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Inquiry Dealt With Suspected Payoffs by Conglomerate : Book Says Reagan Was Cleared in '60s Probe of MCA

September 21, 1986|Associated Press

WASHINGTON — During the 1960s, Ronald Reagan was investigated--and ultimately cleared--in a federal criminal probe into suspected payoffs from the Hollywood entertainment conglomerate MCA to Reagan and other officers of the Screen Actors Guild, according to a new book.

As part of the investigation, Reagan's tax returns from 1952 to 1955 were subpoenaed by the Justice Department's antitrust division, author Dan Moldea says in the book, "Dark Victory: Ronald Reagan, MCA and the Mob."

Reagan served as president of the Screen Actors Guild (SAG) from 1947 until 1952 and again from 1959 to 1960.

Parts of the book are based on 6,000 pages of Justice Department documents obtained 2 1/2 years ago under the Freedom of Information Act by Daily Variety. At that time, the entertainment industry publication ran an extensive but largely unnoticed story on the probe.

Part of Antitrust Inquiry

The grand jury was part of a federal antitrust investigation of alleged monopolistic practices by MCA, which was then Hollywood's largest talent agency.

During his grand jury testimony, which is reprinted in the book, Reagan repeatedly said he could not recall details of a 1952 waiver that SAG granted MCA, allowing the agency to engage in unlimited production of television shows.

As a production company, MCA acted as both the employer of actors and their agent, a situation usually regarded as a conflict of interest because an agency is supposed to negotiate the best possible terms for its clients.

Reagan told the grand jurors the waiver--the only one of its type ever granted--was given to MCA to stimulate employment in the TV industry. Employment was down at the time in motion pictures.

Wasserman Mentioned

At the time the union granted the waiver, Reagan was SAG's president and MCA was his agent. Asked during his grand jury appearance whether he had ever discussed the waiver with MCA executive Lew Wasserman, Reagan said he might have mentioned it on social occasions, but that he could not recall.

Dale A. Petroskey, assistant presidential press secretary, said Saturday that the White House had no comment on the report.

Calls to Wasserman's Universal City office for comment were referred to Harold Haas, MCA vice president and treasurer. Haas said he had not seen the book and that "we wouldn't want to comment."

One source interviewed in the Justice Department probe "described Ronald Reagan as a complete slave of MCA who would do their bidding on anything," according to a file memo by the chief investigator in the probe, Leonard Posner. The names of the sources were blacked out when the Justice Department supplied the documents under the Freedom of Information Act.

"Wasserman and (MCA executive Taft) Schreiber could sell SAG anything," another case file document says.

With Reagan's first tour as SAG president at an end in the early 1950s and his film career in decline, MCA arranged jobs for him in Las Vegas and in television. Reagan was paid more than $100,000 a year as the host, program supervisor and occasional star of "GE Theater," the flagship program of MCA's new entry into the television production business.

No criminal charges were brought against anyone in the yearlong antitrust probe of MCA, but the government did break up the corporation, forcing it to choose between movie and TV production or its talent agency. The corporation closed its talent agency and expanded the much more lucrative production end of its business.

Lee Loevinger, assistant attorney general in the antitrust division, said in a memo to the attorney general at the close of the probe: "It was thought at the beginning of the grand jury that SAG might have purposely favored MCA for some illegal consideration. However, the evidence does not show any such improper purpose."

Moldea's book also details what the author says are connections between MCA and alleged organized crime figures.

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