Fallout From the Milli Vanilli Fiasco : Pop music: Insiders see the debacle prompting a closer look by artists and record companies at the contracts they sign.

It’s less than a week after pop duo Milli Vanilli revealed that they did not sing on their Grammy-winning album or in their live appearances, but repercussions from the hoax are already beginning to be felt throughout the music industry.

The Grammy, for best new artist of 1989, was revoked Monday by the National Academy of Recording Arts and Sciences, an Oakland woman has sued the group for fraud and legislators are proposing to outlaw undisclosed lip-syncing.

At the very least, according to music industry executives interviewed for this story, the Milli Vanilli debacle--whether or not the deception is as serious as critics contend--will prompt record companies and artists to look more carefully at the contracts they sign and at the protections required before an artist is signed with a label.

“I think there is a consumer fraud issue,” said Thomas A. White, a music industry consultant who specializes in fraud and ethical issues. “I think people have been misled into believing that the images that they’ve responded to are the talents that appear on the recording. I think a damage issue is involved.”

White said that legal responses to the Milli Vanilli hoax could include a recall of their albums, states’ attorneys investigations and legislation that would require full disclosure regarding recorded and live performances.

And the misrepresentations by producer Frank Farian and purported singers Robert (Rob) Pilatus and Fabrice (Fab) Morvan could lead to changes in standard recording contracts.

Today’s standard contract, said entertainment attorney Michael Rosenfeld, does not contain a specific clause which requires the artist to ensure that the material presented is actually the work of that artist.

“It’s amazing,” Rosenfeld said, while looking through a number of current contracts, “But I don’t see anything that makes a representation that what the artist delivers embodies the artist’s performance and only the artist’s performance.”

The clause may have been left out because record companies believed that the idea was covered implicitly in clauses that involve assigning rights to the artist’s work to the label, Rosenfeld said.

“I don’t know if it’s a ‘loophole’ but it might be added in the future,” he said.

Al Cafaro, vice president and general manager of Los Angeles-based A&M; Records, said that the addition of such a clause would diminish the lack of control record companies have when they make deals with producers rather than directly with artists, as was the case with Farian and Arista Records.

“I couldn’t honestly say at this time that we are protected contractually,” Cafaro said. “If we’re going to do a production deal it would behoove us to make sure that what we’re getting and marketing is consistent with what’s behind the music. I think it would be appropriate to pursue a legal safeguard.”

Assurances that the artist performing is indeed the artist on the album cover would protect not only record companies, but also the singers and instrumentalists whose work appears--uncredited and not remunerated--on the album, according to attorney Steven Ames Brown.

A&M; is currently being sued by Brown’s client, singer Martha Wash, formerly of the group, the Weather Girls, who alleges that her vocals were improperly used on a song by the group Seduction.

“She went in to cut a Martha Wash record, and (the producers) simply stole it,” Brown said. “Martha has a suit (to get) A&M; to pay her for the copyright.”

Wash has a filed a similar suit against RCA Records in connection with the group, Black Box.

Despite the lawsuit filed by Sheila Stalder in Alameda County Superior Court asking for refunds of the purchase prices of the album, compact disc, tapes and videotapes to consumers, most experts interviewed agreed that it would be easier to rewrite contracts to protect record companies and “ghost singers” than it would be to help consumers. But White, Brown and others are pushing for disclosure laws similar to those regulating the sale of other consumer products. Legislators in both California and New Jersey have already sponsored bills requiring concert promoters to inform the public if a performance will involve taped backing tracks or lip-syncing.

“We want adequate disclosure in pharmaceutical, children’s products, and car safety,” White said. “We want it in all kinds of products and there is no reason we should not have it in (music) products. If someone is producing a sham, let the consumer know it and if he still wants to buy it, fine.”

Legal ramifications aside, however, it could be that the momentum to change industry practices in the wake of the Milli Vanilli fiasco may come from something much more personal: embarrassment.

“I definitely think it’s an embarrassment,” said Hale Milgrim, president of Capitol Records. “It sort of proves that anything can happen in this marketing-oriented world we live in. Anything can be sold.”

Much of the problem, according to some, is the emphasis on image that goes along with today’s video-driven pop music world.

But MTV, the music television service that has borne the brunt of such criticism, reacted sharply.

“That’s an absurd premise,” said Abbey Konowitch, MTV’s senior vice president of music and talent. “It’s the record companies’ job to be honest with the consumers and not mislead them by having artists lip-syncing performances that aren’t their own.”

Will MTV monitor new videos?

“We’re not the music credential police,” he said.