Diplomatic Dash

James Costos and Michael Smith

James Costos and Michael Smith, with their dog, Greco, and Josef Albers’s Study for Homage to the Square, 1963, and Homage to the Square: Fall Finale, 1962.

The decorator Michael Smith is an excitable kind of guy, and as he walks around the residence at the U.S. Embassy in Madrid pointing out some of the artworks and objects he’s installed here since moving in two years ago with his partner, Ambassador James Costos, he finds no shortage of opportunities to use the word “amazing.” In the entrance hall are Roy Lichtenstein’s Mirror (1970) and Robert Rauschenberg’s Bilbao Scraps (1997), both on loan through the Department of State’s Art in Embassies program. Farther on, there’s a watercolor that Ed Ruscha created specifically for the house, with white letters spellingoutscreaming in spanishagainst a fiery orange background. (“So weird, so great,” Smith says.) And upstairs in the private quarters, on a shelf in the master suite, is a small photograph of an empty sitting room; in the distance, through a doorway, there is a familiar silhouette, facing away from the camera. “That was at our house in Rancho Mirage—President Obama came over for drinks or something,” says Smith brightly, before moving on to a John Singer Sargent painting of a dwarf and a giant dog, inspired by Diego Velázquez.

Among American presidents, there’s a long-standing and controversial tradition of awarding plum ambassadorships to major campaign donors. Costos and Smith—who’ve been personal friends of the Obamas since Smith redecorated the White House in 2010, and who reportedly helped raise more than $1 million for the 2012 re-election campaign—are part of the latest round of key Democratic supporters to be dispatched to capitals like London and Berlin. Defenders of the practice argue that a tight connection with the White House can make an envoy effective in ways that a Foreign Service professional could never dream of. Indeed, this past June, as King Juan Carlos of Spain was preparing to step down from the throne, he received a best-wishes phone call from President Obama, who was calling from Costos and Smith’s vacation home in Rancho Mirage, California, where the First Family was visiting for the weekend. “That certainly showed that the new ambassador has juice,” says the journalist George Stephanopoulos, another close friend of Smith’s and Costos’s, who served as a senior adviser to President Clinton.

Whatever the extent of the couple’s experience in international diplomacy, it’s been clear since their arrival in Madrid that they’re not taking their new responsibilities lightly. At the policy level, Costos has been active in multiple bilateral causes, from promoting youth entrepreneurship to strengthening antipiracy efforts. He’s launched a full schedule of cultural happenings, including talks by American contemporary artists and preview screenings of The Amazing Spider-Man 2. Meanwhile, the fabulously appointed embassy residence has become Madrid’s latest social hub: As the Spanish daily El País put it in July, an invitation from Costos and Smith is “much coveted by anybody who is anybody,” from soccer stars and aristocrats to LGBT activists. Last summer’s main event was a Fourth of July bash for a mostly Spanish crowd of 3,000. Smith commandeered the DJ booth before the party ended at 4 a.m.

Countess Aline of Romanones, the 91-year-old American-born socialite and author who has lived in Madrid since 1943 and has known every U.S. ambassador who’s served there in the past seven decades, pronounces Smith and Costos “absolutely exceptional people who have completely revolutionized the stature and the appearance of the American Embassy.”

Still, even though they are among the first same-sex couples to be placed in charge of a U.S. Embassy (Obama has nominated six openly gay ambassadors since 2013), Smith and Costos know better than to overplay the breath-of-fresh-air card. “We’re not, like, showing up at the royal household in Yohji jumpsuits,” Smith jokes. Anyone familiar with Smith’s design work—whether for the Oval Office or the comfortably opulent residences he’s done up for Rupert Murdoch, Steven Spielberg, and George Clooney—knows that his taste for relaxed California style is balanced by a reverence for Old World tradition. He says that before the Obamas approached him to work on the White House, he’d already read every history book he could find about its interiors and every letter that Jacqueline Kennedy had written about her famous restoration. And even in the private quarters at the embassy, Smith seems to get a charge out of referring to his partner by his formal title. “Where is the ambassador?” Smith asks a white-gloved footman when he can’t locate Costos during my visit.

