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Internet Edition, February 21, 2001, Page 1


The National Guard has issued five PR-related RFPs, covering work worth $250 million during a five-year period, according to Elizabeth Keys, a contract specialist at the Guard.

They are for marketing communications ($100M), PSAs ($50M), state media outreach ($50M), Internet services ($25M) and personnel recruitment/retention ($25M). There is another $150 million pact for advertising.

Keys said the RFPs have generated "strong interest" among communications firms since they were issued earlier this month. The deadline to respond to the proposals is March 15.

Keys said Laughlin, Marinaccio & Owens, Arlington, Va., is the incumbent, handling advertising, PSAs and state outreach for the Guard. The other three pacts are new offerings.

The National Guard, which celebrates its 365th anniversary this year, wants a more family-friendly image, and greater support among employers, which may be upset over losing Guard workers for extended periods.

Media placement plays a larger role in the $100 million marketing communications program, according to that RFP's "performance work statement."


Singapore Tourism Board invites pitches for its U.S. consumer/trade account, a business that bills at least $25,000 a month.

Baltimore-based Trahan, Burden & Charles is Singapore's PR firm. The account is handled out of New York by Liz Elman. She said TB&C has worked for Singapore for three years, and plans to pitch the business.

The city state, which attracts seven million visitors a year, seeks to position itself as Asia's premiere leisure destination and an ideal location for business meetings/conventions.

Singapore is asking prospective firms to undergo a "pre-qualification exercise."

They must submit tourism credentials, a roster of current/past clients, details of overseas affiliations/offices, resumes of key personnel who will handle the business, and audited financials for the past two years.

That information is due in STB's Los Angeles office on Feb. 28. "Shortlisted" agencies will be asked to develop a comprehensive PR plan with costs and fee proposals by March 30.


BSMG Worldwide and sister ad agency Bozell are handling the three-year $45 million communications campaign of the Wood Promotion Network.

It's "Be Constructive" theme promotes the use of wood, and trashes "environmental misperceptions" that people have about the forest products industry.

Susan Rogers, who handles PR/advertising for the WPN, said Fleishman-Hillard, GCI Group, Edelman PR Worldwide and Golin/Harris also pitched.

BSMG "flew to the top of the list," according to Rogers, because of its broad "category" experience gained by working for clients representing milk, pork, biotech and wine trade associations.

She credited BSMG with understanding the dynamics involved in dealing with individual members of associations.

That is especially important for WPN due to its diverse membership base. "We have 120 members that represent everything from makers of two-by-fours to high-end furniture," noted Rogers.

PRSA LOSS FOR 2000 IS $650-$700K

Because of unforeseen costs, miscalculated conference profits, and back taxes owed, PRSA will post a loss of between $650,000 and $700,000 for 2000 instead of breaking even, chair Kathy Lewton and president Catherine Bolton said Feb. 14.

PRSA lost $426,288 in 1999.

The 2000 conference in Chicago was supposed to net $387,000 but instead only made $42,000 because costs of the meeting were higher than anticipated. There was also "double counting" of some revenues of the session.

The meeting drew a record 3,400 participants including several hundred from abroad.

Another major cause of the loss is that PRSA has not done the proper tax accounting for its advertising revenues, which totaled $781,199 in 1999 and $732,527 in 1998 for its Tactics monthly and Strategist quarterly.

Because of improper tax accounting, PRSA owed $135,000 in back taxes, penalties and interest, said Lewton.

It had been booking the ad income as regular income in the same category as dues.

However, the Internal Revenue Service says that a certain portion of such "unrelated business income" (minus expenses) is taxable.

(continued on page 7)

Internet Edition, February 21, 2001, Page 2


Fraser Seitel, a PR consultant and the author of a top selling PR textbook for college students, said "overzealous hyping and underexposed thinking have cheapened the currency of PR."

In a speech he gave Jan. 26 to the PR Assn. of Southern California Colleges at the Richard Nixon Library in Yorba Linda, Seitel said PR pros ranked 43rd on a list of 45 spokespeople in a "Credibility Index" prepared for PRSA last year.

