Tycoon's feisty formative years

The class president stood in the gym at Abington High School, all set to deliver his reelection speech.

He found his fellow sophomores distracted, more restive than rapt.

So the erstwhile track star - the self-assured smart kid who always came prepared - raised a starter's pistol above his head and fired, stunning his audience into silence.

Stephen A. Schwarzman, circa 1963.

"And then I beat his ass," Glenn Price, Schwarzman's long-ago high school political rival, said with a chuckle, recalling the episode last week.

Even as a youth in the Philadelphia suburbs, the future "King of Wall Street" had a cheeky, aggressive style, say those who knew the 60-year-old Schwarzman when.

"He really drove himself mentally and physically to excel at everything he did," said Price, a lawyer in Seattle. "I didn't come on as strong.

"I'm also not worth $7.5 billion today."

That is the estimated value of Schwarzman's stake in Blackstone Group L.P. after Friday's initial public offering of the private equity firm he heads. He already ranked 73d on Forbes magazine's 2006 list of the 400 richest Americans, with an estimated $3.5 billion net worth.

Such wealth gets attention, no gunfire needed. So does taking public the nation's largest buyout firm, prompting a storm of controversy with Schwarzman at its eye.

Amid reports of Blackstone's lavish earnings - and Schwarzman's $400 million income in 2006 - congressional leaders are pushing to increase taxes on private equity and hedge fund operators.

Adding fuel are recent news articles, prompted by the Blackstone IPO, detailing Schwarzman's lavish lifestyle and imperious ways.

Some, including the Wall Street Journal, have cast Schwarzman as a wealth-flaunting hardballer who eats $40 crab claws; complains when employees' shoes squeak; owns a $30 million Park Avenue co-op; threw himself a lavish, celebrity-laden 60th birthday party (featuring a $1 million private Rod Stewart concert); and vows to "kill off" and "inflict pain" on his enemies.

A guy, in short, who trumps even The Donald - one of his birthday guests - in chesty ostentation.

Such depictions anger some old Abington cohorts.

"I was a little miffed when I read those things. It seemed like the wrong guy," said Herbert Rogove, a California doctor who served with Schwarzman on the student council.

"At school he was obviously well liked. Good student, great personality, fun to be with. Just a good guy."

Nancy Osser Goldsmith, his junior high girlfriend, recalls a friendly, brilliant, intensely competitive teen whose high-octane ways portended great things ahead.

"You knew Steve was destined for success," said Goldsmith, a retired public relations professional in Ambler. "He had an ego, but it was well-deserved."

And Schwarzman has been generous to his old school. In 2005 he donated $400,000 to help build its first football stadium, a 3,500-seat facility that bears his name.

Schwarzman declined to be interviewed for this article. A Blackstone spokesman cited Securities and Exchange Commission rules discouraging publicity prior to an IPO.

Much has been written of his post-prep career - Yale, Harvard Business School, Wall Street tycoon, chair of Washington's Kennedy Center for the Performing Arts.

Not so his local roots, which took hold near Oxford Circle in Northeast Philadelphia, where Schwarzman lived with his parents and twin younger brothers.

His family ran a popular linen and curtain store beneath the clattering El along nearby Frankford Avenue.

His grandfather, Jacob Schwarzman, had opened the store in the 1920s. Renowned for his charity, Jacob used the upstairs to gather toys, books and clothes for weekly shipments overseas to needy Israeli children.

On Christmas Eve, the Schwarzmans would close up early and throw a party in the rear, lavishing thanks and costly gifts on their workers, said Elaine Maxlow, a store saleswoman for 42 years. "Everyone was always treated beautifully," she said.

Joseph Schwarzman, Steve's father, was just as kindly, Maxlow said.

Frances Salvino, a longtime customer, recalled arriving in Frankford in 1965 from Italy with two small children, her suitcase still in transit.

"I don't even have sheets; I have nothing," said Salvino, of Morristown, N.J. "You know what Mr. Schwarzman told me? 'Buy anything you need, and bring me $2 a week.' Wonderful people."

