The Powers Behind Ocean Drive
Talk about hot. Jerry Powers had yet to unveil his magazine and already he was getting good ink. "Powers, the man behind Ocean Drive magazine, must have more credibility than most new publishers," gushed Miami Herald columnist Gail Meadows in November 1992. "Without even a prototype to show potential customers, he's been able to sell 40 pages of ads."
The January 1993 inaugural issue did not disappoint. Aimed at capturing the upscale advertising market created by South Beach's fashion boom, Ocean Drive immediately defined itself as a mirror image of its namesake -- glamorous and gossipy and desperately beautiful. The ideal read for starstruck browsers. None other than Guess! model Claudia Schiffer graced the cover, her renowned bosom testing the straps of a clingy black gown.
The chicest of advertisers clamored for space in the February issue. Fashion photographer Francesco Scavullo, who had snapped the shot of Schiffer, agreed to supply the next half-dozen covers. The glossy even landed an interview with Thomas Kramer, the mysterious German financier who was gobbling up Beach real estate like Linzer torte.
For Powers, who had arrived in town with little more than a dream, the debut was cause for celebration.
On January 20, 1993, however, the 48-year-old New Jersey native made a very different sort of debut -- this one in U.S. District Court, where he pleaded guilty to two misdemeanor counts of failure to file a federal tax return, crimes for which he faces a maximum sentence of two years in prison.
Two years later Powers has yet to be sentenced (he is slated to receive his punishment April 6). His magazine, in the meantime, has swelled to Vogue-ian proportions, doubled its staff, and sought out new markets in Broward and Palm Beach.
With the ascendance of Ocean Drive, Powers has become South Beach royalty. Once a struggling Sixties radical who put out Miami's first underground newspaper, he now dines in the finest restaurants, drives a Jaguar, lives in a spacious home on exclusive Sunset Island, and rubs elbows with A-list celebs.
All this, of course, while federal charges are pending.
And his trouble with the IRS isn't the only secret Powers has been keeping. There is also his arrest record -- which stretches back to 1966 and includes some twenty busts, most for worthless checks, others drug-related -- and at least four lawsuits filed against Ocean Drive by former staff members and service providers who allege the magazine failed to pay them.
While by no means nefarious, one other secret is equally intriguing. Powers has never publicly discussed Ocean Drive's financial backers, a group that includes prominent advertiser and one-time profile subject Thomas Kramer, who has invested tens of thousands of dollars in the venture.
Other than to confirm that Kramer is an investor, Powers refuses to discuss his magazine's finances. But he is candid about his brushes with the law. He blames most of the arrests on a drug addiction that dominated his life for the better part of a decade. The recent tax charges, he says, were due to bad financial advice and his own carelessness. But he believes these past transgressions have no bearing on his leadership of Ocean Drive. "After all I've been through, I've learned," Powers asserts. "When you're running a business, you have to be very aware of laws that govern the finances. And I am. I am."
Jerry Powers can spin riveting tales of his exploits as a struggling hippie idealist, then acknowledge in the next breath that he recently purchased a new Jag. He can insist that he holds fast to the radical values of his younger years, even as he lounges in an oceanfront office decorated with photos of himself alongside then-presidents Reagan and Bush.
Even his lawsuits smack of irony.
Take the case of Ocean Drive versus Rumor Model Management. Rumor had paid only $1000 of the $4000 the magazine had charged for full-page ads that ran in the first two issues. In March 1992, the agency sent a check for $1000. The check bounced. Months later the bill remained unpaid. Powers hired an attorney to sue Rumor and recently obtained a judgment for $6200, including damages.
Ocean Drive has numerous other suits pending against delinquent advertisers, but those cases don't cover the full scope of Jerry Powers's familiarity with matters like bad checks. Metro-Dade police records indicate that Powers wrote his first bad check in New Jersey in 1966, shortly before he came to Miami and began publishing his underground newspaper, the Daily Planet. Writing bad checks became, by his own admission, a habit.
