Empire at Bernie-Voltaire

Not since Voltaire came to town in 1758 to escape persecution in Geneva has the French border village of Ferney--subsequently renamed Ferney-Voltaire--seen so much excitement. The current fuss is being caused by another refugee from Geneva, controversial Bernard Cornfeld, 40, an American expatriate who has built his eleven-year-old Investors Overseas Services into the largest mutual-fund sales organization outside the U.S. When Bernie Cornfeld decided to move his Swiss-based I.O.S. across the border eight months ago, wags mindful of the 18th century precedent started referring to the town as "Bernie-Voltaire."

The financier may merit the honor even more than the philosopher. With Cornfeld putting up an office building and a host of new apartments to house his employees, the population of economically depressed Ferney-Voltaire has almost doubled, rising to 5,000; the town will be further enlivened by a nightclub that the flamboyant newcomer plans to establish. For the dedication of Cornfeld's new headquarters, clergymen and mayors of no fewer than 14 mountain villages were on hand. Proclaimed Ferney-Voltaire Mayor Roland Ruet: "I assure you that you are more than welcome here."

Nest Eggs & Mattresses. For Cornfeld, that kind of sentiment has been conspicuously rare in recent months; he has made money far faster than friends. An Istanbul-born, Brooklyn-reared onetime social worker, he hit on the idea of selling mutual-fund shares to overseas G.I.s in the 1950s, soon started selling door to door to Europeans. Another successful item that he started peddling in 1962 was the Fund of Funds, consisting of shares of other mutual funds. Paying few taxes, Cornfeld's Panama-chartered I.O.S. employs 10,000 salesmen in over 100 countries, has expanded into a $250 million-a-year empire controlling 88 other enterprises in everything from banking to real estate.

As Cornfeld's success mounted, so did protests. In the U.S., the Securities and Exchange Commission got after him last year on the grounds that his activities violated American law. He finally settled with the SEC by agreeing to stop selling Fund of Funds shares to Americans, limit holdings in U.S. funds, and sell off Investors Planning Corp., a mutual-fund sales firm that I.O.S. purchased in 1965 for $2,000,000. Cornfeld claims to be happy the way things turned out. American clients account for only 3% of l.O.S.'s business anyway--and Cornfeld figures to unload Investors Planning at an $8,000,000 profit.

Eager-Beaver Techniques. Cornfeld also had his difficulties in Geneva, where authorities claimed that I.O.S. employed some 500 foreigners while holding only 93 working permits. But he insists that the real trouble was caused by resentment on the part of "the European banking establishment." Indeed, l.O.S.'s eager-beaver sales techniques often offend Swiss finance men, many of whom nonetheless express grudging admiration. "It took an American," says one with ill-concealed envy, "to sniff the world's private nest eggs out of the mattresses." To bolster l.O.S.'s image, Cornfeld recently hired Erich Mende, who will step down as leader of West Germany's Free Democratic Party and become the $30,000-a-year head of l.O.S.'s German subsidiary. Cornfeld has also signed on F.D.R.'s son James to act as his personal diplomat and to run the I.O.S. Foundation, a five-year-old charitable setup into which Cornfeld's company puts 5% of its profits.

A hard-driving man who brings almost missionary zeal to his work, Cornfeld is a bachelor who appreciates the good life. Ensconced in his velvet-lined office in Ferney-Voltaire, where lissome multilingual secretaries flock around him, Bernie says softly that "we are a comparatively small company compared with where we are going." What he is doing, he says, is "democratizing capitalism." And making it pay.

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