|January 8, 2013|
|New PR Society Board Should Nix Press Boycott|
|By Jack O'Dwyer|
|The 2000 board of the PR Society of America (the “Society,”) correcting a misguided 1999 board that twice voted to boycott the O’Dwyer Co., erased the boycott at its first meeting in January.|
Twenty-two leading PR figures, including 11 Society Fellows, were unrestrained in their condemnation of the 1999 board’s action, calling it “stupid,” “childish,” “half-witted,” “arrogant,” “un-American,” etc.
The 2013 board will erase the current O’Dwyer boycott if enough Fellows and other PR leaders speak out publicly.
The new board consists of 12 women and five men, the first such large female majority in the Society’s history.
The Society’s biggest fear is a groundswell of member and public opinion condemning the boycott that will embarrass it. Especially feared is any major media coverage.
The newly-appointed business editor of the New York Times, Dean Murphy, should take up the subject of PR including the Society’s boycott. Previous editor Larry Ingrassia mostly ignored PR.
NYT business editor
NYT reporters butt their heads up against a lot of PR stonewalls these days, as evidenced by NYT columnist David Carr writing last Jan. 29 that what he mostly encounters at companies is “a wall of communications operatives, many of whom ladle out slop meant to obscure rather than reveal.” http://bit.ly/A5rWeG.
As the National Press Club has publicly observed, the world’s largest organization of PR people should not be giving the lesson that stonewalling is the best way to deal with determined reporters.
Fear of Duffey Scandal Toppled Code in 1999
The Society’s 1999 board declared its enforceable Code of Ethics dead because it was faced with pursuing a case against Atlanta counselor Lee Duffey who as treasurer in 1999 was in line to be chair-elect as had the previous six treasurers.
Media in the South and elsewhere, including the Atlanta Journal-Constitution (full page) and Fox 5 Atlanta (four-part series) began in 1997 to cover claims of the Stucco Home Owners Coalition SHOC) that the EIFS (Exterior Insulation Finishing Systems) form of construction was seriously flawed.
EIFS, improperly applied, allowed moisture to form between layers of cladding, causing heavy damage.
EIFS makers claimed that SHOC was a front organization secretly funded by Boral and other brick interests. SHOC had no funds of its own. A call to SHOC “offices” by the O’Dwyer Co. was answered by a staffer at Duffey Communications. DC’s name was on some SHOC releases. Duffey declined to reveal his client list but said the firm was not involved in anything improper. The Code at that time only said members had to “be prepared to” reveal clients but did not actually have to reveal them.
Although the Duffey firm had more than 40 employees, only two besides Duffey were Society members. The Ethics Board, had it pursued the case, might not have been able to connect Duffey himself to any activities in behalf of SHOC. The brick industry, facing inroads from EIFS, should have directly criticized EIFS rather than using any third parties.
Society Retreats from Enforcement
Articles in the Journal of Mass Media Ethics by Prof. Kathy Fitzpatrick of Quinnipiac University on reasons for sacking the enforceable Code of Ethics in 1999 cited “legal counsel who make mincemeat of violation accusations.”
No doubt the Society heard from L. Lin Wood, Duffey’s attorney, when it started looking into charges that DC was involved in a front group. Wood, one of the “top libel, defamation and First Amendment lawyers in the U.S.,” according to Wikipedia, sent this writer a letter telling us to write no further about charges against the Duffey firm without first clearing it with him. Coverage, which had started in 1997, continued in O’Dwyer media.
Fitzpatrick’s 45 pages on the Society Code do not mention the Duffey case but it’s evident from Society audits that something was suddenly resulting in ethics spending going into the stratosphere after falling sharply.
“Code Enforcement” had cost $230,506 from 1988-93, an average of $38,417 yearly. With installation of Ray Gaulke as COO in mid-1993 and a new board attitude towards ethics enforcement, Code spending dipped to $15,565 in 1994, to zero in 1995, $3,846 in 1996 and $1,557 in 1997.
Spending then suddenly shot up again in 1998 to $24,985 as the Ethics Board took up the challenge of the charges vs. Duffey Communications.
“Serious discussions” about Code revision began in 1998, writes Fitzpatrick.
