Patricia Kluge's Downfall Billionaire Divorcée

Patricia Kluge: The Demise Of A Billionaire Divorcée

NEW YORK – Billionaire Divorcée Patricia Kluge's DownfallPatricia Kluge had it all—beauty, an exotic past, and a rumored “cool billion” post-divorce. So how did she lose it all, from her 960-acre Virginia winery to her 45-room mansion? Sandra McElwaine on Kluge’s dizzying fall.

The saga of Patricia Kluge is one of glamour, sex, power, and money—and the luxurious lifestyle she so carefully crafted has crashed and burned. The era of conspicuous consumption for the ex-wife of the late billionaire John Kluge came to an end last month, when several banks foreclosed on an elaborate 960-acre winery and real-estate development she had established in Charlottesville, Virginia, in 1999. And just last week, Bank of America delivered the coup de grace, filing suit against Kluge, claiming she defaulted on three loans worth $23 million. The bank stepped in and seized Albemarle, her opulent, 45-room Georgian mansion, adjacent to Thomas Jefferson’s Monticello.

Marie Ridder, a prominent Virginia environmentalist, dined on several occasions at the manse, where Kluge, a statuesque society vintner, 62, entertained movie stars, politicians, and international luminaries at pheasant and quail shoots, fox hunts, and lavish black-tie dinners. Albemarle is over the top and overdone, Ridder says: “It’s really ridiculous and very pretentious. There were these grand busts of people everywhere, and even a private chapel. It was imitation British grandeur without the history to go with it.”

Kluge and her third husband, former IBM executive William Moses, tried to save their pastoral property and stave off creditors in 2009 by putting it on the market for $100 million. (The price has been reduced to $24 million.) Last June, the couple began auctioning off an assortment of treasures, including a massive 8-carat cabochon ruby ring, several initialed shooting guns, silver Faberge plates, and a well-worn frock by Arnold Scaasi, who designed Kluge’s wedding gown.

Although these items fetched more than $15 million, Kluge and Moses were forced to retreat to far less ostentatious digs and now reside in a 6,000-square-foot spec home, the only house Kluge ever constructed on the land adjacent to the winery. (There are also reports she has purchased several apartments in Marrakech, Morocco, a resurgent haven for the chic and well-to-do.)

Kluge’s neighborhood is in a tizzy. How could the woman who was once labeled the “Richest Brit in Virginia” be down and out in Charlottesville?

Kluge’s neighborhood is in a tizzy. How could the woman who was once labeled the “Richest Brit in Virginia” be down and out in Charlottesville?

“Nobody knows anything, and nobody sees them anymore,” says a longtime resident. “She’s become a laughingstock, and that’s sad.”

Born in Iraq, the daughter an English translator father and a half-Iraqi half-Scottish mother, Patricia Maureen Rose attended a French convent school in Baghdad. She moved to London at 16 and then burst upon he swinging ’60s scene as a belly dancer in a sleazy nightspot. There she met and married her first husband, Russell Gay, publisher of Knave, a steamy tabloid, and became a member of his soft-porn enterprise and a celebrity by posing nude and contributing to a cheeky sex-advice column.

A saucy, sultry 5-foot-10, with long, dark hair, she created quite a stir and did not lack for admirers. ”I was hot looking in my twenties,” Kluge told The Daily Telegraph. “I was gorgeous. It was a no-brainer.”

Eventually Kluge tired of her spicy role and opted out. After ditching her career and her spouse, she headed for New York, where she met the married and mega-rich John Kluge, chairman of Metromedia and 35 years her senior. (John Kluge ultimately sold his company to Rupert Murdoch for a reported $4 billion and was dubbed the richest person in America by Forbes. Metromedia’s radio and television stations would later form the core of what would become the immensely successful Fox TV network.)

When Kluge laid eyes on the exotic former centerfold, he was smitten and, before long, divorced. “John was so in love, he even converted to Catholicism to marry her,” said Barbara Sinatra, a family friend.

