Martha Stewart is back to her mean, money-grubbing ways

When she walked out of the slammer in 2005, there was such hope. A humiliating jail term after being convicted of lying to investigators had provided the business magnate, media personality, and publisher a little perspecitve, a chance to smell the non-premium coffee and recognize that there was more to life than being, well, Martha. Six years later I guess she's gotten tired of that redemption stuff. Based on Ben Wallace's entertaining profile in this week's New York magazine, she's back to being the same greedy tyrant we all remember. In a nutshell, Martha Stewart Living Omnimedia is in the toilet, and her employees are crying in the bathrooms.

There was unusually high executive churn, and according to many executives who worked there, it was an intensely frustrating environment in which to get things done. Robin Marino, the head of merchandising until this May, was responsible for 3,000 items at Macy's alone, but Stewart insisted on personally approving every one. "At a board meeting," recalls someone with knowledge of the episode, "Martha walked in with a pot, slammed it on the table, and goes, 'This is crap. I don't want my name on it.' " A series of highly capable executives came and went, worn down by Stewart and thwarted in their efforts to bring the company back to health. And yet, although Stewart's reputation of being a difficult boss was widely known, she continued to attract talented executives. Explains one: "Before you go there, you can't imagine how bad it is. You can't imagine that a company with a brand that's so big could keep functioning with so much dysfunction."

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The company's looming revenue problems--and its sinking stock price--­affected Stewart's mood, and the mood was infectious. The creative rank and file at Martha Stewart Living Omnimedia were a mix of proud elitists and wild enthusiasts, prone to almost ecstatic fervor about such matters as glitter and hole punches. They lived for Martha's approval, and at her best, she could be inspiring. But Stewart was also famous for her drive-bys. A group of stylists and art directors might spend a week away on a shoot, only to have Stewart dismiss their labor with a belittling remark. "Martha would say, 'Ugh, why are there bananas there? I hate ­bananas,' " says someone who edited food stories. "There's a list of things she loathes." At times, the offices resembled a shelter for battered crafters. "That women's bathroom," the editor adds, "there are women in there crying literally all day long."