Indecent Exposure (84 page)

Accounts of the September 23, 1977. board of directors meeting and all subsequent board meetings are based in part on the author's examination of the full minutes of each board meeting and related documents. Although the minutes
are
summaries and contain no actual dialogue, they do stand as the corporation's official and confidential record of the meetings and, at a minimum, provide a firm basis for further inquiry.

Frank Capra bases a character on Giannini:
Frank Capra, The Man and His Films,
edited by Richard Glatzcr and John Racburn, Ann Arbor Paperbacks, The University of Michigan Press, 1975, p. 29.

Considerable information on the role of banks and investment firms in the motion-picture industry is contained in Robert H. Stanley,
The Celluloid Empire,
Hastings House, New York, 1978; Tino Balio,
United Artists, The Company Built by the Stars,
University of Wisconsin Press, 1976; and
The American Film Industry,
edited by Tino Balio, University of Wisconsin Press, 1976.

The role of the First National Bank of Boston is described by William F. Thompson in an interview published by
Film Comment,
the Journal of the Film Society of Lincoln Center, September-October 1976, p. 20.

The most detailed explication of the Pierre Groleau embezzlement is contained in
Begelman
's SEC testimony and exhibits, and in memoranda prepared by the Burbank, California, police department.

Rona Barrett: Rona Barrett,
Miss Rona, An Autobiography,
Bantam Books, 1975.

The Wyman, Bautzer law firm later was renamed Wyman, Bautzer, Rothman, Kuchel & Silbcrt.

David Ge
ffcn's life: Julie Baumgold, "The Winning of Cher (and some other major achievements of David Gcffen),"
Esquire,
February 1975; J. Curtis Sanburn, "David Geffen: Starting Over,"
Gentlemen's Quarterly,
July 1981; Jennifer Allen, "What Makes David Geffen Run?," New York
Daily News,
February 25, 1981.

The seven major studios to which the author occasionally refers
are
Columbia, Metro-Goldwyn-Mayc
r, Paramount, Twentieth Century-
Fox, United Artists, Universal, and Warner Bros. Disney, although it is an important studio, is an exception to nearly every rule of Hollywood and is beyond the scope of this book.

The most detailed explication of the Martin Ritt embezzlement is contained in Begelman's SEC testimony and exhibits, and in memoranda prepared by the Burbank police.

chapters
23-36

Much of Gruenberger's interrogation of
Begelman
on November 7, 1977, was duplicated in less detail by the SEC's later questioning of
Begelman
.

One or more of Stark's loans to Begelman were verified or alluded to in the SEC testimony of
Begelman
, Stark, and Gerald Lipsky.

The author was present at the November 10, 1977, annual meeting, and at the November 15 premiere of
Close Encounters.

Details of Berte Hirschfield's employment with E. J. Wolf & Associates Inc.. are contained in letters from
Leo Jaffe
to Irwin Kramer and Alan Hirschfield, both dated Feb. 26, 1976, and from Weil, Gotshal & Manges to Irwin Kramer, dated May 15, 1978.

Northrup foreign payoffs scandal:
WSJ,
February 19, 1976. The author was present at the all-day staff meeting November 28, 1977.

Ira Harris: "Ir
a Harris: Chicago's Big Dealmake
r,"
Business Week.
June 25. 1979.

Jimmy Goldsmith: William Mathe
wson, "Fighting Knight,"
WSJ,
March 29. 1977.

Allan Carr's party for Gladyce
Begelman
was described by Andrew Tobias in "The Fall. Rise and Fall of David Begelman,"
Esquire,
March 14. 1978. Tobias attended the party with an invited guest.

David Kan
^-
: Roy Rowan. "The Death of Dave Karr, and Other Mysteries."
Fortune.
December 3. 1979; Jeff Gcrth, "U.S. Entrepreneur's Soviet Tics,"
NYT,
October 5, 1979.

The December 20, 1977.
WSJ
article and subsequent
WSJ
articles cited here on Columbia Pictures were written by the author of this book.

CHAPTERS
37-47

Stark's call to Cliff Robertson on December 26, 1977, was described by Robertson in his SEC testimony.

Samples of Lucian Truscott's writing: Army career:
Harper's,
July 1974; Ali-Frazier fight:
The Village Voice,
March 18, 1971; Journalism: Monthly newsletter to the Alicia Patters
on Foundation, May 1976. Truscot
t had a fellowship from the foundation that year to study his class at West Point. These samples are indicative of Truscott's style, personality, and approach to writing, but
are
not comprehensively representative of the total body of his journalism, which includes some creditable investigative reporting.

United Artists history: Balio,
United Artists.

The author was the
WSJ
reporter who received the anonymous call about
Berte
Hirschfield.

The extract from Cliff Robertson's interrogation by Detective Elias and Deputy DA Lewis is taken from a transcript of the conversation.

Philip Morris details: Philip Morris Incorporated annual reports; "The Fortune 500,"
Fortune.
May 8, 1978.

Judy Garland partially contradicts her letters: Deposition taken in the case of
Michael Sidney Luft
v.
Frances Gumm Luft, also known as Judy Garland,
Superior Court of the State of California for the County of Los Angeles, No. WED 4146, December 15. 1964.

The author was present at the security analysts' presentation, February 14, 1978.

