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Dec. 18, 2024 - Jim Fetzer
01:06:56
MIKE DEFOY - An Exposé of Decades of Payola and Corruption in the Music Industry
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Time Text
Meanwhile...
Tonight, the first of five Segment 3 reports on what we have chosen to call crime rock.
There's a lot of corruption in the music business because there's a lot of money in the music business, in records, cassettes, and in live performances.
That kind of money attracts all kinds of unsavory characters who don't know much about music but do know a lot about crime.
Brian Ross report.
Police say much of the trouble for Rare Earth came from this man, Joe Ullo, a reputed mob enforcer from New York, who moved to California a few years ago and moved into the rock music business.
One of his first targets was Rare Earth.
In 1969, Rare Earth was on top, its first album a double platinum record, selling more than two million copies.
The good times, the hit albums and the big money only lasted for three years.
And then Rare Earth began having trouble paying its bills and traveling expenses.
Police say that's when Ulo and the mob moved in.
When a band or a management company and a band run into trouble financially, that's when they come in.
And they are heavies.
And they'll promise you anything in the world and say that we'll give you whatever you need, we believe in you, blah, blah, blah.
But meanwhile, they have to have a percentage of the business.
And I'm talking about loan sharking and all the way down the line.
By 1976, Ullo was boasting to his associates that he had taken over a hidden interest in the rock group Rare Earth by providing mob money and mob muscle to take care of Rare Earth's debts.
But the mob's backing did little to help the group's music.
Rare Earth's records didn't sell well.
And the group that had once made millions was almost out of business.
Peter Orlbeck, the group's drummer, says he was getting visits at home from strangers who wanted to know if he was hiding any of the group's money.
You see, we were six guys that were creating lots of money in which lots of people were enjoying.
And we were a motor.
And all of a sudden, the motor stopped running.
And when a motor stopped running, it started affecting a lot of people.
So you don't know what's gonna happen.
Joe Ullo was arrested last year for the performer basketball star Jack Molinas.
And police say members of Rare Earth are lucky no one got hurt.
It was a different story for the Three Dog Night.
And police also are investigating Ullo's relationship with this rock group.
The accountant for the group was shit in the arm and paralyzed in what police believe was a mob dispute over control of Three Dog Night.
The group has since broken up, and police are still investigating the shit.
The members of Rare Earth say what happened to them could happen to any rock group trying to make it big in the rock music world.
Anybody that makes a lot of money, they're susceptible to being...
Come on to by certain people if they run into money problems and if they're not smart enough to handle it all.
And that kind of thing can shut down a group?
Oh, instantly.
Instantly.
Because then the group, if a group becomes paranoid of their safety in any way, shape, or form, you can't go to write a song.
I mean, you have to have total relaxation and feel good about yourself in order to write good material that people accept.
I don't know if I should tell you this, but I don't know who may be listening.
There may be a group of people.
They want to get rid of me.
They don't know if they ain't here anymore.
I don't understand.
What do you mean?
Talk to me.
I can't talk about it.
What was it wrong?
I don't know what's going to happen, but I just feel in my soul why God knows if you keep me. .
They could stand me.
They could frame me and say, I'll be just in my throat.
They can't do all my things.
But who is that?
Who could do this?
It's not a government.
It's a poor.
It's a government.
But I don't know today.
I don't care.
I don't care.
I don't even care about my life anymore.
I just want to... to be okay.
My name is Ross.
I don't care.
I hope you're successful.
Michael. Michael. Michael. Michael. Michael. Michael. Michael.
The Los Angeles Times and CBS News are both now reporting that Michael Jackson has died.
If a determined accident is orchestrated correctly, it can be difficult for the general public to understand what they're looking at as a hit.
Oftentimes, people won't think twice to question someone who's labeled a junkie or depressed.
But you should know that staging of these particular incidents is definitely a real thing that goes on.
"Jumi Hendrix experience is over.
The acid rock musician died today in a London hospital, apparently from an overdose." But don't take my word for it, the CIA will tell you themselves.
An overdose of...
administered as a sedative will cause death without disturbance and is difficult to detect.
The size of the dose will depend upon whether the subject has been using regularly.
If not, two grains will suffice.
Overdose of narcotics, responsible for the death of the well-known rock singer Janice Joplin.
Joplin was found dead.
So they got this new thing out that people sell them all the time.
They got this stuff called, they get blood from somebody with AIDS, and then they shoot you with it.
Oh, that seems bad.
That's a slow death.
You'll notice something incredibly concerning.
Music is one of the few industries on the planet where someone's work is worth significantly more to a company after their passing.
Think about this for a moment.
When an artist signs his name on the dotted line to a record company, the record company will in many cases own all of the masters for the songs recorded under that contract.
And when an artist signs to a major label, it's safe to say that their death is in many ways factored into the initial investment.
And in many ways, after an artist has peaked in popularity, there becomes an awkward point in their career, where the artist is worth more to them dead than alive.
For bigger artists like Prince, the effect was even the effect was even more pronounced, as
he saw a 16,000% increase, while other large as he saw a 16,000% increase, while other large artists saw very staggering I'm mad at him due to the business that he did.
And I can't even say mad.
It's that they didn't have a part of it.
Let's be real.
I'm gonna say it out there straight for everybody listening.
My uncle didn't die.
He was murdered.
I feel the same thing about Prince.
We're losing a lot of stars because you have to remember these are basically insurance policies.
When he dies, whatever was owned by the company reverts back.
We're not talking about $100,000.
We're not talking about a million dollars.
We're talking about billions of dollars.
