Police raid Spanish copyright society in embezzlement case

[Cupe]

Senior officials in Spain's Society of Authors and Publishers (SGAE), the country's leading collection society for songwriters and composers, face embezzlement charges in the wake of a Friday raid on the organization's offices. (A collecting society collects licensing fees for public performances of music and distributes them to artists and record companies.)

According to Spanish newspaper El País, the investigation is focused on José Luis Rodríguez Neri, the head of an SGAE subsidiary called the Digital Society of Spanish Authors (SDAE). Neri faces charges of "fraud, misappropriation of funds and disloyal administration." On Monday, a High Court judge grilled him for more than four hours over the charges.

Investigators say Neri made payments for non-existent services to a contractor that then paid kickbacks to Neri and his associates. The contractor's books show that it received 5 million euros from SDAE, but only reported 3.7 million euros of those funds to tax authorities.

Although Neri is the focus of the investigation, investigators suspect he did not act alone. A total of nine people associated with SGAE, including its chairman Teddy Bautista, were detained on Friday and Saturday. They were released on Sunday without bail, but their passports have been taken and they are barred from leaving Spain.

SGAE, the Spanish counterpart to American collecting societies like ASCAP and BMI, is known for its high fees and aggressive enforcement tactics. According to El País, "the society has been often accused of exceeding its remit by going as far as to infiltrate private weddings to check whether fees had been paid for the music being played at the banquet." (The tactic calls to mind other collecting societies that go so far as to crack down on auto mechanics playing the radio too loudly without paying a yearly fee.)

The paper also says that "SGAE's 'digital canon'—a blank media tax on digital devices such as CD players or music-enabled cellphones—has been extremely unpopular among the Spanish public."

In a Sunday statement (in Spanish, translation here) the organization declared its innocence and pledged to cooperate with the authorities. It also pledged to continue normal operations despite the controversy.