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WHEN LAVINTHAL MET BEER, PART FIVE: DO YOU SWEAR TO TELL THE WHOLE TRUTH?

Near the end of my time at ABC/Dunhill, there was a grand jury investigation out of Newark, N.J., headed by U.S. Attorney Jonathan L. Goldstein. I was subpoenaed to testify as to how the business had operated under Lasker, who had exited by then.

For two days, I sat in a room with two FBI and two IRS agents as they grilled me about the business. That room was about 30x30 and contained every piece of paper I had signed during the previous five years. I was warned by my attorney to answer everything honestly or face possible perjury charges. Yikes.

One problem arose quickly, as I was the exec who had to sign off on the expense reports of the 40 or so execs who reported to me every week or two, and because there were no corporate credit cards, blank receipts from top bars and restaurants had a big cache. One of the agents, holding a bunch of expense accounts in his hand, asked me, “You know this guy Bill Drake?” I replied that Drake was an influential radio programming executive. “Is he a big guy?” the agent asked. “Yes, he’s quite tall,” I answered. “Is he extremely overweight?” Puzzled, I replied, “No sir.” “Can you please explain, Mr. Lavinthal, how he could have had dinner with three of your employees on the same night?” “I have no idea, sir.” The agent then added that two of these “dinners” took place in Los Angeles and the third was in San Francisco. Humiliated but fearing nothing, I threw my hands in the air.

They told me they wouldn’t ask me anything different when I testified in front of the grand jury, unaccompanied by my attorney. They kept their word—almost—and when I finally testified, the one new question was: had I ever done coke in my time at the label?

I then asked to be excused so I could discuss this question with my lawyer, who was waiting outside the jury room. He told me to tell the truth. So I returned and answered affirmatively.

More than 10 times I answered “Yes” to their questions; more than 50 times I said “I’m not sure.” They excused me after that.

Most thought this probe was a result of the Nixon White House attack on the big three networks, ABC, CBS and NBC, which had humiliated him to the point of resigning as President; the Department of Justice was looking for headlines about sex, drugs, rock & roll and payola.

All this happened on the heels of CBS unceremoniously dismissing Clive Davis for what was believed to be a number of irregular practices involving one of his lieutenants, David Wynshaw. Nothing major resulted from this witch hunt, other than a few indictments of minor players at various indie labels on income tax issues.

A few months later, while I was in the South of France, Jerry Rubenstein called me to say he was going to change the first Poco single to a different track. I caught the next plane back to L.A. and told him he shouldn’t get involved in choosing singles, that we were hot and that I had this shit under control. He said he was boss. I replied, “Why don’t you find yourself somebody else to do my job?” And so he did.

But by that time, all sales, promo, marketing and publicity staff had been reporting to me, and the A&R guys had practically lived at my house in Tarzana as we decided how to break acts and sell the music. The crew consisted of Steve Barri, Gary Katz, Dennis Lambert, Brian Potter, Lee Young and, of course, Harvey Bruce—on the loose with the juice—Ed Michel and Bill Szymczyk, who had previously quit and moved to Denver after an earthquake and a bad tab of mescaline.

Rubenstein replaced me and my team and hired Charlie Minor as head of promo. Charlie exited with Rubenstein in ’77 and went to United Artists with Artie Mogull before heading to A&M, where he ruled for the next two decades.

In retrospect, Jerry gave me the break of my life when he fired me and paid me out (a young John Frankenheimer had done my deal). For a year or so after that, I was looking to become the next big thing. Dick Asher wanted me to move to Paris and run CBS Europe. RCA wanted me to move to NYC and be head of promo—ugh. Alain Levy ended up taking that head of Europe job in Paris. Guess I made the right decision; where is he now?

Meanwhile, Steve Diener (father of Octone Records founder James Diener) was named head of ABC/Dunhill; he would be the company’s last president—ABC sold it to MCA two years later. Steve was a super-smart guy but couldn’t turn the company around after Rubinstein decimated it during the short time he was there. After Minor left, Diener hired San Francisco’s Johnny Barbis as head of promo. 

The story so far.

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