by Connie Bruck
Even for the unions, the mega-deal was a mixed blessing. Leo Geffner, the lawyer who represented the IATSE, said, “Walter Diehl was very unhappy about the settlement. He said, it’s too rich. He thought it was a dumb thing to do personally, but politically he had to deliver or lose his job. He said at the time, it’s going to push too many producers into going nonunion—and his prophecy turned out to be true.” Geffner explained that independent producers began to use more nonunion labor. And, in a covert way, by making deals with so- called independent producers that were really studio-financed, some major studios did, too.
“That was the beginning of Lew’s losing his power,” Geffner continued. “He was not the star after that. There was such resentment of him among the other studio heads for what he’d done.”
In times of crisis, Wasserman would still play a decisive role—for example, in helping to avert what seemed about to become the first strike ever by the Directors Guild, and to settle the Writers Guild strike in the summer of 1981. But these were cameo appearances. “Lew started getting out of the labor stuff in the late seventies,” recalled Dan Slusser, who had worked closely with Wasserman in this area. “It was hard for him. He had devoted all his spare time to it. And then there was all this talk about how it had been to his advantage.”
Once Wasserman was no longer intimately involved in relations with the unions, he had less need of Korshak and, not surprisingly, he began to draw away from his close friend of about forty years. But his distancing was also an indication of the degree to which the world had begun to impinge on the two men. Before, when associates had warned Wasserman about his closeness to Korshak, he had been impervious. Now, he evidently did not feel so immune. Moreover, the Hersh article in the New York Times seemed to have pierced Korshak’s magic shield; Korshak was becoming an ever more popular target for law enforcement, the media, even a cartoonist, Garry Trudeau, who had sport with the relationship between Korshak and Wasserman. Wasserman prided himself on his loyalty—it ranked high in the Wasserman code—and he never publicly turned his back on Korshak. But, to Korshak, the rupture was unmistakable, and unforgivable.
In April 1978, Korshak attended a fund-raiser for Governor Jerry Brown at Wasserman’s home. There was nothing unusual about this—he had attended numerous political events there, including Wasserman’s huge fund-raiser for Jimmy Carter during his 1976 presidential campaign. But Korshak’s presence now caused comment in a way it had not before. Asked by reporters whether he was made uncomfortable by Korshak’s attendance, Brown (who had accepted a $1,000 contribution to his 1974 election campaign from Korshak), said he was not. The next year, in a Doonesbury cartoon, Trudeau featured Gray Davis, Governor Brown’s chief of staff, describing the public relations problem caused by the relationship between the governor and Korshak, “the local low-life, an alumnus from the Capone mob.” In the next day’s cartoon, the beleaguered governor was protesting that he barely knew Korshak, having only “run into him a few times at Lew Wasserman’s parties”—and then explained that “Wasserman has to deal with Korshak to get his movies made.” The Chicago Tribune was among the newspapers that ran the series—but the Los Angeles Times did not.
Just a few weeks after Korshak attended the fund-raiser for Brown, California Attorney General Evelle Younger released a list of reputed organized crime figures with ties in California. Korshak was included. Next to his picture, the text read: “His name has been linked with organized crime for more than 30 years, and he has been the subject of several organized crime investigations.” The report also stated that he was a senior adviser to organized crime groups in Chicago, California, Las Vegas, and New York. Korshak responded that he had contributed $3,000 to Younger’s two campaigns for attorney general and had been asked to serve on Younger’s advisory committee for his 1978 gubernatorial bid. “The damage this has caused me is irreparable because what can I do to combat it?” Korshak said in a rare, brief interview.
Much as Korshak loathed such exposure, it affected his reputation and his ability to operate in the legitimate business world—but not his freedom. The FBI, despite its years of investigating Korshak, had not succeeded in gathering enough evidence to win an indictment. But in 1979, an FBI agent named Michael Wacks thought there was a chance. Joseph Hauser, a corrupt insurance company executive who had been indicted for making payoffs to various labor unions to gain insurance contracts, had begun cooperating with the government. He took part in an undercover sting operation known as Brilab, short for bribery-labor, in which he posed as a representative of a fictitious Beverly Hills insurance firm. Wacks and others in the bureau saw great potential in Hauser, a wealthy Beverly Hills resident who had moved in Korshak’s circles, and who, according to Wacks, had also dealt directly with Andy Anderson of the Teamsters. “Anderson and Korshak were the ones we were going for,” Wacks said. “It was rare to get someone like Hauser. The FBI gets somebody like him once in a hundred years—someone at that level, with those contacts. He got so jammed, we made him an offer he felt he couldn’t refuse. Otherwise, he’d spend the rest of his life in prison.”
