Clive Davis Ousted; Payola Coverup Charged - Columbia Records president is fired by CBS amid allegations of misuse of funds and providing drugs to artists and disk jockeys

 

Clive Davis Ousted; Payola Coverup Charged

Columbia Records president is fired by CBS amid allegations of misuse of funds and providing drugs to artists and disk jockeys

 

 

NEW YORK—Clive J. Davis, as president of Columbia Records, was always proud of long-term agreements. Miles Davis and Johnny Cash, Leonard Bernstein and Chicago, Barbra Streisand and the Byrds. He fought, with big money, to keep Laura Nyro at his label, and he refused to believe that Dylan was out of his contract for a year after the fact. He took enormous pleasure in what to him must have been no less than resurrections, born of his own personal patience, of Johnny Winter, Blood Sweat & Tears, Santana, Sly Stone, and Paul Simon and Art Garfunkel.

Davis himself had a long-term agreement with CBS Incorporated: a five year contract stretching to April 14th, 1975. At age 40, he was the commander-in-chief of the largest record company in the world; for his efforts, which kept him at his office on weekends and holidays, he earned $135,000 a year; his contract also provided “incentive” bonuses adding up to $250,000 over three years. And last year, there was “additional compensation” of $74,000 for a total of $359,000. Not bad for a man from the Bronx whose first favorite music came from Make Believe Ballroom on his radio; whose primary goal in life, once, was to be a good lawyer. Clive Davis was proud of himself.

Today, the president is in seclusion, excepting meetings with a criminal lawyer; he has been asked to face a grand jury probe into interstate heroin trafficking and possible connections between payola-by-drugs and Columbia Records. Clive Davis has been fired by his company and sued for alleged personal use of company funds; his contract is null and void; he has been depicted by a CBS officer as a “culprit” found involved in “hanky-panky”; he has been fingered by a once-loyal executive assistant as the man responsible for authorizing the practice of payola at Columbia Records.

And so payola joins Watergate on the front pages, Columbia has its own potential Watergate, and the record business has the shakes, almost as bad as Alan Freed had them when the first government payola investigation began 14 years ago.

* * *

Hello, I’m Clive Davis, President of Columbia Records.” Seven nights in a row, from Sunday, April 29th to the following Saturday, Davis, dressed Palm Springs style in white suit and matching white patent leather shoes, acted as MC for Columbia’s “A Week to Remember.” The idea was another of Clive’s prides, the fact that his was indeed a full-line label, strong in classical, country and jazz music as well as middle-of-the-road pop, hard rock, and, especially since last year’s distribution deal with producers Gamble & Huff, Philadelphia’s black entrepreneurs, soul music. It was a show of eclecticism, and all for charity, the profits going to the Park Century School in Los Angeles. The company also taped the 21 acts for a film to be shown at their annual sales convention in July.

Davis took a 20-minute ride out to the theater in downtown L.A. every day that week. He would go to the box office and become upset that only five of seven shows sold out completely for such a small (2,400-seat) theater. He blamed the flaw on the Ahmanson Theater itself, for not putting advance tickets on sale until opening night. He checked sales every hour so that he could coordinate promotional activities and advertising. He gave an interview to the L.A. Times the week before, and the story hit the entertainment section’s front page on Sunday, just right: CLIVE DAVIS——MIDAS TOUCH ON COLUMBIA LABEL. The story, written by Robert Hilburn, would be hailed by radio tip-sheet publisher Kal Rudman as “fantastic” and “breathtaking.” Clive must have known, even as he shook hands with each impressive act. He must have known, even while changing outfits between concert and press party, while watching the lines form each day, that he was in trouble.

The first rumors had begun to fly during “A Week to Remember.” David Wynshaw, 52, Vice President of Artist Relations at Columbia, had been busted. He’d been locked out of his 12th floor office a couple of weeks ago, and there was talk about prostitution and drugs. The FBI, the rumors said, had invaded CBS’ black skyscraper and seized files from Wynshaw’s office, and CBS had “cordoned off” the room and fired the 11-year veteran.

