To hear him tell it, Peter Paul was a con man by age 13 — though he’d never use that term, of course. “I started a front organization called Americans Seeking Knowledge and I represented the youth of America,” Paul tells me, far beneath the vaulted roof of his Florida living room. A half smile crawls up the side of his silver-bearded face. “But I have to say that that was a bit of a fabrication, because I was the only member of the organization.” He used this front to send letters to venerable men and women of the world and ask them for artifacts. It was in that capacity, Paul claims, that he developed a friendly correspondence with President John F. Kennedy’s secretary and — as the story goes — ended up walking into Lyndon Johnson’s office in the early 1960s during a trip to Washington, D.C. “That’s what started my involvement in politics,” he claims.
Paul has multiple felony convictions from the ’70s and ’80s: one from cocaine possession, another from trying to bilk the Cuban government in an elaborate scheme involving the fraudulent sale of 3,000 metric tons of coffee, a third from using a dead man’s ID to cross the Canadian border. These, he claims, stemmed from secret missions he was performing on behalf of the U.S. government in the global struggle against communism. I ask him why he would do such things. Fingers tented, he laughs and says, “I had been the protégé of Salvador Dalí for a while, and it was just …” He trails off, then starts up again: “the notion of the surreal being incorporated into political action.”
Paul’s life story comes out in an overwhelming torrent when you speak with him: Spanish surrealists, Russian mobsters, Iranian nuclear officials, Nicaraguan death squads, Cuban counterrevolutionaries, Brazilian arsonists. These are the people who populate his self-professed personal chronicles. Who knows how much of it is true? Paul is charismatic and intimidating, the sort of man who could alternatingly charm and bully you into starting a business with him. And that’s exactly what Stan Lee did, in 1998.
Paul claims the Marvel Comics legend knew about the felonies early on in their friendship. “He couldn’t believe it,” Paul recalls. “Like I’d do with anything I say, I showed him all the facts and everything about it. He didn’t care. It didn’t affect our lives.”
The two men had met almost a decade prior, in 1989, when Paul was in charge of the American Spirit Foundation, an organization with a vague mission to enact philanthropic initiatives. He needed a celebrity to present an award to Ronald Reagan, and a mutual friend introduced him to Stan. It was the beginning of a deep friendship that kept Stan’s head up during a time of constant professional disappointment; he had been relegated to a figurehead role at Marvel. In the mid-’90s, the company went bankrupt, putting Stan’s future in jeopardy. By the end of the decade, Marvel was still struggling along, but its executives seemed to consider Stan a slightly embarrassing relic. Although Stan’s status as the credited creator of superheroes like Spider-Man and the Avengers still lent him a certain degree of fame, he felt the company wasn’t capitalizing on his star power.
When Paul came to Stan with a business proposal in 1998, Stan trusted him enough — and was fed up enough — to hop into bed with him.
The proposal was simple. Paul would oversee the creation of an entertainment firm in which Stan would generate new story and character ideas that would then be brought to life in a growing ecosystem: the World Wide Web. Like many companies in the dot-com boom, they would probably operate without profits for a while, with a plan to eventually land deals with top-flight talent that would generate cash in the form of film adaptations, licensing agreements, and other endeavors.
The company Paul created, Stan Lee Media — often referred to in lawsuits and criminal cases as SLM — was supposed to permanently change Stan’s life. And it did, for better and very much for worse.
In October 1998, Paul presented Stan with an employment agreement (formatted, for some reason, in Comic Sans) that would make Stan chairman, publisher, spokesman, and chief creative officer of a company Paul had registered, called Stan Lee Entertainment, Inc. The agreement stated that Stan would forever assign to the company “all right, title, and interest I may have or control, now or in the future” to all the characters and concepts he held any rights to, as well as his name, likeness, and special verbiage. Such a wide-ranging agreement was, as Paul puts it, “not usual, but it’s not exceptional, either.”
More important, Paul says he had done research and found that the legal ambiguities of Marvel in the early ’60s meant Stan, in fact, actually owned all of the characters he claimed to have created there, meaning this new company would own them. Paul says he planned to make a move on Spider-Man et al. eventually, but that Stan didn’t want to do it right away, out of residual loyalty to Marvel. Stan signed the document.
