Indecent Exposure (68 page)
Hirschfield was right about one thing. It had been too quiet. The calm of March and April had been unnatural. While Alan imputed the worst of motives to the board of directors, however, he still welcomed the relief from the almost daily winter confrontations. As a man who lived for the moment perhaps more successfully than most who try, Hirschfield managed to savor the quiet, knowing all the while that it was superficial, and it would end.
Whe
n the end of the interlude came,
Alan supposed it was appropriate that it came in a quarrel with Irwin Kramer, the Columbia board member whom he despised even more than Herbert Allen and Matty Rosenhaus. As much as he loathed Herbert and Matty, it was a less focused, more general loathing, set against the background of their power which Alan held in a degree of grudging awe. In no sense did
n the end of the interlude came,
Alan supposed it was appropriate that it came in a quarrel with Irwin Kramer, the Columbia board member whom he despised even more than Herbert Allen and Matty Rosenhaus. As much as he loathed Herbert and Matty, it was a less focused, more general loathing, set against the background of their power which Alan held in a degree of grudging awe. In no sense did
Alan hold Irwin Kramer in awe. Irwin's power was largely in-law power, and at Columbia Pictures he wielded it mainly as Herbert's blunt instrument as chairman of the board's audit committee. What had particularly incensed Hirschfield since the beginning of the Begelman investigation in the autumn was the belligerence Irwin displayed, and the obvious relish with which he carried out his part of the campa
ign of pressure on Hirschfield.
Alan would never forget that it was Irwin who had handled the dirtiest job of all—threatening to investigate
Berte
Hirschfield
's employment on the excuse that David
Begelman
might not be the only tainted officer in the company. And it was Irwin who had countered Alan's legitimate concern about employee morale by shouting that he was "sick and tired" of hearing about morale and, allegedly, that he didn't care if Columbia's stock fell to two dollars a share.*
ign of pressure on Hirschfield.
Alan would never forget that it was Irwin who had handled the dirtiest job of all—threatening to investigate
Berte
Hirschfield
's employment on the excuse that David
Begelman
might not be the only tainted officer in the company. And it was Irwin who had countered Alan's legitimate concern about employee morale by shouting that he was "sick and tired" of hearing about morale and, allegedly, that he didn't care if Columbia's stock fell to two dollars a share.*
In late April and early May, Irwin Kramer, again in his capacity as head of the audit committee, made two moves that angered Alan Hirschfield as much as anything he had done earlier. First, Kramer expressed doubts about the personal integrity of Joe Fischer, whom Hirschfield respected and valued as much as any other corporate officer. Second, Kramer again dragged up the issue of Berte's employment record, which Alan thought had been resolved months ago by Todd Lang and Peter Gruenberger (after having been previously addressed two years earlier).
Kramer attacked Joe Fischer because Fischer had not
informed him of the Audrey Lisne
r embezzlements immediately upon learning of them. Fischer had chosen to wait until he and
Ilana
Cytto had completed their initial inquiry and established the pertinent facts. He had given Kramer a full briefing the same day he told Hirschfield, Monday, April 24. Kramer, however, had been secretly tipped about the Lisner problem days earlier by someone at Screen Gems in Burbank. Instead of confronting Fischer, Kramer had waited, growing progressively angrier and more suspicious, until Fischer told him. After the April 24 meeting. Kramer wrote a memorandum to
Hirschfield
criticizing Fischer.
informed him of the Audrey Lisne
r embezzlements immediately upon learning of them. Fischer had chosen to wait until he and
Ilana
Cytto had completed their initial inquiry and established the pertinent facts. He had given Kramer a full briefing the same day he told Hirschfield, Monday, April 24. Kramer, however, had been secretly tipped about the Lisner problem days earlier by someone at Screen Gems in Burbank. Instead of confronting Fischer, Kramer had waited, growing progressively angrier and more suspicious, until Fischer told him. After the April 24 meeting. Kramer wrote a memorandum to
Hirschfield
criticizing Fischer.
The memo infuriated
Hirschfield
not only because of its attack on Fischer but also because it appeared to constitute another challenge to Hirschfield's authority to run the corporation—the opening of a new front in his war with the board. As chairman of the audit
Hirschfield
not only because of its attack on Fischer but also because it appeared to constitute another challenge to Hirschfield's authority to run the corporation—the opening of a new front in his war with the board. As chairman of the audit
*
Kr
amer later denied making the remark about the st
ock.
