Leonard Stern HE'S NO PUSSYCAT

Pet-food baron Leonard Stern is a workaholic billionaire who claims he can't get an even break. First he was pilloried for his brass-knuckle business practices. Then he tumbled in a tabloid slinging match with his archrival, Donald Trump. Now he's persona non grata for killing his popular New York weekly 7 Days. JENNET CONANT meets America's angriest rich man

JENNET CONANT

hy don't I show you something. Why don't we see the great mystery piece, O.K.? And, by the way, I think you'll probably treat me a lot rougher than this treats Trump." With that, Leonard Stem charges out of his office brandishing a videocassette of his infamous "revenge film" on Donald Trump, a project into which he poured nearly $1 million before shelving it last summer.

Shoving the tape into a VCR in the oak-paneled conference room, Stern plants himself inches from the TV and, puffing furiously on a huge cigar, watches intently as Trump's talking head fills the screen. The thirty-eightminute reel is all that exists of the stillunfinished documentary Trump: What's the Deal?—the subject of slurs and counterslurs between the two battling tycoons for the last eighteen months, culminating in Trump's accusation turned tabloid story that Stern's new wife, Allison, a former model, repeatedly phoned him for a date, and that he spurned her advances because he "wasn't interested.''

"I didn't have a public-relations man," says Stern,

"That's the man who did that to my wife—who did that to me,'' snaps Stem, jabbing his cigar in the direction of The Donald. "What do you think of this show? It's soft, isn't it? It's too soft. It's boring.''

Leonard Stem knows he's no pussycat. But as the chief executive officer and sole owner of the Hartz Mountain Corporation, the nation's behemoth purveyor of flea collars, fish food, and cat litter, he has earned a reputation as the meanest man in town. He is known as a ruthless competitor who will stop at nothing to win, mowing down even the smallest of rivals. Last April, Stern reasserted himself as the most heartless of hard-nosed businessmen by abruptly closing 7 Days magazine, a popular Manhattan weekly noted for its youthful approach and provocative articles—including one about Trump that ignited the feud. Judging from the outcry among the two-year-old magazine's many fans in the New York media community, it was exactly as if the pet-care king had clubbed a baby seal.

One of the wealthiest men in the country—his pet-supply, real-estate, and publishing empire is thought to be worth anywhere from $1.5 to $3 billion—Stern is also known for a consistent policy toward critics and competitors: never apologize, never explain. A decade ago, he took his company private so he wouldn't have to answer to anyone. He is a legendary tightwad, who quibbles over pennies in deals, and sat out the boom years of the eighties without gambling a cent in stocks or bonds. But now that Trump's casino fortune is being reassessed at less than half its previously reported value, Stern is riding high; there's no debt on his books. While his heavily leveraged foe is out trying to raise money, Stern's sitting on a pile of birdseed worth its weight in gold. He's all cash. He just can't bear to spend it.

"The worst thing that ever happened to Leonard Stern was that someone called him a billionaire,'' says a former colleague. "Because his wealth precedes him wherever he goes. And the man can't stand to lose a plugged nickel.''

For the first time since taking over his father's canary company in 1959, the intensely private fifty-two-year-old billionaire is agreeing to an in-depth personal interview. Pacing up and down his plush antique-filled living room-cum-office, Leonard Stern is, at about five feet five and 155 pounds, a firm, compact bundle of raw nerves, energy, and contradictions. He has a dark, feral handsomeness, with taut skin, sculpted cheekbones, and a high forehead—a cross between Roy Scheider and Roy Cohn that some people find off-putting and some women find sexy. His deepset brown eyes are guarded and implacable, except in the company of his wife and children, when they betray an intense devotion. Without warning, he can shift from a disarmingly warm, wisecracking fellow to a blunt, toughtalking heavy. When angry, which is often, he is notoriously profane. With his uncut New York accent, Leonard Stem makes no bones about who he is—a city kid, a street fighter, a billionaire who tips double the tax and not a penny more.

"He comes across as not very polished but extremely personable,'' says Adam Moss, the former editor of 7 Days. "There's something seductive about him.''

Those who have had Stem "in their face'' take another view. "Leonard has a tremendous ego,'' says a former senior manager who had day-to-day dealings with him. "I've never been in a room with someone with that kind of ego. One minute he's charming, kind, respectful, and considerate. The next he's brutal, nasty, mean, and screaming, 'Fuck you—I want answers.' Leonard answers to a different god."

