Allen Klein

• 1. The Newark Accountant

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  Allen Klein was born on the 18th of December 1931 in Newark, New Jersey. He grew up as the fourth child and only son of Jewish immigrants. His mother died of cancer shortly after his birth. For a time, he lived with his grandparents before entering a Jewish orphanage. His father remarried when Allen was just ten years old. He graduated from Weequahic High School in 1950. Philip Roth was the only classmate to sign his yearbook. An indifferent student, Klein later enlisted in the U.S. Army in 1951. He served as a clerk typist on Governors Island, New York. After military service, he used the G.I. Bill to study accounting at Upsala College. He graduated in 1957 and joined Joseph Fenton and Company. The Manhattan firm fired him after four months for chronic lateness. The company wrote to New Jersey officials urging them not to approve him as a Certified Public Accountant. Klein chose not to take the examination. He briefly attended law school but soon dropped out.

• 2. Sam Cooke's Trust

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  In 1963, Klein began a business partnership with Jocko Henderson. Henderson hosted live rhythm-and-blues shows at the Apollo Theater in Harlem. As Henderson's partner, Klein met Sam Cooke. Cooke had four top-ten hits between 1957 and 1963. RCA Records refused to honor Cooke's requests for an account review. Klein forced the label to open its books for a thorough audit. RCA agreed to renegotiate Cooke's contract shortly afterward. Klein secured a groundbreaking deal for Cooke. Cooke created a holding company named Tracey Ltd. Klein changed paperwork to list himself as owner instead of Cooke. Cooke trusted him to protect him against crooked music executives. Klein used that trust to his own advantage. Tracey manufactured Cooke's recordings and gave exclusive rights to RCA to sell them for 30 years. Cooke received cash advances over three years followed by option years. Instead of receiving $100,000 in cash, Cooke was paid in Tracey preferred stock. The deal benefited Klein greatly when Cooke died in 1964. His widow sold Cooke's remaining rights to Klein. All royalties and publishing profits go to Klein's corporation today.

• 3. Stones Advance

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  In the spring of 1965 Andrew Loog Oldham saw Allen Klein as a business ally. Oldham wanted help winning a power struggle with Eric Easton. Jagger had just achieved his first number one record in the U.S. with Satisfaction. Oldham received Jagger's blessing to bring Klein aboard. Decca Records offered the band $300,000 if their records continued to sell. Klein countered with an arrangement paying twice that amount. He secured a $600,000 advance from London Records. By the time he renegotiated the deal a year later, the Stones were guaranteed $2.6 million. This sum exceeded what the Beatles were making at the time. Klein forced London Records to sign a separate contract. He also arranged tour support far above anything the band had previously experienced for their 1965 American tour. The label offered the band the opportunity to make money if their records continued to sell. Klein secured a million-dollar minimum guarantee paid over a 20-year period. This reduced the Stones' tax liability but kept control of the funds with ABKCO.

• 4. Beatles Management

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  Brian Epstein died in August 1967. The group formed Apple Corps in January 1968. They hoped it would correct Epstein's unfortunate business decisions. Klein contacted John Lennon after reading press comments about the band being broke. On the 26th of January 1969, he met with Lennon who retained him as financial representative. The next day he met with the other Beatles. Paul McCartney preferred Lee and John Eastman. George Harrison and Ringo Starr chose Klein. Given a choice between Klein and the Eastmans, Harrison and Starr preferred Klein. After rancorous meetings in April, Klein was appointed manager on an interim basis. The Eastmans were dismissed as attorneys. On the 8th of May 1969, Klein received a three-year contract as the Beatles' business manager. McCartney refused to sign the contract but was outvoted by the other Beatles. Once in charge of Apple, Klein fired many employees including president Ron Kass. He closed Apple Electronics which was headed by Alexis Mardas. Mardas resigned his directorship in May 1971. Klein attempted to fire Neil Aspinall but was thwarted by the band.

• 5. Bangladesh Fallout

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  In November 1970 George Harrison released All Things Must Pass. It became a sales triumph producing hit singles like My Sweet Lord. In spring 1971 Harrison learned about people devastated by military violence and cyclones in Bangladesh. He organized an event at Madison Square Garden within five weeks. Klein hustled to get artists like Bob Dylan and Eric Clapton to play for free. He convinced Capitol Records to grant an unprecedented 50% royalty rate. The Concert for Bangladesh live album and film raised over $15 million. But Klein failed to register the shows as a UNICEF charity event. Proceeds were denied tax-exempt status in Britain and the U.S. The IRS attempted to tax the income. $10 million of that amount was held back for years. By mid-1972 Harrison was incensed at the outcome of Klein's handling of the relief effort. An article in New York magazine accused Klein of pocketing $1.14 on each copy of the live album. Lennon also felt betrayed by Klein's lack of support for his political work. In early 1973 Lennon, Harrison, and Starr served notice they would not renew Klein's contract.

• 6. Tax Evasion Trial

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  In 1977 Klein and Pete Bennett faced three felony counts of income tax evasion. They were charged for 1970, 1971, and 1972. The IRS claimed they sold promotional copies without declaring sales on their returns. Klein received over $200,000 from these transactions. Bennett pleaded guilty to a single misdemeanor charge and became a witness against Klein. Klein testified he had not instructed Bennett to sell promotional copies. His first trial ended in a mistrial because the jury was deadlocked. At his second trial in 1979 the jury found him not guilty of felonies but guilty of false statements on his 1972 tax return. Klein was fined $5,000 and sentenced to two months in jail. He served that sentence between July and September 1980. The judge ruled that Klein still had a fiduciary responsibility to Harrison regarding Bright Tunes Music. Klein was ordered to hold He's So Fine in trust for Harrison provided Harrison reimbursed him $587,000 it cost to purchase the company.

• 7. Rock Villain

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  In 1978 John Belushi played Ron Decline in The Rutles All You Need is Cash. This mockumentary parodied the career of the Beatles. Decline was introduced as the most feared promoter in the world. Colleagues chose to throw themselves out of skyscraper windows rather than face him. Peter Doggett wrote that Klein has come to be seen as one of the controversial intruders in the Beatles' story. Suspected for their motives and hated for their disruptive power, they all arrived from America. They were regarded as suspects for breaking up the group. The first intruder was Yoko Ono; the second was Linda Eastman; and the third was Allen Klein. No such rehabilitation was available for Allen Klein who entered the story as a villain from central casting. Alistair Taylor said he had all the charm of a broken lavatory seat. Nobody in the Beatles' milieu received a more damning verdict from historians than Allen Klein. He died on the 4th of July 2009, in New York after suffering several heart attacks and Alzheimer's disease.