Sometimes the checks were small (fifteen dollars to one Missy Alspach). Other times they were large ($1278 to Always Better Service Plumbing). Sometimes Powers would fight the charges in court. Other times he would simply fail to show up on the appointed day, whereupon a warrant would be issued for his arrest. On November 20, 1985, when police stopped him for a traffic infraction, a records check showed that Powers had no Florida driver's license but did have warrants outstanding on four previous worthless-check charges dating back to 1978.
Metro-Dade police files list five aliases for Powers, all slight variations on his name. Records also indicate that at various times he has supplied police officers with two different dates of birth and Social Security numbers. Powers says the only "alias" he has used is his given name, Jerry Michael Pulwer, which he legally changed to Powers in 1967 after he landed a job as a radio disc jockey. "It's certainly possible," he says, that he gave cops differing birth dates, though he suspects the discrepancy in Social Security numbers -- a single-digit variance -- is the cops' fault.
As to the misdeeds themselves, he is definitive: "I did it. Clearly I did. I probably wrote more [bad checks] than I got caught for. I'm telling you, the reason I did was because I was on drugs and, like, I had no clue as to the fact that I was even on the planet during parts of that time. But I never spent a day in jail [for writing bad checks], and I don't think there was ever anything I was found guilty of."
Old police and court records are sketchy when it comes to the resolution of the various violations, most of which were felonies. But from the documents that do exist, it appears all but one of the charges were eventually dismissed after restitution was made. Civil court records also show that Powers was sued more than a dozen times between 1977 and 1984.
Powers says his drug problem consisted of an addiction to cocaine, barbiturates, amphetamines, "and whatever else was around." The drugs led to other arrests. In 1973 police busted him for drunkenness and possession of cocaine. (The charges were later dismissed.) In 1978 he was nabbed for attempting to obtain drugs with a forged prescription. (The felony charge was reduced to a misdemeanor and transferred to county court, where, Powers recalls, he was found not guilty.) Four years later he was arrested on drug charges again. Police and court records don't indicate what became of that alleged infraction; most likely, as Powers claims, the charges were eventually dropped.
Powers, who married in 1970 and fathered a daughter two years later, says his drug dependence worsened during the Seventies and early Eighties. In 1984 he finally quit at the urging of his wife Sandi, putting an end to a dark era of his life.
It did not end his problems with authorities, however.
In 1986 he signed on as business manager for pop artist Peter Max, a friend he'd made during his heyday as an underground publisher. Both men reaped the fruits of the Eighties art boom. Powers moved to New York, took a summer house in the Hamptons, and, as it turns out, neglected to pay his taxes. According to a document filed in January 1993 by the U.S. Attorney's Office in New York, he failed to file federal income tax returns for 1988 and 1989, years in which he earned a total of $560,000.
"It was about irresponsibility," he now says. "I had gone from making $25,000 a year to making two, three, four, five hundred thousand dollars a year, and I had no clue of how to deal with my finances. It was like, one day I was taking the bus on Kendall Drive and the next I was in a limo. I was given very, very, very bad financial advice by someone. But I don't blame that person. I blame me."
While his criminal past has remained hidden from the general public, Powers says he has told his business associates and some staffers about the arrests: "I haven't gone into detail, but they know." (Three former employees, all of whom worked closely with Powers, say this claim is nonsense. "He made like he was a pillar of the community," one contends. "If he wanted to be upright and honest, he sure didn't do it with me. I only found out about his past months later, and it wasn't from him.")
A week after the federal tax charges were filed, Powers pleaded guilty. His sentencing date has since been delayed four times, a two-year lag that has fueled speculation that Powers is cooperating with the federal government. One well-worn rumor is that he may be providing the feds with information about his former boss, Peter Max. Powers declines to comment about this, as does Max's attorney, Bob Gage. Powers won't say precisely why he and Max parted ways, only that a slump in the art market led to tensions.
In any event, by 1992 Powers already had set his sights on a new project. All it took was one visit to South Beach and he wanted back into publishing. He says something about the Beach -- the youth, the sultry climate, the sense of possibility -- reminded him of the Sixties.
He recruited a young, energetic partner named Jason Binn, the son of Morton Binstock, chairman of Atwood and Richards, a multimillion-dollar trading company in New York, and the two began brainstorming ideas for a monthly magazine. Once they hit upon a concept, all they needed was money.
