Business: Hutch Trouble

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The playboy pays for perks

Nobody takes Playboy magazine's philosophy of the good life more seriously than Hugh Hefner, the man who started it all on his kitchen table back in 1953. He rules his empire and maintains his image as a protean ladies' man from a fieldstone fortress in Los Angeles. It is equipped with battlements in the backyard, outdoor Jacuzzi baths built into a stone grotto and sprawling lawns where flamingos and pet peacocks roam. Mansion West, as the place is called to distinguish it from Hefner's 54-room Chicago playpen now on the block for $2.5 million, cost the company $3 million last year to operate. Hefner, however, pays an annual rent of only $36,000.

Two years ago, the Securities and Exchange Commission began an informal probe into the compensation at Playboy. The company defended its chairman's perks, saying that the sex conglomerate's sales "are closely related to public recognition of its role in promoting a particular style of urban living." But last week the company's internal audit committee announced that Hefner and four other officers would have to repay $918,413 in improperly documented or unapproved expenses. Hefner's share: $796,413.

Although the SEC is unlikely to press its inquiry now that Hefner has agreed to repay the company, Playboy is still contesting an assessment of about $13.4 million in taxes due the Internal Revenue Service between 1970 and 1976, including $ 1.4 million that taxmen say Hefner owes for his use of the mansions. Nor is this an end to trouble in the hutch. Bunnies are no longer multiplying like rabbits, and for the first time Playboy Clubs are having to hustle for bustle. Evidently, being a bunny these days, like being a playboy, is not what it used to be.