Editor’s note: This article was first published in June 2011. It reports news from 29 June 2011, when the investigation was at an early stage. On 1 July 2011 the Guardia Civil searched SGAE’s headquarters and arrested several executives in what became known as Operación Saga, and the court proceedings went on for years.
The judge in charge of Central Court of Investigation No. 6 at Spain’s National Court (Audiencia Nacional), Eloy Velasco, is investigating an alleged diversion of funds managed by one of the organisations belonging to the SGAE (Spain’s main society of authors and publishers, which collects music and other copyright royalties): the Digital Society of Authors and Publishers (SDAE).
Although the investigation is still at an early stage, it is already being argued that there is solid evidence pointing to a scandal of major proportions. The Guardia Civil began investigating after noticing a series of data suggesting that the SDAE had committed irregularities in managing funds, with unclear transactions allegedly intended to benefit people connected with the SDAE, an entity that collected €365 million last year (1 million a day).
Unlike the parent organisation, the SGAE, which is “supposedly” non-profit (and we stress the word supposedly), the SDAE was set up as a limited company whose sole shareholder is the collecting society itself, which owns 100% of the shares.
In short, the SGAE profits financially from the companies that depend on the SDAE, and there are quite a few of them. The newspaper ABC has described it as a shell company, which makes its official data very hard to find, and, coinciding with the National Court investigation, the SDAE is already announcing that it may close.
I just hope that this time the SGAE doesn’t take legal action against every media outlet that calls it a “pirate”, because if it does it will end up spending a fortune on lawyers and court cases.
Featured image: Luis García, CC BY-SA 3.0, via Wikimedia Commons.
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