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"This is the penalty for the liar: even when he tells the truth, no one believes him."

-- The Talmud

The Country Music Foundation: A Case Study in Tax-Exempt Misconduct

Copyright 2001 Stacy Harris

The Country Music Foundation has a personnel manual purportedly written by its former Director William James Ivey. Could it be that Ivey and his successor, Kyle Young have violated portions of the manual’s Statement on Employee Ethics that would leave them open to "disciplinary action?"

The manual states "The Country Music Foundation has a policy of employing creative and talented individuals experienced in museum and library work and knowledgeable in the history of country music." That would explain the CMF’s hiring Ronnie Pugh as its library’s Head of Reference. It would not explain Kyle Young’s firing of the 22-year veteran nor Young’s replacing Pugh with a medical librarian with no background in country music.

Ivey’s apparent violation of employee ethics would be with respect to this clause: "A Foundation employee may not obtain personal profit from dealings made while working as an agent of the Country Music Foundation… and may not profit unduly from special access to the collections of holdings of the Hall of Fame and museum or Library and Media Center."

Ivey’s behavior prompted Jerry Bradley, president of the Opryland Music Group, to write a scathing 12-page letter to CMF Board members on February 26, 1990. Given the lack of cooperation from William Ivey and Kyle Young in the preparation of this article, I welcome any corrections to the following list of those I believe to have been serving as Board members as of that date: Officers included EMMYLOU HARRIS (President and Trustee), ROY WUNSCH (Executive Vice-President) JIM ED NORMAN (1st Vice-President) NELSON ANDREWS, JERRY BRADLEY, DAVID CONRAD, JOE GALANTE, BRUCE HINTON, FRANK JONES, FRANK "PEE WEE" KING, BOB KIRSCH, LYNN SHULTS, IRVING WAUGH and JANICE WENDELL (Vice-Presidents), CONNIE BRADLEY (Secretary), J. WILLIAM DENNY (Treasurer and Trustee), JOE TALBOT (Chairman of the Board of Trustees), RALPH EMERY, JIM FOGLESONG, RICHARD FRANK, FRANCES PRESTON, GREYLUN LANDON, WESLEY ROSE (Trustees), CONNIE B. GAY, ROY HORTON, BRAD MCCUEN (Trustees Emeriti), WILLIAM IVEY (Director), CHARLIE SEAMON, PEGGY SHERRILL, KYLE YOUNG (Deputy Directors), MIKE MILOM (Legal Counsel) and CHRISTIAN HORSNELL (Associate Counsel).

Bradley wrote: "I feel that our company has been victimized by the actions of the Country Music Foundation (CMF)... I also feel the board should know how the situation arose in which the Opryland Music Group (Opryland) and the CMF are now in an extremely adversarial position.

"It is my feeling that Bill Ivey acted outside the bounds of good faith in his handling of this matter, and it is my further belief that he must have acted outside the scope of his authority as granted by the board of directors of the CMF... I do not personally think that the people who make up the board would condone the approach Mr. Ivey has exhibited… Opryland has the right to handle its internal business affairs and property rights without interference from an organization which is supposed to be a not-for-profit industry advocate."

Confused? Here is, as Paul Harvey would say, the rest of the story: According to Jerry Bradley, then president of the Opryland Music Group, Bill Ivey called OMG staffer Jerry Flowers on January 19, 1989 to request a synchronization license for certain Hank Williams songs for use in a PBS special, In The Hank Williams Tradition, a 70-minute co-production of the Country Music Foundation and the New York-based Ginger Group production company. (The relationship between the CMF, PBS and the Ginger Group continues to this day, most recently in the form of the production of the 2001 PBS series, American Roots Music.)

A synchronization license is an agreement in the form of permission obtained from, in this case a music publisher, allowing another entity, in this case the show’s producers, to use songs, in this instance, for a TV production. (A master use license is obtained from, in this case, the artist’s record company, for use of the recording of the song in the production, since the recording itself is a separate copyright.)

Flowers advised Bradley of Ivey’s request the following day. Bradley responded by ordering Flowers to set up a meeting with Ivey and the OMG staffers to discuss the project.

