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Report finds WGA has distribbed foreign levies

KPMG review sez guild has collected $100 mil over 20 years

The Writers Guild of America has distributed over $100 million in foreign levies over the past two decades, according to a recently completed report by the KPMG consulting firm spurred by the long-running legal challenge to the guild’s handling of such funds.

The report, triggered by the 2010 settlement of a class-action suit by William Richert (“Winter Kills”), will be posted on the WGA website within the next few weeks, according to attorneys who participated in a status conference Tuesday in Los Angeles Superior Court.

“The report confirms the success of the program, which has distributed $104 million to writers over 20 years,” the guild said in a statement after the hearing. “If it wasn’t for the efforts of the WGA West, this money would have remained in the hands of the foreign collection societies.”

Richert’s 2005 suit alleged that the Writers Guild of America had not properly handled foreign funds due scribes as compensation for telecasts and other exhibition of writers’ works. The settlement required the WGA use its “best efforts” to pay all foreign funds within three years and issue a report by a Big Four accounting firm to review the foreign levies from their inception in the early 1990s.

The settlement, signed by Judge Carl West, also required an annual review of the foreign levies program as part of its official annual report to members. Richert attorney Neville Johnson raised concerns during the hearing that the annual report would fall short on details, adding that the foreign levies programs operated by the guilds were kept under wraps for 15 years.

“I don’t want to see just one number,” he added.

WGA West general counsel Anthony Segall asserted in response that the annual report will contain a significant level of detail about the program, equivalent to the KPMG report.

The WGA West disclosed in its last annual report in July that it was holding $25.4 million “due to members” without breaking out how much of that is from foreign levies. The levies for U.S. creatives began to flow after the U.S. agreement in 1989 to terms of the Berne Convention, which establishes the right of authorship for individuals who create works of art, and are handled by collecting societies.

West has also supervised settlements of class-action foreign levies suits that were filed against the Screen Actors Guild by Ken Osmond and the Directors Guild of America by William Webb.

Tuesday’s hour-long hearing was devoted largely to arguments between Johnson and Daniel Schechter over the adequacy of the DGA’s single-page yearly accounting of the program. “They are not complying with the spirit of the settlement agreement,” Johnson said.

Schechter asserted that Johnson had not raised the issue during the first three years of the settlement and accused Johnson of being inconsistent. “Counsel would like to re-write the terms of the settlement,” he added.

West said in response that it appears that the two sides are at an impasse and asked Johnson to file a written motion with the court spelling out his objections. He set a March 16 hearing.

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