Dark Victory

by Moldea, Dan E. ; Miller, Mark Crispin;

  “Bioff. He said, ‘Well, I think I know what you want.’ I proceeded to call him names. The reason I did that was because I knew this man was a vicious man. I saw this gun on his desk, but I was on the right side, I guess. I might as well say that. I asked him what the idea was of calling the strike on Cohn. He said, ‘Well, I found there were violations, and it is not my fault.’ He said, ‘Browne ordered me to do it.’

  “I said, ‘You get Browne on the telephone and I will talk to him.’ I think he did. In fact, I know he did. I talked to Browne and Browne told me on the phone, he said, ‘Listen, that is not my doing. That is his [Bioff’s]. Don’t let him kid you.’

  “I hung up and said, ‘If there are any violations you talk to Harry Cohn and get it straightened out.’

  “He said, ‘All right.’ I think we called Harry Cohn at Palm Springs, and Bioff talked to him. We later made an appointment at my apartment. Oh, at that point Bioff said, ‘Well, you know, [former Chicago Mafia boss] Frank Nitti is my friend.’

  “I said, ‘To hell with you and Nitti.’

  “He said, ‘Well, I am going to have to tell him.’

  “I said, ‘I don’t care who the hell you tell. If you have a violation on this studio, you go ahead and call us.” Of course, I used some choice language which I wouldn’t want to repeat in front of you gentlemen. I was mad enough to use it at the time.

  “He [Bioff] met Harry Cohn at my apartment that afternoon, that evening. I sat there with him a few minutes, and we had some words. He [Bioff] said he found the violations. He wouldn’t state the violations that he found, but he said the men could go back to work that evening.”

  “What respect did you command with respect to Bioff and Browne?” Halley asked.

  “I didn’t command any respect from Browne but I was going to command it from Bioff that day.”

  “How?”

  “If he didn’t have a violation, I knew that there were rumors around that this man was doing things in the industry which I didn’t think were just right and I knew he was getting money somewhere. I didn’t know he was getting money, but there were rumors that he was, and he wasn’t going to do that to a friend of mine.”

  “How were you important enough that they cared what you thought?”

  “He didn’t seem to care. He called the strike, and I was just showing their hand, I guess. They probably didn’t want things to tumble on top of them maybe.”3

  Forty-six-year-old Charles “Cherry Nose” Gioe also testified.* He insisted that all he knew about the Mafia was “what I read in the newspapers.” Gioe was then asked about his relationship with Sidney Korshak. “I have known Sidney a long time, just as friends,” Gioe replied.

  “How long have you known him?” Kefauver asked.

  “I would say I knew Sidney maybe sixteen or seventeen years.”

  “You were not in school with him?”

  “No, sir.”

  “How did you get to know him?”

  “Through some fellows on the West Side when he just opened his office. He had just finished school and opened an office, I believe, about that time.”

  “What fellows?”

  “Oh, some kids he knew around there that I just happened to know. It was just a casual acquaintance at the time when I met him, just as a lawyer. That is all. I think he handled a deal for them in regard to a café or something. That was the first time I met him.”4

  Korshak—whose brother Marshall was elected to the Illinois State Senate—had been the first person to be subpoenaed for the Senate panel’s public hearings in Chicago. However, he was never called as a witness before Kefauver and the members of his committee left Chicago. What happened? According to The New York Times, “Ironically, the Kefauver Committee’s 1950 hearings on organized crime provided Mr. Korshak with an opportunity to enhance his reputation.…

  “One trusted Korshak friend and business associate recalled in an interview that shortly after the committee’s visit Mr. Korshak had shown him infrared photographs of Senator Kefauver in an obviously compromising position with a young woman.

  “Mr. Korshak explained, the friend said, that a woman had been supplied by the Chicago underworld and a camera had been planted in the Senator’s room at the Drake Hotel to photograph her with Mr. Kefauver.

