Former American Apparel CEO Dov Charney Speaks Out for First Time Since Ouster

Dov Charney talks about being at war with the company he built.

March 27, 2015, 10:02 PM

— -- For the first time since his ouster, former American Apparel CEO Dov Charney is talking publicly about being at war with the company he built and overcoming a reputation tarnished by allegations of sexual misconduct and mismanagement.

"I want everybody to know I’m not 'the Sleaze King,'" Charney told ABC News' "20/20" in an exclusive interview. "'The Sleaze King' is another guy."

Since being fired as the chief executive of American Apparel in December, Charney, 46, claims he is broke, but still lives in his 10-bedroom Los Angeles mansion where he plots his return to power. Inside his master bedroom suite, which he calls his “war room,” the walls and mirrors are covered in a collage of notes and newspaper articles.

“I've had a minute being on the outside to re-strategize how I want to take the company, you know, control of the company again, and I intend to,” he said.

To some of his employees, Charney was - and still is - a hero. There have even been rallies of garment workers who believe he can save the troubled California-based company.

But Charney is not universally adored. He is also infamous for building the brand by pushing the limits of good taste and sexual propriety when it came to marketing its clothing. Charney was criticized for using young models in provocative ads, but he says the models just looked younger than their real ages.

“I’m sure we pushed the envelope too far a couple of times,” he said. “That’s why you make the next ad right away.”

When he founded the company in 1989, the American Apparel brand distinguished itself by being a company that, against every trend, manufactured clothing in the U.S. and paid its workers far above the industry average.

“A good worker can make $13, $14 bucks an hour and their colleagues are working in sweatshops where they're paying cash for $5,” Charney said.

By 2005, the company was growing by leaps and bounds, earning $211 million in profits. Two years later, it went public.

For Charney, it was always about breaking boundaries, which became the driving force behind both his rise and fall.

As profits rose, so did allegations that his sexual enthusiasm wasn’t just a marketing ploy, but that it also created a sexually charged, hostile work environment. Charney denies ever sexually harassing an employee.

“I’ve never engaged in any activities that could be characterized as sexual harassment,” he said.

Despite his denials, Charney has been the subject of numerous scandalous headlines and lawsuits, many revolving around sex. Charney admits to sleeping with employees, but says everything was consensual and denies any wrongdoing.

“All those accusations against me are crap,” he said. “There’s allegations… we’ve resolved them. None of it — none of these allegations - were ever proven.”

When asked if he knew how many times he had been sued for sexual harassment, Charney said, “Maybe a dozen, maybe less.” He added that some of the lawsuits were settled and others were dismissed.

Despite the allegations, American Apparel’s board continued to keep Charney on as CEO for years, until this summer.

“The experience of two, three years, yeah, we lost a couple a hundred million dollars,” he said. “I never thought it would be such a difficult job.”

Charney was officially fired in December 2014. Some of the allegations listed in his termination letter included misusing company money, violating the company’s sexual harassment policy, and offering significant severance packages without board approval to numerous former employees to insure his alleged misconduct wouldn’t subject him to personal liability.

“Those accusations are completely false,” he said, calling his termination “ridiculous.”

“I had been working 365 for 10 years solid, OK? Built a massive brand that captured the imagination of the world,” Charney said. “Then to treat me like that, to throw me on the street... shame on them, shame on them, that’s my message to them.”

Charney has alleged that the company conspired to destroy him, citing, among other things, the suspicious leak of a now notorious video shot in a New York City apartment that shows him walking around naked in front of a coworker and a friend.

Charney says the video hit the web one day after he was ousted. He is convinced the leak must have come from inside the company because they “had access to all of my personal affairs.”

“Hours after I'm fired, a personal video shot by a friend, who had not distributed it to anyone ... was released in the public,” Charney said. “It has to be connected to the company's activities, OK? So the company went as far as to release a video of me that was personal.”

Since Charney’s firing, Paula Schneider has taken over as CEO of American Apparel. Her mission is to restore the company to profitability, save workers’ jobs and distance the company as far as possible from its controversial founder.

Schneider denies there was an underhanded plot to fire Charney and says that the company never leaked the video.

“I have great respect for what he built here, but there were challenges,” she said. “In the last five years, the company has lost over ... $300 plus million. So you know, it wasn't a financially healthy company, and my goal is to take it, turn it around.”

“Even the best of American companies had periods of losses," Charney said about the claims he mismanaged company money. "What's important here is about the 'go-forward' opportunity at American Apparel, and I believe I had a good strategy to go forward.”

Aside from the losses, Schneider said Charney was fired “for violating our sexual harassment and our anti-discrimination policy” and “for misuse of corporate assets.”

When asked how Charney was allowed to continue on as CEO for years after repeated sexual harassment allegations from employees were reported, Schneider said that was “hard to understand.”

Getting the company back on track, Schneider admitted, does mean that workers periodically have been furloughed, “and I feel tremendously bad about that,” she said. But the company pointed out that plenty of workers were elated by the news that Charney was fired and banned from the facility.

The company directed ABC News to an American Apparel employee who asked ABC News to call her “Sam” and not to reveal her identity. Sam said she worked with Charney before he was ousted.

“When you work at American Apparel closely with Dov, you’re pretty much scared all the time,” she said.

Sam claims Charney was cruel and vindictive.

“He will yell at you, call you names, humiliate you until you feel down, broken,” she said.

Schneider said that Sam’s statements echoed others she had seen in human resources reports.

When asked about Sam’s allegations, Charney said that was simply “one person's point of view.”

“There's many different points of view,” he said. “I'm not going to get along with everybody. This is a tough environment. It's the apparel industry. Not everybody has to work at American Apparel.”

But he doesn't deny he can be a tough boss.

“I’ll tell you one thing, I’ll push my white collar workers harder,” he said. “I was combative, I was a pushy boss, I was a hammer on my white collar staff, that’s for sure.”

Charney refused to further discuss the sexual harassment allegations and claimed his ouster was the result of a “witch hunt.”

Despite Charney’s plans of returning to the company, Schneider said that he will never be reinstated.

“He is not allowed to be an employee, or an officer, or CEO of the company. Period. There's no option there,” she said.

This week, the U.S. Securities and Exchange Commission announced it was investigating what led to his termination. Charney declined to talk about the investigation.