Dark Victory

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

  Using the coroner’s findings, Schreiber’s widow, Rita Schreiber, and her two children filed a “wrongful death” suit against the Regents of the University of California, charging “medical malpractice,” according to court records. The case was later settled with the final terms undisclosed.

  In late 1976, the Sony Corporation announced the production of the new Sony Betamax system, which used audio/videocasette tapes. MCA and Walt Disney Productions immediately sued Sony for copyright infringement, because home viewers could use the Sony Betamax to record television programs from a receiver and replay them over and over again. Obviously, Universal, Disney, and the rest of the studios preferred that viewers not be taping their programs and film libraries sold to television. Aside from recording television programs and playing prerecorded tapes, the Betamax offered the consumer an optional camera to film home movies. Disco-Vision only offered the viewer the ability to play prerecorded programs. The Sony technology had been tried and tested, and was ready to be marketed. On the other hand, the MCA-Philips effort, which was still having trouble with its patents and overall cost, was not. MCA hoped that its suit would delay Sony from gaining the lead in the potentially billion-dollar home entertainment industry.

  In an expression of frustration, Sidney Sheinberg told reporters, “If Sony’s Betamax prevails, I don’t know if there will be a video-disc industry ultimately.”

  Earlier, a meeting was held in Los Angeles between the Antitrust Division and lawyers representing Philips; for unknown reasons, MCA’s attorneys did not attend. After hearing the government’s lead attorney, Willie Hudgins, explain the investigation, Sam Rossell, Philip’s in-house counsel, protested that if Disco-Vision was stopped, RCA, which was already ahead of MCA-Philips, would completely dominate the video-disc market. He added that, because of all the problems MCA-Philips had faced, their program was a year behind schedule, and their products would not be available until late 1977. Without any resolution to the situation, Philips’s attorneys simply asked that they be permitted to argue their case again before the government officially filed antitrust charges.4

  A few weeks later, MCA lawyer Allen Susman wrote a letter to Thomas E. Kauper, the head of the Antitrust Division in Washington, insisting that there was no cause for an antitrust suit. “[A]ny action against MCA and Philips … would be not only unsustainable, it would have an immediate and long-term substantial anticompetitive impact.”

  Susman continued, “In 1974 top executives of MCA became convinced that MCA had developed the better [audio/visual playback system]; however, the world was not beating a path to MCA’s door. Since millions of dollars had been spent by MCA on their new [system], this lack of enthusiastic response naturally led the company to question how it ended up in this position.”5

  While the problems with Disco-Vision continued, Wasserman became closer to former Georgia governor Jimmy Carter, who had become the presidential nominee of the Democratic Party for the 1976 general election. In an interview, with W magazine, Carter said of Wasserman, “I met him when I was still governor of Georgia. When I decided to run [for president], Mr. Wasserman was one of the first out-of-state people I told. People respected his judgment in business, international affairs, and political affairs. When he let his friends know he had confidence in me, it was extremely helpful.” The MCA chairman threw a fund-raiser for Carter* in August. Among those in attendance was Sidney Korshak.

  Two months before the party for Carter, the sixty-nine-year-old Korshak was the target of a major four-part investigative series from June 27 through June 30, 1976, in The New York Times. It was written by Pulitzer Prize–winning journalist Seymour M. Hersh. Along with his collaborator, Jeff Gerth, Hersh had spent six months doing research. Their report was the most penetrating and detailed analysis of Korshak and his power yet written. “To scores of federal, state and local law-enforcement officials,” the Times stated, “Mr. Korshak is the most important link between organized crime and legitimate business.” The series described him as “a behind-the-scenes ‘fixer’ who has been instrumental in helping criminal elements gain power in union affairs and infiltrate the leisure and entertainment industries.”

  Although Korshak refused to be interviewed, several who knew him did speak on the record. Wasserman said that Korshak was a “very good personal friend.… He’s a very well respected lawyer. He’s a man of his word and good company.” When asked about the allegations of Korshak’s ties to the underworld, Wasserman replied, “I don’t believe them. I’ve never seen him with so-called syndicate members or organization members.”