At the same time, Stan was also in negotiations with Marvel to establish a new contract with them. Shortly after signing with Paul, he signed a deal with Marvel that meant he would continue to act as a spokesperson for the company in exchange for $810,000 a year, with annual raises capping at $1 million, and $125,000 a year for the long-running Spider-Man newspaper strip, plus other benefits. He was even allowed to compete with Marvel. However, Stan also signed away to Marvel “forever throughout the universe all right, title, and interest solely and exclusively which you may have or control or which you may have had or controlled” to the characters he claimed to have created in his work for them. In Marvel’s eyes, this meant an extra layer of reinforcement. In Paul’s eyes, that clause would one day be useless to Marvel, because Stan had already assigned those Marvel properties to his new company a few weeks prior.
The newly dubbed Stan Lee Media quietly opened its virtual doors at stanlee.net (stanlee.com had already been claimed by an unrelated person) and its physical doors at a building in the Los Angeles suburb of Encino, which was occupied by other Paul-controlled companies — he had created more than a few in his erratic career. They had three employees and just $1 million in seed money. But, as the promotional materials they distributed for their new company put it, “In case nobody told you, we’re taking over the world.”
Paul sent Stan on a media blitz. “I’ve been in comics, radio, television, animation, movies, and now the internet,” Stan told the New York Times. “When I got into comics, it was the early days of the industry, and it was all new,” he told Time. “Here’s another chance for me to get in at the beginning.” He presented an air of wild optimism: As he put it in one interview, “If the characters and stories prove popular, we’ve no reason to think that they won’t spin off into interactive games, into movies, television, Saturday morning animated shows, T-shirts, everything.”
Eager to raise cash on the open market, Paul executed a reverse merger with an existing company to become publicly traded. Their stock symbol became “SLEE.” On the first day of trading, the price per share shot up 40 percent, to nine dollars. Paul’s felony convictions meant he couldn’t legally be an officer of the company. Instead, he was listed as a “consultant.”
While all this was happening, Stan was embroiled in a conflict with the co-creator of Spider-Man, Steve Ditko, over the way Stan had obscured the credit Ditko felt he deserved for their work together in the ’60s. But that dispute didn’t seem to matter much in the grand scheme of things; Marvel was still struggling to prove that it had any juice left in the marketplace and Stan spent most of his time talking up his newest properties at SLM — including the centerpiece property, a saga set in cyberspace known as The 7th Portal. In it, a young video-game beta-tester encounters a computer-based gateway to another dimension, populated by champions and monsters. Soon he and his friends find themselves doing battle in the digital world, where they are granted mostly generic superpowers. (Aside from the protagonist, who was given the odd talent of super-powerful breath.)
Other new properties included The Accuser, about a disabled lawyer whose wheelchair was capable of turning into a robotic battle suit. (More than a few people pointed out that Marvel hero Daredevil had been a lawyer and Iron Man had had a machine outfit; perhaps Stan didn’t have as many original ideas as he liked to think.) Then there was The Drifter, about a gritty cyberpunk loner from the future who came back in time to do battle with an evil corporation, but whose knowledge of things to come caused him to be written off as insane.
Intriguingly, SLM signed a deal with superstar boy band the Backstreet Boys to create a series called The Backstreet Project, in which a spaceship crashes near one of their concerts and the alien inside bestows upon them magic crystals that grant them superpowers like martial-arts expertise and top-flight marksmanship. On top of all that, Stan signed a deal with longtime Marvel rival DC Comics to create strange alternative versions of that company’s flagship characters in a comics series co-produced by SLM, cumbersomely entitled Just Imagine Stan Lee Creating the DC Universe.
The new characters and scenarios were to play out first in animated cartoon “webisodes” rendered in the then-cutting-edge technology of Macromedia Flash, with the aim of transporting them to other mediums after they’d taken off. A fan club for SLM called SCUZZLE (short for Searching Cyberspace for Unknown Zoological Zygomorphic Living Entities) was established.
The staff expanded to roughly 40 people within a matter of months. Paul found a CEO in former Columbia Pictures studio head Kenneth Williams, an executive vice-president in the form of a longtime business associate named Stephen Gordon, and a COO named Gill Champion, who had produced soft-core pornography and operated movie-theater kiosks. Most bizarre of all, Zorro, The Gay Blade star (and friend of Stan’s) George Hamilton was hired as the company’s president. For the first time in nearly a half-century, Stan had an honest-to-God bullpen of creatives at his beck and call, furiously working to churn out the content that the company so desperately wanted to push on stanlee.net in order to drum up enthusiasm.
