Philip Morris Incorporated, after considering the report prepared by its acquisitions specialist, had decided against trying to acquire or otherwise seek control of Columbia Pictures Industries. Columbia was attractive to Philip Morris in many ways. Unfortunately, however, the talks between the two companies' representatives had coincided with the most intense period of bad publicity about Columbia, and in the end Philip Morris decided that it was unwise to acquire any company still under the cloud of a major scandal. All of the secret meetings between Bob Critchell and Allen Adler, and all of their work individually, thus went for naught. Privately, Bob Critchell was relieved, and hoped that Herbert Allen would never know that his old fraternity brother had been a party to Alan Hirschfield's attempted putsch.
From Los Angeles, Hirschfield got a call from Deane Johnson, the lawyer to whom he had offered David
Begelman
's old job. Johnson said he deeply appreciated the offer but had chosen not to accept it. He had discussed it at length with his wife, as well as with Ray Stark, Herbert Allen, Marty Ransohoff, and others. Stark had spent several hours on a Saturday at the Johnson home in Bel-Air discussing the Columbia job with Deane and Anne and urging Deane to take it. As Johnson told Hirschfield, however, his loyalty to his partners at O'Melveny & Myers, and to his clients, was too deep for him to leave after so many years with the firm. Besides, he valued the "independence" of his law practice too much to give it up.
Although he had suspected from the beginning that Deane Johnson would turn the job down, Hirschfield was deeply disappointed. He considered Johnson a strong and exceptional man—a man who not only could run Columbia's West Coast operations but would also bring considerable prestige to the company and might even be able to help calm the animosity.* It had become clear to Hirschfield, however, that most good candidat
es for the job would want to see
the animosity erased
before
they joined the company so as not to risk becoming part of it. And the Columbia board of directors had done nothing toward that end. There had been no further negotiations on a new contract for Alan. And there had been no proclamation of support for him. The promises of late January seemed far away. And despite their "happy" lunch at "21" in early March, Alan knew that Herbert's bitterness was as intense as ever.
*
In late 1981. Warner Communications announced that Deane Johnson would move to New York and join its four man Office of the President under Chairman and Chief Executive Steve Ross
.
PART FOUR
FORTY-NINE
The woman had dark eyes, full and sensuous lips, a Mediterranean complexion, and long black hair, which she often wore tucked under a short, curly, black wig. She was about five and a half feet tall, and a bit chunky, especially in the legs. A divorcee, forty years old, she lived with her two teenage daughters in a small brick and frame house in a working-class section of North Hollywood.
From a distance the house appeared ordinary, but it was not. It was the only house in the vicinity with marble floors and custom-designed stained-glass windows. The windows were covered by bars and secured with locks, and there were heavy, imposing locks as well on every door into the house, on the front and back gates to the small lot where the house stood, and on the door to the woman's second-floor bedroom. Only a few people had ever seen the inside of the house and knew that the tight security was a residue of a time, years earlier, when the woman had been placed under official protection after she testified against her ex-husband, a small-time mobster, and thus helped federal authorities convict him of violating gambling laws. Though the protection gradually had been reduced, the woman had stayed in close touch with one of the men hired to provide it, a private detective. She had also kept the locks in place, and had the stained-glass windows installed so that no one could see into the house.
The woman spent most of her free time at home. She did not own or drive a car—very unusual in Los Angeles—and took taxis to and from her office a few miles east in Burbank where she worked as an accountant. On weekends she occasionally would take a bus, as she phrased it. "to the Boulevard." by which she meant Ventura Boulevard, the main east-west commercial artery along the south edge of the San Fernando Valley. Alone, she would stroll and s
hop
and then catch a bus home, where she would occupy herself
with the offerings of the Double
day Book Club, the Literary Guild, the Movie Book Club, and the Columbia Record Club. She loved Rubinstein and the other great pianists and purchased a lot of their recordings.
The woman did not have many close friends, partly by choice, and partly because of her personality. She was aggressive, severe, and even bossy around the people at the office, with the exception of the man for whom she worked. In his presence she was
prim, and insisted to his bemuse
ment on calling him Mr. Kerns, never Dick, even though he was informal and accessible and had employed her for more than a decade. His bemusement was lost on her, however. She was a serious person who believed in observing the formalities. To some at the office she was known as "Marian the Librarian."
Sometime in 1976 or early 1977 people began to notice that the woman had money. She started wearing fine jewelry. Expensive clothing appeared in her formerly drab wardrobe, and she mentioned to a few colleagues that she was having dresses made at Profils du Monde, an exclusive shop on
Wilshire
Boulevard in Beverly Hills.
Then there were the dogs. She purchased several show
dogs of the breed called Bouvie
r des Flandres. She hired a dog handler, traveled to France and Belgium where the dogs were bred, and began flying off to dog shows on weekends.
The few people who knew about these things—mainly other women at the office—assumed that the money was coming from the private detective who had been her bodyguard at one time and with whom she obviously was very friendly. The detective frequently dropped by the office to see her. He looked prosperous and carried a gun inside his jacket. There was an air of mystery about him. The office people assumed he was her lover and the fount of her new prosperity.
It never occurred to them that they might have guessed wrong. The detective was not her lover. And it was not until the auditors suddenly arrived one day in the spring of 1978 and scaled the woman's office that her colleagues realized that she had been financing her dogs, jewelry, custom-made dresses, and trips to Europe by embezzling hundreds of thousands of dollars from the company for
which they all worked, Columbia Pictures Industries.
