Bugging Scandal Reveals Hollywood’s Paranoia


Fear and Loathing in LA

Bugging Scandal Reveals Hollywood’s Paranoia

By Lars-Olav Beier and John Goetz

A court handed down a one-year prison sentence to Hollywood director John McTiernan for having his producer’s phone tapped and then lying about it to the FBI. This bizarre criminal case highlights the mistrust in the film industry.

A blizzard is blowing through Wyoming, and visibility is down to less than 10 yards. Even so, John McTiernan races his white Ford Ranger pickup along the unpaved road. He knows the way so well he could almost drive it with his eyes closed.

McTiernan lives on a ranch near Dayton, a town with only a few hundred inhabitants. The Canadian border is about 400 miles away. There’s not much else around except snow and isolation. McTiernan is talking about a new film project, spitting out the words as quickly as he drives, enthusing about an epic tale from the Indian wars that were fought in the area, and about Civil War General Oliver O. Howard.

A pious Union general who headed the Freedman’s Bureau after the Civil War, Howard founded Howard University but was later forced to participate in the war against the Nez Perce Indians.

Not so long ago, McTiernan was one of Hollywood’s most celebrated film directors. He shot action classics such as “Die Hard,” “The Hunt for Red October,” and “The Last Action Hero,” working with stars like Bruce Willis, Arnold Schwarzenegger and Sean Connery. His movies grossed more than $1 billion at the box office. While McTiernan has always rejected a life in Hollywood, his life on the ranch in Wyoming feels like a kind of self-imposed exile.

McTiernan parks the pickup next to the Crazy Woman Saloon, and pushes the door open. The place is packed, fuller than normal. Men in cowboy hats jostle for space by the bar. The last quarter of the Super Bowl is on TV.

“General Howard was an enormously moral and decent man who was forced to participate in something about which he was privately appalled,” McTiernan says, as he sips from a glass of Chardonnay. Despite the 150 year gap in time, McTiernan feels he has something in common with Howard. Each experienced forces beyond their control marking their lives, their careers and their legacies.

McTiernan looks around. He turned 60 last month, and doesn’t look a day younger. The deep lines on his face look like erosion fissures carved by Wyoming storms. As the topic moves to the role played by Washington, DC in his criminal prosecution, he says that he would prefer not to discuss it in the bar, because the conversation could be overheard.

As if anybody cared in the Crazy Woman saloon, with the Super Bowl on TV and beer bottles on the counter. Dayton, Wyoming is not the kind of place that instills mistrust. McTiernan brought that with him from Los Angeles — from Hollywood. The world in which his heroes fought was governed by mistrust and paranoia, and the city in which they were invented all the more so.

Last October, McTiernan was handed down a one-year prison sentence for first hiring a private investigator to tap the phone of a producer with whom McTiernan had worked on a film project, and then lying about it. McTiernan is appealing.

A Celebrity Detective for Hollywood’s Elite

The case could well have remained a mere footnote in Hollywood’s scandal-ridden history: A director has a producer’s phone tapped because he suspected people were plotting behind his back. Unfortunately for McTiernan, the man he hired was Anthony Pellicano; private detective to Hollywood’s elite. Pellicano’s clientele has included Michael Jackson, Tom Cruise and Chris Rock. He didn’t know it at the time, but McTiernan became involved in one of the biggest wiretapping affairs in US history.

Pellicano was the person celebrities called if they were in trouble; if a divorce loomed, if a one-night stand led to a paternity suit or business partners argued over a jointly held company. Pellicano was a fixer, a troubleshooter, a universal problem-solver. His clients didn’t care how he resolved them, either.

“There are some very despicable people and there’s a whole lot of unhappy millionaires,” says John Nazarian, a colleague of Pellicano’s who has been a detective in Hollywood for the past 17 years. “Their behavior, their sense of entitlement is despicable. They don’t pay me the money they pay me — $400 per hour — to play fair. What do I need? Little or no morals.”

Fifty-nine-year-old Nazarian is bald, trims his beard to a point and wears a Rolex and a diamond-studded platinum ring. “The best part is feeling it,” he says. “I always wear it on the left-hand side. That way I will not be hitting anybody with it,” he says with a smile. “McTiernan is a crybaby. He just doesn’t want to accept that he has to go to jail.”

The McTiernan case began in the summer of 2000 while he was directing a remake of the 1970s classic “Rollerball” in Montreal. The movie was a $70 million science-fiction epic about futuristic sporting gladiators playing a brutal mixture of American football, ice hockey and six-day racing set in various former Soviet republics.

But the production became embroiled in a row between producer Charles Roven (“12 Monkeys” and “City of Angels”) and McTiernan. The director wanted to make a kind of modern “Spartacus,” in which a slave rebels against an inhumane system. But Roven insisted the movie be an “action adventure.”

Shortly after shooting began, part of the set was destroyed by fire, and the movie went completely off the rails. “There is no place where the paranoia is greater than on the set of a film that has spun out of control,” says a film agent. “Anyone could be the next to get kicked out. The only person that cannot be fired is the person who is paying for the movie.”