Stan and Paul took meetings with Hollywood bigwigs in which they chatted up movie adaptations of their newly minted intellectual property. This included a lunch confab between the two of them and Francis Ford Coppola; they wanted to discuss Coppola working on a 7th Portal film, although Coppola was primarily interested in grilling Stan about the origins of his classic Marvel properties. Stan dismissed those venerable characters: “I would’ve kept doing them, but I suddenly realized, I don’t own these, I’m not getting any royalties, and I figured, the hell with it, let ’em pay my salary, and that was it. And I stopped coming up with new ones after meeting Peter. Now I wanna start it all over again.”
However, his ownership of these new properties wasn’t so simple, either: They were, per the terms of that fateful contract with Paul, owned by Stan Lee Media. Stan had a massive share in that, but SLM wasn’t coterminous with his own self — something that would come back to bite him later.
Stan was hardly worried about any of that on February 29, 2000. That balmy night brought the glitzy launch party for the 7th Portal web-cartoon series at Hollywood’s Raleigh Studios, streamed in low resolution through internet connections around the world. Dick Clark emceed the gala. There was a strange performance from a man who dressed as an extraterrestrial and played synthesizers without touching them, followed by a rollicking number performed by Jerry Lee Lewis. Larry King piped in a message of support to “one of the true American innovators, Stan Lee”; a similar one from James Cameron featured the filmmaker calling Stan “a one-man, walking, talking Big Bang theory in action.” Chaka Khan did a song. There was a satellite simulcast of an audience watching in Japan. Stan, uncharacteristically clad in stylish head-to-toe black, gave a brief address, and Dick Clark noted that “Stan the Man” was “soon to be known as Stan the Brand.”
In mid-2000, the company’s share price climbed ever upward. The fuel for the firm’s growth was a copious amount of cash — one estimate said the company spent more than $20 million in the first year of its existence. But it seemed to be paying off in the short term: When The 7th Portal launched, SLM was capitalized at around $300 million in the market — nearly $100 million more than the market cap for still-suffering Marvel. “I thought we had some money in the company and — whether it was Peter’s idea or mine, but the point is — we both discussed, ‘Gee, wouldn’t it be something if we could actually buy Marvel?’”
No goal was too lofty in those days. Stan was kept busy, taking meetings with stars like Michael Jackson and Mary J. Blige, as well as doing interviews and daily sessions with his teams of creatives, and spending long periods signing piles of posters and promotional items at Paul’s behest. An ex-staffer recalls Stan doing one such mass-autograph session and asking, befuddled, “Who are all these for?”
That sort of confusion was, it seems, deeply ingrained at SLM. Speak to former employees of the company and they’ll generally tell you a few things: The content they were making was of questionable quality. None of them had any clue what the overall corporate direction was. Stan was as charming and energetic as ever. And they were all either suspicious or terrified of Paul. “To this day, I don’t understand the full dynamic of Stan Lee Media,” recalls Mark Evanier, a writer who had known Stan for decades and was hired to supervise a group of animators. “I used to walk around that office and say ‘We don’t sell anything. We have no product. We have nothing.’ There was always a deal pending, but the deals never materialized.”
Writer Buzz Dixon was brought onboard as creative director and abruptly promoted to vice-president for creative affairs. The grandiosity of the corporate vision at SLM astonished him, and not in a good way. “They thought somebody in Mumbai would pay them money to set up an office in Mumbai, where they would take characters and develop them for India,” he recalls. Dixon thinks Paul was a “flippin’ sociopath” who had no idea how to manage the empire he’d built: “It seemed like anyone who would ask Peter Paul concrete questions about ‘How are we gonna make money off all of this?’ made him nervous.” In the first quarter of 2000, SLM posted a revenue of just $296,000, against a net loss of $5.4 million.