"There are many in our society who believe that PR people are nothing more than insidious manipulators, exploiting powerful relationships with the press and public officials and relying on devious propaganda techniques to orchestrate public perception for the benefit of the rich and powerful," said Seitel.

If PR is to grow in stature, Seitel said CEOs need to be convinced of "our relevance and our value."

The burden is on PR practitioners to demonstrate, both in terms of technical skills and attitude, that "we are worthy of trust and confidence," said Seitel.

"That means you must be the best writer, the best speaker, the most accomplished web researcher and media expert," he said.

"Communications is your skill. And you must be proficient in all aspects of it. You can't just `like people' or `like parties' or `like ya know,'" he said.

Seitel, who gave his definition of PR as "protecting and defending and enhancing the credibility of our organization in perpetuity," said PR pros should give only ethical advice to clients. "This, above all else, is the characteristic that distinguishes PR from other fields," he said.

PR people must stand for one thing above all else-truth and candor and honesty.

"Unfortunately today-where it's acceptable to `spin' or `obfuscate' or even `lie'-whether you're talking about presidents or preachers or tires or tobacco companies-candor and honesty seem in short supply," said Seitel.


FAIR's first "Fear & Favor" report cites several instances where the media cowed to PR pressure last year. Among the behind-the-scenes deals cited are:

--United Airlines and US Airways' deal with The Washington Post, The New York Times and The Wall Street Journal to give them the story on the airlines' merger, as long as the papers didn't call any "critics" for comment.

--The Idaho Statesman for telling business editor Jim Bartimo that his story about Micron Technologies, the area's largest employer, had to be sent to the company for pre-publication "review."

--KIRO-TV's "Saving the Salmon" documentary, which was actually a half-hour infomercial paid for by the Washington Forest Protection Assn., a timber industry group whose members include Weyerhaeuser and Boise Cascade.

--Peter McFarren, the Associated Press' Bolivian correspondent, who resigned amidst revelations he had lobbied the Bolivian legislature for a $78 million water privatization project profiting a foundation he presided over.

--"Today" show travel editor Peter Greenberg, who sent a memo to travel and resort promoters stating the reason some of the "destinations/resorts" did not make it on the air was because they had "no good video to support them."

A full report is available online at ff2000.html.


Brodeur Worldwide, Boston, part of Omnicom, on Feb. 9 laid off 20 employees, less than ten of them in the headquarters office.

There were other layoffs in Brodeur offices in Phoenix and Provo, Utah.

Andrea "Andy" Carney, who became CEO last October, said that most of the workers were involved in website development. Some of them may relocate to other parts of Brodeur, she said.

Remaining strong, she said, is demand for online communications and e-businesses of clients. One of the founders of Brodeur in 1985, Carney was president of Brodeur/U.S. before becoming CEO of the parent last October.

New York Times advertising columnist Stuart Elliott on Feb. 12 reported staff cuts at a number of ad conglomerates including Omnicom; Leo Burnett USA; Bcom3; FCB Worldwide of True North; Grey Worldwide and MediaCom units of Grey Global; units of Interpublic, and Young & Rubicam Advertising of WPP Group.


Cliff May, who was communications director for the Republican National Committee, has joined BSMG Worldwide as senior managing director in Washington, D.C. He previously reported for The New York Times and Rocky Mountain News.

May, who joined BSMG as a senior managing director, said he was "simpatico" with BSMG's respect for journalism.

He is succeeded at the GOP by Mark Miner, who was former press secretary for Virginia Gov. Gilmore.

The Massachusetts Bay Transportation Authority is seeking corporate sponsors to buy naming rights for Boston subway stations. Sponsorships, which would let businesses put their names on and around stations, could raise as much as $20 million in the next five years, officials said.

Existing station names will be printed in bold, before the names of sponsors, so riders will not be confused, officials said.

The plan is opposed by Ralph Nader, who founded Commercial Alert to oppose excessive corporate marketing.

Internet Edition, February 21, 2001, Page 3


The London Observer's exclusive report in its (Feb. 11) Sunday edition that humans have some 30,000 genes also broke open the controversial practice of "embargoing" science news, according to The Wall Street Journal.