Wynshaw, it was said, was close to Clive Davis, and was variously known around the company and in the business as Davis’ “royal procurer,” or “Clive’s pimp,” or “the all-around Dr. Feelgood.” He had, the hearsay went, been moved over to “Special Projects,” and took care of conventions, providing any necessary “entertainment” for Columbia executives and favored guests. He worked with hotels and travel agents, sometimes handling conventions of 1,000 people. In that capacity, it was said, he——and probably others at Columbia——was involved in some computer scheme. “All billings,” one source said, “come out of a computer. When needs exceeded what was budgeted for his department——you couldn’t keypunch drugs and broads——he’d program for reimbursement, and the computer would program an OK.” The excesses, the source said, were rumored to have reached $500,000. And the operator, it was said, had to have either received authorization from higher up, or been guilty of outright embezzlement.

Clive Davis was on his way to Japan for a meeting with executives of Columbia’s sister label there, CBS/Sony, when the Wynshaw story broke. He canceled the meeting, and Columbia heads already in Asia jetted back to New York.

“The hierarchy at CBS is very concerned about being involved in a scandal,” one inside source said at the first outbreak of news, “and already, Clive’s action has been very circumscribed. He’s already very inhibited.” The black skyscraper took the shape of a clam. Everyone at CBS knew something of the story, but few knew the details.

Wynshaw’s name had come up in connection with a dealer of hard drugs; he’d been traced by wiretap on the office phone, it was said. There was a receptionist involved, “and she implicated Dave.” And more people, the rumors went, had either been busted or would be arrested soon.

Ira Sherman, assistant to Dave Wynshaw, said he wasn’t at work the day his boss disappeared. But, he admitted, “agents——either the FBI or our own security guards——have constantly been in there.” Sherman described Wynshaw——who was given a new title, “Senior Director of Special Events,” just five months ago——as “a real big person, with a big way around him. He was known at all the major clubs; he presented a diamond pinkie-ring image, but he wasn’t a seedy character, wheeling and dealing. He was a good person and probably didn’t deserve the treatment he got. He would forego weekends with his family rather than leave something to be done.”

Wynshaw, Sherman said, had been eased out of his old Artists Relations post with the growth of rock & roll at Columbia. He had recently been dealing with “MOR” artists and, mostly, special projects. “Conventions, meetings, parties. He worked with Clive on many events. The relationship between Clive and Dave? God knows how close they were.”

As for possible involvement in a hard-drug racket, the assistant said the rumors were a “shock. David’s stand on dope was, I wouldn’t even mention marijuana to him out of respect for him. He perhaps knew a couple of these people by the kind of work he did, but he was one of the straightest people I know.”

An early suspicion around CBS was of a cover-up, of some unknown scandal. “Possibly somebody did implicate David,” said Ira Sherman. “He had a certain amount of power. Maybe the company decided that rather than uncovering anything heavier, they should nip it in the bud.”

Columbia Records issued no statement on their dismissal of their 11-year veteran. “He resigned,” said Publicity Director Bob Altshuler, six weeks after the fact. “I don’t know why; I gather it’s because of an investigation going on. He may have been linked to someone under indictment; it might be a guilt-by-association kind of thing.” He dismissed all the rumors. “When I came back from Los Angeles,” he said, “there were rumors going around New York that there were all kinds of changes. I checked it out, and there was absolutely no truth to it at all.” What about the receptionist? He admitted that she was “somehow linked to Dave,” but that she was fired “a long time ago.” (She had been fired a month before the drug raid in which she and the manager of two Columbia acts were indicted.)

We asked Altshuler, long-known in the business——despite his own vehement denials——as “Clive’s PR man,” to ask his boss for more information on possibly the most scandalous incident in Columbia Records’ long, proud history. He complied, and reported back in half an hour with certain relief: “I can say to you that there are no drug charges, no narcotics involved, and he is not under indictment.” CBS, he said, was checking out a charge of misappropriation of funds. “When the study began in earnest, he decided to resign.” (Wynshaw, talking later about the case, gave a different version, basically confirming the rumors. He’d been called out of a restaurant April 9th to face Davis and two company attorneys, who told him about their discovery of some allegedly falsified invoices. He was then asked to leave the president’s office, and the next day he was fired and told by Davis not to go to his office.)

