Edition, February 13, 2002, Page 1
PICKS UP $1M IN CEPHALON BUSINESS
Cephalon Inc. awarded $1 million worth of business (Gabitril
and Provigil) to Hill and Knowlton because Sheryl Williams,
senior director of product communications for the biopharmaceutical
house, got to work with and learned to respect the talent
of top H&K staffers when they were at other shops.
Williams worked with Paul McDade (H&K's executive managing
director/U.S. and Global Health and Pharmaceutical Practices)
when he was at Ruder Finn; Phil Sheldon (H&K's New York
general manager) when he was at Porter Novelli, and Kathy
Cripps, the healthcare veteran who just left H&K to
head the Council of PR Firms. "I never hire an agency.
I hire talent," Williams told this NL.
Provigil, which treats excessive daytime sleepiness due
to narcolepsy, had been at GCI Group. Williams said GCI
had the account for a year, but the team worked on Provigil
when it was at Makovsky. Though there was some staff shifts,
the Provigil team worked on it for a "long time and
were very close to it," said Williams. She added: "They
thought they were thinking 'out of the box,' but they really
H&K's Samina Bari is client relationship manager for
the Cephalon account.
CANCUN CHECKS IN AT
EDELMAN FOR $400K
Edelman PR Worldwide
has picked up the $400,000 Cancun Convention & Visitors
Bureau account in a competitive pitch that included Fleishman-Hillard.
VP Andrea Katsenes
(Edelman/Chicago) said she will oversee the business along
with fellow VP Jose Lima in Miami. The firm's Mexico City
office also will provide support.
Edelman will reach
out to travelers interested in romance, arts and culture,
golf/spa, business and eco-travel. The goal is to increase
the average stay by highlighting the destination's various
attractions (such as the Maya ruins). Cancun currently attracts
more than three million visitors a year (half of which are
Americans) lured mainly by its miles of white beaches and
22,000 "first-class" hotel rooms.
is the firm's executive VP for global tourism.
Thompson, who is outgoing U.S. Surgeon General David
Satcher's comms. director, joins Lipman Hearne/D.C. as VP
on Feb. 25. He says LH's strong position in nonprofit/education
GREY ACQUIRES BOB COHN'S
Grey Global Group
has acquired 360 Thinc in Atlanta, a move that was expected
following their recent joint win of the $150M BellSouth
360, an integrated communications firm that counts Coca-Cola,
Chick-fil-A and Southern Co. as clients, has been merged
The new entity
is headed by Ken Willis, who is GCI's top exec in the city.
The transaction, he said, will result in lots of crossover
work from traditional PR to marketing. The combined firm
claims PR billings in the $18 million range.
Bob Cohn, who joined 360 in 2000, becomes chairman of GCI/Atlanta.
Former C&W vice chairman Jim Overstreet has been named
KILLEEN NAMES WOOD AS
PR Society of America
president Joann Killeen has tapped Charles "Chuck"
Wood, PR director for the Omaha World-Herald Co., as chair
of its Board of Ethics and Professional Standards. Wood
succeeds Seattle counselor Bob Frause, who resigned the
post after six years as chair and five as a board member.
Wood joined the
Omaha World-Herald Co. in 1993 after 28 years in the Air
Force, departing as a lieutenant colonel.
St. John, the former CEO of Cohn & Wolfe/Washington,
has joined Smith & Harroff as a partner. "We knew
she was in play once Cohn & Wolfe decided to close its
Washington office," Jay Smith, S&H CEO, told this
NL, "and we pursued her with vigor." St. John's
healthcare expertise is especially attractive to S&H,
said Smith. She handled the Glaxo SmithKline account at
O&M SETTLES DRUG
Ogilvy & Mather
has agreed to pay the U.S. Government $1.8 million to settle
the civil suit alleging it overbilled the White House Office
of National Drug Control Policy, according to the Justice
Dept. The criminal case continues.
O&M North America
paid the government under the False Claims Act. It will
pay Uncle Sam nearly $700,000 in cash, and reduce charges
on the contract by $1.1 million to reflect the overbilling.
The deal represents
the government's "determination to recover funds inappropriately
billed on government contracts," said Robert McCallum,
assistant attorney general for the Justice Dept.'s civil
Edition, February 13, 2002, Page 2
GRANT'S IS BEARISH ON IPG
a sister publication of Grant's Interest Rate Observer,
has come up with a bearish report on Interpublic Group of
Cos. which recommends that investors maintain their short
Grant's Investor is available
only to subscribers at $1,500 a year but its reports are
sold individually for $150 (212/589-9000).
