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Society

Greece’s Intellectual Property Agency Scandal Brings Corruption Charges

July 2, 2018

Executives at the Hellenic Society for the Protection of Intellectual Property (AEPI) will be charged by prosecutors with a number of corruption counts for failing to pay artists some 42.5 million euros ($49.47 million) in royalties and mishandling royalties, the entertainment media site Billboard said.

AEPI collects money for publishers and composers when their songs play in public – on radio or television, and at stores, restaurants, and music venues but unlike most it was set up as a for-profit company.

An ongoing investigation and police raid of the premises in an upscale Athens neighborhood in 2017 revealed extensive, systemic corruption, the report said, adding that the top officials would be charged with fraud, embezzlement, money laundering, tax evasion, and other crimes.

AEPI’s biggest expense for the years being investigated, 2011-14, were topped by the 635,000 euros ($738,960) salary paid Managing Director Petros Xanthopoulos, whose family controlled the company, it added.

The alleged wrongdoing, which led to revocation of the agency’s license to operate, was uncovered in an audit by Ernst & Young ordered by the Ministry of Culture with the unpaid royalties more than the agency collected some years, raising questions of where the money went.

The ruling Radical Left SYRIZA-led coalition said it would set up a new agency although another intellectual property group controlled by its members, Autodia, is authorized to also collect and distribute royalties to artists.

CISAC, the International Confederation of Societies of Authors and Composers, which suspended AEPI for a year in June 2017 and then expelled it, is backing Autodia among worries any government agency could be subject to corruption in a country notorious for it.

“It’s a very serious situation and we are totally committed to helping fix it,” CISAC Director General Gadi Oron told Billboard.

“CISAC is working with our only member in Greece, Autodia, to help find a long-term solution, fill the vacuum in the market and get money into the hands of creators. We are also in regular contact with the Greek government to gain a better understanding of their plans,” the group added.

CISAC sent its members a memo advising they could transfer rights they gave AEPI to Autodia, which saw its performance royalties market jump from 10 to 30 percent with AEPI’s shutdown.

Autodia Chief Executive Yiannis Glezos told the site that, “It was an anomaly worldwide to have a family company administer intellectual property rights and the same goes for a government entity – it’s another anomaly,” expressing his worries.

Police last year searched the home of Xanthopoulos and his son’s, AEPI’s Director-General Dimitris Xanthopoulos, as part of the investigation.

That led to 450 members of the Metron society of composers and lyricists, including President and CEO, singer-songwriter Foivos Delivorias, to resign in protest over the handling of the crisis, complaining some board members worked with SYRIZA against the artist’s interests.

International Confederation of Music Publishers (ICMP) leader Andrew Jenkins said at that time he was “shocked and outraged by the nature and extent of the alleged transgressions of AEPI,” and pushed CISAC to act.

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