Steve Schwarzman did not share his forebears' zest for retail. "I hated waiting on people," he told the Wall Street Journal recently.

"When his grandpop was there, he would work," Maxlow said. "But if grandpop wasn't around, he'd hide. His mind was on other things."

In 1960, the Schwarzmans bought a seven-room split-level on an oak-shaded lot in Huntingdon Valley. Modest by today's standards, it was considered the upscale section of the Abington School District.

In junior high, Steve ran for class president and won. And there he made his most enduring school friendship.

The pairing seemed unlikely: the white Jewish boy and the black kid of lesser means. But Schwarzman and Bobby Bryant had speed in common.

Both became star sprinters.

"He was a beast," said Bryant, a minister in Vineland, N.J. "I always kidded him that he was the fastest Jewish boy I ever knew in my life."

Bryant said race and religious differences had no bearing on their relationship. "What did kids know? You take a man for what he is."

They hung out at Schwarzman's house. Steve bought Bobby his first pair of track shoes. And by high school, they were dancing to Motown and scoping out girls from Schwarzman's burgundy Chevy Impala convertible.

As sophomores, they were the first and last legs of a mile relay team that won the Penn Relays against heavily favored competitors.

Schwarzman "hated to lose. He pushed everyone in training," and barked at anyone loafing, Bryant recalled. "Every time he ran a 440, he threw up afterward. He gave it everything he had."

In three years, their Abington track team never lost a dual meet. But Schwarzman's finest race, Bryant said, came as a senior in a loss - a national invitational championship half-mile relay in Madison Square Garden.

Schwarzman, running the first 220-yard leg, pulled a hamstring 30 yards into the race. And kept on running.

"That means he ran about 190 yards on a pulled muscle. That's guts," Bryant said.

Schwarzman kept the team close enough for Bryant, a state champion sprinter, to start his anchor leg 30 yards behind. He nearly caught up at the finish line.

The effort so damaged Schwarzman's leg that he missed his entire senior spring season, Bryant said.

He was just as driven in school.

Beaten by Price for class president, Schwarzman ran for student council president. He won at the end of his junior year and went off to summer camp, said Joe Hessenthaler, the vice president.

That summer, "I must have gotten a letter every other day from Steve, with five ideas about what we were going to do with student council," said Hessenthaler, a principal at Towers Perrin in Philadelphia. "My mom would say, 'Who is this guy?' He was really, really driven, and always trying to come up with ideas about how to do things better and different.

"He would overwhelm you. That's what I've read he's like in business - outworking, outthinking you."

When the Class of 1965 graduated, Schwarzman was off for Yale. Bryant left for Vietnam, where he was wounded.

But they kept in touch, mostly by phone. When Bryant's twin daughters were born, an "elated" Schwarzman became their godfather.

By 2004, few people at Abington High recalled Steve Schwarzman. Fewer knew the extent of his successes.

But Bryant's sister-in-law, Carrie Jones, was one who did know. An assistant principal, she asked Bryant to pitch Schwarzman on Abington's $1 million stadium fund drive.

Schwarzman was interested. That December, Superintendent Amy Sichel visited Schwarzman's Palm Beach home. He scoured the renderings, grilled her about the school's standards, wondered how the community had changed.

"I told him we were halfway to the goal, and we were looking for someone to name the facility," Sichel said. "I knew he required perfection, and I was going to deliver."

Schwarzman Stadium it was. Opening night was Sept. 9, 2005, a comeback win over archrival Plymouth-Whitemarsh.

Schwarzman's mother, brothers, wife and daughters were there, and Bryant was with them.

They approached the stadium gate, where twin plaques adorn opposite sides.

To the left, one honored Schwarzman's late father and brothers. To the right, a plaque for Schwarzman's track coach, Jack Armstrong, who posted a 186-4 record.

And right below Armstrong, a tribute to Bobby Bryant, state track champion and "Mr. Schwarzman's Teammate."

"I saw it and almost passed out," Bryant said. "I didn't know."

Schwarzman, he said, "just sat there, grinning."