“No artist ever lost money auditing a record company.” It’s been said, and it’s been true, since before I was old enough to vote. I’ve never even heard anyone suggest it could be refuted. Nevertheless, why it works that way remained obscure until a brave man named Fred Wilhelms delivered his testimony July 23 at the California state senate hearing on music industry accounting.
Wilhelms became former national director of the AFTRA Health and Retirement Funds because he refused to roll over and play dead about the record industry’s deformed income reporting that deprived artists of benefits. Before that, Wilhelms worked as an auditor New Jersey construction trade unions. He says that compared to the record industry, those guys constitute a monument to scruples.
The press coverage of the hearing paid little attention to what Wilhelms said, instead centering on the usual charges, countercharges and record company bleating. The RIAA’s grandstand play this time was walking out without concluding its testimony, which served to piss off the senators and take the headlines away from the revelations of corruption.
My printout of Wilhelm’s remarks runs 10 single-spaced pages (drop me a note and I’ll send it as a Word file). “Routine and systematic disregard of the requirements of the agreement and Federal law” probably summarizes it best. Most devasting to me: His description of an artist dying because “the industry does its absolute best to avoid its obligations.”
More devilish details abound. For instance: Did you know that record companies can be audited only on documents they provide? Manufacturing and even shipping records are off limits. That auditors are hired by the artist but the labels have the right to veto the artist’s choice? (One reason Wilhelms is brave.) That the contract allows no auditor to have more than one active record biz case? That opening balances on statements often bear no relationship to the closing balance on the previous statement? That although the artist can only audit for the preceding two years, record companies make “adjustments” four or five years after the fact? That record companies often charge pension and welfare payments against the artist’s royalties? (That one’s a violation of Federal law, never mind contracts.) That these debits from the royalty account often do not correspond to the amounts paid to the pension and welfare fund? (The amounts paid are, of course, invariably lower, sometimes zero.)
“So, at the end of an audit, which may be a couple years after the first demand for one was made, the artist finds himself at the poker table with the company again,” Wilhelms said. “there is a very good chance the artist has not been paid anything in the interim. IN the middle of the table is what the auditor has found for the artist. Does the company fold and simply push the chips to the artist? Not unless the artist has a current hit.”
Instead, he explains, the record company banks on the artist’s need for cash. So it stalls and stalls some more and doesn’t mind a lawsuit, which will let it stall still further (_its_ lawyers are employees or on retainer). In the end, since they have all the leverage and collect all the dough, rarely do the labels pay out much more than about 30 or 40 percent of what the audit proves they owe.
These practices provoked tears in me but that’s not the right response. The right response is to fight. Artists fight today more often and more powerfully than ever before through the litigation against the AFTRA funds and the record labels and via the Recording Artists Coalition. Can they win? To do that, they’ll have to overturn an entrenched system whose prowess and conniving makes Enron look like amateur hour. Read Wilhelms testimony and see for yourself. _Especially_ if you or anyone you know wants to sign a record deal.
Hard to remember when I received the amount of angry mail I got about my Alan Lomax column (trashing the Ramones didn’t come close). None of it denies that Lomax and his father falsified history, took credit and income that didn’t belong to them, and in doing so cheated the actual creators of the music they championed twice over.
I actually received a vague threat from Alan’s nephew John (“this is the beginning,” accompanied by an Interet screed). More bizarre, according to a whitewash followup by Jon Pareles in the NY Times-I guess inspired by my criticisms, since there were no other prominent ones–“Lomax’s rationale was that without his own clout, publishers wouldn’t bother to track down the likes of a Delta bluesman to get them their royalties. ‘If he did not secure these songs in the names of himself and these artists, they would not be paid,’ said his daughter, Anna L. Chairetakis, who now runs the Alan Lomax Archive.”
Which is kinda strange. I know several blues researchers who at one time or another have campaigned to get artists paid, sometimes successfully. None of them puts their name on the songs as a precondition. I thank Chairetakis and Pareles for proving my point.
(what’s playing in my office; expanded again. Too much good music out there, a rare thing in recent midsummers.)
1. The Rising Bruce Springsteen (Sony)-Abounding evidence that it does not go smoothly at all.
2. Jerusalem, Steve Earle (E Squared)-The real Neil Young.
3. The Complete John Lee Hooker, Vol. 4: Detroit 1950-51 (Body & Soul, Fr.)
4. Love That Louie: The Louie Louie Files(Ace UK) Arguably the greatest rock’n’roll anthology of all time. Or, I guess, the worst.
5. Africa Raps (Trikont)
6. All Over Creation, Jason Ringenberg (Yep Rock)-One of the founders of alt-country struggles with Southerness and freedom, sees the Civil War through the eyes of Irish immigrants and acknowledges responsibility for finishing the work of the civil rights movement.
7. Time Bomb High School, Reigning Sound (In the Red)-If anything could kill doowop, it’d be that opening version of “Stormy Weather.”
8. Try Again, Mike Ireland and Holler (Ashmont) 9. Nellyville, Nelly (Universal)
10. Adult World, Wayne Kramer (MuscleTone)
11. Down in the Alley, Alvin Youngblood-Hart (Memphis International)-Really the blues.
12. Fashionably Late, Linda Thompson (Rounder)-You won’t miss Richard.
13. Faces & Names, Dave Pirner (Ultimatum Music)
14. Electric Warrior, T. Rex (A&M Jpn)-To hell with David Bowie, Marc Bolan rocked 10 times better and 100 times sexier.
15. 1000 Kisses, Patty Griffin (ATO)
16. Viva El Mariachi: Nati Cano’s Mariachi Los Camperos (Smithsonian Folkways)
17. Que Pasa?: The Best of the Fania All-Stars (Columbia/Legacy)
18. Millionaire, Kevin Welch (Dead Reckoning)
19. Keep on Burning, Bob Frank (Bowstring)
20. Superbad! The Soul of the City (Time-Life)-A seamless argument for celebrating the ’70s while ignoring the Bradys, Kiss and the Osmonds.
Dave Marsh coedits Rock and Rap Confidential. Marsh is the author of The Heart of Rock and Soul: the 1001 Greatest Singles.
He can be reached at: email@example.com