Altshuler reiterated: “There is no connection between Columbia and a drug charge or a drug bust. I say that as flat-out as I can say it.” Vice President of Marketing Bruce Lundvall corroborated Altshuler: “I haven’t the vaguest as to what’s going on,” he said. “I understand he was in a great disagreement over a personal matter and he’s gone.” Wynshaw had been reporting to Lundvall for the past year and a half, but, the vice-president said: “I haven’t been given much explanation. He had a very high profile in the industry and suddenly he’s gone.”

Neither Lundvall nor Altshuler chose to reveal, at that time, that another Columbia employee was in trouble. Tony Rubino, Director of Marketing Administration & Budget Control, had been asked by Lundvall to take a leave of absence the day after Wynshaw’s dismissal. He was the man who had (incidentally) hired the mysterious receptionist; now, his office was locked, and he would be officially fired in late May, just before Clive Davis. Rubino, Lundvall explained, “was a staff statistical kind of person,” a man who handled bills and sent them up for ultimate approval. And, finally, there was Jack Gold, who was replaced as head of West Coast A&R by Davis’ order. In his place, Davis appointed Ted Feigin, former co-founder of White Whale Records (the Turtles) and, most recently, personal assistant to Clive Davis. Gold’s departure——he would become an independent producer, it was announced——was in no way connected to the growing scandal; the veteran producer had long been plagued with Hodgkin’s disease, and the West Coast office had been lagging for over a year, with Davis himself assuming most of the A&R authority by making frequent trips to California.

“That’s what’s so startling about this whole thing, this arrogance that he had,” said one Columbia employee on the West Coast. “Clive maintained the same timetable of his business. The week at the Ahmanson, the restructuring of the West Coast, negotiating with millions of artists. He thought the whole thing would just go away.”

Clive Davis spent the week before the Memorial Day weekend conducting business as usual. On Wednesday, May 23rd, he conducted a singles meeting, the weekly roundup of two or three dozen Columbia heads to hear the latest product. As always, Clive played DJ, sitting at the head of the long table, ordering up the tracks from an engineer in an adjacent booth.

Davis saw the singles meeting as a vehicle for getting information out to as many key people as possible at once. The director of promotion would recite a list of recent releases and long lists of radio stations programming each single. Those that were followed by short lists would elicit questions from Davis; suggestions on promotion, advertising, tying in concert and TV appearances. Staffers would nod and make notes. Other guests——Columbia artists and producers; newer employees in the lower ranks; newly appointed higher-ups (like Steve Harris of Artists Development, moving into Dave Wynshaw’s old area of responsibility)——could see just how the Music Machine functioned. “It’s a good learning process,” Davis had said. “It also prevents me from being an inaccessible leader.”

On this, the week before his firing, Clive Davis had no perception of karma, no way of knowing when an omen might come up and slap him in the face. But there was one, and it had popped up at a singles meeting in April, in the form of Paul Simon.

Simon, who shares, with Garfunkel, the honor of having the all-time best-selling album in Columbia’s history——nine million sales of Bridge over Troubled Water——strode into the conference room in the midst of a meeting. Davis, of course, was pleasantly surprised. Then, an eyewitness said, Simon slammed a book onto the table in front of the president, telling him: “You need to read this book more than anyone I know.” Davis glanced at the volume: The Life of Krishna——as Simon spun around. “Wait, stay,” urged Davis. Simon continued out through the door. Slap.

* * *

Clive Davis must have known. But through the Memorial Day weekend, and upon his return to the CBS building on Tuesday morning, May 29th, he gave no indication that he was worried. To those who saw him that morning, he appeared relaxed from the holiday, and he moved directly into discussions on international operations with its division head, Walter Yetnikov.

At 11:45 AM, Davis got a call. Arthur Taylor, six months into the presidency of CBS Inc., wanted to see him on the 40th floor. Davis strode out of his 11th floor office——modestly furnished; left undone, in fact, because he would soon move into Goddard Lieberson’s old suite——made the two elevator trips that it took to get to the upper reaches. Clive Davis marched into Taylor’s office and got fired.