The Journal said the Observer's scoop "underscores the conundrum facing press handlers: How to maximize the hype surrounding a story and still maintain control of its dissemination."

The paper said the episode also "shines a bright light on the arcane world of science reporting, where the practice of embargoing information has been customary since the 1960s."

"Until now, scientific journals have been able to enforce embargoes to a surprising extent," said the Journal. "That's because when reporters violate these agreements, the journals won't send them advance information on other articles to be published. As a result, reporters may not know about a new development-unless they do their own reporting."

"I think embargoes may now be on the endangered species list," Rick Weiss, a science writer for The Washington Post, told the Journal.

Recently Nature and Science magazines offered to give media organizations, including the Journal, an advance look at their articles about the gene-mapping breakthrough of Celera Genomics Group and the International Human Genome Sequencing Consortium.

Journalists who got a preview had to honor an embargo, or agree that they would not publish the data until after a press conference that was to be held Feb. 12.

Never Made a Promise

Robin McKie, the Observer's science reporter, told the Journal the story he wrote did not break the embargo because he never promised to abide by it. McKie also broke the story of the cloning of a sheep named Dolly, which was another big science story four years ago.

McKie said he got the genome story by attending a public biotechnology conference in Lyons, France, on Feb. 9, where J. Craig Venter, Celera's chairman, revealed many details of the genome map that Science was going to announce on Feb. 12.

A spokeswoman for Celera said McKie could only have gotten his information from another journalist who had agreed to the embargo.

After the Observer hit the newsstands Feb. 10, London evening time, staffers at Science and Nature conferred by phone and agreed to lift their embargoes.

The Washington Post, The New York Times, The Los Angeles Times and other publications rushed to get space for stories.

MEDIA BRIEFS ____________________

Time Inc., the magazine publishing arm of AOL Time Warner, is consolidating its business and financial magazines into a new unit to be headed by John Huey, the longtime editor of Fortune magazine.

Huey will oversee Fortune as well as two Fortune spinoffs, eCompany Now and FSB: Fortune Small Business. He will also oversee two other financial magazines, Money and Mutual Funds.

Richard Kirkland, who had been Huey's deputy at Fortune, will become editor of the magazine.

Meredith Corp. is removing Family Money magazine from mail subscription and returning it to the newsstand-only group of Better Homes and Gardens special interest publications.

The bimonthly magazine, launched as a quarterly in 1997, will end mail delivery after the March/April issue. The 500,000-circulation magazine focuses on finances for women and families.

The Portland (Ore.) Tribune, a twice-weekly newspaper, has been started by Robert Pamplin Jr., who built his wealth on textile mills in six states. He is constructing a media conglomerate in the region.

The Tribune, which will be delivered free to about 120,000 households, will compete against The Oregonian, a daily paper which is owned by S.I. Newhouse family's Advance Publications. ( which featured explanations of political issues, links to campaign spending data and original opinion columns, is shutting down. The company's 45 remaining employees will be laid off.

Skiing magazine, based in Boulder, Colo., has promoted Bevin Wallace to managing editor, replacing Lindsey Diforio, who was named ad manager.

PEOPLE ___________________________

The Miami Herald promoted assistant managing editor Mark Seibel and Elissa Vanaver to managing editors, succeeding Larry Olmstead, who left the paper to become assistant VP for its corporate parent Knight Ridder. Seibel will oversee news, and Vanaver will run features and operations.

City editor Judy Miller will replace Seibel as assistant managing editor/metro.

Terence Hunt, 54, White House correspondent for The Associated Press for 20 years, was promoted to assistant chief of AP's Washington, D.C., bureau for news, succeeding Mike Feinsilber, who retired.

Ken Solomon, a TV and new media industry veteran, will become president of Scripps Networks' soon-to-be-launched cable network, Fine Living. Solomon, 38, will be based in Los Angeles.

The new network, which is expected to launch this year, will be devoted to aspiring lifestyles and upscale tastes.

Solomon comes from iBlast Networks, where he was president.

