The Queen and Her King : Leona and Harry Helmsley Own 27 Hotels, but Income Tax Evasion Charges Have Cast a Shadow Over Their Fairy-Tale Existence

Leona and Harry Helmsley emerged from a silver stretch limousine under slate-gray skies a little more than a week ago to be fingerprinted, photographed, booked and arraigned among drug dealers and thieves in the Manhattan criminal courthouse.

Clad in a fire-truck-red coat-dress with blue velvet lapels, Leona Helmsley held her head high, linked arms with her husband and smiled at the mass of reporters outside the courthouse.

Asked for comment, they replied only, “Good morning.”

Helmsley, asked further what he considered to be his greatest achievement, said “Marrying her.”

The billionaire baron and baroness of the hotel industry stand accused in federal and state indictments of evading $4 million in income taxes between June, 1983, and April, 1986, allegedly by charging renovations, furnishings and household expenses for their Greenwich, Conn., mansion to their hotel and real estate businesses and failing to report the amounts on their personal federal and state income tax returns. The Helmsleys pleaded not guilty to all charges and their lawyers, in a prepared statement released at their second federal court appearance last week, said, “The Helmsleys will fight the charges in both cases because they are false and malicious.”

Hotel, Real Estate Empire

The Helmsley $5-billion real estate empire includes 27 hotels, seven of them luxury establishments in New York City led by the 1,051-room Helmsley Palace and the 800-room Harley (so named by joining the couple’s first names) that has been renamed the Helmsley.

Their personal empire includes the 28-room, 26-acre, $8-million estate in Greenwich, which features a walk-in silver vault and an Italian marble pool; a penthouse duplex apartment in the Park Lane Hotel, complete with a living room on each floor, a greenhouse and a pool; and a Palm Beach penthouse, which they jet to regularly in their B.A.C. 111, a British-made plane, similar to a DC-9.

The Helmsleys--whose estimated personal worth is $1.4 billion and who paid $270 million in taxes and gave $35 million to charity over the past five years--are accused, among other allegations in the 188-count state indictment, of billing on April 19, 1984, a white lace and pink satin dress and jacket and a white chiffon skirt worth about $2,000 as “uniforms” for one of their hotels.

But making headlines is not unusual for the Helmsleys.

Charitable Donations

Advertisements claiming that the Helmsley Palace is the “only palace in the world where the queen stands guard” and conspicuously featuring its monarch, Leona Helmsley, have filled newspapers and magazines across the country. Harry Helmsley is said to own a quarter of Manhattan and has often been a part of development projects throughout the city. In better times, the couple could be seen dancing among the glitterati of New York at charity balls as often as three times a week. In 1986, the Helmsleys gave $33 million to New York Hospital--the largest individual contribution to the medical facility since 1927.

They did not always live this regally.

Henry Brakmann Helmsley was born March 4, 1909 in the Bronx into a modest Protestant family, the oldest son of a notions buyer for a wholesale dry goods firm. He began working to help support his family as an office boy when he was 16 and was paid $12 a week by the real estate company he would eventually own. Seven years later, he was an officer of the company, collecting rents and managing properties in the Hell’s Kitchen area of New York. Seven years after that, his name was on the door of the firm, Dwight, Voorhis & Helmsley.

During World War II, Helmsley’s poor eyesight exempted him from military service, but he was hardly idle. He began acquiring and managing commercial land that had been foreclosed during the Depression, thus laying the foundation of his real estate domain. In 1955, the company became Helmsley-Spear Inc., today one of the largest brokerage companies in the country.

“I’ve always wanted to be the biggest real estate man to come down the pike,” Helmsley said in a 1986 interview.

His holdings include part ownership of that cynosure of the New York skyline, the Empire State Building, a site he told an interviewer in 1986 he could not resist because “every morning you would look out of the window and the building is staring you in the face. So, you’d say, ‘Well, I gotta have it.’ ”

He is known for his artful ability to cut deals, but also for his adherence to their terms once the deals are done.

