Indecent Exposure (63 page)
- Since two of
Hirschfield
's main enemies had initiated the contact with Johnson, Alan might naturally have
been leery. But he knew that De
ane Johnson was exceptional. As close as Johnson was to Stark and the
Allens
, he was also close to a multitude of other people, and yet was beholden to no one. Indeed, it was his independence that made him attractive. At the age of fifty-nine, Johnson's stature in the Hollywood community, his reputation for integrity, his international social connections (Mrs. John
son was the former Anne
McDonnell Ford), his interests outside of show business, and his wealth all were too substantial for him to be in anyone's pocket. - Dea
ne Johnson received Alan Hirschf
ield in the late afternoon of Thursday, March 2. Instead of commuting to O'Melveny's large quarters in downtown Los Angeles, Johnson occupied a comfortable corner office in the firm's smaller Century City suite, overlooking the Los Angeles Country Club, adjacent to Beverly Hills, close to his home in Bel-Air. Unlike many of his gold-chained, open-necked brethren in the Hollywood legal community, Johnson prefe
rred conservative suits and tie
s. He had a tanned, lined face, open and friendly, with heavy brows and prominent features. - Hirschfield explained the problems at Columbia and the job Johnson would have if he could be persuaded to take it. He would preside over both motion pictures and television on a high, policymaking level, and would become a senior officer of the parent corporation and a member of the board of directors. To Hirschfield's surprise, Johnson was intrigued. He had been offered similar posts in the past by other motion-picture companies and had turned them down. But the Columbia situation sounded challenging, and although he and
Hirschfield
did not know each other especially well, Johnson had grown to like and respect Alan over the course of a number of business contacts. Johnson had not followed Columbia's recent problems closely as they had unfolded, but he agreed with
Hirschfield
's retrospective judgment that
Begelman
should have been fired immediately upon Columbia's learning of his embezzlements. Johnson accepted at face value Hirschfield's assurance that the disagreements within Columbia's management were healing.
Hirschfield
encouraged him, however, to speak directly with Ray and Herbert, and Johnson agreed to do so. - Deane
and Anne Johnson chatted through most of that evening at home about the Hirschfield overture. Anne was even m
ore captured by the idea than Deane
and urged him to consider it seriously. - Alan
Hirschfield
, meanwhile, was dining nearby at the Bel-Air home
of television producer David Ge
rber and discussing t
he Columbia studio post with Ge
rber and his other guest, Fred Pierce, the president of the ABC television network. Hirschfield admired Pierce as much as any executive in show business of his generation (people still under fifty). He had sought Pierce's counsel occasionally through the fall and winter and Pierce was a
mong his top choices to replace
Begelman. Pierce, however, had assurances that he would move to higher levels at ABC and preferred to stay there. - In addition to establishing Philip Morris as a candidate to acquire Columbia Pictures, Allen Adler put Hirschfield in touch with a Los Angeles management consultant, Victor H. P
almie
ri, who had done extensive work for the Penn Central Corporation. Penn Central, whose assets were built upon the profitable remains of the bankrupt railroad company, was looking for another company to acquire. Having experienced huge losses in the past, Penn Central possessed substantial "tax-loss carry
-
forwards," meaning it could earn substantial profits for years into the future without paying any taxes. It owned some amusement parks and was interested generally in entertainment, among other industri
es. Adle
r's link to Victor Palmieri was a mutual acquaintance, Jerry Perenchio, the chairman of Norman Lear's company, Tandem Productions. Adler had told Perenchio of Hirschfield's desire to find a buy
er for Columbia Pictures, and Perenchio sent Adle
r to Palmieri, who agreed to see
Hirschfield
.
Hirschfield
and Palmicri had dinner in Los Angeles and discussed Columbia Pictures at length, but Penn
Central eventually decided that
it was not interested. - Andrew Tobias, the first journalist to know the details of David Begelman's crimes, wrote by far the best of the major articles published on the subject. Unfortunately, the impact of the Tobias article was limited since it came out so late. Because of the unwieldy production schedules at
Esquire,
the piece did not appear until around March I, four months after Tobias's source briefed him over a pizza in East Harlem on a Sunday night in the fall. Tobias wrote about Begelman's forgeries and their impact on the subcultures of Wall Street and Hollywood with his usual wit, common sense, and accuracy—qualities which so many other articles had lacked. After discussing the entire affair and adding some theretofore unknown details, he con
cluded with what he called a "se
rmonette." - . . . when the board of directors of this public company actually moved to reinstate him (having paid him all the while he was on leave), they truly made a practical and, I think, an ethical blunder.
- The man forged checks.
Not once, in a drunken stupor, but at least three times. You can argue that a bar mitzvah attended by all your industry colleagues is good for business—and hence deductible. You may not win the argument, but you can make it. You can argue that illegal wiretapping, if done in the belief that it would save the country, has some supr
ale
gal moral justification. You may not win the argument, but at least you can make it. You can argue about marijuana, you can argue about draft resistance, you can probably even argue about the millionaire with a compulsion to shoplift at the five-and-dime. You may have to make these arguments from behind bars, and you may lose them—but you can make them. - How can you possibly argue about forgery?
- A board of directors in today's corporate America cannot describe a series of forgeries as "certain unauthorized financial transactions" and then reinstate the perpetrator, hoping that no one will notice or make a stink.
