ABC Prime

By BRIAN ROSS, RICHARD ESPOSITO and VIC WALTER

Feb. 7, 2006 -- ABC News has learned the focus of a two-year long payola investigation by the New York attorney general is turning to the nation's nine largest radio conglomerates.
Attorney General Eliot Spitzer says evidence he has gathered clearly shows some of the radio conglomerates have participated in the illegal practice of accepting payments from record companies and middlemen for guaranteed air play for certain songs.
"The behavior has been unethical, improper, illegal and a sanction of some severity clearly should be imposed," Spitzer told ABC News chief investigative correspondent Brian Ross.
Spitzer and music industry officials told "Primetime" that millions of dollars in payments, gifts and trips are exchanged each year to get music stations to add songs to their weekly play lists.
Spitzer says record company documents obtained in the investigation of Sony Music and Warner, both who have settled with the attorney general, reveal payments for songs that became major hits, including Jennifer Lopez's "I'm Real" and John Mayer's "Daughters."
Other artists whose songs are named in the documents Spitzer has obtained include Jessica Simpson, Celine Dion, Maroon 5, Good Charlotte, Franz Ferdinand, Switchfoot, Michelle Branch, and R.E.M.
Spitzer says much of the money went directly to corporate bottom lines, unlike payola scandals of previous decades when individual disc jockeys and program directors received the money.
"We have people in suits coming in with documents rather than cash payments under the table to a DJ," Spitzer said.
The nine radio conglomerates which have received subpoenas from the attorney general are Clear Channel, Infinity (now CBS Radio), Entercom, Emmis, Citadel, Cumulus, Cox, Pamal, and ABC.
The nine companies, together, control several thousand radio stations across the country. In statements to ABC News, five of the companies say they are cooperating with the attorney general's investigation and take the matter seriously. The other companies have not responded to requests for comment.
A number of other independent radio stations are also under investigation, according to state investigators.
In conducting a probe of payola, banned by federal law, Spitzer has assigned himself the role of hit man to the hit makers, using state consumer fraud and bribery laws to go after the practice.
The FCC says it is closely following the New York investigation although Spitzer says the FCC has yet to move forcefully.
"I would like to see the FCC more directly involved in addressing what is very clearly a payola scandal that has run rife through the industry," Spitzer told ABC News.
Virtually all investigations into radio practices, since the last payola scandal in the 1980s that implicated organized crime figures, have withered on the vine and vanished.
Spitzer's probe could be the most comprehensive to ever hit the industry. Warner Music Group has entered a settlement and contributed five million dollars to charity as part of that agreement. Sony music settled for ten million dollars. Warner and Sony both agreed to cease any questionable business practices and to comply with Spitzer in his ongoing probe.