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

Head Of Spanish Music Collection Society Facing Corruption Charges

from the well-look-at-that dept

Spain is one of a few countries that actually has had pretty sane copyright laws lately. Unlike other places, it has generally felt that private, non-commercial copying of content is legal, and has also rejected the idea of placing liability on third parties. And, despite claims to the contrary from the legacy entertainment industry, there's still great content coming out of Spain (I keep getting great, new music from Spanish bands which, yes, I do pay for). However, it's been interesting to watch the big Spanish music collection agency SGAE, flail around in this environment. In its effort to go after some file sharing sites, it actually pretended two of its employees worked for the courts, and "raided" the homes of people who worked on file sharing programs. As you can imagine, that's a big no-no, and SGAE was fined. It also tried to take legal action against a competing upstart group, that was pushing for more open/copyleft/Creative Commons licensing of music.

And now comes the news that the head of SGAE, Teddy Bautista, is being sought on corruption charges (Google translation from the original Spanish), as a part of a massive investigation into corruption (original Spanish) in the very setup of SGAE.

Maybe, instead of trying to use questionable legal means to attack everyone else, SGAE should have been focusing on getting its own house in order.

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