Univision to pay $1 million for pay-for-play radio scheme

The nation’s largest Hispanic media conglomerate has agreed to pay $1 million to settle allegations that some of its radio stations accepted bribes to play certain songs more frequently.

The Federal Communications Commission and the U.S. Justice Department announced separate settlements with two wings of Los Angeles-based Univision Communications Inc. late Monday.

The announcements came six months after their investigation first drew federal regulators to the Rio Grande Valley.

Univision Services Inc. — former owners of the Univision Music Group — pleaded guilty Monday in a federal court in California to one count of conspiracy to commit mail fraud. The charges stemmed from allegations that some of UMG’s top executives paid hundreds of thousands of dollars in kickbacks from 2002 to 2006 to ensure frequent radio airplay for their artists.

Univision Radio — which operates three of the Valley’s most popular Spanish-language stations — admitted to the FCC in a separate settlement that several of its program managers were on the receiving end of those bribes.

Federal law prohibits these types of pay-for-play transactions — commonly known as “payola” — and requires broadcasters to disclose any content they put on the air in exchange for money.

“Payola — this idea for pay-for-play — misleads the listening public,” FCC chairman Julius Genachowski said in a statement. “This agreement with Univision underscores (our) focus on consumer protection and our commitment to ensuring that broadcasters play it straight.”

ELABORATE SCHEME

The joint investigation began in 2009, after former UMG employee Daniel Mireles filed suit against the company in Los Angeles, claiming he had been fired for refusing to negotiate kickback payments with radio program managers.

According to documents in the case that settled Monday, a few rogue label executives were responsible for the elaborate plan that delivered the bribes to radio station personnel without the knowledge of Univision or its radio branch.

Trusted record promoters would draw up fake invoices for work they had never done and submit them to the label executives. Once the bills were paid, the promoters returned the cash to the executives for a cut of the fee.

One of the most-used promoters often flew back and forth to Los Angeles with tens of thousands of dollars stuffed in a briefcase, federal prosecutors said.

The executives then distributed that money to radio program managers across the country in bribes ranging from $1,000 to $10,000, the documents say.

Court filings list stations in San Antonio, El Paso, Los Angeles and Sacramento, Calif., as recipients of some of that money.

But government officials and a Univision spokesman declined to name any of the record label executives or program managers connected to the payola scheme. They also refused to describe any possible involvement of the company’s stations in the Rio Grande Valley — a list that includes KGBT-FM 98.5, KBTQ-FM Recuerdo 96.1 and KGBT-AM La Tremenda 1530.

However, FCC investigators arrived late last year to interview radio personalities and program managers.

At the time, the company declined to comment.

PAY-FOR-PLAY CULTURE

Payola accusations have long dogged the Valley’s lucrative Spanish-language broadcasting market, which is ranked 12th nationally, according to the market research firm Synovate.

It’s an environment in which local disc jockeys have helped crown stars like Tejano act Grupo Mazz and norteño group Siggno through frequent airplay and one in which the influence of popular radio personalities can make the difference between getting heard and going nowhere.

And some former employees of stations now owned by Univision have made similar claims about the pay-for-play culture there in the past.

From 1992 to 1994, three former employees of KGBT-FM and KIWW-FM filed separate lawsuits alleging they were fired from their jobs for reporting or refusing to participate in payola schemes.

Tichenor Media Systems, the company that owned the stations at the time, denied the allegations and settled the suits out of court. The FCC never took public action in connection with any of those allegations.

Univision spokeswoman Christina Keiser said the scheme at the center of Monday’s settlements was hatched by a few former employees of the company without knowledge of the conglomerate’s higher-ups. Univision sold Univision Music Group in 2008.

“Upon learning of these activities, Univision self-reported to the U.S. Attorney’s Office,” she said. “We have cooperated fully with law enforcement authorities throughout the investigation process.”

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Jeremy Roebuck covers courts and general assignments for The Monitor. You can reach him at (956) 587-9377.