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money co.
Alexander Wolff
February 21, 1997
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February 21, 1997

Money Co.


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Once you learn that Gunnar Everhed is Swedish, two things about him don't surprise you: that he has intimate knowledge of the confiscatory tax codes of northern Europe and that he regards the recent travails of German tennis star Steffi Graf and her father, Peter, with an abundance of Hammarskjöldian compassion. "Such a pity," says Everhed, whose business is advising foreign nationals, primarily athletes, on how to establish and maintain residency in the Mediterranean tax haven of Monaco. "And so unnecessary."

If only the Grafs had come to him a dozen years ago, Everhed says, they might have avoided all the unpleasantness now besieging them, from the tax-fraud charges to the embarrassing revelations of sexual indiscretions, to Peter's humiliating prison sentence of three years and nine months. Actually, Everhed says, "to come to me is not enough. A client must also listen to me. And the client must do as I say."

The Grafs could have easily cleared the first hurdle of tax-free residency in Monaco: a bank account of 500,000 French francs (or roughly $100,000). But telling them that they should have made the move today is like telling Mary Lincoln that she and Abe should have rented a video instead of going to the theater. Still, Gunnar's admonition bears repeating so long as there remain sportsmen and sportswomen who haven't yet read the chapter in The Pro Athlete's Primer that falls somewhere between Keep Your Eye on the Ball and It Ain't Over Till It's Over: Get Thee and Thy Sweat-Gotten Millions to Monaco.

Once a playground for tycoons, courtesans and nobility, Monaco has been a company town for the jockocracy ever since tennis players Bjorn Borg and Mats Wilander bivouacked there during the 1970s and '80s, seeking refuge from Sweden's compulsory military service, a marginal tax rate upwards of 85% and public disclosure laws. Now tennis's Richard Krajicek and Thomas Muster count themselves among Monaco's 30,000 residents, as do athletes from such other sports as track (pole vaulter Sergei Bubka, sprinter Merlene Ottey and hurdler Mark McKoy), auto racing (Gerhard Berger and Jacques Villeneuve), rally driving (Colin McRae, Carlos Sainz) and cycling (Toni Rominger). Together they're exerting outsized influence on the principality's economy, social life and international image.

Indeed, this location, location, location—it's where Suzanne Lenglen served and Johnny Weissmuller swam; where Princess Grace's lady-in-waiting was Virginia Gallico, widow of sportswriter Paul; where Prince Rainier keeps his private collection of 85 vintage automobiles—seems perfectly matched with vocation, vocation, vocation. The offices of the International Amateur Athletic Federation (the world governing body of track and field), the General Association of International Sports Federations, the International Association Against Violence in Sport and the European operations of tennis's ATP Tour can be found in Monaco, as can three of the highlights of the sporting calendar, the Monte Carlo Grand Prix track meet, the Monte Carlo Open of tennis and the Monaco Grand Prix. Every May sidewalks morph into grandstands and parking garages into pits so that Formula One drivers might travel the 78 earsplitting circumnavigations that make up the race. With September comes the World Push Championship, in which two-and four-man teams turned out in shorts push a wheeled bobsled on rails down the long quay of the port, then hop in like common hobos to see how far they can coast. "It does look kind of funny," concedes Prince Albert, the second of Rainier's three children, who has represented his country as a bobsledder in three Winter Olympics and never misses the Monaco event.

Monaco takes its name from Portus Herculis Monoeci, the legendary port of Hercules, so there was muscularity in the place's heritage even before a Genovese swashbuckler named François Grimaldi, posing as a monk and concealing a knife beneath his habit, seized it for Albert's forebears in 1297. For most of the seven centuries after that bit of derring-do there wasn't much to rule over, just penury and bleak rock. But in 1858 the principality felt the first stirrings of the gaming industry that would be its salvation. Prince Charles III ordered the erection of a casino on an outcropping that came to be known as Monte Carlo, and the first gambler there was a winner, pocketing two francs. Unfortunately, it had cost him more than 50 francs for the four-hour coach ride from Nice and the perilous mule-borne descent to Monte Carlo itself, and the casino soon went bust. Only after the French government extended the railroad to Monaco in 1868 did the suckers start streaming in so steadily that the Grimaldis could abolish all taxes.

The casino is where Dick plied Liz with diamonds, where Mata Hari was revealed to be a spy and where to this day few pilgrims enter without rubbing for good luck the statue of the French king Louis XIV in front of the adjacent Hôtel de Paris. Earlier in this century, in what might be characterized as an attempt to diversify the economy, Monte Carlo introduced cabaret-style entertainment, enlisting a number of showgirls, including one American who, legend has it, was sunning herself on a balcony at the Hôtel de Paris one afternoon with a towel draped just so. Suddenly a wolf whistle cut the air, and she discovered to her horror that a rogue gust of wind had rearranged her concession to modesty.

"I see you're no gentleman!" she said indignantly, glaring at her admirer and clutching her serviette.

"I see you're no gentleman, either," he called back. His riposte so disarmed her, the story goes, that the two were eventually married.

Romance like that was of a piece with Monaco's gambling trade and, after Rainier married American movie star Grace Kelly in 1956, its international glamour. But the image of Cash and cachet has been gradually recast over the past two decades. While the Grimaldi gilt has been tarnished by tragedy and scandal, the industries of banking, communications and trade have grown so much in the principality that gaming now accounts for only about 4% of Monaco's economy. In deference to this new order, in which financial status counts as much as social rank, it's no longer appropriate to describe residents as "the idle rich." They're now "high-net-worth private individuals." Nor is Monaco a "tax haven" or, worse yet—this is Somerset Maugham's phrase—"a sunny place for shady people." It is, according to the government, "a tax-efficient center of commerce." Clean, mercantile and international, sports fit in with the palace's vision of the principality's future while retaining a whiff of the storybook aspect that has been missing in Monaco since 1982, the year that Grace died.

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