SGAE Members Vote Against Much-Needed Anti-Corruption Reforms Following CISAC Suspension

Following nearly twenty years of corruption, CISAC suspended Spanish collecting society SGAE’s membership.

Between 2003 and 2007, SGAE executives knowingly misappropriated millions of euros in royalty payments.  Authorities in Madrid had arrested Enrique Loras, SGAE’s Director General, and Ricardo Azcoaga, the society’s Financial Director.

In 2011, civil guard officers raided the once-powerful collecting society’s HQ in Madrid.  Four SGAE executives – including veteran Chairman of the Board, Eduardo ‘Teddy’ Bautista – had engaged in a large-scale corruption scheme.  Police had charged him, along with five other employees, with embezzlement, fraud, and gross administration.  Bautista continues to fight the charges to this day.

In 2017, authorities discovered that the collecting society, including its Chairman, had once again engaged in large-scale fraud.

In a scheme known as ‘La Reuda’ (The Wheel), TV executives played songs late at night.  They had listed SGAE-designated names as the songs’ publisher, writer, and composer.  Upon collection, TV executives and SGAE members would split the royalties between themselves.  Police subsequently raided the collecting society’s headquarters once again, arresting eighteen executives.

The International Confederation of Societies of Authors and Composers (CISAC) tried to help SGAE change its ways.  Although you can teach an old dog new tricks, it seems that nobody can teach this Spanish collecting society to let go of its unscrupulous habits.

The global coalition had closely worked with the Spanish collecting society for months last year.  CISAC had long investigated complaints of discriminatory treatment of rightsholders, unfair practices, and unfair distribution of royalties.

In April 2018, the global coalition presented SGAE with a comprehensive report, detailing recommendations for changes to the society’s governance rules, statutes, and royalty distribution practices.  The Spanish collecting society, however, had refused to implement the much-needed requirements.  This refusal led to a one-year expulsion from CISAC last month.

Now, the collecting society has voted against enacting CISAC’s anti-corruption recommendations.

Saying “No” to halting embezzlement, fraud, and gross administration.

The collecting society held a vote yesterday to turn things around.

If approved, SGAE would implement rules needed to meet to CISAC and Spain’s Ministry of Culture’s demands.  The collecting society’s business practices would finally conform to EU intellectual property law.

Hoping to get the beleaguered society on the right track, Pilar Jurado, SGAE’s recently elected President, said she would enact the changes.

I believe in lawfulness and doing things as they should be done.  If CISAC sees that we have complied and that the organization is functioning effectively, they could lift the sanctions.

Unfortunately, during a general assembly, SGAE members failed to vote for the necessary changes.

Only 62.3% of members – short of the 66.7% needed to enact the reforms – approved of Jurado’s changes.  1,356 of the collecting society’s total 18,000 members participated in the vote.

Following years of trouble at the collecting society, Unison, another collecting society, was established.  Last February, Spain’s Ministry of Culture, José Guirao, gave SGAE just “six months” to change its ways.

But it seems that the Spanish collecting society just doesn’t want to change.  Or, even care.


Featured image by Mathias Pastwa (CC by 2.0).