On Tuesday July 23rd the California Senate Select Committee on Entertainment, in conjunction with the Senate Judiciary Committee held hearings on record labels accounting practices. Before it was over the labels had a bloody nose, and the RIAA spokesperson left before the hearing was over, supposedly to catch a plane, but a rail might have been more appropriate.

Senator Kevin Murray who spoke earlier this year at the Future of Music Conference and who has introduced a bill in the California Senate to limit personal contracts that artists can be signed to seven years, co-chaired the committee hearings.

During the hearings the Senators were stunned to hear testimony from Don Engel who has represented major label artists, including Luther Vandross, The Dixie Chicks, Meatloaf and many others. Sam Moore (of Sam and Dave who did Soulman) talked about his assistance with Mary Wells, during her fight with cancer, of Wilson Picket, and many others who have fought to get proper accounting on the money they earned during their careers from their royalties, which directly affects their healthcare and retirement benefits from AFTRA.

Most profound was Engel who laid out in detail how the labels steal, mislead and disguise the monies they collect, and the backroom deals with the Record Clubs (both of which are owned by major labels). The RIAA spokesperson tried to dismiss all of this as contractual issues between artists and their labels. They were going to be given a chance to respond to the accusations, but didn't hang around for the end of the hearings. I would have left as well had I been trying to defend what was being exposed in these hearings.

One theme that ran throughout the hearings was that there is no incentive for the labels to give an accurate accounting to the artists as the most the artist can get is only what they are owed with no penalty for the label. Calls were made to hold the label heads accountable that the royalty statements were true and accurate. (within 5% for clerical error). Senator Murray spoke of similar problems in the insurance industry and the triple damages that can be awarded if found to be willfully withholding that money. Now that's an idea. Both Don Engel and the current head of AFTRA spoke of how they are hated by the labels when they do an audit, and the level of co-operation or lack thereof they receive.

Another thing that was discussed was how the current practices actually hurt the smaller and mid level artists the most. They don't have the $40 thousand plus (minumum) it takes to do an audit and as a result fly under the radar so to speak. Artists like the Dixie Chicks, Don Henley and other "superstars" have the funds to do the audits and as a result get theirs, the smaller artist doesn't.

The cat is out of the bag, and on the record at last.

We've got the audio from the hearings and will be making it available to stream shortly (MP3). It's well worth a listen even though the time frame is about 5 hours. If you don't feel like listening to all of the testimony, I recommend Don Engle's testimony as the most important (about 72 minutes). It is a must hear for artist and consumer alike.

Part 1>-Opening Statements
Part 2>-Sam Moore, Joyce Moore,
Part 3>Londell McMillan-Artist Empowerment Coalition
Part 4>Montell Jordan
Part 5>Montell Jordan Q & A
Part 6>Steve Marenburg and Steve Marks-RIAA VP
Part 7> Kevin Murray then Don Engel- (a must listen)
Part 8> Fred Wolinsky Accountant- Who audits for Artists
Part 9> Greg Hessinger Current Head of AFTRA