the children of US Sixth Fleet personnel
based at Villefranche-sur-Mer, France. It was
there he met first wife and mother of his five
18/05/2012 02:20:27
Brothers in alms … (far left) Feeney with former
Queensland premier Peter Beattie and (above) his
late friend, 1960s tennis champion Ken Fletcher.
of the operation were used to prop up shortfalls
in another. When the US military started its
own duty-free sales arm and the government
passed legislation aimed at restricting the impact
of duty-free sales on the balance of trade, the
partners were all but wiped out. After paying
their bills and taxes, all they had left were those
two duty-free concessions in Honolulu and Hong
Kong. They proved a licence to print money.
When Feeney, Miller and their minor partners,
lawyer Tony Pilaro and accountant Alan Parker
(each with 2.5 per cent of the company), began
concentrating their attentions on the two airport
outlets in 1965, they were little more than tables
in the corner of the terminals, but they could not
have entered the market at a better time. Japan
had ended its postwar ban on overseas travel for
▲
children, Danielle, and stumbled on the potential
gold mine of duty-free sales. At the time, US naval
personnel serving overseas were permitted to buy
up to five bottles of spirits and have them shipped
back to their home port duty-free. Together
with Robert Miller, a fellow Cornell hotel school
graduate who was also working his way through
Europe, Feeney began selling alcohol to sailors
and arranging for it to be sent home. The business
took off. The two Americans began driving from
port to port all over Europe, meeting US Navy
ships as they docked and taking orders. They
expanded their range, adding perfume, watches
and cars. There was a mail-order arm and dutyfree sales to American tourists driving back over
the Canadian border. Almost as an afterthought,
they picked up the duty-free concessions at new
airport terminals in Honolulu and Hong Kong.
By 1964 they had 200 employees and operated
in 27 countries. And then it all went bad.
Feeney and Miller were good salesmen but
poor financial managers. Cash poured in and
flew out just as quickly. The profits from one part
I suppose in the
back of my mind
I was always one of
those guys who had
a disdain for money.
citizens the previous year and Japanese tourists
began flooding the airports. Feeney’s Korean
War experience had given him a smattering of
the Japanese language and an understanding of
the nation’s gift-giving culture. He built up the
Honolulu operation, then went to Hong Kong,
where the company pioneered the “tourist
package deal” concept. Feeney employees
would establish relationships with tour operators
who then brought their clients direct from
the airport to a DFS shop staffed by Japanesespeaking staff. “That’s when the business kind
of exploded,” he says. “We couldn’t wait on the
tables, we had so many customers. That’s when
I thought, oh my, this is a good business.”
He went looking for new opportunities.
Seeing that Japanese tourists had a stopover at
Anchorage, Alaska, as their flights refuelled en
route to Europe and back, he opened a dutyfree shop at the airport. It was an instant success.
He correctly predicted that Guam would
become a popular destination with the Japanese
and his salespeople were waiting when they
arrived. Feeney felt Saipan would be another
rich pasture for DFS but the tiny Pacific island
didn’t have an airport. So DFS built one.
At their peak, the partners ran more than 100
duty-free shops and expanded into hotel and retail
development. With no shareholders to answer to,
each year they’d split 90 per cent of the company’s
profits. Hundreds of millions of dollars flowed
into their bank accounts, making them among
the richest men in the world. Fabulous wealth
affected them in different ways. Miller developed
a penchant for Rolls-Royces, big boats and
bigger parties. Feeney grew more and more
uncomfortable. “I suppose in the back of my
mind I was always one of those guys who had
a disdain for money,” he says. “It had a value if
you wanted to buy something, but if you didn’t
want to buy something you didn’t need it.”
And Feeney was a person who didn’t want
to buy anything. “I always tried to live my life
as though nothing changed. People would say,
‘you can have a Rolls-Royce’. I’d say to that,
what do I want with a Rolls-Royce when I can
have a Volkswagen or a bike? Some people get
carried away with the juice.”
I ask Feeney to name the most extravagant
item he ever bought. He struggles for an answer.
It’s true he once owned several large homes,
including a run-down villa in the south of France,
but his refusal to renovate was a cause for tension
between him and Danielle (they separated in
1990 and Feeney later married his longtime
assistant Helga Flaiz, now 72). He paid for his
children to attend the best private schools, but
when they ran up large telephone bills at his
New York apartment he disconnected the phone,
put a map on the wall showing locations of the
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philanthropists
“That’s just our policy,” he says. “Giving
while living. Why leave anything behind? It just
creates problems. This way it will all be gone
and there won’t be any arguments. Let’s face
it, I’m not going to starve to death. I always
figured I’d have enough living money.”
