Pando

The "white-slaver" awakens: It's not Disney to whom George Lucas should be apologizing

By Mark Ames , written on January 5, 2016

From The Techtopus Desk

George Lucas ended his 2015 in controversy, describing Disney—owners of the Star Wars franchise—as “white slavers.” He quickly apologized. To Disney.

Rather than apologizing to a $170bn corporation for hurting its feelings, Lucas should probably apologize to all of his employees from the mid-1980s onwards, and to the tens of thousands of VFX animators and tech engineers and others caught up in the massive wage-fixing cartel that spread across industries and oceans until it was busted up by the Department of Justice in 2010.

Better yet, he could pay back some of the stolen wages that VFX tech workers are seeking in a class action antitrust lawsuit that grew out of the landmark Silicon Valley wage-theft lawsuit, and which -- court documents revealed -- was prompted by Pando’s reporting on the Hollywood component of the illegal conspiracy.

As readers of our series of articles on the Silicon Valley wage-theft cartel will recall, it was George Lucas himself who first initiated the illegal conspiracy to suppress tech workers’ wages by secretly coordinating recruitment and salaries with competing VFX film companies. Lucas later justified his actions by claiming that had he not secretly suppressed employees’ wages, the small movie studios would’ve gone bankrupt and everyone would’ve suffered. Stealing workers’ wages and their opportunities to protect Lucasfilm’s bottom line may have been an act of selfless benevolence, but it also turned Lucas into a multibillionaire when he sold out to Disney in 2012 and pocketed over four billion dollars for himself.

Disney too was party to the wage-fixing cartel, both in its own right, and by swallowing up the two original co-conspirators: Lucasfilm, and Steve Jobs’ Pixar—or more specifically, Jobs’ top lieutenant at Pixar, Ed Catmull. Seeing how well the conspiracy worked for Pixar’s bottom line, Jobs later conspired to duplicate the secret wage-suppression agreements in Silicon Valley, and from there the wage-fixing cartel metastasized, roping in companies with a combined workforce of well over a million people.  

Hence the absurdity of Lucas attacking and retracting, and apologizing for, his “white slavers” line towards Disney. He may as well apologize to Jabba the Hutt while he’s at it.

Today Lucas is one of the wealthiest men in the world, recently ranked #94 on the Forbes 400 list. And his Disney stake has doubled and then some, netting him another $2.2 billion just since late 2012.

But let’s go back to the beginning of the Techtopus wage-fixing cartel—to 1986, when Lucas sold off Lucasfilm’s computer animation division, Pixar, to Steve Jobs (and Ed Catmull, in a subordinate role).

It was during this sale that Lucas, Jobs and Catmull made a secret “gentlemen’s agreement” to suppress the computer animation engineers’ wages by secretly coordinating their human resources departments and recruitment.

As Lucas explained in a remarkable 2013 deposition,

“I always -- the rule we had, or the rule that I put down for everybody . . . I had said that we cannot get into a bidding war with other companies because we don't have the margins for that sort of thing.”

A few minutes later, he added:

"It's not a normal industrial competitive situation."

Indeed, Lucas contradicts himself repeatedly in the testimony, and reveals far more than he (or his lawyers) intended.   

In reply to the plaintiffs’ lawyer’s question asking to name some of the VFX companies that Lucasfilm had a no-poaching agreement with, Lucas answered:

“Generally, all companies.”

He described the no-poaching agreement not as a policy, but in imperial terms, as His “wish”:

Q: You said generally that was the policy. Is that a policy that you made?

Lucas: It was a -- it wasn't a policy. It was my wish.

Q: Okay. And did you tell, for example, [former Lucasflim president Micheline] Chau that that was your wish?

Lucas: Yes.

Q: Okay. Did you -- when you told her that, did you expect her to communicate that to the people that worked for her that were responsible for -- for running the recruiting function at the company?

Lucas: Yes.

But when asked to describe how the agreement originated, Lucas became more evasive:

Q: Did you enter into an agreement with -- with Pixar with respect to recruiting or hiring from the two companies?