Kr
amer later denied making the remark about the st
ock.
committee, Kramer insisted that in the future he be informed at the first indication of a possible malfeasance anywhere in the company, instead of after the appropriate executives had investigated and determined the extent of the problem. To
Hirschfield
, Kramer's stance constituted an attempt to harass him and Fischer by usurping their functions, and on Tuesday, May 2, he dispatched an angry letter to Kramer rejecting all his charges and demands.
Hirschfield
, Kramer's stance constituted an attempt to harass him and Fischer by usurping their functions, and on Tuesday, May 2, he dispatched an angry letter to Kramer rejecting all his charges and demands.
Enraged, as well, by the rcinvocation of
Berte
's employment with the Wolf market-research firm.
Hirschfield
attempted to counterattack by alleging possible conflicts of interest in Irwin Kramer's own business aff
airs. He sent memos to Leo Jaffe
, pointing out that Kramer was on the board of Teleprompter, the cable-television company, and had
a business relationship with See
burg, a competitor of Columbia's pinball-machine company. Both of those relationships.
Hirschfield
charged, constituted possible conflicts with the interests of Columbia Pictures.
Berte
's employment with the Wolf market-research firm.
Hirschfield
attempted to counterattack by alleging possible conflicts of interest in Irwin Kramer's own business aff
airs. He sent memos to Leo Jaffe
, pointing out that Kramer was on the board of Teleprompter, the cable-television company, and had
a business relationship with See
burg, a competitor of Columbia's pinball-machine company. Both of those relationships.
Hirschfield
charged, constituted possible conflicts with the interests of Columbia Pictures.
On Thursday afternoon. May 4, Hirschfield talked with Todd Lang about Irwin Kramer's new aggressiveness. Lang was upset, especially about the issue of
Berte
's employment. Weil, Gotshal & Manges had assured Kramer in December that there had been nothing improper about her employment with the Wolf firm. It seemed that Kramer implicitly was questioning the law firm's integrity, as reflected in its handling of that matter, as well as questioning Joe Fischer's integrity, as reflected in his handling of the Lisner affair.
Berte
's employment. Weil, Gotshal & Manges had assured Kramer in December that there had been nothing improper about her employment with the Wolf firm. It seemed that Kramer implicitly was questioning the law firm's integrity, as reflected in its handling of that matter, as well as questioning Joe Fischer's integrity, as reflected in his handling of the Lisner affair.
"What do you think Herbert wants in this whole thing?" Lang asked Hirschfield.
"He wants my head, that's what. And he won't be satisfied until he gets it."
FIFTY-THREE
Herbert Allen telephoned Alan Hirschfield on Friday moming to announce that he had tentatively decided to sell 250,000 shares of the
Allens
' stock in Columbia Pictures—about a third of their holdings and a sixth of the combined Allen-Rosenhaus block—to David Begelman's close friend Sy Weintraub. Herbert just wanted to let Hirschfield know.
Allens
' stock in Columbia Pictures—about a third of their holdings and a sixth of the combined Allen-Rosenhaus block—to David Begelman's close friend Sy Weintraub. Herbert just wanted to let Hirschfield know.
"What you do with your stock is your business," Hirschfield said, "but it surprises me, in view of Weintraub's extensive relationship with
Begelman
."
Begelman
."
"That's irrelevant," Herbert replied. "The point is, Sy's very smart, a great guy, and he could help us a lot. He knows everybody in Hollywood."
"I still think it looks peculiar," Hirschfield said.
"Think about it over the weekend," Herbert asked.
"Think about it over the weekend," Herbert asked.
Over lunch in the office, Hirschfield and Richard Bloch, the chief executive of Filmways, had still another discussion of Columbia's buying Filmways, and of Bloch's heading the two companies' combined motion-picture and television operations on the coast. Both men felt the deal made sense economically and
Hirschfield
felt that Bloch would be an excellent choice to replace Begelman.* Herbert Allen dropped in on the meeting for a while, and though he said nothing definite,
Hirschfield
inferred from his comments that he might favor the merger with Filmways.
Hirschfield
felt that Bloch would be an excellent choice to replace Begelman.* Herbert Allen dropped in on the meeting for a while, and though he said nothing definite,
Hirschfield
inferred from his comments that he might favor the merger with Filmways.
After Herbert left. Bloch asked Hirschfield, "What do you
really
feel?"
really
feel?"
