Monday, August 06, 2007

SoundExchange caught lobbying

SoundExchange, the group charged with collecting online radio royalty payments in the US, is a non-profit organisation and, under US law, is prevented from funding political activities.

Unfortunately, it turns out that it's been helping underwrite the costs of the MusicFirst coalition.

Wired asked them how they could be doing this, what with the bar on them getting involved in lobbying. The answer was... well, not an answer at all:

SoundExchange Executive Director John Simson dodged the question. "Clearly the Broadcasters (CQ) will do or say anything so as not to pay artists for their work," he wrote in an e-mail. "We welcome a full and open debate before Congress on ending the unfair free ride given over-the-air radio and the granting to artists the long overdue right to be paid for their recordings when they are played."

Wired tried again, this time talking to Michael Huppe, General Counsel for SoundExchange. He suggested that it was all fine:
Funding provided by SoundExchange to musicFIRST is authorized by copyright owners and performers who have chosen to become members of SoundExchange. These contributions come only from our members and not from non-member royalties, and were unanimously approved by the SoundExchange board," Huppe replied when asked about its support of musicFIRST.

If we've got this right, he means that the money they use is somehow theoretically drawn from royalties going to members of the organisation, and not the funds which are held by SoundExchange on non-members' behalf, but it's the board rather than the members who have approved this use of the money.

It's still far from clear if this is even legal, but as Wired points out, even if there is crawl room in the establishing statutes, it's hardly ethical for an entity set up to be a neutral administrative body to be paying for political lobbying.