It's Hard to Spend a Billion

Germany's Flick tries resolutely to lower his marks

When Friedrich Karl Flick wants to vent frustrations or have a little fun, he takes over as the drummer of the oom-pah-pah band at his favorite beer cellar, Munich's Franziskaner. After a few brews, he and his buddies--a motley of virile game wardens and ski instructors --get their jollies by smashing glasses against the walls and hurling tablecloths, laden with plates and cutlery, across the room. Last year Flick and friends completely wrecked Ingo's Discotheque in a boys-will-be-boys night of carousing, which ended with a brunch of beer and white sausages. Do proprietors complain? Never. Flick, 51, is invariably accompanied by a paymaster, who covers all damages, and by a dozen stony bodyguards, who are relieved every six hours by a different dozen.

These days Flick, a shy-looking industrialist with horn-rimmed spectacles, has a problem, and it may cause a lot more smashed crockery in those Munich beer cellars. He pocketed $1 billion when in 1976 he sold to a German bank 29% of the stock of Daimler-Benz, which makes Mercedes cars. Under West Germany's tax code, Flick has to spend all of that sum by Dec. 31 in ways that will "benefit the national economy"--or else pay 50% in capital gains and income taxes.

Investing a billion is a tiresome chore, even for a high-living heir who has spent fortunes on blondes (he has married and divorced two of them), villas, Alpine ski resorts and hunting retreats. He also owns a 124-ft. yacht and a Grumman Gulfstream jet, which whisk him to his favorite playgrounds at the Lyford Cay Club in the Bahamas, the ski slopes at Snowbird, Utah, and the big-game preserves of Kenya and Alaska.

Flick inherited his fortune from his blood-and-iron father, Friedrich.

Papa was a self-made Ruhr upstart who earned a bundle speculating in scrap after World War I, created a vast industrial empire, and earned a seven-year war-crimes sentence for making P.O.W.s do forced labor for Hitler. Flick Senior bounced back after serving only three years of his sentence. Released in 1950, he was ordered by the Allies to sell his rich holdings in either coal or steel. He chose coal and collected more than $50 million, which he used to build an even more prosperous empire based on petrochemicals, paper, steel--and Daimler-Benz stock. Today the Flick Group is a $4-billion-a-year conglomerate of some 100 companies that make products as diverse as bathtubs and Leopard tanks for the Bundeswehr. After Papa died at 89 in 1972, his son got it all.

Friedrich Karl Flick sold most of his 40% holdings in Daimler because he figured that the oil crisis darkened the future for cars. Until the present moment, he has been able to reinvest only $300 million, leaving $700 million to go. He bought 12% of the shares of the U.S.'s W.R. Grace Co. (petrochemicals, real estate, restaurants) for $130 million, last month acquired control of West Germany's second largest insurance company for $100 million, and added $70 million to the capital of his conglomerate.

Though Flick is well placed to revive Germany's lagging investment, he has trouble finding properties because growth prospects in most industries seem unexciting. He has, in fact, divested himself of more assets, selling one of his steel companies to U.S. Steel and another to a German rival. He has turned much of the search over to his deputy, Eberhard von Brauchitsch, nephew of the field marshal who led the Wehrmacht into Russia. Well aware of the pressures of the spending deadline, Von Brauchitsch vows: "We will make it by the end of the year, with our tongues flapping." But he adds a disclaimer: "We never said we would invest all of the Daimler-Benz profit tax free."

Meanwhile, Flick is preoccupied with weightier personal investments. An Amsterdam shipyard is building a roomier (184 ft.) yacht for him. It comes complete with a helicopter pad so that the envious Flick can keep up with the Middle Eastern nouveaux riches. On land, he is building a modern town house to replace his unmarked Munich bachelor quarters. He lives there now amid a daunting maze of electronic surveillance devices. They keep watch for any unwelcome visitors, who are, says Flick, "one of the burdens of the rich."

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