*Hirschfield did not feel that naming Bloch to Begelman
's old job would be i
nconsistent with naming Dan Melnick president of the movie divis
ion.
Melnick
was not
sensitive about titles, and Bloch could assume
many of the administrative burdens th
at otherwise would fall on Melni
ck.
's old job would be i
nconsistent with naming Dan Melnick president of the movie divis
ion.
Melnick
was not
sensitive about titles, and Bloch could assume
many of the administrative burdens th
at otherwise would fall on Melni
ck.
"I feel
it would be a sensational deal, but in the end, even though Herbert is mouthing these words,
1
don't believe he really means it. I view the chances as slim. The board won't look at the merits of the deal, only whether it makes me stronger or weaker."
it would be a sensational deal, but in the end, even though Herbert is mouthing these words,
1
don't believe he really means it. I view the chances as slim. The board won't look at the merits of the deal, only whether it makes me stronger or weaker."
Friday's mail brought Joe Fischer a six-page handwritten letter from Audrey Lisner.
Dear Joe:
. . . Although I feel [that] all involved in this matter understand my sorrow, shame, and embarrassment, I feel it necessary to express these feelings to you personally at this time. There
are
no reasonable excuses for unreasonable acts. I know this. After much soul searching I can offer you only the truth
as I see it.
It was the desperate act of an extremely ill woman to try and secure the future of her children, the catalyst, perhaps, being the shock of learning that the thousands of dollars in back child support due me were now totally inaccessible and out of the question. . . . The situation was totally overwhelming, and my decision, as irrational and inexcusable as it was, seemed the only alternative open to me.
...
I expect no sympathy from you. However, I must ask you to remember that this insane chain of events began with my children and now ends with them. This is not easy for me, but for the sake of my children. I
beg
you not to destroy the one thing that is left to insure their future—my earning potential.
are
no reasonable excuses for unreasonable acts. I know this. After much soul searching I can offer you only the truth
as I see it.
It was the desperate act of an extremely ill woman to try and secure the future of her children, the catalyst, perhaps, being the shock of learning that the thousands of dollars in back child support due me were now totally inaccessible and out of the question. . . . The situation was totally overwhelming, and my decision, as irrational and inexcusable as it was, seemed the only alternative open to me.
...
I expect no sympathy from you. However, I must ask you to remember that this insane chain of events began with my children and now ends with them. This is not easy for me, but for the sake of my children. I
beg
you not to destroy the one thing that is left to insure their future—my earning potential.
Very simply, Joe, I am all the children have—If I am unable to work, my girls will have nothing. . . .
The more Hirschfield thought about the prospect of a quarter of a million shares of Columbia Pictures being owned by Sy Weintraub, David Begelman's close friend, the uneasier he became. Could it be that Herbert would try to make Weintraub a member of the board of directors? "Sy could help us a lot," Herbert had said.
Alan telephoned Herbert Monday morning. "While it's none of my business whom you sell your stock to, I would have severe reservations if you have any thought of putting Weintraub on the board."
"Anybody who owns a lot of stock deserves to be on the board," Herbert replied casually, as if the point were self-evident.
"I think that would be a terrible error," Hirschfield said. "I have nothing personal against Sy.
I
hardly know him. But putting him on the board is like putting David back on the board. Sy would be seen as David's surrogate. The public reaction, the SEC reaction, the employee reaction would be that it is an outrage. This is the man who loaned Begelman the money he used to cover up his crimes."
I
hardly know him. But putting him on the board is like putting David back on the board. Sy would be seen as David's surrogate. The public reaction, the SEC reaction, the employee reaction would be that it is an outrage. This is the man who loaned Begelman the money he used to cover up his crimes."
"I disagree." Herbert said. "His relationship with Begelman is irrelevant. I don't believe in guilt by association."
A meeting of the board of directors was scheduled for Thursday, and Herbert let it be known during the week that he planned to propose Sy Weintraub for membership.
A meeting of the board of directors was scheduled for Thursday, and Herbert let it be known during the week that he planned to propose Sy Weintraub for membership.
Although he doubted that Herbert ever would approve Columbia's buying Filmways,
Hirschfield
had higher hopes for a merger with Mattel, principally because Dan Lufkin seemed to favor the deal. Dan was an ally of Herbert's but he also had a close business relationship with the chief executive officer of Mattel, Arthur Spear, and had encouraged Herbert and Matty to consider the merger seriously.