James Grant, the editor
of Grant's Interest Rate Observer, writes a column called,
"Yes, But" for Forbes magazine.
Grant's Investor, in
an exhaustive, eight-page analysis of IPG, says its per-share
earnings have not kept pace with its revenue growth; the
accounting for its pension-plan investment returns made
up a third of its year-to-year per share earnings gain in
2000; accounting for employee options and stock grants helped
boost EPS in 2000; operating margins before one-time charges
are slipping, and interest rate coverage is declining.
One of the most incendiary
charges is that IPG is making "large cash expenditures"
to buy its stock in the open market to cover the cost of
employee options and restricted stock.
Susan Watson, IPG director
of IR, is quoted as saying the share repurchases are made
to satisfy employee options and restricted stock ("restricted"
stock is typically given at no charge or a nominal charge
to employees and the only restriction is that the employee
must remain with the company for several years).
Grant's says the restricted
stock awards but not the employee options show up in the
profit and loss statement.
$600M to Buy Own Stock
It figures that of the
net $600 million spent from 1998 through September 2001
for share repurchases, a total of $480 million in cash,
or the equivalent of more than 20% of IPG's reported pre-charge
operating income for the period, was not reflected in the
It notes that interest coverage, as measured by earnings
before interest, taxes and depreciation (EBITDA), has "dramatically
deteriorated" from a five-year average of 11 times
at the end of 2000 to 4.5 times for recent months.
Grant's also feels cash
flow is not enough to cover current dividend payments and
the dividend payout "may be in jeopardy."
The report is dated Jan.
11 and has not had any noticeable impact on IPG's stock
price which has remained around $28 in recent weeks.
says it "amicably resolved" a breach of
contract suit it filed in 1998 against Bristol-Myers Squibb.
The firm claimed it was owed $363,830 by the client. Bristol
had paid B-M $1,040,576 of the $1,404,406 it was billed
for a global PR campaign for its drug Irbesartan, according
to the firm's complaint filed in N.Y. State Supreme Court.
Bristol execs could not be reached for comment.
BASHE SUED WPP AND H&K
Gil Bashe, who was named CEO of the CommonHealth unit
of WPP Group in November 1997 after serving as head of the
Healthcare unit of subsidiary Hill and Knowlton since 1994,
ended his connection with WPP Group on Dec. 31, 1999 after
disagreements with other executives at the unit.
He filed a lawsuit in New York State Supreme Court in
mid-2000, seeking $1 million+ in deferred bonuses and compensation.
Named in the suit were WPP; WPP Group USA; H&K, and
A settlement was reached after about a year and Bashe
said he is satisfied with it. There was no immediate comment
from WPP or H&K.
Bashe in December 1999 joined GTCR Golder Rauner, Chicago-based
equity firm, to create a new healthcare marketing network
in Metuchen, N.J.
GTCR was reportedly supplying $60 million to finance it.
The network was to provide prescription drug advertising;
medical education; direct-to-consumer ads, late-phase clinical
trial management; dot-com communications, PR and other marketing.
It was later named Health!Quest Global Communications.
Volume of $1 billion in five years had been predicted by
However, Health!Quest became defunct and Bashe in January
2002 became president and CEO of Catalyst Communications,
South Plainfield, N.J., a healthcare marketing firm.
At H&K, Bashe was paid a salary of nearly $300K and
also was eligible for short and long-term incentives.
He did elect to have part of his short-term bonus withheld
and invested in WPP stock.
About Joining CommonHealth
The suit indicates Bashe was hesitant about joining CommonHealth
because he was concerned that John Zweig, CEO of WPP's Branding
& Identity, Healthcare and Specialist Communications
businesses, would not be fully supportive of Bashe's leadership."
CommonHealth claimed billings of $1 billion+.
Under terms of a written agreement, he had an annual target
award of 50% of his base salary ($137K) for achieving individual
and company objectives and a maximum award of 75% of base
salary ($206K) for outstanding achievement of target levels.
The suit says Bashe performed "at a high level,"
garnering "positive media exposure" and winning
for CommonHealth "industry accolades that it had not
earned in 1997."
Both H&K and CommonHealth informed him in writing
he had met the conditions for receiving many of the bonuses
he was eligible for, the suit says.
However, around mid-1999, the suit alleges, Bashe told Zweig
that he was considering leaving because Zweig was "meddling
and interfering with Bashe's leadership of CommonHealth."
