New York Attorney General Eric Schneiderman Says “Pervasive Pattern Of Illegal Activity” Took Place At TWC

New York Attorney General Eric Schneiderman turned to the press and social media this morning to describe a “pervasive pattern of illegal activity” at The Weinstein Co. and accuse some of the leadership of being complicit in the cover-up of Harvey Weinstein’s misconduct, saying that not even one of the allegations during a 12-year period were investigated by human resources at the company, but instead they were covered up.

Schneiderman’s office filed a lawsuit on Sunday naming both former TWC and co-chairmen Harvey Weinstein and his brother Bob Weinstein as defendants. He turned to Twitter, ahead of a planned press conference, to make his case.

“Let me be clear: Weinstein Company leadership was complicit in Harvey Weinstein’s wrongdoing,” Schneiderman wrote on Twitter. “They knew what was happening. They knew how pervasive it was. And yet they did nothing.”

In the press conference held this AM, he went further: “We have never seen anything as despicable as what we’ve seen right here,” Schneiderman told reporters. “It’s clear the company’s management was complicit in this pattern of misconduct. They knew what was happening. It was flagrant, it was flamboyant, they knew how pervasive it was and not only did they fail to stop it, they enabled it and covered it up.”

Schneiderman said any deal to buy The Weinstein Co.’s assets “must ensure victims are adequately compensated, that employees will be protected moving forward and that those executives who were complicit in the misconduct will not be rewarded.” The Attorney General’s Office also wants independent supervision of the victim’s compensation fund.

“As of yesterday, there was no deal that would have met that standard,” Schneiderman said. Still, the New York Attorney General said the office has not filed any application to stop the deal from moving forward. “What’s happened is I think that the purchasers are now taking into account the facts we alleged and understand that they probably have more on their hands than they initially realized,” he said.

The AG launched an investigation into civil rights violations last October after The New York Times revealed years of alleged sexual abuse at the hand of Harvey Weinstein. As that continued, an investor group led by Maria Contreras-Sweet and billionaire and longtime Harvey Weinstein pal Ron Burkle plunked down a $500M bid to try to keep the company from going bankrupt (that included a $225M assumption of debt) and a victims compensation fund ($60M available from the insurance company and backstopped by $10M letter of credit). David Glasser who had been with the Weinsteins and TWC since 2008, would again become COO (or CEO) under this scenario, depending on whom you listen to. Whether the brothers Weinstein would be compensated from any sale as they both own 21% of TWC, remained to be seen.

As the Contreras-Sweet led investment group worked to close the terms of the deal, the AG was four-months into its investigation. Behind the scenes, the office told them in no uncertain terms that it was not satisfied with the deal as constructed by putting Glasser in place and that there was not proper oversight protection, and they were concerned whether there would be enough to justly compensate the victim base.

RELATED: David Glasser staying as The Weinstein Company COO/President

During a press conference, Schneiderman said Contreras-Sweet refused to talk or meet with the attorney general’s office, suggesting that the would-be acquiring party was somehow prevented from doing so by The Weinstein Co. The deal was supposed to close on Sunday. He said that she had a quick call with a representative of the AG’s office, and said she would call back and that never happened.

“We were trying to talk to the attorneys for the purchase and when you hear from their attorney saying, ‘Why do we need to talk to you?” That tells you everything you need to hear,” said Schneiderman.

The attorney general said that, contrary to promises of a new, female-led studio, Glasser would emerge as chief executive of the new company.

Schneiderman was more pointed on social media, Monday saying the new deal would reward COO/president Glasser and other top executives while keeping the victims muzzled “by insidious non-disclosure agreements.”

In the lawsuit, they state that “on more than one occasion, upon forwarding a complaint or information about a complaint to the COO, the Human Resources Director was not involved in any investigation or resolution process” and based on their investigation “such matters were handled by the COO and other members of TWC senior management, as well as counsel retained to contact victims of misconduct.” In his role as COO, Glasser had oversight over the Human Resources Dept.

He went even further in the press conference today saying, “Understand that putting in charge of a newly configured company the same people who were involved in perpetuating – for 12 years – this pattern of misconduct should be unacceptable to anyone who wants to re-imagine the company and we don’t want those people rewarded. We want employees protected and we want victims compensated. Simple principles that were not in the deal that was presented to us.”

Schneiderman said the insurance policies that were proffered, and a $10 million letter of credit, “were inadequate because they had to cover all expenses including legal fees and everything else. We would like a fund that is dedicated to specifically to the compensation of victims alone.”

Contrary to claims, Schneiderman noted there was no real victims’ compensation fund. “Let me repeat that: There was no victims compensation fund,” Schneiderman wrote, adding: “If the buyers are serious about turning the page and doing right by the employees and victims, they can and will fix these problems with the deal. I don’t think that’s too much to ask for the women who have endured years of abuse at the hands of The Weinstein Co.”

Yesterday in the lawsuit the AG’s office stated: “Any sale of The Weinstein Company must ensure that victims will be compensated, employees will be protected going forward, and that neither perpetrators nor enablers will be unjustly enriched. Every New Yorker has a right to a workplace free of sexual harassment, intimidation, and fear.”

The 38-page suit alleges that Harvey Weinstein “repeatedly and persistently” sexually harassed female employees, and others seeking to work with the studio, and subjected them to threats and verbal abuse. Some employees were required to facilitate his sexual encounters – with executive assistants scheduling or helping to arrange sex.

Schneiderman said he thinks it is a “worthy aspiration” by the purchasers to try to avoid bankruptcy for TWC.

“It seems to be clear to us that the facts that we had unearthed in our investigation were not known to the purchasers and they may not have been known to people on the board of TWC. There was extensive cover-up of a lot of this that took place.”

He noted that Harvey Weinstein’s physical personnel file went missing. The NY AG said he doesn’t know the number of complaints and there were dozens of both informal and formal complaints over the years.

“There was never … in all the years covered by our investigation and this is a company that operated with Mr. Weinstein at its helm from 2005 to 2017 one actual investigation by the management or human resources into any of these complaints which you are legally required to do.” He added: “There was clearly a systemic breakdown in the company’s legal obligations … whatever happens going forward, we have to ensure this is all cleaned up.”