Scalise, according to a confidential report of the Chicago Crime Commission, “allegedly drained the union treasury of an estimated $1.5 million in three years. After an investigation by the Cook County Grand Jury into the conduct of the Building Service Employees International Union and the manipulation of its finances by Scalise, who was ousted as president in April 1940, he was indicted by the district attorney of New York on charges of extorting more than $100,000 from hotels and cleaning contractors. It was alleged that on January 4, 1939, Scalise ‘bought’ some fifteen locals of the Elevator Operators Union.… The locals were handed over to Scalise’s international by the International Union of Elevator Constructors, Operators and Starters in return for $10,000 drawn by Scalise from his treasury. Thereafter the dues of the locals flowed into Scalise’s treasure chest.”6
According to another government report, dated July 25, 1942, and developed by the intelligence division of the Internal Revenue Service during the aftermath of the Bioff/Browne trial, “Our informers have stated that Sidney Korshak, a lawyer in Chicago, Illinois, is often delegated to represent the Chicago gang, usually in some secret capacity. Since the conviction of Browne and Bioff on charges of racketeering, Korshak acts as Browne’s attorney. He paid Browne’s $10,000 fine and we are reliably informed that the gang [the Chicago Mafia], and not Browne, produced that money.…
“John Smith [the successor to Tom Maloy in Chicago’s Motion Picture Operators Union Local 110] testified that about one year and a half ago, [an associate] telephoned him that George Browne had expressed the opinion that Local 110 should employ an attorney. Korshak subsequently appeared on the scene. Smith states that he was not employed or paid any money. He [Smith] did testify, however, with respect to the election of union officials on March 4, 1942.”
Q:How much money did you draw to pay off the policemen?
A:About $1,000; made out a check for them.
Q:Made out to cash?
A:I don’t know whether Pete cashed the check or I cashed the check.
Q:Did the police get the entire $1,000?
A:Yes.
Q:Was Sidney Korshak in the picture?
A:Well, he asked me if I wanted protection and I said no. At that time he thought I was going to hire him as attorney for the local and since there is trouble here I don’t want no part of Korshak.7
According to federal investigators, one of those people who did turn to Korshak was Jules Stein, the president of MCA. “Korshak and Stein had met each other back in the early days of Chicago through the band-booking business,” an FBI agent said. “They were introduced by Joe Glaser, a mutual friend who ran his own booking business [Associated Booking]. Stein knew that Korshak was connected [to the Mafia], and he went to him when he wanted to get a message to someone or wanted something done.… Korshak was also a friend of James Petrillo’s.”
*Billy Wilkerson, publisher of The Hollywood Reporter, had previously made a deal with Bioff in which the trade paper would not publish news about studio–labor relations.
†Among the details of Bioff’s past uncovered by Daily Variety and SAG was that he had not served his full jail term for an old pandering conviction. On April 15, 1940, Bioff was extradited back to Illinois, where he served six months in Chicago’s Bridewell.
*According to author Ed Reid in The Grim Reapers, in an effort to silence Circella—who was thought to be a weak link and a possible future informant—syndicate killers broke into the home of his lover, Estelle Carey, “tied [her] to a chair in her apartment, poured gasoline over her, and set her afire. Her pet poodle, cowering in the corner of the room, was the only witness to the crime.”
†Louis “Lepke” Buchalter, who was involved in the shakedown scheme, too, was not indicted but had already been convicted of murder; he was executed in New York’s electric chair in 1944. Benjamin “Bugsy” Siegel was also not implicated, having spent less time in California and more time in Nevada—where gambling had been legal since 1931.
CHAPTER FIVE
On March 20, 1945, a major antitrust suit was filed against MCA by Larry Finley, who had leased the oceanfront Mission Beach Amusement Park and Dance Hall for three years from the city of San Diego, hoping to draw servicemen from nearby military installations and those returning home from the Pacific theatre. Finley had planned to operate Mission Beach six nights a week. Its dance floor was the largest and its sound system the best in San Diego. No alcohol was to be served, thereby guaranteeing civilized and well-behaved patrons. Both San Diego’s mayor and the city council were impressed with Finley’s credentials and his plans for Mission Beach. In addition, Finley had promised the city some $20,000 a year and a piece of the profits for the lease.
