After making a fortune bartering food for fuel, Aleksander Gudzowaty has a found new fields to conquer

By RICHARD HORNIK /WARSAW

leksander Gudzowaty has many treasured possessions on his 6.5-hectare walled estate on the outskirts of Warsaw: a 6-m granite pyramid; an octagonal brick "meditation center" with stained glass windows representing the world's major religions; dozens of oil paintings of the area around his beloved getaway on the Cote d'Azur. But he reserves his greatest affection for the living members of his household--his schnauzer Garo, peacocks, deer, llamas and donkeys--one of which he calls Bouboulina after the retired prostitute in Zorba the Greet Says Gudzawaty, "That is my favorite movie. Zorba is a model of optimism. He could even say 'what a wonderful catastrophe.'"

By some accounts Poland's richest man, Gudzowaty could teach even that old Greek reprobate a thing or two about optimism, at least when it comes to the world of business. Like many capitalists in the transition economies of Eastern Europe, he made a fortune exploiting gaps between the old and new ways of doing business. In 1992, when Russia threatened to stop sending natural gas to Poland because of a $280 million debt, Gudzowaty, using the contacts and skills developed during two decades as a foreign trade official under the communist government, brokered a deal to barter Polish food for Russian gas.

Many other former trade functionaries turned their access to the levers of power into dollars and then retired to soak up the Mediterranean sun. Gudzowaty, through his firm Bartimpex, continues to trade Polish commodities for Russian gas. He knows, however, that such "primitive" transactions are doomed. Using his contacts in Russia he helped form a joint venture with Russian, German and Polish companies to construct the Polish segment of a new gas pipeline from the Yamal peninsula in Siberia to Western Europe. That will ensure that his firm continues to play a significant role in the natural gas business for many decades to come.

But even five years ago this son of a philosophy student turned factory worker had decided to move beyond the energy business: "The trend for commodity transactions will be less. That's why we have diversified into financial services." In 1993 Gudzowaty bought the small, faltering Bank Turystyki (Bank of Tourism) from the Polish Finance Ministry. After changing its name to Bank Wschodnio-Europejski (Eastern European Bank) he used it primarily to finance his deals with Russia. A couple of years later, when he started to think about developing his activities in the West, he changed it to Bank Wspolpracy Europejskiej (Bank of European Cooperation), cleverly retaining the same initials, B.W.E. It is now Poland's 20th largest commercial bank.

Three years later Gudzowaty bought a 98% stake in STU S.A. a property and casualty insurance company once owned by the Polish Teachers' Union. Subsequently he got a license to open a life insurance af filiate. Then last year, Cigna, one of America's leading financial services firms, entered into a unique joint venture agreement with Gudzowaty. Effectively, he has a 51% interest in the original company, while Cigna has a similar stake in--and control of--the life insurance arm. Says Gerhard Hornig, chairman of Cigna Europe "This is the first time we have accepted less than 51% ownership in a joint venture."

What sets Gudzowaty apart is his ability to reinvent himself while remaining essentially unchanged--a trick he has turned at least three times in his 60 years. His first transformation came in his early 20s. After dropping out of engineering school--"I couldn't imagine spending my life as a metallurgical engineer"--Gudzowaty joined the student cooperative in his native Lodz, exploiting one of the few opportunities in communist Poland to show commercial flair. He did everything from washing windows to managing a jazz band but eventually decided to settle down, working for a textile enterprise while earning a night-school economics degree.

The outsider soon turned insider--a consummate Soviet-bloc trade official dealing in everything from textiles to railway carriages. The deals were always large, and they always involved the voodoo accounting practices peculiar to the communist world. National currencies were effec tively worthless, so the heart of trade was barter: one railroad carriage might be worth 20,000 cases of brandy.

He was still a state bureaucrat in l991 but in that transition era he negotiated a contract with the ministry in charge of his agency, Kolmex, which based his pay on its profits. He made the company more money than anyone expected by negotiating an advantageous exchange rate for a deal with Russia His thanks was dismissal. Gudzowaty claims not to understand why he was fired, but Andrzej Wroblewski one of Poland's leading business journalists, thinks it was obvious: "He simply made too much money." Looking back, Gudzowaty declares, "It was the best thing that ever happened to me. One has to learn to lose well"

Although the Soviet empire's official trading system had collapsed, most offi cials did not know how to operate in the global market and were more comfortable trading commodities--and dealing with people they knew from the old days. Gudzowaty's first deal was to sell 100,000 tons of wheat to a foreign trade organization in Moscow. He used the profits to take a group of Polish fines to Tyumen in Siberia for an exhibition of their goods. But the ever irrepressible adventurer decided that to make an impression he would need more than a few bolts of fabric and some light machinery. He brought along 40 models: "The girls had legs up to their necks. The plane landed and there was snow on the ground, but the girls got out and started dancing around."

He continues to do business in his inimitable manner--eccentrically but honestly. Gudzowaty is famed in Poland for paying more than $100 million in taxes since 1992, roughly half the gross income of Bartimpex. "We could have set up an offshore company and paid no taxes," he says. His motivation is personal: "A measure of a man is not blushing when you shave." His father, Eliasz, who chose not to continue his studies under communism, would have approved. "My father would come home from the factory and read his books," he says. "He never spoke about his decision."

But though most Poles thought Gudzowaty was crazy, marching to your own drummer can be more than its own reward. After establishing the insurance company, he says, "We knew we needed a partner, but we were looking in Europe. It was very flattering that Cigna found us." That did not happen by chance. Cigna's Hornig says that they chose STU as a partner largely because of its owner's probity: "His honesty makes it easier for an American company."

Now both partners hope to take advantage of the impending reform of Poland's shaky social security system by working together to create one of Poland's first private pension funds. Once again, Gudzowaty has spied a window of opportunity which may well close when Poland joins the European Union and large Western European firms can freely enter the Polish market: "We hope we can make it (as a big financial firm) before integration."

Last year his privately held holding company Bartimpex, which controls most of his empire, made a $28 million profit on total turnover of $650 million. The firm is worth over $400 million, which would make retirement seem as likely a choice for Gudzowaty as attempting to become Poland's answer to the new American financial services behemoth Citigroup. This is particularly true since he has no natural successor--his son, a law student and would-be photographer, is not interested in the business. Says Gudzowaty, "I have been faced with a choice: retire or expand. Unfortunately I am a slave to challenge." So he will grab a week here and there at his retreat on the Cote d'Azur, feed cookies to Bouboulina and the other members of the menagerie on his Polish estate, and "draw strength" from his granite pyramid. "Life is too precious to let it go," says Gudzowaty. "I love it with all my heart." Zorba couldn't have said it better.

--With Reporting by Tadeusz L. Kuchariski /Warsaw