From the banquettes of the Polo Lounge bar to the elegant tables at Chasen's restaurant, wherever movie industry people meet this Christmas season, the No. 1 topic of conversation is the surprise reinstatement of David Begelman as head of Columbia Pictures studio and speculation about what drove him allegedly to embezzle from the company in the first place.
It is a measure of Begelman's renewed power that the subject invariably is discussed in hushed tones, after a quick glance to make sure that nobody will overhear. It is also, says one director, "typical of the fear that permeates this industry."
One who has been willing to speak out is actor Cliff Robertson, who says that last February he received a tax record slip from Columbia Pictures, a copy of the one forwarded to the Internal Revenue Service, noting $10,000 in salary from the studio.
Since Robertson had not worked for Columbia the previous year - other than to make a few gratis promotional stops - he tried to clear up the matter. Attempts to straighten things out, however, led to the eventual startling discovery that a $10,000 check had, indeed, been made out to him. But it was allegedly chased, with a forged endorsement, by studio chief Begelman, and converted into money orders.
The actor forwarded the information to local law enforcement authorities. Months later, after no action had apparently been taken, a frustrated Robertson contacted the FBI on the advice of Rep. Morris K. Udall (D-Ariz.), whom he had backed in the 1976 Democratic presidential primaries.
On Oct. 3 Columbia Pictures Industries, Inc. announced Begelman was being suspended from his duties until an investigation could be completed into what it called unauthorized financial transactions.
But last week the company said the flamboyant Begelman, after a 2 1/2-month leave of absence, would resume his post as president of the parent company's motion picture and television divisons, but would not regain his executive vice president and company director posts.
At the same time, the company tersely disclosed that an investigation by the board's audit committee established that Begelman "obtained through improper means corporate funds in the amount of $61,008 for his personal benefit" between January, 1975, and May, 1977.
It added the belief that "the emotional problems which prompted these acts, coupled with ongoing therapy, will not impair his continuing effectiveness as an executive."
Begelman, who has a reputation for high living and high rolling, with a well-known penchant for all forms of gambling, earned nearly $300,000 from Columbia in its last fiscal year, not including his executive perquisites. He has already repaid Columbia the $61,008 in question, plus interest, and will pay $23,200 to the company in January relating to expense account items that were challenged.
Begelman was not available for comment. But his attorney, Frank Rothman, asserted that, despite his client's reputation, "Mr. Begelman has not had one dollar of gambling losses since he has been with Columbia - no markers and no losses."
What Columbia did not and still declines to disclose are the troubling circumstances surrounding Begelman's misappropriations - including the allegations he forged not only Robertson's name, but also those of director Martin Ritt and others on checks he cashed - and the nature of Begelman's "emotional problems."
"We will not respond to anything relating to the fact," said Victor A. Kaufman, general counsel of Columbia Pictures Industries, who said the company sees the matter as closed. "We have completed our investigation and are satisfied that as a public company we have complied with our responsibilities." Kaufman said Columbia "does not believe there are any open investigations" delving into the Begelman affair that affect Columbia.
But a spokesman for the FBI confirmed that the Begelman case and allegations of check forgery remain "a pending matter." He said "there are certain elements that have been brought to our attention that are being handled in an investigation out of Washington."
Then there is the Securities and Exchange Commission, which is awaiting a report from Columbia on the Begelman matter and then will decide whether to take further action.
Columbia's Kaufman expressed confidence that the motion picture company would only be required to make "generic" disclosures of Begelman's improprieties, no more detailed than in its statement to the press and shareholders last week, and he claimed that "the SEC is totally satisfied by our disclosures so far."
But sources at the SEC, which hegulates publicly held companies, disputed this view. "The issue would be, if a company executive usese company funds for his own benefit then that is a material fact and should be fully disclosed to shareholders," said one high SES enforcement official. "We have brought lawsuits in cases, even when the amounts of money haven't been very large."
Local law enforcement officials who were informed of the alleged forgery-embezzlement situation nearly six months ago have allowed the matter to lapse because of what they indicate is a jurisdictional squabble between the police department in Burbank, where Columbia studios is located, and police in Beverly Hills, where the Robertson check was cashed. Neither department seems to want the case.
Filmland sources say both departments regard the case as a hot potato and want no part of it.
"At present we are not conducting any investigation," said Beverly Hills detective Joyce Silvey, who indicated that the jurisdictional dispute was the reason.
"I don't know who signed the [Robertson] check," Silvey said. "I know that someone other than Cliff Robertson signed the check. But I don't know if Begelman did, either." She said that neither Robertson nor Begelman has been interviewed by the police department, but indicated that Columbia "has been very helpful."
The Burbank police detective assigned to the case was on vacation and could not be reached.
Within the insular motion picture community there is a tradition of protecting your own, and a number of big names, such as producer Ray Stark, actress Barbara Streisand and actor Jack Nocholson, reportedly went to bat for Begelman to get him reinstated.
And his resuscitation is being greeted enthusiastically by many who welcome the return of his deal-making pancake.