Finley—who had begun his career in the music business as a pianist and an orchestra leader fifteen years earlier in upstate New York—had obtained the Mission Beach lease in November 1944, at which time Larry Barnett, MCA vice-president in charge of band-booking, and MCA agent Harold Eames Bishop had pledged to supply him with a variety of name bands at market rates. To celebrate the opening of his dance hall, Finley planned a massive gala for early February 1945. But MCA failed to produce the big-name bands for the affair.
Asking for triple damages under Section 7 of the Sherman Antitrust Act in his $3.1 million suit, Finley charged that MCA, Jules Stein, Barnett, and Bishop had conspired to freeze him out of the entertainment business in San Diego. His evidence appeared to be overwhelming.
After Finley had initially threatened court action, MCA offered him the King Sisters for a two-day gig, February 10–11. This offer further infuriated Finley, because the King Sisters had just had a three-night stand at the Pacific Square Ballroom, located in downtown San Diego in the city’s civic center, February 2–4. MCA also offered Jack Teagarden for two nights for a $2,500 minimum guarantee and fifty percent of the gross receipts, and Ted Fio Rito under the same terms. Finley insisted that MCA’s scale was excessive and much higher than the fees charged other ballrooms.
Finley gave MCA the names of the bands he wanted for Mission Beach. But nearly all of those he named had been booked into the Pacific Square, owned and operated by Wayne Dailard, who had held the rights to Mission Beach before Finley outbid him in November 1944. Dailard, who had been an executive with RKO for thirteen years and was the former managing editor of the San Diego Exposition, had primarily booked Black and country-western bands—like Bob Wills and the Playboys—when he ran Mission Beach, hoping that Pacific Square would flourish as a result.1
Finley’s attorneys obtained a copy of MCA’s contract with Dailard, which had been drawn up while Dailard was operating Mission Beach. It provided that he had “first refusal on all orchestra bookings for the city of San Diego.” In return, Dailard promised to accept “seventy-five percent of the orchestras offered … or a minimum of thirty-five orchestras per year.”2 Finley charged that MCA had similar exclusive arrangements with other operators around the country, like Jantzen Beach Park in Portland, Oregon. In these cases, MCA usually demanded that booking fees for other agencies bringing in acts be split with MCA when these non-MCA performers played at these exclusive clubs.
According to Barney McDevitt, a Finley public relations man, as soon as Finley brought suit, MCA offered him the exclusive band rights in Oakland, California, if he would drop the whole matter. Finley refused.3
Sparked by the Finley case, the Justice Department’s Antitrust Division resumed its preliminary investigation of MCA, which had been dropped in 1943. Paul Fitting, another antitrust attorney in Los Angeles, interviewed Ralph Wonders, manager for the General Amusement Company in Hollywood, then one of the largest band-booking agencies. Among the bandleaders handled by General Amusement were Glenn Miller, Jimmy Dorsey, Charley Spivak, Cab Calloway, and Woody Herman. It also represented a variety of other artists and had booked several acts for Larry Finley at Mission Beach when his legal problems with MCA began.
Wonders told Fitting that he had seen the contract between Wayne Dailard and
MCA, adding that it was the only such contract he had ever seen. “But,” Wonders said, “a lot of the ballrooms have dealt with MCA exclusively. They knew that they could only get their bands if they dealt with them exclusively.… I know of one bandleader, who’s represented by MCA, who owes them $19,000.”
“Do any of the dance halls complain about MCA’s tactics?” asked Fitting.
“Sure, lots of them do. But, until Larry Finley, no one had the guts to do anything about it. See, the problem is MCA’s full-line forcing policy. The dance halls have to be willing to take the B- and C-grade bands, and then they’ll get the bigger-name groups if they don’t complain too much.”
“What about bands splitting commissions [between MCA and a talent agency representing a band performing at a club with an exclusive contract with MCA]?”