Since last year, Smith has continued to run his decorating business in Los Angeles, where he has a staff of 40, while commuting regularly to Spain. But it so happened that the embassy in Madrid was already in need of a makeover, and the project quickly moved to the top of Smith’s long list of obsessions. According to Stephanopoulos, who spent Christmas 2013 with the couple at the residence with his wife and children, “a lot of the U.S. embassies are great structures, but the interiors haven’t always been kept up. What Michael and James have done in Madrid is bring their taste and flair, and they’ve just made it spectacular. Now the place really shows off the best of America, which is what embassies should do.”____

For many visitors to the residence, which is adjacent to the embassy’s monolithic modern structure dating from 1955, the first thing that strikes the eye is the stunning trove of contemporary art. The Art in Embassies program, now in its sixth decade, acquires artworks and arranges exhibitions for American diplomatic missions around the world, often with pieces borrowed from the storage spaces of major museums or collectors. Smith, needless to say, is not the type to settle for a minor Andrew Wyeth or two. The decorator used his art world connections to help secure a total of 85 works, including a number of special commissions and loans, such as a series of Catherine Opie photographs that replaced some yellowed bullfighting posters in an upstairs hallway. There’s also a giant Walton Ford watercolor of an elk in captivity, a risqué wall sculpture by Jack Pierson, and an arresting late-career Philip Guston.

According to Virginia Shore, the deputy director and chief curator of Art in Embassies, the current display of art in Madrid is easily “the most challenging loan exhibition we’ve ever undertaken.” The installation took place over five “insanely chaotic” days, she says, during which Smith simultaneously replaced carpets and mantels, gave tours to groups of Spanish curators, and persuaded the artist Cristina Iglesias to let him install one of her fountain sculptures in the garden, which required a last-minute intervention by an eight-person team of plumbers, electricians, and landscapers.

Costos and Smith are particularly proud of three large-scale pieces in the dining room, all by African-American artists—Theaster Gates, Glenn Ligon, and Julie Mehretu—whom they know personally. Gates’s piece is a moody abstract painted partly with tar and executed with the help of his father, who’d worked tarring roofs in Chicago to support his nine children. “We wanted the modernity of all these great voices—these artists that are of the time and that have superinteresting stories,” Smith says. One theme of the collection is cultural cross-pollination; many works are Spanish or make reference to Spain and its former colonies.

In terms of decor, Smith operated on the principle that grand is good. “You want to come to the American Embassy and feel that it’s heroic,” he says. “It conveys a sense of stability and strength.” The essence of foreign diplomacy, he observes, hasn’t really changed since the days of Thomas Jefferson. “It’s the idea of promoting America but also understanding the culture that you’re in, and being respectful of it—that’s the core of it all, and that’s just as true now as it was in the 18th century.”

The large first-floor rooms, where Costos and Smith do most of their entertaining, contain a mix of American and European antiques and reproductions, with many finishing touches by Spanish craftsmen. Upstairs in the living quarters, the look is even more traditional, with hints of Louis XVI. In one of Smith’s countless storage units in California, he had some 19th-century wallpaper from the legendary French manufacturer Dufour depicting the Spanish arriving in Peru; it just happened to fit four floor-to-ceiling panels in the private dining room perfectly.

The cupboards are stocked with Richard Ginori dishes and antique silver, shipped over from the couple’s homes in New York and California, and the vases are filled with just the right mix of seasonal flowers. At a time when Spain is still emerging from a deep recession, Smith is careful to cast these luxuries as signs of respect rather than frivolity. Despite the edginess of many of the artworks, he says, the overall feel of the place is “very correct. In some ways, it’s now actually more formal than it’s been in the past.”