Code enforcement cost $14,341 in 1999 and “Code revision” $93,229 in the same year. Code revision then cost $104,018 in 2000 and $11,695 in 2001 for a total of $208,942 on revision.
Interest in “Ethics” is at the lowest point ever, $1,406 in 2011 after being $2,649 in 2010.
A major inconsistency at the Society is that while Silver Anvil Awards are only given to PR firms, corporate PR depts., or other entities, and not individuals, recognizing that PR people practice as part of a team and under the protection of a corporation, charges of improper behavior can only be brought against individual members. A main reason for ditching the enforceable Code was that an accused member might sue the Society.
Reprise of Franco Scandal Feared
Society leaders feared a public scandal such as had erupted when it was revealed that 1986 president Tony Franco had signed an SEC consent decree in 1985. The news of it broke in the middle of Franco’s term and received heavy coverage.
Almost all ethics complaints handled by the Society were done in super-secrecy but the Franco case could not be contained. He resigned as the board was considering whether to expel him or not.
Society leaders, fearful of another “public hanging,” decided the best route was to let Duffey quietly leave the board by denying him the chair-elect nomination.
The desperate nomcom chose Kathy Lewton, who was a member of a previous board. This broke a 52-year tradition against board members ever returning to the board. Founders had feared a self-perpetuating “clique” would someday take over leadership which is just what has happened. Current bylaws are that directors can serve four years in a row, take off a year, and come back for four more in perpetuity.
Duffey contested the Lewton nomination but lost at the 1999 Assembly.
Fitzpatrick Analysis Falls Short
The Fitzpatrick articles also do not mention charges of abuses in financial reporting and the nominating process in 1999 nor the O’Dwyer boycott or charges by a Fellow that the board had broken five articles of the Code of Ethics in voting the boycott.
Her articles in the 2002 Journal of Mass Media Ethics are cited in Wikipedia’s history of the Society. She is considered to be a “reliable” and a “neutral” source about the Society and its Ethics Code although she was on the Ethics Board nearly six years and helped write the new Code.
Today’s O’Dwyer article will be submitted to the Journal and other academic PR publications including the online PR Journal of the Society that is conducted by Prof. Donald Wright of Boston University, and the Journalism & Mass Communications Quarterly of the Assn. for Education in Journalism & Mass Communication. http://tinyurl.com/ang52xr
Society Hopes to Stifle Coverage
As in 1999, the current O’Dwyer boycott is an attempt by the Society to frustrate coverage of a large number of abusive governance, financial reporting and anti-information practices.
A major abuse is the monopoly APRs have had on governance since the 1970s. Attempts to end this since the late 1990s have failed largely because the only body that can change it, the Assembly, is about three-quarters APR.
One reason for the 1999 O’Dwyer boycott was our coverage of the unanimous demand of the Strategic Planning Committee headed by chair-elect Steve Pisinski that all references to APR be wiped from the Society’s bylaws.
This was opposed by the 1999 board headed by counselor Sam Waltz of Wilmington.
A resolution was passed at the board meeting in Vancouver July 30-Aug. 1 saying that “Decoupling at this time would send the wrong signal regarding the Society’s commitment to APR.” Three former APR chairs were on the board—Roger Lewis, Joann Killeen and Tom Bartikoski.
The Society’s New York chapter, in favor of dropping the APR rule since 1998, said it could not get enough signatures to force “decoupling” on the agenda for the Assembly. National Capital, Chicago and other big chapters refused to support the proposal, said New York president Christopher Guidette.
Information Blockages Abound
Information rigor mortis has set in for large sections of the Society. Members don’t know who is in the Assembly, what the delegates say or how they vote; the annual easy-to-use printed, permanent list of members, indexed three ways, was removed from them in 2005; Assembly transcripts were halted the same year; only the skimpiest of reports escape the Assembly since reporters have been barred the past two years; the names of all but eight of the 50+ staff members were removed from the Society website three years ago; the single list of 110 chapter presidents vanished three years ago; the bylaws were re-written in 2009 and a dues hike passed in 2011 without leaders or staff ever once facing a live audience of rank-and-file members; staff is barricaded downtown, isolated from the biggest population of communicators in the U.S.
Financial, Nomcom Hanky-Panky in 1999
Among abusive practices in 1999 was false and late financial reporting.
