by Norman Horowitz
About forty years ago, I returned to Screen Gems International Television (Columbia Pictures) following a three year hiatus at CBS and a nascent Viacom.
Since I had worked at Screen Gems before, I was well prepared to go to London and make a deal for a group of features because the company needed a few paltry millions in order to “make its quarter.”
I ended up making a five or six million dollar deal with the commercial broadcasters in the UK. In order to do this, I negotiated a price for each and every movie in the “package.”
I returned home and submitted the deal to the accounting department, as was the case with all deals that included the negotiated price for each title.
A few days later, one of the senior accounting executives arrived in my office and handed me a sheet of paper indicating the value of each picture in the UK deal and told me to resubmit his per-picture price. He told me that his prices would reduce our obligations to our producers by about $450,000.
I refused to do what he asked. He threatened to go to our president, who would order me to do what he asked.
I told him that, if ordered to do what he wants me to do, I would refuse, and I would be fired. I told him that, if I were fired, I would go directly to the New York District Attorney and tell the story.
He about died but gave up on the re-submission of prices.
I asked him if he would go to a party at a producer’s house and steal cash that he found on a desktop. He said of course he wouldn’t and did I think he was a crook? He was very upset when I answered yes.
To him, “white-collar stealing” was not the same as overt stealing.
At Columbia and MGM/UA, I witnessed many similar interactions with the very powerful Motion Picture Association of America (MPAA.) Both companies used the MPAA to violate the spirit of the anti-trust laws. This happened less in the United States because the laws were very clear and one risked going to prison for violating them.
To give one example, Columbia Pictures (Screen Gems) owned a Puerto Rican television station, and I offered re-runs of The Flintstones to all of the stations on the island. The management of my company improperly ordered me to make sure that our station obtained the series.
I was in the middle of trying to sort this all out when I was called into the office of our General Counsel. He told me that he had received a complaint from one of the other stations on the island who told him that, if his station did not get the program, he would turn the matter over to the Justice Department.
I asked him what I should do, and he replied, “Norman, the worst that Columbia can do is fire you, but the Justice Department can send you to prison.”
As it happened, both of our competing stations sent me a letter indicating that they were not interested in The Flintstones, and I dodged a big bullet.
My point is this: White-collar criminals who violate the rules should be sent to prison for a long time.
What a regulatory difference that would make in the banking industry.
Almost all human beings act primarily in their own interests. They will grab all they can. This represents a basic failure in the human condition.
Until the regulatory process makes the financial risk of screwing around much more dangerous, nothing will change.