As successful as Ocean Drive seemed in its first issue, the magazine was burdened by startup costs A office equipment, legal fees, salaries, not to mention the rent on an office at 804 Ocean Dr. During those first months, one former employee recalls having to transport a personal computer from home into work because the company couldn't afford its own.
Printing costs also took a toll. The magazine, in fact, was sued in state court by a company now called St. Ives Press, for refusing to pay $18,500 in printing fees for its debut issue. Powers claimed the printers had screwed up the color tone on the cover, rendering poor Claudia Schiffer an unsightly shade of orange. Eventually the magazine agreed to pay St. Ives $12,000 in installments, but Powers missed the first payment. On the orders of a judge, Ocean Drive ended up paying St. Ives $14,500.
Well aware of his project's need for capital, Powers had found private backers who invested money in the magazine by buying shares of SoBe News, Inc., the private company Powers had established to launch Ocean Drive. For example, in November 1992, a man named Derick Daniels invested $50,000 in the company, according to documents reviewed by New Times. Powers says Daniels is a former newspaper editor and friend who is chairman of the magazine's editorial advisory board.
As president of SoBe News, Inc., Powers refuses to discuss anything further about Ocean Drive's investors. "Anything having to do with financials I'll have no comment on," he says. "It's a private company and people have a right to their privacy." With some reluctance, however, Powers is willing to comment about one other backer.
Thomas Kramer's relationship with Ocean Drive dates all the way back to the magazine's second issue, which featured an exclusive interview with the German currency trader whose Portofino Group had just purchased $40 million worth of real estate south of Fifth Street in Miami Beach with a grandiose plan to refashion the blighted area into an Italian Riviera-style resort.
The article glossed over questions about Kramer that were raised in other press accounts -- questions regarding his shady dealings in his native country, and his erratic behavior. (In December 1992, New Times published such a piece, a cover story entitled "Tycoon Thomas.") Instead, the interview, which ran under Jerry Powers's own byline, afforded Kramer the opportunity to lash out at his critics.
February also marked the month that Kramer signed on as a major advertiser with Ocean Drive, running two full-page color ads.
The soft-edged Kramer piece meshed with the rest of Ocean Drive's editorial content. Indeed, the magazine continues to write laudatory features about current or desirable advertisers. Clothing designer Betsey Johnson, one of the publication's flagship advertisers, was profiled in the same issue as Kramer. The following month Powers interviewed another prominent advertiser, Russell Galbut, managing director of condo colossus Crescent Heights. Absolut vodka, one of Ocean Drive's first national accounts, has been touted in two separate profiles about artists who worked on the company's ubiquitous ad campaign.
According to Ocean Drive editor Lori Capullo, the line between the magazine's editorial and advertising sides is firm. "They have no say whatsoever over what we print," Capullo says. "I told Jerry I wouldn't work here under any other circumstances."
Kramer's involvement, though, is somewhat special, given that he owns part of the magazine. A significant part, judging from documents obtained by New Times. These not only list Kramer as a shareholder, but indicate that in 1993 he paid $250,000 for 25,000 shares of SoBe News, Inc. At the time he invested, that represented 25 percent of the company. His shares were nonvoting, meaning he was entitled to dividends but had no control over the corporation.
For months people have speculated that Kramer might be backing Ocean Drive, and understandably so. It would be a shrewd move for a landowner with such a large stake in the continued popularity of his adopted home turf: Along with its noncontroversial tone, Ocean Drive is known as an incessant lobbyist for all things South Beach.
Though Powers initially refused to comment on the subject, he later admitted Kramer is an investor, though he says the German has infused less than $250,000 into SoBe News, Inc. One former employee of Ocean Drive, however, claims to have seen the check the magazine received. "It was for 250,000 bucks," says the source, who requested not to be identified by name. "That's not something you forget."
Kramer himself is out of the country, skiing in St. Moritz. His second-in-command at the Portofino Group, CEO Heinrich von Hanau, confirms Kramer invested in Ocean Drive. "We think it's a great magazine and Jerry's doing a great job," says Hanau, but he refuses to reveal how much Kramer invested or whether Kramer has been apprised of Powers's legal troubles.