Although Zweig reaffirmed his promise to support Bashe,
the suit continues, Bashe was told on or about Aug. 31,
1999, while he was on vacation, that he was being removed
as CEO of CommonHealth. He opted not to accept another position
Edition, February 13, 2002, Page 3
TAKE A WALK IN
corporate communications director of Intuit Corp., Mountain
Side, Calif., offers some tips for building closer media
relationships in the February online newsletter of the League
of American Communications Professionals (www.lacp.com):
the exclusive--"Far too many communications pros live
under the myth that exclusives are bad because they'll tick
off rival publications. This myth is the exception rather
than the rule."
do they need?--"Simply take a virtual walk for a mile
in the reporter's shoes. Provide the 'angles' to them on
a bunch of news items not near-and-dear to your heart, and
you'll have a better chance to getting your key messages
picked up when you need the straight story."
in regularly--"Call reporters consistently, but sparingly:
once each calendar quarter should be fine. And when you
call, simply state that you are 'checking in' with them
on how you might be able to help."
LACP as a virtual PR association last fall after he left
Gateway, where he had been PR director. He joined Intuit
SPECIAL ISSUE TO FEATURE BEAUTY
People En Espanol's first-ever bi-lingual issue,
Makeover: Body and Soul, is slated to hit newsstands in
The special edition, which will chronicle Latin beauty
as seen through the eyes of Hispanic celebrities, will also
feature "the 100 Best Beauty Buys" in fragrance,
cosmetics and skin care products and tips on fashion and
The magazine will also have articles on health and fitness,
ranging from diets to yoga and meditation.
The special edition will be distributed in the magazine's
newsstand issues, which reach an estimated 400,000 readers,
plus an additional 100,000 Hispanic women, who will be selected
from the Time Inc. database.
Angelo Figueroa, who is managing editor of People en Espanol,
and fashion and beauty editor, Lucy Lara, are overseeing
has expanded its personal finance coverage with a
new weekly supplement, called "Investor," which
replaces the long-running "Personal Business"
The newly enhanced section will offer advice on a vast
array of reader's financial-management needs, according
to Stephen Smith, editor-in-chief. It will also include
the "Lifestyle" section that covers personal technology,
travel, cars, health, and other topics. Senior editor Jeffrey
Laderman and associate editor Amy Dunkin will oversee the
The Wall Street
will unveil a new section called "Personal Journal"
on April 9.
The new section-which will appear on Tuesdays, Wednesdays
and Thursdays-will deal with personal investing, travel,
health and other non-work issues, including automobiles
Until the staff is fully assembled, deputy editor Eben Shapiro
said PR pros should mail press materials to: Personal Journal,
The Wall Street Journal, 100 6th ave., New York,
Shapiro said the mail will be delivered to the appropriate
editors. His e-mail address is: eben.shapiro
Slate.com's New York
editor, Jodi Kantor, welcomes story pitches, particularly
short opinion pieces about arts and entertainment for the
"Culturebox" section, which she oversees.
Kantor is interested in getting story ideas that have
a new angle and a timely hook.
Some recent stories included a look at how E! might have
covered suspected treasonist John Walker Lindh's before
and after look; an article on World Trade Center architect
Minoru Yamasaki's connection with Osama bin Laden, and a
piece on a Canadian gay TV channel.
Stories run between 300 and 1,200 words.
Kantor wants to get only e-mail pitches at [email protected].
WCBS-TV, New York,
has established a new beat plan for covering the tri-state
Under the plan-devised by Joel Cheatwood, who is Channel
2's news director-the Bronx will be covered by Victoria
Mondesire, who just joined the station from News 12 The
Aimee Nuzzo and Jennifer McLogan will continue to cover
New Jersey and Long Island, respectively.
Paul Fleuranges was named Brooklyn and Staten Island reporter,
with Rose Walia reporting from Queens and Marcella Palmer
contributing to New Jersey coverage.
Vince DeMentri, David Diaz, Pablo Guzman, Marcia Kramer,
John Slattery, Lou Young and Peggy Crone, who are general
assignment reporters, will report from Manhattan and throughout
the tri-state area.
The New York Financial
Writers' Assn. is looking into the possibility of
holding a meeting to discuss the Enron debacle.
The suggestion for the meeting was made at the group's
annual meeting by a member, who said the discussion should
focus on how the press missed the Enron story.
