What made Saul Steinberg run?

When the corporate raider Saul Steinberg died in obscurity on Friday at the age of 73, it seemed hard to believe that he was once one of the most feared and despised figures on Wall Street. Throughout the 1970s and '80s Steinberg was the most visible practitioner of "greenmailing"— that is, the art of making one's living by gobbling up large blocks of shares in publicly-traded companies and then threatening to gobble up the companies themselves unless they paid him a premium to sell back his shares.

In 1968, as a brash and unknown 28-year-old, Steinberg seized control of Reliance Insurance, a 150-year-old Philadelphia company more than ten times the size of his own. The following year he came close to gaining control of the 145-year-old Chemical Bank, then America's sixth largest bank. In 1984 his hostile bid for another iconic institution— the Walt Disney Company— made him $60 million.

Among the so-called sharks of his day— men like T. Boone Pickens, Carl Lindner, Carl Icahn, the Bass brothers and Victor Posner— Steinberg maintained the highest profile. He lived in a 34-room, 17,000-square-foot Park Avenue apartment that had once belonged to John D. Rockefeller and filled it with art treasures and antiques. For his 50th birthday party in 1989, his wife orchestrated ten tableaus of living models displaying scenes from paintings by old masters.

Screaming fit at dinner

Ah, yes— the good life. In the mid-"'80s, while researching a magazine profile of Steinberg, I spoke to some of his friends, associates and employees (Steinberg himself declined to be interviewed). His former household servants painted a picture of a well-meaning but erratic man enslaved by mercurial mood swings. He was unfailingly polite to them, they said, had fresh flowers brought in daily, and took special care about his clothing.

On the other hand, his office was described to me as an unholy mess, cluttered with papers and used Coca-Cola cans. He once refused to take a phone call from his college-age daughter who was vacationing in Egypt, saying, "Tell her I'm not in." He once threw a screaming fit at a dinner because his favorite chicken parts— the legs— had been served to his children rather than to him.

Keeping Mom waiting

Steinberg's visitors at home— including his mother and brother— were sometimes kept waiting for hours. And when Steinberg's second wife left him in the late '70s, he refused to release her clothes— most of which were subsequently smuggled out of the apartment by servants loyal to Mrs. Steinberg.

"He was always nice to us," one of Steinberg's former maids told me. "But you got the feeling that he was paranoid, that he always wanted someone with him and always needed to make you feel that he owned you."

First Jewish president?

Granted, no man is a hero to his valet. Still, this is the same Saul Steinberg who, around that time, told the financial writer Dan Dorfman, "You watch. Like the Rockefellers, I'll own the world. I could even be the first Jewish president."

Of course it didn't work out that way. In 1995, just as his already precarious insurance business was slipping, Steinberg suffered a serious stroke that virtually disabled him for the rest of his life. Soon thereafter Reliance Insurance was liquidated in what was then the biggest insurance company failure in American history. Steinberg and his third wife, Gayfryd, were forced to sell their apartment and auction off their 61 masterpiece paintings. Steinberg was sued by various philanthropies and even his own mother for reneging on various pledges and loans. For the past dozen years or so he was barely heard from at all.

"'Why do I do it?'

Many type-A corporate executives claim to be driven by the need to serve their stockholders. But by 1982 Steinberg had eliminated his stockholders by buying them out. By that time he had accumulated a net worth of perhaps $200 million, so the question logically arose: What made Saul run?

At a Wharton School dinner in 1984, a guest raised that question.

"Let me say this," Steinberg replied eagerly. "I'm sure that many of you have experienced this— there are times in your career when you feel like you've been there, you've done it, you've accomplished so much, and you say, "'Why do I get up at six and do it, and why should I keep doing it?' And I don't have the answer for you, but we do continue…. I love what I do and I have to say it is really a lot of fun. It's great. I just feel I will do more of the same."

J. Paul Getty's law

Steinberg died at the very moment that Congress was debating the merits of raising taxes on wealthy Americans. The widespread belief among the super-rich that they are being "strangled" by government regulations and taxes may seem inexplicable to you and me: With all their money, we wonder, what are they so afraid of?

The best answer was probably provided by the late oil billionaire J. Paul Getty, who ascribed both his business success and his marital failures to his control over his emotions: "There is a law of compensation in nature. Every plus is somewhere, somehow offset by a minus."

Great wealth doesn't merely warp one's perspective. It also deprives the wealthy of other equally valuable commodities, like wisdom, patience, maturity and humility. If money is all you have, you will cling to it that much more desperately.

Saul Steinberg loved his work and planned to go on doing it. Ultimately it was all he knew. When he was suddenly rendered unable to go on doing it, he lacked a Plan B. Maybe that should be his epitaph.♦

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