Poor Little Rich Girls

How a charismatic success guru beguiled two heirs to the Seagram’s fortune and squandered more than $100 million of their inheritance

Photo by: Patrick Dodson / Courtesy of Albany Student PressNXIVM founder Keith Raniere uses ideas derived from Scientology and the writings of Ayn Rand in his teachings.

The heiress wanted to meet the Dalai Lama. She wanted the Dalai Lama to be her friend. She had been obsessed with him for two and a half years.

“I was literally in my bedroom one day listening to his tapes and thought to myself, ‘Wow, this guy is amazing!’” Sara Bronfman told an Albany, N.Y., AM radio host last year. When His Holiness arrived in town the next day, Bronfman could take credit for his presence.

During her dilettantish early 20s, Bronfman continued, she never would have conceived of such an ambition, but for the previous five years she had been immersed in Executive Success Programs (ESP), a self-help regimen administered by the local organization NXIVM (pronounced Nex-ee-um). It was an experience she found singularly emboldening.

Bronfman sensed a connection between the Dalai Lama’s teachings and her training. “The way he looks at things is very scientific and very much in line with the philosophy of NXIVM,” she told the host. “I said, ‘Well, that kind of sounds like what we do!’ And I thought, ‘Maybe I could introduce myself, and bring him here and introduce him to Keith.’ Because I think Keith is a scientist and also a great philosopher.”

Bronfman was referring to NXIVM founder Keith Raniere, a bespectacled 49-year-old with graying, shoulder-length hair. Raniere, who goes by the moniker Vanguard, bills himself as a “leader in human potential development” and has trademarked a philosophy he calls the Rational Inquiry Method. He is what you would get, said one former associate, “if David Koresh and Bernie Madoff had a child.” Over the past seven years, Raniere has earned the devotion of Sara Bronfman and her sister Clare. In that time, according to his former girlfriend and financial adviser Barbara Bouchey, Raniere has also squandered more than $100 million of the Bronfman liquor fortune, destabilizing one of New York’s most prominent business and social dynasties.

In NXIVM’s arcane system of ranking members by colored sashes and stripes, Bouchey ascended to the fourth stripe of the group’s green-sash tier. (In ascending order of rank, the NXIVM awards yellow, orange, green, purple and blue sashes.) As such, she is the highest-ranking of Raniere’s disciples to defect publicly from the group. “For years I was telling them that the scarves, the stripes, all the weird stuff needed to go. I mean, come on, the bowing? There were a lot of good things about NXIVM, and we were turning people off with the weirdness.”

A restraining order bars Bouchey from speaking publicly about the Bronfman sisters, who have sued her for breach of fiduciary duty and invasion of privacy. But in an affidavit made public in January, she said the sisters had ceded more than $100 million to Raniere and his executive success operation.

The pair remain staunchly loyal to NXIVM and Raniere, who appears to have curtailed his most profligate spending habits. (A roster of NXIVM coaches lists Sara, 33, and Clare, 30, as having received the organization’s orange and green sashes, respectively.) But they continue to spend what one former NXIVM associate estimates is $2 million a month waging Raniere’s and NXIVM’s numerous legal and public relations battles with various enemies.

With their trust funds drained, Bouchey said, the sisters have started borrowing against the inheritance they expect to receive upon the death of their 81-year-old father, Edgar Bronfman Sr.

Forbes pegged Bronfman’s fortune this year at about $2.5 billion. That number would be larger by a few orders of magnitude if not for the dismemberment of the Seagram liquor cash cow—including its divestiture of a near–25 percent stake in DuPont—at the hands of the sisters’ half-brother Edgar Jr. in his quest to become an entertainment mogul.

The costly antics of the wayward sisters are but another in a series of blows to the Bronfman legacy the past four decades. In 2007 Edgar Sr. was forced to retire after almost three decades as president of the once mighty World Jewish Congress, the liberal philanthropic organization known as “the diplomatic arm of the Jewish people,” after evidence surfaced that his trusted deputy, Rabbi Israel Singer, had embezzled more than a million dollars.

Three decades ago, the clan suffered public humiliation when, on the eve of Edgar Sr.’s wedding to the sisters’ mother, his eldest son, Samuel II, who had just graduated from Williams College, was abducted by a pair of kidnappers, one of them a New York City firefighter, and held for a $4.6 million ransom. The next year a jury acquitted the duo of kidnapping charges on suspicions that young Sam had been attempting to extort money from his father in retaliation for the anointing of his younger brother Edgar as heir to the Seagram throne.