It was, as in Wynshaw’s case, a short meeting, with the stunned Davis getting a further surprise by the presentation of a civil complaint against him, dated that day and filed with the state supreme court. He was charged, he then read, with three specific instances of alleged misappropriations of company funds adding up to $94,000; the charges included the taking of $6,500 in $100 bills from “agents Wynshaw and others” out of a “false invoice” paid by CBS; and a final, general charge covered Davis’ almost-seven years as president, claiming he “improperly obtained or received other substantial sums of money in cash and other property from plaintiff for his own personal benefit.” The complaint asked for a reply from Davis within 20 days, including an accounting of all allegedly “wrongfully obtained” money, the return of that money, and legal fees.

Clive Davis was stunned yet again when he returned to his office. He never quite got there. While he was upstairs, moving men had been whisked into his office and had begun cramming his personal papers and effects into cardboard boxes, piling them up in the reception area. The area, normally occupied by waiting visitors and two secretaries, was bare except for a growing pile of cardboard boxes. His staff had been suddenly called into another nearby room, so that they would be conveniently out of the way.

There was a joke going around at CBS that, what with the movable, cream-colored metal walls dividing offices, you would know right away if you’d been fired. You’d show up one morning and your office would be missing.

Within another hour, the word was out to all regional branches of Columbia. A meeting of department and division heads took place. The word was that Clive Davis had been “discharged” from his twin presidencies, of the CBS/Records Group and its CBS Records Division, and that he was being sued for improper use of company funds. Further, it was announced that Goddard Lieberson, former head of Columbia Records and a Senior Vice President of CBS, would replace Clive as head of the CBS/Records Group, and that Irwin Segelstein, a CBS-TV programming vice president, would take over as president of the Records Division, meaning the day-to-day leadership of Columbia Records. The announcement mentioned two other firings at Columbia “following investigation of the irregularities relating to Mr. Davis’ discharge,” but named no names.

And before Clive Davis was back in his apartment, on Central Park West, CBS was ready with copies of the civil suit for the press. In it, the alleged misappropriations were detailed: $53,700 for alterations to the apartment; “at least” $20,000 for a bar mitzvah for Davis’ son last October, and $20,000 of reimbursements that CBS claims Davis used to pay for renting a house in Beverly Hills last summer. The company also listed one alleged cash kickback——the 65 one-hundred-dollar bills “handed over to defendant by Wynshaw.”

Few in the industry believed it was all so simple. “A company like CBS,” said one executive at Warner Brothers, “is idiotic to bust a president of one of the major profit-making divisions for a mere hundred G. They’re affecting their stock, and the entire record business.” One consistent line of sympathy ran: If Clive was guilty, he was doing nothing that many others in the business didn’t do. Davis, people were saying early on, might have cause for a huge damage suit.

“If there was nothing else to this whole thing,” a source close to CBS added, “it would be the most outrageous action a company took against a senior executive. I think the FBI went in and told [Chairman of the Board William] Paley or [CBS President] Arthur Taylor that they’d ask for an indictment against Clive, and I think it must be for big stuff. And therefore CBS wanted to do everything possible to disassociate themselves from him.”

So the talk again was of a cover-up. But if the action was harsh, outrageous, or even idiotic, it was not without precedent. In spring of 1965, James Aubrey, then 46, was “dismissed” from the presidency of the CBS-TV network, without comment, by William Paley. Aubrey, like Clive Davis, made his a basically one-man company, earning the nickname, “Smiling Cobra,” after he coldly dropped Jack Benny and Gary Moore while taking CBS to the top of the ratings through The Beverly Hillbillies. Later, through a CBS stockholders’ lawsuit, Aubrey was accused of accepting kickbacks from a friend, a would-be producer whose efforts——three outright flops——he placed on CBS in prime time. Other, more scandalous affairs linked to his name never got reported in the papers; he stayed low for four years of “independent productions” before emerging as president of MGM.

Clive Davis was a genius in the business of selling records. He influenced the course of the industry in 1967 when he virtually wiped out monaural records by moving to only the stereo price, at that time $4.79. The move caused confusion at first, with its implied obsolescence of mono, but within a year, Columbia was claiming an overall profit on the move. Always claiming records to be the entertainment field’s best, most durable buy, Davis then tested “variable pricing,” pricing certain albums at a $5.79 list “depending on demand and cost factors.” He succeeded in getting gold albums on the first three tries: The Graduate, Bookends, and Cheap Thrills. And Davis took CBS into the retailing business by acquiring two chains: Discount Records and Pacific Stereo.