  Stating that Korshak was “entrenched in Hollywood’s social and business structures,” Hersh and Gerth reported that he was a close friend of Gulf & Western chairman Charles Bluhdorn. “Their meeting had been arranged in 1969 by Robert Evans, the successful Paramount executive and close Korshak friend [and client], shortly after Gulf & Western purchased Paramount.

  “Mr. Korshak often used his influence and his skill as a mediator to solve problems for Gulf & Western.

  “For example, Mr. Bluhdorn recalled that during early casting for The Godfather, one of the biggest successes at Paramount, his company’s subsidiary, Mr. Korshak obtained for the production the services of Al Pacino, the actor, then under contract to MGM.”

  Hollywood columnist Joyce Haber added, “Sidney Korshak is probably the most important man socially out here. If you’re not invited to his Christmas party, it’s a disaster.” Haber, in a January 1975 column, identified the “The Big Six” in Hollywood social circles as “the Paul Ziffrens, Lew Wassermans, and Sidney Korshaks.”

  According to the Times, although never indicted, Korshak had been named in no less than twenty organized-crime investigations and had been called as a witness before no less than a half-dozen grand juries.

  The reaction to the Hersh series on Korshak was favorable in Chicago, generally unreported in Los Angeles, and hostile in New York. Columnist Nat Hentoff, a respected civil libertarian, was enraged. “To be crudely accurate about it, The New York Times … set out to get Sidney Korshak.… Tom Jefferson may not have had this mouthpiece precisely in mind when he envisioned the democratic populace two centuries hence but he could not have excluded even him from the Bill of Rights.”

  Objecting especially to the FBI inside information used in the report, Hentoff wrote that he saw “no First Amendment problems in punishing officials in the criminal justice system who have violated Sidney Korshak’s rights by leaking protected information to Sy Hersh. I am assuming, by the way, that Hersh did not conduct his own black-bag jobs into the FBI to get the kind of material that has so badly damaged Korshak.”6

  Korshak had been hospitalized in Chicago for an intestinal disorder in the midst of Hersh’s series, but he was still loved in Hollywood. Three days after the Times series, Korshak was among three hundred guests at the Wassermans’ fortieth wedding anniversary party. According to published reports, when Korshak was getting ready to leave the affair, Wasserman embraced him. To no one’s surprise, film producer Harry Korshak, Sid’s son, had his first film released for Universal—Gable and Lombard, a fictitious rendering of the love affair between film stars Clark Gable and Carole Lombard, starring James Brolin and Jill Clayburgh. In August, Sid Korshak’s wife, Beatrice, was Barbara Marx’s matron of honor at her wedding to Frank Sinatra, which was held at Walter Annenberg’s home in Palm Springs.* And the following month, he was in attendance at a testimonial dinner honoring Charles Bluhdorn, arranged by Barry Diller, Paramount’s new chairman of the board.

  Despite the New York Times series, 1976 turned out to be another banner year for Korshak. Instead of being viewed as a corrupt, Mafia-backed lawyer, he was regarded as a Hollywood institution of legendary proportions and continued to be feared, respected, and even revered by those who brought the American public what they viewed on television and at their local movie theatres.

  *Reagan Kitchen Cabinet member A. C. Rubel died in 1967.

  *In 1975, a U.S.
Senate Select Committee investigated the CIA-Mafia plots to assassinate Cuban premier Fidel Castro. Two of the suspected conspirators, Sam Giancana and Jimmy Hoffa, were murdered in the midst of the investigation. Johnny Roselli, who had continued being a familiar face in Hollywood, did testify before the committee—but was later found dismembered and badly decomposed in a fifty-five-gallon drum floating in Florida’s Biscayne Bay. He had been last seen on a boat owned by Santos Trafficante, one of his co-conspirators in the Castro plots. (See Dan E. Moldea, The Hoffa Wars, chapters 18 and 19.)

  *After being elected, Carter appointed former MCA legal counsel Cyrus R. Vance as secretary of state.

  *Ronald and Nancy Reagan took time out from his 1976 presidential campaign to be among the 130 guests at Sinatra and Marx’s wedding.