Lucas: I wouldn't call it an "agreement."

Q: Okay. What would you –

Lucas: It was basically a conversation that -- my only involvement was a conversation between Ed [Catmull] and myself about, since we were both fragile companies, that we wouldn't destroy each other.

Q: And can you tell me to the best of your recollection who said what to whom during that conversation?

Lucas: We were talking about that he was getting his group together, and he was -- you know, there were some people who were -- could be put every -- either way. He thought that they'd worked all that out and everything with the head of ILM, and -- and the other parts of the computer division, which weren't being sold, there was only a small part, and he said he thought it was going well. I said, great. But we should agree not to try to run each other out of business. I knew he wanted to go into the film business, and when it came to that, you know, we'll be helpful, but, you know, we -- I really didn't want him raiding the company and trying to take all the good people away.

Lucas said in the deposition that a free and fair employment market in computer VFX would be “killing” each other, and so it had to be avoided. One way to avoid being “killed” was  to agree in secret not to recruit each other’s employees; enforcement was carried out by snitching on each other’s employees if they came looking for a better job.

Q: In your conversation with Ed Catmull, did you discuss with him how you would handle the situation when an employee did, in fact, want to leave one company for the other?

Lucas: We had discussed the -- the fact of, you know, if somebody want -- comes to them looking for a job and wants to leave here, at least give us a heads-up that that's what they're going to do.

Q: I'm sorry. Who would give whom the heads-up?

Lucas: Ed or somebody at Pixar would call us, whoever the head of, like, ILM, and say, hey, this person is looking for a job. He's come here. We just want to let you know.

At this point in the deposition, Lucas’ lawyer must’ve channeled some Jedi mind-trick on his client, because Lucas completely flipped and started arguing that the purpose of his non-solicitation “wish” with Pixar and other film companies had zero to do with his wish to avoid a “bidding war.” In order to refresh Lucas’ memory, the plaintiffs’ attorney showed him evidence obtained during discovery by both the Department of Justice and in the civil trial—including this email from Pixar’s head of HR to Disney Studios’ head of HR, Subject: “Lucas gentleman's agmt. FYI”:

Hi Marge,

Here's something I wrote up for Ed [Catmull] a couple of years ago on the LFL [LucasFilm] relationship so you have it handy. I can provide you lots of examples of our following this procedure if it's helpful.

Attached was a document marked “CONFIDENTIAL” that begins, “Our gentleman’s agreement with the Lucas companies” and ends by emphasizing that no bidding up of a prospective employee’s salary is allowed:

Once we have had the conversation with LFL, we never counter if the candidate comes back to us with a better offer from Lucasfilm.

After being shown this and reams of other damning emails, Lucas was again asked about his position on suppressing recruiting in order to suppress wage bidding competition. Incredibly, Lucas denies everything in front of his face:

Q: Did you want to avoid bidding wars with Pixar?

Lucas: No. That wasn't the original intention of my wish.

Q: Okay. But did you want to avoid bidding wars with Pixar –

Lucas: No.

Q: -- with respect to employees?

Lucas: No.

Q: Did you have any feeling one way or another about bidding wars with respect to Pixar?

Lucas: No. I didn't -- no.

Lucas backtracked completely, claiming that other companies’ salary offers to VFX workers had absolutely zero influence on Lucasfilm’s own employee compensation levels. But then something happened at the end of the day—Lucas’ facade cracked, and he vented about the way new companies with their sweet salary offers threatened to bankrupt Lucasfilm, nearly derailing his billionairedom:

Lucas: When a company is formed, they immediately go out and raid all the other companies. It's a big problem. And they will pay whatever it takes, even though it is irresponsible. And, of course, these companies are all out of business now, because they paid everybody more than they could afford.

So we have to protect ourselves against that, because that can completely wipe out a department. . . . So if they take away 30 of our people, or key -- 10 of our key people, we're wiped out. We'll go bankrupt. So it's that close to the edge.