The film’s main producer was the MGM studio, but McTiernan was worried Roven wanted to take control by buying up the studios with the help of Japanese and German investors. He also suspected the fire had been started deliberately to lower the price. He probably also feared that Roven wanted to get rid of him.

‘Scheming, Wriggling, Lying, Hypocrisy’

He hired Pellicano, who had developed a special hardware- and software-based system that secretly records telephone conversations. Pellicano had even trademarked it under the name Telesleuth. This bugging system spared the PI from the trouble and risk of breaking into apartments, since all he had to do was to tap into a local exchange.For days on end, it was claimed in the trial against Pellicano, he listened to Roven’s calls. On August 17, 2000, McTiernan telephoned him for an update. “Do you realize how much fucking work you gave me?” Pellicano said right at the start of their conversation, which, as with many of his clients, he was recording. “I think in the process you’ll probably get a hell of an education on the film industry.” McTiernan replied.

“You have no fucking idea,” Pellicano said. “I mean scheming, you know, wriggling, lying, hypocrisy, my God.”

The two men spoke for 30 minutes. McTiernan wanted to know whether the producer was going behind his back by saying one thing to his financial backers and something else to his director. He also wanted information about the apparent deal. But Pellicano hadn’t found anything out.

In fact, it is unclear if Pellicano had really tapped Roven’s phone or if he just claimed to McTiernan that he did. The information ‘revealed’ to McTiernan in the 30 minute phone call reads much like the gossip published in the Hollywood trade press at the time. The person in charge of Pellicano’s wiretapping effort told SPIEGEL that she could not confirm if Roven had actually been wiretapped. The FBI was not able to prove it because the recordings were encrypted and the FBI’s best experts were not able to crack the code.

So McTiernan paid Pellicano his $50,000 fee and told him to stop the surveillance. As far as McTiernan was concerned, the case was closed. He finished shooting “Rollerball,” the movie opened in February 2002 and was a flop that took in only about a third of what it cost to make.

Nine months later, FBI agents stumbled upon the recording of the conversation between McTiernan and Pellicano during a search of the private investigator’s offices. Pellicano was under suspicion of threatening a female reporter who was researching an article about the alleged Mafia connections of Hollywood stars. FBI agents went to the detective’s offices, where they found hand grenades and explosives as well as thousands of recordings of tapped phone calls that a computer specialist had encrypted for Pellicano.

When it turned out that the thousands of hours of phone taps would not be easy to decode, the district attorney’s entire strategy was based on one thing: that Pellicano inform on his friends and clients in order to stay out of prison. Pellicano refused.

Hollywood ‘s Best-Kept Secrets

In December 2008, Pellicano was given a 15-year jail sentence for 76 counts of illegal wiretapping. He is now serving his time in an Arizona penitentiary. Had he cooperated with the FBI, he would be a free man today. The contents of the calls he tapped are Hollywood’s best-kept secret.

“Anthony could make $10 million out of a 10-minute interview,” says Hollywood investigator Nazarian, who commented on the Pellicano case for CBS. “He’s today probably one of the most interesting men in the world because of what he heard.”

Pellicano is like a character out of a James Ellroy thriller: a man who was prepared to do anything if the price was right. He was born in 1944 in the Chicago suburb where Al Capone grew up in. There Pellicano worked as a detective under the name Tony Fortune. In 1978 he tracked down the remains of Elizabeth Taylor’s deceased husband, Mike Todd, which had been taken from his final resting place. In the early 1980s, he moved to Los Angeles.

Pellicano had his offices in the elegant Luckman Plaza, the home of many production companies and law firms, just west of Beverly Hills. Pellicano’s employees had names like Lily LeMasters and Tarita Virtue. In 2003, Maxim magazine crowned Virtue “the sexiest private investigator in America.”

Pellicano named one of his sons after Luca Brasi, a killer in “The Godfather”. He gave parking attendants $100 tips. The mafia movie’s theme music was the hold music on his phone. He had his children kiss his hands, and claimed to always have a baseball bat in arm’s reach.

One person who knew him well said, “Pellicano could have only existed in LA. He was created by the theatrical law community based in West LA. They were looking for a Pellicano and he filled that need. Anthony Pellicano satisfied weak people’s desire to have a strong person on their side. The entertainment industry attorneys liked to be able to present him to their their clients and have things said like ‘I’ll chew his leg off,’ ‘We’ll kill him’ or ‘I’ll get my guy on him’.”

The Hollywood community projected all their visions of the perfect private investigator onto Pellicano: tough, clever, a pithy speaker and a man surrounded by beautiful women. Hollywood made Pellicano a player; a Mr. Fixit who could be sent in where lawyers feared to tread.

Pellicano’s lawyer, Steven Gruel, says his client is ex communicado at the moment. The private investigator recently got into an altercation with a guard at Safford Federal Correctional Institution in southern Arizona, and is now in solitary confinement. Even behind bars, Pellicano remains true to the image he created of himself, of a man who won’t be pushed around by anyone.

