Grammy Group Hires Investigators, Seeking to Trace Information Leaks

Deeply concerned about its public image, the nonprofit Grammy organization has hired investigators to determine who has been leaking confidential information, according to attorneys representing the group.

The lawyers employed by the National Academy of Recording Arts and Sciences said that in the course of the investigation the organization had deliberately allowed false information to be disseminated by some sources. They declined to say why Grammy executives would employ the tactic--apparently a sting operation to catch somebody leaking information or a method of embarrassing any news organization that might publish it.

The moves follow a series of articles published in 1998 by The Times that questioned NARAS’ philanthropic activities. The series reported that one of NARAS’ own charities, MusiCares, spent roughly 10% of its annual income on its principal philanthropic purpose--providing medical and financial help for ailing or indigent musicians--while spending heavily on fund-raising, professional services, and other expenses.

The series triggered an Internal Revenue Service investigation of the organization’s financial practices under its controversial chief executive, C. Michael Greene.

Greene, who will appear on tonight’s annual Grammy telecast, did not return calls on Tuesday. Attorneys Charles Ortner and Vincent Marella, who represent NARAS and disclosed the investigation to The Times, also did not return subsequent calls or declined comment.

Over the last two years, NARAS’ lawyers have sent repeated letters to The Times threatening to sue the newspaper for allegedly publishing inaccurate information about the Grammy organization. The Times has declined to retract any of its reporting, and editors said they are confident none of the paper’s reports has been misled by the deliberate leaking of false information by the Grammy organization.

The Times won a Pulitzer Prize in 1999 in part for its Grammy reports. NARAS’ attorneys wrote a letter threatening legal action to the Columbia School of Journalism, complaining about the Pulitzer committee’s decision.

Several media and investigative experts contacted by The Times were surprised at the Grammy tactics.

“They’ve spread misinformation and disinformation to trick the press so the press can lie to the public?” remarked Tom Rosenstiel, a former Times reporter and director of the Pew Foundation’s Project on Excellence in Journalism. “That’s novel.”

Ortner and Marella disclosed NARAS’ internal investigation as well as the leaking of false information on Thursday at a meeting with Times editors scheduled at NARAS’ request.

Ortner said NARAS undertook the investigation because those leaking information may be doing so in violation of their contractual obligations.

He said NARAS had launched an investigation using sophisticated techniques to identify those who have given information to The Times.

He said NARAS was taking the unusual step of revealing the investigation so The Times would act “prudently” with the knowledge that reporters had been deliberately fed wrong information.

San Francisco investigator Jack Palladino said NARAS’ actions reminded him of tactics used recently in the for-profit world by Brown & Williamson, the tobacco giant that tried to stop an employee from leaking confidential data about cigarette addiction to a reporter.

“The tobacco industry tried to silence my client Jeffrey Wygand in a similar fashion: by sidestepping the issue of the truth, and focusing instead on whether he had broken a contractual obligation,” Palladino said.

NARAS declined to disclose how much of the nonprofit group’s funding was being spent on private detectives.

Tax records show that the academy and its charities spent about $286,000 in legal fees during 1997, the most recent year for which records are available.

The nonprofit organization also has retained three public relations firms, spending an estimated $22,000 per month collectively for their services, sources said. That’s in addition to the estimated $90,000 salary the academy pays its new in-house corporate communications chief.

Experts in philanthropic policy could think of few cases in which a nonprofit institution took aggressive steps to prevent financial information from getting to the public--especially considering the high level of public reporting the government requires of such organizations in return for their tax-exempt status.

“I would hope that any organization would not be involved in activities they would be so concerned about sharing with the public,” said Bennett Weiner, director of the philanthropic advisory service of the Council of Better Business Bureaus. “One of the foundations of accountability is disclosure.”