By JOHN G. EDWARDS
REVIEW-JOURNAL (Reprinted with permission of the Las Vegas Review-Journal 12/2005)
Steve Stern understands business crises inside and out.
As a reporter for The Wall Street Journal, he was an outsider watching businesses struggle. Later, as the top public relations executive for Occidental Petroleum, Gulf + Western and PurchasePro.com, he participated as an insider coping with corporate challenges.
Stern saw history unfold during his stay as a top aide to the late Dr. Armand Hammer, the colorful chief executive officer of “Oxy Pete.”
Stern now runs Stern And Company, a strategic communications firm specializing in corporate, financial and crisis communications.
Question: How did your career begin?
Answer: I ended up working at the Indianapolis Times. (After that) I just sort of bounced around in my Volkswagen, latching on to whatever paper or writing job I could until I got to Washington where I got a job with a newsletter. I saw an ad in (the trade magazine) Editor & Publisher for The Wall Street Journal and applied.
Question: What did you do for the Journal?
Answer: I wrote the stock market commentary. I wrote “Heard on the Street” occasionally. I went to Washington. I covered the Senate, the House, the Fed, the Treasury.
I worked on the Trans Alaska pipeline (story), right up to the Supreme Court decision. Lockheed loan guarantees where (Vice President) Spiro Agnew broke the tie, I believe. Chrysler loan guarantees. People I interviewed, John Connolly, William Simon, great senators, true legislators Mike Mansfield, Everett Dirksen, Bill Proxmire.
It was great. Jim Fallows wrote a book called, “Breaking the News,” and it talks about the current state of the news and how reporters are on television and here and there. At that time, reporters weren’t the story.
Question: When did you leave journalism?
Answer: In 1974, I went to work for Occidental Petroleum, my first foray into (public relations). I reported to Armand Hammer, chief executive officer.
Occidental owned Island Creek Coal, and the coal miners were going to go on strike. I was sent to Washington, D.C., for two or three days. I attended negotiations with the coal miners union for Oxy and just sat there taking notes. After three days, I was ready to come home, and Hammer said, “No, you need to stay for the duration.”
I said: “I have no clothes.”
He said: “Buy them.”
I bought a complete wardrobe. About two weeks later, I returned to Los Angeles and turned in my expenses to Dr. Hammer.
He said: “Well, I don’t sign these. The person you report to signs them.”
“Well, I report to you,” I said.
He said: “Well then, you sign your own expense accounts.”
The next crisis at Oxy was less than two months later. John Swearingen of Standard Oil of Indiana came into Hammer’s office and said he was going to take over the company. I was called to come upstairs.
Question: What happened?
Answer: (Swearingen told Hammer): I think the two of us ought to get together. Dr. Hammer, who by fact or legend had founded this company by drilling midway between two (major oil companies) in Iran, said: I have no reason to.
To which Swearingen said: Then, we’ll go for you or we’ll make a run for you. Something to that effect.
I suggested we get a Senate hearing and we get a Wall Street Journal story, and we did. We got a Wall Street Journal story that portrayed Armand Hammer as a poor, embattled entrepreneur. That coupled with Senate hearings precluded the takeover. Standard of Indiana just withdrew.
Question: What was Dr. Hammer like?
Answer: One time, he called me in the middle of the night to put together a presentation to sell his real estate division, and I had to take my kids with me.
He invited me over to his house, and the kids were just wandering around this house filled with great art treasures. Playing with sculptures. It didn’t bother him or his wife a bit. He was a very nice, sweet, very strong businessman to whom you could never say no. He always kept his word to me. He was guilty of overseas payoffs. He was guilty of illegal campaign contributions, and God knows how much else.
Question: But you didn’t witness any of that.
Question: Why did you leave?
Answer: A federal marshal came in and subpoenaed my files, and then he left another subpoena on the desk.
I went up to Hammer’s office and said, “Doctor, what is this about?”
He said: “Oh, it’s something about our international operation.”
I opened the other document, and it was a subpoena for me to testify.
I said: “You know what? I don’t want to work here anymore.”
He said OK, we’ll take care of your legal fees, and I’ll pay you for a year, which was really helpful, because I was getting a divorce.
Question: What are some other highlights?
Answer: I got a job (in New York) at Gulf + Western Industries as head of corporate communications.
Gulf + Western owned 160 something companies. Four of those were publicly held. They owned New Jersey Zinc. They owned a sugar company. They owned a resort in the Dominican Republic. They owned a piece of a company in Hawaii. They owned Simon & Schuster. They owned Paramount. They owned Madison Square Garden. They owned Consolidated Cigar.
It was 16-hour days. Lots of entertaining. Lots of very, very hard work and traveling. The average life there at the PR department was two years. I lasted three before deciding to leave.
Question: You’ve worked at public relations firms as well.
Answer: Yes, a couple of nationally known firms specializing in crisis and corporate work where we did some huge Chapter 11s (bankruptcies). Lomas Financial Corp. Circle K. America West. L.J. Hooker. Pic `n Save. I did the Hollywood Park takeover. A couple of years later, I left and started Stern and Co. We did Teledyne. Bergen Brunswig. Kaufman & Broad. Orion Pictures. Republic Pictures. Westwood One.
Question: And then?
Answer: I came to PurchasePro in March 2001. I took the job because it had been a long time since I had worked for a company in crisis. I thought it would be interesting.
Question: What’s the secret of your success?
Answer: Telling clients the absolute truth, taking all the bark off, and providing I guess appropriate counsel based on my experience. That experience is broad. There are very few crisis situations, corporation communications or investor relations situations that I haven’t seen.
Name: Steve Stern.
Position: President, Stern And Company
Family: Sons, David and Andy.
Work history: Reporter for the Indianapolis Times; reporter for The Wall Street Journal reporter in Washington, D.C.; editor of US Oil Week; Washington bureau chief for American Banker; independent speech writer. Also, vice president of corporate communications and investor relations for Occidental Petroleum Corp., Gulf + Western Industries and PurchasePro.com; director of corporate communications for Wickes Cos., PurchasePro.com. and established Stern and Co. in Los Angeles, which was combined with PondelWilkinson MSL where he was senior counselor.
Education: Undergraduate and Graduate Degrees from Indiana University.
Favorite reading: James Thurber, Saul Bellow, John Cheever, mysteries and daily newspapers.
Hobbies: Following New York Yankees baseball, photography, writing poetry and golf.
Hometown: New York.
In Las Vegas since: March 2001.
Dow Jones & Co. (Wall Street Journal, Dow Jones News Service-DC and NYC)
Washington Evening Star (DC)
Indianapolis Times (IN)
Bloomington Tribune (IN)
Indianapolis Times (IN)
US Oil Week (DC)
Gulf+Western Industries (NYC)
Occidental Petroleum (LA)
Boise Cascade (ID)