(Media news continued on next page)

Internet Edition, February 21, 2001, Page 4


Iowa's top business people said they have never lied or misled the media, a view not shared by more than four out of 10 media people who work for news organizations in Iowa.

This was not the only area in which business and media leaders in the state held different views, according to the findings of a survey of 532 of Iowa's largest businesses, and 272 daily, print, broadcast and Internet news media outlets. The survey was recently conducted for Hanser & Assocs., a Des Moines-based PR firm.

While 95% of editors believe the media give Iowans a clear view of the business world and business issues, 55% of the business executives believe the media give a distorted view of business issues.

Too Sensational

When asked if the media is more interested in scandal, conflict and sensationalism rather than solid facts, 81% of business executives said yes, and 49% said they tend to avoid contact with the media for this reason.

Less than half (42%) of the business leaders think Iowa's news media are biased against business, but 60% of the business leaders and 55% of the media respondents believe news organizations are manipulated by advertisers, politicians, and government.

Sixty-nine percent of business respondents said the media is predominantly left in political orientation, while 77% of journalists classified themselves as politically neutral.

Overall, 59% of the business leaders said they trust Iowa's news media, and 90% of the journalists said they trusted business leaders.

Need More Education

Media and business executives also agreed reporters should have a more comprehensive understanding of business.

Seventy-six percent of media respondents said reporters do not have sufficient backgrounds in economics, accounting or other business concepts to cover business issues, and nearly 74% of business repondents believe reporters do not have sufficient backgrounds in these areas.

Ninety-five percent of the business executives said business stories are more accurately told by reporters with specific indusdry background, such as business editors or editors of trade publications, and 73% of the media respondents agreed with this view.

Media give business executives average grades in their abilities to work with the media, with the highest grade (B-) for interview preparedness and fair-to-good grades (C+) in accessibility, quotability and trustworthiness.

Business executives give journalists an overall average grade of C, with the highest grade (C+) for the media's ability to be factually accurate and report useful information.


The Chicago Headline Club and Loyola University's Center for Ethics have created The Ethics Advice Line for Journalists.

"Though the vast majority of journalists strive to be ethical, all of us are hurt by reports of columnists who create fictitious people and quotes, of undisclosed revenue-sharing schemes between news organizations and advertisers and of undercover reporting that is considered legal," said a press release announcing the free service.

The service is open 24 hours a day, and pledges to try to respond to queries within 24 hours.

CNNfn, which is being renamed "CNN Money" later this year, has begun to make changes in its program lineup.

Starting Feb. 26, the evening show "Big Buzz" on the media and entertainment industry will be renamed "The Biz," airing from 11:50 a.m. to 12:30 p.m. with new host Susan Liscovicz.

A new show called "The Money Gang" will air from 12:30 p.m. to 3 p.m., replacing general market coverage. The show, hosted by David Haffenreffer and Christine Romans, will be a roundtable discussion with market experts.

CNN, the flagship network, also continues to tinker with its programming. It is adding a new show called "He Said/She Said," that will focus on the latest movies, home releases and other entertainment news. The show will air Saturdays from 10:30 a.m.-11 a.m., The Wall Street Journal's free online entrepreneurial center, will feature a new monthly column on PR and marketing starting in March.

Written by Edward Segal, author of Getting Your 15 Minutes of Fame, and More: A Guide to Guranteeing Your Business Success (John Wiley, 2000), the column will cover PR and marketing strategies, tactics and techniques for executives of startup companies and aspiring entrepreneurs.

Topics to be covered will include: how to make effective presentations to investors; selecting and working with advertising and PR agencies, and how to prepare business marketing plans.

Segal is a Washington, D.C.-based PR consultant.

Tony Lee is general manager and editor-in-chief of, which is published by Dow Jones.

The Daily News Express, a free weekday afternoon newspaper, has a circulation of 90,000, according to Les Goodstein, president/COO of the Express' parent, The New York Daily News. The paper, which first published on Sept. 12, is distributed outside of major bus, train and subway commuter hubs in Manhattan.

Oahu Publications, the company purchasing The Honolulu Star-Bulletin, has named John Flanagan as its editor-in-chief.

