The Tribe Has Spoken: UMG COO Voted Off The Island
Finally. Yesterday UMG CEO and new president of show business, Lucian Grainge, banished long-standing President & COO, Zach Horowitz, to Siberia by moving him over to the publishing company as Chairman and CEO thus getting Zach out of everybody’s hair.
Recently, some of Lucian’s new executive team have locked horns with Zach and that might have factored into the move. Insiders say the writing was on the wall for Zach the moment that Barry Weiss brought his crony Ivan Gavin over from Sony. The rumors are that Gavin, who evidently has no respect whatsoever for Horowitz, thought nothing of undercutting Zach at every turn. According to one source, “There’s just no room for both Zach and Ivan in the music group”.
Conventional wisdom asks how Zach has survived for so long given the many top management upheavals he seems to have weathered. “He must have something on somebody”, claims one source familiar with the company.
The Torquemada of the music business, Zach had been the hatchet man for septuagenarian former UMG CEO Doug Morris for years. Prior to that Zach had been general counsel at MCA Records during the period when the US Justice Department was probing MCA Records’ connection with Sal Pisello, a known mob figure. The government notified Zach that they intended to subpoena him in the inquiry, but he responded that if he were not granted full immunity from prosecution he would take the Fifth Amendment. It’s the Justice Department’s policy not to put a person on the stand if he says in writing that he intends to take the Fifth.
At the time, investigative reporter Dan Moldea wrote: “Interviews with industry sources and law enforcement officials, court documents, and MCA’s own records indicate that there’s an unusual relationship between the Mafia figure and the Fortune 500 company — a relationship that seems to be just the sort of thing that the Justice Department is supposed to investigate.
At the end of 1987, when Justice Department officials ended the probe of MCA, they knew the following:
* Pisello is an active participant in the world of organized crime. His name appears on numerous federal reports, where he is identified as a high-ranking soldier of the Carlo Gambino crime family in New York (which was then headed by mobster John Gotti) and as an alleged narcotics trafficker with links to drug dealers in Mexico, Italy, and Panama.* Pisello had close business ties with several hoods more powerful than he; some of them had recently been indicted for trying to infiltrate the record industry.
* MCA started to work with Pisello in 1983, although he had no previous experience in the record business.
* MCA lost money on every deal it made through Pisello. The company appears to have lost as much as $ 3 million on these deals, while Pisello made at least $ 600,000.
* MCA executives may have made false and misleading statements to federal officials who were investigating the Pisello case.
* At least six executives of MCA Records were subpoenaed to testify before a federal grand jury in Los Angeles. Five of them refused to cooperate unless they were granted immunity from prosecution.
* An argument erupted over the relationship between MCA Records and Pisello at an MCA board meeting in 1985. Howard Baker, who was then a board member, demanded that the executives who were involved with Pisello either cooperate with federal officials or be fired. Several of these officials subsequently received raises and promotions.
* MCA continued to deal with Pisello after his underworld ties were made public and he was convicted of tax evasion in 1985.”
The investigation was ultimately dropped after then MCA CEO Lew Wasserman, who was Ronald Regan’s agent and friend for 22 years, made a few phone calls. Coincidentally on May 19, 1986, within three months after the grand jury investigation began, Wasserman became the largest individual contributor to the Ronald Reagan Presidential Foundation, donating $ 517,969 for the construction of the Reagan library.
Thus Zach Horowitz launched his career into the upper echelons of the record industry. He sure must know in which end zone all the bodies are buried.