Indecent Exposure (44 page)
- Was he weak? Should he truly reconsider this time? Could he? Were there any conceivable circumstances under which he could justify changing his mind and reinstating David
Begelman
? - Before leaving the office for the weekend, Hirschfield telephoned Todd Lang and asked that he and Peter Gruenberger come to the Hirschfield home on Saturday morning.
- THIRTY-TWO
- "What would the consequences be if I decided to bring him back?"
- Hirschfield and the two lawyers sipped coffee and munched pastry in the
Hirschfield
s' sunny, art-adorned living room. The double doors were closed but the voices of children at play occasionally penetrated the room. - Hirschfield's question was not a
total surprise to Lang and Gruenberger,
who had sensed that the pressure on
Hirschfield
was growing torturous. They had been among the targets of the board's vehement anger two and a half weeks earlier when Gruenberger had reported the results of his investigation of Begelman. They also were privy to the pressure tactics being applied to Hirschfield, including the bitter clash over
Berte
's employment. Although their legal work for the corporation was scrupulously objective, Lang and Gruenberger personally were sympathetic to
Hirschfield
's plight. The resolution of the
Begelman
problem, as it had evolved, turned less on strictly legal issues than on issues of morality, philosophy, public relations, and business judgment. The core of Lang's advice, in fact, had been that
legally
the corporation could either reinstate Begelman or fire him, as long as it could show that its decision was rooted in "prudent business judgment." Aside from citing guidelines by which business judgment could be measured. Lang had offered no formal opinion to the board on whether
Begelman
should
be reinstated, and the board had not sought such an opinion. Alan
Hirschfield
had sought Lang's opinion, however, and by early December Lang as well as Gruenberger had often expressed privately their general, agreement with
Hirschfield
's point of view. They could do little more than commiserate, therefore, as
Hirschfield
told of the difficult Friday meetings with Herbert and the other directors. - "Essentially. I have my choice of d
isasters," Hirschfield told the
lawyers. "If I fire him, the board will be so down on me that my own days at the company are numbered. They won't let me accom
plish anything. If I
bring him back, all the bad things we've talked about will probably happen—the publicity, the image, and so on and so forth. So let's suppose hypothetically for the moment that I brought him back. How can we minimize the bad things?" - Lang began by reiterating the ramifications of the "business-judgment rule," which he had analyzed in two confidential memoranda distributed to the board three weeks earlier. To protect itself against allegations of imprudence if it reinstated
Begelman
, Columbia should impose restrictions sufficient to prevent him from stealing again. Generally, he would have to be denied direct access to corporate funds. The company, for instance, should prohibit him from drawing checks on his own authority. - In addition to scaling the cash drawer, the company should withhold, at least for the time being, the new contract it had promised
Begelman
just a few weeks prior to the discovery of the embezzlements. He would have to return to the studio under his existing contract. Otherwise, it would appear that he was being rewarded. - If Columbia was willing to take such steps, Lang said, there was a chance that it could reinstate
Begelman
without inordinate risk of acute public embarrassment and other problems. Just a few days earlier, the lawyers had briefed staff members of the SEC on the status of th
e case—the results of Gruenberge
r's investigation and the decision not to reinstate
Begelman
. The SEC people had seemed impressed with the quality of the investigation and somewhat less concerned about Begelman's fate than the lawyers had anticipated they might be. So it was possible (hat reinstatement would pass the SEC's "smell test." There could be no guarantee however—no guarantee that (he SEC would not launch its own investigation, and no guarantee that the SEC would not require public disclosure of the details of
Begelman
's misdeeds, which remained a closely held secret within the company and a relatively small number of outsiders. - Hirschfield told Lang and Gruenberger that he had to give the board his final decision by Monday and would let them know if there was any change in his stated anti-
Begelman
position. - It was noon. Lang went home. Gruenberger stayed to go over with
Berte
the details of her employment with the Wolf market-research company. And Hirschfield went upstairs to the privacy of his study and telepho
ned Herbert Allen at the Carlyle
. - "I've just had a meeting with Todd and Peter, and I'm seriously considering taking David back into the company." "That's great news, Alan."
- "I really feel it may be the only way to bind up the wounds we've all suffered, and get on with
the business of the company. We
can't go on like we have been." - "That's certainly true. It's been a difficult period."
- Hirschfield explained the restrictions that would be placed on Begelman if he was reinstated. Herbert endorsed them.
- "I haven't yet made up my mind for sure," Hirschfield said, "but I wanted you to know that I'm reconsidering it in good faith and will let you know my final decision on Monday."
- "Fine, I'm sure you can work it out. We'll all feel better once this is behind us."
- At home on Linden Drive in Beverly Hills, Begelman took a call from David Geffen.
- "Are you happy?" Geffen asked.
- "Happy about what?"
- "Alan's going to reinstate you. Haven't you heard?" "I've heard no such thing."
- "It's not definite, but he's leaning heavily in that direction. The board essentially has given him no choice. It's been at a fever pitch the last couple of days. Alan feels that if he doesn't do it, they'll fire
him
eventually and make it impossible for him to run the company in the interim. They've got him by the throat." - "In other words, or rather using your word, I'm being stuffed down Alan's throat."