On this afternoon he is in fine form, as tensed and ready as a welterweight boxer in the ring, springing to his own defense before the bell sounds. "Are you approaching this with an open mind?" he demands, perching on the edge of a linen-chenille club chair and leaning forward over the stone coffee table, elbows on his knees.

Stern is referring to the mother lode of bad press he's received in the last two decades, and the fact that the death of 7 Days by his hand is being taken as further proof that he is an unreformable philistine. He says it's been a bum rap from the beginning, though he's not exactly feeling sorry for himself.

"I was an immensely wealthy young man," he says flatly. "When you are nominated and elected as a 'whiz kid without parallel in American business,' and those are the exact words Fortune used in 1973, and 'the richest of the newly rich,' you become a subject of immense fascination." Stern has come prepared with a long speech on the subject, which, when he finally gets down to it, is a reluctant admission that he may not have handled himself all that well in public. "I became a media celebrity, without being involved in the media," he says pointedly. "I didn't have a public-relations man, and that started it."

"and that started it."

That may have started it, but it would take an amazingly cynical view of journalism—even for Stern—to believe for a minute that his lack of a public-relations representative was the cause of all his troubles. Ten years of litigation against Hartz Mountain, including more than a dozen anti-trust suits filed by his distributors and competitors accusing him of unfair trade practices—citing the use of bribes, prostitutes, and intimidation—and a long-drawn-out court case that necessitated a battalion of lawyers that at one time numbered twenty-six, and legal bills that averaged $400,000 a month, are more than a P.R. problem. But they go a long way toward explaining Stern's obsession with Trump, whom he views as the bully, liar, and media manipulator of all time. It also suggests why a billionaire who built his empire on pet products and enlarged it by turning New Jersey swampland into prime office space would so badly want in on the New York media game.

''It's not about editorial control," observes a former colleague. ''It's not even about money. It's completely about ego and psychology. That's the key to Leonard."

Unlike many moguls turned media barons, Stem has no political agenda. Friends say he is probably a Scoop Jackson Democrat—liberal on domestic issues, conservative on foreign policy. In 1985 he bought the pugnaciously independent Village Voice from Rupert Murdoch and to everyone's surprise held true to his word to remain handsoff with regard to the paper's editorial slant. This, even when the Voice endorsed Jesse Jackson for the Democratic presidential nomination in 1988, which privately infuriated Stern, who loathes Jackson, in part on the ground that he is anti-Israel. But as Stern confided to a friend, ''If I messed up the Voice, my kids would kill me." (Voice staffers on the business side don't fare so well. ''He doesn't play with the church, just the state," says one former employee. ''He is screwing around with it all the time. The phone is stuck to his ear. He calls two, three times a day. Week-

ends. Leonard likes to flex his muscles. ")

Stern also lacks the obvious social agenda of some of his fellow publishers. His media investments—the Voice, the Hudson Reporter group, a half-interest in seven New Jersey weeklies, and Harmon Publishing, which distributes 234 real-estate guides across the country—don't exactly cater to an uptown crowd. In fact, Stern is ambivalent about New York's high society, making only occasional appearances at black-tie functions, such as the annual PEN dinner and the late Malcolm Forbes's birthday bash in Morocco last year. ''To know them is not to like them," says Stern, who prefers the company of his childhood friends.

''Leonard is not a vanity publisher," confirms David Schneiderman, president of Stern Publications, Inc., who seems to have a nervous father-son relationship with the owner. ''He's not in it for the dinner parties. He's a businessman and that's it."

That's the same explanation Stern offered in a tense meeting at the newly renovated offices of 7 Days on the morning of April 16, when he told the dozens of staffers assembled that he was folding the magazine. He was a businessman, he said, and the bottom line was 7 Days had failed to generate enough advertising support.

''In the first thirty seconds of his speech, he said, 'I wasn't in this for my ego,' " recalls one young writer. ''He offered it completely unprompted. He was very feisty and direct. He had girded himself for hostile questioning."

''He was never shy about telling people how rich he was," recalls another 7 Days staffer. ''It was particularly grating at the end, when he'd talk about his money and closing the magazine in the same breath. ' '

Staffers and 7 Days admirers were angry that Stern decided to close the magazine less than a month after putting it on the sales block, making it virtually impossible for most large companies to consider acquiring it. While there had been a decisive downturn in the adver-

tising market, and the magazine's losses were mounting, most industry experts feel Stern could easily have afforded to keep it going until a suitable buyer was found. ''What kind of businessman with that kind of money pulls out of the game when he's dealt his first bad hand?" says Gary Hoenig, editor and part owner of Newslnc., a publishingindustry monthly. ' 'Publishing is a cyclical business; there are downturns. But he made an impetuous business decision, and left a lot of people holding the bag. There's a question of responsibility."

