Silence settled behind the towering walls of Sony Corp.’s tortured movie empire Tuesday, as Sony Pictures Entertainment and Columbia stoically withheld comment on alleged Hollywood madam Heidi Fleiss.Not since the David Begelman check-forging scandals at Columbia 15 years ago has the “no comment” policy been so pervasive. Most Columbia executives will not talk even off the record and will not even acknowledge the words “no comment.” Many in Hollywood are convinced that the passive stance taken by both companies has served to heighten the focus on SPE and Columbia. “They have failed to respond, which in crisis management is the worst thing you can do,” said one top marketing executive at a rival studio. Columbia and Sony corporate insiders insist that the two companies have no option other than silence for now. They say it is far too risky to comment on where the investigation is centered or how it will end. Sure enough, SPE and Columbia’s quietude has failed to stop waves of speculation and an investigation that have pursued the Culver City-based movie companies for more than three months. Levels of confrontation While denial is the order of the day among the majority of executives and the rank-and-file, the Fleiss situation confronts Columbia and Sony Pictures externally and internally on at least four separate levels: o The Fleiss affair adds another hurdle in Columbia’s bid to repair strained creative relationships; o It raises questions whether parent company Sony USA will act on the situation; o It represents another public relations nightmare for two companies — SPE and Columbia — with troubled corporate images; o And internally, the ongoing investigation into the Fleiss situation forces SPE and Columbia into an uncomfortable position of investigating members of its own corporate family. Reports of an ongoing investigation have been confirmed, but the failure of SPE and Columbia to answer key questions has insiders questioning whether the investigation is being conducted in the interest of full disclosure or damage control. Columbia senior veepee of publicity and promotion Mark Gill and a spokesman for SPE declined comment on all aspects of this story or the investigation. Indeed, the few details about the internal investigations at Columbia that can be fleshed out were as spooky as the rest of the Fleiss situation. Sources corroborated Tuesday that what was described as a “white-hot spotlight” has been turned on a couple of sectors within the Sony Picturesempire , including a possible television connection, but the source declined to elaborate further. The statements match those made Monday by a highly placed executive on the Sony Studios lot, who said the investigation had widened to cover a large swath of Sony movie and television operations. Daunting task The same highly placed source said Monday that investigators looking into Columbia and Sony face a daunting task in looking for expenditures for vice purchases. However, that source had no direct knowledge that such expenditures existed. Sources assert that any Sony investigation of possible improper expenditures has turned toward corporate expense accounts, expenditures for company parties and special events, and line items in the budgets of negative pick-ups and mainline productions. Again, Col and SPE had no comment. Ironically, the no-comment stance matches the position taken by Columbia Pictures the last time it was immersed in scandal. In 1978, the studio attempted to keep the lid on allegations by actor Cliff Robertson that studio head David Begelman diverted funds. The Wall Street Journal and the Los Angeles Herald-Examiner eventually rendered the damage control moot when they brought the extraordinary scandal to light, bringing down an entire studio regime in the process. The current negative publicity does not seem to have translated into negative box office, as SPE and Columbia have seen strong showing for such recent releases as “In the Line of Fire” and “Poetic Justice,” even in the face of incredible distractions. Strained relations But production at the company has been thwarted by a lack of development dollars and strained relationships with screenwriters and filmmakers. It’s left new president of production Lisa Henson with the formidable task of filling a pipeline for embattled Colpix chairman Mark Canton. Many SPE and Columbia execs now quietly insist that the companies have cultivated corporate cultures conducive to public disaster. In the 22 months since Canton replaced Frank Price, Colpix has in fact been involved in more than its fair share of public imbroglios. For example, there was Canton’s bid to take credit for the box office performance of director Penny Marshall’s “A League of Their Own,” an aborted marketing plan to launch a rocket in support of “Last Action Hero” and, once the Arnold Schwarzenegger picture was released, marketing and distribution president Sid Ganis made roundly disputed statements that the studio was “very happy” with the box office gross generated by the fiscal disaster. The overall impact of such situations has led to hard-hitting stories and items reported by several major publications and broadcasters, including Newsweek, Time, Premiere, CNN and the L.A. Times. Studio execs wince when they see Time magazine slotting Columbia in its “Loser-of-the-Week” column alongside the Menendez brothers, or when the Los Angeles Times suggests that Columbia is populated by “not nice” people. Ironically, it was a move by Columbia Pictures president of production Michael Nathanson to confront head-on rumors about the studio and his character that proved one of the major breaks in the Fleiss story. Nathanson, a studio veteran who has worked for five separate Columbia regimes , went on record with the Los Angeles Times on Aug. 4 to say through attorney Howard Weitzman that he has “not done anything that should cause any concern on behalf of Columbia … It’s time he confront the rumors, put them to bed, and get on with his life.” Fleiss has also gone on the record with Daily Variety denying any involvement with Nathanson. Apathy questioned A healthy contingent of Columbia executives and rank-and-file now question why SPE and Columbia failed to rally around Nathanson before and after the statements. They chose instead to have Canton, Ganis and spokeswoman Marcy Granata participate in what was perceived by Nathanson supporters as a negative story about the executive published on Monday. Others counter that Nathanson signed off on the company’s news release. SPE and Columbia sources insist that any conclusive findings in its corporate investigation will yield action, as it moves to eliminate anyone implicated in mixing corporate dollars and vice. They respond that any individual involved in diverting company funds will be “cut out like a cancer.” Meanwhile, a company quakes in a muffled panic at what may be nothing more provocative than silence behind studio walls.
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