NYFWA's new president Gene Smith, who is editor of Utility
Spotlight, said the "idea of an Enron forum is
certainly worth consideration, and the sooner, the better."
news continued on next page)
Edition, February 13, 2002, Page 4
McDONELL NAMED SI's MANAGING
Terry McDonell, 57, who is editor-in-chief of US Weekly,
was named managing editor of Sports Illustrated.
His appointment was announced by Time Inc. editor-in-chief
Norman Pearlstine and editorial director John Huey.
McDonell will succeed Bill Colson, who will step down-after
six years as SI's top editor-at the conclusion of the Winter
SI executive editor David Bauer was promoted to deputy
McDonell has been editor of several magazines during his
career, including Men's Journal, Sports Afield,
Esquire, Smart, Rolling Stone, Outside
and Rocky Mountain.
Bauer joined SI in 1987 after five years as editor of
NEWSWEEK NAMES NEW FOREIGN
Jeffrey Bartholet was named foreign editor of Newsweek.
Editor Mark Whitaker said Bartholet, who will be based
in New York, will oversee reporting, writing and analysis
of the magazine's international section.
Since joining Newsweek in 1989, he has been bureau chief
in Nairobi, Jerusalem and Tokyo.
SPIN MAGAZINE LOSES EDITOR
Alan Light, who has been editor-in-chief of Spin,
a music magazine, is leaving in March to start a new music
publication with John Rollins, who is a former publisher
Sia Michel, who is Spin's executive editor, was
named interim editor-in-chief.
MS. SEEKS EDITOR-IN-CHIEF
Ms. magazine wants to hire an editor-in-chief with
a "solid understanding and knowledge of feminism...who
can ably articulate her vision."
Katherine Spillar, executive VP of the Feminist Majority
Foundation, which now owns Ms., is handling resumes
for the position.
One of the new editor's first jobs will be to assemble
a new editorial staff in Los Angeles. None of the 22 editorial
staffers who had worked in the magazine's New York offices
wanted to relocate to Los Angeles.
The Foundation, whose offices are in Arlington, Va., hopes
to increase the magazine's circulation, now 150,000, and
offer readers more activist opportunities. The magazine
will continue to use many of the regular contributors.
BLOOMBERG NEEDS ENERGY REPORTERS
Bloomberg LP is looking to hire several reporters for
its U.S. bureaus.
Among the positions open is one for an energy news reporter/bureau
chief for the Houston bureau; two energy industry reporters
in Chicago to cover spot markets in oil, natural gas, refined
products and electricity, and one reporter in New York to
cover the energy markets, including the Energy Dept., the
EPA and Federal Energy Regulatory Commission.
Other openings exist for reporters to cover computer beats
for Bloomberg's San Francisco, Los Angeles, and Princeton,
Bloomberg is also hiring commodities reporters, including
one in the Washington, D.C., bureau to cover U.S. agriculture
policy, and one in the Chicago bureau to cover agricultural
markets in that area.
Interested candidates must apply through the Bloomberg
website at bloomberg.jobportals.com/
FORTUNE SMALL BIZ ADDS NEW
Ellyn Spragins was named an editor-at-large at Fortune
Small Business magazine.
Hank Gilman, editor of FSB, said Spragins will write the
column "Details," which is featured in the "Part
One" section, and also the "Ways and Means"
column in the "Money" section.
Spragins will continue to write a column for The New
York Times business section.
In other staff changes, Arlyn Gajilan was promoted to
senior editor where she will oversee the "Money"
Jason Tanz has replaced Gajilan as editor of the "Part
One" section. Previously, Tanz was a writer at Fortune,
and Smart Money.
previously news director at WGRZ, Buffalo, N.Y., was named
news director of WKYC, Cleveland, Oh., replacing Kathy Williams,
who left to become news director at KRIV-TV in Houston,
previously deputy editor, has replaced Marc
Frons as editor of SmartMoney.com.
Frons, who was founding editor and chief technology officer
of SmartMoney, went to AOL Time Warner as VP, programming
and products for AOL personal finance.
54, has become editor of Editor & Publisher magazine.
Mitchell, who is currently articles editor at E&P,
is replacing Bill Gloede, who left to join Cable World
was promoted to editor of Real
Estate Southern California, which is based in Los
Angeles. The magazine is published by Real Estate Media,
a New York-based publisher that also publishes Real Estate
Forum, Real Estate Chicago, Real Estate New
York and Real Estate New Jersey.
Kirk had been REM's west coast bureau chief for GlobeSt.com,
a commercial real estate news site.