But none of these shames match the strange contortions of the tale of Sara, Clare and the $100 million they gave up to the “philosopher” they call Vanguard.

Sara and Clare Bronfman are the products of Edgar Bronfman Sr.’s second marriage, to an English nightclub receptionist 21 years his junior. He met Rita Webb in Marbella, Spain, and like a lot of men, he fell hard for her fair-haired beauty and disarming guilelessness. The daughter of pub owners, the young Miss Webb was an unapologetic social climber. Renaming herself “Georgiana” after Edgar Sr. took to calling her “George,” she married him in 1975, gave birth to Sara the following year and had Clare two and a half years later.

In one of his three memoirs, Edgar Sr. wrote that Georgiana asked for a divorce “shortly after Clare was born.” The couple remarried for a brief stint in the early ’80s, a decision Bronfman termed “really naïve.” After the second divorce, she began a brief but tempestuous affair with Lorenzo Ricciardi, an Italian filmmaker in his 60s. He was arrested in 1990 for trying to kill her. In 2007, she married the British television actor Nigel Havers.

While Georgiana divided her time between New York, London and Kenya, the girls spent most of their childhood in England. They make scant appearances in Edgar Sr.’s memoirs.

Susan White, a family friend, recommended an ESP course to Sara. She enrolled in a seminar, as did Edgar Bronfman Sr. Sara was instantly hooked, and Clare, an amateur equestrian with ambitions to be an Olympic show jumper, followed soon after. In 2003, the sisters settled near Albany, working as ESP trainers. By October 2003 Edgar Bronfman Sr. had decided the group was a cult, an assessment he aired to a Forbes reporter, but it was already too late.

NXIVM is headquartered in a modest suburban office park on the outskirts of Albany. On a Friday afternoon in July, I visited the center with John Tighe, a 53-year-old retired waste-management worker for the city of Saratoga Springs, N.Y., who has been chronicling NXIVM on his blog, Saratoga in Decline.

Tighe frequently mocks NXIVM on his blog, and a few concerned Saratogians have started a legal defense fund for him. Tighe marvels at the paranoia the organization has instilled in many former associates but remains unbowed.

My son, a cult leader …” James Raniere said. “It’s just not so.” The elder Raniere is a retired advertising executive. He responded to my inquiries, he said, primarily to defend his deceased wife, Vera. Many in the NXIVM community believe that Keith Raniere’s mother was an abusive alcoholic, and this, James contends, could not be farther from the truth. “She was the best mother I’ve ever come across,” he said. Keith’s first five years were spent in Brooklyn before the family moved to Rockland County for better public schools. By coincidence, James handled his agency’s Seagram’s account and said he knew Edgar Bronfman Sr. professionally during the 1970s.

Records indicate that Keith graduated in three years from Troy’s Rensselaer Polytechnic Institute in 1981. James told me his son spent the ’80s “drifting.” Bouchey believes that Keith toiled for much of the decade as a salesman in a series of “multilevel marketing” operations, a business he learned about from a girlfriend whose father was an Amway salesman. In 1990 he founded his own multilevel-marketing firm, Consumers’ Buyline, reselling $14 annual memberships in Purchase Power, a Texas discount club, for more than $200 a year. He was forced by authorities to shutter the operation in 1993 amid widespread allegations that it was a pyramid scheme.

NXIVM is a potent cocktail of ideas derived from self-help, therapeutic hypnosis, Scientology and the writings of Ayn Rand—all delivered through the classic mechanisms of the pyramid scheme first employed with Consumers’ Buyline. Its origins date to 1997, when Raniere met Nancy Salzman, a registered nurse. Their relationship was initially romantic, but, in Bouchey’s telling, he cut off their physical relationship abruptly over an apparent “ethical breach.” Still, Raniere saw potential in Salzman’s expertise in neuro-linguistic programming, a therapeutic form of mind control used to hypnotize patients out of habits like smoking and binge-eating.

From the jargon-loaded worksheets and grammatically scattershot texts that make up Raniere’s 240-page “Rational Inquiry Method” patent application, it is hard to tell what so many have found life-changing about NXIVM. Many extol the method for its supposed “mathematical” elegance. Skeptics are more likely to credit its appeal to a combination of long classes, the heavy repetition of key concepts, the twisting of language and a cannily calibrated sequence of attacks on participants’ emotional vulnerabilities.