Posing as insurance men, Wacks and another undercover agent would often accompany Hauser to the Bistro in Beverly Hills, where they sought to be seated at a table near Korshak’s; but they usually couldn’t overhear much. One day in mid-April 1979, however, they learned through a wiretap on Chicago insurance executive Allen Dorfman’s phone that Dorfman, Korshak, and Anderson had arranged to have lunch at the Bistro the following day. (Dorfman, a close Korshak associate and a mob liaison to the Teamsters Central States Pension Fund, was being investigated by the FBI; he would be indicted on racketeering charges in 1983, and murdered two weeks after his indictment.) Wacks and his confederates were there, at an adjacent table, when Korshak and Anderson arrived before Dorfman. And, according to Wacks, he heard Korshak say to Anderson, “Have you got the money for Lou [phonetic]? I’m going to have dinner with him tonight.” Then, Wacks saw Anderson hand Korshak a large envelope, which Korshak put in an inside pocket of his jacket. The exchange was suggestive; Wacks immediately thought of Lew Wasserman, but it was pure speculation. He tried to get a court order to allow him to have a hidden microphone placed at Korshak’s table, but he failed. And Hauser, he finally realized, was “too hot” to be able to entrap Korshak or Anderson. “Korshak would see him at the Bistro, say hello, and keep going,” Wacks said. They made one more effort; the following month, Hauser approached a close associate of Korshak’s about getting the Teamsters to buy insurance from him, and the associate suggested meeting with Korshak’s brother, Marshall, in Chicago. Hauser and an undercover agent had lunch with Marshall at the Covenant Club, and Marshall agreed to arrange a meeting with Teamsters officials. But then Dorfman heard about the planned meeting and he evidently suspected Hauser was working for the government. “Don’t walk away from Hauser,” Dorfman said. “Run from him.” Hauser’s handlers turned his attention away from the Korshaks. The Brilab operation moved to Louisiana, Texas, Oklahoma, and Arkansas. Eventually, more than a dozen individuals (union officials, organized crime figures, and public officials) would be convicted.
In April 1983, Hauser testified before the Senate Permanent Subcommittee on Investigations about the control of organized crime over the health plans, pension plans, and life insurance coverage of the Teamsters, laborers, and hotel workers unions. At one point in his testimony, he said, “Organized crime leader Tony Accardo, whom I have known for many years . . . told me on several occasions that he had sent Korshak to Los Angeles to represent the mob there. Since then, Mr. Korshak has become well known as a labor consultant in Las Vegas and Los Angeles. I don’t need to tell this Subcommittee who Sidney Korshak is.” Hauser’s statement was consistent with that made two years earlier by Jimmy “the Weasel” Fratianno, a Mafia member who became a government informant and testified in a deposition that Korshak was not a member of La Cosa Nostra but was controlled by “the Chicago family.”
What had always been known
in a general way about Korshak—the stuff of his mystique, titillating to his friends, half hidden in shadow—was now repeatedly being brought to light. Those who had done business with Korshak for years found it was no longer tenable to plead ignorance. In 1985, the New Jersey Casino Control Commission rejected Hilton Corp.’s bid for a casino license on the grounds that it had used Korshak as an attorney for more than a decade. The commission found him to be “a key actor in organized crime’s unholy alliances with corrupt union officers.” Under prolonged questioning by the commission, Hilton chairman Barron Hilton had finally said he’d seen the error of his ways. Regarding Korshak, he said, “I wish to hell we would never have hired him, because I can see it’s a distinct problem here in the minds of you gentlemen about this fellow’s integrity.” After hearing of Hilton’s testimony, Korshak wrote to him, saying, “You have caused me irreparable harm, and as long as I live I will never forget that. When did I become a shady character? I imagine when you were having difficulty getting a license in Atlantic City.”
