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Jack O'Dwyer
Jack O'Dwyer is editor-in-chief of the J.R. O'Dwyer publications. He can be reached at jack@ odwyerpr.com

Sept. 13, 2005

LOOPHOLES IN ETHICS CODES
 

Shona Seifert, formerly of Ogilvy & Mather, who is going to jail for 18 months and paying a $125K fine for falsely billing the U.S. Government, on Aug. 30 gave the court a written a code of ethics for the ad industry, as she was ordered to do. There is, of course, no shortage of ad industry and other codes.

Siefert lists 16 codes including those of the American Assn. of Advertising Agencies; WPP Code of Corporate Social Responsibility; Johnson & Johnson; General Electric, and the U.S. Marine Corps Code. We like the Marine code for its simplicity. It says: "Integrity is a variable and tends to degrade over time if not reinforced."

The "biggest risk" that Siefert met in her work (billing clients) was that it was "boring."

She writes: "The advertising industry places a higher value on big ideas than we do on process. The processes for accurately recording time and costs are unpopular at most ad agencies. We feel more pressure to do other work that we perceive to be more valuable to our client."
More than ever, she adds, "ad agencies are challenged by short-term financial pressures."


Most of the bad stuff we see is not covered by any of the ethics codes.

Time pressures and the "boring," repetitive nature of detailed record-keeping are blamed by Siefert for O&M's overbilling the U.S. Government.

Siefert offers well-worn advice: "Don't stretch the truth"...don't sign paperwork you haven't checked..."stay true your values, be brave"..."don't be afraid to tell the client their demand is unfair"..."think before you act."

We're perplexed by all this talk of ethics because most of the bad stuff we see is not covered by any of the codes. At least that's what the enforcers of the codes say. There's always some loophole.

For instance, about eight hours of our notes were stolen from an open PRSA conference bag while we were covering the 2003 Assembly. This greatly interfered with our coverage of that fractious Assembly that defeated decoupling APR from Assembly membership by six votes.

With us when the theft happened was PRSA national board member Gerry Corbett of Hitachi America. We told him about the theft, which left us in a shocked condition, and he helped us search the immediate area.

Realizing what happened, we sat down for the next 20 minutes and composed our notes from memory as best as possible.

We then told PRSA PR manager Cedric Bess what happened and asked for PRSA's audiotape of the Assembly to help us fill in the missing coverage.

PRSA tapes the Assembly for transcription at a later date. An elaborate audio system, including microphones placed throughout the Assembly, is employed by PRSA.

Technicians later told us that the eight-hour Assembly tape could have been easily duplicated in real time by running the tapes overnight. If the recording was digital, they said, new CDs can be "burned" in a few minutes.

Bess took our request but made no promises. Except for Corbett, none of the PRSA leaders showed any interest in the theft of our notes.

When we called Bess the next day (Sunday), we only got his voice message and he did not return the call. We could not reach him until the next Thursday, long after our deadline. These details were carried in our next Newsletter.

Neither PRSA leaders nor the ethics board have shown any interest in the theft, telling us to go to the police. Police see it as a "misdemeanor" and not very serious. It's not breaking and entering, armed robbery, etc., they said.

Ethics chair Dave Rickey, asked about the theft on Sept. 2, said he didn't think it was something that the code addressed. How about members' promise to "deal fairly" with the media and others, we asked? September is Ethics Month at PRSA. Its code says "Ethical practice is the most important obligation of a PRSA member." Members promise to "report ethical violations, whether committed by PRSA members or not, to the appropriate authority."

Ad people were tested for their ethical sense in The Moral Media (4/27/05 NL). Sixty-five ad pros took the "Issues Defining Test," which tests a person's interest in society at large vs. personal considerations. "Ad people think about immediate consequences when deciding how to act," says the book. "At the very least," it says, they "choose not to exercise the ethical reasoning abilities they have."

PRSA is again using Dr. Mark Schilansky, a Catskill, N.Y., podiatrist, as parliamentarian for its Assembly in Miami Oct. 22. He also served in 2004. Previously PRSA hired local parliamentarians.

Schilansky is in Schilansky & Binnall, which is the top advertiser on Google's parliamentarian listings.

The firm provides numerous services including helping groups revise their bylaws. Schilansky promises to go "around the country and around the world" to serve clients. Partner Jesse Binnall is based in Northern Virginia. S&B charges $150 an hour with a six-hour minimum. Since Schilansky is from Catskill, there will be additional charges for travel, meals, hotels.

The website of S&B (parliamentarians.net/site) identifies Schilansky as "Dr.," not indicating that his specialty is foot medicine. The site warns that "people can misuse parliamentary procedure to pursue their own agendas." It provides "Seven abused points of Parliamentary Procedure" such as people using "point of information" when they want to give information. A debate can't be ended by simply calling the question and makers of motions have no special rights to amend them, says the site.
Highlighting a weakness of parliamentarians, the site points out they may "only advise the presiding officer and may not make rulings. The chair has no obligation to follow the parliamentarian's advice."

The 2003 Assembly was marred by two false rulings–that an agenda had to be adopted before it could be changed (no agenda at all need be adopted), and that the loser in a vote could bring up the matter for a re-vote in the same day. Only the winning side may do this.

Parliamentarians tell us that where there are two sides to an issue (such as decoupling) each side should have its own parliamentarian. Leadership supported decoupling in 2003 and hired the parliamentarian. Those against decoupling should have had their own parliamentarian. Chapter delegates this year should have their own parliamentarian and not rely on Schilansky. This year the 56 non-APR chapter presidents (out of 110 chapters) can appoint themselves as delegates ("the chapter president ... may at any time designate an alternate chapter delegate") and they could bring about major needed changes in PRSA governance.

About 45 chapters have 100 or fewer members.

 
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Sad but Just (9/14):
News items like this about criminal convictions, although saddening, create fear that can hold down four kinds of stealing. One, stealing from stockholders. Employees are given shares so they'll work harder, but top management siphons off nearly all the profits in salaries, bonuses and "expenses" that employees are in no position to control.

Two, stealing from creditors by having a series of bankruptcies. An individual can go bankrupt only every so many years, but anyone can incorporate a PR firm, go bankrupt, then incorporate another and another, each time giving the incorporated a fat compensation program, and go bankrupt again and again, sometimes in different states.

Three, stealing from clients by submitting false reports of huge media pickup so the clients renew, sometimes for many years. Sometimes clips or broadcast usage reports are said to have gone lost in the mail. Sometimes actual results are multiplied by five or ten to account for media usage supposedly not "found" by the monitoring or clipping services.

Four, stealing from the government by charging as tax-deductible expenses not only restaurant meals and trips that were not business, but charging as payroll expense money paid to maids and nannies used by the top managers.

Sadness at seeing anyone convicted is moderated when the person nailed is someone who strutted around as a successful executive, not a successful thief. But operating a crooked venture is not success like driving a stolen car isn't success.

Sometimes, fortunately, employees or former employees turn in the crooks, then others in the organization move up. Shareholders get more of their rightful shares--and the grossly dishonest go to jail.


 

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