March 18, 1985 12:00 PM

There are power lunches, power offices and now, wonderful to relate, New York finally has a power barber—Gio Hernandez. The pooh-bahs of Manhattan flock to him for his haircuts, for the very status of sitting in his chair and for his connections. “Gio,” claims Roone Arledge, “is secretly running New York.” Says Chrysler chairman Lee Iacocca, “I meet more people through Gio than I do through the White House.”

It was those connections that led to the Affair Iacocca, which still has Gio pretty steamed, though he remains friends with Lee. He pretends it doesn’t bother him, but it does. See, it was Gio the power barber—not some fancy-pants literary agent—who put Bantam Books together with his very good friend Iacocca. The publishers “were desperate for Lee to do a book,” Gio recalls. Lee was reluctant, but the barber kept cajoling, and finally a meeting was arranged. The result of that meeting became a runaway best-seller, Iacocca, An Autobiography, now in its 27th printing with more than 1.5 million $19.95 copies in circulation.

To show its deep appreciation, Bantam last November sent Gio a check—for $5,000. Not impressed by the offer, the 59-year-old Cuban immigrant had his lawyer friend Roy Cohn send the check back with a nasty letter. “It’s a matter of fairness,” says Cohn, arm-twister extraordinaire. “Without me,” adds Gio. “there is no book.” Bantam begs to differ. And the imbroglio grows bigger each day.

But first, the art of power tonsure. Gio has a six-chair shop in Manhattan’s tony Hotel Pierre. His clout has its roots in the follicles of his “friends”—his haut monde clients—who include the likes of Baron Guy de Rothschild, ex-mayor John Lindsay and, when he’s in town, actor Robert Redford. They come to him as links in an unbroken chain of barbering success. Singer Vic Damone brought in limo tycoon Bill Fugazy, who brought in Lee Iacocca. Roy Cohn brought in Yankee owner George Steinbrenner. Broadcaster Frank Gifford led to ABC honcho Roone Arledge, just as director Sidney Lumet led inexorably to Al Pacino.

“As a haircutter, he’s a genius,” says photographer Francesco Scavullo. “I use him whenever I have someone important come here, like Sinatra or Pavarotti.” But perhaps Gio’s real genius lies in making his mover and shaker friends comfortable during their $45 trimming. In cultivating the heavy hitters “he’s neither servile nor forward,” notes lawyer Adam Walinsky, onetime aide to Sen. Robert Kennedy. “The wealthy and powerful can actually relax around him.” In fact, so socially disarming is Gio that, in the words of Cohn, “He’s become part of the gang.” That’s the gang that winters in Palm Beach and summers in the Hamptons. Gio was one of seven guests at Steinbrenner’s Christmas party; when Iacocca’s wife, Mary, died in May 1983, Gio was a pallbearer.

“I love to call this a men’s club,” says Gio, making a sweeping gesture that takes in his shop. And indeed, the place—a sumptuous medley of glass, leather and earth-toned marble—is like an overachiever’s version of the island of lost boys. He keeps Oreos on hand for Frank Gifford. (The cookie jar is kept filled by Ross Johnson, head of Nabisco.) There are vintage wines from Gio’s 4,000-bottle cellar. The place echoes with peals of rich, male laughter. Deals are done. Connections are made.

That’s the way it was when the Iacocca flap began. As one elite “friend” to another, Bantam Books’ veep Stuart Applebaum, a Gio client, asked the barber to introduce him to the Chrysler chairman. Gio contends Applebaum promised to “take care of” him with a hefty chunk of change though, he laments, “nothing was put in writing.” Applebaum responds flatly, “The issue of money was never raised by Gio until after the book became a runaway best-seller.”

There are parallels between Iacocca and his barber. Just as Lee went through a cycle of rise, fall and redemption, so did Gio. Born to an upper-middle-class family, Hernandez was a radio journalist in Havana until Castro came to power. “I meet Fidel at the university,” says Gio, who still has traces of an accent. “We were friends. When I tell him I was leaving Cuba he says, ‘Why?’ I say, ‘I don’t agree with your politics.’ ” But of course Gio added, “We can still be friends.”

Gio and his wife, Bertha, who now manages the shop, left everything behind in Cuba in 1962. And in fact Gio suspects this may have contributed to his compulsive amicability. “Because I lost everything,” he says, “the greatest reality for me has become friendship.” The couple, childless, live in the same one-bedroom Murray Hill apartment they moved into 23 years ago. Shortly after fleeing Castro, Gio learned haircutting and for 14 years was a barber at Bergdorf Goodman. Through hard work and a little help from his friends (in loans totaling $150,000), he was able to open his own shop two and a half years ago.

Bill Fugazy leaves. In walks Roy Cohn. Gio will arrange for his friends to meet. He will solve little problems for them, obtaining impossible theater tickets or rare wines. “And when I have little problems I come to them too,” he says. It was to Cohn he came with the little problem of the $5,000 check. And it was Cohn, master needler, who replied to Bantam. “In the letter I said this was more like a tip for a haircut. They were,” he chuckles, “highly offended.”

“A finder’s fee” is what Gio says he wants out of all this. While Cohn figures $300,000-$400,000 sounds right, Gio is willing to compromise. “But not $5,000,” he says. “That’s a humiliation.” As for Bantam, they’re working both sides of the street. While insisting they owe nothing to Gio—”We question his aggrandized perspective on his contribution to the success of Iacocca,” says Applebaum—they don’t want to appear greedy. “We would like to resolve this in a friendly fashion,” he adds. Lee Iacocca is donating all his earnings on the book to diabetes research. Although friends say he has privately pressed Bantam to pony up, Iacocca has publicly remained aloof.

Meanwhile, Stuart Applebaum hasn’t been back to Gio’s since Bantam mailed the bounced-back check. “I personally like Gio a lot. It’s amazing in his shop,” he says, somewhat wistfully. Depending on how Bantam plays their cards, Applebaum may find himself part of a very small, very exclusive club—the ex-friends of Gio.