“What Barron Hilton did pained Sidney so,” said Frank Yablans, who remained close to Korshak until Korshak’s death in 1996. “He couldn’t accept the idea that people were distancing themselves. Lew and Sidney had been very close. But eventually they became estranged. Earlier, it was easier, there was some kind of acceptance—the newspapers wouldn’t write about Sidney. But what you once controlled, you couldn’t control anymore. So Lew moved to get some distance. And Sidney was old-school—he couldn’t accept that in this new reality, it brought Lew too much heat.”
Korshak had also outlived his usefulness for Wasserman, Yablans added. In the mid-seventies, Hoffa, Giancana, and Roselli were all murdered. “After they were gone, Sidney started to lose his power. He still had influence in Chicago and Vegas, but he lost it in Hollywood. In Chicago and Vegas, people respected him for what he’d done. But not in Hollywood—Hollywood only respects you for what you can do.
“At the end of his life,” he continued, “Sidney was very bitter—bitter about Lew, bitter about everything.”
Because, in the end, he regretted the life he’d lived?
“No! Not because he regretted the life he’d lived,” said Yablans, rolling his eyes at such obtuseness. “Because he couldn’t live the life anymore.”
When Wasserman had shuttered the agency and gone fully into production at Universal Studios, one question had hovered most insistently over the sprawling enterprise: would the production business prove to be his Frankenstein? In the previous two decades, after all, he had done more than any other individual to shift the balance of power from the studios to the star, and, even more, the agent. He had driven stars’ salaries up, encouraged them to free themselves of the studios’ fetters, transposed Jules Stein’s packaging from bands to movies, revolutionized the business by obtaining a percentage of movies’ profits for his star clients—and mortally weakened the studio system. Now that he was the studio head, would he not be bedeviled by the very forces he had earlier set in motion—taking on a life of their own, out of his control? One way Wasserman had attempted to inoculate himself against them was with his mammoth TV movie deal with Kintner, which had enabled him to re-create his own version of the old studio system, with a stable of actors, actresses, writers, and directors under long-term contracts. Eventually, though, the forces he had set in motion when he was an agent began to win out.
Just as Wasserman had redefined the relationship of the star and the studio, so others were now seeking to redefine the relationship of the film-maker and the studio. George Lucas was one of the first to chart this new terrain. When he made American Graffiti, he had no leverage at all. Earning less than a schoolteacher’s salary, he had devoted himself for about three years to that mostly autobiographical project—and he had been angry at the way it was treated at the end. He knew that some Universal executives were reluctant to release the film, and he was opposed to the changes they demanded when it was recut. He held these putative movie executives in low esteem, as unworthy successors to a Darryl Zanuck or Jack Warner. “They’re people who have never made a movie in their lives, agents and lawyers with no idea of dramatic flow,” Lucas said in an interview in the mid-seventies. “But they can come in, see a movie twice, and in those few hours they can tell you to take this out or shorten that. The movie industry was built by independent entrepreneurs, dictators who had a very strong feeling about movies. They knew what they wanted and they made it happen.”
After the unexpected success of American Graffiti, Lucas had more clout. And he struck a deal with Twentieth Century-Fox for the movie that would become Star Wars—a deal that was truly portentous, guarding against any future studio interference and giving him extraordinary financial advantages. In return for taking a low fee as a director, Lucas retained exclusive rights to sequels, music, profits from the soundtrack albums, and, ultimately, merchandising—after a period of time, he owned the rights to every toy, game, book, and cartoon. Just how almost unimaginably meaningful that was began to become apparent when Star Wars was completed in 1977. Ned Tanen recalled that he attended a screening with his wife and daughter. He had more than his usual competitor’s interest, because it was a movie that he thought should have been Universal’s. Following American Graffiti, Universal had had the chance to buy this next Lucas project in an embryonic form. “It was just maybe a fourteen-page outline, and you could hardly read it—it was like hieroglyphics—R2D2!” exclaimed Tanen. “Still, this guy had just made American Graffiti—and we could buy it for $25,000. So I brought it to Lew, three times—and three times he threw me out of his office.” Now, Tanen continued, the screening began. “I watched the first two minutes,” he said. “I couldn’t stay. I knew this was going to be huge. I went out and sat on the curb like a bum for the next two hours. Monday morning, Lew walked into my office. ‘I heard you went to the screening of Star Wars. What did you think?’ I said, ‘It’s going to go by Jaws like it never happened.’ (Jaws was everything to him at that time.) He walked out and slammed the door. I counted the seconds: 1-2-3-4-5. The door opened, and he said, ‘You put that in turnaround.’
