Latin Radio Figure to Plead Guilty in Payola-Related Case

One of the most influential radio program directors in the Spanish music business is expected to plead guilty today to a payola-related tax offense, his attorney confirmed, as part of a continuing Justice Department probe into record promotion.

Salvador Homero Campos accepted more than $200,000 in kickbacks to air songs on a dozen Spanish-language music stations across California and the U.S. from 1995 to 1997, law enforcement sources said.

Campos, who was vice president of programming at Sacramento-based Z-Spanish Radio, the national leader in Latin music radio, received as much as $15,000 in payola a month from Van Nuys-based Fonovisa Records, the largest independent label in the Spanish music industry.

Campos, according to his attorney, is scheduled to plead guilty this morning in U.S. District Court in Los Angeles to a single felony tax count for failing to report payola earnings on his tax returns--an offense that could cost him as much as $250,000 and three years in prison. Campos, 48, stopped working for Z-Spanish radio late last year.

Attorney Alvin Michaelson, who is representing Campos, said: “Mr. Campos took money from Fonovisa, but he says he would have played their songs anyway. I’m sure Fonovisa’s intent was that he would take the money and treat them favorably. But his intent was to get his station off the ground, and he needed the money to do that.”

Michaelson added: “Mr. Campos was also approached by other labels. The bottom line is that during that time, this was just business as usual--and he didn’t think he was doing anything wrong. In Mexico, it’s legal.”

By cooperating with the investigation, the radio programmer avoided being charged directly with violating the U.S. payola statute--which prohibits broadcasters from taking money for playing specific songs without disclosing the payment to listeners. Z-Spanish Radio Network has grown over the last seven years from one station, KZSA-FM (92.1) in Sacramento, to 32 owned-and-operated broadcast outlets and 46 affiliate stations across the U.S.

The action is the latest in a series of payola-related convictions stemming from a government probe of Fonovisa, which provided millions of dollars to obtain airplay for its songs in the late 1990s--a period when the record label dominated the Latin charts. Fonovisa and two of its most senior executives already have pleaded guilty to several payola-related charges.

Agents from the U.S. attorney’s office in Los Angeles, along with the Justice Department and the Internal Revenue Service, are trying to determine which other record labels might be bribing radio stations to play their songs.

Richard Robinson, assistant U.S. attorney in Los Angeles, confirmed the government’s interest in prosecuting payola violations but would not discuss details of Campos’ plea bargain.

“We are continuing to investigate individuals around the country who may have taken bribes in exchange for increased airplay of Fonovisa’s Spanish-language music,” Robinson said. “During our investigation, we have also received many indications that payola is not limited to the promotion of Latin music. Consequently, we are actively pursuing leads that extend to other markets as well, such as urban music.

Authorities are looking into questionable promotion practices involving cash payments by third parties at broadcast outlets throughout the southern U.S. that specialize in rap and rhythm and blues music, industry sources say. Some of those stations are owned by the nation’s largest radio conglomerates.

The Justice Department has received tips about alleged kickbacks involving the urban music divisions of some of the world’s largest record conglomerates, law enforcement sources say. Officials have begun to investigate those leads as well as others involving the Latin music divisions of several large record corporations.

In the urban music world, record labels attempt to insulate themselves from allegations of payola by hiring independent contractors, known as “quarterbacks”--some of whom orchestrate under-the-table cash transactions. To further distance themselves from the process, record labels require the quarterbacks to sign declarations vowing that their operations do not violate payola laws.

Radio and record label sources say that more than a dozen such urban quarterbacks operate in New Orleans, Atlanta and other major cities throughout the South. Unlike the independent consultants who provide annual promotion budgets to pop and rock stations, a number of these urban music quarterbacks are believed to make direct cash payments to radio programmers to add specific songs.

Radio and record label sources who are familiar with the world of quarterbacking say the process works like this: Labels pay about $75,000 over a four-month period to finance the quarterbacking of a hit single. First, the label writes a check to the quarterback to cover his expenses. The quarterback then distributes a portion of the proceeds to programmers who add the song to their stations’ playlists.

That initial check to the quarterback guarantees that a song will be played several times on a specific number of stations. Quarterbacks charge additional fees to guarantee that a station will put the song into “rotation,” airing 20 times or more over a two-week period.

Today’s plea bargain in the Campos case is the result of a payola probe launched three years ago after lawyers representing Fonovisa contacted the Justice Department to report improprieties within the company’s own radio promotion department. Fonovisa is a subsidiary of Mexican media giant Grupo Televisa.

In June 1998, authorities served subpoenas on dozens of radio stations, requiring them to turn over payroll records and other data that could help document improper payments.

Last year, Fonovisa’s top promotion executive, Jesus Gilberto Moreno, pleaded guilty to payola, admitting he paid Spanish radio station deejays to obtain airplay for Fonovisa songs. Fonovisa President Guillermo Santiso also pleaded guilty to a payola-related tax violation, as did the Van Nuys-based record label itself for falsely reporting promotional expenses.

Moreno was fined $50,000 and put on two years’ probation. Santiso was fined $200,000 and received two years’ probation. In addition, the company was fined $700,000. The company and the executives received lenient sentences primarily because they cooperated in the expanding investigation.

Today’s plea bargain stems from illegal activity dating back to 1995 when Fonovisa began paying Campos $5,000 a month to add songs to his syndicated playlist, court papers show. By 1997, Fonovisa increased Campos’ payola stipend to $15,000 a month, court records say.

During those two years, Campos received about $200,000 in cash kickbacks from Fonovisa, none of which he ever reported to the IRS.

The government decided to charge Campos with a single count pertaining to his 1998 tax return (in which he failed to disclose an additional $100,000 in cash earnings) because he cooperated with the probe. Under the plea bargain, he has agreed to pay back the entire $200,000 plus interest and possible additional fines. Campos also faces possible jail time.