Indecent Exposure (20 page)
- Begelman did not say, and Weintraub did not ask, what the money was for.
- The only Columbia person
Begelman
saw after the board meeting was Matty Rosenhaus, who gave him a tearful recital of what had been decided. Begelman was aboard the seven o'clock TWA flight to Los Angeles, and managed to have a pleasant weekend. On
Saturday evening, he and Gladyce
attended a VIP screening of
Bobby Deerfield
at the Directors Guild. As
Newsweek
would later report, s
omewhat snide
ly,
Begelman
looked that night as if he "owned the town—which, in many ways, he did. He was riding, high, universally respected, trim and handsome, a real doer. The man who turned around Columbia Pictures." - On Sunday morning, Joe Fischer flew to Boston, took a taxi to the Ritz-Carlton Hotel, and went to the sedate second-floor lounge where he had arranged to meet William Thompson, the senior vice president of the First National Bank of Boston and Columbia's principal banker.
- Aside from Columbia Pictures' top officers and a couple of board members, no one played as crucial a role in the company's affairs in the 1970s as Bill Thompson. It wasn't unprecedented for a banker to be so important. Major banks had been active in the movie business since its beginnings. When the Great Depression hit Hollywood, at the same time as a pressing need for new capital to finance conversion of the studios to sound. Chase Manhattan (then called Chase National) and Morgan Guaranty came to the rescue. In the fifties, Chase was among the backers of Twentieth Century-Fox in developing the Cinemascope process. But banks in general were wary of movies, preferring to deal with industries whose products were more tangible and commercially dependable, and only two banks—the Bank of America and First of Boston—had maintained a strong and consistent presence in Hollywood over many decades. A $100,000 loan from A. P. Giannini of the Bank of America financed the birth of Columbia Pictures in 1920, and the Bank of America was still an important financier of the industry at large more than half a century later.* Columbia Pictures, however, had switched to the First of Boston in
the late thirties after Serge Se
menenko, who was to become the Boston bank's vice chairman, began making movie loans. Semenenko loved the picture business like no other, and by the seventies, the First of Boston was the principal bank for Warner Communications, Twentieth Century-Fox, Columbia, and several smaller companies in the United States, and for Lord Grade's company in England. - Bill Thompson had assumed responsibility for entertainment lending after Semenenko left the bank, and Thompson's influence was crucial in arranging the
Allens
' takeover of Columbia Pictures and the installation of
Hirschfield
as chief executive off
icer. Thompson, delighted to see
his judgment vindicated by Hirschfield's success at rejuvenating Columbia, had developed a warm relationship with him and Fischer since the management change. It was for Hirschfield and Fischer, therefore, that he felt his deepest sympathy when he heard the
Begelman
news in the Ritz-Carlton lounge. Thompson and Fischer talked for an hour about Columbia's plans for dealing with the
Begelman
problem, and then Fischer caught the shuttle back to New York. - *
In 1932. when Frank
Copra
made
American Madness
for Columbia, he bas
ed the lead character, a benevolent banker pla
yed by Walter Huston, on A. P. G
iannini. "A
ll the other banks thought he w
as absolutely nuts, lending money on character."
Capra recalled years later of Giannini
.
