The “Financial Follies,” a night of fun for financial reporters, the biggies they cover, and for PR pros, is an annual tradition stretching back to 1938 and has always seemed harmless enough.

However, in the light of the current financial mess of the U.S. and the degree of responsibility that the financial press bears for it, a second look is needed at this activity.

2009 Financial Follies

It’s mainly a night for networking since the show has lost some of its edge over the years. The status of the “writers” on the stage (and PR pros) is not what it was some years ago when leading writers and editors from the New York Times and other media were active in the New York Financial Writers’ Assn., which puts on the show.

While 15 NYT reporters were members in 1979, only three NYT reporters are currently members. Forbes had ten members in 1979 and five currently. Ninety of the current members are “freelancers” when there was no such category in 1979.

At least a couple of hundred writers were guests of financial firms, blue chip companies and PR firms Nov. 20. Tickets were $300 each if purchased ten at a time or $350 for individual tickets.

The financial PR firm of Rooney & Assocs. hosted 38 journalists at its five tables.

Shades of PR Seminar!

If the economy were booming and criticism of Wall Street small or non-existent, we would not be writing this editorial.

But the U.S. is in what may be its second worst economic funk ever. Unemployment is 10%, the recovering housing market looks like it hit a snag, the national debt is at least $11 trillion and the value of the dollar is sinking.

The O’Dwyer website, NL and magazine alone have covered PR Seminar, the annual gathering of 160 or so corporate PR executives and executives and editors of major press including the NYT, Washington Post, Wall Street Journal, Financial Times, Forbes, Business Week, Bloomberg, etc.

Efforts to interest any of the above media in this story or any journalism magazines have been fruitless.

The financial press should not be in any sort of a activity that looks like its objectivity is compromised.

Major blame for the financial collapse belongs to Moody’s, Fitch and S&P, the rating services that gave too-rosy ratings to what were really junk bonds.

The three services, as we know, were paid by the very institutions they were rating.

What is the relationship between the financial press and the financial institutions that have misbehaved and brought the U.S. to its financial knees? That needs to be examined.

Major Media, J-Groups Duck Story

Our articles on PR Seminar have been sent for years to the media present at Seminar as well as to the Columbia Journalism Review and the Society of Professional Journalists.

The package sent this year to the Columbia J-School and its Review noted the criticism of AIG in 2008 for hosting meetings at plush resorts after taking billions in aid from the U.S. Government.

It seemed to us that the 2009 Seminar at the Ritz-Carlton/Laguna Niguel, which only attracted 127 PR executives instead of the usual 160, was cut out of the same cloth.

The materials were also sent to the Bloomberg reporters who were exposing the AIG meetings, NYT and other papers. Also told was Judith Czelusniak, global PR director of Bloomberg who was at the 2009 Seminar.

There was one “bite.” Peter Sussman, one of the creators of the Ethics Code of the SPJ, blasted the journalists at Seminar for violating at least 10 articles of the SPJ code.

However, the SPJ did not back him up. The only thing that stood was his personal opinion.

SPJ’s publication, Quill, has never covered the story of Seminar.

Columbia J-Review Ducks

We have to wonder when we see praise piled on the Columbia J-School, which is what Peter Osnos, a senior fellow for media at The Century Foundation, did in an essay Nov. 24.
Perhaps the essay was in reaction to Richard Sine’s remarks that J-schools should be closed as a waste of time and money.

Osnos admitted that J-education has “always been regarded somewhat dubiously by most academics and many journalists,” but he claimed that Columbia has many fine courses and excellent teachers and described some in detail. (Picture and bio of Osnos)

Cost is $72,182 for the year-long course which attracted 1,057 applicants this year of which 412 were accepted.

Economy, Wall St. Need Covering

The economy and Wall Street, which sometimes seem to go in different directions, are the big story these days and probably for years to come.

Almost no matter what they cover, the Columbia grads are going to run up against PR pros who are going to be very tight with information.

We have witnessed this sea change in the course of covering PR for 40 years.

At big and small institutions and companies, the PR dept. is often the “Dept. of No.” It’s almost as if you’re trying to borrow money from them if you seek information. They want an extensive explanation of who you are, what you will do with the information, and how that will benefit the company. Quite often, a “clerk” acting as a shield rather than a PR person will answer the phone.

“PR” Directors Handle Advertising

The heads of corporate communications depts. (PR was mostly dropped decades ago) take pride in handling all forms of communications including corporate advertising.

They may be the ad decision makers when a publication plans a special issue on corporate social responsibility, the environment, or diversity.

What reporter wants to bust the chops of executives with that power? Politics becomes important and perhaps decisive.

PR (or the lack of it) has an enormous influence on news flow and we think it’s imperative that all J-schools as well as the SPJ and CJF take notice of it instead of playing politics.

CJR Skipped Rotbart/O’Dwyer Lawsuit

We had a previous experience (or lack of it) with the Columbia J-School.

The O’Dwyer Co. and this writer were sued in 1994 on charges including that we violated the copyright of Dean Rotbart when we covered his hour and 40-minute presentation to the 1993 PRSA conference.

