His Not So Wonderful World : WALT DISNEY: Hollywood’s Dark Prince, <i> By Marc Eliot (Birch Lane Press: $21.95; 281 pp.)</i>

When the Walt Disney Co. bought independent distributor Miramax Films in April, a reporter asked Disney studio chief Jeffrey Katzenberg if the deal would send Uncle Walt spinning in his grave.

It was a fair question, given that the company built on the foundation of “Snow White” and “Mary Poppins” was suddenly in cahoots with the purveyors of the splatter movie “Reservoir Dogs” and the transvestite shocker “The Crying Game.”

Katzenberg answered coldly. “I don’t know,” he said. “I haven’t been over to the grave lately.”

Walt Disney would have loved Katzenberg’s obstinacy. And, despite reservations, he might have approved the Miramax deal, too, for the simple reason it met Walt’s overriding priority: It was smart business. For what’s startling to realize about the modern Disney studio is not that it abandoned its founder’s tactics, but that it remains true to his original, occasionally ruthless, strategies.

During his upstart career and following his death in 1966, Walt Disney was uncritically cast as a creative and financial genius, a Hollywood interloper born with innate show-business savvy. With the under-publicized but essential assistance of his brother Roy, Walt executed that rare capitalist exacta of enriching himself as well as his patrons. Besides Disneyland and Walt Disney World, his legacy includes the enduring Mickey Mouse and Donald Duck characters and some of the best animated films ever made, including “Pinocchio,” “Fantasia” and “Dumbo.” Disney was revered by children and embraced by politicians, proving amid Hays Code panic that the movie industry could in fact deliver wholesome entertainment. The company today, thanks partially to steady income from Walt’s creations, stands among the world’s most dominant entertainment conglomerates.

But Disney worked in what remains a particularly competitive, back-stabbing town, and while his films and theme parks are all good fun, their conception and delivery were not necessarily equally painless. Rather than reinvent the Hollywood game, Disney instead became one of its most skillful players, tirelessly repelling unions, rivals and soaring production costs. When cronyism worked to his advantage, he didn’t complain, but when it hurt, he threw a fit. For example, he threw his weight behind breaking up the studio monopoly on movie theaters that kept independent films like his own off the screen. In a collaborative process, he reserved most of the credit for himself.

In fact, as depicted by Marc Eliot in “Walt Disney: Hollywood’s Dark Prince,” Disney was the prototypical studio executive.

It’s a testament to Eliot’s schizophrenic and clearly unauthorized work that “Walt Disney: Hollywood’s Dark Prince” has worked itself onto the pages of both the New York Times and the National Enquirer. The New York Times showcased the book’s revelation that Disney for 26 years was a secret FBI informer, a J. Edgar Hoover mole in the thick of suspicious actors, writers, directors, producers, union organizers and animators. The National Enquirer, on the other hand, serialized the biography, sandwiched between its usual array of celebrity diets and romantic liaisons.

Through Eliot’s sometimes lurid telling, Disney comes off alternately as a visionary and as an anti-Semitic, alcohol-abusing, sexually impotent snitch. The book does not stop, though, with Disney’s on-screen triumphs and backstage transgressions. It also focuses repeatedly on how Disney’s allegedly illegitimate birth, adoption, political skirmishes and studios fights influenced his creative output.

In one particularly creaky armchair therapy session, Eliot tries to explain why Disney took full credit for Mickey Mouse, who was actually co-created by Disney collaborator Ub Iwerks. “By denying Iwerks credit for his role in ‘giving birth’ to Mickey, Walt may have been expressing more than just the symptoms of an excessive ego,” Eliot writes. “He may have been, in fact, trying to avoid any doubt about the ‘parental’ heritage of Mickey, an echo of the lingering childhood fear and uncertainty Disney carried concerning his heritage.”

Disney’s Davy Crockett television show, Eliot writes later, appealed to Uncle Walt because “Crockett’s courage and ideals in the face of enormous odds clearly symbolized Walt’s struggles during his battles against the established powers that had dominated the (major studios) and against the Communist ‘invasion’ of Hollywood.”

The FBI revelations, despite their newsworthiness, prove to be oddly dull, and are not a significant component of Eliot’s work. It is no secret that Disney was a rabid right-winger, a friendly witness to the House Un-American Activities Committee (following Ronald Reagan on the stand) and the vice president of Motion Picture Alliance for the Preservation of American Ideals. The FBI files don’t add much to these facts. Eliot’s review of the contentious union movement by Disney animators is lively, but not insightful. More diverting (and humorous) is a brief anecdote about Disney’s anti-Communist campaign and his confusion over which was a front organization: the League of Women Voters or the League of Women Shoppers. (It was the latter, he somehow concluded.)

Because the book lacks contemporary perspective, it fails to fix precisely Disney’s place on the Hollywood timeline. Rather than exhausting himself with scandal, this is where Eliot could have brought his historical subject into the modern world, giving the book the texture and depth it needs. After all, this is hardly the first Disney biography.

The book’s most trenchant observations pop up almost accidentally. In these occasional nuggets, the link between the old and new Disney studios is sharpest, and Walt comes forth as a progenitor of something both great and obsessive. Like the current studio management, Disney disbursed money (particularly at the lower ranks of the organization) as if it were printed in his own blood. “Walt treated his animators in the same fashion the heads of most Hollywood studios treated talent--as employees rather than artists,” Eliot writes. “. . . Disney, never a great sharer, preferred to think of his studio as essentially a one-man operation.” The studio’s conflict with unions extended well beyond Walt’s death: The Writers Guild of America blamed Katzenberg personally for stonewalling in the devastating 1988 screenwriters’ strike.

Disney might have been cheap, but he hired brilliantly, and his personnel office proved almost as pivotal as his own imagination. “Walt made the final decision on every applicant, hiring more by instinct than any other criteria,” Eliot writes of the studio’s growth in the 1930s. “Many of the men he chose during this drive eventually took their places among the most talented animators, artists and story men of their generation.”

The contemporary Disney studio is vigilant about protecting its copyrights, going so far as to nail three private Florida children’s centers for unauthorized Disney characters on their walls. In that embarrassing action, though, the studio was only following a precedent established by the company’s founder. Walt Disney knew that among his most valuable assets were the legal deeds to his fictional, one-dimensional creations, and he protected them vigorously.

Eliot condemns Disney’s unfairness, but fails to hold himself to the same standard. He openly repeats “unfounded rumors,” “one unproven theory” and “sick jokes” about Disney only to discredit them.

So any conclusions are left for the reader to draw. Eliot seems satisfied to have aired every garment in Disney’s wardrobe. But there’s not enough news here to merit a term like groundbreaking biography, so what we’re left with is another slightly salacious, workmanlike tale to shelve under “Hollywood Biography.”