During the meeting in early February, Bradley informed Ivey that "Opryland was aware of several projects in development surrounding those copyrights" and that In The Hank Williams Tradition would likely be seen as "detrimental to those projects."

Accordingly, "he would have to pay rates competitive with those quoted" to competitors in order for "Opryland to even consider his request."

When Ivey requested a five-year license giving PBS exclusive rights for three broadcasts in three years in the United States, international free-TV and cable rights and U.S. pay cable rights for the fourth and fifth years, Flowers was skeptical. Jerry told Bill PBS contracts customarily stipulate "unspecified numbers of airings in a broadcast window, but Bill assured us that three broadcasts on PBS were all that was being requested."

Flowers asked Ivey to determine what constituted a "release," since Flowers’ experience with PBS was that the network’s "normal broadcast window was not what Bill was representing it to be. In fact, this was later found to be the case with the PBS/CMF agreement."

According to Bradley, Ivey indicated that CMF budgeted $15,000 for music rights, $15,000 for artist talent fees and that he had been advised by [attorney] Mike Milom that the rights he was requesting could be secured for $1,000 per song.

Bradley says Ivey told him that CMF would make $35,000 on the deal and that the Ginger Group "would receive a similar amount from the $250,000 production advance" from PBS." Bill added that CMF and the Ginger Group would "split monies above production costs (costs which Bill said in a later meeting to be $350,000)" should they receive additional underwriting.

Jerry’s response was that Ivey could use two or three Hank Williams songs for the $1,000 fee proposed, but "I made it extremely clear to Bill" that if Ivey "built an entire show around the heart of the Hank Williams copyrights" that he would have to pay the market rate: $10,000 per song for 14-15 full-length compositions.

When Ivey indicated "PBS did not have that kind of money," Bradley countered that it was "a good thing [Bill] had not signed a contract with PBS to deliver a show" and that Ivey should consider using two or three of Hank’s songs, as Jerry could grant a license for those at Bill’s proposed rate since to do so "would not seriously weaken my ability to do another deal elsewhere."

Bradley says that "After a rather long pause, Bill told me that he had indeed signed a contract with PBS to deliver the show (although the contract is actually dated May 8, 1989, weeks after this discussion). The meeting ended with Ivey telling Bradley that, as originally conceived, the PBS special was to feature both Hank Williams and Bob Wills’ material and that he would meet with PBS and the Ginger Group to discuss the possibility of reverting to the original plan, thus reducing the number of Hank Williams’ songs needed.

Ivey’s alleged dishonesty was of such concern to Jerry Bradley that Bradley told Country Music Foundation Board President Joe Talbot of "our concerns regarding Bill’s handling of the negotiations... I felt that [Talbot] had a right to know what was happening, as did the rest of the Board."

As it became apparent "that the CMF was already well into the production of the show, and Bill admitted that he had already begun production (which we had learned previously from other sources but which he had not told us until this meeting) and that it was too late to change the concept," Ivey "appealed to us to help him and told us that he was really in a jam and needed us to work with him to try and find some solution to the dilemma. He said a deal had already been struck with PBS and The Ginger Group regarding the specifics of the show."

Jerry Bradley responded by reminding Ivey that if Bill went ahead with the production it would undercut OMG’s ability to license Hank Williams’ music for competitive projects and the options previously discussed. "Bill told us that he understood that it was his fault that he was in such a jam because he had not sought the appropriate licenses."

On March 21, 1989 Ivey wrote the Opryland Music Group indicating that he had modified the show’s concept and wanted to use six Hank Williams compositions in the program and therefore he would not "interfere with any exploitation of the entire Hank Williams legacy." Accordingly Bill proposed Opryland Music license the works for $70 to $1,000 per song!

During a April 19, 1989 meeting, CMF proposed paying $18,000 for the rights to up to six Hank Williams songs and a partnership between CMF and the Ginger Group that would result in Opryland Music receiving additional funds for the use of the songs. Specifically, a 50/50 partnership between OMG and CMF for proceeds from any uses of the show beyond PBS’ three-year run was discussed.