This was not the first time Stern had folded his tent and run in face of high costs. In 1984 he bought a weekly Manhattan paper called the East Side Express from Washington publisher Philip Merrill for $75,000. ''Stern chatted up the staff and told us what deep pockets he had," recalls then executive editor Harriet Fier. ''It was going to be a whole new era." The next thing they knew. Stern had sold the magazine's name for $50,000 and was handing out pink slips. According to Stern, a close look at the books had revealed that the business plan was unworkable. He owned the paper for all of six weeks.

In response to the widespread industry impression that once he had decided to pull the plug on 7 Days he never seriously considered any offers, Stern's jaw sets. Sidestepping the question of whether he could have expected to get a firm offer in a couple of weeks, he says defiantly, "There was no buyer out there." He runs down the list, explaining that everyone from Forbes and Hearst to Conde Nast had passed. "The answer was 'No, no, no,' " he says. "I'm no fool. If somebody wanted to pay me $5 or $10 million for it, I was more than happy to do it. I sold the name 7 Days and the subscription list for close to $500,000 to Entertainment Weekly, so it wasn't to keep it, like some spoiled baby."

But there had been a deal in the works.

Stem made the final decision to close the magazine on the Thursday before Easter. The next day, Schneiderman called to tell him "something is happening." Wilma Jordan, who had been brokering the sale of 7 Days through her consulting company, the Jordan Group, had called with the exciting news that Thomas Ryder, president of the American Express Publishing Corp., was trying to raise money to keep the magazine afloat.

"It was Easter weekend, and not an easy thing to do," recalls Ryder, who spent that Saturday making calls from the Connecticut hospital where his wife was having emergency surgery. "My sense was that it would take $10 to $15 million to make the magazine work. I didn't think that was a risk I could take for American Express. I felt that it should have some venture-capital financing, and that we at American Express Publishing would manage the deal and try to turn it around." Ryder cobbled together a last-minute offer to assume the magazine's liabilities and keep it running with $8 million of Citibank venture capital. Essentially, Ryder would take 7 Days off Stem's hands; there would be no immediate profit for Stem, but he would retain part ownership—and 7 Days would live. Initially, Ryder wanted to keep the deal under wraps because his superiors hadn't yet been notified.

Stem refused the offer outright. It was a brief conversation. "I can't prove, and I don't care to prove, it was a fishtail," he says angrily, jumping up from his chair and circling his office to let off steam. "And if it wasn't a fishtail, then I think there was a scam against American Express being perpetrated. I've been around business enough to know that that's how it's done." He says he suspected certain Amex principals of planning to use the venture capital so that in six months they could turn around and "sell" the magazine to their company at a profit.

"There's nothing the slightest bit 'fishy' or inappropriate about what we were doing," says Ryder, sounding aggrieved. "I thought it would be a tragedy if that magazine went under. It was a chance to save it."

"Up to that point, Leonard had done nothing wrong," says a sad Adam Moss, who spent Easter weekend hoping for a lastminute reprieve for 7 Days.

"But here was an offer on the table, and he wouldn't listen. That hurt."

"He put seventy people out of work with almost no notice," says another magazine editor. "A lot of people's visions went up in flames. I think it's criminal."

"So I should just pay the bills?" explodes Stem, who says that the magazine was losing $100,000 and more a week (a figure some others dispute as too high), and that the months of negotiating a sale might have cost him another $1 million. He was already into the magazine for $8 million, and he calculates the severance policy—a year for Moss, four weeks for staff members— will cost him another $500,000. "Do you know something?" demands Stem. "I have been working since I was fifteen years of age, and I think to waste money is a sin.

"To maintain this business venture, in the face of all rational decisions," he continues heatedly, "is folly. I don't know how to do it. And nobody is going to tell me how to run my businesses who aren't businessmen, and who don't pay the bills."

Nobody has told Leonard Stem much of anything for the past thirty years. As a result, he is usually the sole author of his mistakes. Whether 7 Days' fate was sealed by the public brawl it kicked off between Stern and Trump—the magazine ran two articles critical of Trump Tower—is impossible to say. But many of Stern's critics believe that close encounter left Stern licking his wounds, with a diminished desire for the kind of attention his highprofile magazine had brought him.