What happened inside the iconic Beverly Hilton remains a mystery.
Paramedics raced to the fourth floor and found a lifeless Whitney Houston inside her home.
One paper titled Music, Death, and Prophets lays this all out for us.
Notably, this was the first study of its kind to show the long-term effects of this phenomenon.
In their study that monitored 81 artists who passed away from 2015 to 2017, they found something pretty disturbing.
Our findings show that a rate of sales does not return to pre-death levels, but instead is in most instances persistently higher even several years after the death shock occurs.
Album sales left a staggering 226% on average just on the day the artist died, and they doubled overall on average for the first 100 days.
Rappers who have died young, we see that almost all of them see commercial success they never saw in their own lifetime.
As if the financial incentives weren't already way too far in the wrong direction, this actually gets a hell of a lot worse.
Because there's a clause in record contracts that allows record labels to cash in even more after an artist's passing.
This has been going on since the early days of the music industry, and it's quite literally a standard practice.
It's called the death clause, or the non-performance clause.
Now, this is one of those lesser-known details in regards to record contracts, but the former manager of The Grateful Dead, Hank Harrison, wrote about this some years back.
Essentially, it goes something like this.
Company shall have the right to secure insurance equivalent to 10 times the estimated value of the artist's earnings from any source of revenue for company's sole benefit.
And to quote what Hank Harrison later wrote in this article, he states,
In short, here is what a death clause does in my humble opinion: If an artist fails to perform or pay back advances, the artist becomes more profitable, dead.
Today, the hit clause still exists, but it is more subtle, and whereas it used to be worth thousands, it's now potentially worth billions.
Labels invest millions in new talent, and the insurance policy is a protection against loss or a way of collecting projected profits for music, t-shirts, books, foreign rights, and everything else in all forms.
Now, I want to clarify one thing here about the death clause, and it's that this type of life insurance, also known as key man insurance, is actually a standard practice in other industries as well.
And depending on how you look at this, it's honestly just a smart business move given how much money they invested into them in the first place.
But normally when an employee dies in other industries, there is a pretty significant loss of revenue.
And this insurance is designed to make it so the company can stay afloat until they find a replacement.
But in the music industry, this is just them double dipping.
Now, in case you're unfamiliar, record deals are structured like a loan, also known as an advance.
A certain amount the artist gets to keep for living expenses, and the rest will usually get poured into the cost of making an album as well as marketing it.
While the specifics will vary from deal to deal, the premise is pretty much the same across the board.
Only after the label is paid back in full will the artist receive any royalties on the music recorded during that time.
And assuming all goes well with the contract, the process will repeat with a new contract and new debt.
If they don't succeed though, or paying back the label is taking too long, or the artist is trying to get out of the deal, then the death clause conveniently helps the label collect.
What's more, as bad of a reputation as record labels may have, they aren't the only ones with perverse incentives.
The artist also has to consider that his own loved ones might be out to get him as well, presuming any family members may be included in their will.
And if that wasn't bad enough, it has become a far more common practice for artists nowadays to sell parts of their recording catalog on brokerage sites like Royalty Exchange.
And I'm just going to flat out say this right now, it's only a matter of time before something bad happens with one of these royalty exchange platforms.
As one article from MarketWatch stated, buy some of the rights to a rock star's music and you're likely to see a big bump in your royalties if he or she dies suddenly.
It creates some awkward incentives.
Don't be surprised if this turns up as the plot to a Hollywood thriller sometime soon.
So yeah, nowadays basically an artist has to worry about literally anyone and everyone potentially having a price on their head.
Musician was disclosed today, Jim Morrison, 27 years old, lead singer of The Doors.
His manager said Morrison died six days ago in Paris, either of a heart attack or pneumonia, but the death was kept secret.
Manufacturer of a substance that starts with L and ends in SD was the financier behind the band The Grateful Dead.
Had it not been for him, they largely would have never succeeded.
In the present day, many DJs are just fronts for selling narcotics.
And you'll often see that rap groups are often fronts for illegal activity.
But that's not to say that gangsterism is exclusive to rap in any capacity.
Frank Sinatra, for example, was known to have been a mob-connected musician.
One of the most successful, largely due to his mob ties.
While never prosecuted because they could never build a case against him, he was known to have been close with many famous mobsters like Sam Giancana, the legendary mob boss of the Chicago outfit for a time, as well as reputed mob boss Lucky Luciano, the first mob boss of what would later become the Genovese crime family.
When Sinatra first started the music business, he had rose to prominence singing in Tommy Dorsey's band.
After his notoriety outlived the band's usefulness, Sinatra was stuck in his contract with Dorsey.
The story allegedly goes that Sinatra's management offered $60,000 at first to get him out of that contract, but when Dorsey refused, Sinatra turned to his godfather, Willie Moretti, the New Jersey underboss of the Genovese crime family.
Rumor has it he threatened him, and curiously, Dorsey let him out of that contract shortly after for $1.
You see, Sinatra had to be watched closely by the powers that be.
He had political influence, wealth, and close business dealings with very powerful people.
This is why you'll notably see a lot of references to Sinatra in rap music.
The new Paola, a sour note that is tainting the rock music business once again.
It was back in the 1950s that Paola became a way of life in this industry.
Record companies and promoters paying off disc jockeys to plug new releases and to boost sales.
Today, the practice appears to be back with a group of independent promoters playing a major role, and federal authorities are investigating a possible mafia connection.
NBC's investigative reporter Brian Ross has additional details.
This block on First Avenue on the Lower East Side of New York is a stronghold of the Gambino mafia family.