  CHAPTER THIRTY-THREE

  The photograph was real. After years of denying his associations with major Mafia figures, Frank Sinatra was pictured in his dressing room with several top mobsters, including New York syndicate head Carlo Gambino and Los Angeles Mafia boss Jimmy Fratianno.* The 1976 photograph was admitted as evidence in a New York grand jury fraud investigation, stemming from the bankruptcy and wholesale skimming of the Westchester Premier Theater—which would lead to the indictments of several Mafia figures, including three mob associates who also appeared in the picture with Sinatra: Gregory DePalma, Thomas Marson, and Richard Fusco. Adding to Sinatra’s woes was the revelation that the telephone of his personal secretary had been wiretapped by federal investigators, because it was thought that she knew about the skimming operation. However, neither Sinatra nor his secretary were charged with any wrongdoing. The bugging had begun while Sinatra and Dean Martin had been performing at the theatre.

  In early 1977, during an investigation of corruption in Las Vegas, the FBI had tapped the telephones of Marson and DePalma. On one of the tapes, DePalma said that he and his business partners were planning “to siphon off money at an upcoming Frank Sinatra appearance at the Westchester Theater in New York to keep [the money] from bankruptcy officials.”

  Owned by DePalma, Fusco, and Eliot Weisman, the 3,500-seat Westchester Theater in Tarrytown, New York, which opened in 1975, was a popular entertainment center where celebrities performed before sellout audiences. Gambino, who had loaned the Westchester Theater $100,000 to help in its construction, died in 1976 before the indictments were handed down. Funzi Tieri, who headed the notorious Vito Genovese crime family in New York, and Fratianno were named as unindicted co-conspirators in the case. A Tieri associate, Louis Pacella, reportedly a close friend of Sinatra, was indicted for allegedly skimming $50,000 from the theatre.

  Also implicated in the scheme were two top executives of Warner Communications: Solomon Weiss, Warner’s assistant treasurer, and Jay Emmett, a top assistant to Warner boss Steven J. Ross. Both were accused of accepting a $50,000 bribe from the theatre’s management, hoping to influence Warner Communications to buy Westchester stock. After the alleged bribe was made, Warner bought 20,000 shares at five dollars per share.

  Fratianno, who later turned state’s evidence, explained that after Sinatra agreed to perform at the theatre, the management thought, “Two days, four performances, with about two hundred unrecorded seats at fifty dollars a seat: that was $10,000. A thousand scalped tickets, the best seats in the house, going anywhere from fifty to a hundred dollars above cost. That was about $75,000. All the other stuff, the programs, the T-shirts, at least $3,000 per performance. Multiply everything by four and you got $400,000, split three ways: one third to DePalma for the theatre, one third to Louie Dome [Pacella], one third to [Fratianno]. Louie Dome was included for insurance, to make sure Sinatra fulfilled his obligation. Besides, Louie was Frank’s good friend, which automatically earned him a cut.”1

  In 1976, for the first time in its history, MCA grossed $100 million in a single year, a forty-percent increase over the previous year. The following year, Universal-TV started making moves to become a fourth network in a project called Operation Prime Time. An effort to sell first-run movies to independent stations throughout the United States with world-wide syndication potential—thus bypassing CBS, ABC, and NBC—Prime Time also involved Paramount Pictures, which was also MCA’s partner in the CIC overseas distribution venture. Initiating the project with a drama based on Taylor Caldwell’s best-selling novel Testimony of Two Men, MCA-Paramount hoped to offer one night a week of quality programming to these independent stations.

  After an unsuccessful attempt to buy Sea World in 1976, MCA’s attempts to diversify continued.* MCA made a $140 million offer to purchase the Coca-Cola Bottling Company of Los Angeles; Wasserman personally called Coke’s chairman, Arthur D. MacDonald, to inform him of the takeover bid. Upset with the offer, which they considered too low, Coke and MacDonald battled MCA in the courts and in the press while looking for a better bid. They found it when Northwest Industries topped MCA by $60 million. For its $200 million investment, Northwest later sold the Los Angeles Coca-Cola franchise for $600 million.