The official Stan Lee archives contain a pair of what appear to be email messages that Stan sent to the SLM leadership. In one, he laments that the fan club SCUZZLE is “dying on the vine” and suggests juicing interest for the ostensibly kid-oriented site with some T&A: “Just like there’s a ‘Playboy’s Playmate of the Week,’ let’s have a ‘Scuzzle Sweetie of the Week,’ ” Stan wrote. “Or ‘Scuzzle’s Most Adorable Agent of the Week!’ Or ‘Scuzzle’s Grooviest Girl-Friend of the Week,’ or ‘Scuzzle’s Coolest Chick of the Week’ or ‘Scuzzle’s Most Exotic Enemy of the Week.’ You get the idea.”
Even more remarkable is a message that Stan penned for his fellow SLM higher-ups, which begins with a blunt sentence: “I just had an epiphany — Our website stinks!” He goes on to describe a litany of ways in which SLM was dropping the ball. “Think about it — what are we offering to make anyone come to our site — and, even if they do come, why would they want to come back????” he wrote. “I logged on myself last night; after a few minutes I got bored and went away!” The list of complaints went on and on. And yet, in the face of these issues, Stan saw only chaos at the upper echelons. “Another problem is — who the hell is responsible for things???” he wrote. “I feel like the little kid in that fairy tale who yells out, ‘But the Emperor is wearing no clothes!’ Everyone’s working around the clock, doing a million things to our site, but we all seem to be too busy to notice that the site’s a bomb!!!”
This message suggests Stan wasn’t exactly in the know about the deepest inner workings of the company that bore his name. According to those who worked with him, that appeared to be the case. “If you think of it in levels, Peter was the first level, Stan was on the second level, I was on level three, and the artists were on five or six,” Buzz Dixon recalled. “I think there were wheels within wheels that Stan may not have been aware of.”
Paul longed to bring greater prestige to SLM. So he set his sights about as high as they could go: He decided he wanted outgoing president Bill Clinton to act as a global ambassador for SLM after leaving office in 2001.
Years before, Paul had met and worked with an avowed con artist named Aaron Tonken, who had made a name for himself by befriending Hollywood celebrities and corralling them into glitzy fundraising galas. Tonken — who began his memoir with the sentence, “In a land of moral imbeciles, I knew I could be king” — ingratiated himself with the Democratic Party Establishment, helping an associate of convicted-felon financier and Clinton friend Marc Rich throw high-end fundraisers. When Paul decided to get in bed with the Clintons, he reached out to Tonken, who informed him that he’d been invited to a small, $30,000-to-$55,000-per-plate dinner with Bill and Hillary Clinton in Los Angeles. Paul and Tonken got into the event and made contact with the president and First Lady and, in the ensuing weeks, ties grew between the Tonken–Paul brain trust and Hillary’s campaign to become the next senator from New York. It was decided that Paul would enter the fundraising arena.
He started to throw elite events for the Democrats in 2000’s pivotal election: a fundraiser for Al Gore at the Beverly Hills Hotel, a fundraiser for Hillary at the restaurant Spago, and a sunny afternoon tea party for 200 Hollywood donors. When Hillary visited the SLM offices, animators were pulled off their projects to hastily assemble a welcome video, in which an animated Stan quipped about creating a superheroine named Super Senator and an SLM villain, Lord Mongorr, intoned, “I shall rule everything. Except New York. I hear you’ve got a lock on it.” Photos were taken of the grinning Clintons posing alongside Paul and his wife.
At these events, Paul laid out parts of his curious past in direct conversations with Hillary, including his claims that he was involved in anti-Castro activities. “I mean, I wasn’t hiding anything,” Paul says. “I was testing her to see how far I’d go with her.” Either the Clintons’ team did an incompetent job of vetting Paul (one of their lawyers would later claim they had only done a quick online search for his name), or they weren’t bothered enough by his criminal convictions to avoid associating with him.
Whatever the case, it was decided that Paul and Tonken would throw their biggest shindig yet: a Hollywood send-off for Bill that would also raise money for Hillary’s Senate run. On August 12, 2000, a 1,300-person tribute fundraiser took place on a $30 million estate. “The Hollywood Gala Salute to President William Jefferson Clinton” was officially identified as a production of SLM. Stan and his wife, Joan, sat next to the Clintons, with Paul and his wife on their opposite flank. Diana Ross belted out “Ain’t No Mountain High Enough,” Cher cheekily confessed that she didn’t vote for Bill and sang “If I Could Turn Back Time” as a plea for forgiveness, and Bill cried as he listened to singer-songwriter Melissa Etheridge say he had partly inspired her to publicly announce that she was gay. Eventually, Bill spoke to the assembled members of the donor class, spouting platitudes about brighter futures: “The kind of chance we have today to build a future of our dreams for our kids maybe, maybe, comes along once in a lifetime,” he said. “Nothing stays the same. So thanks for the honor, thanks for the memories you gave me tonight, but don’t stop” — he paused — “thinkin’ about tomorrow.”