As is generally the case with Smith, his favorite things don’t come cheap: He and Costos ended up spending their own funds on many items that will remain in the embassy after their three-year term is over—including virtually all the carpets, curtains, and upholstery, and some of the furniture and lamps. In Washington, D.C., there’s a tacit understanding that well-heeled appointees will open their checkbooks when government budgets don’t cover all the costs, especially for entertaining. “To some degree it’s expected,” Stephanopoulos says. “But James and Michael are going above and beyond the norm.” Smith, who calls the extra expenditures “part of the gig,” emphasizes that one can’t expect the U.S. to underwrite every throw pillow. “There are other embassies with real concerns—buildings that need to be fortified, where there are people in harm’s way,” he says.

More to the point, perhaps, Smith simply doesn’t do dumpy. “The reality is, I only have one speed,” he says. “I don’t know how to be like, ‘Okay, let’s just put a folding table here, and it will be cool!’ I can’t have it be depressing or crappy, and I don’t want to leave it like that for the next person.”

At lunchtime, I join Ambassador Costos for paella in the private dining room. Unlike several of Obama’s recent ambassadorial appointees, who got slammed during their Senate hearings for their unsettling lack of knowledge and experience (hotel magnate George Tsunis seemed unaware that his assigned country, Norway, is a constitutional monarchy), Costos breezed through his confirmation process; today he appears poised and confident, whether he’s discussing the Transatlantic Trade and Investment Partnership or the negotiations about the placement of U.S. destroyers in Spain. As part of his preparation for the post, he spent seven weeks doing research and training in Washington before moving to Madrid.

Shortly after his arrival, Costos received an urgent summons from the Spanish prime minister, Mariano Rajoy, to discuss revelations that the National Security Agency had been monitoring millions of phone calls in Spain. How’d that meeting go? “You know, we dealt with it, and moved forward,” Costos says. “I can’t get into the details publicly, but Spain and the U.S. share a lot of information to the benefit of all of our citizens.”

Within a few months, Costos had helped arrange the first meeting between Rajoy and Obama. “I’d talked to President Obama about getting that done before I left for Madrid,” Costos says. When I ask about the budget cutbacks faced by the State Department, Costos notes drily that if it were up to certain congressmen, there might be no embassies at all. “They’d basically say, ‘Let’s close them—we have video-conferencing! We can get the president of Spain on Skype and discuss what we need to do in Ukraine.’”

At the time of his appointment, Costos was an executive at HBO, where he was in charge of global licensing, retail, and marketing. Previously, he’d held several posts in fashion, overseeing retail operations for Tod’s and Hermès. In many ways, an ambassadorship is the ultimate marketing job, and Costos has made a point of spreading the word about his country and his mission throughout Spain, with plans to visit every one of its 17 autonomous regions before his tenure ends. He says his main areas of focus are U.S.-Spanish partnerships related to security and defense, as well as to Spain’s battered economy, which is now slowly recovering and giving rise to, Costos says, “a measured sense of hope and optimism.” He has launched several programs promoting entrepreneurship, part of a larger social outreach that keeps the embassy schedule packed with meetings, conferences, roundtables, parties, and dinners.

The extent of the activity is clear when I sit in on a protocol meeting with Smith and three embassy staffers. “This meeting is not about moving nuclear warheads,” Smith quips to me at the start. For a dinner of visiting U.S. senators, he decides to invite Countess Aline, who can spice up the conversation with her stories about her experience as an Office of Strategic Services spy during World War II. He considers rescheduling a trip to Paris for the Biennale des Antiquaires when he learns that Google honcho Eric Schmidt will be coming to town for a reception and spending the night at the residence (“He’s staying here? Crazy!”). Smith then determines the best dates to squeeze in a personal trip to England to see a friend and client, the Net-a-Porter founder Natalie Massenet, at her new country house. Before wrapping up the meeting, he has two questions: “Aren’t we doing something with Tiffany’s for Paloma Picasso?” and “Shouldn’t we do a haunted house on Halloween?”