- The best that can be said is that in doing so, out of compassion for a friend and in hopes that he could make their company yet another $100 million, the board of Columbia Pictures made an honest mistake.
- It is a mistake few other boards of public companies would have made, I think, and one that—after this—fewer still will be inclined to make.
- Robert Critchell, the acquisitions specialist from Philip Morris, had his fifth secret me
eting with Columbia's Allen Adle
r on Saturday at Adler's apartment on East Sixty-fourth Street. They had nearly completed their exchange of information on their respective companies and discussion of Columbia's plans for participating in the rapidly expanding home-video market. Critchell shortly would prepare a report for the high command of Philip Morris which it would use in deciding whether to make a move toward acquiring Columbia Pictures. - Back in slushy Manhattan on Monday, after the rainiest week of the winter in Los Angeles, Alan Hirschfield had lunch with Herbert Allen at "21." It was an entirely cynical and quite awkward gesture, like two weary fighters pausing after the seventh round to have tea in the center of the ring. Both men laughed about the lunch before, during, and after. "Why don't we have a p
ublic lunch so everybody can see
that we're still talking to each other," Herbert had said on the phone late the previous week. "Fine," Alan replied, "let's go to '21.' I can't think of a more public place, although with our luck, no one will show up a
t '21' that day. No one will see
us." He was righ
t. No one of consequence did see
them, and not a single gossip columnist reported the
meeting. Alan talked about Deane
Johnson. Herbert talked about his planned suit against
The New York Times.
They tried hard to appear relaxed and informal. - Herbert had convinced himself that appearances were important. Having calculated incorrectly around the first of the year that the press coverage would (as Ray Stark had put it) "blow over in two weeks," Herbert and most of the other Columbia directors eventually had seized upon a new and equally superficial appraisal of their dilemma: We have a PR problem. The solution? Obvious. Hire a public re
lations firm. Columbia already em
ployed a capable public relations director, Jean Vagnini, whose work was considered excellent by objective observers outside the company, as well as many inside. The board of directors, however, had lost confidence in Vagnini's ability to handle the continuing media onslaught alone. They also suspected that Vagnini's loyalty, in the continuing animosity between Hirschfield and the board, was to
Hirschfield
. Since she was young, relatively inexperienced, and female, she was a convenient target for a group of men who did not want to confront the true source of the "PR" problem—themselves and their own actions. So they instructed Alan Hirschfield to retain an outside firm—not a show-biz publicity outfit but a firm experienced in dealing with the public-relations problems of major corporations. Recognizing the futility of the gesture but reluctant to spark still another fight with the board,
Hirschfield
acquiesced. He interviewed some of the best known public-relations firms in the country—Hill and Knowlton, Rubenstein Wolfson, Burso
n Marsteller, and Adams & Rinehe
art— but for the time being deferred a decision on which to hire. - FORTY-EIGHT
- Alan Hirschfield's secret effort to overthrow Herbert Allen was not a tightly controlled, meticulously organized, all-or-nothing-at-all plot. It was an improvisational and occasionally haphazard scheme whose intensity varied from week to week depending upon Hirschfield's mood and the degree of Allen Adler's success in finding a potential savior.
- In the wake of the Jimmy Goldsmith debacle, Hirschfield had grown pessimistic, despite Adler's ongoing contacts with Philip Morris. Even if Philip Morris were to acquire Columbia Pictures Industries and get rid of the
Allens
, there was no guarantee of bliss and contentment. After the flush of victory had faded, Hirschfield would have to face the fact that he still did not control his own destiny. Instead of being the
Allens
' employee, he would become Philip Morris's employee. He could not imagine anything worse than working for the
Allens
, but how much better working for Philip Morris would be was unclear. - Meanwhile, as he continued his search for someone to seize control of the company, he also was scheming more modestly for help simply in
reducing
Herbert's power, even if only slightly. If another company—say Time Inc. or General Cinema—bought a sufficiently large block of Columbia Pictures stock, it could legitimately demand a scat or two on the Columbia board of directors and presumably would fill those seats with allies of Hirschfield. A second approach was for Columbia to acquire another company whose management, while publicly neutral, would side with
Hirschfield
once it was a part of Columbia and held a substantial enough financial stake in the combined enterprise to demand a voice in the company's affairs. As Hirschfield saw it, the Mattel toy company was a candidate for such an arrangement. He had talked intermittently with Mattel since Columbia Pictures had purchased a block of the toy company's stock the previous fall. - Another such candidate was Filmways Incorporated, whose chief executive, Richard Bloch, had been a friend of Hirschfield's for many years and had been very sympathetic to his position on the
Begelman
issue. Merger talks between Columbia and Filmways had come to naught a year earlier, but Hirschfield decided to try to revive them and broached the possibility to Bloch over breakfast at the Regency Hotel on Thursday, March 9.
Hirschfield
believed that Filmways could help in three ways: First, it would give Columbia a stake in the publishing
industry; Filmways owned Grosse
t & Dunlap. Second, it would fill the management gap at the Columbia studio; Bloch, a skilled executive of stature, could replace
Begelman
as president of both motion pictures and television. Third, and most important to Hirschfield personally, Bloch would be a natural ally on the board of directors of the combined company. Dick Bloch was interested in Hirschfield's new overture. But he had been appalled by Columbia's handling of the Begelman problem and was leery of, in effect, enlisting in a war for control of the corporation, no matter how subtly it was waged. He promised Alan he would think it over.
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