Court report on SGAE slams "megalomaniac" boss Bautista

Spain's largest copyright collection society, the Sociedad General de Autores y Editores (SGAE), "disproportionately" invaded economic sectors in which it had no business being, such as real estate, according to an independent auditors' report that was released Monday by an investigative committee.

SGAE has been under court investigation since July 1 in connection with a large-scale corruption scheme allegedly involving four executives, including the former long-standing chairman of the board, Eduardo Teddy Bautista. They and five other people were arrested and charged with embezzlement, fraud and gross misadministration over a racket that allegedly diverted millions of euros from SGAE to private firms controlled by some of its own managers.

Ramón López Vilas, a former Supreme Court justice and president of the investigative committee, said that the underlying cause of SGAE's current predicament was "the megalomaniac attitude and disproportionate conduct" by Eduardo Bautista, a one-time musician who became a music manager and all-powerful chief of the copyright collection society.

Using the report, drawn up by Ernst & Young, López Vilas recommended that the new SGAE that comes out of a deep restructuring process abandon property investments and reconsider its core mission. He also said the Culture Ministry should have done more to curb SGAE's excesses.

López Vilas also noted 145 million euros of unidentified copyright money in SGAE accounts that has not been paid out to the corresponding artists. By law, the society can hold on to this cash for 15 years and then keep it if the lawful beneficiaries are not found.

The auditors suspect SGAE may not be making enough of an effort to find these beneficiaries.

Under Bautista, SGAE became a regular target of citizen wrath over initiatives such as the "digital canon," a controversial tax levied pre-emptively on gadgets able to store copyrighted digital material, regardless of their actual use. The society is also known to have sent undercover agents to weddings and other private celebrations to check whether copyrighted music was being played without paying the corresponding fees. The institution collected millions of euros, which it reinvested in a theater project and real estate, among other things.