Democracy of Sound (29 page)

Lockhart, described as “the proverbial ‘sad but wiser’ man” in the ruling, defended their activities with a critique of the music industry that was familiar to many pirates and their lawyers. “You see, Atlantic and Columbia have a great gimmick in what they do,” he testified. “They put two good songs on and six bad ones and they will sell it for $6.95. Now, very honestly, what we did was we put eight good ones on and they were sold to the market for $3.00. So that it was a value to the kids around the country and it serves a purpose, in my mind.”
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In any case, the pirate enterprise ceased operation in March 1972, less than a month after the new copyright for sound recordings closed the loophole that Lockhart and his friends sought to exploit.
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The decision to call it quits suggests that the Kesslers had learned their lesson, but Jack soon ran afoul of the law on the other end of the country. Going by the name Jack Fine, he was indicted in Los Angeles in December 1973 for his bootlegging activities, on grounds of tax evasion—the result of an IRS investigation. Like most pirates, he and his partner Martin Stern worked with cash and hid their actual profits from the government.
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“Most of them don’t even pay their employees by check,” the RIAA’s Jules Yarnell observed, emphasizing the harm of such practices to ordinary citizens. “They pay all in cash … There are no social security deductions or payments. There are no unemployment insurance payments, no health or other benefits, and the general public has to bear that additional burden.”
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Local officials in Los Angeles launched a crackdown against piracy the same month that Fine and Stern were indicted, focusing on retailers. The city government enlisted the help of the Latin American Record and Tape Association (LARTA), in part because police raids found pirated tapes in many stores that catered to the Latino community. LARTA president Osvaldo Venzor formed the group after finding that bootleg recordings were being sold throughout Oklahoma and Texas. “We hope to make a dent in Southern California and then move on to the northern part of the state,” Venzor said. “Then we will move east.”
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Both the state and federal operations reveal a collaboration between law enforcement and corporate lobbying, in what might be called a public-private partnership. The RIAA started a twenty-four hour hotline for tips on the sale and production of illicit records, although an industry spokesman implied that the number got few rings. Meanwhile, the group’s AntiPiracy Intelligence Unit functioned as the music industry’s own spy agency. “Part of our job is to disseminate information and acquire information on pirates all over the country,” Jack Francis told Louis Lefkowitz, the New York attorney general. “It’s a very clandestine operation. When something happens in New Jersey they know about it in Columbus, Ohio, two hours later.”
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Of course, all that information could only lead to more tedious civil suits unless local or federal authorities were persuaded to act, and the industry’s
representatives had to train police to do their bidding. “We finally educated the state police up there and they being aware, there have been two subsequent arrests since then on their own without anyone’s help,” Francis said. “They know a pirate tape when they see one.” Joel Schoenfeld, an intern with Lefkowitz’s office, teamed up with RIAA counsel Jules Yarnell to scour the five boroughs of New York for evidence of pirated recordings, and then reported the information back to the police.
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(Schoenfeld went on to become a major RIAA spokesman.) Likewise, LARTA assisted the Los Angeles police in pursuing pirates.

This collaboration resulted in ever more elaborate sting operations by local law enforcement. At the initiation of the RIAA, the District Attorney’s Office in Manhattan began investigating piracy in the city, and detectives soon identified All Boro Records and Tapes as a wholesaler of counterfeits. Police raided the firm’s office at 156 Fifth Avenue and called in label representatives to determine whether the recordings were copies. The experts said they were, but the sound quality was so high that prosecutors feared they could not persuade a jury that the wholesaler definitely knew he was dealing in counterfeits.
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As a result, the NYPD began using informants, undercover agents, and surveillance. The police used these tools, including wiretaps, to arrange deals to purchase 35,000 recordings from Premier Albums of 10 W. 66th Street, posing as retailers. Delbert Green, the owner of All Boro, had taken the precaution of moving his enterprise to Farmingdale, Long Island, where he stored records in a car wash. Premier Albums got its products from Green and “a source in Pennsylvania,” Assistant District Attorney Roy Kulcsar said. On the day Premier Albums delivered the shipment to the detectives, police carried out simultaneous raids on the car wash in Farmingdale and a warehouse in Long Island City, Queens. Along with Green, Michael Javits and Phillip Vaudevehr of Premier pled guilty in February 1974, and the New York County district attorney pressed hard for jail sentences. The maximum penalty would have been one year in prison and a $1000 fine, but the judge only imposed fines on the men. All the work it took to nab these three pirates hardly seemed worth it.
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Even with a federal copyright for sound recordings, reams of favorable rulings, and an array of state laws, the record industry found itself in much the same spot as in the 1950s and 1960s. Piracy continued, and its trade group still had to pressure the government for further protection. Continued litigation such as the Missouri case
NBC v. Nance
(1974) and
A&M Records v. MVC Distributing
(1978), which reached the Sixth Circuit Appeals Court, suggests that the new statutory penalties had inadequately deterred copiers.
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Jan Bohusch or Rubber Dubber might have gotten out of the business with the passage of the federal act in 1971 or the
Goldstein
decision two years later, but some players persisted, and others joined in the game.