Internet Edition, February 21, 2001, Page 7

PRSA LOSS IS $650-$700K (continued from page 1)

Income from professional development seminars is considered professional fees and is not taxable.

Any ad that attempts to sell a product or promote a company (almost all of them do) is considered to generate taxable income.

Not taxable would be income from an ad that said, "Compliments of a Friend" and merely listed the name of the company.

With PRSA following this ruling, its two periodicals become much more expensive. Certain other income of PRSA is also taxable.

Also discovered were $100,000 in unpaid bills that belonged in 1999 but were then placed in 2000. Estimated taxes for 2001 are being paid in 2000, it was also noted. Another mistake was that the value of inventories carried was recorded the wrong way.

PRSA owes money to the installer of the iMIS computer system and doesn't want to pay it but is booking it as though fully paid.

Goal is to return $200,000 to the treasury in 2000.

Strategist Goes In-House

In one move to cut costs, Strategist has been brought "in-house," meaning the bulk of the work will be done by PRSA staffers, said Lewton.

Fraser Seitel, editor of Strategist since its founding five years ago and who has interviewed 20 CEOs for the magazine, will now be a contributing editor.

Also affected is Ernie Blitzer, executive art director of Strategist and a non-staffer.

The outside "professional fees" for Strategist were $144,897 in 1999 and $140,087 in 1998. Presumably, most of this went to Seitel and Blitzer.

John Elsasser, editor-in-chief of Tactics, becomes the head of communications at PRSA including Strategist.

All printing contracts of PRSA, including those for Strategist and Tactics, will be put up for bid, said Lewton.

She would not discuss the final settlement with Ray Gaulke, who resigned as president and COO at the end of 2000 with four years still to go on his contract. Elizabeth Allan, who resigned as president and CEO of the International Assn. of Business Communicators as of Jan. 15, was given a final payment of $50,000 to be spread out over the next two years.

Lewton and Bolton discussed the Society's finances but did not have an unaudited financial report.

The audited report will be out in April, they said.

PRSA started out 2000 with 21,000 members, added 3,800 new ones and lost 4,700 for a renewal rate of 77% annualized, said Lewton. She said she was not happy with that rate and said PRSA is doing everything it can to raise it. Members of the PR Student Society of America will start calling lapsed members, she said.

Reed Byrum, treasurer of PRSA, addressing a teleconference Feb. 14, said the PRSA staff is now able to communicate "bad news" to the board, creating "an atmosphere that did not exist." Lewton admitted the staff was "nervous" last year when bad news was surfacing.

One caller said he learned about the financial difficulties of PRSA on the O'Dwyer website. Both Lewton and Bolton promised that communications to members would improve in 2001.

Robert Stack and Michael McDermott are members of a new audit committee. Asked about possible "improprieties" in the past two years, Lewton said there were "strange systems" and "poor judgment" at PRSA h.q. but "nothing nefarious."


The International Assn. of Business Communicators reported an unaudited loss of $1 million for the year ended Sept. 30, 2000 on income of $5,459,016.

The group is projecting a loss of $600,000 for the year to Sept. 30, 2001. It lost $339,987 in 1999 on revenues of $4.8 million.

The figures were announced by Charles Pizzo, chair, in an e-mail to members.

Interim president Louis Williams, in another e-mail to members, quoted IABC finance director Paul Sanchez as saying that what happened to IABC over the past 18 months could be described as "The Perfect Storm," in which a number of negative developments impacted the association at one time.

Said Williams:

"A number of related and unrelated events came together at nearly the same time, taking our organization from a financially viable entity to one facing a multitude of financial woes. This was certainly a turn of events since our previous audit was very clean and unqualified."

The unaudited report listed $165,859 in accounts receivable and $345,544 in accounts payable.

Cash declined from about $1.8 million to about $600,000.
Total current assets as of Sept. 30, 2000, were $887,862 vs. $2,052,826 a year earlier.