According to the FBI and New York City Police, the mafia copo who runs things on this block and in places far from this block is Joseph Armone, the man with the glasses, a convicted heroin dealer who on most days can be found conducting mob business at a back table in this pastry shop.
For months now, the activities of Armone and others have been watched closely by the FBI and police as far away as Los Angeles as part of an investigation of corrupt practices in the rock music business and what appears to be the re-emergence of payola at rock music radio stations.
This was the Waldorf Astoria last month at a black tie celebrity dinner to honor some of the early stars of rock and roll.
And among the guests, two of the most powerful and feared men in the rock music business.
Joseph Isgro, who authorities say has described Mafia Capo Armon as his partner.
And Isgro's close associate, Fred Decipio, who rarely does business without his associate, Mike, by his side.
Decipio and Isgro, each with his own company, are top men in what is called the network.
About 30 men, many at this dinner, all known as independent record promoters, who industry executives say are getting millions of dollars a year from record companies to make sure that certain new songs become hits on certain rock music radio stations.
South Florida's hit music station.
Don Cox of Miami, one of the top disc jockeys in the country, says some promoters will do almost anything to get their records played and earn their big fees from the record companies.
Well, do you know much money you make on having a hit record in this country?
Cox, who's had a drug problem, says he's had to turn away promoters who have offered him cash, cane.
You take this ounce and go on home, okay?
A couple thousand dollars.
Here, you go take, you know, we can get more, you take this.
And I'll give you a call Tuesday.
And what happens Tuesday?
They call you and go, how was that?
By the way, I got this record I want you to hear.
Now if you take it, you gotta answer the phone.
They cozy up and they corrupt.
Cox says at his station, the music staff picks which records to play based on the music.
But disc jockeys and program directors elsewhere, who said they were afraid to go on camera, tell the same story Cox does about payoffs of cash, cars, expensive watches, drugs, and nights with women sent over by the promoters.
Another side of the payola scandal, according to industry executives, is suspected fraud involving the weekly top 40 hits charts, which determine more than anything what's played on the radio in this country.
This chart, published by the trade newspaper Radio& Record, is based on calls from 250 leading rock radio stations reporting what songs they're playing.
Authoritative industry sources say independent promoters have been getting certain radio stations to make phony reports, getting records not doing so well, not even getting played, getting those records on the top 40 chart.
It's a serious thing.
Ken Barnes, the paper's editor, says about 20 radio stations were put on notice for making suspected phony reports, and two have been referred to federal authorities.
We're a trade paper.
We can't be a cop.
We can't really police.
What goes on at radio stations?
By industry estimates, Disipio, on the East Coast, is sometimes paid as much as $150,000 by a record company for handling just one record.
Disipio would not talk to NBC News for this story.
And on the West Coast, Isgro has become one of the wealthiest men in the music business, driving around in his Rolls Royce, always accompanied by at least one bodyguard.
Isgro would not talk to NBC News for this story.
Isgro, shown here with a record company executive, is well known in the music business, and so is his bodyguard.
But of ten record company presidents contacted by NBC News, including the heads of such major labels as CBS, Warners, RCA, MCA, none would agree to talk on camera about Isgro, or Decipio, or the network of independent promoters, some saying they feared repercussions.
Off camera one company president said, you just can't be in business without them.
A second company president said, it's obvious what's going on.
According to figures provided to NBC News by industry sources, record companies pay independent promoters, many with mafia connections, almost 80 million dollars a year.
80 million.
And with this has come a climate of fear in the rock music business.
Jay McDaniel says he was threatened by a big promoter when he tried to start a record promotion business saying publicly he wasn't going to use payola.
Were there threats of violence against you?
Yes.
What was said to you?
It basically came out that I could have my face rearranged.
Just how important the rock music business is to the Mafia became clear last month at this New York City hotel.
Joseph Armone, the man from the pastry shop, arranged an unusual meeting with the top three men in the Gambino Mafia family, including the Gambino family boss, John Gotti.
In the view of the FBI, a mob summit meeting.
Also observed here, Joseph Isgro, who authorities say meets frequently with Armon and other gangsters.
And Fred Decipio, who according to his lawyer, has never met Gotti, has met Armon only twice, and has no business relationship with mobsters.
One hour after meeting top people in the American Mafia, Isgro and Decipio were at the Waldorf, taking their places among the top people in the American music business.
Ryan Ross, NBC News, New York.
Manufacturing companies for jukeboxes in America.
Roccola was founded by businessman David Cullen Roccola, a mob-connected businessman who was later charged with corruption in 1929. AMI was run by Jacob Guzik's son-in-law, Frank Garnett.
That was until 1949 when it was taken over by the other infamous mobster, Sam Giancana.
Many jukebox manufacturers didn't sell to bars and clubs directly.
They were sold instead to regional distribution entities, and these distribution entities would sell to operators of jukebox routes.
These operators would collect the cash that would supply the records for the machines, and they would be responsible for the repairs and needed maintenance.
The Mafia focused its attention at the distribution level.
This gave them control over the machines where the cash was picked up, and it also gave them control over what records went inside the jukeboxes.
As the 1950s would pass, various mobsters built their empires on jukeboxes, with the Chicago outfit controlling 100,000 of the nation's 575,000 jukeboxes.
As a result, this would lead to a situation sort of reminiscent to what we know today as an industry plant.
If you recall, the charts were originally based on jukebox data.
This now meant that all they had to do was put a new artist's records inside their machines, then simply misreport the amount of plays in the machines to instantly send a new artist to the top of the charts for as long as they wanted.