Deloitte & Touche refused to sign the audit for two months, finally doing so in August, setting a record for lateness of the Society audit. Treasurer Killeen said concerns of D&T included “the method we used to account for deferred dues.” PRS practice was to defer only the small portion of dues required to fund Strategist & Tactics, a practice that put it with odds not only with legal, medical and CPA groups but IABC, a nearly identical organization.
Pisinski, as 2000 chair, released some unaudited figures in June, showing receivables had zoomed 281% to $880,379 as of Dec. 31, 1999, and deferred dues had been drawn down to $198,746 from $350,309 even though membership had risen to 19,623 in 1999 from 18,512 in 1998.
Pisinski, who allowed this writer to sit in the front row of the 2000 Assembly after we had been forced to sit in the rear outside of the Assembly since 1996, said in a letter to members July 25, 2000 that PRS would henceforth be “in compliance” with the method used for deferred dues by the American Society of Assn. Executives, which in 1999 set aside $2.74 million of its $5.1M in dues in a deferred account. Rules of the Financial Accounting Standards Board say dues are to be booked as earned. The DD account of PRS went to $813,116 in 2000 from $425,309 in 1999. However, PRS again raided the DD account in 2001 to pad net assets by reporting $556,459 in DD. It was raided again in 2002, falling to $389,941.
D&T stopped doing the Society’s books after 2001, possibly because of its reversion to inadequate allowance for DD. None of the “Big Four” CPA firms has worked for the Society since 2001. Ernst & Young was the Society’s outside accountant before D&T.
Pisinski, as treasurer in 1998, publicly castigated Gaulke for sending a letter to leadership on Aug. 12, 1998 in which the Society promised to support Haymarket’s PR Week/U.S which was making its debut later that year. Gaulke wrote that the Society would “encourage its members to subscribe” and would “help them meet our advertisers.” Pisinski wrote that such actions did not have board approval. The Society “favoring or appearing to favor” any PR industry publication was wrong, said Pisinski.
PRS CFO Quit Suddenly in June 2000
CFO Joe Cussick quit suddenly in June after six years at the Society and before completion of the 1999 audit, raising what CPAs call a “red flag,” a signal for members to look closely at PRS finances.
D&T finally signed off on the audit in August, showing a loss of $426,288. PRS did not have the funds to print the 2000 members’ directory, skipping publication for the first time in its history.
A $678,893 loss was then reported for 2000, bringing the two-year loss to $1,105,181. One reason is that the Society had to pay back taxes on a substantial amount of unrelated business income. The mis-reported “chickens” of the 1990s had come home to roost.
A ten-year O’Dwyer study of Society audits found that deferred dues went from $904,767 in 1991 to $169,530 by 1995 and $350,309 by 1998) thereby bloating “net assets.” The O’Dwyer study showed travel/meals/hotels skyrocketed from $161,859 in 1987 or 4% of revenues to $665,692 in 1990 or 12.6% of revenues.
Nomcom Abuses Abounded
Another area that the Waltz board did not want covered was a chorus of complaints about nominating practices.
Members charged that the 1999 nominating committee, headed by 1997 president Debra Miller, was improperly lobbied by current and former leaders. Up until 2003, when reforms were put in, only the nomcom knew who was running for office. There was no chance for members to comment or ask candidates questions. Fellow Robert Stack, nominated as a director from the Sunshine district, withdrew his name, saying the process was “fatally flawed” because certain insiders knew who were running for office and lobbied for them.
Killeen’s election in 1999 as treasurer, defeating official nominee Michael McDermott by a vote of 123-121 was disputed by the parliamentarian, who ruled that she was short of winning a majority of delegates present. The delegates were using electronic voting devices for the first time and some either did not know how to use them or voted after the 15-second limit. The vote was 123-121 in favor of Killeen but 262 delegates were registered including 220 chapter delegates and 42 leaders. The parliamentarian called for a second vote. However, both lawyer Arthur Abelson of Moses & Singer and Gaulke overruled the parliamentarian and declared Killeen elected. McDermott should have motioned for a recount but the meeting quickly moved on to other business.
Robert’s Rules, under which the Assembly is conducted, are not “rules” at all but only “advice” that a group can use or ignore. Staff/leaders preferred Killeen, based in Los Angeles, to McDermott, a financial PR specialist based in nearby Connecticut.