  Simultaneously, MCA’s problems with Disco-Vision continued. A federal court in Los Angeles heard testimony on MCA’s copyright suit against Sony, which MCA was expected to lose. Meantime, MCA-Philips and Pioneer Electronics, a Japanese corporation, formed an equal alliance to distribute video-disc players all over the world, aiming first at industrial applications.

  The Antitrust Division was still in pursuit, claiming that “MCA and RCA had tied up programming for video discs to such an extent that it was very unlikely that video-disc hardware other than theirs will be able to enter the consumer market.… [F]or any video-disc hardware to succeed in the consumer market it has to have programming available. No one will buy a video-disc player without some assurance that programming on compatible discs will be available. By controlling the programming a firm could control the hardware that comes on the market.”2

  In 1978, Jules Stein, who had become “the grand old man of Hollywood,” was honored by the Motion Picture Pioneers, a philanthropic Hollywood group established to help needy people in the film industry. The dinner for Stein was held at New York’s Waldorf-Astoria Hotel, where Stein used to book big bands. Jack Valenti made the introductions; Danny Thomas was the master of ceremonies; Health, Education, and Welfare Secretary Joseph Califano was the keynote speaker; and Diana Ross sang “Reach Out.”

  “I’m here only by chance,” a beaming Stein told his crowd of admirers. “If Johns Hopkins had accepted my application … but I lacked eighteen hours of work in organic chemistry and they said come back next year. I was in a hurry so I applied to the University of Chicago and it was while I was working my way through medical school that I started my second career—booking bands. If it were not for those eighteen hours in chemistry I might be an unknown eye doctor in the Midwest still saying do you see better this way … or this way.”3

  Meanwhile Wasserman and MCA filed suit against Playboy publisher Hugh Hefner because “videotapes of Universal motion pictures contained in Playboy’s private film library constituted copyright infringement.”4 MCA feared that Hefner’s ownership of the films might establish a dangerous precedent, influencing Playboy readers, in MCA’s opinion, to violate copyright laws as well.

  Hefner was convinced that there had been a misunderstanding and tried to talk to Wasserman, who was still sensitive about the fate of Disco-Vision and combative about MCA’s copyright lawsuit against Sony. Consequently, Wasserman refused to speak with him. According to court documents, Hefner contacted and hired “Sidney Korshak, an Illinois attorney with influence in the Hollywood, California, community, as an intermediary to deal with Korshak’s friend, Lew Wasserman.… Hefner paid Korshak $50,000 [by check, dated March 16, 1978], seemingly simply for the purpose of having Korshak explain Hefner’s position to Wasserman and to arrange a meeting with Wasserman, not Universal’s attorneys, to discuss a possible settlement of the lawsuit.”5

  Korshak failed to arrange the meeting with Wasserman or to soften his position against Playbo
y but kept the $50,000 for trying. In the end, Hefner was forced to relent and surrender the Universal films in his personal library.

  The following month, Korshak was in attendance at a political fundraiser for incumbent California governor Jerry Brown, who was being challenged in the Democratic primary. The party was held at Lew Wasserman’s home in Beverly Hills. “We called Lew in the primary,” said a Brown campaign staffer, “and we asked him to host a dinner that could bring $50,000. Well, sure enough, by the time we collected all the money it came to $50,000—almost to the penny.”6

  Brown said that it did not bother him that Korshak—who had reportedly given Brown a $1,000 contribution in 1974—was present. Wasserman—who chaired the Brown campaign’s executive committee—personally gave $10,000 to the cause; there is no known record of a Korshak contribution in 1978.

  Days later, California attorney general Evelle J. Younger, the Republican candidate for governor, released an eighty-eight-page report on the status of organized crime in the state, which had heavily contributed to the $6.8-billion-a-year California crime industry. Included was a list of ninety-two known organized crime figures operating in the state. Among the names listed was that of Korshak, who was described as “a senior adviser to organized crime groups in California, Chicago, Las Vegas, and New York.”7

  Edwin Meese, Governor Reagan’s former executive assistant and vice-chairman of the eight-member commission that published the report, told reporters, “It’s true that most of the information was in the hands of law enforcement prior to our hearings but now it is all pulled together in one place for everyone to see.”