Probe of Rap Label Looks at Entrepreneur Behind Bars

There’s no doubt that Michael “Harry O” Harris has entrepreneurial instincts. Growing up in a Los Angeles neighborhood he calls “the low bottom,” he became one of the region’s most notorious crack dealers before he was arrested and sent to prison in 1987.

Since being in prison, he has decided that his real talents lie in the entertainment business.

In fact, Harris says that, while serving a 28-year sentence for crack dealing and attempted murder, he helped launch rap giant Death Row Records--a claim that the label’s founder disputes. He and his wife also negotiated deals with music labels owned by Time Warner, Polygram, Sony and Viacom.

Harris in recent months has emerged as a central figure in a federal racketeering probe of Death Row, which is under investigation for alleged links to street gangs, drug trafficking, money laundering and violent acts. Last week, FBI agents completed a third round of interviews with Los Angeles music executives, asking questions about Harris and his purported role as a financier of Death Row, sources said.

It may not be surprising that a convicted drug dealer claims to have helped start a company whose music has been criticized for glorifying criminal activity and whose founder--Marion “Suge” Knight--was recently jailed. More surprising, perhaps, is that Harris and his wife have negotiated deals with a variety of mainstream music labels, all while he has been in state prison.

‘I’m a Workaholic’

How did a man who was indisputably one of the Southland’s major drug lords end up doing business with so many executives throughout the record industry--some of whom even visited him in prison?

“I’m a workaholic,” said Harris in an interview conducted in the Metro Detention Center in downtown Los Angeles, where he was transferred temporarily. “I applied myself. I know I did wrong in the past and I am paying my debt to society. That, however, in no way negates the fact that I was blessed with entrepreneurial talent.

“I could have sold bottle tops and become a billionaire, but instead I made that fatal choice which has haunted me and my family ever since. My deepest regret in life is that I sold dope. Knowing what I know now, if I got out of jail tomorrow, my goal would be to create the seventh major entertainment conglomerate.”

Harris noted that he invested in and managed more than a dozen legitimate businesses before his drug arrest.

His account of his music industry dealings is backed up in part by such respected industry veterans as Maverick Records chief Freddy DeMann, who calls Harris “a talented entrepreneur.”

Record companies involved declined to comment.

But others, such as Knight, characterize Harris as a scheming “snitch” who is trying to lighten his sentence by selling the government a bill of goods.

It is against the law for an inmate to run a business while in state prison. So Harris is careful to describe his role as a “consultant” to ventures operated by his wife, Lydia Harris, who sings under the name Ms. Lydia. But those familiar with the company say Harris has played a key role in negotiating deals with music industry executives by phone from his prison cell. And Harris says that under community property laws he owns half of his wife’s businesses.

Harris was moved from state prison to the Metro Detention Center after receiving a subpoena to turn over documents and testify before a federal grand jury examining the roots of Death Row Records. The 35-year-old convict refused to discuss the racketeering probe, but sources say he has testified before the federal grand jury--as have a number of people involved in the early days of Death Row.

Death Row Records

According to Harris, the story of Death Row begins in the autumn of 1991 when he introduced David Kenner, his lawyer, to Knight, a former college football player and aspiring music entrepreneur who had access to a Hollywood recording studio.

That October, Harris says, he asked Kenner--who was working on an appeal of his drug conviction--to bring Knight for a visit to the Metro Detention Center to discuss the possibility of cutting a demo tape of his wife’s singing.

Within months, Harris says, he put up $1.5 million in working capital for a half stake in an entertainment corporation called GF Entertainment that would include a record division called Death Row. Harris said he financed the company primarily because Knight had promised that Death Row’s music would be produced by Andre “Dr. Dre” Young, a co-founder of the hit rap act NWA and one of the nation’s most respected record producers.

Harris says he spoke frequently by phone in late 1991 to Knight and Young as they were putting together tracks for Young’s “Chronic” album, which was to be the label’s debut release. State records indicate that Knight visited Harris at the California Correctional Institution in Tehachapi nearly two dozen times over the next 18 months.

On Feb. 22, 1992, Young and Snoop Doggy Dogg performed at a party thrown by GF Entertainment at Chasen’s Restaurant in Beverly Hills to mark the “springing of Death Row Records.” A videotape of the party includes Knight and Kenner making tribute speeches in which they give “special thanks to Harry O,” sources said.

