Indecent Exposure (25 page)
- EIGHTEEN
- Wyman, Bautzer, Rothman & Kuchel is one of the best-known law firms in Southern California. The late Eugene Wyman was a Democratic Party leader in the state.
Gregson Bautze
r has been a celebrated Hollywood deal maker and social lion for decades. Thomas Kuchel was a United States Senator from 1953 until 1965. But Frank Rothman, in contrast to his principal partners, has gained prominence entirely through the practice of law. He has represented a wide variety of clients, show business people and others, in criminal matters as well as civil. - Columbia production head Dan Melnick telephoned Frank Rothman on Saturday after returning from New York and asked him to see David Begelman.
Melnick
had known Rothman through a common association with MGM, Rothman as general counsel,
Melnick
as head of production before moving to Columbia. But Rothman and
Begelman
had never met, though they had dealt occasionally on the telephone for many years. Rothman agreed to confer with Begelman and they rendezvoused Sunday morning at the Bel-Air home of Sy Weintraub, who had loaned Begelman 525,000 a week earlier, pleaded his case in New York, and also was a close friend of Rothman's. - In a quarter century of defending clients accused of wrongdoing, Rothman had encountered many overwrought people. But it struck him that none had been more upset than David
Begelman
seemed that morning. He was trembling slightly, his voice was unsteady, his pallor suggested physical illness, and he was nursing a large sore on his lower lip. After hearing Begelman's story and being assured that the rest of the stolen money would be repaid, Rothman agreed to represent
Begelman
in Columbia's investigation and any other inquiry that arose. While Rothman recognized that Begelman theoretically was vulnerable to various law-enforcement actions—by the police, the SEC, and the IRS—he felt that a "psychological problem" defense was workable and could be used to thwart other investigative initiatives, especially since
Begelman
was about to begin psychotherapy. The Columbia inquiry, therefore, was the first priority, and Frank Rothman promised to begin his work by telephoning Todd Lang and Mickey Rudin on Monday morning. - Begelman
drove from Weintraub'
s home to the residence of Judd
Marmor, M.D., less than a m
ile away, also in Bel-Air. Judd
Marmor, sixty-seven years old and a
former president of the Ameri
can Psychiatric Association, had practiced psychiatry in Los Angele
s
since the late 1940s and had becom
e known as "psychiatrist to the
stars." Marmor had counseled Begelman the previous spring about
difficulties in his relationship wi
th his daughter from his second
marriage. When the Columbia problem arose, friends urged
him to
see Marmor again. The doctor listened to
Begelman
's tale and
scheduled several sessions with him for the coming week. - As
Begelman
chatted with Judd Marmor early Sunday afternoon in Bel-Air, Alan Hirschfield was two miles cast checking into Bungalow 8 of the Beverly Hills Hotel, having come out with Joe Fischer on the morning American flight from New York. - Of the twenty-one bungalows on the grounds of the Beverly Hills Hotel, Bungalows 6, 8, and 9—for reasons long forgotten—carry the highest status. They face Crescent Drive, the quiet street that borders the hotel on the cast, away from the noise of Sunset Boulevard and the traffic at the hotel entrance. Like the rest of the hotel, they are salmon pink with white trim and ocher tile roofs. Shaded by maple, spruce, and fruit trees, as well as by coconut and date palms, the bungalows
are
bordered by privet hedges and flowering shrubs. Bungalow 8 seems to be preferred by moguls and executives more than by stars. Steve Ross of Warner Communications and Ahmet Ertegun of
Atlantic Records like it, as doe
s Alan Hirschfield, although he is less particular than some people. Bungalow 8 is the only bungalow with a small Spanish-style walled patio in front. Inside, the thirty-foot living room is light, with white walls, beige carpeting, and at one end, a walnut fireplace with gas logs. An Oriental tapestry hangs on the wall above a yellow sofa and a large rectangular mahogany coffee table. The occasional chairs are orange, yellow, and green, the same colors as in the three floral prints on the walls and two fresh floral bouquets. The cheery dining room, with windows on three sides, is off the northeast comer of the living room. - The top executives of the Columbia studio gathered in Bungalow 8 around 1:30 as they had been instructed to do. Dan
Melnick
, the head of worldwide production; Norman Levy, the executive vice
president for marketing; John Ve
itch, the senior vice president in charge of physical production; Eli Horowitz, the senior vice president for business affairs (no relation to Norman Horowitz of television); Robert Cort, the young vice president for advertising; Jim Johnson, the vice president for administration; and several others.
There was negligible small talk. "I'm sorry to have interrupted your weekends," Hirschfield began, "but I had to ask you here today to hear some bad news. David
Begelman
is leaving the company. It may be temporary; we don't know yet. Some of you undoubtedly have heard a certain amount about this problem, and others may know little or nothing. In order that everybody is working with the same information, I'm going to read you a press release which we will be distributing this afternoon and tomorrow. - "NEW YORK, October 3, 1977—Columbia Pictures Industries inc. announced today that the Audit Committee of the Board of Directors has commenced an inquiry into certain unauthorized financial transactions between David Begelman and the Company. The amounts involved in these transactions, of which the Company recently became aware, are in the aggregate not material to the Company. Mr. Begelman has resigned as a Director and Senior Executive Vice President of the Company and is taking a leave of absence from his operating responsibilities with the Company.