Coincidentally, or perhaps a part of a grander conspiracy, during the 1950s, all of the radio stations across the nation began focusing their programming to the best music, the hits.
With most major radio stations adopting the Top 40 format, As author Gus Russo stated in his book, The Super Mob, it was Stein who encouraged fellow Lawndale entrepreneur William Paley to boost his new network, the Columbia Broadcasting System, by putting Stein's music acts on air, live, and turning the rigged top 40 into a national phenomenon.
Industry insiders have been saying, Paola never went away, and given the fact that 2,500 text messages leaked to Rolling Stone in 2020 seemed to show that radio station promoters were actively stuffing playlists with the same songs, going as far as to play the same thing on repeat every 15 minutes to reach chart goals.
And then the text later showed that once a song hit a chart position goal, they would swap it out for another song.
Not surprising, but it's almost like the charts aren't an accurate reflection of what people are choosing to listen to.
It almost seems like a closed system of power where only certain people are allowed to cheat.
Notice how when an Indian rapper buys views to break the world record on YouTube, he gets stripped of his title and they change the rules.
But when Taylor Swift does it, it's completely okay.
Notice how when Jay-Z tries to create an artist-owned platform to challenge Spotify, When he fakes a world record, his company gets investigated for data fraud.
But when record companies partnered with YouTube launched Vevo in 2009, Vevo magically becomes the number one most viewed channel on YouTube, with Lady Gaga's Just Dance magically getting 90 million views in 24 hours at a time when most of the world didn't even have smartphones.
Actually, if you're paying attention to this chart here, supposedly this video was uploaded in June.
Notice that it gets zero views that entire time, and then the day before Vevo launches, it gets 90 million views in a day.
Vivo hadn't even gone live yet.
The same pattern of behavior can be found in a number of different videos after Soundscan's introduction.
Record labels began holding back singles, then juicing the charts by building up radio play first.
Additionally, there's stories of sweetheart deals being arranged with retailers, where they would send a bunch of discounted copies to their store, only for someone to come in that day and then just clear them all off the shelf.
And then there's stories of people being paid off The main method of gaming SoundScan back in the day was to send a bunch of copies to independent retailers.
Here, each copy would be worth three on the charts.
The idea here was to give a bunch of extra weight to independent retailers at the time because the SoundScan system hadn't rolled out across every single store yet.
Then found in the documents of the Eliot Spitzer Payola investigation, the documents accused Sony of keeping people on payroll to basically call in to the radio stations and make fake song requests.
Then also found in these documents is alleged that radio stations have participated in selling spin packages.
This one's really interesting.
I always wondered why radio stations sometimes just play like a whole bunch of songs in quick succession during commercial break, but they'll only play like snippets and then they'll say like you're listening to Pay 0104 or something.
The airplay monitoring companies detect that the song is being played on the radio, even if it's just for a short time, and then they count that towards the charts.
While you may have heard that people lie and numbers don't, just know that sometimes we don't get the full story behind those numbers.
The contract is sort of, you know, the indentured servitude type of thing.
Our first contract was seven albums, essentially 14 years.
So I signed that contract when I was 23. That's crazy.
Okay, so I'm signing, at 23 years old, I'm signing a contract that's supposed to take me into 37. You're signing a contract for more than half your life.
And if you look at the shelf life of most artists, it's four to...
So they're basically anticipating your entire arc.
That's so crazy.
So you don't have any leverage, you know, other than that they want to sign you.
You sign the deal and then it becomes this weird dance of like, can I sustain success?
Yeah.
If you get success and you have leverage, they'll get out of your way because you're making them a lot of money.
But the minute you're not making them as much money, then they step in and they start playing these Jedi mind tricks on you.
We know what to do.
You know, the public's gonna forget about you.
I mean, I've heard all these things, like, you know, this kind of weird, like, yeah, you're in the room, but, you know, we're the arbiter of whether you can stay in the room.
That's the weird position that record companies had for a long time that they don't seem to have anymore.
I would argue against that.
They still do?
Well, they've moved to a different set of circumstances, and I'm not as conversant as I once was, but one thing they do with certain younger artists, but I think particularly more in the pop realm, is they do these 360 deals, where it's like if you get a perfume deal, like your whole world, we own a piece of your whole world.
And fame is such a great quotient in American life now that you can see where kids would trade fame and be willing to give away the profit part.
Well, they'll take a risk at the long-term ownership.
Right, so let me jump in there.
So, if you actually survive the cut, let's call it phase one, you're successful, you're a name, and now you're in a place to either renegotiate or your deal is up or whatever.
I once had a conversation with a very powerful music executive, and I was friends with the guy, so I was like, give me the insider psychology here.
Now that I know the game that you run, What do you tell people like me when they get here?
And he says, oh, it's just, there's always a price.
So they know that even if you get through the matrix of the whole thing and get out the other side, that there's just a dollar amount that will buy you back in.
They're not worried that you'll go independent.
And in fact, if you look at a lot of the machinations of the music business over the last 20 years, especially with the rise of the internet, it's to keep people in the system.
They don't want true independence.
You get your street smarts.
I can smell that, you know what, a mile away.
I always got paid, and everybody in the band got paid cash at the end of the night, contractually speaking.
So I was able to find books on the music industry from a legal standpoint.
And of course, they were kind enough to put a lot of contracts in there.
So I, sounds great.
I'll sign here, you sign there.
So I had always worked on that level.
Nasty grams I got in my voicemail at the time.
From the people that I was factoring out of the equation, you see.
Like I said, Mike DeFoy always gets paid.