"He'd take collateral if you had it, but if you didn't and you ha
d character, he'd lend you money anyhow." - * *
* - Todd Lang, who was to oversee the Begelman investigation, spent several hours at his Scarsdale home that afternoon with the man who actually would go to Los Angeles and conduct the investigation, Peter Gruenberger, a Weil, Gotshal partner who specialized in litigation and the conduct of sensitive inquiries for corporate clients. Forty years old, married with a family in Sca
rsdale, Gruenberger had been born
in Czechoslovakia, reared in the United States, and educated at the Columbia University Law School where he had made the law review. Gruenberger had a strong personality typical in some ways of lawyers who make their reputations as litigators. More comfortable on his feet in a courtroom than in an upholstered chair in a boardroom, more at home interrogating a witness than negotiating a corporate merger, Gruenberger was a spirited man, moody at times, quicker both to laughter and to anger than his more reserved brethren like Todd Lang. With dark hair and eyes, a dusky complexion, and an athletic build, Gruenberger possessed a minor physical quirk that occasionally worked to his professional advantage. His left eye diverged involuntarily to the left from his normal line of vision and his eyelid drooped slightly, giving an effect that some adversaries found distracting if not a bit menacing. - Peter Gruenberger not only had conducted other investigations of comparable sensitivity but also was qualified to confront the unique aspects of the
Begelman
affair. Having handled Columbia Pictures' litigation for years, he was intimately familiar with the company and, just as important, with the Hollywood community. This was not the ball bearing business in Cleveland, after all. There would probably be publicity and other kinds of problems that onl
y Hollywood seemed to pose. Conducting
a discreet investigation of David
Begelman
, in his own town, surrounded by hundreds of his friends, would require special skills, including but not limited to quick wits, tenacity, and an ability to function in an environment that could occasionally be nonsensical. Todd Lang felt that if Peter Gruenberger could not handle it, no one could. They talked in Lang's living room until nearly sundown. - For Alan
Hirschfield
. who passed the day at his Scarsdale home just around the corner from Lang's, there was a pleasant little surprise to divert him from his gloom, if only for a moment. The widely read "Suzy" column in the New York
Daily News
on Sunday reported that: - Close Encounters of the Third Kind
is Columbia Pictures' long in the making, millions in the spending, blockbuster movie of UFOs. It opens at the Ziegfeld Theater Nov. 15 under the chairmanship of multimilliona
ires Nathan Cummings, Mary Laske
r and Mrs. S. Joseph Tankoos, Jr., as a benefit for the Cancer Research Institute. . . . Alan J.
Hirschfield
, president of Columbia Pictures and a trustee of the Cancer Research Institute, will be honored at a supper dance after the premiere at the Trianon Ballroom of the New York Hilton. To give you some idea of the prestige of the evening, these are the vice chairmen—Robert L. Bernstein, chairman of Random House; Edgar Bronfman, chairman of Joseph Seagram and Sons; Barry Diller, chairman of Paramount Pictu
res; Douglas Dillon, chairman
of Dillon, Read and Co.; Walter Hoving, chairman of Tiffany and Co.; Donald Kendall, chairman of PepsiCo, Mr. and Mrs. Harding Lawrence (he's the head of Braniff; she's the head of Wells, Rich, Greene); John L. Loeb, Jr., partner in Loeb, Rhoades; Louis Nizen William S. Paley
, chairman of CBS; and Sue Menge
rs, the top Hollywood agent, a flying object who was identified a long time ago. - FIFTEEN
- At home on Linden Drive in Beverly Hills, David Begelman also was preoccupied that Sunday. All of his options had become risky. If he did nothing, the investigators probably would discover the third embezzlement. Then again, they might miss it. If he carried out his concealment plan, it might work. Or the act of concealment itself might arouse suspicions and lead to discovery.
- In some ways, the third embezzlement had been the most elaborate of all of Begelman's thefts. A little more than four months earlier—on Thursday, May 19—he had asked one of the studio lawyers, Leon Brachman, to prepare a contract calling for Columbia Pictures to pay $25,000 to a man named Pierre Groleau. The money was for "consulting" work on the marketing of two motion pictures that had been made in France,
Madame Claude
and
The Photographer.
