The Spurned Millionaire's Vendetta

By Jeff Jacoby
Thursday, August 11, 2011

JOHN P. WALSH learned five years ago that some people don't especially care for him. He still hasn't gotten over that discovery.

Maybe it's himself he needs to get over.

The revelation that we aren't everyone's cup of tea is something most of us manage to figure out by the time we get through kindergarten. But Walsh, a self-made millionaire and chief executive of the Elizabeth Grady skin-care salon chain, apparently didn't realize it until 2006, when he tried to buy a unit in a luxury cooperative on Beacon Hill and was turned down by the board. Residential co-ops by definition are private associations that choose their own shareholders; would-be residents may not buy in without the approval of the existing owners. And in the case of 68 Beacon Street, a nine-story co-op overlooking Boston's Public Garden, the existing owners concluded -- as they put it in their rejection letter -- that "Mr. Walsh would not reasonably coalesce as a member of this cooperative community."

In response, Walsh embarked on a campaign to paint the co-op's board, and especially its chairman, Jonathan Winthrop, as snobs and social creeps. He told reporters he had been discriminated against because he lacked "blue blood" and "was not of the same social status" as the building's residents. He filed a lawsuit over his rejection and claimed in a deposition that he was a victim of "ancient and archaic values" by a group of "bigoted people." The residents of 68 Beacon Street paid $2.2 million to settle the case -- an outrageous amount of money, but worth paying, perhaps, to put an end to Walsh's vendetta.

Except that Walsh wasn't finished. With the help of friends in the Legislature, he has been pushing for a law to make housing cooperatives all but illegal in Massachusetts. Twice lawmakers have passed a bill that would allow co-ops to reject a prospective purchaser only on strict financial grounds. Twice Governor Deval Patrick vetoed the bill. So co-op boards in the Bay State are still free to turn down a would-be owner who might be richer than Bill Gates but who, in the board's judgment, would not be a good fit for the community the residents have created for themselves. The kind of owner, to take a theoretical example, who thinks being a self-made millionaire entitles him to anything he wants, and who is quick to level accusations of bigotry -- or to file a lawsuit -- when he doesn't get his way.

Now a third version of Walsh's bill is making its way through the Legislature. It would require every co-op to provide an explicit justification for its own existence, and a board that rejected an applicant would have to detail its reasons in writing. In effect, the bill would spell the end of co-ops like the one at 68 Beacon Street. And all because Walsh, a rags-to-riches millionaire who grew up in Somerville, felt snubbed by the old-money Brahmins who own the building.

Some lawmakers make no secret of their hatred for the freedoms of choice and association that co-ops embody. "When people get to choose their neighbors, bad things happen," says state Senator Barry Finegold, a cosponsor of Walsh's bill. "I think it is fundamentally wrong and I don't think that is what we as a state are about." But then, why stop with residential co-ops? Why should people be allowed to choose the town or neighborhood they live in? Why should parents have the option of choosing the school their children attend? Why should customers be permitted to choose where to shop?

Finegold's political campaigns, the Globe reported last month, "have gotten generous financial support from Walsh." Was that fair to Finegold's opponents? Can't "bad things happen" if donors are free to choose which politicians get their money? And what about Walsh's business? Should anyone who wishes to join the Elizabeth Grady Co.'s board of directors be entitled to do so? Suppose Jonathan Winthrop were nominated for a seat on Walsh's board.

Would Finegold see something "fundamentally wrong" with allowing Walsh to reject his bid? Every liberty can be abused, and every right to choose can result in bad choices. It is one thing to curb freedom to prevent fraud or widespread social harm. But in a free society, there is no guarantee your feelings will never be hurt. Even if you're John P. Walsh, the law can't make everyone love you. Not even in Massachusetts.