Broadcasting (Apr - June 1960)

Record Details:

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ment Mr. Saccone was under investigation, the station questioned him and on the basis of this, “his appointment was terminated” (last March). Harry Novik, WLIB’s president, said he had cooperated with the district attorney’s officer who called upon him a few months ago and that “we will study the facts and then make a decision.” J. Elroy McCaw, president of WINS, said Mr. Leeds left the station in January during the investigation and before any facts had become known. He said the station had requested but did not receive an affidavit. In reference to Mr. Freed, Mr. McCaw said he left in 1958 but apparently before the period covered in the indictment. Edith Dick, general manager, WWRL. noted the station’s policy that makes employes subject to dismissal when found to be accepting “gratituities.” She said Tommy Smalls on Nov. 23, 1959, signed an affidavit and that in view of the information now disclosed by the district attorney, his employment has been terminated. He joined the station Aug. 1, 1951. Payment Methods Sampled ■ The District Attorney’s office explained that company payments took various forms. Mr. Freed, for example, allegedly received $400-$700 per month to favor records from companies, while in other cases, individuals received $50-$ 100 on the average although some payments went as high as $750 per month. The investigators found flat payments, $25 per record for example, in certain instances for plugging a single record. Mr. Tripp, it was noted, allegedly received a Vi cent royalty per record. Two examples: Mr. Tripp is alleged to have received $4,850 for two records (“Sixteen Candles” and “I Wonder Why”) and $13,000 for another record on this royalty basis. Indictments covered only 1958 and 1959 because of a two-year statute of limitations governing charges of commercial bribery. Frank S. Hogan, the district attorney, said the American Guild of Authors and Composers made information available to his office as well as to the House Legislative Oversight Subcommittee. He explained that the station personnel, who were not disc jockeys, were involved as they had authority to select recordings to be played. Pleadings ■ The eight men were arraigned at Special Sessions Court in Manhattan. Mr. Freed and Mr. Leeds flew to New York to surrender to authorities. Mr. Freed and Mr. Leeds pleaded not guilty. Trial was set for Sept. 19. The other cases were adjourned to June 14. All eight men were paroled in the custody of their attorneys with no bail. The record companies were not acted against, as the usual practice is to proceed against only one party to an alleged bribery. The companies therefore had immunity so that officials could testify. None of the defendants chose to appear before the grand jury. Total payments charged to each rec ord company: Abel Productions $5,000 Action Records 2,350 Alpha Distributing 21,650 Atlantic Record Sales 6,050 Big Top Records 150 Brent Music 1,000 Carlton Records Distributing 2,175 Coed Records , 5,675 Co-op Distributing 3,950 Cosnat Distributing 12,950 Ember Distributing 750 End Music 1,400 Fury Records 1,455 Gone Recording 725 Hugo & Luigi Productions 1,750 Laurie Records 8,100 London Records 3,600 Malverne Distributing 1,550 Portem Distributing 325 Roulette Records 12,325 Superior Records Sales ...18,200 United Artists Records 3,350 United Telefilm Records 2,100 WHO’S NEXT? President accepts Mills’ withdrawal Sec. 4 (b) of the Communications Act has ended Edward K. Mills Jr.’s hopes of becoming a member of the FCC. Last Monday (May 16), the President officially withdrew from the Senate his nomination of Mr. Mills to serve as a commissioner until June 30, 1961. The recall came at Mr. Mills’ own request (At Deadline, May 16) after he had revealed a conflict-of-interest resulting from a trust fund of which he is a lifetime tenant. First public word of the conflict came when Mr. Mills appeared before the Senate Commerce Committee for his confirmation hearing (Broadcasting, May 2). Mr. Mills’ father established a trust for his two sons which is administered by a New Jersey bank. The trust owns stock in General Electric and Westinghouse which the trustees refused to sell, when requested to do so by Mr. Mills, because approximately $27,000 in capital gains taxes would have to be paid. Sec. 4 (b) reads: “No member of the commission or person in its employ shall be financially interested in the manufacture or sale of radio apparatus or of apparatus for wire or radio communication; in communication by wire or radio or in radio transmission of energy. . . . 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