Edition, February 13, 2002, Page 7
HANDLES PRIEST SCANDAL
of Boston is relying on an ex-Regan Communications Group
pro to counter the firestorm of controversy arising from
the child molestation claims and pedophile charges that
have been lodged against its priests.
Globe "Spotlight Team" of investigative reporters
has been detailing some of the gruesome developments of
that the Archdiocese, "under an extraordinary cloak
of secrecy, privately settled claims against at least 70
priests during the past decade."
them, including the defrocked John Geoghan, have been convicted
of charges of criminal sex abuse.
according to the Jan. 31 Globe, shelled out tons of 'hush
money' to "avoid public scandal at whatever cost."
650 active priests in the archdiocese.
could not reach Donna Morrissey, the archdiocese spokesperson
and Regan veteran.
did not return this NL's calls about PR strategy, and whether
the archdiocese plans to hire a PR firm for advice-as some
posted a Jan. 30 message on the archdiocese's website about
how the Church is cooperating with law enforcement.
"reported to the appropriate law enforcement authorities
within the Commonwealth the names of priests against whom
there have been allegations involving the sexual abuse of
children dating back over the past 40 years," said
via his assistant, said his firm does not represent the
top Boston counselor, Larry Rasky, told this NL he has worked
for the archdiocese for its Cartas Christi healthcare system
for a number of years.
'no comment' when asked whether his firm, RaskyBaerlein
Group, is involved in the pedophile story.
Bernard Law, who has apologized to the abuse victims, said
Feb. 10 that he would not resign over the scandal.
CUBAN GROUP TURNS TO GRIESINGER
The Citizens for Liberty in Cuba is using Washington,
D.C.-based Griesinger Assocs. to "promote policies
to aid in bringing democracy" to the island, according
to federal documents.
GA's Lino Piedra, who recently retired from DaimlerChrysler
after "33 wonderful years," said he is working
to raise the level of discourse on Cuba. "We want the
media to have a more balanced view," he added.
GA is not doing traditional lobbying on behalf of Citizens,
noted Piedra. It registered with the government as a precautionary
Otto Reich, who was sworn in as the State Dept.'s assistant
secretary for Western Hemisphere Affairs on Jan. 11, is
the former director of CLC.
Reich's nomination met with heated opposition from liberal
groups for the role he played in the State Dept.'s Office
of Public Diplomacy for Latin America and the Caribbean
during the Reagan Admin.
Various Congressional committees probed Reich's role in
the Iran/Contra affair. Reich served as U.S. Ambassador
to Venezuela (1986-1989) and headed the Brock Group's Latin
American practice until co-founding RMA International, consulting
firm, in 1997.
OGILVY PITCHES UPS IN CHINA
United Parcel Service, which has $30.6 billion in annual
revenues, has selected Ogilvy PR Worldwide to handle media
relations and issues management in China. Edelman PR Worldwide
had the account. Scott Kronick, Ogilvy's managing director
in Beijing, will supervise the business.
China has emerged as a key market for UPS especially in
light of that country's entry into the World Trade Organization.
UPS launched direct service between the U.S. and China last
April. It operates six-times-a-week service from Newark
and Ontario (Calif.) to Shanghai and Beijing.
UPS unveiled the biggest ad campaign in its 95-year history
during the broadcast of the opening ceremony of the Salt
Lake City Olympics. The $45 million drive carries the "What
can BROWN do for you" tagline. It makes the point that
UPS is more than delivering packages by highlighting the
company's logistics, freight forwarding, customs clearance,
technology and financial expertise. The Martin Agency created
NAID DEFENDS DOCUMENT SHREDDING
The National Assn. for Information Destruction, the trade
group for the "contract information destruction"
industry, is telling the press that most document shredding
is appropriate and "for the cause of good."
The group, which represents 250 companies who destroy
confidential information as a primary source of business,
is trying to counter reports of inappropriate shredding
at Arthur Andersen and Enron.
Executive director for NAID, Bob Johnson, said that reports
of shredding at the two companies does not change the fact
that "the proper destruction and disposal of documents
is a necessary and responsible business practice."
The trade group says destroying documents is important
to protect trade secrets and personal employee information.
NAID recommends, via its website, that a company adhere
to a regular schedule of destroying documents to avoid exhibiting
"suspicious disposal practices that could be negatively
construed in the event of litigation or audit."
managing director of Manning, Selvage & Lee/Atlanta
since 1995, who originally joined MS&L in 1984, is retiring.
Jim Tsokanos, previously a VP at Ketchum, succeeds her.
