Indecent Exposure Read Free

of the World." The eastern point of the diamond, as one looked at a map, was formed by Paramount Pictures and the ABC studios southeast of Burbank across the hills in the eastern part of Hollywood proper. The western point was the cluster of Beverly Hills, Century City, and the Twentieth Century-Fox studios southwest of Burbank across the hills in the western sector of Los Angeles. The southern point of the diamond was the Metro-Goldwyn-Mayer lot, housing MGM and Uni ted Artists, a forty-five-minute drive south of Burbank in Culver City, not far from the Los Angeles airport.
    Columbia Pictures shared the thirty-eight sound stages and other facilities of The Burbank Studios with Warner Bros. The Columbia executive offices were housed in a striking two-story redwood, tinted glass, and concrete building with a central atrium at the northeast corner of the Burbank lot. The accounting department was on the second floor at the back.
    When Evelyn Christel's letter arrived, the accounts-payable supervisor, Dick Caudillo, pulled the files and found that a check payable to Cliff Robertson had been drawn on September 2, 1976, at the request of the president of the Columbia studio, David Bege lman, the flamboyant former talent agent who had been running Columbia for nearly four years. Caudillo informed Begelman's office of the Robertson inquiry and was told that the money had been paid to Robertson to cover his expenses for a personal-appearance tour that he had made to promote Obsession. The inquiry took two weeks to make its way from Caudillo to David Begelman's office and back. Caudillo forwarded the information to Evelyn Christel on Monday, March 28.
    What he forwarded was not the full story, however. Dick Caudillo, a stocky man in his early thirties, with thinning dark hair, did not tell Christel a curious fact which he found amusing. Cliff Robertson's inquiry was one of dozens of similar inquiries and complaints that had deluged the studio during those late winter and early spring weeks. The furor arose because Columbia, in tightening some of its accounting practices to conform to stricter rules of the Internal Revenue Service, had reported to the tax authorities, via the requisite Form 1099, a substantially greater number of "miscellaneous payments" for 1976 than it had reported for past years. Such payments—to actors, directors, producers, and a host of other people— were a way of life in the entertainment business. In addition to paying the salaries and fees prescribed in contracts for specific services such as directing or acting in a film, the studios also shelled out countless other payments under countless other labels, mostly to retain the goodwill of the recipients. A studio would give an actor $10,000 to cover his "expenses" on a promotional tour, knowing that the expenses would be only a fraction of the $10,000 but not asking for any accounting of unused funds. A director would do some extra work on a picture, and instead of being paid an additional fee, he would be given a new $30,000 automobile. Whether these payments were in cash, cars, or other tender, their tax status historically was in doubt. Theoretically, the payments were taxable, but the IRS never declared them so specifically and the studios rarely bothered to report them to the IRS. The aggregate result was the payment of millions of dollars of tax-free income that was widely taken for granted by those who received it.
    In the seventies, however, the IRS explicitly ruled such payments taxable and also developed more sophisticated auditing methods to detect them. The studios, therefore, began reporting more of the payments to the IRS, with the result that income that had been tax-free suddenly became taxable. Many of the habitual recipients were incensed, and in the early months of 1977—the time for reporting 1976 income—angry letters poured into the Columbia Pictures accounting department. Of course, the recipients of 1099 forms couldn't officially