Three days later, Washington Post gossip columnist Lloyd Grove wrote in his column that one of the gala’s producers, Paul, was a convicted felon. “Is Hillary Clinton soft on crime?” he asked, rhetorically. In response, Paul wrote Grove an open letter, in which he laid out the supposed secret anti-communist reasoning for his previous jail time. The next day, Grove wrote that Federal Election Commission records put Paul down as a donor of $2,000 to Hillary’s campaign, the legal maximum for individuals. Her campaign announced that it was giving the check back, but Paul now says no mention was made of a key fact: He’d already spent $1.176 million of his own money on the gala, which was both a violation of election laws and an amount significantly larger than the $401,419 cost that the campaign had reported to the FEC.
Word spread in Hollywood and the Beltway. Paul’s invitation to the final state dinner of the Clinton presidency was rescinded. Paul, to this day, insists that he and Bill had already come to an agreement that the latter would act as a global spokesperson for SLM, so the distancing that the Clintons were carrying out infuriated him. But, as it turned out, he didn’t have much time to worry about a welched deal. He had more pressing concerns.
What came next remains a matter of great dispute between Paul and, well, virtually everyone else. As 2000 wore on, the dot-com bubble was rapidly contracting, putting SLM in a perilous position. Paul and his team secured a deal with a bank to get $2.2 million in short-term financing, with the catch that the stock price had to stay above $1 — something that seemed possible, given that it had been trading between $7 and $9 per share most days. But, on November 27, 2000, a few days after Thanksgiving, the price plummeted to $3 a share. The next day, it fell to $1.75. Investors panicked and sold like crazy, dropping the stock price to 13 cents — far below that $1 bank threshold. The financing was cut off, throwing the company into a sudden, horrifying panic.
“You could hear them calling out the tumbling stock price in the bullpen area,” one creative staffer would later say. “And as loud as the panic was downstairs, there was a tremendous silence coming from upstairs.” Soda delivery stopped; the delivery company hadn’t been paid in months. Paul flew to Brazil — he claims it was to shore up his other major company, a language-education firm called Mondo English, but prosecutors would later say it was to escape what he knew was coming. One day, employees were sent emails informing them that they were fired, only for the company to announce that it was a computer mistake and that no one was being terminated. Yet.
Rock bottom arrived on December 15. “We went home one night and then came in the next day and, somehow, overnight, everything had changed,” says former SLM staffer Dana Moreshead. Emails went out informing everyone that there would be a meeting at 2 p.m. in the bullpen. At the appointed time, Kenneth Williams told the assembled group of employees that they were all out of a job and that the company was shutting down operations. “It was a crushing blow to Stan,” recalls Dixon. An employee later said Stan literally collapsed when he heard the news. By sheer coincidence, a life-size Spider-Man statue was being delivered to the offices that day. Employees presented it to the devastated man whose name was on the building.
As Stan started to call each of the newly fired people on the phone to apologize, matters only got worse. On January 2, 2001, the rump SLM entity, by now employing only Stan and a few execs, announced that it was being looked at by the Securities and Exchange Commission. Apparently investigators had been curious about why the SLM stock had so abruptly dropped off a cliff. They said they found alarming evidence of fraud at the top levels of SLM.
Paul claims everything he did was perfectly legal. According to him, it was CEO Williams, VP Stephen Gordon, and a “cabal” of others that sought to take SLM down and plunder the assets. However, the federal government, an auditor hired by SLM, and multiple former SLM execs have gone on the record to say they learned that Paul had built the company on fraud. Paul and Gordon were both accused of inflating the price of the company’s stock through a variety of methods, such as lying to the press and hiring a Wall Street analyst to plug the company in bogus research reports. According to the charges, the two opened accounts at Merrill Lynch and, using SLM stocks as collateral, borrowed millions of dollars on margin — converting their stock into instant cash without disclosing it to investors.