And while it was Lieberson who first suggested Davis go to the Monterey Pop Festival in ’67——Goddard always liked the area and had attended the jazz festivals there, he said——Davis on his own did become an aggressive part of the rock scene, signing as many important artists as he did duds, making much more money than the amounts he would be reported spending. Columbia, number one, was an easy target——”kinda like the Yankees,” as West Coast producer Paul Baratta put it——and Clive may have been guilty of arrogance and a Yankee-sized ego. People told stories about how he tried to reorganize a song for Jackson Browne, as a favor; how he refused to join in the celebration of Woodstock by holding his artists from the festival album for business reasons. People laughed when he signed Delaney and Bonnie, only to have them get divorced shortly after the signing.

Still, in his moment of crisis, Clive Davis was the subject of a wave of sympathy. “He had no friends,” a Columbia employee said, “but everybody respected him.” The day after his deposing, a West Coast record company issued bumper strips——albeit facetiously——reading FREE CLIVE. Kris Kristofferson, in concert, dedicated a tune to Davis, “Me and Bobby McGee,” saying, “I never liked him, but I don’t believe all this.” Most managers of Columbia artists were saying Davis treated them fairly, and well.

Kitter Meade, speaking as corporate information officer, shrugged off the— question of harshness in Clive Davis’ case: “Counsel weighed the matter and decided this was the most appropriate course.” And Goddard Lieberson, the grand old man of Columbia Records, president of the label from ’56 to ’66 when he stepped upstairs and gave his job to his protege/lawyer, stuck close to the moral root of the issue. “They say, ‘What the hell’s it all about, it’s only $100,000.’ That’s not the point. If it were $5,000 or $150 … I mean, you can’t be a little bit pregnant. And it’s like Watergate: ‘Oh, everybody does that.’ You can’t take that point of view. It’s what happened. I mean, there was a falsification of invoices … and worse … it was between Clive and Arthur Taylor who asked him, I think, at some point to tell him the truth and he found out that it wasn’t the truth. It was difficult. I don’t think CBS felt that they wanted to do it. But what could you do? Let me remind you that this guy’s an officer, a member of the Board of Directors of a publicly held company.”

Still other observers thought that Davis had been the loser in the power struggle at CBS, that he had his eyes on the presidency of the corporation. Davis himself always denied any ambitions beyond Columbia, beyond “music.” Lieberson dismissed the talk as “kid stuff. ‘Cause, you know, I put him in that job——against, by the way, a lot of opposition. But I saw potential in him, because he was very avid, a very hard worker and buried himself in what he was doing. No. How could that be the reason? He’s so well compensated for what he did … …”

Which was exactly the point of still more speculation, that Davis had aroused the resentment and/or jealousy of those above him. Only five years into his job, the man had become a star in his own business, had become one of the best-paid executives in the corporation, had kept his company number one, moving with the times and making rock & roll the dominant music at the company, forging out 22% of the record market for Columbia, making this rock & roll label the most profitable of CBS’ several divisions.

Kitter Meade smirked. A chunky, pink man with Hooverish features, he’d rattled off the corporate case against Davis, Wynshaw and Rubino with precision.

He was responding to a final question, about the insistent talk about Columbia giving drugs to its artists. “I mean, with all the money those people were getting, couldn’t they just buy their own?”

Meade, a veteran who’d lost a leg in the second war, told how CBS, alerted by an outside source that Wynshaw ought to be investigated, sent its own law department, “and outside counsel,” after the executive’s records. Wynshaw and accountant Rubino, he said, “were both up to the same hanky-panky,” and Davis was “implicated in the investigation of Wynshaw. And by the same token, our investigation of Rubino led to Clive Davis. As far as we know, we got all the culprits.”

The listing of $6,500, said Meade, was the suit’s one “cold specific. We want to get that money back.” Such a specific may also open Davis and the others up to further scrutiny from state and federal agents. As Meade put it, “Laws may have been violated. They could look into it because they represent society.”