- "Alan J. Hirschfield, President and Chief Executive Officer of the Company, expressed both confidence in, and enthusiasm for, the executive teams of the motion picture and television divisions. The Company's plans for a substantial increase in motion picture production and expansion of its televsion activities will proceed unabated. The motion picture division will continue to operate under Dan Melnick, who is in charge of feature production, Norman Levy, who is in charge of marketing, and Pat Williamson, who is in charge of international operations. The television division will continue to operate under the direction of Larry White, who is in charge of television production, and Norman Horowitz, who is in charge of worldwide syndication.
- "Mr.
Hirschfield
stated that the Company is in a strong financial position and he expects the Company's progress to continue." - Hirschfield gave a copy of the release to each person in the room, and before anyone could break the stunned silence, went on to say that the company lawyers had ordered him and Joe Fischer not to elaborate on the press release, even to other officers of the company. "Please don't pump us," he said. "Wc just can't say any more right now." He asked the group to cooperate with the team of investigators who would be at the studio for the next few weeks, and to refrain from discussing the Begelman matter with anyone outside the company.
- "As serious as this is, it's not the end of the world. We're a strong company, we have
Close Encounters
coming out, and we're going to have another good year. So just keep doing your jobs, and we'll get this behind us as soon as possible." - The shock in the living room was the shock of amazement, sadness, and anger, but it was not the shock of disbelief. No one said, "I don't believe it. It can't be true." On the contrary, someone had the tactlessness to say, with a grim chuckle, "I always knew David was a crook."
- The remark enraged Dan Melnick.
- "That is totally uncalled for and out of line," Melnick declared. "A lot of you people in this room have seen your careers prosper under David. Whatever your personal feelings may be, you have no right to prejudge him. The one crucial thing that this press release does not say, because it's too sensitive and personal—and should not leave this room—is that David is a sick man. He has emotional problems that may take a while to sort out, and the thing he needs and deserves most from all of us is compassion.
Rachmones.
Compassion in the deepest sense. He needs our understanding. He does not need any fucking sneering, cheap prejudgments." - Hirschfield seconded Melnick's sentiment, and the meeting broke up, some people going home, others to the Polo Lounge for a drink.
- The executives of the television division assembled at three for a similar session. As it was adjourning, Norman Horowitz, an excitable, assertive man who had learned by phone Friday evening about the changing of the locks but knew nothing more until Sunday, took
Hirschfield
aside and pressed for more insight, if not detail. - "Whatever this bullshit is, isn't there some way he can make restitution and clean it up?" Horowitz asked.
- Hirschfield rolled his eyes toward the ceiling, sighed and shook his head. "Norman, it isn't that simple. We can't maintain any level of morality in the company if someone is allowed to steal, and then be forgiven, and then have the opportunity to steal again."
- "This isn't a Clive Davis bar mitzvah then?"
- "No, it's more serious than that."
- "Holy shit!"
- Rona Barrett had been getting cryptic calls from sources all weekend. "Something really big is brewing at Columbia." "In what area is something brewing?" Barrett asked. "How about right at the top?" "The top of what? The corporation? Herbie Allen?" "The top of the studio." "Begelman?"
- "Yes. This is so bizarre that nobody knows what to do. Nobody knows what to say. It's just awful."
- "Nobody knows what to say about
what? What
is happening?" - "You'd never believe it anyway. You're just never gonna believe it."
- "Believe what? Has someone murdered someone, and there's a cover-up?" "Try financial irregularities."
- By Sunday evening, Barrett had gathered enough information to prepare a report for her Monday morning ABC network broadcast, introduced as usual at 7:40
a.m
. by David Hartman. - Good morning, David, and good morning, America.
- The post-Watergate insistence on full disclosure for public corporations has caught up with Hollywood. This afternoon, Columbia Pictures Industries will issue a release stating that Columbia Pictures President David Begelman has resigned from the board of directors and has been temporarily relieved of his duties, pending an investigation into the manner in which
Begelman
dispersed funds authorized for his personal use. Current production chief Dan Melnick will assume some of Begelman's duties. The official release stresses that the money in question is not of a substantial amount and would not affect the financial stability of the company. When reached for comment, David Begelman said he concurs with the release and emphasized that he and Columbia are "not adversaries." He said the investigation centered around a difference in judgment as to how money allocated for his personal use was dispersed.
Begelman
emphasized his judgment in dealing with motion-picture projects was not in question, and added that he is confident he can stand on his record. While the official release says the leave of absence is temporary, sources at the studio say the dismissal may be permanent, depending on the outcome of the inquiry. Those same sources further allege that while the money in question does not exceed one hundred thousand dollars over a four-year period, the way in which the money was used is reportedly illegal and could spark an investigation by various state and federal authorities. Both
Begelman
and the studio concur that as a public corporation, all executives
are
answerable to this sort of scrutiny. The release comes on the heels of reports that indicate the studio is currently enjoying its strongest financial showing in more than a decade, with Wall Street sources claiming the stock will soar even higher with the release of
Close Encounters of the Third Kind
next month. Furthermore, under Begelman's administration, the Columbia debt was reduced from a staggering one hundred sixty million-plus to under sixty million. David Begelman is also considered one of the most benevolent executives in the motion picture industry, having, without fanfare, supported many worthwhile ventures. We will certainly be following the ramifications of this story over the next few weeks. - Rona Barrett finally understood why David Begelman had had her to breakfast the previous Thursday.
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