More Details On Spanish Music Collection Society Corruption: Accused Of Stealing $550 Million From Artists

from the lovely-people dept

Late last week, we wrote about the corruption-driven raids on the Spanish music collection society SGAE, and the arrest of its boss, Teddy Bautista. Over the weekend, more details have come out. Jose Luis Campanello points us to the news that officials believe that SGAE execs may have diverted approximately $550 million (US) to their own (or others) profits, at the expense of the actual musicians who should have received that money (Google translation of the original Spanish).

TorrentFreak has additional details as well, about the scheme that seems extremely questionable. Basically, the accusations are that SGAE hired some "consultants" to set up a supposedly independent subsidiary. The thing is, some of those consultants were relatives of SGAE execs:
The complaint alleges that SGAE operatives set up companies and used revenue destined for artists to generate profit for themselves and their families, and that money bound for artists living abroad was diverted to personal Swiss bank accounts.

At the center of the storm is SDAE, the digital rights arm of SGAE. Although a notionally separate entity, SDAE is fully operated by SGAE. It appears that when SDAE was being set up, SGAE hired a for-profit company called Microgenesis as consultants.

Microgenesis describe themselves as “a team of specialists in engineering, consultancy and development, managed by individuals with established experience in the fields of intellectual property, as well as the culture and entertainment industries.”

Microgenesis operated a number of companies which provided various services for SGAE and SDAE, some of them suspiciously registered at SGAE/SDAE’s own office address. The problems only deepen when one learns who is behind Microgenesis.

Jose Luis Rodriguez Neri is Director General of SDAE and ex-director of SGAE. His wife, Maria Antonia Garcia Pombo, is the ex-president of Microgenesis. Partner-Chief Legal Officer of Microgenesis is Eva Garcia Pombo. She is Neri’s sister-in-law.
This all sheds additional light on SGAE's rather fanatical approach to increasing who it could collect the digital levy from. It sounds like they weren't necessarily looking for more money from artists, but potentially for themselves...

Filed Under: collection society, corruption, music, spain, teddy bautista
Companies: sgae


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  1. icon
    Austin (profile), 6 Jul 2011 @ 9:26am

    I Blame the Artists

    This is 2011. We've finally hit a point where artists can self-promote to the point where they can earn as much money as a signed act without a studio behind them. Furthermore, their fan base will be smaller, but they'll be more engaged, and more likely to buy. If I was an artist, I'd rather have 10,000 fanatics than 1 million casual fans. With the advent of the internet, any Artist can now achieve this without a label.

    So yeah, I blame the Artists. If they had chosen the wiser path, and done this on their own, they wouldn't need a label, and a label they wouldn't be signed to wouldn't be stealing their profits.

    Or to distill this for any Artists who may be reading: Wake up and smell the savings guys! The suits in Hollywood and Nashville are giving you 50 cents every time they sell a $20 CD with your hard work on it! A record contract is NOT the answer! Your fans ARE the answer!

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