The films were real enough, as was Pierre Grolcau. But Grolcau was not a marketing consultant and knew nothing of the work he was to do for Columbia because it was entirely bogus—a figment of David Begelman's imagination. - The contract was drafted to Begelman's specifications, a check for $25,000 was drawn to the order of Pierre Groleau, and both documents were delivered to Begelman's office. With the assistance of his friendly banker, Joe Lipsher, Begelman opened an account the next day in Groleau's name at the Wells Fargo Bank in Beverly Hills. The following Tuesday, May 24,
Begelman
wrote a check for $6,838 to himself on the Groleau account, signing Groleau's name on the front, and his own name on the back as the endorsement, and deposited the check in his own account. That same day, he wrote anoth
er check for $8,162 on the Grole
au account, signing and endorsing it similarly,
and sent it to the Margo Le
avin Gallery, a small art gallery on Robertson Boulevard popular among the Beverly Hills elite. The second check was payment for four works of art which Begelman had purchased two weeks earlier—a Jasper Johns silk screen, an Arakawa lithograph, a Jerry
McMillen acrylic, and a McMille
n coil brass-leaf wall sculpture. Neither Groleau check was challenged by the bank. - David and Gladyce Begelman flew to New York on Wednesday, May 25, in preparation for the wedding of Gladyce's daughter the following Monday. They returned to Los Angeles on Wednesday, June 1, in time for the convention of Columbia's foreign sales executives, during which Begelman learned for the first time that Cliff Robertson's representatives were demanding an explanation of the IRS form indicating a $10,000 payment from Columbia Pictures that Robertson had never received. Two weeks later, having disseminated what he thought was a plausible alibi for the Robertson embezzlement, Begelman cleaned out the Pierre Groleau checking account and deposited the remaining $10,000 in his own account. He was unaware, of course, that on that same
day Cliff Robertson was in Winnetka, Illinois, making a se
ries of telephone calls which would promptly result in a report to the police that the Robertson check was a forgery. - Sitting at home on a Sunday three months later, facing an imminent investigation, Begelman decided to proceed with his plan for concealing the Pierre Groleau embezzlement. He drove to the Columbia Pictures building on the Burbank lot. Finding the premises deserted as he had expected, he proceeded to concoct a phony telex message, purportedly from Pierre Groleau in St. Tropez, canceling the consulting contract. He left the message on the desk of Leon Brachman, the same lawyer who had drafted the Groleau contract in May. On Monday morning, after Begelman's friend Sy Weintraub delivered the cashier's check for $25,000 that David had requested by phone from New York on Friday, Begelman sent the check along to Brachman with instructions to prepare a formal release from the Groleau contract.
- Later in the day, when the cashier's check and the other documents reached the studio financial office (the last stop before deposit of the check in Columbia's bank account), Lou Phillips, the controller, sensed something peculiar. (Phillips had been extra vigilant, of course, since Joe Fischer's visit ten days earlier and the revelation that Begelman was suspected of embezzlement.) Although there was nothing overtly phony about the Groleau transaction—the original contract in May had not caught Phillips's attention—it seemed odd to him in retrospect that a marketing consultant for two minor French films would be retained by
Begelman
personally. The same sense of irregular procedure had led Phillips to question the Peter Choate contract. Still, Phillips felt that he probably was being excessively cautious when he took the Groleau material to Jim Johnson, the vice president for administration. It turned out, however, that the Groleau matter had caught Johnson's attention, too. When the original contract had crossed his desk in May, Johnson had thought it sufficiently peculiar to send a note about it to the head of Columbia Pictures' foreign marketing in New York. There had been no response to the note, and Johnson soon forgot about it. But Lou Phillips's independent suspicions, together with their heightened sensitivity to anything unusual in the wake of the other revelations, galvanized Johnson to further inquiry. He sent Phillips for a copy of the canceled $25,000 check that Begelman had requested in May. Though the endorsement "Pierre Groleau" did not look as much like
Begelman
's handwriting as the Cliff Robertson endorsement had, Johnson and
Phillips were devastated to see
that there was a distinct resemblance. - Who could Pierre Groleau be? Was it a phony name, or was Groleau a real but misrepresented person, as Peter Choate had turned out to be? Johnson and Phillips were baffled. Neither of them had ever heard the name.
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