"The good news," said Williams, "is that we're not talking about deaths; the not-so-good news is that IABC will need to dramatically change the way it does business to get through the storm. That, most of all, means becoming a marketing-driven business that creatively applies its resources to revenue enhancements, quickly, and over the long term."

The group is having its annual conference in New York in June.

The University of Maryland college of journalism has received a $10 million gift from Philip Merrill, 66, who publishes The (Annapolis) Capital, the Washingtonian Magazine, and a chain of suburban papers. Merrill, 66, is a former State Department spokesman. The school, which dropped its PR curriculum last year, will be named the Phillip Merrill college of journalism. His wife, Eleanor Merrill, chairs the board of the journalism school.

Internet Edition, February 21, 2001, Page 8



The huge losses posted by PRSA and IABC (pages 1 and 7) raise questions about the candor of the officers responsible for these organizations.

Rosy views of the finances of each have been circulated among the members for years.

Leaders of PRSA have been predicting a break even year for 2000 even after saving more than $100,000 by not printing the Bluebook of members and cutting other services.

We wonder if the loss at PRSA for 2000 was close to the $1 million mark. IABC has admitted a loss of this size in an unaudited report.

PRSA is making its members wait for the audit although this could be as long as two months away. The habit of the board was to pocket the annual audit until there was a board meeting. That's how members for years got their audit in the middle of summer or even fall.

Current leadership promises the audit will be given to the members right away.

Debra Miller, by the way, the 1997 president of PRSA, put out a full unaudited report for 1996 in late February of 1997, showing there was no need for the board to "sit on" the figures for so long. The National Investor Relations Institute, also with a Dec. 31 fiscal year, typically puts out an audited report in February.

Part of the blame for the poor finances and poor financial reporting of the two organizations is being laid at the doorstep of the paid staff.

Insiders at the two groups tell us the staffs of each got "too much power." This was aided by the bloated boards of each (25 members for IABC and 17 for PRSA). The bigger the board, the weaker it is. Power gets lodged in a few staffers since the boards find it hard to make up their minds.

The top staff officers and top financial executives of both PRSA and IABC left these groups at short notice.

It could be the American Society of Assn. Executives urges its members to get as much power and titles as possible, including president and CEO.

An ASAE spokesperson said the ASAE has no such policy and we believe it. What happened is that the weak elected officers of the two groups allowed staff to get this power. IABC has now removed the title of CEO from its top staff officer. PRSA has installed as president and COO a career PR professional after nearly 20 years of having the staff headed by a non-PR person.

Betsy Kovacs, who headed the PRSA staff for 13 years until the end of 1992, was succeeded by Ray Gaulke, a career advertising and publishing executive. Rea Smith was the last PRSA member and PR professional to head the staff.

Military PR junkets are much in the news these days because of the submarine Greeneville's blunder into an unsuspecting Japanese fishing vessel.

This disaster could put an end to such junketing. PRSA staff and leaders went on such a junket in 1997 (4/16/97 NL).

The tour was described by Dave Murray, a reporter for The Ragan Report.

Also on it were PRSA president Debra Miller and PRSA COO Ray Gaulke.

Others on the "Partners in PR Tour," which involved a tour of U.S. Air Force bases in Texas and Florida March 5-6, 1997, were Jane Cabot of M Booth & Assocs.; Cos Mallozzi, Gibbs & Soell; Kent McKamy; Ed Orgon; Brian Rafferty; Peter Rush, Sumner Rider; Stephen Sigmund of Robinson Lerer & Montgomery; Morris Silver; Idan Sims, and Hal Warner, 1993 PRSA president.

Air Force PA chief Ronald Sconyers (now with the Kids in a Drug-Free America foundation) helped conduct the tour. He said that public support of the AF was needed but that government rules prohibited normal PR practices. He told those invited to tell their friends "what the AF can do."

The group, some of whom were picked up in New York and flown to Texas, Florida and back, saw an F-15 show, a helicopter maneuver, and a performance by the AF band.

Sconyers said similar tours were scheduled for Fortune "100" CEOs, doctors and other influentials.

The AF guests paid $135 each to offset their expenses. The tour came just before the AF rolled out its first $71 million F-22 fighter jet.


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