Rotbart, a 1980 graduate of the Columbia J-School, described instances of news tips and ads being influential on news coverage. He noted, correctly, that certain agendas might influence coverage.

All charges against the company and us personally were dismissed in 1995. A first page story (top middle) in the New York Law Journal said the case broke new ground for journalists writing about other journalists.

The American Journalism Review July/August 1994 devoted a page to the suit, describing both sides and saying disposition of it “may make new rules on the right of journalists to report critically on each other’s work.” Lyle Denniston was the author.

NYT reporter William Glaberson did a lengthy story on Dec. 27, 1993 on our coverage of the speech. He quoted BusinessWeek editor Stephen Shepard as saying of Rotbart, “This guy passes himself off as an independent media critic. He’s not. He is serving the PR community and he is presenting  a cynical and highly warped view of the major news organizations.”

Glaberson reported that Rotbart was “preaching his message in workshops for PR people nationwide” who paid up to $350 each for the “Newsroom Confidential” sessions.

Another reference to the speech was made in a March 7, 1994 column in which it was said that this reporter “slipped in to a sample session” of Rotbart’s. In fact, this reporter was fully credentialed by the Society, the meeting was open to any of the attendees at the 1993 conference, and at one point Rotbart acknowledged our presence when we replied to a general question he posed to the audience and we answered it by speaking out.

Glaberson, although he continued to cover media news until December 1995, did not cover the lawsuit, which was filed March 24, 1994.

PRSA used two cameras to videotape the presentation which was to be offered for sale to members. PRSA chief staff officer Ellen Gerber said in a letter to Rotbart Oct. 19, 1993 that a tape of about 45 minutes would be made from his presentation for sale by the Society “as a professional development resource.”

The tape was never offered for sale.

However, when we were sued in early 1994 for $21.5M ($6.5M in compensatory damages and $15M in punitive damages), this won no further coverage in the NYT.

The decision dismissing all charges, was ignored by the NYT, Columbia J-School and CJR. A number of legal publications gave the decision extensive coverage, saying new legal ground had been broken.

Click to enlarge NY Law Journal clip

Michael Wolff, writing in 2002 in New York magazine, said NYT “has enormous clout” at the Columbia J-school and the school’s “highest mission” may be preparing students for NYT jobs.

PR Society Withheld Copyright

Upon being hit with the suit, we went to PR Society h.q. and asked for assistance since we were a credentialed reporter.

The Society’s contract with Rotbart gave PRS perpetual, unlimited copyright to the speech. But PRS refused to let us use it, which we felt would have ended the suit.

At the same time that it was refusing aid to us, PRS was making a hefty profit selling copies of our articles and those of many other authors without the permission of any of us. We found copies of nearly 100 O’Dwyer articles in 11 “information packets” that were purchased. Our articles were by far the most copied, totaling at least 50,000 copies in the latest three years of the activity. PRS was reporting net profits of nearly $200,000 in that period on the activity which was cancelled shortly after our expose. The practice had gone on for at least 15 years.

PRS was making serious money off our articles while at the same time refusing to help us in a major legal matter. In Brooklyn, we call that “moxie.”

O’Dwyer Helped NYT

NYT reporter Winnie Hu spent about two hours in 2001 in O’Dwyer Co. offices when we provided her with background and numerous documents relating to the death of PR figure Denny Griswold.

Griswold, founder of PR News, had been held in virtual isolation in a Connecticut nursing home for the last five years of her life. Her death at the age of 92 on Feb. 7, 2001 was discovered by this writer in a routine telephone call to the home.

No one in the PR community had been able to reach her for the previous five years. State authorities later said her PR friends should have contacted the police.

Despite this help, the NYT has a virtual boycott on any mention of O’Dwyer products. The last NYT mention of our yearly ranking of PR firms was on March 31, 1989. There have been only three (slight) mentions of anything connected with the O’Dwyer Co. since 2000, according to a search of the NYT archives.

Calls to the NYT on this subject have been met with the reply that the paper does not cover PR.

The “Secret PR Firm”

What especially caught our attention this year in the seating list for the “Follies” was the five tables hosted by Rooney & Associates.

Guests included 38 journalists from 22 different financial publications or broadcast outlets. If any of them paid for their own $300 tickets we would be glad to report it.

What further shocked us was that we had no information whatever on this firm in our Directory of PR Firms that lists 1,850 firms.

Buyers expect that we will have at least some information on any sizable firm. We provide as much information as we can obtain for PR firms that don’t want to be in the directory.

Although we’re supposed to be in an age of transparency, we have found that some financial PR firms are tight-lipped.

Lack of sunshine is at the root of the country’s financial problems and “PR” firms should be the last ones practicing that.

Rooney was one of the principals of Morgen-Walke Assocs. which listed more than 200 clients in the 1998 O’Dwyer’s Directory. The business was sold to Financial Dynamics, now FD.

Morgen-Walke held the record for most number of tables at a “Follies,” purchasing 13 in 1999.

By Jack O'Dwyer