Inside the Financial Collapse of Annie Leibovitz
How did Annie Leibovitz end up $24 million in the hole? New York magazine's Andrew Goldman has cataloged her wildly ill-advised spending flourishes. Oh, and the money behind her glorified pawnshop loan came from none other than Goldman Sachs.
Goldman's write-around profile of an artist in crisis goes a long way toward explaining exactly how the world's most celebrated celebrity photographer wound up hocking her photographic legacy to keep up with her mounting bills. Mostly it's that she never cared about how much anything cost, was an obsessive perfectionist, and trusted the wrong accountant.
Here's Annie the spendthrift:
Leibovitz had also built a life that had become extraordinarily expensive to maintain. It wasn't just the mortgages on the homes. It was the Range Rover, the trips to Paris, the chef and housekeeper, the handyman, the personal yoga instructor, the terrace gardener, and the live-in nanny. There was only one man Leibovitz deemed qualified to work on anything involving air-conditioning or ductwork at either residence, and he lived in Vermont. "She wanted her life to be like a magazine spread," Kellum says. "Everything beautiful, nothing out of place. She wanted everything to be perfect."
Along the same lines, Goldman reports, she flew in kid-song star Dan Zanes and Rosanne Cash to perform at her daughter's first birthday party.
As for Annie the perfectionist, in 2007, former Vanity Fair editor Tina Brown asked Leibovitz to take the author jacket photo for her book about Princess Diana. Leibovitz showed up with two cars bearing a stylist, an assistant, a wardrobe, and a wind machine, and tried to extend the shoot to a second day after she was unsatisfied with the first days' results. Leibovitz was bearing the cost of the shoot herself.
That sort of behavior tends to pile up the debts, and in 2007 Leibovitz—who had an extremely hard time doing simple things like signing her own prints in order to make a lot of money selling them—fired her accountant Rick Kantor and manager Jimmy Moffat, who told Goldman that they had done what they could to rein in Leibovitz's spending. She replaced them with an accountant named Kenneth Starr (no relation), who had worked with Wesley Snipes (!). It was Starr who introduced Leibovitz to Art Capital Group. Goldman says Leibovitz didn't run the loan by her family or agent, and had no idea what she was getting into. She was shocked by a New York Times article reporting that she'd put her photos up as collateral:
"Trust me," says her sister Paula. "She thought it was a pure loan. That New York Times article was as much news to her as it was to anybody else."
Interestingly, the loan was financed by Goldman Sachs, which seems to be behind every epic collapse these days, and Goldman is now distancing itself from Art Capital: "We are deeply troubled by recent developments concerning Annie Leibovitz and Art Capital," Goldman (the firm) told Goldman (the writer). "Goldman Sachs owns a portion of the loan underwritten by an affiliate of Art Capital to Annie Leibovitz, but we have no involvement in the current sales-agreement dispute between Art Capital and Ms. Leibovitz. We have proposed to Art Capital that we terminate the current loan agreement with their affiliate so that we can work directly with Ms. Leibovitz to help her resolve her financing needs."
The one question that Goldman doesn't answer: Where did she get the money that she was spending so liberally? When Leibovitz went to Art Capital, her mortgage debts totaled $15.5 million. Half that, Goldman notes, was owed to her employer Condé Nast itself. (We broke that story two weeks ago, but Goldman doesn't credit us. We forgive him both because he is a stand-up gent and because he found out about it independently before we did, but sat helpless while New York's publication schedule worked its slow magic and the internet kept going.) But Leibovitz borrowed $24 million, indicating that there was an additional $9 million or so in debt she was facing—otherwise why borrow that much more than she needed for a short-term loan? There were other debts, including about $700,000 in lawsuits from unpaid vendors and a million or so in tax liens. But no matter how you cut it, Leibovitz appears to have owed millions more than we currently know about. We have a good idea what she spent it on, but where did it come from? Who else was loaning Leibovitz money? It's an especially interesting question because Leibovitz was never a good credit risk—as far back as the 1980s, Goldman writes, she had trouble getting an American Express card even as she was shooting ad campaigns for American Express (an ad agency intervened and arranged for her to get a card after Leibovitz lost an envelope full of cash she kept handy to pay vendors).
Somehow, it seems, Leibovitz managed to get nearly $10 million in the hole over and above the mortgages on her homes. Was that all on her AmEx? We don't think so.