“That’s a common practice; it’s sort of the general rule. Some of the bigger bands can put up a stink and avoid it. We had to split commissions with MCA on Stan Kenton and Spike Jones, but not on Jimmy Dorsey, Charley Spivak, or Woody Herman [who were all GAC clients]. I tell you openly that we split commissions on the Jantzen Beach Park Ballroom in Portland. That’s the business.”
“How have you fellows been able to break through the MCA stranglehold over the industry?”
“We’ve done all right in Chicago and at the New Yorker and the Pennsylvania hotels in New York. They used to be exclusively MCA; now they book General Amusement’s bands. In the two New York hotels, the new managers are personal friends of mine and, during the war, there just weren’t enough good bands available.”
“What about in Los Angeles?”
“I can still get a good band in anywhere. MCA has about thirty-five percent more name bands than I do, and we’re as big as William Morris—which represents Artie Shaw, Vaughn Monroe, and Duke Ellington, as well as Count Basie, Dizzy Gillespie, and Charlie Parker—and the Frederick Brothers Agency, which runs fourth. But, for all of us, the big money is in the one-night stands. A good promoter can rent out large auditoriums for a night, book a big band, and make plenty for everyone.”
“What about the unions? Who do you deal with? AFM?”
“Sure, we deal with AFM. We deal with the American Guild of Variety Artists. We deal with the Screen Actors Guild and the American Federation of Radio Artists.”
“So what does the AFM do?”
“They appoint the booking agent as the exclusive agent, in return for commission of ten percent on steady engagements, and twenty percent on engagements of three days or less. The AFM obligates the booking agency, the bandleader, and the members of his band to stay in good standing with the union, and provides that the executive board of the American Federation of Musicians be the final arbiter of any disputes coming out of the contract.”4
Fitting also interviewed Billy McDonald, who was in charge of bands for Frederick Brothers, the smallest of the four agencies representing name bands. It numbered among its clients Lawrence Welk and Wingy Manone. McDonald had been a West Coast bandleader, represented by MCA for nearly ten years. He told Fitting that he was still on excellent terms with the corporation but had a couple of complaints with its handling of his career. Mostly, he had been upset because MCA had refused lucrative bookings without consulting him.
As a booking agent, McDonald was among the first people Larry Finley turned to after his falling out with MCA. According to McDonald, Finley had had big problems trying to get bands for Mission Beach. “Finley got Henry Busse [a bandleader] from the William Morris Agency. In fact, the agent had to go through MCA to get him. Normally, Busse received something like $600–$800 a night and maybe $1,500 for two. Finley was forced to pay $2,750 for a two-night stand.”5
Despite the antitrust investigation, MCA continued to expand.* And as MCA expanded, disgruntlement among some of the major bandleaders grew as well.
Did MCA work for them or did they work for MCA? Why did they feel completely dominated by their agency? Jack Teagarden recorded an album, “Jack Hits the Road,” with the theme, “You won’t see me for many a day, because I’m on the road for MCA.” Tommy Dorsey had been quoted as saying, “They [MCA] make me so mad I could cut their throats, but I’ve got to play ball with them.” When the term of Dorsey’s contract with MCA ran out, he put a large ad in a trade paper, exclaiming: “Whew … I am finally out of the clutches of you-know-who.”6
Two other bandleaders, Benny Goodman and Horace Heidt, had frequently protested—to no avail—against the bookings MCA had given them. Both musicians had even gone to the AFM and James Petrillo, seeking relief from their grievances against MCA, but were turned down by the AFM’s executive board—which, each time, ruled in MCA’s favor. As a result, both Goodman and Heidt actually disbanded their groups—and didn’t play regularly again until their contracts with MCA expired in 1946. Until then, when Heidt did book his own act and perform, he was still required to pay MCA its ten-percent commission. During the interim Heidt lost his radio sponsor—which then backed another MCA show.