I ask Feeney how much money he has.
“Let’s see,” he says, reaching into his trouser
pocket and pulling out four crisp notes. “Two
hundred bucks. Enough for both of us.”
Ken Fletcher didn’t find any commercial
opportunities that interested Feeney in Australia,
but his big personality paid huge dividends for his
countrymen. Regarded as the best player ever to
come out of Brisbane, in the 1960s Fletcher won
27 international singles titles and in 1963 the
Wimbledon and French men’s doubles titles. He
and Margaret Court won the only Grand Slam of
mixed doubles. More recently he was introduced
to a wider local audience through the writings of
his lifelong friend, author Hugh Lunn. To Feeney,
Fletcher epitomised the larrikin Australian and as
A
digital artwork: qweekend
I benefited from
education and
felt there was an
element of payback.
he regularly travelled to Brisbane to see his mate,
he felt a growing affinity with the country. “I liked
the beach atmosphere here,” he says. “I like
Australians; they’re no bullshit-type people. What
you see is what you get. It’s been rare that people
turn on their word here and I like the people that
I met. Ken had a particularly good group of friends
around him and I looked up to Ken in those days.
The first one I met was Hughie [Lunn]. I looked
at the business opportunities and even though
they didn’t seem positive, I felt if we could
find something to do down here we’d do it.”
In 1998, Fletcher introduced Feeney to then
Brisbane lord mayor Jim Soorley, who arranged
a dinner at the Irish Club with then University
of Queensland vice-chancellor Professor John
Hay. By the end of the meal Feeney had
decided to provide $10m to kickstart Hay’s
dream of an institute of molecular bioscience.
With additional funding from federal and state
governments, plus university funds and research
grants, the project grew to become a $200m-plus
institute. It was a blueprint for other projects
in Australia in which Atlantic funds have been
the magnet for further public and private
investment. While Feeney has donated $500m
to research and education in Australia, the total
amount of funding raised through his leverage
is estimated at $2 billion.
“What he did in this country wasn’t just an
academic exercise, it was a cultural change. He
brought a culture of giving to a country that doesn’t
have a history of it,” says former Queensland
premier Peter Beattie, whose government was
a major partner in Atlantic-backed projects. “John
Hay brought him to see me and we had a long chat
in the Executive Building. It was when we were
starting our Smart State program, so the timing
was perfect. Meeting Chuck was a humbling
experience. I have never met anyone in my career
so selfless, so committed to helping other people.
“He was tactically brilliant in what he wanted
to achieve. He wasn’t just about paying for people
in lab coats or research on the never-never. He
was outcome-focused; he needed to know there
would be long-term results, and that’s what
brought partners. He would come to me and say,
this project needs this much funding. I’ll put in
this much as long as you put in this much. Every
time he came to see me, Treasury got nervous.”
The biotech industry in Queensland was
almost non-existent when Feeney sat down for
dinner with John Hay at the Irish Club. Within
ten years it was a world leader, with 23 drugs in
clinical trial. With its final grant of $5m made in
May 2011 to a head and neck cancer research
centre, Atlantic had donated a total of $233m
in Queensland. When its current five building
projects are completed, it will have helped to
either build or expand 12 research institutions
ADDITIONAL Photography: getty images
closest public phones, and attached a strip of
coins with stickytape. He preferred a pencil to
expensive pens, walking to cabs and, until age
got the better of him, would always fly economy.
And then there’s that plastic watch. How much
did it cost? “I think it was $15 but for that it
must have come with an extra battery,” he says.
So if Feeney is a man who has no need for
money – is disdainful of it, in fact – the question
must be asked: why did he make so much of it?
“I’m a competitive guy. I wanted to be a success
and in business it’s measured by how much money
you make. It’s just that too often people are
inclined to think, I’m going to make a buck and
spend a buck. I feel that if you can make money,
you’re better off helping other people than helping
yourself. You can use your money to solve someone’s
problem, and the success of that type of business is
something you can’t appreciate until you do it.” An
example? “Well, we helped start a university in
Vietnam and all of a sudden it’s graduation time
and there’s a couple of thousand kids walking
down the stairs. You see them all and you realise
that if it wasn’t for someone like ourselves … ”
Feeney first experienced that feeling around
1980 when he started a fund to anonymously
pay the school fees of needy children. “I had
benefited from education and I felt there was
an element of payback,” he says.