They were doing the, you know, sell the tickets scams.
So they're getting the money from the venue, and so they're pocketing all the money that you would have gotten, and then they're giving you a roll of tickets to sell to bring people into the show to buy drinks and all that.
So thank God that I was able to get my hands on all those legal books about the Someone was called, like, how not to get screwed in the music industry.
I mean, that was the actual title of But soon after working with Keen, Sam Cooke came out with a record that included Summertime and on the other side it had You Send Me.
You Send Me ended up reaching the number one on the charts after it took off in 1957. At this point, despite Keen Records having earned over one million from sales from You Send Me, Bob apparently only had an oral contract with Simus.
Eventually Keen was cut out of the picture and he was duped and received nothing and was left out in the dust.
Hereafter, Keen would go on to found Del-Fi.
Keen basically had an open-door policy for musicians to audition for him.
One of the more known was Richie Millens, who, after seeing short-lived success, passed away along with Buddy Holly and J.P. Richardson, and pilot Roger Peterson for reasons unknown in a plane crash after failing a takeoff.
Now, that being said, just because the reasons were undetermined is worth mentioning that the weather conditions were incredibly poor, and the pilot wasn't even made aware of the weather they were flying into.
On top of that, the pilot was 21 years old, Was not instrument-rated and should not have been flying in a snowstorm.
Now, as a result, Keane ended up owning Valen's legacy via his masters, and over the course of the next half-decade with Nunes, he built up a pretty sizable catalog, including Chan Romero, Little Caesar and the Romans, Ron Holden, Johnny Crawford, Brenda Holloway, some of the first records from Frank Zappa, and the Safaris.
But that being said, Bob Keen basically had his entire catalog stolen out from under him.
As he wrote in his autobiography, I was trying to resolve the dissolution of Stereo Phi and towards the end of 1970, I finally got an agreement with Larry Nunes as to who was going to get what from the company assets.
I was to receive all master recordings, including my Delphi tapes, and he got 600 copyrights in the publishing division.
I signed the papers and went over to the local storage facility to pick up my property.
There was nothing there, missing, presumed stolen.
I don't know who got the recording equipment, but it seems that the now-defunct MGM Records was figured in the deal somewhere.
MCA was even selling bootleg Richie Balen's albums.
This evening, part two in a series of five on crime in the rock music business, or how in some cities they might but don't advertise a rock concert brought to you under the auspices of a band of hoodlums.
There is so much money in it, so many guitar players becoming millionaires in their 20s, gangsters have seen an opportunity and moved in, as reported now by Brian Ross.
This is Jerry Michelson, a rock concert promoter in Chicago.
This is Arnie Granite, Michelson's partner.
As rock promoters, they expect problems.
Last-minute cancellations, managers, agents, temperamental rock groups.
For the marquee tomorrow night, we cannot fit fabulous poodles across the marquee.
But what they never expected was trouble from the mob and that they would have to turn down concerts because of the people involved.
And in the summer of 1977, Michelson and Granite turned down an offer to be part of promoting three of the biggest rock concerts ever held in Chicago.
This is Soldier Field, and the three big concerts held here were called the Super Bowl of Rock, with estimated ticket sales of well over two million dollars and the biggest names in rock music appearing.
A federal grand jury is now investigating allegations that the mob ran these concerts, suspected of bribing city officials to get an exclusive on concerts in Soldier Field, booking rock groups through front men, and driving up the price of concert tickets, all part of a huge mob scheme to make big money in the rock concert business.
One of the men under federal investigation is Victor Comforti, last photographed 20 years ago when he appeared before the McClellan Senate Rackets Committee.
Comforti works out of this heating and air conditioning company on Chicago's west side.
A number of rock concert promoters from around the country are believed to be close to Comforti.
And federal investigators say this garage has become an important meeting place in the rock concert business.
Terry Bruner of the Chicago Better Government Association investigated the concerts.
He says come 40 was the godfather of the Soldier Field concerts.
He goes way back in the history of organized crime in Chicago.
And I think that it's pretty clear that he was the person who was the go-between between the rock promoters and the city officials who were concerned.
If you talk to enough people in the entertainment business or the rock business, they're going to tell you that this kind of thing goes on all over the country and that they know ahead of time that we're not even going to bother with Chicago.
There's too much hassle, as they say.
I think that's a code word for you've got to pay off.
And I think that it's pretty clear that these people had to pay off in the city of Chicago.
One of the people who says he was a victim of the mob scheme at Soldier Field in Chicago is rock superstar Ted Nugent.
Police estimates based on aerial photographs of the crowded Soldier Field were that as many as 90,000 people were in the stands.
But the promoters told Nugent they were only 56,000.
And Nugent says he was cheated out of more than $100,000 in his percentage of the ticket sales.
You lost a lot of money there, didn't you?
Well, again, you know, it's hard for me to walk away from a gig making a quarter of a million dollars and realize that I lost money.
But yes, the people paid to see Ted Nugent.
Ted Nugent should get his money.
You consider yourself an honest businessman?
Oh, totally.
Do you, though?
Yes.
Has that hurt you in this industry?
I would say so.
I would say that it's definitely hurt as being honest and operating in an honest way.
It is difficult.
Over the years, there's been times when it's been difficult.
We've had to make hard decisions like that.
Not to make a payoff, not to skim, not to cheat.
Yeah, those decisions have had to be made.
There's been easy money out there at times.
There was hours for the taking.
In this hall in Nebraska, it is still possible to put on a rock concert without the mob.
But in Chicago, and in a number of cities in this country, promoters, managers, and rock stars have to go along with a lot to put on a rock concert.