Bohusch’s old partner at E-C Tape, David Heilman, also carried on, despite having his stock confiscated by the FBI in May 1975. E-C Tape sold mixes tailored to those with a taste for “Early Beatles” or “Revolutionary Beatles,” and nostalgia collections such as “Return of the Big Bands” and “Country & Western Classics.”
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Heilman moved the business from Wisconsin to California, where it ran afoul of A&M Records and the state antipiracy law. According to court records, Heilman’s earnings from 1971 to 1975 amounted to $4,300,000, of which he personally collected $200,000. He broke several injunctions against continuing his business, and defied a ruling of unfair competition by the Superior Court of Los Angeles. Heilman went on plead the reproducers’ case at hearings for the Copyright Act of 1976, but his appeal to the Supreme Court was denied in January 1978.
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The ease of entering the piracy business tugged the curious into what was now an unambiguously black market. Pirates could begin with a small investment and reap large profits. One Maryland man set up a pirate factory in his living room, with a turntable connected to five tape recorders. Beyond the initial capital costs, he only needed blank tapes and an LP to use as a master recording. This kind of operation might seem small to the point of preciousness, an RIAA spokesman said, but he urged the public to consider the output. The man could turn out five tapes every forty minutes and fifty tapes a day.
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When a record shop bought pirate recordings at $2 apiece, such a small-scale business could gross $700 a week. By comparison, a professionally run pirate venture with printing presses, warehouses, and a large staff could make a better product and pull in $500,000 during the same time.
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Bootleggers, of course, were not alone in skirting the law. They could make a better product when they used a record company’s own original recording rather than copying the mass-produced consumer LP. The availability of these masters hinted that some pirates had links to both the Mafia and the industry itself. The allegation of mob involvement in piracy was nothing new; in 1959 organized crime was held responsible for flooding the market with illicit 45s of Bobby Rydell’s hit “Ding-A-Ling,” and many observers had cited the use of pirated records in jukeboxes, through which the Mafia laundered funds.
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In 1973 a grand jury in Los Angeles looked into accusations that record labels used drugs to bribe radio DJs and retailers, shook down artists for prized bookings in Mafia-linked clubs and casinos, and even collaborated with pirates. Meanwhile, warehouses and other buildings owned by record companies in Los Angeles were going up in flames; FBI investigators suggested darkly that someone was “trying to bring people into line.”
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Two years later the
Chicago Tribune
reported bombings at bootleg facilities in Michigan.
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Such scandals had a habit of “coming with uncanny timing in relationship to proposed legislation,” the sociologists R. Serge Denisoff and Charles McCaghy
observed in 1978. Just as Congress was considering whether to extend or enhance the 1971 Sound Recording Act, allegations of payola and other unethical practices once again hit the music industry.
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The music business could not shake off its seedy public image. As the
Chicago Tribune
’s Bill Anderson observed in 1972, “The flamboyant lifestyles of singing stars generated little public sympathy from buyers and the small businessmen who began stocking bootleg tapes in gas stations, laundromats, convenience food stores, and the like.”
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Indeed, poor publicity may have contributed to the record industry’s inability to achieve its legislative goals for such a long time.
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However, the record industry had little trouble influencing lawmakers in the 1970s. The 1971 bill was a stopgap measure that provided copyright protection for new sound recordings only until 1975, on the assumption that a comprehensive reform of copyright law would be passed by then. The RIAA lobbied Congress to extend the law and to beef up penalties, and the House Judiciary Committee approved an increase in fines in September 1974. The Sound Recording Act of 1971 imposed a $100 fine on a first-time offender and $1,000 for repeated convictions. In contrast, the new bill increased fines to $25,000 and $50,000 respectively—a 250 times increase for the first offense. The prison term, previously one year, became two, and the law passed in December 1974.
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“I feel we now have the tools to go after them,” Jules Yarnell said. “Whether the government will use them depends on the individual U.S. attorney in each area.”
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Then again, the industry simultaneously pushed for New York and other states to make their own statutes more severe.

The campaign to stop piracy reached its most spectacular dimensions in 1978. Early that year two fresh-faced young men opened a record store in Westbury, Long Island, with hip disco interiors and the name Modular Sounds. People in the neighborhood could not believe the bargains they found at Modular. Nobody expected the boys to stay in business long, but they snapped up the deals while they lasted. You could buy a 99-cent tape for 79 cents. To the landlord, Bobbie and Richie were just “nice kids” who did not know how to run a store, although they always paid their rent on time. The two daydreamed most of the day, left early, and had little traffic from customers.
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Transactions must have occurred there, at some time of day or night, because the FBI had identified 400 suspects when it hung up the “For Rent” sign at Modular months later.
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Bobbie and Richie had been undercover agents all along. They made contact with over fifty underground merchants, who brought them pirate recordings to stock the store.
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The ruse allowed the FBI to get an inside look at the networks that distributed bootlegs across the country. On the December morning Modular closed in 1978, the FBI simultaneously raided four plants in Suffolk County, New York; one in Albany; one in Mount Vernon; two in Georgia; three in Connecticut; four in New Jersey; and eight in North Carolina. The investigation had gone on
for two years and had uncovered significant ties between the Tar Heel state and Long Island. Facilities on the Island manufactured both tapes and packaging, and the labels—a lighter and more discreet cargo than recordings—traveled to Charlotte, where workers pasted them onto locally produced records and tapes.

In fact, investigators identified a Charlotte businessman, Jerrold H. Pettus, as the kingpin of both the North Carolina and New York operations.
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His company, General Music, also sold tapes to retail stores in the Midwest.
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Pettus denied the FBI’s claims of big takings. “The figures are grossly exaggerated,” he said. “I don’t think we have that much inventory in stock.” He and his brother-in-law, Ralph “Buddy” Phillips, claimed to have legitimate invoices for all their merchandise. However, music industry men and store owners around Charlotte expressed little surprise at Pettus’s legal troubles. In 1971 he settled out-of-court with four major record companies over reproducing recordings without permission, and in 1974 the FBI raided his company Sound Duplicating Systems.
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