Employees of Spanish collecting society SGAE face fraud charges

Executives of Spain's Society of Authors and Publishers (SGAE) – the main Spanish copyright royalty collecting society- have been accused of embezzling or misappropriating royalty revenues. Employees of SGAE have been charged with fraud for transferring funds destined for artists to unknown accounts and evading taxes.

According to Spanish newspaper El País, the investigation is focused on José Luis Rodríguez Neri, the manager of a SGAE body called the Digital Society of Spanish Authors (SDAE). Neri faces charges of "fraud, misappropriation of funds and disloyal administration" and has been interrogated by judges, last Monday.

Investigators say Neri made payments for non-existent services to a contractor that then paid shady bills 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.

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 remain under investigation.

Royalty collecting societies around Europe have all had their round of bad publicity recently. French collecting society Hadopi was accused of having a barbaric enforcement policy. Subsequently the organisation was crippled by hackers. In The Netherlands, the integrity of the copyright administration of collecting society Buma-Stemra was openly questioned in parliament, after radio executives had registered their own names as composer or songwriter of popular songs.

The problem for most of these collecting societies is transparency. For the system of copyright protection, licensing and royalty payments to function properly, the trust of the creative sector is crucial. Unfortunately this trust has been challenged quite a few times. Possibly some of this trust can be restored if it will become more comprehensible to the general public how these organisations work. Let’s hope this recent Spanish issue will be solved as soon as possible.

Sources: El País, ArsTechnica