By Jack O'Dwyer

The Mortgage Bankers Assn. committed a major hypocrisy by railing against homeowners who walk away from mortgages worth far more than their homes but then sold its own h.q. for $34 million less than the mortgage, stiffing the banks. New Yorker columnist James Surowiecki said Dec. 19 “It might be time for homeowners to do the smart thing” instead of the “right thing.”

What got Surowiecki going was the bankruptcy American Airlines filed even though it has $4 billion and “could have kept paying its bills.” Homeowners are deluding themselves with “inflated expectations” of value returning to their homes, he wrote.

The January 2012 Harper’s advises “Stop Payment! A homeowner’s revolt against the banks.” Christopher Ketchum says the title to many homes is cloudy because mortgages were shifted to and fro without filing with local county registrars and no one may now have a secure title. People could be paying to entities that don’t own the home. He faults the Mortgage Electronic Registration Systems (MERS) created in 1995.

“Rich Get Richer,” headlined the Oct. 26 New York Times, reporting that the top 1% more than doubled their share of income in the last 30 years. Quoted was a report of the Congressional Budget Office. The 1% saw their income rise 275% (inflation-adjusted) from 1979-2007 while after-tax income of the bottom one-fifth rose only 18%.

Economist Joe Stiglitz helped to ignite the “Occupy Wall Street” movement with his April Vanity Fair article entitled “Of the 1%, by the 1%, for the 1%.”

time coverThe OWS crowd, practicing basic PR (which is to get noticed), and calling themselves “the 99%,” won Time mag’s “Person of the Year” award.

Poll Position found that 13% of Americans think they’re in the “top 1%.”

Among the poverty-stricken are America’s newspapers and other media that have been hit with massive ad and circulation losses. Newspaper ad revenues plunged from $49.4 billion in 2005 to $25.8B in 2010—a $24B annual whack which is a lot of journalist jobs.

There is a lot less space for story placements but PR firms are experiencing good growing weather because now clients have to keep track of a House of Babel of Internet voices instead of a relatively few major media and trade papers. Most of these new voices are not susceptible to advertising or other pressures.

PR pros Rich Torrenzano and Mark Davis authored "Digital Assassination" showing how “digital lynch mobs” hijack good reputations using all sorts of tactics including “stealth attacks” (you don’t know you’re being wasted until its too late). On balance, the internet may be more of a threat to organizations than an opportunity to promote products and causes.

digital assasinFinancially-pressed media passed the hat for donations including Wikipedia (asking for gifts of $5 and up), FAIR, asking for donations of any size (it needs $26,000 to keep going for its 26th year of “Fighting Big, Bad Media”), and Columbia Journalism Review.

They should consider the tried-and-true method of raising $$--give awards or a platform to biggies at high-ticket banquets. Doing this year after year are New York Women in Communication ($500K Matrix Awards); Committee to Protect Journalists’ fall banquet (CPJ has $12.9M in assets); Hospitality Sales & Marketing Assn. Int’l awards dinner; Institute for PR annual dinner; New York Financial Writers’ Assn. annual “Follies,” and awards dinners of PR publishers, to name some of them.

Some members in the black-tie audience of the CPJ banquet at the Waldorf-Astoria remarked about the “incongruity” watching videos of journalists who had been murdered or tortured while dining in such splendor.

CPJ is only a few blocks from our office and staffed by “expert investigative journalists” but so far we have been unable to entice any of them to come to our office and examine evidence that U.S. journalists are not only losing jobs by the tens of thousands (a form of assassination) but PR pros are being told the best way to deal with a critical news medium is to boycott it. Politics is the reason.

We attended the “Washington Business Hall of Fame” banquet in D.C. Nov. 29 that raised more than $1 million for Junior Achievement. Honored by 1,100 attendees were five D.C. business leaders.

Key leaders and members of the International PR Assn., London, quit to protest what they called abuses and irregularities including the abolition of the 60-member Council (equivalent of PR Society of America's Assembly). Only the Council can abolish itself, said the critics. IPRA, like PRSA, says it’s ruled by Robert’s Rules, which give bodies like the Council and Assembly ultimate power.

The hypocrisy of the Mortgage Bankers in doing the very thing it condemns (“staggering” wrote Surowiecki) shows that the way organizations define “ethical” is different from the way most people define it.

FTC logoThe Federal Trade Commission in 1975 went after associations of doctors, lawyers, pharmacists, PR people and others because they had unethical “ethical codes” that barred price and other forms of competition. First target was the American Pharmaceutical Assn. whose code blocked ads with prescription drug prices.

Two FTC staffers visited PRS in the fall of 1976 and told it to remove bans against contingency fees and members pitching each other’s accounts. The board brought the matter to the Assembly which refused to amend the code. Some delegates said they didn’t know enough about the situation while others said “chaos” would result if anyone could pitch anyone else’s accounts.