In April 1945, after three months of negotiations, MCA absorbed the prestigious Hayward-Deverich Agency of Beverly Hills, and the Leland Hayward Agency of New York. Both Leland Hayward and Nat Deverich were immediately named as vice-presidents of MCA Artists with ten-year employment contracts. Hayward—who had been pressured by his wife, actress Margaret Sullavan, to give up his business—also became a member of MCA’s executive board.
Hayward had become an agent in 1930, joining the Myron Selznick Agency in New York. Soon after, he broke away and started his own firm. In 1937, Hayward and Deverich, who had been a vice-president of the Myron Selznick Agency,* became partners and started their own business in Hollywood.
Hayward-Deverich represented over three hundred clients, mostly playwrights and screenwriters, eighty of whom were based in Hollywood and ninety-two of whom were involved in Broadway productions in New York. Included among the actors were Greta Garbo, Ginger Rogers, Fred Astaire, Barbara Bel Geddes, Henry Fonda, Jimmy Stewart, Alfred Hitchcock, Ethel Merman, Laurence Olivier, Vivien Leigh, Barbara Stanwyck, Shirley Temple, Katharine Hepburn, and Gregory Peck. Hayward-Deverich also had represented the writers Arthur Miller, Dorothy Parker, and Dashiell Hammett.
MCA’s domination of the top Hollywood talent was nearly complete. The big names meant bigger pictures, bigger salaries, and bigger commissions. According to a Justice Department document, “These top stars are the only ones who can be used as bankable credit—i.e., banks will loan money for financing a picture solely because a producer has one of these stars available. Without at least one of these stars, it is virtually impossible to get financing for a major motion picture.”7
To federal attorneys, the major motion picture studios had always attempted to monopolize what the American people heard and saw at their local theatres. To the movie moguls, the American government had always tried to restrict their ability to participate in the free-enterprise system.
As early as 1938, the Justice Department’s Antitrust Division had filed suit against the eight big motion picture companies—Paramount, Loews, RKO, Warner Brothers, Twentieth Century–Fox, Columbia, Universal, and United Artists—for “combining and conspiring to restrain trade in the production, distribution, and exhibition of motion pictures,” in violation of the Sherman Antitrust Act. Essentially—in what became known as simply “the Paramount case”—the federal government wanted to prove that the studios had tried to control the production, distribution, and exhibition of all motion pictures. Five of these companies—Paramount, Loews, RKO, Warner Brothers, and Twentieth Century–Fox—owned their own strings of theatres and, of course, gave them the first opportunities to offer Hollywood’s best films. Consequently, the government claimed that the major motion picture companies were engaged in block-booking, forcing independently owned theatres to accept the bad, low-grossing films in order to get the occasional blockbusters. Through this practice of block-booking, the studios began to control more and more of the first-run theatres.
Thurman Arnold, the head of the Antitrust Division, charged that the motion picture business had become “an industrial dictatorship and distinctly un-American,” insisting that such concentrations of power were a threat to democracy, as well as an unfair tax on the people. Arnold said, “The danger in this country is the private seizure of power. It is subject to no checks and balances, it is subject to no elections every four years, it is subject to no criticism and no attacks because no one even knows about it.” He added that he was interested in “abolishing all monopolistic practices in the motion picture industry.” By October 1940, a settlement had been reached, although few changes were made. Many theatre operations remained under the control of the big studios.
In August 1944, the Justice Department asked for a new trial. This time, treading lightly on the alleged antitrust violations, the government pushed for “divorcement”—to divorce theatre interests from the studios’ production and distribution enterprises. As the trial started on October 8, 1945, the motion picture companies, in their defense, insisted that strict obedience to federal antitrust laws would destroy the film industry—to which the government replied that the studios needed to petition Congress to obtain exemption from the Sherman Antitrust Act.
The trial lasted nearly three months. When the court decision was read on December 31, 1945, the studios were cleared of violating federal antitrust laws and were permitted to keep their theatres. However, the court struck down many of the abuses the studios had engaged in at the local theatre level, such as price-fixing and other questionable trade practices. Even though the lower court’s decision gave both sides “victories,” the government immediately announced that it would appeal to the U.S. Supreme Court, while the studios announced that they would counter-appeal.
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