Judge Dismisses Payola Charges Against Record Promoter Isgro

In a humiliating defeat for the Justice Department, a Los Angeles judge Monday abruptly closed the book on the biggest payola case in history.

Following two hours of intense arguments, U.S. District Judge Consuelo B. Marshall ruled that the federal government had violated the speedy-trial act and dismissed the 7-year-old case against Burbank record promoter Joseph Isgro, who was accused of payola, racketeering and more than four dozen other counts.

The case, which had already been dismissed once and revived, has seen six prosecutors come and go and cost the government an estimated $10 million to pursue.

“Am I glad it’s over? In my opinion, this case should never have been started in the first place,” Isgro said.

Prosecutor Kenneth Lowrie could not be reached for comment.

During the 1980s, Isgro was one of the most successful members of the Network, a loose affiliation of nine key independent record promoters who reportedly charged the record industry a collective $60 million a year to ensure radio airplay for songs across the nation.

A payola scandal erupted in February 1986 following an NBC news broadcast that said Isgro and another record promoter met several East Coast organized-crime figures at a hotel before a rock awards dinner. The NBC report also alleged that several members of the Network were offering payola to radio programmers in the form of cash, drugs and prostitutes to get songs played.

Isgro and other promoters denied the charges, but within days of the NBC telecast, 12 record companies cut their ties to any firm doing independent promotion. The allegations triggered grand jury investigations in Newark, N.J., Los Angeles and New York, after which one of Isgro’s former associates, Ralph Tashjian, eventually pleaded guilty to payola-related charges in 1989.

In November 1989, Isgro was indicted in Los Angeles on charges of payola and 56 other felony counts, including racketeering and conspiracy to distribute cocaine.

U.S. District Judge James M. Ideman dismissed the charges against Isgro in September 1990, after learning that lead prosecutor William S. Lynch concealed critical information that cast doubt on the credibility of the government’s key witness as well as the merits of the case. Ideman publicly chastised the prosecutor, and the Justice Department formally reprimanded him.

The case was reinstated because the U.S. 9th Circuit Court of Appeals ruled in 1993 that Ideman exceeded his authority by throwing it out. The appeals court also ruled that Ideman had no authority to bar key testimony.

The government’s prosecution of Isgro has done little to curb the growth of the independent promotion business.

Although the promotion profession is no longer tainted by allegations of underworld cash, drugs and prostitutes, a new coterie of outside contractors has devised increasingly sophisticated strategies to influence the nation’s broadcasters without getting trapped in a net of federal laws.

Sources estimate that the six major record conglomerates spend at least $200 million a year to get songs played on radio--about a quarter of which is still paid to outside contractors whose effectiveness has come under increasing scrutiny by the corporate chiefs now running the industry.