"I could give a

shit for Trump and his low life," says Allison

"He was definitely experimenting with something—a new visibility," says someone close to Stern at the time. "And he got slapped back. He didn't like the price of being a public person. He put his toe in the water and a big alligator came by and bit it off."

When asked about Trump, Stern shrugs, opens his office door, and in a loud voice instructs his secretary, "Bring me my Trump file, please." She enters a second later and hands him a fat, yellow, legal-size folder brimming with newspaper clippings and Trump stationery. Watching Stern sort through the papers, utterly confident of his side of the story, it's almost possible to believe he is sincere when he says that he put up the money for the Trump documentary because he thought it was "a cheap way to get into television."

Certainly when Stern undertook the film project in the fall of 1988, he and Trump were not sworn enemies. In fact, they hardly knew each other. True, they had both been in hot-and-heavy contention for a deal with NBC, which was thinking about relocating its studios, and would have been a coup for any real-estate developer. But in the end NBC chose to stay put in Rockefeller Center. They had also been neck and neck on Forbes's list of the four hundred richest people in America for years. Last year, the magazine put Trump at $1.7 billion and Stern at $1.5 billion, though Stern maintained all along—which he now gleefully points out—that Trump's fortune was vastly inflated.

The late eighties marked a new chapter in Stern's life. He was finally free of the legal siege over Hartz Mountain's shady business practices, and he and Judith, his wife of eighteen years, had divorced. He was stepping out on the town. He took up a bon vivant bachelor life-style on Manhattan's Upper East Side. He bought a six-story mansion on Fifth Avenue, and redid it from top to bottom. The interior is quite dramatic, with an opulent Lalique crystal table decorating the foyer and a sweeping marble staircase leading up to the firstfloor landing, which is dominated by a grand chandelier and an even grander Van Gogh. The living room has that Old World, old-money feel, with handsome honey-colored wood paneling, stately rounded windows facing Fifth Avenue, a Modigliani, and the requisite dynasty photos framed in silver.

As an eligible bachelor, he began to appear regularly in the gossip columns—the Voice giving his name a new prestige. He also stepped up his philanthropic activities, making gifts to N. Y.U., his alma mater, as well as donating more than $1 million to the Legal Aid Society's Homeless Family Rights Project, and $250,000 to the Ms. Foundation for Women. Along with his new image, Stern for the first time began cultivating the hobbies of a rich man: riding, skiing, winetasting, and art collecting. "He is the fastest learner I have ever seen," says art dealer Edward Merrin, who has sold Stern a number of early Cycladic sculptures. "Leonard is notone to do things casually. He reads voraciously, and is extremely knowledgeable about the areas that interest him."

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Stem began to entertain often in his home, and dated a succession of pretty women. "I'm not a playboy, but I do like to have a good time," he told one reporter. "He wanted to remarry, and he was very much on the lookout," says Louise Duncan, a former party columnist for On the Avenue magazine who dated Stem. "He was very forthcoming about the fact that he wanted a blue-eyed blonde. What he found was someone who looks like a model, but who is actually very levelheaded and nice."

Stem first met blue-eyed, blonde Allison Maher at a party at his home, when she arrived on the arm of John Halpem, a flamboyant man-about-town who was then head of Stem's New York real-estate operation. Tall and willowy, with a spirited sense of humpr, she seems a decade younger than her forty years. From a "dirt-poor" family in the Appalachian foothills of Kentucky, she had decided to try to escape poverty by becoming a model. In 1974 she sent the Wilhelmina agency her picture, and got back an invitation to stop by its New York offices. Allison left home with a one-way ticket and sixtyfive dollars in her pocketbook.

She stayed with Wilhelmina for five years, working in Paris and London for a time. She is probably best known as the shapely body above the shark in the Jaws movie poster—a framed copy of which hangs in the Stern home. Her face can still be found on bars of Lux soap throughout the Middle East. In 1982 she began working as an independent television producer. Three years later, "Displaced Person," which aired on PBS's American Playhouse series, won her an Emmy award for Outstanding Children's Program.

Stem didn't start dating her until six months after they met, but then they hit it off right away. Allison moved in almost immediately, and they were married in August 1987. As befits the wife of a petcare czar, she now does volunteer work for the New York Zoological Society.

Stem has gone with Allison to visit her family, and has given them considerable financial assistance—he moved her mother from a trailer with no running water to a new home. Leonard and Allison still have eyes only for each other, according to friends, who have seen them slip away from parties to tryst on the balcony. "Our best time is alone," confides Stem. "I never thought I'd fall in love again. It's thrilling."

