Money Co.

As a teenager backpacking with buddies along the Riviera, I never breached the borders of Monaco. The place was prohibitively expensive, and the casino required a coat and tie, which we hadn't packed. So to lash Monaco to my imagination I had always run string through two geographical grommets, one on either side of the principality: Cap d'Ail, the place where Grace's Rover came to crumpled rest and where we stayed in a villa turned youth hostel and chilled the evening's vin blanc in the Mediterranean; and Menton, where we unfurled our sleeping bags in a schoolyard, only to be chased out by a fussbudget prefect at sunrise.

Upon first glimpsing Monaco two decades after getting run out of Menton on a Eurail, I was struck by how easy it is to tell the residents from the tourists. Whether staring slack-jawed at the Cartier windows or hopefully ascending the casino steps, the sojourners are all palpably in search of something. Residents, by contrast, all look hunted: the men by revenuers, the women by cellulite, the poodles by the gendarmes (there is one for every 60 residents) ready to impound them if they should deliver themselves of so much as a single crotte. In Monaco, the society chronicler Taki once observed, "One does not choose friends. It's a bit like being in prison. You talk to the people you're thrown in with."

So it is that baseliners coexist alongside hurdlers alongside time-trialers. To become tax-free residents they had to produce bank records establishing the filth of their richness; to renew that residence card they must prove either that they have lived in Monaco for at least six months of the previous year or that the principality is "the center of their interests"—in other words, that between tournaments or races they routinely alight at their soulless studio apartments. (Someone who has actually visited Krajicek's digs describes them as little more than a mattress on the floor, a stack of CDs and a mass of dirty laundry "that looked like it had been dropped from a great height." This is the habitat of a guy who, you'll recall, called female tennis players "pigs.")

Resident status is so prized that, once granted, athletes will do almost anything to retain it. There are slapstick tales of their rushing into Monaco, turning on the taps and flicking on the lights, trying to run up meter readings so their documentation will look more impressive when their permits come up for renewal. Australian tennis pro Mark Woodforde unavoidably missed the Monte Carlo Open last April when a sister in London fell ill, so he wrote an abject letter of apology to the authorities, lest his absence be held against him when he renewed his residency. "It doesn't work anymore simply to have an address and never be here," says a Monaco-based American lawyer with many international clients.

But what wealthy and healthy athlete wouldn't want to be here? "It's not exactly a great hardship," says Marcos Romagosa, an agent in International Management Group's Monaco office. Residents must cope with a negligible crime rate; the Nice-Côte d'Azur International Airport's being a six-minute chopper flight away; breakfasts of socca, a crepelike delicacy made from beaten garbanzo beans, served fresh off the griddle down at the market; and with the choice of clay or hard courts at the country club. There also looms the likelihood that they will bump into such resident lovelies as Helena Christensen, Claudia Schiffer and the herein-pictured Karen Mulder at jock commissaries like Stars 'n' Bars, a sports bar where a framed cover of this magazine, signed by the depicted, one Jus d'Orange Simpson, graces the doorway. In florid script J.O. reassures the owners, "I'm rooting for you!"

And if they should feel just a bit hemmed in by Monaco's paltry 473 acres, the residents can always hop into their Testarossas and head 90 minutes into the Alps to ski, or cruise the Riviera's littoral, or explore the Provençal backcountry with its mile after Peter Mayle of terra-cotta-roofed villages and parasol pines. To a Swede or a German or a Dutchman there is much to be said for life lived at a pace that should be unlawful for its languor and in weather so reliably satisfying that the local paper integrates an all-purpose forecast into its name, Nice Matin.

There is, of course, even more to be said for not being taxed at all, and that is where Gunnar Everhed comes in. He has one more cautionary tale to tell, about Michael Schumacher, the two-time Formula One world champion driver from Germany, and a former client. "He lived in Monaco, but wanted a second residence, in Italy or France," Everhed says, getting all rueful at the retelling. "I recommended Italy because it is so much easier to dodge the fiscal authorities, and there are lower taxes. While if you have a house in France, you are taxed again and again."

Though he had gone to Gunnar, though he had listened to Gunnar, Schumacher did something very stupid. He didn't do as Gunnar said. His manager went ahead and bought that villa in France anyway. Then Schumacher moved in, not very inconspicuously, with his dogs and cars and girlfriend. "Aha!" said the Clouseaus of the French tax police. "You are ici, nooooet in Monaco!" And the same German IRS, da Finanzamt, that turned the Grafs' world into a living hell wanted to know the provenance of every one of those 17 million francs Herr Schumacher's manager plunked down for that villa. All because he didn't stick by his principality.

"I tell all the clients that they must play the game," says Everhed.

Last year Ferrari paid Schumacher $25 million to drive for its Formula One team. He made another $8 million in endorsements. Of all athletes worldwide, only Mike Tyson and Michael Jordan outearned him. But ask Everhed what has become of his former client, and it is as if this international superstar who routinely stares down death has dropped off the face of the earth. "Last I heard, he was living in Switzerland," he says. "Or suddenly moved to Portugal."