- "That's one way of putting it."
- "I thought everything was final," Begelman said. "I was just getting used to the idea of being an independent producer.''
- "Well, you can think again. Everything is far from final, and you're probably going to be offered your job back. 1 suppose I should congratulate you and say that I'm pleased for you, and I am in a way, but in reality, David, I must tell you that I think it would be very unwise for you to return to this job. If you go back, you'll only succeed in drawing a great deal of attention to this situation that thus far it hasn't attracted. You'll cause a spotlight to rest on you which will be very hot and could cause you tremendous trouble. Besides, if Alan docs this only under extreme duress, and really doesn't want you, the job may not be worth having. The situation could get even worse than it is now."
- "I wish Alan would discuss this with me directly," Begelman said.
- "Also," Geffen continued, "you'd be much better off as a producer in the long run. You'd make far more money. And who needs all the aggravation of the bureaucratic life anyway?"
- When
Begelman
dialed t
he Hirschfield home, Alan was in the basement playing table tennis and pinball with his children. The Houston-Texas A&M game was on television. - "Hello, Alan, it's David."
"Hello, David, how are you?"
"Fine, how are you?"
"Well, it's been difficult."
"I know what you mean, believe me." - "I'm sure you do."
- "Alan, the reason I'm calling—1 just got a call from David Geffen, who tells me that he understands that you are seriously considering reinstating me, that you've been under unbearable pressure from the board, and that in effect I'm being shoved down your throat. 1 just wanted you to know, first, that I've had nothing to do with any pressure on you—I've literally just found out about it within the last few minutes—and second, that I've come to terms with my immediate future in terms of the production deal we've discussed and am fully prepared to make a production arrangement. I'm emotionally ready to do it, and I feel it's probably the best thing for me, for you, and for everybody else under the circumstances. As much us I'd like to come back, to have an opportunity to make up to you all the grief I've caused you, I certainly don't want to be stuffed down your throat. If that's the only way it can happen, then I think it best that it not happen, and that we proceed along the lines we discussed last Sunday. I've accepted the idea. I feel it's the best way for me to go. and I just wanted you to know that I'm committed to it and that I feel badly about any pressure that has been brought to bear on you. I assure you that I had nothing to do with it."
- "Well. David. I'm glad to hear you say these things. It makes it mu
ch easier for me. The fact is. I am reconsidering, and I
don't know where I'm going to come out. It's a tough decision. It's become impossible for me to run the company the way things have been, and - I'm really down to groping for a way to salvage the company itself at this point. But you've made it much easier by what you've said, and I appreciate it."
- Hirschfield was flabbergasted. Was
Begelman
suddenly giving up? Could it be that after more than two months of fighting tenaciously for his job he was giving up? No, it couldn't be. It was inconceivable. After the discovery of the embezzlements, Begelman had sobbed and pleaded not to be suspended. After the investigation, he had mesmerized most members of the Columbia board of directors with his impassioned plea for reinstatement. As recently as last Sunday at the Beverly Hills Hotel, Hirschfield had interpreted Begelman's impractical contract demands as an attempt to induce reinstatement. Moreover, Hirschfield had assumed that Begelman, while he had not been an active participant, had certainly known of the building pressure on Hirschfield, and approved it at least passively. Could Alan have been wrong? Why would David pick this moment, when Alan actually was considering reinstatement, to change his mind? - The phone rang again. It was Herbert. Begelman had called him, too, r
elated his conversations with Ge
ffen and Hirschfield, and told Herbert that he wanted to proceed with his independent production arrangement. David was tired of the battle, Herbert said, and could not endure any more uncertainty. - "I just wanted you to know, Alan, that if this is what David wants, then it's what I'll support."
- "I'm still in shock from David's call. It's hard to believe he has his wits about him."
- "He seems to have adjusted himself to being a producer and consultant. All I've ever wanted was what was good for David, and to make sure that he was treated fairly. If he's happy, then I'm happy."
- "Wait a minute, Herbert. Too much has gone on here for this just to be sloughed off this easily. I think you should call David back and go over it with him again, and make sure that he's thought it through and is sure of his position. As
1
said to you earlier, I've been seriously considering bringing him back. It appears to be the only way the company's going to function." - "David says he doesn't want it. All I want is to make sure David's happy and being treated fairly."
- "Please call him back and go over it with him again. I just want us all to be sure of ourselves and not live to regret this."
- Herbert called back in the late afternoon. David had assured him that he meant what he said.
- "Look, Alan," Herbert said, "I know I've put pressure on you.
I
don't question I've put pressure on you, but as far as I'm concerned it's all off if David wants to be an independent producer. All I want is to help him get what he wants, after all he's done for us." - "I can't believe this is happening, Herbert. What about Matty and Ray? I've seen how hysterical Matty is. You've told me my relationship with him is irreparable. You've told me Ray isn't going to sign his new contract."
- "I'll call Matty and Ray. They'll be all right, once they know the circumstances."
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