Nobody gets to the top without doing a few favors.
Formerly represented by MCA, Jones, like Duke Ellington and Count Bassey, had left the agency in 1939, after Willard Alexander, a top MCA agent, had defected to the William Morris Agency.
Jones told Maury that MCA controlled most of the big-name bands in America and Canada, and at least 75% of the entire band booking business.
How has MCA become so successful?
Maury asked.
Well, they've devised a system of rotating bands in all the places they play, Jones replied.
The system's so perfect that without the MCA contract, a band leader can't make enough bookings to make a living, And the clubs can't get enough bands unless they sign contracts with MCA. This system that Julius Caesar Stein created is the reason that bands go on tour to this day.
Before this, they all had been playing at one location for months at a time.
Warner Brothers was interested if we wanted to bundle it, which is when you include the record like with a ticket.
And a lot of people have been doing it, whether you buy a t-shirt and you get a record, and it's a digital download link.
And I was like, well, how does that work?
And they're like, well, you would get $5 from each ticket back to Warner Brothers, and then you would get a record sale.
And I was like, that doesn't make any sense to me and to Dan.
And they're like, yeah, well, it's the only way you're going to get a number one record.
So if you want a number one record, you got to do that.
And I was like, well, it's one-to-one.
Like, we get five bucks back, and then we get a royalty, and we get a ticket sale.
And I'm like, no, you don't get a royalty.
And you only get an album sale count if they click the link.
And we have a 50%.
Click through.
So, in other words, we would pay $10 per sale on Nielsen's sound scan by giving the money back that we've sold on tickets to Warner Brothers, to our record label.
I was like, that.
At this point...
That is a crazy deal.
Check it out.
We've sold 250,000 tickets on this tour.
So we would give back 1.25 million.
Our record advance for this record was less than that.
So I was like, if Dan and I were just on our own record label, we could give ourselves $5 per ticket, and we'd just take the money from the right hand to the left hand, give you a link, and if you counted it, we'd get the sale, we'd keep the money.
That's basically what the f*** was going on.
That would be a person who maintains a distribution network of retail space at various mom and pop shops.
The purpose of this kind of distributor would be to sell cutouts and overstocks for record companies, usually titles that didn't sell well or that they had overstock of that could be sold off for pennies on the dollar.
While this might seem like honest work, this job was also a front for other illegal activity.
For one, cutout deals allowed record labels to bypass the artist and not pay them any royalties.
And the second use case for illegal activity would be to sell counterfeit records as well, under the cover of a cutout.
As the LA Times once reported, critics of these sell-off practices have been complaining for years that record companies use the cutout and overstock designations arbitrarily to raise quick cash at the expense of the artists.
They say that cutouts and overstocks often are routinely sold, bartered, or given away by the record companies to cut out distributors, favored retail accounts, and even company employees.
In most cases, the artist receives no royalties.
What's more, the Recording Industry Association of America, a trade group of the major record companies, contends that mass sell-offs create an atmosphere conducive to counterfeiting by providing illegal duplicators with a cover to produce large quantities of the recordings that have been sold by manufacturers as cutouts and overstocks.
The reports on this program, NBC investigative reporter Brian Ross has detailed several links between the mob and the songs that make the charts.
And tonight, Ross has more.
This is the man federal authorities describe as the godfather of the American music business, Morris Levy, in the custody of FBI agents after his arrest just after 7 this morning at the Ritz-Carlton Hotel in Boston.
Levy, the president of Roulette Record, is little known outside the music business, but federal authorities say Levy is as powerful as any big record company president, using his ties with organized crime to control record companies, record stores, and big name performers.
Also arrested along with Levy this morning were 21 others in Florida, New York, and New Jersey.
Indicted by a federal grand jury in Newark on racketeering and extortion charges.
Accused of using violence to get their way in the gambling business, the narcotics business, and the music business.
United States Attorney Thomas Grealish.
A Mac 11 machine gun with a silencer is not used for target shooting.
The New Jersey mob investigation began more than three years ago with a man identified by federal and state authorities as a mafia boss, Gaetano Vastola, known on the streets of New Jersey and in the recording studios of Hollywood as Corky.
By following Bastola and tapping his phone, federal agents were led to Morris Levy, to New York talent agencies, and finally to Hollywood, to the corporate headquarters of the huge entertainment conglomerate, MCA, and what authorities describe as some suspicious business deals at MCA Records.
The president of MCA Records, Irving Azoff, said earlier this year that his company was the victim of the mob, and that MCA had done nothing wrong.
But somehow, according to federal authorities, millions of MCA records by Neil Diamond, Elton John, and the rock group The Who and others ended up in the hands of Mob Front Record Company, which were going to sell the records at huge profits to record stores.
The mob showed up.
The enforcers came down.
Dennis Isman is the lawyer for a man who ran one of the mob front companies and is now a protected federal witness in the case.
Isman says his client was beaten up by the mob when he refused to pay for a large shipment of MCA records.
I think it was to show him that if he didn't pay, he was going to get hurt, maybe hurt worse.
I'm not sure if they intended to break his jaw and fracture some bones in his face.
I think it was just Just to show him that he couldn't not pay.
And there has been other violence in the case.
Earlier this year, a New York City policeman was while following one of the men involved in the MCA deal, who is expected to be indicted soon by another grand jury.
This indictment is the work of one of five grand juries now investigating organized crime in the music business.
Federal sources say a grand jury in Los Angeles is investigating the role of top MCA executives in all this.