The original move came as a considerable shock since Begelman was one of Hollywood's most prominent and visible executives, the prototype of the modern-day movie mogul. He was also credited by many with reversing Columbia Picture's fortunes since 1973 when Allen & Co., the close-to-the-vest New York investment banking firm, took over the parent company when it was floundering near bankruptcy and installed Begelman at the studio's helm.
Begelman, 56, was responsible for producing hits such as "Shampoo," "Funny Lady," "Tommy," "The front," "Fun With Dick and Jane," "The Deep" and other profitable films that helped Columbia reduce it staggering debt burden. He also committed the studio to its largest project in history, "Close Encounters of the Third Kind," which recently opened to record-breaking business after some critics had charged that its $20 million budget had newly mortgaged the studio's future.
Once known as an agent for Judy Garland and other stars, Begelman, with partner Freddie Fields, in 1960 formed Creative Management Associates, one of Hollywood's biggest agencies, which specialized in the movie "package" - the single deal combining stars-director-writer. And Begelman brought his packaging knack with him to Columbia.
"The producers want David Begelman back," said one Hollywood insider. "They don't want the boat rocked. A little thing like theft doesn't mean anything in the movie business. Because in the movie business people have been stealing for years."
One publicity executive at Columbia who has also worked at MGM and Fox says the only thing surprising to him is the small amount cited in the Begelman defalcations. He said that at other studios people "were dealing in millions of dollars," but he would not be specific.
Dennis Stanfill, who came to Twentieth Century-Fox several years ago from the Times-Mirror Co. and who is considered to be a business manager rather than the traditional studio mogul, was supposedly shocked by business practices when he arrived at the studio.
While there have been attempts to gloss over the seriousness of Begelman's alleged offenses, more than one person has noted that if there is no attempt to prosecute him, will add to public cynicism about two standards of laws - one for the rich and famous and another for the ordinary person.
One Hollywood director describes the scene this way: "Wrong has become right. These powerful guys are just like Nixon was - they simply are not accustomed to being questioned."
One of the reasons given for the hesitation of any law enforcement agency to move on this case is the unwillingness of Columbia Pictures to prosecute Begelman, and the absence, therefore, of any complainant.
Robertson, who was interviewed at length by The Washington Post before he left to direct a movie on location, said he is willing to testify.
"I'm not going to race to the witness stand," he said, "but I don't see how I can avoid it. I'll probably be pretty lonely up there." But he said he thinks there is "a spreading cancer of corruption in Hollywood" of which the Begelman incident is but one example.
Robertson said friends have warned him that even what he has done so far "is not professionally smart" because of Hollywood's old tradition of ostracizing a performer or other professional who violates the community's code. But he said he feels sufficiently secure at this point in his career to proceed.
Invariably, when anyone here is told Robertson's version of the story, they are dumbstruck. The trade and local press have soft-pedaled the Begelman affair. Gossip colomnist Rona Barrett was on it, then suddenly took a vacation. Only the Wall Street Journal, in a long article this week headlined "Columbia Pictures's Begelman Case Seen Ending as Bizarrely as It Began," has dealt with the story in any detail.
The Journal story said Columbia's board had been split over whether to take Begelman back. Company president and chief executive officer Alan J. Hirschfield reportedly wanted Begelman to become an independent producer and consultant to Columbia (a press release to this effect went out but was hastily called back by Columbia), but he was overruled by other board members who wanted Begelman back, with pressure coming particularly from Herbert Allen, president of Allen & Co., which controls about 15 per cent of Columbia stock. A spokesman for Columbia would say only that the board's vote was unanimous.
Almost everyone agrees that Robertson is taking a chance with his career by making this revelation because of the immense power of the studios and their alleged ability to blacklist. But they also note that Robertson, who won an Oscar for best acting performance in 1969 for his portrayal of the mentally retarded Bostonian in "Charly" and who recently played the director of the Central Intelligence Agency in the novel-for-television "Washington: Behind Closed Doors," is independently wealthy. His wife, actress Dina Merrill, is the daughter of the late Marjorie Merriweather Post.
Sources here also say that Begelman picked the wrong man when he used Cliff Robertson's name on the allegedly forged check. Robertson, according to one director who knows him well, "is totally honest and above the whole mess out here."
According to Robertson's version, which was corroborated by his accountant, he first came across the Columbia slip concerning the $10,000 in question while he was going over some bills last February at a time he and his family were temporarily residing in California.
Since Robertson had not worked for the studio in 1076, "I told my secretary to contact Columbia and find out what it was all about," Robertson's secretary wrote Columbia's auditing or financial department, but got no reply to her first letter. After another letter, she got a call from "a man at Columbia who said that obviously some mistake had been made and they would let her know."
Some months went by; Robertson had finished his project in Los Angeles and had returned to New York, where he lives. After being out of town a few days, "my answering service said it had received a couple of calls from David Begelman," Robertson remembered, with the message to call the Columbia studio chief at home.
Robertson called Begelman, whom he knew from when he was a client of Creative Management Associates, the talent agency, and Begelman was a top executive there.
"He said, 'Cliff, I wanted to ask you about this $10,000 check'" recalled Robertson. "I was surprised he would be calling me about it, but I thought at the time that as president he was really minding the store." During the conversation Begelman made detailed inquiries about the form Robertson had received, and asked Robertson to give him "any information, as soon as you get it." He ended the conversation by inviting Robertson to lunch the next time he was in California.