Since his marriage, Stem has given up Orthodox Judaism. Now he and Allison— whom Stern describes tolerantly as "very liberal, right on the fringe"—are active in a touchie-feelie ecumenical group called the Temple of Understanding. "It's a little weird," says an acquaintance who attended a temple function at the Stems' home last year. "There was the whole Birkenstock-sandal set running around between the crystal and marble statues. And Judy Collins, at the top of the stairs, singing, 'Tis a gift to be simple.' "

It was through Allison that Stem met Ned Schnurman, a veteran documentaryfilm producer with six Emmys to his credit and an idea for a series on leading Americans such as George Steinbrenner, Lee Iacocca, H. Ross Perot, and Trump. Stem says he was interested in adding television to his growing media interests, and thought Schnurman's proposed $500,000 budget for the first program sounded like a good offer. "If you can produce a first-class product for that kind of money, I thought you should be able to syndicate it and make a fortune," explains Stem. "The first one was Trump; he was the most obvious interest story. It was supposed to be a critical look at the guy."

Stern settled one legal probe by forking over a $20,000 fine: "Ever pay a parking ticket?"

Independently, 7 Days had already taken a critical look at Trump, giving Trump Tower low marks in an investigative realestate story that appeared in May 1988. Stem received a long, outraged letter from Trump, and he agreed to have 7 Days rereport the story so as to prove there was no malice involved. Published in August 1988, the second story was still less than flattering.

By early 1989, the tension had escalated. Schnurman's team was well into filming the documentary, and Trump was denying them any access to him or his buildings. Then, in the middle of an admiring Daily News profile of him, there appeared the unattributed statement that Allison "had continually phoned Trump's office asking for a date." Stern countered, and the story became a three-day sensation, with Allison's face making the front pages of all the tabloids.

Stem says he then received a call from Trump to the effect that "if I stopped going after him, he would make a public apology to Allison, saying it was a mistake—it must have been another Allison, or some nonsense like that."

Stem called his wife and put it to her: "I said, 'Look, Allison, you're in a bad situation—you could be remembered as the girl who Donald burnt.' " Her answer: she'd grown up in poverty, her family had been kicked around her whole life, and she wasn't about to be blackmailed. So Stem sent back a message to Trump: "Drop dead."

"I could give a shit for Donald Trump, for his affairs and low life," Allison says, laughing. "I'd met him twice, I think." She says she can't believe all the attention she got for something she didn't do, adding that her new motto is "If they're going to drag you through the mud, let them do it with a good photo."

For his part, Trump categorically denies ever calling Stem and offering to retract his comments about Allison. "Can you imagine me making a public apology to him?" he bellows through the phone from his office in the much-maligned Trump Tower. "You know me. Can you imagine this? He's nuts. I don't apologize to anyone, let alone a weasel like him.

"Let's face it, this is not exactly Little Red Riding Hood," continues Trump, who maintains that Stem is just jealous. "My assets are far better than his assets.

"Leonard's got a lot of complexes— most of which are obvious," he sneers. "He spent almost $1 million on trying to 'get Trump. He's got some deep-seated problems. And whatever his motivations, that money would have been better spent seeing a psychiatrist."

But apart from all the bluster, when it comes to confirming the reported phone calls from Allison, Trump refuses to comment—even though he has confirmed the story in the past.

Allison, unfazed by all the ruckus, says she took great pleasure in snubbing the Trumps at a party at the Plaza not long after the tabloid fire storm. "There was a receiving line and Leonard and I just walked right by. It was like a vindication. And it was fun to show up and piss everyone off. I really believe what goes around comes around and bites you right in the ass," she adds, referring to Trump's recent financial woes. "It's his own bad Karma."

But Stem was shaken by the public confrontation. Furious at the Daily News, he threatened to sue, and won a printed correction. (Trump threatened Stem with litigation at various times, but never followed through.) He was also sufficiently stung to call on the counsel of highpowered public-relations consultant John Scanlon—who is currently representing Ivana in the Trump split.

"Everyone told Leonard to keep his cool, but he overreacted," says someone close to Stem at the time. "Then Donald went ballistic. It freaked Leonard out. He began to withdraw from public life a bit."

Stem admits the documentary was a "mistake," but only from a business perspective: he shut it down for the usual reason—cost overruns. "It's a stale editorial product," he says. Schnurman disagrees and plans to finish it; he's now haggling with Stern over who controls the rights to the documentary. Schnurman confirms that Stem played no part in shaping the material—"We worked completely independently"—but wasn't the bias built in? Stern assumes a high-and-mighty editorial tone he must have picked up at the Voice: "Oh, stop. Come on, being in the media business, you don't think that way. You go after the story."

