Judge Abruptly Ends Payola Case Against 3

Citing “outrageous government misconduct,” a federal judge Tuesday dismissed the biggest payola case in 30 years, abruptly ending the trial of record promoter Joseph Isgro and two other defendants after they successfully claimed that prosecutors had improperly withheld key documents.

U.S. District Judge James M. Ideman in Los Angeles dismissed a 57-count indictment “with prejudice” after finding that six volumes of testimony given in an earlier trial by a key government witness, Dennis Di Ricco, had not been given to either the defense or the grand jury that indicted the three. Along with Isgro, the defendants included former CBS Records executive Ray Anderson and Isgro associate and convicted cocaine dealer Jeffrey Monka.

Ideman said the prosecutors’ case against Isgro was suspect because they extracted from Di Ricco, in his appearance before a federal grand jury in Los Angeles last year, “a story (against the defendants) that was diametrically opposed in every respect” to his statements at his own trial in San Francisco.

The judge’s ruling “with prejudice” means that the charges against Isgro, Anderson and Monka cannot be refiled unless Ideman’s ruling is overturned on appeal, a move prosecutors said in court they would seek. They could not be reached for further comment.

Isgro, 43, became one of the most powerful and successful promoters of the 1980s, when record companies hired his Los Angeles firm to persuade radio stations to play certain songs. Prosecutors had alleged that Isgro gave cash and cocaine to employees at stations in California and Texas in exchange for playing songs he promoted.

Since 1960, it has been a federal crime to exchange money or other inducements for broadcasting a specific record, if the payment is not publicly disclosed.

Standing outside the courthouse after the dismissal, amid a crush of reporters and TV cameramen, a subdued Isgro observed that the case “affected . . . my personal life” but added: “I’m happy now; I’m not angry.”

The case, which had been closely followed by the radio and record industries, was the largest to arise from a five-year federal government investigation of alleged organized crime involvement in the record business and, later, of alleged payola practices. The multimillion-dollar probe had involved prosecutors in four cities as well as grand juries in Los Angeles, New York, Philadelphia and other cities.

But after securing one conviction--of reputed organized crime figure Salvatore Pisello on tax evasion charges in connection with fees paid by MCA Records--and several quick indictments of some top Isgro lieutenants, including Ralph Tashjian, the investigations seemed to come unraveled.

Marvin L. Rudnick, the Justice Department’s Organized Crime Strike Force attorney who led the Los Angeles probe in its early years, was dismissed in July, 1989, after several run-ins with his superiors about the scope and direction of his investigation.

Last year, U.S. District Court Judge Pamela A. Rymer in Los Angeles dismissed payola-related charges of obstruction of justice against Tashjian’s wife, Valerie Tashjian. Ralph Tashjian pleaded guilty last year to felony tax, obstruction of justice and other payola-related charges. He was sentenced to 60 days at a government-run halfway house.

Like Ideman, Rymer cited authorities for “reprehensible” behavior that was “well below the standard of conduct expected of government prosecutors.”

In the end, observers say, the government’s probe left more questions unanswered than it answered. The sudden end of the government’s massive payola case also left some people frustrated.

“I’m very disappointed that an experienced prosecutor could have blundered so badly,” said Rudnick, who is now an attorney in private practice in Pasadena. William S. Lynch, the Justice Department’s senior litigation counsel in Washington, was brought in to handle the Isgro case.

“There is clearly payola going on in the record industry,” Rudnick charged. “I wish the (U.S.) attorney general would make the same effort to find out what went wrong with these prosecutors as when they moved me out” of the case.

Record industry executive Irving Azoff, a former head of MCA Records who had complained publicly about the direction of the government’s investigations, said: “While at MCA, we were constantly criticized by the press for claiming government misconduct; maybe now those protests will be better understood.” MCA and Azoff have repeatedly denied any suggestion that they knowingly had ties to organized crime figures. Both have criticized the government investigation as unjustified and over-reaching.

No other radio or record executives contacted by The Times would comment, but Robert Umacht, editor of M Street Journal, a radio newsletter based in Alexandria, Va., said the end of the trial did little to rehabilitate the reputation of the record industry.

“People in the radio industry followed the trial not out of concern but out of curiosity,” Umacht said. “I think the general feeling was, ‘Let’s see what scummy things are happening in the record industry.’ But that question was never really” answered.

Along with racketeering and payola, Isgro, Anderson and Monka had been charged with conspiracy to obstruct justice, conspiracy to defraud numerous record companies, mail fraud, conspiracy to distribute cocaine and filing false tax returns. All three had pleaded not guilty.

Charges of payola have long plagued the music industry, which was rocked by a major scandal in the late 1950s and early 1960s. A congressional investigation cost the careers of several top radio disc jockeys who had taken payoffs in exchange for playing records on their shows.

In 1984, the House subcommittee on oversight and investigations conducted a preliminary investigation into suspected payola practices. But subcommittee staff members recommended against a full investigation, citing a lack of hard evidence.

Isgro said after the dismissal of his trial that he would return full time to his record promotion business, which received about $10 million of the $50 million to $60 million record companies spent annually on record promotion during the 1980s.