POPULIST HERO OR BOTTOM FEEDER?

By Daniel Kadlec

After decades of believing, antitobacco forces finally found their Santa Claus. Sure enough, he's short, plump and round, sports a silver beard and grins impishly. But his name isn't Santa Claus, it's Bennett LeBow.

LeBow, 59, makes an unlikely populist hero. He's an '80s-style corporate buccaneer who plundered Western Union, rattled American Brands and took runs at Prime Computer and RJR Nabisco. As head of the Liggett tobacco company, he has contributed to one of America's unhealthiest habits, but last week, ironically, he became the bearer of gifts to those plotting the demise of the cigarette industry. In settling a raft of lawsuits, LeBow agreed to turn over documents that presumably tell what the tobacco execs knew and when they knew it.

How does LeBow feel about being the maverick who broke ranks with his peers? "I just feel like we've done the right thing," he says. "I'm not a maverick." He can deny that all he wants. But LeBow is more maverick than James Garner. He shuns glamour, preferring to invest in down-and-out companies. He has teamed up with the likes of Carl Icahn, a consummate outsider. And he doesn't mind an ugly fight.

The son of a Philadelphia insurance man, LeBow earned an engineering degree at Drexel University and launched his own computer company. A few years later, he had to rescue it with a financial restructuring. In short order, bailouts became his business, backed by the infamous junk bonds of Michael Milken in his heyday.

LeBow is a reformed smoker, but he is not a reformed capitalist. In the 1980s, for example, LeBow made noise about a possible takeover of cigarette maker American Brands. He lost his resolve but found a profit, making $30 million when he surprised other investors by selling the stock. He made one of his biggest killings early this decade. LeBow had bought the Western Union money-transfer business in 1987, and watched his company sink into bankruptcy in 1991. Then, amazingly enough, he managed to find a buyer for the business a couple of years ago, which allowed him to pay off old debts and emerge with some $300 million in cash--his springboard to the skirmish with RJR and a rejuvenated raiding career.

The RJR proxy fight in 1995-96--in which LeBow proposed to split the company into two pieces, the Nabisco Brands food group and the R.J. Reynolds tobacco firm--was ultimately rejected by skeptical stockholders. "I think it was...an issue of character," said tobacco-industry analyst Ellen Baras at the time. "I think there are people who would support a spin-off of Nabisco, but not by LeBow." One of the prime factors was LeBow's dubious reputation as a manager. In 1994 his own shareholders had sued him, claiming he had taken millions of dollars in improper loans; LeBow settled out of court.

An avid scuba diver, LeBow has enjoyed the tycoon life-style to the hilt, operating from Florida's millionaire ghetto on Fisher Island. During the late 1980s, he chartered a jet to fly dozens of friends to a multimillion-dollar party in London to celebrate the launch of his private yacht, modeled after Queen Victoria's. He reportedly gave guests gold coins bearing a likeness of himself wearing a Lord Nelson hat. He has sold off some of his lavish baubles in recent years, but his profligate reputation remains a flaw. In the RJR fight, opponents delighted in propagating the slogan "LeBow...Le Bankrupt. Any questions?"

--By Daniel Kadlec