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Film Charity Pulls Out as Beneficiary of Gala

Authorities are looking into an unregistered fundraiser's annual Oscar-night event.

January 26, 2004|Michael Cieply and James Bates | Times Staff Writers

A long-running Oscar-night charity gala suffered a blow last week when movie director Martin Scorsese's Film Foundation abruptly pulled out as the beneficiary after being questioned about the event by California law enforcement officials.

The "Night of 100 Stars," in its 14th year, is set for Feb. 29 at the Beverly Hills Hotel. The black-tie gala, organized by former sports agent Norby Walters, has become a popular stop for second-tier celebrities.

A spokeswoman for the Scorsese foundation declined to give a reason for its withdrawal from the gala after six years of involvement but said foundation officials had recently been questioned about the event by representatives of the California attorney general's office, which oversees fundraising in the state. The spokeswoman said the foundation had only recently learned details of the benefit's finances.

A spokesman for Atty. Gen. Bill Lockyer said Sunday that the office was "reviewing the event" but wouldn't elaborate.

Since 1998, the "Night of 100 Stars" has raised a total of about $400,000 for the Film Foundation, a New York-based philanthropy headed by Scorsese and a board that includes Steven Spielberg, George Lucas, Francis Ford Coppola, Sydney Pollack, Robert Redford and others. Past attendees at the Academy Awards-night event have included Judd Nelson, Tom Arnold, Harry Hamlin, Bridget Fonda, David Hasselhoff and Anna Nicole Smith.

Walters said Sunday that he planned to go forward with "Night of 100 Stars" as a private party, with no money going to charity.

"The show goes on," he said. "I'm going to invite everybody for free. This is my party for 150 actors."

Walters said the Film Foundation, dedicated to film preservation and artists' rights, hadn't explained why it had decided to stop participating. "I can't figure it out," he said. The promoter said foundation officials had recently asked him for financial details but said he wasn't aware of the state probe.

Scorsese is named on a solicitation card for the $1,000-per-ticket event and was prominently featured on its website until last week. The foundation spokeswoman, who stressed that the foundation itself wasn't the subject of any of the questions by state officials, said it appeared that neither Scorsese nor any of the foundation's directors had ever attended the event.

According to the spokeswoman, Walters had recently informed the group that he compensated himself by keeping the difference between what it costs to put the benefit on and the payments he receives from the event's underwriters, with the foundation getting proceeds from ticket sales.

This year's solicitation card identifies the underwriters as Chicago-based Driehaus Capital Management Inc. and Valencia-based DVD maker Future Media Productions Inc. Walters estimated their total contribution this year at $150,000.

In financial statements filed with the city of Beverly Hills, Walters reported paying himself a fee of $10,000 in 2002; a similar fee was recorded for an unnamed person on last year's statement.

Lockyer's spokesman said Walters hadn't registered with the state as a fundraiser for hire, but declined to say whether officials believed he was obligated to do so. State law generally requires those who raise charitable funds for compensation to register and file reports with the attorney general.

A review of financial statements filed by Walters with the city of Beverly Hills shows that in past years, as many as 90% of the gala's guests have attended for free. In 2000, for instance, Walters gave 400 complimentary tickets to actors and their guests and 80 to the press. Just 72 people paid the average ticket price of $650, yielding a relatively modest $47,000 in donations.

Hollywood philanthropy has come under increased scrutiny in the last year after state and federal officials filed a civil complaint and criminal charges against charity promoter Aaron Tonken.

Tonken pleaded guilty in December to defrauding charities and is awaiting sentencing.

Lockyer has said he planned to propose an overhaul of state laws governing charity events, hoping to curb gifts to stars and other practices that surfaced in the Tonken investigation.

A onetime friend of Tonken's, Walters sometimes assisted Tonken -- and occasionally lectured him on the uses of star power. "You, better than anyone understand the power of stars & celebrities," Walters once counseled Tonken in a nine-page, handwritten memo. "Whether you net $100,000 or $1 million, YOUR party is YOUR party."

Speaking on Sunday, Walters acknowledged making a modest profit from his own annual gala in most years.

"I don't have a problem being compensated," Walters said. "The money that goes to me is whatever might be left over. From $8,000 to $14,000."

Walters confirmed that he wasn't registered with the state as a charitable fundraiser, but said he filed annual financial statements with the city of Beverly Hills.

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