If you thought that the departure of Elliott Spitzer from the public scene might have put out the FCC’s fire for enforcement of the payola rules, think again. That fire is still blazing. In recent days the Enforcement Bureau has sent out letters of inquiry to a number of Spanish-language radio stations demanding responses concerning allegations of payola.
The claims arise from a lawsuit filed in Los Angeles two years ago. The plaintiff there, one Daniel Mireles, claims that he was wrongfully discharged from his position as Vice President of Promotions at Univision Music. (As always, the pivotal role of the “disgruntled former employee” should never be underestimated.) According to his complaint, Mireles was instructed by management-level executives of Univision and Fonovisa (a record label owned by Univision) to make “cash payments to the program directors and others at radio stations in order to increase the airplay of Fonovisa’s records”. While Mireles alleges that he resisted those instructions initially (apparently he had been involved in a payola investigation in the 1990s and was understandably gun-shy about going through the meat grinder again), he acknowledges that, between February-June, 2006, he was given some $720,000 to pay to “individuals at radio stations”. The goal was apparently to “get Fonovisa’s records played more frequently on the radio”.
Mireles claims that, in drawing up his list of “individuals at radio stations”, he spoke with people at “approximately fifty or more” stations. He allegedly made deals to make payments ranging from $3,000-$10,000 per month.
The complaint does not identify any stations or station personnel. But it appears that, in the two years since the complaint was filed, some names and call signs have surfaced in the lawsuit. More importantly, it looks like those names and calls have found their way to the Commission. The Enforcement Bureau’s inquiry letter to at least one station states that that station “is specifically mentioned in the [Mireles] lawsuit as having participated in the payola scheme”.
The Bureau’s letter asks standard questions relating to charges of payola as well as questions concerning, for example: (1) the station’s relationship with, among others, Univision Music Group, and (2) the station’s own internal policies and practices relating to awareness of and compliance with the sponsorhip ID rules. The letter also requires that the licensee turn over any responsive documents it might have in its files.
Of course, regardless of what may or may not have surfaced in Mireles’s litigation, at present it appears that all we have on the table are allegations, pure and simple. As far as we can tell, Mireles’s case has not to date generated any findings of misconduct by any radio station or station personnel and, of course, much more than mere allegations is needed to justify the imposition of any penalty.
It’s not clear where this is going or how long it will play out. Just last year, the Commission shook a grand total of about $10 million out of Clear Channel, Entercom and CBS in “voluntary contributions” arising from the Spitzer-triggered payola inquiries launched a year or two earlier by the Commission. Whether the FCC will have similar luck this time around remains to be seen.