“What was I going to say? He ran the company, he paid my salary, he could say whatever he wanted. If I didn’t like it, I could stop picking up my checks. But for years, I carried that around. People would say, ‘Tanen put Star Wars in turnaround.’ ” In some quarters there was apparently some skepticism, though, about whether the responsibility was truly Tanen’s. One person who knew Jules Stein well recalled him saying, repeatedly, “I want to find out who in this company rejected Star Wars!” Tanen said that Stein quizzed him, but he did not divulge what had occurred. “I was Lew’s guy,” Tanen said.
After Star Wars, Tanen was offered the script for Raiders of the Lost Ark. Lucas was the producer, and his friend Steven Spielberg was attached as the director. Lucas’s lawyer was Tom Pollock, a noted entertainment attorney, and he had structured the deal in a way that was groundbreaking at the time. Lucas was asking for a straight partnership with the studio, Pollock explained—without the studio’s first taking credit for “distribution fees,” “overhead,” and other charges that, traditionally, reduced the net profits to be shared—and mutual approval over everything, in terms of sequels. “No one else had made a deal like this before,” Pollock said. “George was very much into the idea that the studio and he should be dealing as equals. He was saying, ‘I’m making the movie, they’re putting up the money and doing the marketing. We’re fifty-fifty partners.’ It was a radical concept, to be as simple and fair as that. But Lew hadn’t been confronted with it before, and he felt, if we start doing this, then what’s left for the way we do business? His attitude was, we don’t want to be fair, we’re taking all these risks.’ ” Wasserman’s immediate response was actually less reasoned, as Tanen recalled it. “I showed the deal to Lew. He threw the papers across the room. He said, ‘Nobody runs my business but me!’ He was so angry—because of what they were trying to do and, also, becaus
e of his frustration. He knew it was changing and he couldn’t control it anymore.”
The deal had been offered to five studios, and Paramount finally accepted it. “Michael Eisner [president of the Paramount studio] went out on a limb for this movie in a big way,” Pollock said. “I was in a room with Eisner, Diller [the studio’s chairman], and Bluhdorn. And in front of me, an outsider, Diller said, ‘Michael, are you sure you want to make this ridiculous deal?’ Eisner said, ‘Yes.’ It was positioned publicly by Diller in that room: ‘This one is yours, not mine.’ ” Someone in the movie division at Universal recalled the day they learned that Eisner had indeed made the Raiders deal. “I remember Sid [Sheinberg] screaming, ‘Eisner made it! It’s going to break the business!’ ” Released in 1981, Raiders was a gigantic box office hit.
Increasingly, agents and lawyers were crafting the kinds of deals that denied the studios their accustomed power—much as Wasserman had done decades earlier. When Wasserman had reached his agreement with the Kennedy Justice Department that the agency business would not be sold but shut down, many close observers had counted that one of Wasserman’s craftiest manipulations. Thanks to the government, he would not have to deal as studio head with a mainly intact, still powerful, supremely aggressive agency on the other side of the table from him. Indeed, he had enjoyed its absence for close to two decades. But in 1975, a young agent named Michael Ovitz and several of his colleagues left William Morris to start their own company, Creative Artists Association (CAA). And by the early eighties, Ovitz was a new kind of force to be reckoned with. He idolized Wasserman, and though he barely knew him, behaved as though he were a disciple. He studied Wasserman’s old methods of operation at the MCA agency as though they were canonical, and he tried to bring them to new life at CAA. He became such an aggressive practitioner of packaging, for example, that before long it was almost an industry-wide phenomenon, and—in this town with a notably short memory—many forgot that it had been carried out even more boldly (with MCA’s collecting commissions for virtual packaging) decades earlier. Wasserman no doubt privately appreciated the irony, but it must have been small comfort for being on the disadvantaged side.