AFM and MROC Reach Settlement

The recently formed Musicians' Rights Organization of Canada (MROC) had sued AFM for $3 million in damages for breach of contract and other charges.

AFM countersued for $1 million claiming misrepresentation and breach of fiduciary duty.

President Hair's persistent negotiations and extensive talks with the principals of MROC, plus AFM's immediate countersuit, established the necessary leverage to formulate the settlement, the terms of which are being reduced to formal agreement by attorneys for both sides.

President Hair did not flinch or waiver in the face of the suit, which may have resulted in a permanent split between AFM and its Canadian members. The leaders of MROC, Len Lytwyn and Bill Skolnick, also used good judgment in setting aside their initial reluctance to compromise.

Internal protracted lawsuits are expensive, destructive and lead to organizational breakdowns devastating to all members. The settlement was a wise move for all and a solid test of President Hair's leadership.

We will have more details on the substance of the suit, which stems from a situation created by former President Tom Lee, and the details of the settlement, in the coming weeks.

Wrong Again, "Committee"

Under the heading, "A GLIMMER OF BRAVERY," the "Committee for a More Responsible Local 47" writes:

"Ed Shamgochian suggested suing the RMA to get the legal fees back for the lawsuits the recording musicians filed."

RMA was not a plaintiff in the Parmeter and Rishik cases. I never suggested "suing the RMA."
 
AFM prevailed in the suits and could have filed a motion to assess attorney fees against the handful of Parmeter and Rishik plaintiffs. The Hair administration chose not to. I said they should have.

The "Committee" should retract its misleading comments for the sake of accuracy. However, this is unlikely since accuracy is of no importance to the "Committee."

For example, although Resolution 17 ("Save the MPTF") had nothing whatsoever to do with the RMA, the "Committee" advised a no vote merely because it was proposed by Ed Shamgochian, "RMA sympathizer."

So which is it, "Committee?" Am I with you or against you?

We can only hope that the "Committee" in its current form will fade away along with other relics of Tom Lee's war on RMA.

Letter to Dan Wakin

Today I wrote Dan Wakin, writer of two pieces in the New York Times on foreign "sweatshop" orchestras, with the following message.

Thank you for your pieces on foreign orchestras like the Moscow State Radio Symphony. I am the president of AFM Local 143 (Worcester, Mass.). I've seen firsthand that foreign "sweatshop tours" have displaced local musicians, and have written about it since 2007 on my blog, Sounds (afm143.org).

I want to highlight two points relevant to your recent pieces. First, though the AFM purports to denounce these foreign tours, it generates significant revenue by issuing "no-objection" letters and charging a fee. From 2004-2009, the AFM president's office has collected over $3.7 million in such fees, with nothing accruing to displaced musicians in places like Worcester. This revenue began in 2004 and continues to grow each year.

Second, I proposed a resolution at the 2010 AFM Convention to redirect a portion of these fees to the Music Performance Trust Fund (MPTF), to compensate local musicians displaced by foreign orchestras. As you probably know, MPTF was created in the 1940s to compensate live musicians for the displacement of recorded music. MPTF is in dire need of funding, and is set up specifically to fund local musicians playing live, admission-free concerts across the US and Canada. The AFM Convention refused to adopt this resolution, claiming that it could not do without the no-objection letter revenue.

The upshot is that the MPTF will likely be defunct very soon, promoters will continue to hire foreign "sweatshop" orchestras instead of professional local musicians, and the AFM, beyond lip service, has done nothing about it.

Best wishes,

Ed Shamgochian

Dan Wakin's pieces:

Orchestras on Tour: Names Strike a False Note, May 16, 2011.

Russian Orchestra Tour: From the Bus to the Stage, March 3, 2010.

What the President Left Out

In the April 2011 International Musician, President Ray Hair says that foreign orchestra "sweatshop tours degrade our profession."

This is the first time the issue of sweatshop tours has ever appeared in the IM. I first wrote about the issue in May 2007. It even made The New York Times before it made the IM — before the convention at which I proposed that we do something constructive about it.

Unfortunately, the President's piece is no more than lip service. The only action he proposes is "partnering with other US entertainment unions at the AFL-CIO’s Department of Professional Employees to examine the introduction of legislative options in the US Congress."

The President's message conveniently leaves out the $3.7 million the AFM President's Office collected from 2004-2009 in visa processing fees, much of it from the same sweatshop tours he denounces. This accidental and unjustified cash cow is jealously guarded by the AFM, which doesn't want members to know that without it, the union would be insolvent.