Complaints about nomcom abuses led to the creation of a nomcom study committee headed by 1987 president Jack Felton. He charged at the 2000 Assembly that “a little elite group” of board members had made a “grab for power” and were trampling on the bylaws by publicly supporting Killeen over the nomcom’s choice of Art Stevens of New York for chair-elect. Head of the 2000 nomcom was Mary Lynn Cusick, 1998 chair. Nine directors had signed Killeen’s nomcom petition. Directors are not to pick their own fellow directors, Felton told the Assemby.
Stevens, furious at the interference of the board with the election process, said it was a first for the Society and that the nine had done “irreparable harm” to the Society. Killeen and Stevens made presentations to the Assembly, Killeen winning 62% of the votes.
Killeen, as a write-in candidate supported by APR enthusiasts, had defeated McDermott for treasurer and as a write-in candidate had defeated Stevens for chair-elect. Her support of APR was much stronger than that of either McDermott or Stevens. McDermott told the Assembly he was unsure of the value of APR. “With $1.50 and APR you can get on the subway,” he said. Stevens was on the board of PRS/New York which had voted in 1998 to support decoupling APR from office-holding.
Society to Press: Go Away
The 1999 board was hit with a record number of negative, controversial and/or embarrassing developments that it preferred not to have covered.
-- A $50 dues hike, the first in 11 years, was being sought although the Society’s own surveys found most members were opposed to the hike. It went into effect starting in 2000 in three stages.
-- “PR specialist” was found to rank 43rd in terms of credibility on a list of 45 public figures by a five-year, $150,000 study funded by the Society and Rockefeller Foundations. The 2,500 in-person interviews that were conducted resulted in 5,000 pages of materials. Heading the research team was Robert Hinckley, former research director of the U.S. Information Agency and former director of crisis management studies, National Security Council.
The Society did not have a press conference on it nor send releases to media using PR Newswire or Business Wire. It never printed the table of 45 in any Society media. Results were disclosed at a meeting in the Rockefeller Foundation offices in late June.
TV anchors, local reporters, syndicated columnists, and major newspaper and magazine writers were in the top 25. The 1999 board, which no doubt knew about the results study, since several directors including Waltz and Deanna Pelfrey were also on the Foundation board, voted the formal boycott of the O’Dwyer Co. at a meeting in April, announcing it to the PR trade press. PR Week/U.S. gave it prominent mention.
--The College of Fellows unveiled two-years of interviews with 16 PR executive recruiters who were almost unanimous in their view that APR meant nothing in the job market and was even a sign of “naivete.”
--Society board violated five articles of the Ethics Code in voting and publicizing the O’Dwyer boycott, said a member who filed formal charges. Rather than hear the charges, the board declared the Code null and void and began work on a new Code with no teeth. http://tinyurl.com/b4v2zxb Cost was $208,942 including $50,554 in fees to the Ethics Resource Center, D.C.; $62,958 in staff time, and $18,049 in travel, hotels and meals.
Code enforcement had cost $276,459 since 1988 including $208,000 in legal fees. Only one member had been publicly scolded, Summer Harrison, who in 1988 criticized four Society members who gave advice to CIA head Bill Casey on how win support for the Contras of Guatemala. The Society spent $1,406 on ethics in 2011 and $2,649 in 2010.
--COO Ray Gaulke, 66, was given a record five-year contract by the executive committee at the Vancouver meeting, a contract that was voided at the end of 2000 by mutual consent. He received a $250K severance, Society sources have said.
Resort cities and resorts themselves were the standard locales for board meetings for decades—Sante Fe in the summer for the music/art festival; San Antonio in the winter for golf; Lake Tahoe and Sundance for skiing; Carmel for summer sports and art, etc. The entire board went to London from April 5-8, 2000. O’Dwyer coverage of board meetings at vacation spots was not welcomed by the board.
--The Society refused to publish a list of the 250+ Assembly delegates in advance of the meeting.
--New directors were barred from a traditional meeting with old board that began at 8 a.m. on Oct. 22. Five new directors (Mitch Head, Del Galloway, Judy Phair, Steve Shivinsky and David Simon) showed up plus chair-elect nominee Kathy Lewton and treasurer nominee McDermott. The old board then voted 10-2 to ask them to leave. McDermott denounced the eviction as a blow to “transparency” and “democracy.” Waltz said he did not want the new directors to be exposed to “a contentious discussion” that might have been ignited by “a small minority on the board.”