State records indicate that Harris’ wife and Kenner filed incorporation papers in May 1992 to establish a firm called GFE Inc., which stands for Godfather Entertainment Inc. By that November, Harris says, he learned that Knight and Young had cut a deal behind his back with Interscope Records, which subsequently released Death Row’s debut album and a string of other multimillion-selling hits.

Harris says Knight and Kenner repeatedly have refused to give him an accounting from Death Row or share any of its profits with his wife, who he maintains deserves half of any income earned.

Knight denies that Harris financed Death Row, insisting the label was launched with millions of dollars from deals cut with Sony, Interscope and Time Warner.

Proving one account or the other may not be simple and that is one thing the federal investigation is trying to establish.

Over the past four years, Death Row’s music has been distributed by four of the nation’s six biggest record conglomerates and generated more than $300 million in retail sales.

“I was betrayed by Kenner and Suge,” Harris said. “I remember how Suge used to always say to me, ‘We don’t fatten no frogs for no snakes,’ meaning he didn’t want undeserving individuals in the corporate world to benefit from our hard work. As it turned out, Suge ended up being both the frog and the snake.”

Kenner, who worked on a federal appeal and a state habeas corpus motion for Harris, said that the attorney-client privilege prevents him from addressing his former client’s accusations.

“One thing I will say is that I was never paid for the legal work I did for Mr. Harris,” Kenner said. “I am sincerely disappointed by Mr. Harris’ attitude.”

In a written response to questions from The Times, Knight, who is serving a nine-year sentence at the California Men’s Colony in San Luis Obispo for an assault probation violation, said last week: “You have to realize what kind of guy this is. . . . Michael Harris makes things up to try to get out of jail.”

“What he wanted from me was to make a record for his wife. In exchange, he offered me the group the Geto Boys. There were two big problems with that, though. One, he didn’t own the Geto Boys. And two, she couldn’t sing.”

Harris dismissed Knight’s account.

“I am not afraid of the truth,” Harris said. “But I am truly disturbed by these insinuations that I am some kind of a rat. I am not a rat. If I was a rat, I could have been home free 10 years ago. I want to make it very clear that I have never cut any kind of deal with the government. My documents were subpoenaed. I was brought down here by subpoena. I had no choice in the matter.”

A ‘Lying Snitch’

Death Row wasn’t the first company Harris allegedly backed. There have been rumors in the rap world for nearly a decade that Harris put up hundreds of thousands of dollars in seed money to launch Houston-based Rap-A-Lot Records, the company to which the controversial Geto Boys are under contract.

Harris contends he underwrote the start-up of the successful label based on a handshake in 1987 with Rap-A-Lot founder James “Lil J” Smith, a friend with whom he socialized regularly throughout the 1980s. Harris would not specify the amount of money he invested in Rap-A-Lot, but sources said he put up about $200,000 to help Smith get the label off the ground--an allegation Smith denies.

Harris says he kept in close contact with Smith by phone until around 1994 when the two had a falling-out over ownership to the rights of music by rapper Dana Dane.

In an interview, Smith--whose company signed a multimillion-dollar distribution pact in 1995 with EMI-owned Virgin Records--said: “Mike Harris is a pathological lying snitch. I guess he must be working with the feds trying to bring down black-owned companies. I started Rap-A-Lot with my own money.”

Building a Drug Empire

Opinions may differ about Harris’ contributions to the companies that made gangsta rap music famous, but there is little debate about his status as a gangster. Nor any doubt that he has played a key role in negotiating a series of deals on behalf of his wife’s companies over the last six years.

Born in Los Angeles, Harris grew up in a gang-infested area on 46th Street where he worked his way through junior high and high school shining shoes for “high-rollers and players.” He worked a series of odd jobs during his late teens while studying marketing and business at West Los Angeles Community College.

By the time he turned 20, Harris had dropped out of school and quit his job as an electrical supply salesman to sling crack in South-Central. Five years later, Harris and his brother, David, had built a drug empire that reached halfway across the United States. According to the Drug Enforcement Administration, Harris’ operation was part of an international drug ring that linked Los Angeles street gangs to a Colombian cocaine cartel.

In 1987, he was convicted of the kidnapping and attempted murder of one of the members of his drug ring, James Lester, a distant relative whom Harris suspected of stealing money from the organization. Lester testified that he was driven to the Antelope Valley by Harris and two accomplices, shot several times and left for dead. Harris denies that he shot Lester.

