Clear Channel Communications disclosed Tuesday that it fired two employees after an investigation by New York Atty. Gen. Eliot Spitzer alleged that some of the radio giant’s programmers improperly accepted gifts from record companies in exchange for airplay.
In a statement, the nation’s largest radio broadcaster said it concluded an internal review into “pay-for-play” allegations raised in a recent settlement between Spitzer and Sony BMG Music Entertainment, finding two instances of wrongdoing. San Antonio-based Clear Channel would not disclose the names of the fired employees.
“We take this issue very seriously, and our policy is clear: If you engage in pay-for-play, you cannot work for Clear Channel,” said John Hogan, CEO of Clear Channel Radio. “We believe the vast majority of our programmers are doing a terrific job, fully within the law.”
Sony BMG settled with Spitzer in July, agreeing to pay a $10-million fine and admitting the company had used some improper promotional practices. Immediately, Clear Channel vowed to investigate allegations that some of its employees had received improper gifts and mete out “swift and appropriate disciplinary action” if necessary.
Two specific incidents involving Clear Channel program directors were detailed in the settlement document.
In the first, which Spitzer alleged occurred in August 2004, promoters working for the Sony Urban label agreed to provide Michael Saunders, program director at Clear Channel station WWPR in New York, with a plasma TV and entertainment system worth several thousand dollars. In exchange, Spitzer alleged, Sony Urban’s albums were assured airplay on the station.
A Sony Urban promotion executive obtained Saunders’ home address and attempted to falsely account for the transaction as promotional support for WWPR, the settlement document said. As a result of Spitzer’s investigation, however, the transaction was discovered and Saunders never received the equipment, according to the document.
Another incident detailed in the settlement document allegedly occurred in November 2002, when an employee of Sony’s Epic label gave Clear Channel program director Diana Laird of KHTS in San Diego a 32-inch flat-screen TV. In return, Spitzer alleged, Laird added songs from Jennifer Lopez’s album “This Is Me ... Then” to her playlist.
In addition, the document also identified a Clear Channel programmer, Donnie Michaels of WHYI in Miami, as having received improper trips when he worked for a previous employer, WFLY in Albany, N.Y., owned by Albany Broadcasting Inc.
It is unknown whether Saunders, Laird or Michaels were among the employees dismissed. None could be reached for comment. Clear Channel declined to elaborate on its statement.
Spitzer, who is conducting his investigation under New York law, continues to scrutinize the three other major record companies -- Universal Music Group, EMI Group and Warner Music Group -- as well as Clear Channel.
Additionally, the Federal Communications Commission has opened an investigation into the wrongdoing uncovered by Spitzer, and one FCC Commissioner has said he may push for stations to lose their broadcast licenses if evidence of corruption exists.