Letter asks Labor Secretary Solis to intervene

More than 100 Screen Actors Guild members have asked U.S. Secretary of Labor Hilda Solis to investigate how SAG disburses money collected from foreign tax revenues.

Signers of the Aug. 17 missive include SAG national board member Clancy Brown, former SAG president Ed Asner, veteran thesps Michael Bell and Peggy McCay, guild activist Michelle Santopietro and screenwriter William Richert (“Winter Kills”).

“What it alleges is startling, disturbing, and extremely serious,” Brown told Variety. “To continue the current investigations seems like an appropriate and reasonable request.”

Duncan Crabtree-Ireland, SAG’s general counsel, said in response, “These complaints are unfounded as the foreign royalties issue has been addressed in litigation against Screen Actors Guild (and also

the DGA and WGA). Not only were all parties satisfied with the outcome of that action, but the presiding judge approved a settlement covering a class of more than 70,000 people — all of whom were notified before the final settlement and none objected. Only one objection was ultimately noted and that single objector was found by the presiding judge to lack standing in this matter and is also one of the authors of these communications.”

A spokesman for the Dept. of Labor confirmed to Daily Variety that the department has received the letter, which was attached to another letter from SAG and WGA member Eric Hughes. Both documents include allegations of embezzlement, tax fraud and money laundering by SAG. “We are reviewing the letters,” the Dept. of Labor spokesman said.

Guild officials have insisted repeatedly that SAG has done nothing wrong in how it handles foreign levies.

McCay said that she’d distributed the letter among her “Days of Our Lives” castmates. Thesp said she’s received only miniscule foreign levies payments over the course of her lengthy career.

“If the allegations are true, it’s really shocking,” McCay said. “I think it definitely should be investigated.”

The letters stem from issues raised in Ken Osmond’s 2007 class-action lawsuit against SAG, which was settled in February. Osmond had asserted when he filed the suit that SAG had over-stepped its authority in collecting the funds for the past two decades and had never disclosed the collection agreements until he and Jack Klugman threatened to file suit.

SAG has asserted that it settled the Osmond suit to avoid prolonged litigation. It declared in its current issue of SAG Actor magazine that it had distributed over $11 million of the foreign funds to members as of July.

The foreign levies are collected from countries through mechanisms such as taxes on video sales and rentals to compensate copyright holders for reuse. The monies began to flow in 1989 after the U.S. agreed to the terms of the Berne Convention, which established the right of authorship for individuals who create works of art. SAG, the WGA and the DGA began collecting the foreign funds in the early 1990s on behalf of members and nonmembers who had a stake in films and TV programs.

Attorneys for the guilds have asserted that previously copyright holders — studios and producers represented through the Alliance of Motion Picture & Television Producers — received all the funds before the guilds negotiated agreements with foreign collection societies for portions of it.

A similar foreign levies suit was filed in 2005 against the WGA West by Richert and was settled last year; another was filed in 2006 against the DGA by William Webb, who settled in 2008.

The letter said that the signers had written to “express serious concerns” regarding the allegations of unlawfully accessing the funds. And it accused SAG of mis-representing that its members have given it the right to collect the funds.

“SAG represents to foreign rights societies that its members have agreed to remit, to designated AMPTP companies, from 50% to 100% of the royalties collected in foreign countries for our performances in U.S. audiovisual works,” the letter said. “Only a society of performers can access these monies.”

The letter also asserted that an investigation by the Dept. of Labor into the handling of the funds had been stalled by the three class-action suits filed against the guilds.

“Nonetheless, the issue of whether the unions have a right to be collecting these monies and allegations of fraud and conversion were not litigated and are outside the scope of the settlements,” the letter said. “There was no discovery, not a single deposition taken, in the SAG case. And there are false and misleading statements in the filings by the union, including the submission of an agreement that SAG claims is a collective bargaining agreement in which the members of SAG assign our right to claim these monies to the companies.”

Attorneys for SAG asserted earlier this year that questions about the legality of the foreign levies agreement were outside the scope of the suit. Only 31 SAG members opted out of the settlement and only a single objection was filed by Hughes on grounds that the foreign levies agreement is illegal. Los Angeles Superior Court Judge Carl West West denied Hughes’ objection, asserting that the settlement contains safeguards against improprieties and pledging that he’ll monitor its execution.

The letter also noted the July 1 raid in Madrid of Spain’s copyright management organization, the Sociedad General de Autores y Editores, in which the chairman and eight people were arrested on suspicion of involvement in a scheme to divert tens of thousands of euros through companies that provided non-existent services.

“It was only weeks ago, when the Spanish national police raided a rights society in Madrid, that we even knew the name of any foreign entity representing our performers rights,” the missive noted.

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