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How Deborah Dugan Sealed Her Fate at the Recording Academy

Deborah Dugan’s ouster from the top job at the Recording Academy, just ten days before the Grammy Awards, was a shock to nearly everyone not directly involved in the decision. But according to multiple sources and the bombshell complaint her attorneys filed on Tuesday, she and the Academy establishment were working at cross purposes almost from the outset, and tensions had been escalating dramatically for months.

Hired last year after the Grammys had undergone a wave of criticism in the wake of former chief Neil Portnow’s “step up” comment in 2018, Dugan seemed to be exactly what had been recommended by the Task Force for Diversity the Academy appointed in the wake of the significant diversity issues laid bare by his misspoken but telling words: A decisive and experienced — and female — executive and attorney who spent nine years in the music industry but had been outside of it for the past 20, working as chief of Disney’s print publishing division (where she oversaw a staff of 1,000) and then as CEO of U2 singer Bono’s (RED) charity.

Over three separate interviews with Variety in November and December, she spoke optimistically about the changes underway at the Academy and looked forward to her first Grammy Awards as president and CEO with a mandate for change, a perspective that was reflected in a glowing Los Angeles Times article (and a Variety feature that was yanked from our Grammy issue, literally as it was about to be printed).

Yet the complaint filed by Dugan’s attorneys makes the organization sound like a horror show. Included in the long list of allegations are claims that her predecessor, Neil Portnow, allegedly raped a female artist (and Academy executives were aware), a claim he has since denied; that Joel Katz, a prominent attorney who has been part of the Academy’s inner circle for decades, attempted to “woo” and kiss her after a private dinner, a claim he has since denied; “egregious conflicts of interest, improper self-dealing by Board members and voting irregularities with respect to nominations for Grammy Awards”; millions of “exorbitant and unnecessary” fees paid to outside law firms; and that her emails were being monitored and shared with Academy executives by her assistant, Claudine Little, who was previously Portnow’s assistant. (Also in there: that she was asked to provide Portnow with a $750,000 consulting contract after his departure.) These concerns had been sent by Dugan in a memo to the Academy’s head of HR; three weeks later, she was placed on administrative leave amid a series of strongly worded but vague accusations of misconduct. That both parties were able to keep the festering problems under wraps for so long — Dugan’s allegations date back to May of last year — is in itself remarkable.

One very high-level executive outside the Academy who worked closely with Dugan spoke positively of his experience to Variety the day after her ouster, describing her as a “very capable, refreshingly decisive” exec who “wanted the Academy to stand for more than just the Grammys.”

Dugan herself gave no indication of trouble to Variety during our interviews in November and December, when the situation was rapidly reaching its peak.

“I’m approaching everything with a beginners’ mind,” she told Variety at the Grammy nominations ceremony on November 20 — long after things had begun to unravel. “I need to go through the Grammy process once to see it in its totality, and each step of the way I’m taking notes and starting to work on that change. It’s been good, although it’s not an easy job,” she laughed, “and there’s still much to do, but I’m only getting good feedback and I feel really good about the direction.” That, however, was only one of two statements in nearly three hours of interviews that seems disingenuous in retrospect.

So is the accurate scenario that, as Dugan supporters claim, an agent of change was blocked from making those changes by an entrenched hierarchy that outwardly said it wanted change but actually wanted things to go back to the country-club, insider-dealing culture that has been in place for decades? Or was a new boss coming in with outsized ideas that were impractical for the organization and its staff?

The two scenarios are hardly mutually exclusive, and according to multiple sources, both are accurate: The Board of Trustees, where the Academy’s power lies, was opposed to the changes Dugan felt she had license to make — but she lacked the internal support, even if some may have agreed with them — and her Silicon Valley-tinged approach clashed hard with the comparatively staid and slow-moving organization she was trying to modernize. Through it all, there is talk of her failure to enlist support and take the existing staff seriously — particularly Claudine Little, the assistant she inherited from Portnow, who by all accounts is the person who brought the allegations of misconduct against her.

Whether or not those allegations are valid, whether or not they might have been brought against a man, whether or not they’re being exaggerated in order to discredit if not demonize Dugan in an effort to bring validity to her ouster, one thing is clear: Dugan faced formidable foes in both the entrenched Academy hierarchy — which loosely includes key Board members and longtime attorneys Joel Katz and Chuck Ortner — as well as Little, whose tenure with the Academy reaches back to the 1990s and is by many accounts one of those “assistants” who not only knows where bodies are buried but how deep. “She’s loyal to a fault and the keeper of many secrets, I am sure,” one Academy veteran says. “She has been the lone female in that kingdom for many years. And when you get on Claude’s bad side — uh-oh….”

The narrative coming out of the Academy focuses on Dugan’s alleged misconduct against Little — which, while inflammatorily worded, on the face of it amounts to her being rude or dismissive — yet the bigger picture points to her inability or disinclination to enlist support from the source she most needed to enact the change she thought she’d been empowered to make: the Board.