Later that afternoon, Ambassador Costos joins us again in the sitting room, having ditched his dark suit for a pair of jeans; he and Smith are about to fly to Mallorca for the weekend. The two men first met on a plane: Costos spotted Smith in a nearby seat and found a pretext to speak with him on his way to the lavatory. Today, after 14 years together, Smith and Costos engage in lots of mutual ribbing, on such subjects as who spends too much time at the tailor (Smith), who has a punctuality problem (Smith), and who is just too sensitive (Smith). At one point, Smith remarks that his overhaul of the embassy has taken more time and effort than he’d expected, and Costos says, “I mean, what would you have done if you didn’t have this project? You would have been selling doilies.” (Smith has a successful fabric business, in addition to his decorating firm.) Smith retorts, “No, I would have traveled around the country promoting your mission, like Eleanor Roosevelt.”

Jokes aside, friends say Smith and Costos are a rare example of a true power couple. On Instagram, their feed (@theserranopost) offers carefully curated glimpses of their travels together, from Mallorca and Seville to Aspen for a Google event with the TV talk show host Charlie Rose. There are group shots with soldiers, and lots and lots of views of American flags in places like Martha’s Vineyard and the Hamptons.

Although Spain has a progressive record on gay rights—same-sex marriage has been legal since 2005—Countess Aline says she was initially unsure how some old guard Madrileños would react to a gay couple at the embassy. But she says Smith and Costos were accepted unreservedly, in large part because of what she calls their impeccable natural instincts for people and protocol. “They have the manners and the elegance that are, I would say, superior to many ambassadors we have had. And they have made people realize that one’s sexual orientation has absolutely no importance whatsoever—that it does not make people less effective, or more so.”

For Madrid’s more liberal art and fashion crowd, the main surprise has been a welcome shift in tone, says the couple’s friend Miguel Bosé, the musician and actor. “It was very clever of President Obama to send them here, because the image that the United States had in the past was very military, a bit arrogant,” he says. “James and Michael have brought a modern outlook that is hugely important. As stately as the embassy is, when I go there I always feel at home, like I could take off my shoes if I wanted to.”

Costos made sure the rainbow flag was flying outside the embassy on Madrid Gay Pride day, and he has organized a number of LGBT events and outreach programs, all without evincing a hint of activism. “I’m an ambassador who happens to be gay,” he says. Although Smith offers up a few off-color asides about his official title in Spain—“ambassador consort”—both men remark upon how quickly their sexuality has become almost a non-issue. “The Spaniards have been really elegant about altering the protocol,” Smith says. “They’ll say, ‘We’re going to move your chair next to the ambassador’s.’ Like, ‘Oh, it’s not a big deal.’”

Costos, a vegetarian, is a longtime animal-rights supporter, and he and Smith have adopted two rescue dogs, named Greco and Whistler. Costos was unnerved to discover that Greco sometimes likes to catch birds midflight, then bring them indoors. “It’s a little hard to take,” Costos says. “I actually tried to resuscitate one. I had it in the house for about six hours and couldn’t bring it back to life.”

No matter how many Madrileño birds Costos might revive in the future, the realities of the Foreign Service dictatethat in 2016, when the new administration arrives in Washington, he and Smith will be out. Costos says he’s unsure of his next career move, though it’s clear that as an ex-ambassador he won’t be hurting for powerful contacts. (Neither will Smith: Countess Aline notes that many of her friends are “very anxious to have Michael decorate their palaces, but he’s always busy.”) They’ll be taking all their dishes back to California, along with their Chuck Close portrait of President Obama, which hangs in a sitting room. As for the massive 18th-century Chinese screen in the main salon—another piece they brought with them—Smith smiles and professes himself undecided. “That screen is amazing,” he says. “There’s talk of it having belonged to Coco Chanel. That will be hard to leave behind.”

Photography assistant: Clement Vayssieres.