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Monday, March 19, 2012

A Conflict of Interest at the Metropolitan Opera

Prior to the Peter Gelb's administration at the Metropolitan Opera, sound restoration projects were handled by the Metropolitan Opera Guild.  Paul Gruber, a seasoned veteran in record marketing coordinated the engineering, production and sales of the effort.  A wide number of complete operas, solo discs and variety discs were produced by the Guild for sale in the gift shop, Guild periodicals and catalogs, as well as given to major donors; all sales benefited the Metropolitan Opera.  Mr. Gruber employed a team of leading experts in the field to engineer and produce these projects for two decades.  Among these leading authorities included historical sound engineer, Seth Winner; producer David Hamilton and producer/engineer Dan Hladik.  These cd issues and records were very popular, known for their attention to detail in sound quality, as well as superb notes, photographs and packaging.

When Mr. Gelb took over the job as General Manager of the Metropolitan Opera, he took these projects away from the Guild as well as the gift shop. The explanation was he wanted everything under one roof for branding purposes, which was his prerogative.  The Metropolitan Opera Board approved his request and it was done; much to the detriment of the Metropolitan Opera Guild a support organization of the Opera Company, but that's another story.  One of Mr. Gelb's signature plans was to put the Metropolitan Opera on Sirius Radio.  Through the Guild's efforts of many years, the MET had a number of operas "in the can" so to speak, engineered through their historical re-issue program.  So he had ready material to broadcast.  He then hired a former Sony employee by the name of Grace Row as the "Digital Music Production Specialist" for the opera company.  Now, with a channel on Sirius Radio, there was a need for additional historical engineering on broadcasts never previously engineered.  Prior to 2007, the work was farmed out to a variety of expert engineering and producing teams in the business including Sony Sound Studios.  Now here is where it gets sticky.  In 2007 the former Senior Engineer of Sony Studios, Charles Harbutt, started up a sound engineering firm called Long Tail Audio LLC.  Mr. Gelb used to be President of Sony Classical and all of a sudden all of the historical sound engineering work was farmed to Long Tail Audio.  Now, here is the conflict of interest, Grace Row, who is specifically in charge of where these engineering jobs get directed, is married to Charles Harbutt.

The issue is this, not for profit organizations are supposed to bid these sort of projects to whomever has the capacity and ability to handle the required work.  The IRS and the State of New York have specific rules and regulations concerning the award of single source contracts to outside companies for not for profit organizations.  Where a family member is directly involved with the selection of the vendor and would be enriched by the selection, the IRS policy is very strict and included below.   If they had taken this function in-house and not resourced it out, this would not be an issue, however, they chose to hire an outside company to do the work. Moreover the employee, Grace Row, who is charged with assigning the contracts and specific projects is married to the contractor they have designated as their exclusive resource.  There are a wide variety of recognized engineers out there with at least as much experience and in many cases far more experience in the historical field as those employed by Mr. Harbutt.  When there is a family conflict of interest such as this, the organization must be able to prove that the source they are using is the only source available for the work required.  (I have been though the process years ago when I was a vendor to American Ballet Theatre and all i's were dotted and t's crossed.) If a statement has been put in the file stating Long Tail Audio LLC is such a sole operation, it is incorrect, as there are a number of historical sound engineers both locally and throughout the United States who have the desire, technology and capability to do this work and who have no familial connection to the Metropolitan Opera.

update 8:46 AM 3/20/12

It is interesting to note on the new commercial releases of Metroplitan Opera Historic Broadcast Series on the Sony label makes no mention of Long Tail Audio LLC in the booklet credits.  Instead, each employee of Long Tail Audio is mentioned as if they were individual  independent contractors and or employees of Sony/BMG.  However, a quick review of their web-site indicates the studio is handling all this work.

Click here to be directed to the Long Tail Audio LLC web-site

IRS policy regarding conflicts of interest for not for profit operations:

Click here to see IRS policy

New York City Guidelines for Not For Profit Organizations and Conflicts of Interest.  The guidelines are written by then Attorney General for the State of New York, Andrew Cuomo:

See New York City Guidelines for Conflicts of Interest in NPF's

From the Long Tail Audio LLC "Current Projects" section of their web-site:

Feb. 2009
The Metropolitan Opera has tapped Long Tail Audio to restore sources and master the Metropolitan Opera's 125th Anniversary CD. Producer Grace Row has worked closely with engineers I-Hua Tseng and Andreas Meyer of Meyer-Media on the project. The CD will be released commercially.

The Metropolitan Opera has entrusted Long Tail Audio LLC to restore and revive the legendary 75-year broadcast history of the The Metropolitan Opera. These restorations have been utilized for Sirius Satellite Radio's Met Opera channel, Rhapsody's on-demand digital music service and are being ingested into The Metropolitan Opera's in house network system.

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