Mad Man

Arnell grew up in Sheepshead Bay, down on the southern end of Brooklyn. His father, a mechanical engineer, changed the family name from Abramovitz to Arnell. His maternal grandfather, a Jewish immigrant from Russia, was a fishmonger in the Fulton Fish Market. As a boy, Arnell sometimes went to work with him. He remembers crossing the Brooklyn Bridge into Manhattan at midnight, seeing the skyscrapers. "That bridge," he says, "was like a gateway to a fantasy land." He graduated from Brooklyn Technical High School in 1976 and was working odd jobs when he attended a lecture by the postmodernist architect Michael Graves. He introduced himself and talked his way into an internship at Graves's offices. There he met Ted Bickford, a Princeton architecture student. Soon Arnell and Bickford started collaborating on books about artists and architects. In the early 1980s Dawn Mello, then the fashion director at Bergdorf Goodman, hired them to create ads.

Their big break came from Donna Karan, who was launching her clothing line. Arnell went to the Fulton Fish Mar-ket and shot a black-and-white photograph of the Brooklyn Bridge, the view he remembered from childhood. The ad was more than a hit—it defined the brand. Later, Arnell created the famous DKNY logo with the Statue of Liberty and the Manhattan skyline. "Peter was extraordinarily instrumental in launching the company," Karan says. By 1985, the Arnell-Bickford agency was booking $4.4 million a year, and Adweek was touting the 27-year-old Arnell as a rising young star. Business rolled in: Anne Klein, Bank of America, Chanel, Condé Nast, Consolidated Edison, Ray-Ban, Rockport, Tommy Hilfiger. Arnell became known as someone with fresh ideas whose eccentricities are worth tolerating. "The first time I met him, I didn't think I could work with him," says Micky Pant, chief marketing officer at Yum Brands and former marketing boss at Reebok. "But over the years I've learned to respect his instincts."

Those instincts are on display during the afternoon I spent in Arnell's brand-new glass-wrapped office space on the 36th floor of 7 World Trade Center. There are white-leather couches, a 105-inch flat-panel screen, amazing views of Manhattan and the harbor. Arnell works at a conference table, surrounded by staffers. They watch in silence as he examines paper samples for a book he's producing. There's a meeting with a team to talk about building a train. There's a phone call with someone named Jay. Arnell puts the call on speakerphone. In case I don't recognize the voice, he stage-whispers to me, "It's Jay Leno." Afterward, he calls Ben Silverman, co-chairman of NBC Entertainment, and Rudy Giuliani, but can't get them on the phone.

Arnell has been compared to movie mogul Harvey Weinstein, meaning you could fill a book with horror stories about his cruel behavior—screaming at people, even hitting them. "He has this remarkable capacity to be both the most intoxicating character—lovable, brilliant, seductively intellectual—and then turn on a dime and be staggeringly cruel," says a former business associate, who spoke on condition of anonymity for fear of alienating Arnell. This person recalls Arnell humiliating employees by making them get down and do push-ups in front of clients. "He is unencumbered with any sense of morality. Until you experience it firsthand, it's just completely and utterly unfathomable."

In 1996 Arnell was sued by four women, former assistants who claimed he had abused and degraded them; the suit was settled out of court. But even afterward, Arnell's behavior continued to offend. A woman who worked for Arnell years later says he still delighted in bringing assistants to tears. "Everybody cries, without exception," she says. A spokesman says "the lengths of these tales are greatly exaggerated." Arnell says some employees have been with him for more than a decade, and why would they stay if he's so awful?

Advertising Age estimates Arnell's firm booked revenues of about $25 million in 2007. (They haven't worked up 2008 numbers yet.) The firm employs 170 people and bills itself not as an ad agency but as a "multi-disciplinary brand and product invention company" that "examines the space between brand assets and consumer desire" to "help brands capture and realize differentiation by exploiting a unique emotional dimension." No wonder Arnell says his leaked PepsiCo memo—with its references to Euclid and Pythagoras, and Leonardo da Vinci's Vitruvian man—makes perfect sense.

Arnell also can't understand the kerfuffle over his work for Tropicana. "Can you imagine such mishegoss over a freaking box of juice?" he says. "I can't believe that for the rest of my life I'm going to be known as Peter 'Tropicana' Arnell." He says Tropicana overreacted to complaints. "I have my own perspective on it. But it's not my brand. It's not my company. So what the hell? I got paid a lot of money, and I have 30 other projects. You move on." (Neil Campbell, president of Tropicana North America, says Tropicana will continue working with Arnell.)

Later, when we're sitting outside Arnell's office in his Jeep Commander, so Arnell can take a cigar break, he says a lot of the backbiting comes from people who are jealous of his success. "Who else is winning business in this economy? You expect this when you're in my business."

On day two Arnell meets me in a Chrysler skunk-works building outside Detroit, where engineers are working on a little battery-powered vehicle called the Peapod. Arnell has overseen development of the Peapod and even put his initials—as in Peter Eric Arnell—into the name. He says it's not a car, but rather a new category he's invented, called a "mobi." He describes its design as "a mix of Darth Vader, a bullet train, and a Citroën deux chevaux." With no air conditioning and a top speed of 25 miles per hour, the $12,500 Peapod is basically a fancy golf cart. Arnell hopes people will buy them for doing errands around town. He wants to call customers "peaple" and has designed a line of accessories: pens, flashlights, T shirts, baseball caps, shopping carts, picnic baskets, yoga bags, gardening sets. He's even designed fragrance inserts that create an aromatherapy experience while you drive. "I would argue this business could be hundreds and hundreds of millions of dollars," he says. His counterpart at the meeting, a veteran Chrysler engineer, just nods and says, "Uh huh."

We move on to Chrysler headquarters in Auburn Hills, Mich., where Arnell meets with a team from a small software company that develops programs for Apple's iPhone and iPod. The Peapod has an iPod dock in its dashboard. The software guys have created a "green meter" application that would let the iPod keep track of how much carbon you're saving by driving a Peapod rather than a regular car. The meeting quickly turns weird, however, as Arnell, chomping oranges and spitting out seeds, starts expounding on Magritte's "Ceci N'est Pas une Pipe," dadaism, Meret Oppenheim's fur teacup at the Museum of Modern Art, the way Martha Stewart examines the leaves of a flower, the logo for the 1968 Olympics in Mexico City, the style of Yves Saint Laurent dresses, wristwatches, polar bears stranded on ice floes, the Web site of Jenny Craig. The poor software guys, who've never met Arnell and didn't know what to expect, just sit there looking befuddled but trying their best to play along. "You say garden, but I say Versailles," Arnell says. "You see what I mean? What's the aspirational currency? Are you tracking me?" They nod. What else can they do? They've scored a meeting with the chief innovation officer at Chrysler, a guy who can greenlight their project. So what if they have no clue what he's talking about? It's their job to sit there and listen.