It goes on: Allegedly, Paul and Gordon then used shell companies to invest more than $2 million of the borrowed money into SLM, providing the illusion that the companies were independent entities betting big on the endeavor. Gordon’s brother, a broker at Merrill Lynch, stood accused of facilitating the transactions and getting $340,000 in off-the-books payments. Paul and Gordon were also accused of trying to save the company by writing checks from empty accounts. (Paul maintains that the accounts weren’t empty, per se, because they were based on SLM stock.)
On top of all that, there was an accusation that the two men were buying back their own shares of SLM through two co-conspirators to boost the stock price. When the stock-buyback scheme ran out of cash — so the allegations go — the share price declined, and a brokerage firm that had loaned Paul money made a margin call that dumped more than 170,000 shares. It was that final act that triggered the stock collapse and all that came after. The Department of Justice indicted Gordon and Paul, though the latter was still in Brazil.
Stan, on the other hand, has always pleaded ignorance. “I have absolutely no idea who paid for what at any time in our company,” he said in sworn testimony a few years later. He was investigated and cleared of wrongdoing. But an anonymous high-level SLM staffer I spoke to is adamant that Stan lied to investigators and prosecutors. “One thing about Stan is he knew everything that was going on, but he always played the dummy,” the employee says. “His game was ‘Oh, I’m just a simple old man that really doesn’t understand what’s going on, but Peter will help you out’…He was a nice man, but it was very apparent that he was playing this innocent, didn’t-understand-what-was-going-on type of guy.”
Interpol picked up Paul in Brazil. He was detained in what he says was called “the Corridor of Death,” a stretch of jail where people had been burned alive a few months earlier and where, he claims, he was cellmates with an al-Qaeda terrorist. He was eventually shipped back to the United States in September 2003 and pleaded guilty to one count in the SLM case in 2005, beginning a years-long prison sentence soon after.
Nevertheless, when Paul got out, he helped coordinate a series of legal attacks on Stan, his next entertainment company POW! Entertainment, and Marvel from behind the scenes. An obscure group of SLM investors had reconstituted the company as an employee-less legal entity and, starting in the late aughts, issued a dizzying array of lawsuits. This zombie SLM claims it is the rightful owner of Stan’s name, likeness, and slogans; owner of all the SLM properties that POW! purchased in questionable bankruptcy acquisitions; and, most daring, owner of all the Marvel Comics characters that Stan claimed to have created. At various points, media outlets reporting on these claims have had to puzzle through how it could be that something called Stan Lee Media was suing Stan Lee. One federal judge, finding himself deep in the morass, unloaded on all parties in a 2011 hearing: “This has become — and not just today, but over time — an unbelievable mess.”
Paul and Stan would never meet again before Stan’s death in 2018, and Stan never liked to talk about the period from 1998 to 2001. Years later, he commissioned a comics-format memoir. The writer of the comic, Peter David, wrote out multiple pages’ worth of narrative about SLM — and Stan’s people told him to excise them almost entirely. All that was left and approved was an anecdote about meeting the Clintons and a single panel in which a resentful-looking cartoon Stan muses, “Also around then I was talked into starting up an internet company. Seemed like a good idea at the time. It wasn’t.”
Stan and Paul’s friendship, which had brought both men to fairy-dust riches, was permanently, irrevocably ceased with the collapse of their audacious corporate moon shot. All that was left was a stinging reminder of the dangers of Wall Street froth, valuing style over substance, and the impulse to cut corners (as well as the perils of associating oneself with the Clinton family).
Still to this day, Paul is convinced he can win back the branding and alleged creations of the comic-book legend who went to the grave resenting him. As the moon glints off Paul’s outdoor pool in Florida, I propose an analogy: “It sounds like you’re saying you want to do what Disney has done with Walt Disney, which is they don’t talk about him anymore.”
Paul nods. “I wanted to turn Stan into a lifestyle brand,” he says.
“Kind of divorced from who he really was,” I say.
Paul nods again. “It’s irrelevant. It’s what he did.”
From the book TRUE BELIEVER: The Rise and Fall of Stan Lee by Abraham Riesman. Copyright © 2021 by Abraham Riesman. Published this month by Crown, an imprint of Random House, a division of Penguin Random House LLC.