Documents are sought from Clear Channel, CBS, Entercom and Citadel,
say. The agency’s step comes after settlement talks stall.
By Charles Duhigg
LA Times Staff Writer
April 20, 2006
The Federal Communications Commission on Wednesday launched formal
investigations into pay-for-play practices at four of the nation’s
radio corporations, the biggest federal inquiry into radio bribery
the congressional payola hearings of 1960.
Two FCC officials with direct knowledge of the matter confirmed that
agency had requested documents from Clear Channel Communications Inc.,
Radio Inc., Entercom Communications Corp. and Citadel Broadcasting
over allegations that radio programmers had received cash, checks,
and other gifts in exchange for playing certain songs without
deals to listeners, a violation of federal rules.
The FCC requests, known formally as “letters of inquiry,” are the
step in investigations that could result in sanctions ranging from
financial penalties to the revocation of stations’ licenses.
An FCC spokeswoman declined to comment. Representatives of the four
companies could not be reached for comment.
In the past, radio executives at firms including Clear Channel, the
nation’s largest station owner, have said that company policies
accepting gifts for airplay and that internal probes have not revealed
The four broadcasters have been negotiating with the FCC for weeks to
forestall a federal inquiry by offering to discontinue certain
and pay limited fines. But those talks stalled last month over the
how much the broadcasters should pay.
Clear Channel proposed a fine of about $1 million, according to people
knowledge of the negotiations. Some commissioners were pushing for as
as $10 million, those sources said.
“We were in the process of trying to reach settlements, but when talks
inconclusive, we decided we needed more information,” said an FCC
who spoke on the condition of anonymity because the investigation was
continuing. “We will continue to speak with the parties and to hold
who have violated commission rules accountable.”
The FCC requires that radio listeners be informed anytime there is an
exchange of items of value for airplay of specific songs.
The FCC’s action comes amid New York Atty. Gen. Eliot Spitzer’s
pay-for-play probe, launched in 2004, which has alleged wrongdoing by
music and radio companies. In February, Spitzer sued Entercom,
that high-ranking executives had implemented scams to trade cash for
airplay of songs by such artists as Avril Lavigne, Liz Phair and
Entercom has denied the allegations.
The other three radio companies are also under investigation by
who has shared his evidence with the FCC.
Radio programmers at stations around the country say that fear of
regulatory scrutiny has scared them into airing fewer new songs.
many stations are sticking to less diverse playlists.
Bryan Tramont, who served as chief of staff to former FCC Chairman
K. Powell and is now an attorney in private practice, said the inquiry
appeared to be more than a fishing expedition.
“The FCC would only launch a formal investigation if they had
leading them to believe possible violations have occurred,” he said.
Other FCC insiders said this new stage of investigation could put
broadcasters more at risk of previously undiscovered evidence of
being found. The investigation could give the FCC access to millions
previously unexamined documents. It could also expand to include
and radio executives across the nation.
“Until now, we’ve been limited to the evidence Spitzer gave us, but a
formal investigation will compel the radio companies to answer certain
questions, which are usually pretty exhaustive,” said another current
official familiar with the inquiry. “It will all be on the record now,
once we start demanding documents, we can keep on going until we’re
convinced we’ve found everything.”
Spitzer has been critical of the FCC’s negotiations with radio
saying that if the federal government allowed stations to settle it
undercut his efforts to force tougher sanctions and rules on the
“Unfortunately the FCC, contrary to good public policy, has not
investigation of the underlying facts,” Spitzer said in April. His
representative could not be reached for comment.
The last time the FCC took action on pay-for-play allegations was in
when it fined two stations in Texas and Michigan $4,000 each for not
disclosing payments received from A&M Records in exchange for playing
by Bryan Adams.
But the investigation launched Wednesday was evidence of the FCC’s
vigilance, said federal officials.
“The chairman has always taken these allegations seriously,” said one
official, referring to FCC Chairman Kevin J. Martin. “We’re not
The FCC’s new investigation is the largest federal radio bribery
since Congress opened hearings on pay-for-play in 1960. Those
resulted in the first federal “payola” laws and killed the career of
disc jockey Alan Freed, who pleaded guilty to two counts of commercial
bribery and was fined $300.