Since his splashy arrival in 1992, Kramer's reputation has plummeted among Beach residents. He once spoke of building an elegant development that would match the scale and ambiance of the Art Deco District. That vision somehow mutated into a stated desire to build a gargantuan casino and hotel complex; Kramer contributed heavily to last year's push to legalize casino gambling in Florida.
Powers stresses that Kramer's stake in Ocean Drive is purely financial, that aside from the ads he continues to run, the real estate magnate has absolutely no influence over the magazine's content. "My only comment [about Kramer] is that I don't share his philosophy on how the Beach should be developed and I'm totally against gambling in this town, totally," Powers says. "Then again, I don't know his philosophy, so I'm not sure that's correct. But I know about gambling and think gambling would be a nightmare for this town, and I've said that in an editorial."
Though Kramer is a regular attendee of Ocean Drive's various fetes, Powers says he and the developer are hardly mutual confidants. "I know him when I see him out. He always slaps me on the back a little too hard and laughs real hard. I like him."
The affinity makes some sense: Both men are dazzling self-promoters with checkered pasts, and both fell instantly in love with South Beach, which has always attracted that type.
Like Kramer, Powers has earned his share of enemies. Most are former Ocean Drive staffers who complain that their boss lived the high life as publisher while often failing to reward his employees as promised. Two former workers have sued the magazine, both on the grounds that they were not paid monies owed them. At least two others say they have contemplated legal action.
Many people who were interviewed for this story said they feared that speaking publicly about Powers could jeopardize their future in publishing. One notable exception isCyn. Zarco, a columnist who worked at Ocean Drive as a freelancer until this past July, when the magazine severed relations with her. Zarco filed a suit accusing Ocean Drive of withholding more than $3000 in back pay, and of stealing the name of her column, "UpLate." Besides the suit, Zarco has lodged any number of broadsides against Powers. She claims he exploited the magazine's trade advertising arrangements for his own personal benefit, eavesdropped on employee phone calls, even appropriated celebrity party invitations intended for her.
All lies, Powers counters. He won't comment about the pending suit, but he says he has misled no one, eavesdropped on no one, and never received any goods or services from an advertiser without reimbursing the company. "Our accountants have given us a chart telling us exactly what we can and can't do," he explains.
"I can't help but feel that part of the reason this story is being written is due to disgruntled employees," Powers adds with a sigh, "and the fact that Ocean Drive has takena huge chunk of advertising revenue from New Times."
Still, Powers admits, his newfound position of prominence may have something to do with public scrutiny of his past and present business dealings. "I'm fair game," the publisher concedes glumly.
There was a time when Jerry Powers was thrilled to be viewed as fair game. Like other members of the Woodstock generation, back in 1969 he considered getting arrested to be a badge of honor.
As publisher of the Daily Planet, he was arrested twice, after police deemed his publication "obscene material." He keeps news clippings of these busts close at hand, in a desk drawer that also holds a stack of Daily Planet covers. To visitors, Powers offers up the memorabilia as an artifact of the lean days when he was on the cutting edge of the counterculture.
In a different sense, Powers is again on the cutting edge. He has molded Ocean Drive into a bustling concern. He has attained the financial security that eluded him throughout his young adulthood, survived his addictions, and become a rising star in the capitalist establishment he once railed against.
Of course, Powers tries to downplay the contrast between his life then and now. He points to the ecology column Ocean Drive runs monthly, and attempts to compare the youthful exuberance of hippiedom with the youth worship of South Beach. He speaks of his altruistic endeavors, which include volunteering time and ad space to charitable groups such as the United Foundation for AIDS and the Dolphin Project.
He plainly hankers for the old days, though. You can hear it in his tone, which grows urgent whenever he recounts past exploits. You can also hear it in the way he describes Ocean Drive, the hint of derision. "People pick up the magazine to look at fashion and trends and gossip," he says. "It's a light read." After a lengthy pause, he adds, "I guess in 1968 my stand on Ocean Drive magazine would have been that they're not taking stands on very many social issues."
Then again, no one ever got busted for selling out.
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