  “‘Sid showed it to me,’ the friend said. ‘That was the end of [the] hearings, and this also made Sid a very big man with the boys. Sid was the guy responsible.’”5

  In the midst of the hearings, Lester Velie, a crime reporter for Collier’s, described the Chicago Mafia as being “as strong today as the United States Army.” In discussing Korshak, Velie wrote that he “seems to transact much of his practice while traveling, for he is out of his office about half the time—shuttling between Chicago, New York, Florida, and the West Coast.… Korshak seems to commit little business to paper and keeps few files.”6

  At the end of the committee’s investigation in 1951—which included 52,000 miles of travel to fifteen cities—the panel concluded, “There is a sinister criminal organization known as the Mafia operating throughout the country with ties in other nations.… The Mafia is the direct descendant of a criminal organization of the same name originating in the island of Sicily.… The membership of the Mafia today is not confined to persons of Sicilian origin. The Mafia is a loose-knit organization specializing in the sale and distribution of narcotics, the conduct of various gambling enterprises, prostitution, and other rackets based on extortion and violence.… The power of the Mafia is based on a ruthless enforcement of its edicts and its own law of vengeance, to which have been creditably attributed literally hundreds of murders throughout the country.”7

  In its 1,400-page final report, the Kefauver Committee recommended to the full Senate that wiretapping be legalized for federal agents to combat organized crime. It also proposed that witnesses against the mob be given immunity from prosecution in return for their testimonies against their more dangerous bosses. Both proposals were rejected by the Senate.

  On the motion picture front, Associated Press Hollywood correspondent James Bacon credited MCA’s Lew Wasserman with saving Universal Pictures by getting his client Jimmy Stewart to play the lead in the 1950 Western drama Winchester 73.

  “In those days, Bill Goetz was head of the studio and it was in financial trouble,” Bacon wrote. “There were no star names on the roster, just seventy-five-dollar-a-week contract players like Rock Hudson and Shelley Winters. Goetz cast Rock and Shelley in the movie but needed a star name to sell the picture. Wasserman sensed this and demanded—and got—a fabulous deal for Stewart that netted him fifty percent of the profits.

  “The movie was a blockbuster at the box office. Jimmy got rich. Goetz got blasted by all the other studio heads for ruining the industry. Percentage deals for stars were practically unheard of in those days.”8

  As the giant talent agency began to turn its attention to television, the Justice Department’s Antitrust Division in Los Angeles received a letter from Assistant U.S. Attorney General Herbert A. Bergson, notifying its staff that the government had “recommended against the FBI investigation [of MCA]. Our file in this matter [is] accordingly closed.…”9

  MCA was spared once again.

  *Gioe had once been arrested with James de Mora—alias Jack “Machinegun” McGurn—who had ordered vaudeville actor Joe E. Lewis’ throat slashed in November 1927. On another occasion, Gioe had been arrested with Tony Accardo for carrying concealed weapons.

  II

  THE FALL

  CHAPTER THIRTEEN

  Although television technology began as early as 1923, network programming really didn’t start until 1946. General Electric, an early pioneer in the new medium, began telecasting in Schenectady, New York, in 1928, while NBC and CBS had created primitive television stations in New York City in 1930 and 1931, respectively. By 1938, NBC was broadcasting scenes from the Broadway play Susan and God, as well as occasional on-the-scene news events. The following year, NBC televise
d the opening ceremonies of the 1939 World’s Fair in New York, featuring President Franklin D. Roosevelt delivering the keynote address. At the time, television viewing was so limited that NBC maintained a list of everyone who owned a television and sent them directly a weekly schedule of programs to be aired.

  By 1941, NBC and CBS had several shows to offer their New York viewing audiences. Working with General Electric, NBC had developed the first network, telecasting the same programs to its station in New York, General Electric’s station in Schenectady, and a Philco station in Philadelphia. That same year, both NBC and CBS became the first commercially licensed television broadcasters.