Still skeptical, Bradley said he’d need to see any contracts governing the show’s production and a copy of the budget before he’d agree. Ivey’s response? He’d have to discuss it with the Ginger Group.

Over a month later, on May 25, 1989, Ivey called Jerry Flowers asking Flowers "to give him Opryland’s understanding of his latest offer on the project." Flowers said he’d "pull the file and call Bill the next day with the information," reminding Ivey that the license issue would have to be settled before the show’s production, that "Opryland’s position would remain" that William Ivey "had been informed repeatedly that no license agreement had been made and that Bill should govern the CMF’s actions accordingly."

Then, on May 26, 1989, The Tennessean ran a Tommy Goldsmith feature titled Hank Williams Sr.’s Influence on Music Topic of PBS Special.  The article quoted Bill, giving details of the entire PBS pledge week special "under production in Nashville this week."

Goldsmith noted that the program "is being shot on film, instead of videotape to insure high technical quality." Participants would include Hank Williams’ erstwhile Drifting Cowboys band members Don Helms and Jerry Rivers. But when Jerry Bradley read Goldsmith’s report that Chet "Atkins was shot picking and talking yesterday at a Music Row studio, that Ricky "Skaggs is scheduled to film his segment today," that Kris “Kristofferson was filmed recently at New York’s Bottom Line" and that "Producers of the special are talking to other stars… about appearing on the program," Bradley hit the roof!

By Jerry’s account, Bill had not told him that segments were still being filmed. Bradley ordered Jerry Flowers to call Ivey to express that "Opryland was very disappointed in the way he had handled the release of the information to the press" and that production of the show prior to the settlement of the licensing issue was a "violation of Opryland’s rights in the copyrights."

Flowers told Ivey that, as Bradley put it, Bill "was not negotiating in good faith... since it seemed to us as if we discovered something new and important each time we talked about the project."

A few days later, at yet another meeting, according to Bradley, Ivey proposed a formula involving incremental payments of Opryland’s fee, based on the gross revenue CMF and the Ginger Group could generate for the show. The upshot of it was that "Bill suggested a split of 75% for CMF, 25% for Opryland. Flowers told him that I would not accept anything less than a 50/50 split" and that only after OMG had seen contracts between all of the parties to the project.

By June 26, 1989, with the parties at an impasse, Jerry Flowers wrote Ivey to reiterate his understanding of where things stood and of Flowers’ willingness to relay any proposal Bill chose to make to Jerry Bradley and to OMG’s legal department, but that it was Flowers’ understanding that the CMF’s latest proposal was that it and OMG be equal partners in show revenues exceeding $550,000.

In his June 30, 1989 response, Bill Ivey said this was not the case. As discussion continued, Ivey provided a budget breakdown, but failed to provide the requested contracts.

Further, OMG’s view of the budget convinced Bradley that, under its terms, "CMF, the Ginger Group and Bill Ivey, as writer of the show, stood to make substantial profits at the expense of the artists, songwriters, and publishing companies whose talent and works would be the basis for the show." Bradley added that it was inappropriate for the Country Music Foundation, "a non-profit foundation, to profit at the expense of the people and companies," artists and songwriters "who work for scale, for low PBS raters or ‘deferred fees'" when double-dipping Bill would "receive $10,000 for writing a show while also accepting a salary from the CMF."

Further, Jerry told Bill that "CMF/Ginger Group’s potential revenue in excess of $100,000" abrogated CMF’s "non-profit, industry advocate’s position" and that "other writers, artists, publishers, record companies, managers and booking agents" would agree "if they were ever to know the facts."

Bradley told Ivey he couldn’t believe the CMF Board would approve such a "profit-making position," but Bill was "very emphatic" in "his belief that it is well within his purview as director to undertake such projects on behalf of the board."

By late summer, Kyle Young had taken over negotiations for Ivey and OMG received a copy of the PBS contract in late August of 1989, but not the Ginger Group contract which was not yet finalized.

Young placed several calls in November, 1989 asking about the status of the deal. Each time Kyle was told OMG’s legal department wouldn’t even look at the documents and there would be no license until all of the contracts were received.