Hirschfield
and Spear liked each other and felt they could work well together. Spear, although he had lived for many years in Southern California, was a New England native and retained, at age fifty-seven, the accent and mien of a New England gentleman. He and Hirschfield not only had discussed the structure of a combined company, but also had talked of possible future acquis
itions of other companies, e.g.
EMI, the British entertainment conglomerate.
Hirschfield
had higher hopes for a merger with Mattel, principally because Dan Lufkin seemed to favor the deal. Dan was an ally of Herbert's but he also had a close business relationship with the chief executive officer of Mattel, Arthur Spear, and had encouraged Herbert and Matty to consider the merger seriously.
Hirschfield
and Spear liked each other and felt they could work well together. Spear, although he had lived for many years in Southern California, was a New England native and retained, at age fifty-seven, the accent and mien of a New England gentleman. He and Hirschfield not only had discussed the structure of a combined company, but also had talked of possible future acquis
itions of other companies, e.g.
EMI, the British entertainment conglomerate.
Art Spear and other top Mattel executives came to New York for a formal meeting with Columbia on Wednesday, May 10. Prior to the meeting
. Hirschfield, Allen, Rosenhaus
and Lufkin conferred privately. Rosenhaus was opposed to Columbia's buying Mattel. He referred repeatedly to Nabisco's having had a bad experience in the toy business through the ownership of Aurora, another toy compamy.
. Hirschfield, Allen, Rosenhaus
and Lufkin conferred privately. Rosenhaus was opposed to Columbia's buying Mattel. He referred repeatedly to Nabisco's having had a bad experience in the toy business through the ownership of Aurora, another toy compamy.
"It was terrible." Rosenhaus said.
"But Matty, that's like saying Allied Artists is in the movie business."
Hirschfield
said. "Mattel is the biggest company in the toy. business, and to compare it to Aurora, a small and troubled company with enormous problems, is ridiculous."
Hirschfield
said. "Mattel is the biggest company in the toy. business, and to compare it to Aurora, a small and troubled company with enormous problems, is ridiculous."
Though Rosenhaus remained doubtful, the Columbia people proceeded on down to Mattel's New York quarters in an office tower above Penn Station, where the Mattel executives staged a compelling presentation of their company's various lines of business, how measure, Irwin also reignites the Berte Hirschfield controversy—an entirely unrelated issue which had been settled not once but twice previously. Herbert Allen, meanwhile, in surely the most irrational of all his irrational acts, tries to put one of David
Begelman
's most intimate friends—the man from whom
Begelman
borrowed to repay the money he stole—on the Columbia board of directors. The Filmways and Mattel deals, which Hirschfield had seen as his last realistic chances to dilute Herbert's control and adjust the balance of power in the corporation, appear to have collapsed. Although Herbert would cite other reasons for opposing both acquisitions, Alan was convinced that the real reason was Herbert's mistrust of his motives.
Begelman
's most intimate friends—the man from whom
Begelman
borrowed to repay the money he stole—on the Columbia board of directors. The Filmways and Mattel deals, which Hirschfield had seen as his last realistic chances to dilute Herbert's control and adjust the balance of power in the corporation, appear to have collapsed. Although Herbert would cite other reasons for opposing both acquisitions, Alan was convinced that the real reason was Herbert's mistrust of his motives.
Hirschfield was growing desperate again, but as he said to Adler, who was urging tough initiatives against the board, "I've got to live to fight another day. I've got to survive as long as I can. Our ambitions will be meaningless if we're not here."
Audrey Lisner had had long-standing arrangements to spend the last half of May in Mexico City at a major international dog show. However, because of the investigation of her embezzlements, she had agreed not to leave Los Angeles. She had been cooperating with
Ilana
Cytto's audit of Screen Gems' records, and had promised to cooperate, too, with Peter Gruenberger, who was scheduled to go to Los Angeles and take command of the investigation the third week of May. The Los Angeles District Attorney's office was on the case as well, having been called by an anonymous tipster, but had agreed to await the results of Columbia's internal probe before taking any action.
Ilana
Cytto's audit of Screen Gems' records, and had promised to cooperate, too, with Peter Gruenberger, who was scheduled to go to Los Angeles and take command of the investigation the third week of May. The Los Angeles District Attorney's office was on the case as well, having been called by an anonymous tipster, but had agreed to await the results of Columbia's internal probe before taking any action.
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