Lucian Truscott's
New York Times Magazine
article: In addition to the mistakes noted in Chapter 46, the article contained other erroneous statements, including the following: that Charles Allen put up $11 million to buy RKO Pictures from Howard Hughes; that Villem Zwillinger brought Charles Allen into the movie business in 1953; that Eliot Hyman bought and sold RKO, and also bought and sold Mo
nogram Pictures; that Zwillinge
r introduced Charles Allen to Hyman; that the 1948 decree requiring the studios to divest their theater chains was initiated by the SEC; that Charles Allen had an office on lower Broadway; that Columbia Pictures was a $100 million-plus corporation. (While technically correct, the low figure used in the last statement was highly misleading: according to Columbia's 1977 annual report, which was readily available to Truscott, the corporation's revenues were $391 million and its assets were $336 million.)
chapters
48-56

Nonpublic details of
Begelman
's deal with Columbia: Memorandum to corporate counsel Victor Kaufman, February 15, 1978, filed with board-meeting minutes.

Robert L. Stone: Hugh D. Me
nzies, "The Ten Toughest Bosses,"
Fortune,
April 21, 1980;
WSJ,
March 22, 1977.

Herbert Allen's attitude toward Columbia's acquiring Filmways: On May 1, 1978, Allen wrote a letter to Hirschfield saying, "I think that this would be the proper time to acquire Filmways. . . ." On May 5,
Hirschfield
replied ". . . It sounds like an interesting idea to pursue. . . ." In view of subsequent developments, as well as the overall political climate within Columbia, it could be inferred that both letters were formalities and not entirely serious.

Discussion of the Mattel deal by Hirschfield, Spear, and Lufkin: Lufkin subsequently said that he had no genuine interest in being chief executive officer but may have offered to be a "straw horse" chief executive "to get the deal done." He said the talks were stymied by Art Spear's insistence on being chief executive.

Herbert Allen's objections to the Filmways and Mattel deals: Subsequently he said that both companies' asking prices had been too high, Rosenhaus disliked the toy business, the mode of payment Filmways had asked was unacceptable to Columbia, and Filmway's businesses did not "fit well" with Columbia's.

Robert Stone's talks with Herbert Allen: The account is based in large part on Stone's SEC testimony, which is generally consistent with Allen's testimony on this subject but more detailed and specific.

Audrey Lisne
r: The basic information on her alleged crimes is contained in the files of
The People of the State of California
v.
Audrey Bride Lis
ner,
Case No. A350655, Superior Court of the State of California for the County of Los Angeles. The author also was aided by the district attorney's
Affidavit for Search Warrant,
filed in support of Search Warrant No. 14799, signed June 7, 1978. The affidavit, which sets forth the details of Columbia's internal investigation by
Ilana
Cytto and Peter Gruenberger, was obtained from Columbia sources, as was extensive additional information on Lisner's background and activities.

Board meeting of June 22, 1978: Hirschfield later objected in writing to the accuracy of the board secretary's minutes of the meeting and subsequent board meetings. This book's account rcfleets those objections in instances where the author has determined that they have merit.

Price Waterhouse's analysis of Columbia's West Coast financial controls: In a six-page report dated February 24. 1978. Price Waterhouse said its investigation "disclosed no conditions that we believe to be material weaknesses" and emphasized that no "reasonable" control system can provide an "absolute" guarantee against circumvention by a "single individual within management with respect to the execution and recording of transactions." However, Price Waterhouse recommended thirteen procedural changes—most if not all of which Columbia implemented—to further reduce the possibility of embezzlement.

CHAPTERS
57-62

Begelman criminal proceeding:
The People of the State of California
v.
David Begelman.
Case No. A-586983, Superior Court of the State of California, County of Los Angeles, 1978.

Herbert Allen and Irwin Kramer's letters rebutting
Hirschfield
's letter of June 28, 1978: Further extracts follow:

Allen: ". . . The board is not 'out of control.' Without deprecating the 'management' members of the board, I am proud to say that the 'outside' board members
are
, without regard to their financial interest in the company, as purposeful, disciplined, honest and hard working a group as 1 have ever had the privilege of being associated with. I am forced to the conclusion that Mr. Hirschfield uses the term 'the board is out of control' because he feels that the board is out of his control and he cannot control the board.
...
It is not only factually incorrect but also grossly unfair to characterize the actions of the directors, taken in good faith, as 'vexatious and obstruent.' I for one have been available to the company generally, and to Mr.
Hirschfield
specifically, at a few moments' notice on a 24-hour-a-day basis. And Mr.
Hirschfield
has called on me on that basis— days, nights, telephone calls by him at 1:30 in the morning, telephone calls to me in Europe, the use of my home to negotiate with existing and proposed executives. And other directors have been similarly unstinting in their availability and output. . . ."

Kramer: ". . . as chairman of the audit committee of the board, my efforts have been extensive and intensive to make the audit committee more effective and responsive. It is only through hard work of our committee, in the face of obstacles and delay, that we have made progress in attaining our stated objectives.
..."

Adler memorandum of meeting with Lufkin July 20, 1978: Lufkin later said his remarks referred to his general motivation for joining the Columbia board and not to the specific act of firing Hirschfield.

epilogue

Clive Da
vis. Dan Melnick. and Allen Adle
r did not actually become Fox employees. Columbia sold Davis's record company, Arista, to Bertelsmann, a multinational media company based in Germany. Davis remained the head of Arista, however, and established a production relationship with Fox. Dan Melnick moved his production company from Columbia to Fox, and Adler, who had learned by his middle thirties to control his temper and brashness, went into partnership with Melnick.