From equally humble beginnings was born Leona Mindy Rosenthal on July 4, 1920 in the Flatbush section of Brooklyn. The daughter of a milliner, she studied English for two years at Hunter College before quitting to become a model using the name Mindy Roberts, then posed in ads as a Chesterfield cigarette girl. Soon after, she married Leo Panzirer, now a retired lawyer in New York, and bore her only child, a son named Jay Robert Panzirer, who died March 31, 1982, of a massive heart attack at the age of 40.

From Receptionist to VP

She divorced her first husband in 1959 and began working as Leona Roberts at the New York real estate firm of Pease & Elliman, where she rose from receptionist to senior vice president, selling apartments that were becoming cooperatives on the Upper East Side. When the company formed a cooperative division, Sutton & Towne Residential, she became its president.

Neither Helmsley would agree to be interviewed for this story, but Leona Helmsley has been quoted in the past as saying that Harry Helmsley asked to meet her because she made so much money in real estate commissions.

In 1970, he hired her as a senior vice president for $500,000 a year at Brown, Harris, Stevens, Inc., a Helmsley real estate subsidiary. Two years later, Harry ended his childless marriage of 33 years and the couple were married that April. Before marrying Helmsley, Leona had married for a second time, to Joseph Lubin, now a retired garment industry executive living in south Florida, according to her daughter-in-law, Mimi Panzirer.

“Neither the subject of Leo Panzirer, nor the subject of Joseph Lubin was ever to be brought up,” Mimi Panzirer, who runs her own design installation company, Panzirer Purchasing Inc. in Casselberry, Fla., said in an interview with The Times. “Leona made that very clear.”

Harry crowned Leona queen of his hotel empire in June of 1980, naming her to replace him as president of the Helmsley Hotels, while he remained chairman. He had recently acquired the Hospitality Inns from Standard Oil Co. for $36 million and renamed the chain of hotels and motels across the United States the Harley.

“It was Harry’s idea,” Leona Helmsley said in discussing her new job a month after it was announced. “He thinks I work hard, he thinks I deserve it, he thinks I’m good. . . . He said the best thing about it was that the board of directors meeting was over when we got out of bed.”

It seemed the perfect match. He was the first to say that he preferred the bottom line of deal-making to the details of managing his hotels. She had a flair for decorating and a passion for the minutiae of operating the establishments. She accepted her responsibilities with relish, visiting the hotels unannounced to inspect the service, often to the dismay of her employees, whom she would roundly take to task for every failing, small or large.

“I know if a bulb is out in Room 14 of the Harley before the manager does,” Leona Helmsley told Jane Maas, an advertising agent who described the experience of working for her in a December, 1985, article in Savvy magazine. “I know if there’s a torn pillowcase at a suite in the Palace. I read every comment card guests filled out from every one of the hotels, especially the negative ones. And I answer them personally.”

But when she took over the helm in 1980, sources say, she demanded that her husband fire numerous employees. The reports of discontent among her subjects are legion and, in fact, some observers believe that her imperious manner of treating employees may be coming back to haunt her. At least two dozen former employees are reported to have testified before the grand juries that drew up the indictments.

“She is brilliant, but absolutely impossible to work with,” said one source in the real estate market, who preferred to speak on background, as did nearly everyone interviewed for this story. “She is very tough, but she is talented.”

By all accounts, there is one person who never feels Leona’s wrath and that is “her Harry.” Until recently, she threw birthday parties for Harry, where her 200 guests wore “I’m Just Wild About Harry” buttons and Harry wore the largest button of all: “I’m Harry.” For party favors, her guests would receive T-shirts with Harry’s baby picture or music boxes that play “I’m Just Wild About Harry,” according to news accounts.

“They are devoted to each other,” said one former employee, who also refused to be quoted by name. “There is no question of the fact that she has also changed his life for the better. He is more fun-loving and outgoing than he was before he met her. The difference is night and day.”

Their fairy-tale existence began to unravel slightly in 1982, when they made headlines in Florida for suing Jay Panzirer’s third wife and estate soon after he died leaving no will.

Panzirer had been president of Deco Purchasing and Distributing Inc., a wholly owned Helmsley subsidiary that provided amenities for its parent company’s hotels and office buildings. Seven days after Jay’s death, his third wife, Mimi Panzirer, said she received a 30-day eviction notice from her parents-in-law to vacate her home in Maitland, Fla., which was owned by Deco. She challenged it in court, asking for a 30-day extension, which she was granted, so her stepson could finish high school.