Edition, February 13, 2002, Page 8
Grant's Investor analysis of Interpublic's finances
is a Rosetta stone for the PR world, translating
the convoluted accounting of IPG into something approaching
PR pros need to know the finances of all their advertising
owners so they'll have a clue as to why the heads of their
PR firms are suddenly "retired" while in their
40's and why they may be next in line for the ax. The agencies
at the end of 2000 owned PR firms with fees of $3 billion
that employed 23,000 (19,000 at the top ten).
We're hoping Grant's will let us provide a web link to the
entire eight-page report but in the meantime it can be bought
for $150 (212/589-9000).
IPG's auditor is PricewaterhouseCoopers while its True North
acquisition used Arthur Andersen. Omnicom and WPP Group
both use Andersen (of Enron fame).
What Grant's has done,
which we don't see the analysts connected with investment
banks doing, is challenge the assertions of IPG execs.
IPG CFO Sean Orr has a chart showing IPG had $249 million
of "free cash flow" for the first nine months
But Grant's says that according to the usual definition
of free cash flow (cash from operations less capital spending)
IPG had a negative flow of $712M for the period or
a difference of nearly $1 billion. Orr argued that Grant's
was wrong and that there wasn't enough publicly available
information for Grant's to make its statement.
Such information needs to be knocked out of IPG along with
plenty of other data including exactly what is in the claims
of billions of dollars of "net new business" that
IPG (and OMC) regularly make and the identity of the 210
companies IPG acquired in 1998-2000. There were 30 more
purchases in 2001 (besides the acquisition of True North).
Tyco, a serial acquirer like IPG and OMC (Tyco spent $55
billion on acquisitions in five years) is taking plenty
of heat for not announcing about 700 of its acquisitions.
We don't know of similar pressure on IPG. Media are cautious
about writing about the six ad giants (the other three being
Bcom3, Publicis and Havas) that control 60% of all ads,
especially when the giants make it all too clear that they
don't want to be written about.
The information in
Grant's and analyst reports would help investors and PR
pros to understand companies and industries. But
access to it is often blocked in one way or another.
The National IR Institute sternly warns its members against
distributing analyst reports. They are said to be "proprietary"
and that distributing them could be cited as evidence of
a "conspiracy" between the company and the analyst.
Nonsense, we say. It can be argued that the reports are
"material" and subject to public disclosure. The
"fair use" argument might also be used (material
can be summarized for news or critical purposes).
A company could provide brief summaries of all the analyst
reports, thereby eliminating the argument that it is only
distributing the favorable ones.
NIRI, instead of waiting for the SEC and other bodies to
do something, could urge its members to do everything to
provide access to those reports.
The OMC website provides a list of 12 analysts covering
it and also their phone numbers. But the analysts are rarely
available to the casual caller.
IPG's website has no such list. The ad giant stingiest with
info is Grey Global Group. Its website provides no financial
info or links. It features articles on general subjects
from its Grey Matter house organ. Almost no one ever
writes about Grey, whose stock is kept in the $600's to
discourage casual investors.
Byron, columnist for the New York Post, slammed the
SEC and the Justice Dept. for failing to protect
the investor with regard to Enron. It is only after businesses
and lives have been wrecked that the "G-men at last
rouse themselves to action," he wrote Feb. 4. The SEC
mostly hits wrongdoers with "meaningless consent decrees,"
The SEC, Financial
Accounting Standards Board ("agonizingly slow,"
says former SEC chairman Arthur Levitt), plus government
bodies and "professional" groups such as NIRI
and the American Institute of CPAs, appear to be part of
the disclosure problem rather than part of the solution.
posting messages on the Yahoo! bulletin boards for OMC and
IPG worry about the huge amounts of intangibles being
carried on their books ($3.4 billion and $3 billion, respectively),
part of which must be written off this year under new accounting
rules. U.S. companies could be forced to write off $1 trillion
"causing losses of a magnitude never seen before,"
said the Times of London. Cash is not involved. Another
worry of bulletin board visitors is the constant selling
of stock by OMC and IPG insiders. In the past year, sales/proposed
sales by 34 OMC insiders totaled 631,000 shares worth about
$55 million while about 115 IPG insiders were selling or
trying to sell 2.1 million shares worth about $60 million.
OMC insiders purchased 21,750 shares and IPG insiders purchased
16,000 (not counting $17 million in IPG shares obtained
by True North CEO David Bell following the merger last June
and $1M+ in stock obtained by Brendan Ryan, CEO of the FCB
unit). "Do they know more than we do?" asked one