Buddy Fletcher: Financial Genius — or a Fake?
Young, African American, and rich, Buddy Fletcher was a dream alumnus for Harvard—a Wall Street philanthropist who gave millions to endow professors and support civil rights. And then his whole world came tumbling down.
Fletcher and Fowlkes moved comfortably through New York society, regularly inviting friends, potential clients, and neighbors to soirees at Apartment 52. Fletcher’s staff included chefs for his home and office and a chauffeur, who drove, variously, a Porsche, a Mercedes, a Jaguar, and a Bentley. All the amenities were necessary, Fletcher told BusinessWeek, to convince investors who might be skeptical of his youth and experience: “When we call a company and say we’d like to invest millions of dollars when other investors are shying away, sometimes they don’t take us seriously.”
Fletcher’s ascent couldn’t have come at a better time for Neil Rudenstine, Harvard’s president from 1991 to 2001. Perhaps the most liberal president in school history, Rudenstine was determined to improve race relations on campus, partly by pouring money into Harvard’s neglected African American Studies department. Rudenstine wanted a black donor to fund a university professorship — the most prestigious academic position that exists at Harvard — for black scholars. But Harvard didn’t have a lot of black alumni, and many of the ones it did have didn’t look back fondly on their time in Cambridge. Fletcher was different. He was wealthy, and he wanted to align himself with the university.
In April 1996 Rudenstine announced that Fletcher had given Harvard more than $3 million to fund the Alphonse Fletcher Jr. University Professorship. “This was an important gift for Neil,” says one former Harvard official. And for Fletcher, the official says, endowing a professorship meant associating his name with the Harvard brand. Surely there would be more and larger donations to come. “Buddy was being groomed,” another high-level Harvard official recalls.
Fletcher would later serve not only on the Committee on University Resources — the powerful group of donors that helps shape Harvard policy — but also on the New York Major Gifts Committee and as a director of the Harvard Alumni Association. His money gave him clout: When Cornel West — the first scholar to hold the Fletcher chair — exited Harvard in 2002 after a falling-out with then-president Larry Summers, Fletcher served as an intermediary between Summers and black alumni, working to rebuild bridges. Harvard officials were pleased, but some wondered whether Buddy Fletcher was too good to be true. “The unbroken string of profitable quarters was already an object of some puzzlement,” says a Harvard official. “I remember people being impressed, but puzzled.”
Fletcher didn’t limit his generosity to Harvard. In May 2004, on the occasion of the 50th anniversary of the Supreme Court’s landmark Brown v. Board of Education ruling, Fletcher announced that he would give $50 million to people and organizations working to promote civil rights. As part of that pledge, he would establish the Alphonse Fletcher Jr. Fellowships, $50,000 grants to be awarded to civil rights–minded scholars, artists, and writers. Henry Louis “Skip” Gates Jr., soon to become Harvard’s second Alphonse Fletcher Jr. University Professor, would be the primary director of the grant-giving.
The details were largely unspecified, but no matter: The Times compared Fletcher to Bill Cosby and Oprah Winfrey, and quoted a philanthropy expert who called the pledge “one of the largest individual gifts ever made by an African-American.”
In 2005, the Harvard Gay and Lesbian Caucus approached Fletcher to discuss giving him its annual Civil Rights Award. “The grapevine had made it known that he was in an intimate relationship with a man, so he seemed to qualify,” says Warren Goldfarb, a Harvard philosophy professor who is one of HGLC’s founders. “But we weren’t at all sure whether he would want to be public.” After an initial reluctance, Fletcher decided to accept the award at a dinner in June of that year. Shortly after, he made a $100,000 contribution to the group.
Was Fletcher hesitant to accept the Civil Rights Award because his personal life was in turmoil? In 2003 and 2006, two male property managers hired by Fletcher to work at his Connecticut estate sued him for sexual harassment. Fletcher denied the allegations, though both men reportedly received confidential settlements. Then, in the summer of 2007, Fletcher surprised his friends by striking up a relationship with a woman. Her name was Ellen Pao, and they met at the Aspen Institute in Colorado, where both were among a group of fellows the institute had dubbed the “next generation of community-spirited leaders.” A few years younger than Fletcher, Pao also had an impressive résumé: A Princeton graduate with a JD and MBA from Harvard, she was a partner at the California-based venture capital firm Kleiner Perkins Caufield & Byers.
Fletcher and Pao were married before the year was out, and in May 2008 bought and moved into a $3.9 million apartment in San Francisco. By that fall they were the parents of a baby girl, Matilda Pao Fletcher. In about a year, Fletcher had gone from being in a long-term relationship with a man to marrying a woman and having a daughter.
Some people were surprised by this transformation. Stephen Cass was not among them. Cass had been one of Fletcher’s roommates at Harvard, and had then worked at FAM. But their relationship ended badly in January 1996, Cass says, when Fletcher fired him shortly before he was to receive a substantial bonus. Cass hired a lawyer, and months later Fletcher gave him a six-figure settlement. Over the years Cass has become convinced that with Buddy Fletcher, appearances can’t be trusted. Cass says Fletcher was a deeply conflicted young man at Harvard, obsessed with appearances and plagued by doubts about his own identity. Fletcher made disparaging remarks about homosexuals, Cass says, and seemed uncomfortable around more-activist black students.
When it came to the classroom, studying wasn’t his highest priority. In his concentration of applied math, says one Harvard acquaintance, Fletcher had to be “dragged over the finish line.” Cass says that “The social side and perception side of Harvard was much more important to him than the actual work. I never met anyone who wanted so much to be liked. And that’s a good thing. But if you take a good thing far enough, I suppose, it could become bad.”
In January 2011, after the Dakota rejected his bid to buy Apartment 50, Fletcher sued the building for racial discrimination. The board members had an “extensive pattern of hostility toward non-white residents,” Fletcher claimed in his lawsuit. He charged that the Dakota board was against Jews, and had discriminated against an African American (allegedly making a black Dakota resident ride in the service elevator with her dogs — unlike the white residents) and a “Hispanic” apartment shopper (widely believed to be the actor Antonio Banderas).
“Mr. Fletcher’s application to purchase an additional apartment in the Dakota was rejected based on financial materials he provided…” the Dakota board responded. “Any accusations of racial discrimination are untrue and outrageous.”
From a PR standpoint, Fletcher’s lawsuit backfired almost immediately. The Wall Street Journal launched an in-depth investigation of FAM, and last July the paper reported some major peculiarities with the hedge fund. While FAM claimed to have $500 million in assets, the Journal argued that “it appears to arrive at this figure by counting some assets more than once…. A more orthodox way of measuring assets under management would produce a figure of about $200 million for one recent year.” Fletcher told the Journal that his investments were complex, but that they represented a “well-hedged and consistent portfolio.”