Harris was so notorious that then-Los Angeles Mayor Tom Bradley called a news conference in 1988 with the DEA and the Los Angeles Police Department to announce the seizure of Harris’ holdings, which included three extravagant San Fernando Valley estates, a fleet of luxury cars and a speedboat. By the time federal officials stepped in, Harris also had built an extensive portfolio of legitimate businesses, including a Beverly Hills beauty salon, a deli, a limousine service, an electrical contracting company and a theater production company, which helped launch Denzel Washington’s career in the Broadway play, “Checkmate.”

“They called me the gang godfather,” Harris said. “I had strong relationships with both the Bloods and the Crips. I was a player who knew how to get things done from the streets to suites. Back then I was blinded by the greed and the false sense of power. I know now that selling dope was a big mistake. Look what it did to my family. Look what it did to the community. Look where I ended up.”

Reading the Trades

If the arrest ended his success in the drug trade, it began a fruitful period in the music business.

Today, first thing every morning, Harris scours the daily trade magazines Variety and the Hollywood Reporter. The 6-foot-5, 240-pound inmate cites Connie Bruck’s “Master of the Game: Steve Ross and the Creation of Time Warner” as one of his favorite books.

Over the last four years, Harris’ wife has launched two record labels and cut production and publishing deals with four of the six major music companies. Michael Harris says he did not bring any cash to the table in those arrangements.

Lydia Harris says that she was responsible for discovering and signing the artists and producers, and that she oversaw daily operations. She acknowledged that her husband spoke with executives at the companies with whom she did business to discuss marketing, promotion and other strategies.

“These are my businesses,” Lydia Harris said. “I run them. I make the decisions. But sure, upon occasion I have put Michael on the line with certain people over the years and he gave them his input.”

In 1993, PolyGram-owned Motown Records paid Lydia Harris about $150,000 for a production deal to deliver recordings by an artist named Freddie “Beefy” Johnson. Sony-affiliated Relativity Records signed a $250,000 production deal with Lydia Harris to release an album by rapper Blak Czer, which sold poorly, sources said.

In addition, Interscope Records financed a $500,000 recording session for Lifestyle Records rapper Dana Dane, but decided to pass on signing Lydia Harris’ Lifestyle company to a broader deal. Interscope paid Harris’ wife about $300,000 to resolve a Death Row-related legal dispute, sources said.

In 1994, Viacom-owned Famous Music inked a $200,000 publishing deal with Lifestyle for compositions written by Lifestyle producer DJ Battlecat, who was also hired to produce tracks for Def Jam, Elektra and Big Beat Records, sources said.

That same year, Lifestyle negotiated a $2-million label pact with Madonna’s Maverick Records, which is half-owned by Time Warner. Maverick scored a minor hit with the Dana Dane album but cut ties with Lifestyle in 1995 after a public outcry over rap music prompted Time Warner to dump Interscope Records.

Visits From Businessman

Of all the businessmen he has dealt with over the years, Michael Harris says, Maverick chief Freddy DeMann is his favorite.

“I have tremendous respect for the guy,” Harris said. “You don’t get much more Beverly Hills than Freddy. I mean this is a guy who certainly didn’t have to come up to prison and visit me, but the man has a heart of gold. He is a real straight-shooter.”

In an interview, DeMann said he visited Harris in prison several times and talked with him by phone frequently during the tenure of the Lifestyle pact. Although he negotiated Maverick’s Lifestyle deal with Lydia Harris, DeMann said he considered the couple to be “partners in running the company.”

“I like Michael a lot,” said DeMann. “He has a wonderful mind. I think he is a very bright guy and a talented entrepreneur.”

Harris’ wife started a record company earlier this year called New Image Entertainment, whose music is being marketed and promoted through a deal with Acworth, Ga.-based Alexia Records and its distributor Ichiban Records.

Harris says New Image was funded with money generated from a variety of deals his wife has cut over the past four years. Last week, the company released its debut album, “Life after Evolution: Reality Check,” a two-CD compilation that showcases a dozen new rap and R&B; acts as well as Ms. Lydia.

The album’s title track, “Reality Check,” features a scathing lyric singling Knight out by name and accusing him of ripping off people who trusted him. The song, performed by rapper Ruff Dogg and the L.A. Grinders, ends with a warning to Knight to prepare himself for a “reality check.”

Harris didn’t write the song, but he says he likes it.

“The magnitude of what happened at Death Row is pretty deep,” Harris said. “Death Row took rap to another level and the benefits bestowed from this venture were many--and many people cashed in. From Interscope to Time Warner to EMI to PolyGram to Universal. In the end, I was the only one denied the fruits of my own creation.”