When Panzirer asked her step-father-in-law why he was evicting her, she said he told her that “he needed the money, quite coldly, not nastily, not vindictively, but in great detail. He laid out the expense of the house as compared to today’s market value and said he could no longer amortize the cost against Jay’s salary because he had died.”

In all, according to published accounts, the Helmsleys and Deco filed more than six lawsuits and/or claims against Mimi Panzirer and her late husband’s estate in the four years after he died.

Leona Helmsley sued Mimi Panzirer for an $18,000, 24.48-karat white topaz ring surrounded by 136 diamonds that Helmsley said she had lent her daughter-in-law in January of 1982. Helmsley eventually dropped the suit, according to Panzirer, who claimed her mother-in-law bestowed the ring as a gift at her grandson’s bar mitzvah more than a year before.

Leona Helmsley also filed a successful claim against the estate for $100,000 plus interest of $46,092, contending that she had lent her son the money to buy a piece of the Helmsley Palace.

Finally, Harry Helmsley sued the estate for the cost of shipping his stepson’s casket back to New York for the funeral. The casket had been too big for the cargo door of the Helmsley’s private plane, and had to be sent back on a commercial jet, which cost about $7,000, according to Mimi Panzirer.

The estate was finally settled in September, 1986. Asked why she had pursued the estate’s assets so vigorously, a spokesman for the Helmsleys told a reporter in early 1987 that Leona Helmsley doesn’t discuss family matters.

Prior to her husband’s death, Mimi Panzirer said her relations with the Helmsleys were “very cordial.”

Testified With Immunity

“We spent Thanksgiving each year in Palm Beach with them. They would spend Christmas with us in our home in Maitland,” Panzirer said in a telephone interview. “I would shop for all the kids, wrap the gifts and say they were from Leona and Harry; they didn’t like to be called Grandma and Grandpa.”

The web of good fortune untangled further in late 1986 when Leona Helmsley testified with immunity that she failed to pay $38,662 in sales taxes on hundreds of thousands of dollars of jewelry she had bought in 1980 and 1981. According to published accounts, empty boxes ostensibly containing the baubles were shipped from the fashionable Van Cleef & Arpels to an out-of-state address, while she, in fact, took the jewelry with her from the store. Although only the storekeeper was charged with the tax evasion scheme, Helmsley had to contend with press reports about her admission that she hadn’t paid sales tax on the items.

Late that year also the couple left for several months in Barbados, skipping their annual Christmas party, amid tabloid reports on their billing procedure for renovations to Glenellen, their Greenwich home. The New York Post’s investigation reported what ultimately became the meat of the indictments.

Two weeks ago the Post reported that when the Helmsleys returned from Barbados in 1987, they left several bills unpaid. In interviews with The Times, two of the proprietors owed money confirmed the reports. Ann Stoute, who operates Stoute’s Car Rental, said that the Helmsleys paid one month’s car rental and owe $1,329, or about 80% of the total.

“We have repeatedly submitted bills to no avail,” Stoute said. “I’m sure I’ll not get the money. It’s not worth it to sue.”

The Helmsleys also owe a balance of about $4,500 to Barbados Security Kennels for the two guards and three dogs they rented for protection, according to the wife of the owner, Keith Laurie. A spokesman for the rental agent who had made the Helmsleys’ housing arrangements and who told The Times he is owed $3,500, said he was referring the matter to his lawyer. The Helmsleys have not responded publicly to the allegations about the outstanding bills, and could not be reached for comment.

When the Helmsleys appeared in federal court last Thursday to enter pleas to the 47-count indictment that the U.S. Attorney served on them, they were again elegantly clad and self-assured. They appeared relaxed and jovial, chatting with their lawyers as they sat waiting for the judge to arrive. They pleaded innocent to the charges, just as they had in state court the week before. This time, though, the court ordered them to turn in their passports.

Outside the courthouse, as the cameras rolled and reporters pressed against the police barricades for comment, the Helmsleys were asked if they were innocent.

Before the numerous security guards could whisk them into the waiting limousine, Harry Helmsley said with dignity, “Of course we’re innocent.”