David Begelman, the studio president of Columbia Pictures since 1973, wrote checks to others that he cashed himself. The forgeries came to light when actor Cliff Robertson received an IRS Form 1099 from Columbia for income he never received. Investigators found that Begelman had written a check to Robertson, forged the actor’s name, and cashed the check himself. Years after the scandal, Begelman was found dead in an apparent suicide.
On February 25, 1977, actor Cliff Robertson, who earlier had been represented by Hollywood agent and later studio executive David Begelman, received Internal Revenue Service Form 1099 (for miscellaneous income) from Columbia Pictures, indicating he had received $10,000 from the company in 1976. However, Robertson never received the money. Furthermore, he soon discovered that his endorsement on the check in question had been forged. The handwriting clearly was not his, and the check was signed incorrectly as, simply, “Cliff Robertson.” The real Cliff Robertson signed his full name, “Clifford T. Robertson,” on all legal documents, including checks. The actor then reported the forgery to police.
The Los Angeles and Beverly Hills Police departments, led by detective Joyce Silvey, and the Federal Bureau of Investigation verified that the $10,000 check was indeed a forgery and interviewed the manager of the Beverly Hills branch of the Wells Fargo Bank where the check was cashed. The manager informed the investigators that Begelman, now head of Columbia’s motion picture division, had exchanged the check, made out to Robertson, for traveler’s checks, also for Robertson. However, in retrospect, what was odd about the transaction was that the two had parted ways before Begelman cashed the check. Their business relationship had ended acrimoniously: Begelman (as a Hollywood agent) had been fired by Robertson (his client at the time) for siding with a film company in a dispute with the actor.
Columbia allowed Begelman to take a leave of absence in July, 1977, and began its own investigation, led by attorney Peter Gruenberger, a partner in Columbia’s primary law firm of Weil, Gotshal, and Manges. Gruenberger had previous experience with sensitive inquiries and was considered ideal for the job. His team consisted of associates from the law firm and members of the accounting firm Price Waterhouse. Team members interviewed Begelman for two days and Begelman’s psychiatrist for two hours. They also examined about twenty thousand checks and discovered that Begelman had embezzled an additional $65,000 through forgery. In addition, they found that he had abused his expense accounts and used company cars for personal business.
Upon presenting his report to the board, Gruenberger found to his surprise that some of the Columbia board members were openly hostile to him and questioned his objectivity. However, Alan Hirschfield, Columbia’s president and chief executive officer, accepted Gruenberger’s findings and decided to fire Begelman. Columbia’s chief counsel, Robert Todd Lang, concurred with Hirschfield in private, but his legal opinion on the issue was neutral. This opinion gave the board of directors the option to retain Begelman. The board, led by Herbert Allen, Jr., chose to retain Begelman and disputed Hirschfield’s decision.
Begelman also had the support of Ray Stark, who was the most important independent producer working with the studio at the time. Stark persuaded a majority of board members that Begelman, not Hirschfield, was primarily responsible for Columbia’s success during the 1970’s, especially with the hit film Close Encounters of the Third Kind (1977), and that he was indispensable. Hirschfield backed down, and Begelman was reinstated in December.
Still angry with Begelman, Robertson gave an interview to The Washington Post. Other mainstream newspapers and magazines began their own investigations. New West Magazine resurrected an old accusation against Begelman, also involving theft. Rumors existed that Begelman, as actor-singer Judy Garland’s agent, embezzled some of her money as well. A writer for New West Magazine also discovered that Begelman’s claim to be a graduate of Yale Law School was false, and that his time on the Yale campus consisted only of a short stint with a U.S. Air Force training school during World War II.
On January 12, 1978, syndicated columnist Liz Smith devoted a column to the story and later interviewed Robertson herself. On February 28, the U.S. Securities and Exchange Commission
Begelman pleaded no contest to the forgery and embezzlement charges and was sentenced to community service. Through this service he produced the documentary Angel Dust (1979), a film about the dangers of the drug PCP. By the mid-1990’s, Begelman was broke and he declared bankruptcy. In 1995, he was found dead, shot in an apparent suicide in a Los Angeles hotel room.
As a result of the scandal, the Los Angeles District Attorney’s Office established an Entertainment Industry Task Force to investigate wrongdoing in the industry. A special hotline was developed for anonymous tips. After two years, the task force received more than six hundred tips about possible wrongdoing at nearly every major film studio in the region.
Begelman’s career did not suffer in the immediate aftermath of the scandal. In 1979, he was hired as chief executive officer of Metro-Goldwyn-Mayer (MGM). He was unable to repeat his success at Columbia, so he left MGM in 1982. He had some success as an independent producer with Mannequin (1987) and Weekend at Bernie’s (1989). Hirschfield became chief executive officer of Twentieth Century Fox in 1981. Robertson believed he was blacklisted for his role in exposing the scandal. Ironically, Robertson’s first film role after the scandal broke was Brainstorm (1983), a film produced at MGM during Begelman’s tenure there.
It remains a mystery why Begelman took the money, which he did not need. Begelman’s psychiatrist believed that his client felt guilty about his success and had a neurotic need to self-destruct.
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Clarke, Gerald. Get Happy: The Life of Judy Garland. New York: Random House, 2000. The author supports the allegation that studio executive David Begelman embezzled money from his onetime client, actor-singer Judy Garland. -
Fink, Steven. Crisis Management: Planning for the Inevitable. New York: American Management Association, 1986. One chapter in this work on managing particular crises at work analyzes the Begelman forgery and embezzlement scandal as an example of how not to handle a crisis at the corporate level. -
Harpole, Charles, et al. Lost Illusions: American Cinema in the Shadow of Viet Nam and Watergate, 1970-1979. New York: Simon & Schuster, 2000. This work on American cinema during the 1970’s examines the David Begelman-Alan Hirschfield administration at Columbia Pictures. -
McClintick, David. Indecent Exposure: A True Story of Hollywood and Wall Street. New York: William Morrow, 1982. A comprehensive account of the Begelman forgery and embezzlement scandal by a reporter for The Wall Street Journal.
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