How a Handful of Billionaires Kept Their Friend Harvey Weinstein in Power
The Harvey Weinstein sexual assault saga is a scandal for the ages. But the grave accusations of harassment and, in some cases, rape from over 100 women have helped shed an important if disheartening light on the widespread misconduct of many rich and powerful figures in Hollywood, the media, government and elsewhere. The story has been so big that it has let another scandal disappear a corporate backstory about how a group of billionaire board members from the worlds of Wall Street and entertainment let Harvey Weinstein stay in power. It features an all-star cast that included James Dolan and Dirk Ziffand later, in cameo appearances, Paul Tudor Jones and Marc Lasrywho oversaw an almost unimaginably toxic corporate culture built and led by their friend, according to two directors who long opposed Harvey Weinstein. In an extraordinary case of governance-gone-awry, these distinguished figuresbrilliant in managing their own venturesallowed themselves to be deceived by a charismatic mogul, whose blatant business abuses, including allegedly spending millions of dollars of TWC funds on his own personal projects, mirror his serial alleged abuse of women. Weinstein was fired by the board of Weinstein Co. TWC on Oct. 8, just three days after the New York Times published a report detailing extensive allegations of abuse and harassment by the Hollywood legend on Oct. 17, Weinstein resigned from the company's board. He still retains an ownership stake in the company., Here, Fortune reports for the first time the extent of the dysfunction of this dysfunctional corporate boardone that an insider calls "the ultimate shit show." The board's inaction helped Harvey Weinstein remain all-powerful for more than a decade, as directors from the vanguard of the business elite enabled him to stay atop the company. Weinstein has admitted to some of the inappropriate behavior and has denied other allegations. He has categorically denied taking part in nonconsensual sex. He has not made public statements regarding allegations that he mismanaged the company or used its funds inappropriately. Weinstein declined Fortune's request to respond to critics of his management. Holly Baird, a spokesperson for Harvey Weinstein, sent Fortune an email stating that, "We are not commenting on issues involving the board and Mr. Weinstein is not available for interviews." Messages requesting a response from TWC, and others seeking comment from Harvey's brother and co-founder Bob Weinstein, were not returned. Weinstein's attorney David Boies did address the issue in a letter to director Lance Maerov in August of 2015. In the letter, reviewed by Fortune, Boies states that "Harvey has dedicated himself to making TWC a success." Boies did not question Maerov's assertion that TWC was losing money on an operating basisaccording to Maerov, it had a deficit of 65 million in 2014but argued that Maerov's assertion that "TWC never generated a profit' ignores the hundreds of millions of dollars in asset values created by the film and television business.", None of the celebrated names that once served on its board are now engaged in salvaging the battered Weinstein Co. Hedge fund manager Jones, publishing heir and mega-investor Dirk Ziff, and Lasry, chief of distressed debt colossus Avenue Capital and co-owner of the Milwaukee Bucks, quit the board over the weekend of October 6, following the publication of the damning New York Times investigation that set the scandal in motion. A fourth director, Tim Sarnoff, grandson of the founder of NBC and RCA, and president of production at film processing company Technicolordescribed by anti-Weinstein directors as a Harvey loyalistdeparted along with them. Dolan, executive chairman of MSG, owner of the New York Knicks and New York Rangers, had left in mid-2016. For Sarnoff, Ziff and Lasry the last official act was participating in the stormy conference call that Thursday evening, Oct. 5, when all but Jones voted to effectively fire the Hollywood titan they'd long supported. That exodus leaves just three of the nine pre-scandal directors to rescue a once-fabled filmmaker. That cleanup crew consists of Harvey's brother, co-founder, and longtime co-chairman Bob Weinstein, who's running the studio, and the two directors who, they maintain, had long wanted to dump Harvey Weinstein. The anti-Harvey survivors are Tarak Ben Ammar, a Franco-Tunisian financier who's a leading adviser to a number of global media chiefs, including Rupert Murdoch, Silvio Berlusconi, and Vincent Bollore and Maerov, EVP of corporate development at ad giant WPP, and a top lieutenant of its CEO, Sir Martin Sorrell. Ben Ammar and Maerov, who've served on the board since TWC's launch in 2005, assert that Weinstein for years bullied and insulted employees, directors, and his brother, squandered outside investors' money, and ran TWC not to earn profits for its outside investors, but as a personal fiefdom that bestowed celebrity and power. "If Harvey Weinstein had run TWC honestly and responsibly, and shown respect for the people around him and investors' money, Tarak and I would have supported him," Maerov tells Fortune. "But he wasn't interested in running the studio honestly and responsibly. He was running it for his own self-aggrandizement.", Adds Ben Ammar, "Harvey was so powerful in all circles, social, political, fashion, charity, entertainment, that he used all those tools to get what he wanted. He traded on his social currency like no one else. He began to think that he was untouchable, and that was his downfall." In this story, all references to a person as "Weinstein" are to Harvey Weinstein., Ben Ammar and Maerov have discussed their concerns about Weinstein in other recent interviews, including with Fortune. But they've revealed little about the boardroom infighting, until now. Neither Weinstein nor the company has made any previous comment on boardroom issues during Harvey Weinstein's tenure as co-chairman. The critical standoff came in 2015. Weinstein's offenses, say Ben Ammar and Maerov, had escalated into misdeeds so damaging that the board and investors had ample cause to terminate the film mogul. Early that year, the board suspected that Weinstein had been misusing company funds, according to Ben Ammar and Maerov. Weinstein hasn't commented on this allegation. But through his attorney in 2015, Weinstein agreed to repay more than 7 million in company funds that, as his lawyer acknowledged in documents Fortune has reviewed, he had used for personal projects. And in April, news that an Italian model had accused him of groping her in his Tribeca office made headlines worldwide. "At that point, Lance and I pushed to refuse him a new contract," says Ben Ammar. "But we were blocked by his allies, who held the swing votes, and who were really acting more like his buddies than representing the best interests of TWC.", The two long-time dissidents insist that TWC wouldn't be verging on collapse if the group they describe as Weinstein's loyalistsDolan, Ziff, Sarnoff, as well as prominent investorshad joined in their effort to dump him two years ago. Lasry and Jones joined the board after Weinstein won a new contract. None of the recently departed directors have spoken out on this issue, either to Fortune or elsewhere. "The tragedy is that if we'd removed Harvey two years ago, we'd still have issues, but the talent would have stayed, because Harvey would have been long gone as CEO. We'd look a lot cleaner and less damaged than we do today," says Ben Ammar.