The result of this intransigence was that the Society was forced to sign and publicize nationally a consent decree accusing it of blocking “open competition” in the sale of PR services and having a mechanism (judicial panels) that “policed” enforcement of the code. Docket No. C-2907, 90 FTC 324 was published Oct. 27, 1977, a supreme embarrassment to PRS and PR.

Similar intransigence is taking place as the Society ignores the advice of the National Press Club and PR Watch to halt its blockage of coverage of the Assembly (by all reporters) and stop any other interference with press coverage. PRS cannot reasonably stiff the nation’s premiere press group.

The Society champions the “free flow of accurate and truthful information” but in a democracy this is only determined via vigorous public debate (such as the grueling series of 12 debates for the Republican Presidential hopefuls). PRS leaders and staff were in hiding all year from press and members, even blocking member questions on so-called “teleconferences.”

The web is seen as empowering individuals and helping them organize their own groups. There are 56 PR groups on LinkedIn including Social Media Marketing with 195,000 members and 20 special interest groups. Gerald Haman’s “Innovative Marketing & PR Group” claims 150,000+. Such groups have to become politically active and do things that bring credit to the PR industry.

Still under consideration by the U.S. Justice Dept. is the charge that PRS retaliated by barring us from any sessions of the 2011 annual conference after we sought the use of assistive hearing devices. Retaliation of any sort against those seeking such assistance is strictly forbidden.

The bogus hearing aid industry is in for a shake-up. No longer needed, in this day of the web, are visits to fancy offices staffed by high-priced people using expensive equipment to make numerous unneeded tests (resulting in costs of thousands of dollars for devices that may not work). Excellent aids are now available on the web at under $30. A Bell & Howell $19.50 aid performs better for us than aids costing thousands. The new aids come with three sizes of soft plastic tips that fit any ear (no need for costly custom moulds). Also good: the $17.10 SSI aid from China.

Martin Sorrell
Today is the 12th anniversary of the all time high that Omnicom stock reached--$53.50 on Dec. 19, 1999. It’s currently around $41. Debt is $3.2 billion on revenues of $13.6B. WPP, which reached $92.50 on Feb. 7, 2000, is $50. Debt on revenues of $14.9B is $7.19B. IPG, which hit $55 in 2000, is $9. Debt on sales of $6.97B is $1.72B.

WPP’s Martin Sorrell, who regularly gives press conferences that tout the importance of PR and who addressed the Institute for PR in 2008, has emerged as PR’s No. 1 booster (in the absence of anyone doing that in the U.S.).

“Fighting Big, Bad Media” is the goal of FAIR, which faulted “the media monopoly” for promoting “deficit hysteria” and failing to give enough coverage to the threat of earth-warming. NYT columnist Paul Krugman is not criticized since he is one of the loudest voices calling for more spending to get the economy moving.

Evidence of Big Media sticking together is the shutout it pitched against "The Tylenol Mafia," a 619-page book by former Johnson & Johnson employee Scott Bartz that shows the Tylenol poisonings of 1982 and 1986 almost certainly took place in the J&J distribution chain and not at the store level. Much evidence was destroyed or under the control of J&J.

Bartz got publicity in Chicago but the New York Times, although it wrote many thousands of words about J&J this year, did not return calls and e-mails from Bartz. Network affiliates including Fox, NBC, ABC and CBS covered the book but not the networks themselves. This was blatant news management since the mainstream press covered a reopening of the case in 2009 when suspect James Lewis’s apartment was searched and when the FBI said in 2010 that DNA of “mad bomber” Ted Kaczynski was sought in connection with the murders. Neither man could possibly have done the poisonings but by re-opening the case many documents were sealed for another 25 years. The Bartz book may get some exposure next year, the 30th anniversary of the poisonings.

Another story NYT skipped (except for a couple of AP items) was the rape charges against one of college sports’ most famous athletes, the devoutly religious Garret Wittels of Florida Int’l University, who owned a 56-game hitting streak in baseball. He and two other FIU students were accused of raping two allegedly 17-year-old women at the Atlantis in late 2010. NYT had pulled out all the stops when three Duke students were accused of rape in 2006. Wittels quit FIU at the end of his junior year to join a St. Louis Cardinals farm team. The rape charges against all three were dropped.

Although executives and editors of NYT and 20+ other media including the Washington Post, Economist, Financial Times and Time mag plus the investigative ProPublica have spoken at (PR) Seminar, the annual gathering of 150 or so top corporate and PR execs, none of them have ever mentioned its existence. Seminar took in 49 new members this year meaning that about number of PR execs lost their jobs because job loss means dismissal from the group and replacement by someone new.

It’s about time NYT wrote about the PR Society. Jack Felton, 1987 president who headed a 2000 task force studying the much-criticized nomination process, said “a little elite group” had taken control of PRS and was trampling on the Society’s principles and rules. He referred to nine directors publicly backing candidate Joann Killeen for chair-elect when “the board is not to elect its own officers.” Directors, who once were forbidden to return to the board, now can do so indefinitely. Rosanna Fiske, 2011 chair, is on her fourth trip to the board. Only APRs could serve on the nomcom for many years and it's still nearly 100% APR.