--Six key staffers quit in 1999—Ellen Gerber, chief staff officer, in June, after 12 years; Richard George, PR director since April, 1997, in October, and his assistant, Heather Rogers; Blane Withers, information head, in June, after three years; Lucy deLaval, chapter communications manager, and Christine Heyssel, who succeeded Steve Erickson in 1997 as director of the Counselors Academy. Erickson also doubled as PR director.
Only 12 of the 44 staffers listed in 1992 remained in 1999.
George quit just before the 1999 conference, when he was most needed. The departure of George and Rogers left no PR pros on the staff who could devise a PR program to defuse the negative results of the credibility study. It was almost a year before the Society hired another PR person, Catherine Bolton, who came in as chief PR officer in September, 2000.
Erickson quit just before the 1997 conference.
Perhaps George would have stayed had his pay been higher. But the “media relations” pay/benefits in 1999 totaled only $85,619 and was probably split $50K for George and $35K for Rogers. Total budget was only $137,500.
Arthur Yann, current VP-PR, who has been one of the enforcers of the O’Dwyer ban, got a 25% hike in pay to $163,271 in 2011 http://tinyurl.com/bukhakh with total pay/benefits being $186,485. He became the third highest paid staffer after only four years. Total budget for media relations in 2011 was $593,134.
The Society’s initial boycott, voted in April 1999, did not accuse the O’Dwyer NL of any inaccuracies but said O’Dwyer staffers were taking up too much time of leaders and staff with questions.
O’Dwyer “Pen” Created at 1999 Assembly
The 1999 board’s offensive against this reporter is echoed in current treatment which included our being barred from all events at the 2012 Society conference in San Francisco. Marriott staffers even ordered us to leave the hotel and not come back although they had no right to evict us from such a “public accommodation.”
When we showed up at the Assembly in 1999, Waltz approached us and directed us to a small, roped-off area near the left rear of the room, outside of the Assembly area, and told us we would be barred for the rest of the day if we set foot outside that area.
PR Figures (11 Fellows) Rap Boycott
Daniel Edelman, 1999 Gold Anvil recipient, said that avoiding O’Dwyer coverage was “childish” and “outside the bounds of our field and the principles of our country.”
Dennis McGrath, Counselors Academy chair, called the board “narrow-minded” and “unethical.”
Davis Young, who headed the “PR for PR” committee of the Society, faxed the 17 board members that they should end this “embarrassing dispute.”
Tom Harris said “Stonewalling the media is a terrible idea for an association or any client.”
Stan Sauerhaft, vice chairman of Burson-Marsteller, was “astonished” by the “weasely” refusal of the Fellows to take a stand.
Chuck Werle of Chicago wondered how Fellows could mentor younger PR pros.
Dave Grossman, McDonald’s internal PR head and Chicago chapter president, said “It is never a good idea to stonewall the media.”
Karl Skutski of Pittsburgh called the boycott “totally unacceptable, juvenile and arrogant.” Bill Corbett of New York said that in 45 years he had never advised ducking the media.
Tom Preston of Kentucky said the board “committed an act of considerable stupidity.”
Richard Weiner of New York said he would withhold dues until the boycott was removed. Mitch Kozikowski of New York said the boycott “makes a joke of the whole profession…the Society must talk to the media.”
Fraser Seitel, then publisher of the Strategist of the Society, said the Society “should not be reluctant to discuss what it does with anyone including my friend Jack O’Dwyer. Open communications is the best philosophy.”
Counselor Robert Dilenschneider said the boycott “strikes a knife in the heart of one of PR’s major daily activities—working honestly and openly with the media.”
Veteran Society member Ronald Mueller, former EVP of Burson-Marsteller and SVP of Ketchum, citing the boycott, resigned his membership and asked for a refund of his dues. He stopped using APR after his name and removed any references to the Society from his biography.
Al Croft wrote in the June issue of his Management Strategies for PR Firms that PR people do not advise clients to boycott critical editors and called the move “half-witted” and a “horrendous example.” The reasons presented by the board are “lame brain ideas” and a “real turn-off,” he added.”
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