Music attorney Don Engel, speaking on behalf of artists at a California Senate Committee music business hearing on Tuesday, has described record industry accounting practices as "intentionally fraudulent," comparing them to Enron and WorldCom. Engel was providing testimony at a seven hour hearing on allegations that label’s underpay royalties. Also giving evidence were artists Sam Moore and Montel Jordan, auditor Fred Wolinsky, Recording Industry Association of America senior VP of business legal affairs Steven Marks, and other label representatives. The labels, needless to say, deny any wrongdoing, arguing that royalty payments are a contract issue and therefore each artist’s case is separate. But Kevin Murray, one of the senators who organised the hearing, disagrees. He says many recording contracts mean that artists who feel they are being underpaid only have a case if it is proved in an audit of the label’s accounts – and Murray argues this is effectively a disincentive for record labels to fully report. A second hearing is likely to be scheduled.
Jul 25, 2002
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1 min read
Labels defend accounting processes
At a California Senate hearing on alleged label underpayment, music attorney Don Engel called label accounting intentionally fraudulent, while the labels deny wrongdoing.