In the motion picture world, news about a scandal can travel slowly – very slowly. Late in March, Paramount Pictures announced it had dismissed a longtime executive, Stephen Koppekin, two years earlier for embezzling an unspecified sum of funds from three union benefit plans to which the studio makes contributions. The departure of Koppekin, Paramount’s vice president of industrial relations and a trustee for the plans, originally was attributed to “retirement.” Yet the real explanation was his hand in the till, says a whistleblower ex-employee, Nichole Goluskin. Koppekin denies all accusations. Yet even if he is innocent, the problem of benefits theft, and cover-up, may be far more common to the film industry than realized. The U.S. Department of Labor, for one, wants some answers.
Stephen Koppekin became senior vice president of industrial relations for Paramount back in 1985, eventually rising to the rank of executive vice president of industrial relations. He also came to serve as a trustee for the health and pension plans of three unions: the Directors Guild; the Writers Guild; and the Motion Picture Industry, the latter representing lighting, sound and other film crew members. Each of the benefit plans is managed by a board of trustees whose membership is split evenly between management and labor. Union members, for the most part, are not “rich Hollywood elite.” They rely on these plans for their health care and retirement. Unfortunately, as with so many unions in other trades, certain plan caretakers see a license to steal. That’s the charge being made by Nichole Goluskin, who says she no longer has a job at Paramount Pictures because she refused to participate in lawbreaking at Koppekin’s behest.
Goluskin, hired by Paramount in late 2012, this March disclosed in a post on Facebook, and then in interviews with trade periodicals such as Variety and Deadline Hollywood, that shortly after she came aboard, Koppekin sent her a pair of travel receipts. The smaller amount was non-refundable; the higher amount was refundable. Koppekin kept the difference. Goluskin would not go along with the request, a decision allegedly resulting in her firing in October 2013. Last year she filed separate wrongful termination suits with the U.S. Department of Labor and the California Department of Labor Standards Enforcement. Each action is currently under investigation.
Whistleblowers in any employment situation take the risk of becoming not only unemployed, but unemployable as well. The film industry has its own version of that. Unable to find alternative work, Nichole Goluskin went public with her charge. She explained the situation to Deadline Hollywood:
I was asked to participate in an embezzlement scheme at Paramount Pictures. My former boss, Stephen Koppekin, was stealing from the health care and pension funds of the entertainment industry labor unions – such as the Writers Guild, the Directors Guild and the Motion Picture Industry Pension and Health Plans. I refused to participate, and turned Koppekin in to Human Resources at Paramount. Stephen was terminated in April 2013, but there was a good old-fashioned Hollywood cover-up: Paramount released a statement saying that Koppekin had decided to retire. I was asked to participate in the cover-up. Then I was shuffled around from department to department until I was terminated shortly thereafter.
She added:
I filed a whistleblower retaliation case with the Department of Labor in March of 2014, and it is currently being investigated. And there is a separate California Department of Labor Standards Enforcement claim that is also under investigation. A year after filing the claim – a year and a half of being unemployed and somewhat blacklisted – I’ve finally decided to ‘go public’ with my story.
Goluskin got pretty specific. She accused her former boss of stealing from health and pension funds for at least 14 of the 27 years he’d been with the studio. Worse yet, nobody seemed to notice. Goluskin stated in Facebook, as quoted in Variety:
Once I started learning more, I found out that stealing this money was not an uncommon practice, and a lot of studio execs were dipping into the health care and pension funds of the artists and workers who make the films that pay their million-dollar-a-year salaries. This kind of rampant fraud raises the income threshold that artists and workers each year in order to get their access to their health care.
He (Koppekin) told me to put the flight information from a non-refundable receipt for $183 onto his travel itinerary because that was the flight he was actually going to take, but to keep the other refundable receipt for $719 in the file to submit at the time of expense reimbursement, explaining that he already had the $719 refunded to him, but he wanted to submit the more expensive receipt later so he could just pocket the difference of $536 for himself.
When I started looking through the files from the previous years and asking previous assistants, I found that this instance was actually a pretty mild offense in comparison to his many other swindles over the previous 14 years. In another case, he submitted a receipt for a flight that cost roughly $3,000, but actually took a flight that cost roughly $2,000, pocketing the $1,000 difference as profit. I was asked to engage in this practice four different times during my short three months in his department.
In response to these revelations, Paramount spokeswoman Katie Martin Kelley admitted that the studio had let go of Koppekin once Goluskin had come forward with her accusations. “As soon as this was brought to our attention,” said Kelley, “we required that Mr. Koppekin immediately resign his position at the studio, resign all board seats on industry Pension & Health Plans, and make full restitution.” Yet she disputes Goluskin’s claim of wrongful termination. Kelley asserted: “There is no merit to the claim of retaliation. Paramount has acted appropriately in all of its dealings with Ms. Goluskin.”
Stephen Koppekin adamantly rejects any assertion that he embezzled from union benefit plans or that he was fired on the suspicion of having done so. He told Variety: “I was not required to resign immediately. My resignation had nothing to do with her allegations.” He claims the allegation grew out of single instance of a missed commercial flight, which resulted in his having to buy a more expensive ticket. “There would have been zero problems if I had made the flight,” he emphasized.
Nobody at Paramount has given a specific dollar figure on the funds allegedly stolen by Koppekin. And neither federal nor state investigators are commenting on their respective probes. But with a bow to Nichole Goluskin, it is a fair bet that where there is smoke, there is fire. Corruption among film moguls is hardly breaking news. Budd Schulberg’s classic 1941 Hollywood expose novel, What Makes Sammy Run? was based on the young author’s first-hand experiences with the studio system, in all its ruthlessness. “Creative bookkeeping,” a euphemism for legalized theft, remains common in that world. Hopefully, the ongoing investigations in the Koppekin scandal will square away some accounts. Pilfering benefits from dues-paying union members isn’t a good business model for any industry.