Gruel has offices on the ninth floor of a high-rise building in downtown San Francisco. The walls are adorned with pictures showing him together with former US Presidents Ford, Carter, Reagan, Clinton and George W. Bush. Gruel has taken on the Pellicano case on a pro bono basis because Pellicano is bankrupt. One of the benefits for him is that the case still attracts media attention. Gruel has already appealed Pellicano’s jail sentence (his scheduled release date from prison is March 2019) against a number of the prosecution’s allegations, and believes he could well get the sentence reduced. “Anthony was the best salesman in a city where image is everything,” he says.

The kind of information Pellicano had at his disposal is the most precious commodity in Hollywood. “Information is our currency,” the agent says. “With information you can get the relationships, and with the relationships you get success. Talent without the information and without the relationships — that’s like a sports car without fuel.”

Above the Law

Who is the most sought-after writer of the moment? What deals have been cut recently? Which bestseller has just been bought? How much was paid for it? As far back as the silent-movie era, the studios opened the mail of stars and starlets who threatened to get out of control, and even questioned neighbors to find out everything they could about them.If, for example, a producer died under mysterious circumstances on the yacht of billionaire William Randolph Hearst, fixers were hired to sweep the dirt under the carpet, and bribe police officers and pathologists. Often enough, this helped stars and directors alike escape punishment.

Hollywood has always had the reputation of being a place where anything can be purchased, even immunity from prosecution. A rumor currently doing the rounds claims that several movie moguls who escaped prosecution as part of the Pellicano trial had paid money to members of his family.

“I’m sure a lot of studio executives are thinking about helping Anthony,” says Nazarian. “Because of the people involved in that story, major players in the media, the story got very little coverage,” he adds, suspiciously little.

Trial testimony shows that Pellicano was hired by Brad Grey, the boss of Paramount Studios and one of the most powerful men in Hollywood, to investigate a screenplay writer who had pressed charges against Grey for alleged plagiarism. Pellicano bugged the writer’s phone, though Grey denies any knowledge of this. Pellicano is also known to have used illegal means to investigate a woman who claimed that actor Chris Rock had fathered her child. A recording of a conversation between Rock and Pellicano, in which the star discusses having sex with the woman, has intermittently been available as an audio file on the Internet.

McTiernan hadn’t had any dealings with Pellicano for some time when he received a call from an FBI agent in 2006. In the interim he had shot another movie, the thriller “Basic,” starring John Travolta. He had just returned to Wyoming from Thailand, where he had been preparing another action film.

Upon advice from his attorney, McTiernan pleaded guilty to having lied to an FBI agent. The case has since been turned completely on its head, partly because McTiernan then withdrew his guilty plea and pleaded not-guilty. Then he was charged with having lied before a court by making mutually exclusive statements before a judge. After another round of attorneys, he then pleaded guilty again and was sentenced to one year in prison in October 2010. He is now appealing the sentence on technical grounds. It is still impossible to say when his case will finally be over.

McTiernan stands at the window of an airy wooden house, and looks out into the snow. He had had the house set up especially for screenplay writers who fly in from Hollywood. “When I met him, I realized Chuck Roven would would never be involved in anything like that,” he says.

McTiernan hasn’t made a feature film in eight years. In the past, he would pop down to Los Angeles aboard a private jet. “I never belonged to the Hollywood community,” he says. “I was always an outsider.”

He even shot a documentary about Karl Rove, George W. Bush’s influential senior advisor, and his alleged attempts to criminalize elected officials and Democratic Party sympathizers. It was called “The Political Prosecutions of Karl Rove.” Some of the claims are well documented, and Scott Horton, a law professor at New York’s Columbia University, is convinced the Bush administration had a political bias in many Justice Department investigations.

McTiernan believes it was Rove who had steered the prosecution against Pellicano because, McTiernen believes, the private investigator worked for the Clinton camp back in 1992 as part of a campaign to discredit statements by an alleged mistress of Bill Clinton. It would have been very convenient to have an investigation into Hillary Clinton in 2008 during the presidential campaign. Rove has denied such allegations. McTiernan, for his part, maintains: “This is not simply a local Hollywood prosecution. The decisions were made in Washington, DC.”

Daniel Saunders, 48, the public prosecutor in the case, says that the Rove theory is “ludicrous — this investigation was run out of California, there was no direction out of Washington, DC. The reality is that John McTiernan committed a crime and he got caught.” Saunders recently joined the huge law firm Bingham as part of its white collar investigations team.

McTiernan himself appears in the documentary and argues in the film, “Americans are afraid of their government: Say that to yourself a couple of times. We could strip every tree off the Sierra, we could burn coal till the sky was black, and we would not so poison the world as much as if we left our children with that ugly little phrase.”

Outside the snow is still falling. McTiernan says he feels betrayed by his own country, and his eyes well up.

Translated from the German by Jan Liebelt