He didn't feel the same way when the press went after him in the late seventies for his suspect business practices, applying every nasty epithet to the Hartz Mountain heir. Aside from Time Warner's Steve Ross, who was under investigation at about the same time, few businessmen of Stem's stature have been so thoroughly indicted by the press. As Forbes concluded in 1979, "there's at least as much Jimmy Hoffa in Leonard Stern as Horatio Alger."

It's an ironic tag for a man who was handed control of the family canary business at the age of twenty-one. Hartz had been founded twelve years before Leonard was born, by his father. Max Stern, who immigrated to America in 1926 after his textile business failed. On the boat, Max was accompanied by 2,100 canaries bred in the Harz (it was later Anglicized to Hartz) Mountain region of Germany by a friend, Willy Odenwald, who owed him $30,000 and who suggested that selling his birds in America might settle the debt. The two hopped a steamer to New York, opened a shop, and sold the canaries in six months. Later, Max diversified, selling seed, cages, cuttlebone, and water dishes.

When Leonard, the youngest of three, was twelve, Max divorced his wife. He then married Ghity Amiel Lindenbaum, who had four children of her own. It was a close, traditional, and deeply religious household, which Max ruled with iron discipline. When Stern was still in knee pants, he would accompany his father to the office on Saturday nights, after the Sabbath, and on Sunday afternoons. "My father saw qualities in him early on," says Armand Lindenbaum, Stern's stepbrother. "They were very close."

Max's office is still there on the sixth floor of the building at 36 Cooper Square, where 7 Days was housed. Then there's the office Max kept in the Harrison, New Jersey, headquarters of Hartz. Max's portrait hangs in the conference room in the sleek tower Stern built for himself at 667 Madison Avenue. "Max is king," says David Schneiderman, adding that Stern always wants to know if anyone is using the offices, or why the lights were on. Stem once told a colleague, "Part of the reason I'm so successful is that my father didn't die with any secrets.'' "When I think about Leonard in fond terms,'' says a former employee, "that's the Leonard I think of."

During his lifetime, Max, who didn't believe in inherited wealth, gave most of his fortune away, donating more than $10 million to Yeshiva University in Manhattan, including grants to the Stern College for Women and the Albert Einstein College of Medicine. But in the fifties he signed all his common stock, worth less than $1 million, over to his three children. Stem bought his brother's and sister's shares.

Stern graduated from New York University at eighteen, received his M.B.A. at nineteen, and entered the firm. When he took over, Hartz was an old-fashioned family business that was floundering and heavily in debt. He once described his transformation of the company over the next decade: "I took Hartz from canaries into pet supplies, from sixty products into 1,200 products, from eighteen people to 400 in the field, from packaging to integrated manufacturing, from being a debtor to a lender. "

In the 1970s, already a multimillionaire, Stem indulged in few luxuries: religious holidays were still at Grossinger's, the Catskills resort where he and Judith had met. She was from a well-to-do family, "straight out of Goodbye, Columbus," says a family friend, describing Judith as "beautiful, a Jackie O type." They had married in January 1962; she was nineteen, he was twenty-three. They had three children in rapid succession— Manny, Eddie, and Andrea. Summers were spent in Atlantic Beach, Long Island, where Stem attended an Orthodox synagogue. "That was just his style," says Judith, who is now married to financier Stephen Peck, and works as a family therapist in Manhattan. "He never aspired to grand social life. He never wanted to be seen at a party. He wasn't looking to build his name through those avenues. He wanted to build an empire, and he did."

Stem was responsible for the company's boldest venture—investing in a soggy, garbage-strewn stretch of the Meadowlands area of New Jersey. The company had little debt, and Stern had a huge cash flow to play with. The price was then $13,000 an acre, $10 million for the lot. It was the investment opportunity of a lifetime: those 750 acres, plus 500 more acquired later, are now worth $800 million, every square inch occupied by retail stores and offices built by Hartz Mountain Industries. Stern is also building a small city with a partner, developer Arthur Imperatore, on eighty-five acres of land adjoining Lincoln Harbor. Stern's total realestate holdings in New Jersey are estimated to be worth more than $2.6 billion; he pays $40 million in real-estate taxes on them annually.