  After the war, while the motion picture industry was having its best time ever—grossing over $2 billion in 1946 alone—network television started to take off. The Depression was over, and people had money. With this money, they could get married, buy homes, and raise families. Leisure time became premium family time. And, to those who could afford a television, family time started to revolve around the TV sets in their living rooms. Advertisers viewed television as a revolutionary new means of reaching consumers. Producers, directors, writers, technicians, and actors discovered a new medium to exhibit their talents.

  On May 9, NBC unveiled the first entertainment series, Hour Glass, an hour-long variety show, sponsored by Chase and Sanborn Coffee and Tender Leaf Tea. Hour Glass was followed by such NBC programs as I Love to Eat, a cooking show, and Gillette Cavalcade of Sports. NBC’s Kraft Television Theater followed in 1947 with low-budget dramatic productions.

  Not yet competitive in the new market, CBS was already trying to revolutionize the industry by making color television the standard—and thereby making the other networks’ black-and-white telecasts obsolete. But CBS’s technology was not ready. After NBC broadcast the first televised World Series in 1947, CBS jumped into the black-and-white market. By 1948, CBS was coming on strong with Arthur Godfrey’s Talent Scouts and Ed Sullivan’s Toast of the Town.

  In August 1948, ABC received its first New York station and began programming sports shows, news shorts, and old movies.

  MCA watched the growth of television carefully. Jules Stein said, “There is nothing so permanent as change. Had I stayed in the radio business, I’d be out of business today. We went into television when the movies could have taken over the television business. In the early days of television, the movie business could have owned the stations. But those men [the studio owners] were too sure of themselves. They were too smug.”1

  In the midst of the near-extinction of the big bands—caused by the popularity of individual singers and the rise of bop—seven major record companies—Capitol, Columbia, Decca, London, Mercury, MGM, and RCA—remained in business, recording more solo artists and smaller musical groups.

  As television eclipsed the popularity of radio, it also started to challenge the motion picture industry, which was in the midst of a deep recession and had turned to such gimmicks as “3-D,” “Natural Vision,” and “Cinerama” in hopes of revolutionizing the film business.

  The boost that sent Jules Stein, Lew Wasserman, and MCA rocketing into the world of television occurred during Reagan’s final months as the president of the Screen Actors Guild in 1952.

  MCA had already started producing earlier that year. MCA vice-president Karl Kramer first suggested forming Revue Productions for a television show called Stars Over Hollywood. Kramer was given the go-ahead to find a commercial sponsor. Armour, the meat packer, obliged; thus, Revue Productions, MCA’s new television production company, was born. MCA rented space at Eagle-Lion Studios for its early production ventures.

  In 1939, SAG had amended its by-laws to read that no agents could engage in theatrical film production without a waiver from the Guild. According to SAG’s by-laws, “[The] Screen Actors Guild may issue waivers at its discretion … but any such waiver shall be without prejudice to any claim by an actor that the agent’s production activities have interfered with the proper representation of the actor by the agent or to the agent’s defense thereto.”

  Any violation of this rule would be classified as a conflict of interest since agents would be representing their clients in negotiations with their own production companies. In other words, instead of an actor employing the agent, the agent would remain the agent but also become the employer. However, the SAG by-laws had not been updated to specifically include television production.

  Reagan and the SAG board were involved in negotiations with the Alliance of Television Producers over the issue of paying actors when TV programs were rerun, which the producers had refused to do. The Guild postponed a threatened strike to negotiate further. On June 6, 1952, former SAG legal counsel Laurence Beilenson—who had become exclusively an attorney for Revue Productions and had previously represented Reagan in his divorce from Jane Wyman—met with members of the SAG board to discuss a possible solution to the deadlock in the negotiations.

  “MCA had been trying to get me for years,” Beilenson explained. “And I always told them that I wouldn’t take them as long as I was representing the Guild. So I resigned from the Guild … in 1949. After I resigned, Wasserman called me and said, ‘What’s holding you now?’ And I said, ‘Nothing.’”