"It's been too long," he said. I thought this was pretty friendly and had no reason to suspect him," Robertson said.
Robertson, meanwhile, apprised his West Coast agent, Michael Black, about the matter and they both puzzled over the situation since the flat $10,000 amount was unusual and would not have represented a salary check.
"Black called me sometime later and said, 'The mystery has been solved,'" according to Robertson. Black told him he had received a call from Begelman who supposedly informed him that a young Columbia employee had admitted forging the check to him.
"Begelman was very vague about it. He didn't say what the check was for. He said the young man had come to his office, admitted he was guilty, had come in with his father, and on bended knee promised full restitution."
Begelman claimed he offered to absolve the individual because it was a first offense and wanted to ask Black if Robertson would do the same.
Robertson said he was ready to forget the whole thing, but after talking with his accountant decided to at least get a copy of the $10,000 check in case there was any future dispute with the IRS. Because banks must record transactions of this size, the accountant easily obtained a facsimile.
The check had been made out to Robertson, and furthermore, on its back in "very big, bold letters," it was endorsed "Cliff Robertson," the actor recalled. "There was no attempt to copy sign as I would," he said, adding he uses his full name, Clifford P. R. Robertson III, for endorsement purposes. There were also small initials under the forged signature.
Issued by the Bank of America, it had been cashed at a branch of the Wells Fargo Bank in Beverly Hills, about five miles away. A contact with the Wells Fargo branch brought out the information that the small initials, presumably approving the check for cashing, belonged to the Wells Fargo bank's loan officer in charge of its movie studio business. The employee who revealed this also remembered cashing the check the previous September.
"She said she remembered it because it was for a large amount," said Robertson, "and because it was immediately converted into money orders - $10,000 in money orders. It was so stated on the code on the check. I asked if she remembered who brought the check in, and she said. 'Yes, it was the president of Columbia Pictures, David Begelman. At that point my jaw dropped to my knees - I was absolutely dumbfounded."
Robertson then consulted with his attorney and they agreed that his only choice was to go the police. Otherwise, he would be vulnerable to future charges that he was an accessory to the facts of a crime that he did not report. This was now the beginning of July. Then, after months of inaction by the Burbank and Beverly Hills police departments, he took the already noted next step of also informing the FBI.
Robertson says he has not been involved further, other than a recent contact from the FBI "just before the SEC's investigation was starting, which they told me about, and said they would keep on top of."
Ironically, Columbia Pictures, in its in-depth investigation conducted before Begelman's restoration, had not bothered to interview Robertson or director Martin Ritt, whose name was also allegedly used for forgery purposes.
Ritt, director of such pictures as "Hud" and "The Front," said he did not know how much money was involved in his case since he had done a number of projects for Columbia the previous year and hadn't carefully sorted through all his records. It was clear to him his name had been used, but Ritt said Columbia never talked to him in its investigation.
The only comment on Robertson's story came from Begelman's attorney, Frank Rothman, who would say only that "essential portions are correct, essential portions are incorrect." "Rothman refused to specify which portions of Robertson's story he considered incorrect.
It could not be determined what constituted the remainder of the $61,008 Columbia says Begelman obtained improperly for his own benefit.
Because of the immense secrecy shrouding the case on the part of the studio, speculation has been rife here about many possibilities, including kickbacks to Begelman from producers. That contention is vehemently denied by attorney Rothman: "That would be totally untrue and a very erroneous charge."
Columbia, in a press release echoed by Begelman in a prepared statement, emphasized that "none of the improper acts involved participation or knowledge of any third parties with whom Mr. Begelman conducted business on behalf of the company or any employee of the company."
As to his "emotional problems," no one has been willing to comment beyond the unsubstantiated but almost universal speculation here about Begelman's gambling habits. Begelman has been put under the care of Beverly Hills psychiatrist Dr. Judd Marmor, a former head of the American Psychiatric Association and known here as the psychiatrist to the stars.
Whether the Begelman affiar has been put completely to rest is doubtful, considering open inquiries. There is a feeling, however, that Begelman and Columbia may be able to ride it out.
Lee Isgur of Mitchell, Hutchins, Inc., who is considered to be Wall Street's top entertainment analyst and who has followed Columbia, predicts that "nothing is going to happen, just because it's a white-collar crime. It's stopped by no one really wanting to prosecute."
Isgur rejects the argument that Begelman had to be taken back because he was so instrumental to Columbia's operations and success.
"The problem with Hollywood is that it is so small, once a guy is in there, he has built up a lot of alliances and tremendous loyalties," he said. "The pressure to reinstate Begelman has more to do with personalities and allegiances and alliances than with sitting back and saying he's the only man for the job. In Hollywood, there is no 'only man for the job.' But it's a place where there's a tremendous amount of symapthy." CAPTION: Picture 1, Robertson: says he received tax slip from studio on $10,000 he never earned. AP; Picture 2, Robertson: says he received tax record slip from studio on $10,000 he never earned By Arthur Ellis - The Washington Post