Q: Okay. Well, you never had that problem with Pixar, right?

Lucas: No.

In the final moments of the anti-white-slaver crusader’s deposition, he completely reversed his earlier denials, and grandstanded about how his secret wage-suppression scheme was a kind of benevolent act of anti-capitalist charity, Mother Theresa by way of Mother Jones:

Q: Would you agree that your conversations with Ed Catmull served to head off any competition between the two companies to attract digital animation employees?

Lucas: No.

Q: Well, would you agree that the discussions you had with Ed Catmull generally prevented, as you said, efforts by the two companies that might have killed each other?

Lucas: Right. I was trying to -- we were trying to protect the San Francisco film industry. It is very, very small. It is very hard for us. We're not like Hollywood. And the only way we can survive is if we do it together. United we stand, divided we fall. This is not like a regular capitalist kind of operation where you're out to kill the other guy. I'm promoting digital technology for cinema, and I'm devoting a lot of my time working with animators and with visual effects people to try to expand the entire medium and discipline for everybody. When I came here, there were nobody -- there was nobody.

Q: Did you believe that if you were kind of competing with Pixar for employees, and -- and recruiting or raiding each other's talent, that you would -- that would have limited your ability to do that?

Lucas: Yes.

Q: And it would have made -- it's your testimony that that kind of raiding or recruiting would have limited the growth of the industry here.

Lucas: Definitely. 

It should be clear by now that Lucas is not the type to apologize to the victims of his wage-theft conspiracy, which eventually spread to scores of studios involved in computer animation films, and got so brazen that studio HR heads held annual secret meetings to compare each other’s pay scales and compensation policies.

It also comes as no surprise that Lucas would apologize to his co-conspirator, Disney, if only because Disney is where his billions are parked. Anti-capitalist, anti-Disney blather goes over well with his Marin County sycophants and employees, but not with Lucas’ new billionaire-class crowd. He’s not just rich as hell, he’s also a member of the financial-political elite, one half of Chicago’s “power couple”with his wife Mellody Hobson, a leading Rahm Emanuel backer, president of Ariel Securities and chair of Dreamworks Animation (she also serves on the boards of Starbucks, Estee Lauder, Groupon, and a host of politically-connected Chicago charities).

It’s through Ariel Securities — which manages Chicago’s pension funds, teachers’ funds, and scores of Illinois state and county funds — that Lucas’ wife made tens of millions, and her important connections—with Mayor Rahm, with Obama’s former Education Secretary Arne Duncan (who got his start heading Ariel Community Academy, the financial firm’s South Side charter school), and with Michelle Obama’s family, who are old friends of Mellody’s boss,  Ariel Securities CEO John Rogers.

Last month, as Chicago exploded in protests and outrage over Rahm Emanuel’s role in covering up the police killing of Laquan McDonald, he appointed Sharon Fairley to head up the Chicago police oversight board and reform the police department’s culture of violence and unaccountability. Fairley, it turns out, is the wife of Ariel Securities CEO John Rogers — Mellody Hobson’s boss.

That crowd doesn’t appreciate Lucas’ reckless (and hypocritical) anti-corporate blather like calling Disney “white-slavers.” They’re all about networks, and Hell, so is Lucas. For example, after reneging on his initial pledge to give away his wealth, Lucas wound up plowing millions of his dollars into Starbucks—where his wife Mellody is a board director, a job she got through her lifelong friendship with Bill Bradley, a fellow Starbucks board director. Mellody’s connections to Rahm—Lucas’ wife was donating tens of thousands to his mayoral candidacy even as her firm was upping its management of city funds—helped grease the controversial ten dollar lakefront property, and the new law rushed through by Illinois’ zillionaire Republican governor providing special legal protections for Lucas so that he could rush his museum deal through, a bill that piggybacked on the planned new Obama Library...

So indulge your childhood nostalgia and George Lucas’ tales of good vs evil—every ticket sold only makes Lucas, Disney’s top shareholder, that much richer.