The investigation, Meade concluded, “was very, very thorough and very, very fair. That’s one thing we do here at CBS. We take pride in being fast.”

And aside from the old guard, aside from William Paley’s staunchly Republican leanings and the corporation’s militaristic ways, the new guard, CBS President Arthur Taylor, was reported aghast to learn how young musicians and record people had fun. He heard, it is said, about the CBS conventions, about a famous hooker called “The Indian,” a famous event called “the circus,” and about the prevalence at record conventions of famous drugs and drinks. Taylor, graduate of Brown University in Renaissance history and economic history, straight into CBS from the International Paper Company, was shocked.

Somehow, despite all the rumors about “Dr. Feelgood” and Wynshaw as “house pimp” from the very beginning, CBS had managed to separate the simple money issue from the drug rumors.

No one believed the strategy was sound. Variety, without any verification of Wynshaw’s or Davis’ involvement in anything close to a drug ring, tagged its first piece on the president’s firing with two paragraphs relating to industry payola rumors last year. Gossip columnist Earl Wilson saw a possible government connection, writing: “President Nixon may find some consolation from one thing in show business. A reported federal look into the music business may produce some competitive headlines involving narcotics, payola, kickbacks and income tax evasions——especially the belief that heroin and cocaine have been used for payola purposes for ‘sweeting up’ certain top artists or their agents. Tin Pan Alley talks mysteriously of significant ‘drug busts’ and of a music ‘Watergate.’ Federal agents checked on rumors of worldwide drug smuggling that ended in midtown New York.”

Not quite, but close.

From the first rumors, there was talk of a receptionist named Fran, reportedly constantly doped up at work at CBS and fired. There was talk of a Frank Campana, who’d worked at Columbia and been a friend of a man named “Pat.” Later, the name “Falcone,” supposedly known in Mafia circles, surfaced. These men reportedly knew Wynshaw, and one of them, it was known, had been busted along with Fran.

Finally, one week after Davis’ dismissal, a February 6th bust of a “major international heroin smuggling operation” came back into light. The bust, of a reported $15 million operation centered in Montreal, involved a Francine Berger, 30, listed as the operator of a fried chicken stand. A Federal grand jury in Newark indicted eight persons in the case, busted open, reportedly, “by use of the telephone.” One of the others was Pasquale Falcone, 41, also known as “Patsy” and “Pat.” He had identified himself as manager of Lynn Anderson and Tommy Cash, two Nashville-based Columbia acts.

He was also described by one source as “a frequent visitor to conventions and the CBS building. On Falcone, whom sources close to the Justice Department described as a member of the Vito Genovese “family,” were found papers allegedly implicating Wynshaw.

Falcone is not officially listed as manager of either Lynn Anderson or Tommy Cash. Their manager, according to the best sources, is one Frank Campana, formerly in Artists Relations at Columbia Records.

As for Francine Berger, it was learned that after she’d been fired from Columbia, she began working at the fried chicken stand.

* * *

Wynshaw, who immediately began singing to the grand jury and met with the US Attorney’s Office Strike Force Against Organized Crime five times, was cleared of any involvement with the heroin ring.

Davis himself immediately hired a lawyer, Vincent Broderick, former New York City Police Commissioner, and stayed away from the press. Wynshaw, meantime, stayed public, showing up, even, at a planning committee meeting for a record business charity event, and somehow letting his testimony to the Strike Force leak. He told the investigators about Columbia spending more than $250,000 last year in payola, money to disk jockeys and music directors at black radio stations in exchange for airplay.

He and, since his first testimony, others have reportedly detailed different forms of payola, many of them well-known in the record and music business: •

• Columbia, Wynshaw was reported to have said, paid as much as $7,000 a week to the publisher of a radio tipsheet, who in turn paid off black radio station personnel. •

• Another major company allegedly paid $6,000 to the same tipsheet publisher——formerly employed by the originator of such publications, Bill Gavin——to mention one new R&B single in his sheet, and $3,000 for a mention of a pop single.