  Beilenson added that he went with MCA-Revue with the proviso that “I not take part in any negotiations with the Guild or unions, because, when I was representing the Guild, I wouldn’t represent agents or producers. I felt that would constitute conflicts of interest.”2

  Nevertheless, soon after joining the MCA-Revue team, Beilenson was thrust into the middle of the SAG-ATP dispute. Beilenson suggested a formula whereby the producers could rerun a program once for free, with a minimum royalty schedule for all future reruns.

  Because it was thought that other Hollywood unions would be affected by any ultimate agreement, SAG and the producers agreed to bring IATSE’s national president, Richard Walsh, into the discussions. Walsh met with SAG’s executive committee at the home of SAG board member Walter Pidgeon. Walsh told the committee that IATSE would support a SAG-sponsored strike. James Caesar Petrillo, the president of the American Federation of Musicians, was also brought into the negotiations and pledged his union’s support to SAG’s cause.

  The following week, according to SAG’s official minutes of the June 16, 1952, meeting of the SAG board of directors, “[D]iscussions were held with Revue Productions, which is in the rather peculiar position of being on both sides of the fence inasmuch as they are agents for actors as well as being producers.” MCA was indeed engaging in production without a SAG-approved waiver.

  As the negotiations between SAG and ATP progressed, the producers relented somewhat, indicating that, according to the minutes of the June 30th board meeting, “[T]hey want that second run without any additional payment. They will agree to repay fifty percent of the actor’s salary for the third and fourth run, twenty-five percent for the fifth run, and a single twenty-five-percent payment for the sixth and all subsequent runs.”

  SAG still wasn’t ready to settle. Then, the SAG minutes continued, “Further discussion was had with Mr. Beilenson, representing Revue Productions, who stated that if a deadlock exists, they would still be willing to help break it. In connection with the negotiations with Revue, it was pointed out that this [is] a wholly-owned subsidiary of MCA and that the pattern of agents’ interests in production in television, as in the radio field, is well established. Consequently, it appears desirable to recognize the right of agents to engage in TV film production and package-show operation, subject to reasonable regulation by the Guild.”

  Once the contract between SAG and ATP was made final, Lew Wasserman immediately wanted to get MCA into the television production business on a larger scale. In order to gain authorization for this dual status, MCA had to convince SAG to approve an exclusive “blanket waiver” of its rules. The only previous exceptions had been for the Myron Selznick Agency and Charles Feldman, an agent for Famous Artists, who also made an occasional movie. Selznick
and Feldman received temporary SAG waivers on a case-by-case basis and under strict union control.

  According to SAG guidelines, the process for obtaining a waiver was quite simple. The agent telephoned the SAG office, saying he wanted to produce a show. He would be told to submit a letter to the union, applying for the waiver. Upon receipt, a SAG committee would determine whether or not to grant the request.

  In July 1952, there was a series of meetings between certain members of the SAG board and MCA, including Wasserman, Schreiber, Beilenson, and Kramer. No record of these private meetings was kept.3

  At the conclusion of these talks, Reagan and SAG national executive secretary John Dales—working in concert with Beilenson—managed to engineer a “special arrangement” between the union and the giant talent agency. However, a Justice Department document stated that “Wasserman and Schreiber could sell SAG anything” because of their relationship with Reagan.4

  The unprecedented deal granted MCA permission to operate in the profitable field of television production with its talent agency, MCA Artists, and its new television production company, Revue Productions, headed by MCA executive Taft Schreiber. Nothing like it had ever been approved by the SAG board before.

  According to the official minutes of the July 14th meeting of the full SAG board*: “A report was made on a special agreement which has been drawn up between Revue Productions, Inc., a wholly-owned subsidiary of MCA Artists, Ltd., and the Guild in connection with television production.… The board indicated at its last meeting that it understood and agreed that agents would be interested in the television field as they are in radio. Therefore, further meetings were held with Laurence W. Beilenson, representing Revue Productions, and an agreement was reached which permits MCA to enter and remain in the field of film television during the life of the present Agency regulations but prohibits them from charging commission to any of their clients who appear in their television films.”