Within two years he had decided to take his
philanthropy to the absolute extreme. Apart from
what he describes as “a generous settlement” to
Danielle and the children (originally $40m and
six homes, but increased by an extra $100m on
their divorce), everything Feeney owned went
into the foundation to be given away during his
lifetime. He says his children took news of his
plan “generally pretty well. They accepted it”,
and all five have taken what he terms “interesting
paths” in life. Juliette, 50, is a lawyer involved in
charity work; Caroleen, 49, is an actress; Leslie,
47, an academic. Diane, 44, founded and runs
a charitable foundation and Patrick, 41 (“super
smart with three degrees from Stanford
University”), is developing educational software.
Feeney’s decision to give away all his money
and assets was first sparked in the late 1970s
when he read an essay titled “Wealth”, written in
1889 by Andrew Carnegie, the US iron and steel
tycoon who gave away much of his fortune during
his lifetime to establish libraries, schools and
universities. Feeney shared Carnegie’s theory
that leaving excessive wealth to family could
be a burden, and bequeathing it to government
could see it frittered away, but he differed with
the Scottish-born industrialist on two points.
Carnegie ensured his name was written large
on every project he funded and, more crucially,
he gave away only part of his mammoth
fortune. Feeney decided to go all the way.
18 |
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in the state with a combined value of $1 billion.
Two years ago Feeney signed off on a single
donation of $102m to be split between the
University of Queensland’s Diamantina
Institute for Cancer, Immunology and Metabolic
Medicine at Princess Alexandra Hospital, the
Queensland Institute of Medical Research,
and the Queensland University of Technology.
“His influence has been profound,” says
Professor Michael Good, director of the QIMR
from 2000-2010, during which time Feeney
donated more than $50m to the institute.
“Queensland wouldn’t be one of the leading
research states in the country if not for his
initiative. He convinced the state and federal
governments to become involved. Because
of him we were able to build up significant
institutes and that has convinced leading
international scientists to come and work here.
“He’s very well read, follows everything very
carefully and because he knows so many people
he is able to put people together. We had a team
working on skin cancer research at QIMR. Chuck
knew someone in Arizona doing world-leading
work in the field and he put them together.
“His generosity will affect hundreds of
A C C 0 0 7 4 _ B _ Q W. p d f
Pa ge
1
millions of lives. For the past two years, I have
been at Griffith University working on a drug
to treat malaria. Chuck contacted me,
unsolicited, and said he’d like to help. He gave
the program $800,000. Every year there are
500 million new cases of malaria and a million
children die from it. If this vaccine works, you
can imagine the effect it will have.
“He is a very honest man; very humble with
a cheeky wink, but he’s a man who’s going to
make a difference to the world. It’s just
fortunate for us that, thanks to his friendship
with Ken Fletcher, Australia was one of the
places he came to.”
While he would happily let someone else put
their name on a building he had funded – as long
as they paid for naming rights – Feeney would go
to great lengths to avoid recognition, says Hugh
Lunn. “One night at a function a photographer
came up to him and said, ‘Are you Chuck
Feeney?’ He said, ‘no, that’s him over there’ and
pointed to me. The photographer came up and
shook my hand and thanked me for everything
I had done for science in Brisbane. It was very
embarrassing; I didn’t know what to say.”
Feeney says he had good reason for avoiding
2 3 / 0 4 / 1 2 ,
1 0 : 1 2
publicity about his wealth. “It attracts people
to you,” he says. “People who wish you no well
are interested in you for what they can get from
you. I didn’t want that, and in the end I didn’t
want the money and the life that came with it.
I never had a problem with that decision. The
trade-offs are found pretty easily. You didn’t
wind up with a new boat, but you wound up
helping someone and that is a great feeling.”
A feeling that never ceases to move Feeney,
regardless of how much it has cost him. As we
talk, he looks through the pile of documents on
his desk, trying to find a brochure about one of
his latest projects. Instead, he comes across an
unopened envelope. Inside is a thank-you card,
signed by the doorman and maintenance staff at
the New York building where Feeney and Helga
stay in his daughter’s apartment when they are
in town. He reads it and hands it across the desk.
“At Christmas we give them each $100, and
they’ve tracked me down to say thanks,” he says.
The man who has given away $7 billion takes
back the card and stares at it, obviously touched.
“Can you believe that?” he says quietly,
shaking his head. “They’ve gone to that much
trouble … all for a hundred bucks.” n
AM
He said, “Is this in
your price range?”
I said, “Ummm. . .”
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