* * *
The wom
an's name was Audrey Bride Lisne
r. She had grown up in a small town in Illinois, the daughter of a farmer who was sixty-five years old when she was born and a mother who was twenty-Five. (Her mother died young; her father lived to be one hundred and five.) After moving to California around 1960, Audrey met and married Jerry Lisner, a minor-league hoodlum who had been arrested numerous times in Las Vegas and Los Angeles on a myriad of charges including robbery, illegal bookmaking, assault with intent to commit rape, simple assault and battery, drunkenness, and contributing to the delinquency of a minor. His only convictions were for bookmaking. In the mid-sixties, Audrey and Jerry were divorced and Audrey, through her court testimony, helped the IRS and the Justice Department convict Jerry of tax violations associated with gambling.
While still involved with the trial and its aftermath, Audrey Lisner took a job in the accounting department of Columbia Pictures, which was still occupying its original quarters on Gower Street in Hollywood. She quickly gained a reputation as a conscientious, loyal, and capable employee, and eventually was given full responsibility for all of the accounting and bookkeeping for a division of Columbi
a known as EUE-Scree
n Gems, which was the nation's leading producer of television commercials. Screen Gems was housed about a mile from the main Burbank lot in a small building at the so-called "ranch," a site where many western movies had been filmed in the thirties and forties. Along with geographical isolation, Screen Gems also had considerable financial autonomy. It used a different data-processing service from that of the Columbia studio and was rarely audited thoroughly.
Audrey Lisner began embezzling money from Screen Gems in 1974. She stole small amounts at first, but the thefts grew in 1975 and 1976, and by early 1978, she had taken more than $300,000. Although the head of Screen Gems' West Coast arm, Richard Kerns, was Lisner's supervisor, the chain of command over routine financial transactions ran from Lisner directly to Lou Phillips, the controller of all of Columbia's Burbank operations.
Lisner's work load had grown over the years, and in 1977 Lou Phillips assigned a young member of his staff. Kirk Borcherding, to become her assistan
t. It was not long before Borche
rding began noticing irregularities in Screen Gems' traveler's check accounts. Although he first became suspicious in the fall of 1977 (about the time David
Begelman
was suspended from the studio), he was unsure of himself and procrastinated until the following March when he secretly went to Lou Phillips and said he believed th
at someone, perhaps Audrey Lisne
r, was stealing. Phillips asked Borcherding to go back to Screen Gems and, without revealing his suspicions to Lisner, prepare an analysis of how much might be missing. Borcherding returned a fe
w days later with an estimate: $
250,000. Phillips pondered the matter over the weekend, and on Monday, March 27, he placed a call to Joe Fischer in New York. Fischer did not return the call.
At about seven Wednesday evening, after most employees had left for the day, Lou Phillips walked down the long second-floor hallway of the main Columbia building to the office of Jim Johnson, the vice president for administration. It had been just under ten months since Phillips had traversed the same hallway bearing the Cliff Robertson problem. Even though no one else was in the executive suite to overhear the conversation, Phillips closed Johnson's door before sitting down. It took him most o
f an hour to outline Kirk Borche
rding's suspicions.
Jim Johnson immediately grasped the ramifications of the discovery. Seen in isolation, it appeared to be a serious embezzlement but it could be handled. Seen in the wake of the Begelman scandal, it was like a huge time bomb, dropped suddenly into the midst of a battlefield of contending armies already bloody and weary from protracted combat. Although Jim Johnson personally had not experienced all the pain that had been suffered by Joe Fischer and Alan
Hirschfield
, he had seen and felt very vividly the damage to the company and its people that had flowed from the Begelman scandal—a scandal set in motion by a single, questionable financial transaction, revealed to him by Lou Phillips in a quiet conversation just like this one.
Johnson dismissed Phillips and telephoned Joe Fischer at home in New Jersey. Fischer was at a hockey game in Manhattan, but his wife. Edie, answered the phone. Johnson asked that Joe call either him or Lou Phillips. "It's urgent," Johnson said. "I think we may have another irregularity, and I'm not talking about a bowel movement."
When Fischer got home he couldn't reach Johnson so he phoned Phillips. True to his cautious nature, which he had displayed previously when the Cliff Robertson check was discovered, Phillips did not use the word "embezzlement" or accuse Audrey Lisner in his conversation with Fischer. He merely noted that the use of traveler's checks at Screen Gems had been inexplicably heavy and might suggest some sort of irregularity. Fischer said he would get back to Phillips within a few days.
FIFTY
Alan Hirschfield and the Columbia board of directors spoke less to each other directly and more through Leo Jaffe. Thus, when Hirschfield wanted to brief the board on his search for a successor to David Begelman, he wrote Jaffe a "confidential" memorandum:
"While it may sound self-serving, it does bear repeating that one of the problems I have had in surfacing good people, and in eliciting even initial interest among others, has been the uncertainty regarding the management situation here at Columbia. In virtually every case, the first question from potential candidates concerns the status of my own position. While I have attempted to be glib in terms of an answer, most of the people are smart enough to realize that there is no present resolution. This certainly has not helped in terms of attracting and/or negotiating with potential candidates. While there may be people who would be happy to take the job, irrespective of my own situation, there
are
very few that all of us would agree upon as being qualified. Nevertheless, I have continued to make every possible effort to find qualified personnel and will continue to do so."
Once the media coverage of the Columbia scandal gained momentum, much of it implying that the attitude of Los Angeles law-enf
orcement authorities had been lax,
the likelihood of formal criminal proceedings against David
Begelman
increased. Two deputy district attorneys spent much of February a
nd March studying the case with
Burbank Detective Bob Elias. Although Cliff Robertson and Columbia Pictures still refused to sign complaints, the press and the public at large clearly believed that crimes had been committed. It was obvious that
Begelman
had repaid the stolen money only after he was caught.