WASHINGTON, June 20—Has the agony of Watergate taught us nothing about how to handle scandal?
The Columbia Broadcasting System, a corporation active in many busi nesses, earned $82 million last year. Its fastest growing profit center, which accounts for nearly 30 per cent of its earnings, is the division that produces C.B.S. records and tapes.
C.B.S. is by far the largest producer of records and tapes in the youth dominated music world, an industry that takes in revenues of $2 billion year—more than all professional sports and the entire film industry combined. Grand juries and district attorneys are now trying to find out if the music industry is shot through with a higher dollar volume of venality and corrup tion than has ever been seen in Ameri can business history.
The corporate corruption being in vestigated includes the old‐fashioned payola—bribery to disk jockeys by record companies—with a new, ethnic wrinkle: One C.B.S. Records executive has reportedly told a grand jury that $250,000 in cash has been slipped to disk jockeys who direct their program ing to black audiences.
But the return of payola, even on an unprecedented scale, is not the whole story: Federal investigators are looking into the use of hard drugs— cocaine and heroin—by the business men of music to bribe their distribu tion outlets, or to entertain their entertainers.
The Federal Bureau of Narcotics and Dangerous Drugs unearthed the first lead while investigating Pasquale Fal cone, a reputed New Jersey mobster, indicted on drug charges on Feb. 7. He turned out to be sharing an office with a former promotion man at Co lumbia Records, whose papers led to David Wynshaw, until recently direc tor of artist relations at C.B.S. Records Group.
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