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A big-bucks divorce case

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September 19, 2007

The divorce case titled Scaife v. Scaife has wound its way through the courts under a blanket of secrecy as both sides struggle over a storied Pittsburgh fortune surpassing $1.4 billion and a temporary monthly alimony payment bigger than the life savings of most people.

Margaret Ritchie Battle Scaife, 60, and her husband, Mellon banking and oil heir Richard Mellon Scaife, 75, have been unable to agree on support payments, whether one of his newspapers is a hobby or a business investment, and even the date of their separation. She says they split in December 2005, after she caught him in an affair. He says they separated 10 months earlier.

Details of the dispute have remained out of the public eye for more than a year. Lawyers for Richard Scaife, a reclusive financier of the political right who underwrote much of the campaign against the Clinton administration in the 1990s, asked Allegheny County Judge Alan Hertzberg to seal the record of his divorce. The judge complied.

The marriage of Richard and “Ritchie” Scaife, as she preferred to call herself, was his second. The couple had been together since the early ’80s while Scaife was still married to his first wife, the former Frances Gilmore. In the course of the next 14 years, Ritchie Scaife would serve on the board of Scaife’s publishing company, sometimes exercising influence in its editorial judgments, and once sat alongside him during a rare interview he granted in the midst of the Clinton investigations. All the while, she was living in a house of her own two blocks from the mansion occupied by Scaife.

Copies of the Scaife case file obtained by the Pittsburgh Post-Gazette illuminate a dispute that could set a new record for a divorce settlement. The couple did not have a prenuptial agreement. The case file, though ostensibly sealed by the court, was readily available online from the Web site housing Allegheny County court records over a period of several days at the end of last month.

A court hearing officer ordered Scaife to pay his estranged wife $725,000 a month in preliminary temporary support shortly after she filed for divorce early last year. The amount was derived from a standing formula in the law that places temporary support at 40 percent of a husband’s income.

It appears, based on an order filed Aug. 28 by Hertzberg, that hearing officer Patricia Miller has entered a recommendation for how much Ritchie Scaife should receive in the longer term, but no order implementing those recommendations appears in the court docket. Attorneys for both sides have requested permission to file briefs outlining their objections to the recommendation, and Hertzberg granted them permission to exceed the court’s usual 10-page limit. The briefs are due Thursday.

The monthly award could set a new Pennsylvania record for a temporary support order, according to Albert Momjian, a prominent divorce attorney in Philadelphia who has handled celebrity divorces and who said he held the previous record for a temporary alimony order at $275,000 per month. Generally, alimony is treated as taxable income for the spouse who receives it and tax-deductible for the spouse who pays it.

“I can’t conceive of any alimony amount that would be that large,” Momjian said of the Scaife case. “That’s gigantic. We thought that what we got here was terrific.”

The case could also affect the fortunes of Scaife’s publishing enterprise, notably the Pittsburgh Tribune-Review, which, records filed with the divorce papers show, he has subsidized with more than $140 million — Ritchie Scaife’s lawyers contend the figure is $244 million — from one of his trust funds over the past 15 years, and which has lost between $20 million and $30 million yearly since it was started in 1992.

“The most remarkable feature of the relevant and material issues of consequence in this case is the number of zeroes after Mr. Scaife’s disposable income,” wrote Ritchie Scaife’s lawyers, Gary Gentile and William Pietragallo II, in a pretrial statement filed Oct. 23. They put his monthly income on earnings from nine various trusts at $3.9 million.

“Incredibly, this fantasia of monthly distributions is taxed at an aggregate rate of slightly less than 15 percent,” they write.

Both Gentile and Scaife’s attorney, H. Yale Gutnick, declined all comment on the case, citing the order sealing the file.

(Dennis B. Roddy can be reached at droddy(at)post-gazette.com. Roddy worked for a Scaife newspaper more than 20 years ago.)