Raniere has consistently presented himself as a child prodigy. In 1988, he was inducted into the Mega Society, a sort of ultra-Mensa for individuals with IQs of 176 and higher. An Albany Times-Union profile repeated Raniere’s dubious claims that he “tied for the state record in the 100-yard dash” and required “only two to four hours of sleep” each night.

Then there is his notorious charisma. Even the 2003 Forbes investigation of his “cult of personality” referred to his “disarmingly warm smile.” Over the years, he has left the day-to-day operations of his various enterprises to his revolving cast of disciples-cum-girlfriends while devoting his own time to an assortment of projects with male collaborators.

Bouchey said she was “creeped out” by Raniere when he first began pursuing her. “On the last day of class, he presented me with his personal copy of Atlas Shrugged (Random House, 1957), with all his highlighting and everything, and he looked at me very seriously and said, ‘You’re Dagny,’” she remembers, a reference to the Ayn Rand novel’s heroine. Dagny is dragged down by an endless string of losers before she submits to the industrial superman John Galt. “It was obvious that he was supposed to be John Galt.”

Like Rand, Raniere divides the population into “parasites” and “producers.” No. 11 of NXIVM’s 12 “commandments” requires all followers to “pledge to ethically control as much of the money, wealth and resources of the world as possible,” since “it is essential for the survival of humankind for these things to be controlled by successful, ethical people.”

Bouchey said Raniere’s libertarian ravings are a “sideshow,” but the wealth within the NXIVM network is formidable. It includes former Enron executive Stephen Cooper, Black Entertainment Television co-founder Sheila Johnson, former U.S. Surgeon General Antonia Novello and actress Goldie Hawn. Richard Branson has hosted a NXIVM course on the Caribbean island he owns. Branson is listed along with Sara Bronf-man as one of the two “benefactors” of the 2008 Albany A Cappella Innovations conference, the culmination of Raniere’s brief obsession with a cappella singing.

NXIVM is much like its forebears in that it has attracted zealous devotees and equally vehement communities of apostates. But perhaps no group has succeeded as thoroughly as Raniere’s at peddling the promise of “executive success” to people with so little actual need for success in any conventional sense—the scions of the wealthy.

There is a certain genius to targeting such people for a “success” program, since it eludes any requirement to help followers achieve material results: They are already rich. Yet the program clearly filled a gap in the lives of Sara and Clare Bronfman. A former NXIVM employee familiar with both told me that Clare struck him as withdrawn and awkward with people, whereas the more sociable Sara’s malaise was a more typical case of someone with too many parties to attend and too few responsibilities to uphold. Both sisters likely suffered from an inferiority complex in the shadow of their self-made socialite mother.

The Bronfman family has of late exhibited a rapidly diminishing ability to control its own wealth. In 2003 Edgar Bronfman Sr., who initially encouraged his once directionless daughters’ journeys of personal growth, said he believed Raniere was operating a cult. He has since remained silent about Raniere.

Until Sara and Clare Bronfman bolt from NXIVM, anyone who flees Raniere’s discipleship risks legal hell. Several have been bankrupted, and few have escaped unsued. The defection, meanwhile, of Bouchey, who retained power lawyer Nathan Goldberg (of Allred, Maroko & Goldberg) to represent her in court against the Bronfmans, could prove to be Raniere’s undoing. Bouchey controlled the purse strings of Raniere’s operation for a decade, until she left abruptly with eight other followers in April 2009. In a deposition taken that summer, she detailed how the sisters handed over their wealth to Raniere.

When the sisters’ trust funds ran out, Bouchey took the pair to Citibank to open two $20 million lines of credit using their future inheritance as collateral—a move that first required a change in trustee. Because Edgar Sr.’s father, Samuel, structured the Bronfman family trust to favor younger generations, there was little any concerned party could do to stop them.

It is no accident Sara and her sister were ripe targets for Raniere’s capitalist mysticism. The Bronfman family has floated for generations on a fortune amassed by bootlegging Canadians during Prohibition. Its scions can hardly be blamed for losing their grip on reality. And who, without a tether to reality, could be expected to hold on to money? Lucky for the Bronfmans—and for Raniere—they have plenty more to lose.

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