Other grand juries in Los Angeles, Cleveland, Philadelphia, and New York are investigating allegations of payola, the use of cash, cocaine, prostitutes, and some mob controlled promoters to get songs played on the radio.
Law enforcement authorities say what's at stake in all these investigations is the mob's stronghold in a business that earns $4 billion a year.
Brian Ross, NBC News, Newark, New Jersey.
We'll be right back.
Sound. Sound. Sound.
Sound.
I'll tell you what they feel.
turn to us and say, how could have we been careless all along the way?
Another day we'll dumb and all their pieces left behind.
We'll give that up and take the right path that you find.
Oh, some are architects in the world.
A grand illusion pulling us around.
We, caught inside, we'll find our way.
And bring the walls of the glass house.
Down.
I just can't imagine where I would be then.
We always see where we're going.
And I look at where we've been.
I feel so empty.
And I know you would too.
Losing one so close.
Being far away from you.
Hold me tight tonight.
there's no words I need to hear.
Hold me tight, so tight.
You're all I ever felt so dear You're all I ever felt
so dear What could I do?
Where could I go?
My friend Without you would be the end All the things we've done together Whisper with the words I
need to hear.
Oh, we died so tight.
That's all I'm asking here.
Oh, we died tonight.
Whisper with the words I need to hear.
Oh, we died so tight.
You're all I ever had told you Without you My life just isn't the same Without you
Was I the one to blame Without you My heart is broken too Oh, how can I live Without you Without you Yeah, I'm the one to blame
a space of time It seems so right Hand in hand In the summer nights But through the tears I watched them scream How did this all start?
Was it something I said?
What did I do?
Tell me who was misled?
Without a word, I watched you walk away.
What about you?
My life just isn't the same Oh, without you Was I the only one to blame?
Without you My heart is broken And
there you go.
That's exactly why I don't want nothing to do with the music industry.
Meanwhile...
And there you go.
That's exactly why I don't want anything to do with the music industry.
One of the most disturbing aspects was artists being more valuable to companies dead than alive.
Yeah.
That's what happens, Jim, when you put your name on the bottom line.
As an independent artist, I don't have to worry about that.
I can do a show, not do a show.
I can release an album.
I don't have somebody over me forcing me to pump out a certain amount of material every year.
I like that video a lot because I tried to use as much of it as I could because it's all centered out of Chicago, you know, where I'm from originally.
Of course, most of the stories were a bit dated, but I think they got that core idea across, and I expect you believe it's the same today as it was then.
No, yeah.
Well, like I said, since I was from Chicago, you know, I would run into stuff like that.
And even today, I think it was George Carlin said, you know, it's a great big plug, but we're not in it.
So that pretty much sums it up.
So when you go independent, you have to make sure that you have your thinking cap on and you make sure that you have all your plans Implemented strategically.
You have to kind of be smart about that.
I've done quite a bit on my own, so I'm living proof that it is possible.
You can circumvent the majority of everything and the things that you're unable to circumvent You just create your own thing and you're still able to get from point A to point B. It's just not the industry standard.
We have a couple of questions.
Yeah, go for it.
The first one and the most important, Mike, is everybody wants to know what is the name of the documentary and is there a link to it?
Did you make it?
And thank you very much for sharing it if you can.
I'll find the link for it and I'll send it over to either you, Lorian, or Jim so they can reference the source material.
But because of the fact that I took the original program, because we're only given an hour segment, I sat down and I edited that thing all the time as far as I could because I wanted to add more material.
And like I said earlier, this is kind of Part one, if you will, because of the fact that it's, you know, I'm an independent filmmaker as well as an internationally recognized artist.
And so I get hit from both angles, you see.
So beyond that is the film industry and just all of the stuff that's going on there.
And it's just, it's horrific.
It is horrific.
And I choose not to do that.
Thank God and His guiding hand and me using my God-given talents appropriately and just being savvy in your business activities.
As they say, wise isn't certain, but...
Other questions?
If there were, they scrolled beyond me, but I don't think so.
But I have a question, Mike.
I was going to say, how did you decide that the music industry was bad before anything happened to you?
Did you just figure it out on your own young, or did it just manifest itself?
How did you come to this conclusion?
Well, I used to come home and check my voicemails and I would get a lot of nasty grams.
And because I was instinctively working on a contractual level at an early age where I was able to deal directly with the venue owner.
The nasty grams I would get on my voicemail would be from all the people, all the middlemen who I was factoring out of the equation, of course.
So when you embark on that level, you know, specifically with the intention on circumventing what's already in place, then of course you're gonna step on some people's toes eventually.
And it can get kind of nasty.
Do you think Janis Joplin, Jim Morrison, Michael Jackson were all victims of being more valuable dead than alive?
Well, yeah, there's a lot of factors in play.
And that goes into the whole film area.
There's a saying on the street, you have to give to get.
And that's a whole other topic.
That's an all-day show.
But that's reality where it involves you having to literally sacrifice someone from your family to be into the $100 million club or like this.
So the more people that you execute from your own family, you kind of move your way up there.
Here's a question for you, Mike.
Are any famous bands organic or are they all promoted by the system?
Yeah, a lot of that stuff is, you know, that's why I wanted to put a lot of those clips in there, how they fudge the numbers and all that, even today with the, you know, streaming and stuff like that.
And I... I've just pulled all my material off of online, but you can't find me on Spotify anymore just because of the fact that I failed to take Jimmy Page's advice from the band Led Zeppelin, where he said, if you put any of your music online, you'll never see a penny of it.
And there's a lot of truth to that.