"It was instinct," says Stem of his decision to invest in swampland. "The thing about being young is that you assess risks differently than when you're older. There is a natural order to the world. And when you're very young, you just know you're right."

It's that supreme confidence that may have gotten him into so much trouble. Throughout the seventies, his heavyhanded executive style (best captured by a sign that graced his office: "Once you've got them by the balls, their hearts and minds will follow") did little to temper his rough-and-tumble image.

As Hartz put the squeeze on its competition, eventually cornering 75 percent of the market, rumors about its dirty trade tactics escalated into a barrage of litigation and government investigation. In the largest suit brought against Hartz, the A. H. Robins Company—then the owner of Sergeants pet products—identified approximately 280 incidents of "discriminatory and coercive payments, rebates, grants of free goods, allowances and the like." In the most sensational element of the case, Robins also presented evidence establishing that Hartz attracted retailers by entertaining them with prostitutes at sales conferences.

In October 1979, on the day Stern was supposed to be deposed, settlement negotiations began. In the end, Hartz paid a Robins subsidiary $42.5 million, one of the largest individual anti-trust settlements in history. If the case had gone to court, it could have cost Hartz three times as much under the triple-damage provisions of the anti-trust laws. As it was, Hartz was able to take the entire amount as a tax deduction in the first year. (Also that year, Stem announced he was taking the company private—for nearly $70 million in cold cash. The maneuver, making Hartz his own fiefdom, was thought to be an attempt to avoid scrutiny by the Securities and Exchange Commission.)

As three former Hartz vice presidents were sentenced to jail, a federal grand jury began investigating senior corporate executives, including Stem, in connection with a cover-up of the anti-trust violations. The probe ended abruptly in 1984, when Hartz pleaded guilty to obstruction of justice, committing perjury, and suborning perjury, and paid a $20,000 fine.

The settlement so outraged the judge in the case, Robert Merhige Jr., that he complained about it in open court, and then took a five-minute recess to cool off. When Merhige closed the hearings at the end of the day, he told the court somberly, "Usually, one of the compensations of my job is being able to leave here every day. . .feeling justice has been done. I can't feel that way today."

When asked about the amount of the penalty, Stern smiles: "Ever pay a parking ticket?" But the negative press cost him plenty. It was "a painful time in my personal life," he says. Particularly painful was an article by Connie Bruck that ran in The American Lawyer, entitled "The Hartz Mountain Guide to Committing Perjury, Suborning Perjury, Obstructing Justice, Locking Up the Market, and Paying a $20,000 Fine." Stern is still so sensitive about the article that he quotes from memory a passage that describes him as having "a snakelike head." "She started with a bias," he complains. According to Stern, the Virginia-based Robins subsidiary, like many other local petcare competitors, was just mad it was losing business to Hartz. "They couldn't stand the licking we gave them," he says. "They used to call me 'that Jewish boy.' These are the same people who brought you the Daikon Shield. Think about it."

Stem vehemently denies any personal wrongdoing. He maintains that many of the charges brought against him were manufactured by employees whom he had caught stealing from the company. These "bad apples," according to Stern, "poisoned those around them." As for the prostitution charges, "One sales manager of the company had used prostitutes," he concedes. "It was wrong. We were a fastgrowing company, and at that time I think that type of behavior was quite prevalent." In a joking tone, Stem adds that when he asked the manager how he had made the arrangements, " he said they went over to [a competitor] and got their girls."

When the conversation gets around to the 1981 60 Minutes segment on Hartz Mountain, Stern is suddenly serious—and angry. The program challenged the company's strong-arm tactics and Stern's credibility, and showed him escaping the cameras by ducking into his limousine. "I was furious," says Stem. "Furious. Should I have cooperated with them? Let me tell you what they did to me."

'How could any human being see their lifetime s work torn apart and not be upset?" Stern says of the 60 Minutes segment that criticized his business tactics.

Visibly upset, he explains that he was stalked one day as he went to pick up his children; the building's doorman alerted him that there were suspicious men outside. Because his children had been the subject of kidnapping threats, Stem says, he was terrified. "I was in a panic—my kids were coming down from upstairs." He says he ran outside and stood by the strangers' car, but they took off down Fifth Avenue. Stem gave chase for twenty blocks, finally catching up with them in the traffic. "I lay there on their car, and the police finally came and took out their revolvers, and I said, 'I got the kidnappers.' And who do you think they were?"

