Its looking like fraud and embezzlement are the order of the day, with RIAA "front" company Soundexchange being asked some searching questions over what has happened to tens of millions of artists money.
http://www.p2pnet.net/story/13016Ex-RIAA bag company SoundExchange is a non-profit which supposedly exists to collect money for artists and labels.
It doesn’t appear to be too successful, at least as far as the artists are concerned, not seeming to know who or where many of its clients, if they can be called that, are.
Consequently, it has considerable difficulty paying them the money it owes. Exactly what happens to all the millions of dollars left in limbo? SoundExchange keeps the money.
Section 114(g)(3) of the Copyright Act explicitly limits how the nonprofit can spend the money it collects, approving just three carefully circumscribed activities:
“(A) the administration of the collection, distribution, and calculation of the royalties;
“(B) the settlement of disputes relating to the collection and calculation of the royalties; and
“(C) the licensing and enforcement of rights with respect to the making of ephemeral recordings and performances subject to licensing under section 112 and this section, including those incurred in participating in negotiations or arbitration proceedings under section 112 and this section, except that all costs incurred relating to the section 112 ephemeral recordings right may only be deducted from the royalties received pursuant to section 112.”
It came as quite a surprise when a source familiar with SoundExchange told me on condition of anonymity that the group is engaged in lobbying and public relations activities, in apparent violation of the law cited above,” says Van Buskirk
A little fact-checking showed that SoundExchange registered the MusicFirstCoalition.org domain on May 9, 2007; that it is a member of the organization; and that SoundExchange supports musicFIRST financially, although it has not disclosed the extent of its spending. (When asked about it, SoundExchange spokesperson Richard Ades called that information “proprietary.”)
Here’s what’s not proprietary: The musicFIRST Coalition (Fairness In Radio Starting Today) is a public relations group that launched on June 14, 2007 with the sole mission of implementing a sound recording performance royalty on terrestrial radio stations. It is comprised of labels, managers and artists, including Hall & Oates, Jay-Z, Celine Dion and various artists’ and labels’ organizations, including the RIAA. SoundExchange is listed as a sponsor on the homepage of the organization’s web site.
Asked about the legality of the lobbying expenditures, SoundExchange Executive Director John Simson dodged the question. “Clearly the Broadcasters (CQ) will do or say anything so as not to pay artists for their work,” he wrote in an e-mail. “We welcome a full and open debate before Congress on ending the unfair free ride given over-the-air radio and the granting to artists the long overdue right to be paid for their recordings when they are played.”
This system of revenue collection for artists is undesirable in that many never get a cent/penny when their work is performed and those that do are forced to pay a stealth tax to those collecting it on "their behalf".
It seems Soundexchange makes little or no effort to find many of the artists it should be returning royalty revenues to and pockets the money for itself and its pro RIAA advertising and publicity campaigns.
Artists already get a poor deal from the big labels, with Soundexchange taking what for many is the "top up" income from some of their creative works for its own political activities, is it suprising many are now calling for the RIAA and its seemingly corrupt affiliates to come clean and leave the field open to a fresh organisation that is at least transparent and more resolute in ensuring those who have earned the money from their musical works actually receive it, to do nothing is to legalise fraudulant and deceptive practices that help no one.