The President's message skirts the fact that foreign sweatshop tours displace AFM musicians. When I proposed that we offset this displacement by directing visa processing fees to the Music Performance Trust Fund — just like Petrillo did in the 1940s when recorded music was displacing live music — the union cried poverty.

But when AFM forfeits attorney fees of $379,000 to a handful of unsuccessful recording musician litigants, the members can afford it.

When AFM officers collect double salaries (one from their Local, one from the AFM), plus benefits and expenses, the members can afford it.

Members, most of whom get hardly anything from AFM, won't be able to afford it much longer. Without serious constructive action — far beyond this President's lip service — the AFM will continue its descent into ruin.

More on the Two Extremes

A reader writes:

Either we have rapproachment with recording musicians or we don't. Overlooked here is the added work dues on non-symphonic recording that these musicians voted overwhelmingly to impose on themselves as a way of helping fund the AFM.

Again, the so-called "80%" who voted for Lee until the last convention could be said to have brought those lawsuits on the AFM and are therefore responsible for legal fees as much as recording musicians.

This is not how the law works. The law allows the winner to recover attorney fees. If the AFM had lost the lawsuits, I would be completely in favor of the AFM paying the costs. This is simple fairness.

If recording musicians thought of Rishik and others who took the risk of lawsuits as knights in shining armor, they couldn't be more wrong. They presented themselves as fighting the good fight, and then accepted a bailout when it came time to pay.

The correct avenue for rapprochement was about to happen at Convention 2010. This is what the judges told them: resolve your differences through union democracy, not through the courts.

A bailout of the losers is extraordinary. It should offend any member of this union, including most recording musicians who did not take the risk of suing. It is a giveaway of hundreds of thousands of dollars to a small number of beneficiaries who lost after having many chances in court.

Whether the added work dues on non-symphonic recording end up being significant remains to be seen. I hope that they do. It doesn't change the issue of attorney fees.

The added work dues are projected to bring in $200,000 per year. According to the court proceedings, recording musicians voluntarily paid Local 47 about $79,000 under the prior Tom Lee regime. This was money that RMA told them not to pay, and which AFM never even properly billed. If $79,000 is a mere error, then $200,000 isn't that significant, given the union's dire financial condition. These figures suggest that the work dues look more like lip service than real sacrifice.

A Tale of Two Extremes

For years on this blog I have supported reconciliation between AFM and RMA. I denounced the treatment of recording musicians by the prior administration. I supported a change in governance which I hoped would bring about negotiation and compromise.

I am now convinced that when it comes to RMA, our union has swung from one extreme to the other, completely missing the middle ground, and continuing to ignore the majority of the membership. We have gone from a complete shutout of aggrieved recording musicians, to giving them hundreds of thousands of dollars with no strings attached.

What was the price of ending the feud with recording musicians? In his January 2011 letter, Ray Hair presented the bizarre image of himself accepting a check on behalf of AFM for $15,000 from Rafael Rishik and Andrew Malloy, two recording musicians who personified the struggle with Tom Lee's administration.

What is the money for? Ray Hair explains that it signals "the beginning of reconciliation, a renewal of trust and understanding, and a fresh opportunity to build unity." But those things are free.

What did Malloy and Rishik get for their $15,000? They got an agreement that AFM would not pursue reimbursement of its legal fees in the Rishik and Parmeter cases. AFM was victorious in both cases and thus was entitled to attorney fees, which are an undisclosed amount, but likely to exceed $500,000 (see update below).

Thus, Ray Hair's bargain was $15,000 for us, and $500,000 for them. That is not reconciliation. It is a giveaway. And it's made worse by the concealment of the bargain, and the failure to disclose the actual amount of attorney fees AFM surrendered.

Even with AFM "falling on hard times" according to Secretary-Treasurer Sam Folio, Ray Hair apparently made no attempt to pursue reimbursement of attorney fees, or even to split the difference.

Furthermore, as predicted, the Music Performance Trust Fund is nearly bust. As a member of Tom Lee's rubber stamp IEB, Ray Hair made no objection to the prohibition of MPTF proposals in Special Payments Fund negotiations since 2005. At Convention 2010, the same rubber stamp IEB sponsored the ridiculous, ineffectual and disingenuous Recommendation 12, claiming "unconditional support for the MPTF." It wouldn't take an expert negotiator to predict that this technique would fail miserably, as it has.

And thus far, while Ray Hair has found $500,000 or more to give away to formerly aggrieved recording musicians, he has shelled out only lip service to MPTF.

It seems that no matter who's in charge, 80 percent of the union gets no attention.

Update 3/21/2011: President Ray Hair at the New England Conference reports that attorney fees for the Rishik and Parmeter cases totaled $379,000.