Payola Probe Witness Is Given Federal Protection

A former employee of a local independent promoter who is the subject of a federal grand jury investigation into alleged payola practices has been placed in the government’s witness protection program and is cooperating with authorities, The Times has learned.

David Michael Smith, a British citizen who sources identify as a one-time bodyguard for promoter Joseph Isgro, has been talking to both Internal Revenue Service investigators and attorneys for the Los Angeles office of the Justice Department’s Organized Crime Strike Force who are conducting the probe, sources say.

John Newcomer, head of the Strike Force here, would neither confirm nor deny that Smith was in protective custody and cooperating.

Isgro said Smith “was never my personal bodyguard, he was the head of my office security and he left my employ nearly three years ago. I’m not concerned about anything he has to say.”

Smith surrendered to U.S. authorities in London last month, having left Los Angeles a year ago, apparently to avoid a subpoena to testify before the grand jury, according to one law enforcement source.

According to sources in the record industry who asked not to be identified, before deciding to cooperate with authorities Smith first contacted lawyers for at least two major U.S. record companies--Capitol Records and Warner Bros. Records--offering to tell them what he knew about Isgro’s operation.

“He indicated he would need financial support if he returned to the United States, and he was concerned about whether the government might prosecute him,” one source said. At the time, Warner and Capitol were defending themselves in a $25-million anti-trust lawsuit filed by Isgro against 12 major record labels. Capitol has since settled with the promoter.

The record company lawyers subsequently put Smith in touch with representatives of the Strike Force, sources said. However, after an initial phone interview with investigators, Smith failed to show up for a prearranged meeting at a London hotel last May, according to authorities. Smith was not heard from again until recently. One radio industry trade paper reported in November that authorities believed Smith had met with foul play.

According to one law enforcement source, information provided by Smith in his initial conversation with authorities last spring helped authorities obtain an indictment last week of George Wilson Crowell, the former vice president and general manager of radio station KIQQ in Los Angeles.

In the first round of indictments from the two-year payola investigation, Crowell was charged with failing to file income tax returns on more than $435,000 of income for 1984, 1985 and 1986. Prosecutors said these included more than $100,000 in illegal undisclosed cash payments. Crowell was not available for comment Thursday.

Also indicted with Crowell were two independent record promoters who formerly worked for Isgro--Ralph Tashjian of San Mateo, Calif., and Bill Craig of Scottsdale, Ariz. Both men have denied wrongdoing.