At first blush Matthew Taylor Mellon II lives up to his patrician name as we dine at his favourite lunch spot, a little Italian place below his apartment situated within Manhattan’s stately Pierre hotel. Five years sober, after lengthy battles with drugs and booze, the 50-year-old has an enviable tan that complements his blue Savile Row suit and Hermès tie. He orders a salad and a cranberry-juice-and-soda.
But unexpectedly he asks the waiter to take away his cellphones, fearing Snowden-style eavesdropping. And then the scion of America’s most enduring banking family lets it fly: “I feel like citizens are fed up with banksters,” using a term the Occupy Wall Street crowd would surely approve. Politicians receive similar disdain: “We need to live in a more transparent, free democracy. The more secretive America becomes, the more dangerous it is.” The solution, Mellon says, is Bitcoin, and he’s invested $2 million to start an incubator for Bitcoin companies, convinced virtual currency will replace the dollar bill. “The banks are going to be scratching their heads,” he says, a smile encroa-ching on his high cheekbones.
A bit loony? Clearly. But in an ironic way, Matthew Mellon is exactly what his great-great-great-grandfather Thomas Mellon envisioned when he launched the family on what’s now a nearly two-century run of financial dominance. In scanning Forbes’s first-ever ranking of America’s Richest Families, one thing that stands out is how many of the great fortunes of the mid-19th century have dissipated. The Astors and the Vanderbilts, the Morgans and the Carnegies, none make the cut. Some of that is the result of generous, world-changing philanthropy. Some of it decades upon decades of wastrel heirs. Much stems from both. Amid this peer group, however, the Mellons stand out. Of America’s billion-dollar dynasties, only the Du Ponts are having a longer run, and they have a dominant family company perpetually generating the wealth. Not so with the Mellons, who have flaky heirs like Matthew plowing millions into fashion labels and Bitcoin startups, yet have nonetheless maintained a $12 billion fortune, the 19th-largest family net worth in America, one greater than the Rockefellers and Kennedys, combined.
They’ve done this quietly. Most of the Mellons contacted declined to be interviewed for this story or would speak only on background. “We’re happy being under the radar,” says Peter Stephaich, Matthew’s cousin, who owns a barge company in Pittsburgh. But the secret boils down to a family ethos that values one thing over all others: Capital preservation. While the pitfalls of inheriting money without purpose have been well-documented, Thomas Mellon himself put forward a tacit understanding that while spending was acceptable (Matthew Mellon’s pad at the Pierre is likely worth $7 million, and he likes to fly private), it came with the expectation that each generation push forward a bigger pile than he or she was given. While all the branches operate independently, they’ve almost universally employed smart tricks that minimise taxes, including generation-skipping trusts and making charitable contributions in stock. More critically, Thomas Mellon expected his progeny to be entrepreneurial, with the anticipated corollary that the process would fuel the American economic machine.
Other than that, there have been few covenants or restrictions, with nary a family office or annual meeting. The family mantra as he was growing up, Matthew Mellon recalls: “Intuition is the number one tool in the toolbox.” The result of all that decentralised intuition has been numerous companies, from banking to media to metals to energy, that have altered the face of American business.
The last time the do-it-yourself Mellon clan actually got together, a once-a-decade occurrence that happened four years ago, they went back to the roots of their success: A patch of land in County Tyrone, Ireland. It was here that Thomas Mellon was born to farmers in 1813. The family immigrated to America in 1818, settling into a dilapidated log cabin near relatives who arrived before them in a section of western Pennsylvania that would soon be proven a misnomer, Poverty Point.
His parents soon made their 160-acre lot prosperous. Thomas worked the ground alongside them, but when the plow horses needed a rest, he read Shakespeare in the shade. “The more I read and the more I saw, I was the more convinced that I might do better,” Thomas wrote in his autobiography.
Then there’s Richard Scaife, 82, who bought a small suburban paper in 1970, then grew it into today’s Pittsburgh Tribune-Review. Best known as the man who reportedly funded an ongoing effort to dig up dirt on Bill Clinton during the 1990s, Scaife is perhaps the most important media mogul in western Pennsylvania, with several local weekly newspapers and a stake in Newsmax, the conservative online newsmagazine. He’s worth $1.5 billion.
Which brings us to Matthew Mellon, who is carrying on the family tradition of investing in far-flung personal business passions. Matthew’s father, Karl Mellon, was an absent parent for most of his childhood and later committed suicide, a subject he isn’t fond of bringing up. His mother, Anne, and stepfather, J Reeve Bright, a once powerful GOP attorney and distant relative of Theodore Roosevelt, largely kept him in the dark about the Mellons and what he could expect in terms of inheritance. So it came as a shock at age 21 when he inherited 14 trust funds worth an estimated $25 million. “There’s a saying: More money, more problems,” says Matthew. With little grounding in how to live up to the Mellon name or what to do with the money, he raced around southern California in a little black Ferrari, working ostensibly as a talent agent. He swam the bay at St.-Tropez with the crown prince of Greece. (“He’s a really fun guy,” says Prince Pavlos.)
He partied, enjoying scotch on the rocks and developing an addiction to cocaine. Entrepreneurship found him at an alcoholics anonymous meeting in 1998, when he met Tamara Yeardye, who was building the shoe line Jimmy Choo. They married, and the Mellon genes soon had him dabbling, first with a Jimmy Choo men’s line, then his own shoe brand, Harrys of London, with shoes cushioned like a sneaker and fancy like a wingtip.
Harrys got some traction, but it proved a decade ahead of its time. “I think if it launched today it would be much bigger and have a more global appetite,” says Michael Atmore, editor of Footwear News. And recurring addiction—one investment was negotiated from a rehab pay phone—stunted sales, which today remain at $7 million. (He lost day-to-day management in 2005, and his marriage to Yeardye ended shortly thereafter.)
Still, the Mellon lessons had seeped in. (“You never touch the principal. And you try to spend 1 percent of your income that comes in. There are always surprises. Always emergencies. Always charities. Trust me, you end up spending 20 percent of your income.”) And as he got sober, he began investing: In an online art action house, Paddle8, alongside Alex von Furstenberg and Damien Hirst, and a YouTube channel called StyleHaul, which produces short movies on how to dress well.
And given his fashion chops (besides Jimmy Choo and Harrys, he dated Tory Burch in college), he’s at it again. With his new wife, Nicole Hanley, a former Ralph Lauren designer, he has started Hanley Mellon, with an ecommerce store selling chic women’s clothing, with $3 million invested in the past year or so.
Working from a living room adorned with two Warhols, Nicole is calling the shots on the fashion business, while Matthew focuses on the Bitcoin incubator, CoinApex, which plays into his anti-establishment worldview (he also once contributed to Julian Assange’s bail money).
For now it’s all pie in the sky, though Matthew insists he received a buyout offer in the ballpark of $20 million for the most promising one, Coin.co, a payment processor of Bitcoins the way PayPal handles a transaction between sellers and buyers in dollars. “Matthew is the kind of guy who’s very smart about attracting very talented people to help him figure it out,” says J Todd Morley, founder of Guggenheim Partners and a longtime friend. “I know he’s been studying Bitcoin and talking to senior people in the industry.”
Already, though, there’s a shift in the way Matthew is perceived as a Mellon. His aunt, Rachel “Bunny” Mellon, died this spring. He went to Virginia for the funeral, one of the few events that can bring the Mellons together. At one point he struck up a conversation with one of Bunny’s advisors. “He said, ‘I can tell you that you’re on to something really huge. You could be the next Andrew Mellon in that space,’” Matthew recalls. “Which I took as a huge compliment.”