Stem stops for a second and stares out the window toward Central Park, clenching and unclenching his jaw in an effort to regain his composure. He says the cameramen apologized, and one went so far as to tell him, " 'Look, I feel terrible. Let me pay you back for what I did.' He said, 'They're after you. Don't do the interview.' "

Stern says his decision, on the advice of his lawyers, not to talk to 60 Minutes was probably a mistake—it looked as though he had something to hide. The program was devastating and, according to friends, greatly upset Max Stem. ''We were all upset," says Stern dramatically. ''How could any human being see their lifetime's work, their own flesh and blood, torn apart and not be upset. But he was not upset with me. He said, 'Don't worry, Leonard. We did nothing wrong. This will blow over.' "

These days, more often than not, it's Stern's generosity that lands him in the news. He is following in his father's footsteps by endowing schools. His blockbuster $30 million ''naming gift" to N.Y.U. two years ago means that henceforth the business school will be known as the Leonard N. Stern School of Business.

Some have suggested that Stem is interested in ''buying his good name." ''I think that's an unfair criticism," says John Brademas, president of N.Y.U. ''It's nonsense. Strong letter follows!"

Even Stem's critics grudgingly admit that it is too facile to dismiss his work on behalf of the homeless as simply a bid for good publicity. His Homes for the Homeless, which operates three transitional shelters for homeless families, entailed a cash donation of $750,000 and $22 million in loan guarantees. It is the largest private project of its kind in the country, and currently houses 1,300 people a night—10 percent of the city's homeless families.

Stem became interested in the project through his longtime friend Helaine Barnett, who is active in homeless-rights issues with the Legal Aid Society. Stem asked her if she could get him into the shelters so he could see what was going on. Accompanied by two Legal Aid Society lawyers, Stern and Barnett took his limousine up to the South Bronx to the Roberto Clemente gymnasium, a temporary shelter, and then down to the Martinique, a grim Herald Square welfare hotel that has since been closed. Driving through the slums, Stern stared out into the black night and told the astonished attorneys, ''Maybe I'll just buy this land and build housing for these people."

''He likes to build things," explains Carol Kellermann, the executive director of the Stern Foundation, which administers his charity work. ''He likes to do things on a large scale, and do them quickly. With this project, he got tangible results right away. He could walk around and see the families and know he had made an impact. If he had just wanted approval, he could have written a check to some charity. It would have been much less trouble and responsibility."

Stern is also motivated by a desire to start projects that interest his children. The oldest, Manny, worked for Homes for the Homeless for a year, and has just finished his master's in public policy at Columbia. Friends speculate he may have political aspirations. Eddie has quit his job as a reporter at the satiric Spy magazine to join the Stern media group, and his father clearly hopes he is grooming a future editor. Andrea, who graduated from Brown last year, is interested in photojournalism. ''We're all very close," says Eddie, who speaks to his father by phone every day.

Those who know Stern well say that his second marriage has mellowed him, and that he is enjoying himself more. Allison has even persuaded him to spend a little of his money: this winter he bought billionaire John Kluge's yacht for approximately $8 million. And for the first time in Schneiderman's recollection, the boss took a real vacation, though he's never far from a phone. The boat is equipped with the latest communications systems, including a fax machine. ''He's the lion in winter," says John Halpern, only partly in jest. ''When you're younger, you're competitive. But those jealousies and envies abate. It's nature's way."

At one point during this year's PEN dinner, seeing Stern at the center of the dance floor, flanked by fellow tycoons Henry Kravis and Saul Steinberg, one acquaintance observed, "I think all these guys go through a brass-knuckle phase when they are completely ruthless. Then they make all their money, and they realize they don't have to be a shit all the time. They become more socially acceptable."

But Stem is still every inch the hardnosed businessman. At the first downturn in the real-estate market, he started making across-the-board cuts in his company to keep it lean and mean. In addition to closing 7 Days, he has pulled out of a number of major real-estate projects, including scratching plans to build a chic SoHo hotel, and disappointing Long Island City by backing out of two real-estate development deals. Last month, he also fired sixty employees in New Jersey, almost 20 percent of his operation there.

"Of everything I own, 7 Days was the least important," says Stern matter-offactly. As far as he's concerned, it was just a flawed product he pulled from the shelves. There will be plenty of opportunities to try again. "I'm putting the company into place," he says, "into a position to build new products."

With that, Stern grins broadly and his eyes take on a mischievous glint. He already has something in mind—an evening newspaper. When will his broadsheet start up? "After the Post folds," he says, clearly delighted at the prospect of some poor publisher going belly-up chasing his dream. Leonard Stern would never be so sentimental.