Music attorney Don Engel, speaking on behalf of artists yesterday (July 23) at a California Senate Committee music business hearing in Sacramento, described record industry accounting practices as "in

Music attorney Don Engel, speaking on behalf of artists yesterday (July 23) at a California Senate Committee music business hearing in Sacramento, described record industry accounting practices as "intentionally fraudulent," and compared the practices to those of Enron and WorldCom.

Engel joined artists Sam Moore and Montel Jordan, auditor Fred Wolinsky, Recording Industry Association of America senior VP of business legal affairs Steven Marks, and other label representatives, in providing testimony at the seven-hour hearing on allegations that labels underpay royalties.

In the hearing, organized by Senate Judiciary Committee chairman Martha Escutia (D-Montebello) and Sen. Kevin Murray (D-Culver City), the labels denied any wrongdoing, arguing that contract issues are part of the negotiation process. Murray disagreed, saying that many recording contracts only require a label to pay an artist what they are owed if they are found at fault in an audit -- which he says is effectively a disincentive for record labels to fully report.

Moore, an R&B veteran formerly of Sam & Dave, recalled learning in his 50s that his retirement fund would be $67 a month because his record label never reported income to his pension fund.

Jordan, who scored a No. 1 Billboard Hot 100 hit in 1995 with "This Is How We Do It," said despite selling 2 million copies of that single, he still owes money to his record label. "I have sold many gold and platinum records. I've never had a moneymaking loss and yet ... I still haven't recouped," he said.

A second hearing is likely to be scheduled.


-- Tamara Conniff, The Hollywood Reporter & AP



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