On November 29, 1989 Young faxed the CMF/Ginger Group joint venture agreement to OMG. Kyle was told to allow two weeks for review of the documents, because Opryland was moving its offices, but that a cursory check of the PBS contract "revealed inconsistencies between financial representations Bill Ivey made to Opryland and terms presented in the PBS/joint venture agreement."

Further, OMG demanded that CMF either "rectify any inconsistencies" between what Bill Ivey had told OMG and "the terms of the PBS (or Ginger Group) agreements" or to provide guarantees that any eventual license granted by Opryland would prevail over any contractual stipulations of the PBS and/or Ginger Group contracts with CMF."

On December 5, 1989, following notification that the show’s revised budget, referred to in the PBS contract, was missing from the documentation Young forwarded to Opryland, Kyle faxed same to Jerry Flowers. A mid-December meeting of OMG staffers followed in which "it became apparent rather quickly that the CMF had offered us things that we felt were already committed to the Ginger Group and PBS in their contracts."

Further, CMF’s contract with PBS indicated that the CMF had already obtained not only necessary synchronization licenses but "home video and other rights which were specifically excluded in discussions between CMF and Opryland." And, as if that weren’t enough, the financial terms CMF had proposed to OMG were "precluded by CMF’s agreements with PBS and the Ginger Group, who each retained, by contract, an interest in revenues above the production budget" despite Bill Ivey’s written assurances "that no one would be ahead of Opryland for participation at the back end of the deal."

Late December 1989 phone conversations between Jerry Flowers and Kyle Young, followed by a meeting between the two, established "conflicts between the contracts CMF had signed with PBS/Ginger Group and what was being offered to Opryland." Flowers again insisted that CMF "clear the inconsistencies and guarantee to Opryland what was being negotiated."

In early January 1980, Opryland’s legal department informed Kyle Young of "what we considered to be serious questions regarding CMF’s ability to deliver the deal which was proposed to Opryland." Prior to a January 18, 1990 meeting at Opryland’s offices, "Kyle was provided a list of questions which would need answers at that meeting before any agreement could be finalized."

Bill Ivey did not attend the January 18th meeting. Kyle Young and attorney Christian Horsnell represented the Country Music Foundation. During the meeting it became apparent that no deal could be made, for with PBS retaining a share of the show and being repaid certain advances before Opryland received additional revenue, "CMF and Opryland would not be the only equal partners in profit participation."

Further, "The nine Acuff-Rose songs we had agreed could be covered by any proposed deal had risen to fifteen. These items were clearly not revealed fully to us during the negotiations."

Therefore, "Our legal counsel advised... that it would not be wise to enter into a deal with the CMF to share revenues which were arguably in dispute and which, by contract, CMF could not deliver."

Bradley added "CMF representatives present at the meeting did not deny that the CMF could not contractually deliver the deal... Nor did they offer any reasons why the actual song usages in the show differed substantially from what had been requested [nor] suggestions to rectify the inconsistencies."

Jerry told CMF that OMG would allow the additional Williams songs, would grant PBS a worldwide license, free TV and cable airings and theatrical use (excluding home video rights), in exchange for a $100,000 fee CMF could repay in installments and a guarantee that CMF staff "would not personally profit from the venture." CMF would also be required to "grant Opryland properties use of the research resources, services and facilities," many which Opryland had loaned to CMF, at cost, "rather than the significantly higher fees customarily charged."

Chris Horsnell’s letter of February 2, 1990 to Opryland’s lawyers Francis Wentworth, Jr. and Hal Willis, repeated the conditions of Bradley’s proposal, indicating that CMF and the Ginger Group’s Jim and Ginger Brown refused to accept OMG’s synchronization license proposal." Horsnell wrote that OMG was forcing the CMF to "scale back its plans" and "to modify its arrangements with PBS and the co-producer to... broadcast the Program only by noncommercial educational broadcast stations."

On February 16, 1990 Horsnell wrote Hal Willis that he had suitably "amended the license obligation provisions of the agreement between the Foundation and the Ginger Group... and have clarified the copyright ownership and work for hire nature of the services provided by the Ginger Group."