John and Patricia tied the knot in St. Patrick’s Cathedral in 1981. According to Marie Ridder, his wife’s belly dancing became the main topic of John Kluge’s conversation. “It was startling to sit next to him at dinner and have him tell you what an expert she was,” says Ridder.

With the new wedding band came a new persona and starring role—society maven. The Kluges adopted a son, John Jr., began construction on Albemarle, and acquired a Palm Beach villa, apartments in New York and London, and a shooting lodge in the Scottish Highlands, close to Balmoral. Patricia Kluge tried to ingratiate herself with her neighbor the queen, but was continually snubbed. Finally one Christmas the queen sent over a gift of a Labrador retriever, indicating a social benediction of sorts.

The Kluges’ foray into the high-powered whirl of Palm Beach benefits proved more problematic. When the couple was asked to host a soiree for Prince Charles and Princess Diana, the British tabloids trumpeted the “Naked Truth,” revealing Patricia’s shady past, along with nude photos and the name of her racy movie, The Nine Ages of Nakedness. The couple quickly withdrew from the royal welcoming committee and scuttled off to an undisclosed location. The scandal, she said, “was the best thing that ever happened,” because she learned exactly who her friends were. Even Prince Charles, she claimed, “sent a note” when, a few years later, they were back in the news. John Kluge wanted to split and was willing to ante up. According to The New York Times, “It sounded like a divorce made in heaven, which was refreshing, since everyone had had enough of the other kind.”

Speculation was that Patricia received a cool $1 billion, the largest divorce settlement ever, along with several of their homes in order to liquidate the nine-year union. This startling sum alone was enough to stir up the local gentry, but Patricia’s close connection to the dashing Douglas Wilder, Virginia’s first elected African-American governor, drew even greater scrutiny. And when his helicopter was frequently seen whizzing back and forth between the State House in Richmond and her elaborate pad, a firestorm of publicity erupted. Both vehemently denied any impropriety, saying they were strictly friends, but insiders recall the relationship as “a good romance” and “a terrific fling.” (Wilder is the former mayor of Richmond, and Kluge has been married for 11 years to Moses, with whom she started the extravagant winery. John Kluge died in September.)

Now all their plans are smashed. On Feb. 15, Albemarle House is to be sold by creditors on the steps of the Albemarle County Courthouse. (Rumors abound that Patricia is trying to disassociate her name from the entire process.)

I tried to reach both Moses and Kluge and left messages at the winery, but got no response. When I called The Farm Shop, a café and general store on the property, on Monday morning I was told the bank had taken over and the couple were no longer there.

What precipitated this devastating fall?

Hubris, over-expansion, the recession, and naivete. Million-dollar French wine masters, imported oak barrels, boxes specially designed by Viscount Linley, and overpriced consultants do not produce profits. Nor do $75-a-bottle wines. Like yacht and horse racing, wine making is a wildly expensive proposition, says Michael Mondavi, founder of Folio Wines. “It’s a cutthroat business,” he says from his vineyard in Napa Valley, California. “To establish a brand is extremely capital intensive, and you have to be prepared for seven to 10 years of negative cash flow. If you can weather that storm, you’re generally OK, but if you haven’t planned for that, it can be critical.”

According to local vintners, Patricia Kluge way overspent and overproduced, and tried to go national and global before establishing a regional market.

“Unless you have an unlimited budget, to be taken seriously in this business you have to give it 120 percent of your time,” says Mondavi.

So, was this a business or a hobby for Kluge?

No one can answer that question.

An earlier version of this story said that Douglas Wilder is mayor of Richmond, Virginia. Wilder was mayor from 2005 to 2008.

Sandra McElwaine is a Washington correspondent for The Daily Beast. She has been a reporter for The Washington Star, The Baltimore Sun, a correspondent for CNN and People, and Washington editor of Vogue and Cosmopolitan. She has also written for The Washington Post, Time, and Forbes.

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