LA Weekly

One day last June, Teri Mial warned Beth Paolozzi that she’d best keep her mouth shut about an ongoing federal Department of Labor investigation of the Writers Guild of America West — or she’d have to kill her.

“Beth was like a daughter to me,” says the 68-year-old Mial, an estates-trust manager with the WGA until the guild put her on permanent suspension. “I treated her as my daughter. I trained her.”

It didn’t seem to matter that Paolozzi, another employee in the trust division, was 30 years younger and “weighs about 200 pounds more than I do,” recalls the petite, scrappy grandmother. The whispered threat, clearly repeating the classic old joke, mushroomed quickly into a disciplinary confrontation with a WGA attorney, followed by Mial hiring her own lawyer and suing the guild for wrongful termination.

Mial’s forced departure was not set off by the purported death threat, she claims. Instead, she insists, she got the boot because she had recently blown the whistle on a growing scandal within the guild’s foreign-levies and estates-trust departments, in which the union was sitting on millions of dollars owed to member writers and nonmember writers alike, frequently withholding checks from both struggling and famous writers for decades.

The check-withholding scandal made headlines 18 months ago, when ex-guild member William Richert (The Man in the Iron Mask [1998], Winter Kills [1979], etc.) filed a class-action lawsuit against the WGA in federal court. Richert, a WGA maverick from Santa Monica who claimed to represent thousands of unpaid guild members and unaffiliated writers, as well as their widows and heirs, accused the venerable screenwriters’ union of systematically withholding, misappropriating and misspending tens of millions of dollars’ worth of writers’ foreign earnings over the past 15 years.

At first, then-WGA-president Dan Petrie Jr. heatedly denied the charges. But in response to a September 2005 New York Times story on the hoarding of so-called “foreign levies,” he admitted that the guild was holding a treasure-trove — over $20 million due to writers, most of them concentrated in Los Angeles and New York.

Since then, the WGA’s chief financial officer, Don Gor, has conceded that the union, headquartered in swank digs at Third Street and Fairfax Boulevard in Los Angeles, has had trouble getting the money out to an estimated 10,000 WGA members and nonmembers, claiming that the payees either could not be found or could not be verified as the right person. Gor admitted in a December deposition for the federal class-action lawsuit that the bustling office had no workable plan for handling the Internet-driven explosion in foreign earnings by American writers in recent years. “Most of the buildup occurred around 2000 where we got more money in — and our system was not capable of processing all of it,” he conceded.

But angry writers say they have evidence of an even more disturbing guild practice: its diverting of 92.5 percent of writers’ pay from foreign airings of their works to Hollywood studios, producers and, perhaps most galling, to the Writers Guild of America West itself. Since 1990, these critics contend, the guild has quietly been paying a king’s ransom in writers’ foreign earnings — far beyond the $20 million in withheld checks already acknowledged by Gor — to powerful Hollywood entities without the writers’ agreement or knowledge.

“The theft has been extraordinary,” declares WGA rebel Eric Hughes (Against All Odds [1984], White Nights [1985], etc.), who has led the charge against the guild hierarchy.

The L.A. Weekly has learned that the Department of Labor has been quietly gathering evidence and testimony about the guild’s payment practices for over a year — though it refuses to confirm or deny that it is investigating. Moreover, on April 12, a 27-page ruling by Los Angeles federal District Judge Margaret Morrow appears to have granted the writers some legitimacy, by rejecting the WGA claim that, as a labor union, it could collect and hold their money — and charge them hefty fees to boot. In sending the Richert suit back to state court, according to Hughes and Neville Johnson, the attorney spearheading the class action, Judge Morrow left the guild wide-open to charges of conversion and fraud.

The controversial but, to many, compelling argument made by Hughes, Richert and other critics is that foreign levies are being withheld by all of Hollywood’s talent guilds in a long-standing practice they see as a bizarre twisting of U.S. copyright law.

That virtually unnoticed 1990 decision, by the guild’s board of directors, to funnel more than 90 percent of American writers’ foreign earnings to big studios and other fat cats, mirrors an old practice struck between screenwriters, actors, directors and the studios in the 1940s shortly after the WGA, Directors Guild of America and Screen Actors Guild were born — and conceded authorship of the movies they created to the studios.

This uniquely Hollywood practice, not observed in most of the rest of the world, has left guild members and nonmembers alike scrambling for tiny leftover scraps — with most American writers having no idea how much of their earnings from foreign lands is handed over to others.

“The judge’s ruling means that they can’t hide behind the collective-bargaining agreement,” says Richert’s attorney, Neville Johnson. “It looks more and more like a common fraud case.”



Hughes’ failed run for the WGA presidency in 2004 first alerted him to the WGA West’s byzantine and, in his eyes, suspect accounting and payment practices. He mounted a one-man crusade and, in the fall of 2005, after a year of poring over court documents, U.S. Labor Department records, WGA contracts and accounting ledgers, helped expose the WGA’s hoarding of millions of dollars in foreign levies. In addition to The New York Times, both Daily Variety and the Hollywood Reporter have covered the story. But the larger context didn’t surface until Teri Mial got fed up one day, a short time after news of the scandal broke. A furious Mial started smuggling out of the gleaming glass WGA headquarters records of “undeliverable” foreign levies — essentially, piles and piles of payment records and mysteriously uncashed checks reviewed by the Weekly, which she claims she rescued from the guild’s shredder.