Bradley was not impressed. He advised the CMF Board to "note that the original PBS and Ginger Group fully-executed contract documents... present a vastly different picture of the profit status of the parties to the venture.

"It should be noted that the CMF never requested a PBS-only license. To the contrary, Bill Ivey repeatedly insisted that a PBS-only production… would place CMF in an untenable position with PBS and CMF’s production partners, killing the show and perhaps exposing CMF to liabilities."

Accordingly, Bradley indicated, "it is my strong feeling that Bill Ivey’s conduct in this matter should be repudiated by the board of directors.  The CMF should not be a competitor to the legitimate business interests of the country music industry... [nor] to feed off the property and intellectual rights of the legitimate businesses which have supported the foundation in the past and which comprise its very constituency… [Ivey] has taken the position that it is acceptable for the CMF to take competitive advantage of my company (and others)."

Jerry reminded the board that "Bill Ivey admitted that he initiated a project requiring a synchronization license without such a license." Further, Ivey was "told at the very first meeting on the subject what the price range for the license would be" and that Bill was "told repeatedly told not to proceed with the project unless he was prepared to meet the quoted fees or reduce the number of compositions he planned to used."

Additionally, despite being repeatedly told that "his project could seriously undermine the commercial viability of other Opryland projects," Ivey "negotiated for the rights for almost a year" misleading Opryland into believing that "the framework for a deal which he could deliver was in place," even as Ivey "withheld information regarding the status of production and contracts with Opryland.

"It is our strong position that [Bill] substantially misrepresented… the kind of deal he was empowered by his prior contracts with PBS and the Ginger Company to strike with Opryland."

Bradley expressed to the CMF Board his understanding that William Ivey kept Board members out of the loop regarding "the status of and problems encountered in the negotiations for a license and [that the Board] was told on several occasions by Bill Ivey that the deal would be made."

As if this were not galling enough, Jerry conveyed to the CMF Board his understanding that "the board was not advised of the provision for a $10,000 fee to Bill Ivey for writing the program until after I raised the issue with [Board member and Board Treasurer] Bill Denny. The report which I received indicated that the fee was reported to the board as $5,000, rather than the $10,000 shown on the budget."

Bradley concluded his 12-point summary of Ivey’s misconduct by indicating on page 11 of Jerry’s 12-page letter to the CMF Board that "This is not good faith negotiation [nor] conduct on the level we would expect to receive from a representative of the Country Music Foundation. You simply do not negotiate a deal with someone for almost a year and then abruptly decide that you cannot deliver... Yet we feel this is precisely what Bill Ivey is doing in the name of the CMF...

"We regret that Opryland is in a confrontation with the Country Music Foundation. But we emphatically state that it is a confrontation not of our making... We hope to provide any opportunity to prevent any damage to the CMF which might arise from this conflict, but we have no alternative but to aggressively seek to protect our interests and those of our writers."

According to an article by Edward Morris (Clash Reported Between OMG and CMF) in the March 24, 1990 issue of Billboard, on March 2, 1990, Opryland filed a complaint in U.S. District Court in Arlington, Virginia "asking for a restraining order to prevent PBS from broadcasting [the Hank Williams special] as scheduled."

The Country Music Foundation was spared the embarrassment of litigation when a settlement was reached with OMG less than three days later.

Details of that settlement have never been revealed, though a source close to the Board indicates that Kyle Young has confirmed that terms did not address Jerry Bradley’s complaints against Bill Ivey.

The bottom line on this aspect of the cover-up is as follows: Purportedly, Bill Ivey requested of the CMF Board that a portion ($5,000) of the contractual amount between CMF and the Ginger Group be- conveniently- designated for himself. The rubber- stamp CMF Board approved the request. Then, apparently unbeknownst to the Board, Ivey upped his requested portion from the Ginger Group to $10,000.

Whether William Ivey ultimately received and retained either amount is unknown.  Bill Ivey and Kyle Young refuse comment, though should that change I will be happy to print their responses.


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