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Former Radio Payola Crusader Governor Eliot Spitzer in Prostitution Scandal

Dateline: 03/10/08

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New York Governor Eliot Spitzer

New York Governor Eliot Spitzer

Photo Credit: © U.S. Department of State
New York Governor Eliot Spitzer - a crusader against payola in the Radio and recording industries – is embroiled in a scandal involving a prostitution scandal.

"I have acted in a way that violates my obligations to my family and violates my or any sense of right or wrong. I apologize first and most importantly to my family; I apologize to the public who I promised better," Spitzer said at a news conference held earlier today.

Prior to becoming Governor, Spitzer pursued payola connections between record companies and radio stations and successfully forced several large players to change the way they do business while brokering agreements including hefty fines and modified business behavior.

On November 11, 2005, while New York Attorney General, he brokered a settlement in the music industry’s "pay-for-play" arrangement with the Radio industry involving Warner Music Group Corp., the third largest record company in the United States. Warner agreed to abandon the industry-wide practice of providing radio stations and their employees with financial incentives and promotional items in exchange for "airplay" for Warner’s recordings.

Earlier that same year on July 25, Attorney General Eliot Spitzer announced an agreement where Sony BMG Music Entertainment agreed to stop making payments and providing expensive gifts to radio stations and their employees in return for "airplay" for the company's songs. The inducements for airplay, also known as "payola," took several forms:

  • Outright bribes to radio programmers, including expensive vacation packages, electronics and other valuable items;
  • Contest giveaways for stations' listening audiences;
  • Payments to radio stations to cover operational expenses;
  • Retention of middlemen, known as independent promoters, as conduits for illegal payments to radio stations;
  • Payments for "spin programs," airplay under the guise of advertising. E-mail correspondence obtained during the investigation shows that company executives were well aware of the payoffs and made sure that the company got sufficient airplay to justify these expenditures.

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