“She didn’t make any friends,” one insider says. “It’s too bad, because when you are someone like her and people say they want you to make change, you are supposedly empowered by that task,” not to mention the Task Force, nearly all of whose recommendations Dugan immediately implemented. “But if they don’t really want any change, you’re screwed.”

“I know the Board couldn’t stand her,” another says.

So how did things between this agent of change and the Grammy brass that selected and elected her unravel so quickly and so bitterly? Variety sources and the complaint provide a rough timeline of events.

APRIL-MAY
According to sources and the complaint filed by Dugan’s lawyers, the problems began as soon as she was approved by the Board last spring, and the news was immediately leaked to the press on April 12 — suspiciously, Dugan claims in her complaint (sources say the leak came from a disgruntled Academy executive and took even the staff by surprise). During contract negotiations, “Ms. Dugan asked to be paid commensurate with the compensation received by Mr. Portnow, [but] her request was rejected and she was told that she should be happy to be earning more than she had in her previous role,” her complaint notes. According to the Recording Academy’s most recent tax forms — it is a a 501(c)(6) tax exempt non-profit organization — Portnow’s compensation topped $2 million in certain years and was usually in the $1-2 million range.

A source with knowledge of Dugan’s contract with the Academy says it was a three-year deal for either $1 million or a low $900,000 figure annually with bonuses (and, significantly in retrospect, eight months’ severance). “After the ‘step up’ fiasco, I doubt they would want to pay her much less than Neil was making. The Board wouldn’t want it publicly known that they were paying their first female [leader] considerably less.” (That arrangement is likely the “several million dollar” settlement that an unnamed Academy representative reported to Billboard.)

Regardless, they agreed upon terms, the contract was signed and announced on May 8, with a start date of August 1. Also in that month, the complaint states, she learned of the rape allegation against Portnow (which he has said was investigated and exonerated him) and the multimillion-dollar fees being paid to outside law firms associated with Academy insiders Joel Katz and Chuck Ortner. In her first week, according to the complaint, she was asked to approve a payment to Ortner of $250,000 for “consulting” services, and was told by [Board chair Harvey] Mason that “the future of the Recording Academy is in Joel Katz’s hands.” On May 18, according to the complaint, was the dinner at which Dugan claims Katz attempted to kiss her.

Dugan’s complaint alleges that beginning around this time, her email (presumably her Academy account) was being monitored. However, one insider tells Variety, “The email [monitoring] wasn’t as nefarious as it might sound,” the person says, without excusing the practice. “From what I’ve heard, [Dugan] wasn’t very careful about what she said in her emails, and apparently there were a few ‘These people are morons’ comments that got shared with the people she was talking about. The emails were used more to turn people against her.” Still, if true, the practice likely provided an intimate and detailed look at Dugan’s plans and opinions.

JULY-AUGUST
In July, Dugan, her daughter and mother relocated to Los Angeles. A source tells Variety that shortly after their arrival, Dugan’s house was broken into, and despite the presence of several expensive items, only a computer was taken.

The Academy’s statement on Dugan’s appointment said that Portnow would remain on Board for a period of transition, although his last day seems to have been July 31 — the day before Dugan took charge. Sources say this was due to her denial of a $750,000 consulting fee for him; although Portnow denied “demanding” such a payment, the complaint alleges that she was asked to approve it by outgoing Board chair John Poppo, who was replaced by Mason.

Asked about how involved Portnow was in the transition, Dugan said, in her second possibly disingenuous comment, “He was very helpful, he stayed until August 1. and I think on the 31st there was a big celebration for him. I started on August 1, so there wasn’t overlap in working but he was available if I needed him, and we went to a lovely lunch, so he was,” she paused, “fine in the transition.”

OCTOBER-NOVEMBER
As Dugan worked to plan the agenda of change she believed she’d been charged with, her relationship with Little declined. Sources and the complaint speak of Little’s inability to work with certain office software such as Outlook and her failure to forward messages to Dugan, among other issues. The complaint alleges that Dugan attempted to find another role at the Academy for Little, who went on leave late in October, with an expected return date of late November, although to date she has not returned to the Academy.

But despite the addition of new officers, including Mason as chair in 2019, it was largely the same Portnow-era Board to which Dugan presented her new org chart and proposals for dramatic change in early November. There, the escalating situation came to a head. At this meeting, according to sources and the complaint, she “highlighted many aspects of the ‘boys’ club’ culture at the Academy and proposed ways in which to increase diversity, including ‘creating a culture of diversity, setting a goal of a ‘50/50 gender balance’” at the Academy, among other goals.

Closer to home, sources say her proposal also included the addition of an in-house attorney, with outside legal bills significantly scaled back, as well as “cutting Board positions in Los Angeles, New York and Nashville,” one source tells Variety. “Those are all huge and powerful chapters, and I know she was looking at staff salaries and positions as well.”

Another source said, “I can’t imagine any Board member being on Deborah Dugan’s side,” with regard to the changes she proposed.

