News America's Carlucci Admits He's a "Godfather" Fan; Denies Unannounced Price Rises

Last Updated Jun 22, 2009 11:54 AM EDT

News America Marketing CEO Paul Carlucci talked about his interest in the mafia in a video deposition at a Michigan State court trial in which his company is accused of anticompetitive practices. The court also heard about a memo in which Carlucci discussed raising prices without telling clients to see how much money the company could collect before anyone noticed.

The testimony was entered by lawyers for Valassis, a rival newspaper coupon provider, who claim that News America priced it out of the business. Valassis has been attempting to demonstrate to the jury that Carlucci regards himself as a mob-like enforcer in the world of coupons and supermarket advertising (BNET's coverage of the trial is several days old due to this.)

At the beginning of Carlucci's testimony, he admitted showing a scene from the movie The Untouchables at a sales meeting. That scene is believed to be the one in which Al Capone beats someone to death with a baseball bat. Next, a Valassis lawyer demonstrated that Carlucci's memory is somewhat faulty as to whether he refers to News America owner Rupert Murdoch as the the "Capo di Tuto Capo," a mafia reference meaning boss of all bosses. Initially, Carlucci testified that "I don't recall" using the term to describe Murdoch. But later he admitted using the term in a speech:

Question: Now, on the next page of your speech, 3923, you again make a reference to "Capo di Tuto Capo of all secret agents." Do you see that? Answer: Yes, I do. Question: And you are leading into a fairly long and actually quite a good joke. Answer: Thank you. Question: But the -- why do you choose again to use that mafia reference? Answer: It's actually an Italian reference. I am Italian American, and I do use a lot of Italian American express, expressions. Capo di Tuto Capo means head -- boss of all bosses. Question: So, within News, are you the Capo di Tuto Capo or is Mr. Murdoch? Answer: I don't know who is the Capo -- I don't use that term with him. Question: Does -- do you use that term with reference to him? Answer: No.
The implication appears to be that he regards himself as the don. Carlucci also admitted that he's a big fan of The Godfather:
Question: You were talking here about the regional offices. And at the bottom of the prior page, the sentence begins, "the mafia would refer to our General Sales Managers as I 'good earners' and indeed they are." Do you see that? Answer: Yes, I do see that. Question: Why would you use mafia references? Answer: I -- mafia references, probably I enjoy, you know, Godfather and I enjoy the term "good earnings" as a term. And I thought it was a nice term that people would relate to. It has no bearing on being an Italian American.
When questioned about one of the more dramatic turns in the direct-marketing wars (a meeting at the Dish of Salt restaurant in New York in which Carlucci warned a competing agency, Floorgraphics, "I will destroy you!") Carlucci claimed not to remember the threat or any other details of the meeting, even though the incident eventually led to News America acquiring Floorgraphics. In attempts to avoid questions about the meeting, Carlucci also revealed a Clintonesque side -- he initially denied having a lunch meeting at the Dish of Salt because the meeting wasn't at "lunch":
Question: Okay. So, you did have a meeting with them at the Dish of Salt, is that right? Answer: A very brief meeting in the afternoon, yes. Question: I see. So it was not a luncheon meeting, but an afternoon meeting, is that right? Answer: That's correct. Question: So, the reason you were denying my prior questions is because I used the word 'lunch'? Answer: That's correct.
More importantly in terms of the case, the court heard that Carlucci had discussed in October 2003 raising its prices without telling its customers to see how much extra money they could collect before the clients noticed:
Question: 'The group discussed raising production rates on the SSCM and Paul decided that we should raise the price to $2.66 without making a major announcement to clients and to begin adding it to the invoices. Paul wants to track to see how much we collect.' Do you see those words? Answer: Yes, I do. Question: Does this refresh your recollection about a discussion of this kind? Answer: No, it does not.
The trial continues.