• Promotion men have allegedly been giving disk jockeys——at Top 40 as well as at FM-rock and black stations——”gifts” of drugs, as soft as marijuana, as hard as cocaine——for years, in some instances replacing the more traditional presents of prostitutes, cash, fur coats and liquor. Promo men have also, in some markets, allegedly served as market-wise dealers of low-priced drugs. •

• Especially with black stations, promo men have allegedly provided quantities of free albums for their own resale through their own shops or to middlemen retailers. •

• New forms of payola also allegedly include airline tickets——provided to DJs to use or sell at will——and company connections with travel agencies that provided a label with “bonus” tickets which executives would use——or sell.

The specific allegations of payola by way of tipsheet would appear to implicate Kal Rudman, who has openly admitted receiving money from record companies. He called them “promotional” and “consultant” fees. He had also been in attendance at a Columbia singles meeting, and had been written up in the New Yorker magazine. Last week, another allegation reported how “a promotion man spent 15 minutes talking on the telephone with the publisher about a new single. The next day, the company got a bill for $150 for the conversation.”

Rudman was busy at home in Cherry Hills, New Jersey, from which he puts out both his weekly tipsheet and his “Soundtrack” column for the Hollywood Reporter. He let his wife, Lucy, speak for him, and she denied that Rudman had been contacted by any investigators in relation to the latest payola charges. Rudman himself had told us, in an earlier interview: “You cannot read the sheet and know who’s paying me and who’s not. I only take money when I know the record is good. If I can’t deliver, then my ass is grass. It’s consultation at the highest level. My field is music; I’m a music junkie; we all serve the artist.”

The charges regarding Columbia and alleged payola with black radio stations are based on Columbia’s recent and successful involvement with the Kenny Gamble and Leon Huff production team. Distributing Gamble and Huff’s Philadelphia-International label, Columbia scored four gold singles in a year’s time, accounting for almost half of Columbia’s nine million-sellers last year.

Neither Gamble nor Huff could be reached for comment on the matter. But elsewhere around the industry, spokesmen reflected either studied nonchalance——an aloofness, in fact——or outright fear. Rumors of feds hitting other record companies——were reported and denied; rumors of presidents Mike Curb of MGM and Rocco Laginestra of RCA getting canned for alleged malfeasance, a la Clive Davis, were spread——and denied. At Warner Brothers, workers reported “all-day meetings” to map out strategies for possible federal investigations into account books and promotional practices. The company denied such meetings. Sources at Columbia, now in the middle of talk of heavy organized crime involvement in the business, told how fellow workers, and chiefly executives, were “running scared.” Those executives looking the most frightened were questioned; they issued denials. And CBS announced its own “thorough investigation” of the latest charges.

The larger story has just begun. But for Clive J. Davis, it could be the James Aubrey story all over again, the rise and the sudden fall.

Goddard Lieberson, only a few months ago, sat up on the 40th floor, away from it all, a Senior Vice President who didn’t think he was doing enough, a 61-year-old figure ready to quit. At that time, thinking about the man who’d replaced him, he betrayed just a touch of envy at the power now held by Clive Davis. He nodded when he was told of how Davis was seen by others in the business. “Yeah, egocentric … ego trip. It’s very corruptive, you know. Ah, power is corruptive.”

Kitter Meade leaned back, high up in his office in the upper reaches, looking almost soft for a minute. “The sad thing,” he said, “is a man of imminent promise, a good mind … he had nowhere to go but up. What in hell motivated him to do this?”

Clive Davis was probably no more “corrupt” than anyone else so suddenly and overwhelmingly empowered. And in a business as competitive as his, where each artist, each piece of product, each chart, each contract, and each competitor was the greatest of challenges, he mixed power and pride in each battle. And he won most of them. For a while there, Columbia was his label more than he was its president. He once said that he thought he wouldn’t handle his job any differently if he owned the company. And owning his own company may yet be Clive Davis’ future. He is too strong to be counted out now. On these intermittently warm and rainy days in New York, it’s not so difficult to think of silver linings.

Yes, said Nat Weiss, manager of the Mahavishnu Orchestra, “Clive had created a one-man company, with press releases being written about him, and I don’t think that was the best situation.

“But listen: We’re all saddened when this kind of thing happens to any human being.”

In This Article: Clive Davis, Coverwall

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