After her presentation — which multiple sources say was met with a significant lack of enthusiasm — the Board went into “executive session,” common in not-for-profits, and Dugan was required to leave the room. While the complaint casts this move in an exclusionary light (“following Ms. Dugan’s presentation, the Executive Committee of the Board held a meeting and specifically excluded Ms. Dugan”), Academy sources say the procedure is standard. But during that session, sources say the Board rejected her proposal — and voted to give Katz and Ortner raises of around $100,000 each, bringing their annual salaries into the half-million range (that move is referenced less specifically in the complaint).

After the meeting, a source says Dugan met with Katz in an effort to work out an exit strategy. “It was her frustration with them not allowing change to happen: She’d take a few steps forward and they’d pull her back,” the source says. “So she said to him, ‘You’re not going to let me do what I want, so let’s figure out an exit.’”

On November 20, Dugan and Mason appeared on “CBS This Morning” with Alicia Keys to announce the 2020 Grammy nominees. Dugan’s speech was awkward — “I’m so nervous!,” she said at the beginning — but her conversations with reporters afterward were focused and positive.

Asked about the nominations, Mason told Variety, “We’re really aware of the membership and working to make sure it reflects the music ecosystem, reflecting all genres, genders, regions — that’s really a focus for us,” he said “I think a lot of things really trickle down from that, so having a relevant and reflective membership is really important.”

On November 25, the executive committee confronted Dugan about “the Little situation.” According to the complaint, “Dugan calmly explained the situation to the Executive Committee and invited HR to further explain the circumstances. At the time Ms. Little had not even made a legal claim; she was simply out on leave (a leave that was being managed by HR).

“The Executive Committee then started critiquing Ms. Dugan for random things,” it continues, “including her decision to hire certain consultants and to limit the participants in certain meetings to individuals who actually needed to be in the room (rather than the entire male dominated leadership team).”

DECEMBER-JANUARY
On December 9, according to the complaint, “Dugan received an email from Harvey Mason, the Chair of the Board. Most notably, the email stated that Ms. Dugan, who was the CEO of the Academy, was no longer permitted to hire or terminate staff members without Board approval. The Board also prohibited Ms. Dugan from assigning any new initiatives or special projects to staff members for at least two months. Ms. Dugan was also prohibited from choosing outside counsel.”

On December 11, Variety interviewed Dugan at the Academy’s offices. During the conversation, she was energetic and optimistic, taking this reporter on a brief tour of the offices, where she spoke of several different ideas to brighten its rather staid atmosphere, and talked at length about her plans for the show and the Academy, all the while saying she wanted to go through a Grammy cycle before making big decisions. At no point did she or any Academy staffer mention the situation that was rapidly reaching a boiling point.

On December 16, Dugan replied to Mason’s letter and contested several of its points. The complaint says that on the following day, “Ms. Little’s attorney sent the Academy a ‘demand letter’ that falsely accused Ms. Dugan of being a bully,” and that “Despite knowing full well that the claims were completely frivolous and bogus, Ms. Dugan was warned by Mr. Katz to “get [her] own attorney.”

On December 22, according to the complaint, Dugan sent an email to Academy head of HR Shonda Grant — the “memo” that laid out many of the allegations that later appeared in her complaint. They included her claim that she was sexually harassed by Katz, that “the Academy requested that Ms. Dugan approve a $750,000 consulting fee to be paid to her predecessor,” the “inherent conflict of interest arising out of the fact that the attorneys that represent the Academy (and make millions of dollars doing so) also represent individual Board members and members of the Board’s Executive Committee (the very people who are approving the payment by the Academy of millions of dollars to these attorneys),” and that those fees were “plainly exorbitant for a not-for-profit company the size of the Academy,” and, most significantly to the public, “The fact that the Board is intimately involved in the Grammy voting and awards process.”

On December 24, Dugan’s attorney, Bryan Freedman, put the Academy on notice of her intention to pursue legal claims, according to the complaint. “Over the following weeks,” it continues, “Mr. Freedman and counsel for the Academy, Tony Oncidi, Esq., with Proskauer Rose, attempted to work out a resolution of Ms. Dugan’s claims.”

Despite how bitter the situation had become, the complaint says that an amicable exit was nearly reached. “In fact, the parties were relatively close in negotiations and had nearly arrived at an agreement in principle. However, the Academy ultimately backed out of the deal. Mr. Mason then presented a new unfavorable deal to Ms. Dugan, and demanded that she accept within the hour.”

Sources say an initial settlement of around $8 million was discussed — which is in line with the amounts sources say was in her contract — but then the Academy withdrew that offer and replaced it with one significantly less. That is apparently when the situation began its move into open warfare.

“Ms. Dugan did not accept the Board’s revised settlement proposal and, immediately after the time to accept expired, the Board made the blatantly retaliatory decision to put Ms. Dugan on administrative leave,” the complaint reads.

And here we are.

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