I had put a post up on X in the past months before where I was disgusted with the fact that the guy who started Spotify had retired, and he had retired with more money than Paul McCartney.
And I can guarantee you that he probably doesn't have any idea how to string a guitar, how to write a song, or how to perform live and all this kind of stuff.
It takes a lot of work.
And when I saw that, I just, you know, We're done.
So I sell all my stuff from my own website, and I encourage people to sign up there directly so I can communicate with my fanbase via email because of the fact, yes, you know, there is such a thing as shadow banning, where you have a voice if you don't have a reach and no one cares yourself.
So if I set stuff up online, usually at least once a year or every so often as a general housekeeping procedure, I intentionally reset all of my social media accounts.
So there'll be zero following and then there'll also be zero followers.
So because I like to keep my...
I keep my cards close to my chest.
I never disclose what I'm doing or where I'm going.
I only sell tickets to my customer base.
I never do shows that are like general admission where anybody can just happen to walk in.
I do maintain a high level of security, safety and things like that.
I'm playing if it was passed, and then, you know, if you're a customer of mine, you'll get an email from me where I'll be at, and then if you want a ticket, you can buy it.
If not, then you can pass, and then your ticket will become available to some other, you know, customer.
And, you know, because of the fact, you know, depending on the size of the venue, if it only seats 5,000 people, and If someone happens to be the 5,001 customer as far as volume of purchases, they'll never get an invite to the show unless somebody in the original 500 passes and then I make it available to the 5,001 person and so on.
Just for safety reasons to keep it out of the maximum occupancy.
Michael, just to participate this year, I'm just delighted to have you.
And it's a great angle, you know, something we haven't explored before, but it's very clear.
I mean, the case is beyond dispute.
Lorian, your thoughts?
Well, I am so pleased that we got a musician that understands what's really going on in the music industry to be here with us this year.
Because I've never, we've had it addressed.
Yeah, exactly.
We've had it addressed through the rapper problem and Tupac and they've been discussed over the years at this conference, but you really nailed it.
You went right back into the history of it and brought us forward and now we understand what the heck's going on.
Because it's fine to scratch the surface of what happened to some of the rappers, but without that documentary going back into the 80s, we didn't get the platform that the mob was behind it, and now it's a different type of mob, but it's a tech mob.
There's always a mob behind something, right, Mike?
Yeah.
Mike, let me add a question.
You know, George Soros has just bought, what is it, iHearty or Comcast 220 stations.
Yeah!
How's that going to affect and impact music?
I think it's going to have a bias in terms of news reporting, but your thoughts?
Well, there's an old adage.
If you want to be on commercial radio, you have to have at least a million dollar budget.
Because, you know, like in the video, I wanted to make sure I left in all the segments on the payola aspect because of the fact that, you know, it's just like if you had an item that you wanted to sell at the grocery store, you have to rent that shelf space.
And if it doesn't sell, then they rent it to somebody else.
I get it.
But like I had told other interviewers, there's other ways.
You know, like this.
And, you know, you can come in into any market through the back door utilizing non-commercial radio.
And there's a lot of FM radio stations, you know, so I appear everywhere else.
So, Mike, how do people get to know you, be part of your subscriber base, and how do they get to your concerts?
MikeDeFoy.com.
And you can find me there.
Just subscribe direct.
Otherwise, if you follow me on X, you know, when I start seeing a whole bunch of posts that I had put up there that I just want to get rid of, I clean house and I reset everything back to the room just to kind of keep things, you know, nice and tight.
So people need to be aware that they need to resubscribe every January 1st, correct?
Yes.
Well, whenever they stop getting feeds from me, you know, you'll know when I reset it.
It'll be non-existent.
You'll see it like in the hashtags.
I'll usually hashtag rock and roll or, you know, hashtag music.
And usually all the posts I put up there will end up in the top ten, stay in the top ten for, you know, at least a month or so.
And then they start drifting down to the 50s.
You know, top 50, top 100. So, yeah, usually all my posts will stay up there.
I had, before I had reset my X account, I had just gotten a follower.
He was the chief editor for the Rolling Stone magazine.
So, sorry.
Thanks.
Very nice.
There you go.
Well, Mike, it's been a pleasure.
Anything else you want to add, Jim?
No, I guess I'm delighted to have him here.
I'm wonderful.
Okay, so Mike, we're going to let you go.
And thank you so much for being with us.
And then Jim and I will stay on and do a recap here of this year's conference.
And then thanks so much.
Take care.
You're welcome.
Thank you for the invite.
I appreciate it.
Hope to see you next year.
You bet.
Mike.
Super.
Thank you.
Okay, so...
Lauren, I just want to thank you and Gary not being here, but the two of you made this relatively effortless.
You're a pro at producing conferences and...
I'm just very, very happy about the way it all came together this year.
Jim, I love working with you.
It is so cool.
I mean, our late night chats and our, like, what the heck's going on phone calls, those are always fun.
I love it.
It's great.
I'm very grateful to the audience, those who hung around for the late show, parts of this conference, and we're going to get them up.
We're going to get them up.
They'll be on BitChute, they'll be on Rumble, and I think they're going to start showing up by midweek.
We should have Absolutely.
Yeah, because Gary's already working on the morning stuff.
I've already compiled the evening from yesterday and it's already up in a Dropbox area for Gary to grab.
And tonight I'll do the same with today's evening participants.
And so it's going to be wonderful.
So I hope you guys re-watch everything.
Just re-watch it all a million times because you're going to learn a lot more to listen to it the second time.
So thank you, one and all, for participating in the fifth annual Volkswagen Conspiracy Conference.
See you next year!
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