H&K 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 weren't."

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.

Cathleen Johnson is the firm's executive VP for global tourism.

Damon 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 attracted him.

GREY ACQUIRES BOB COHN'S 360

Grey Global Group has acquired 360 Thinc in Atlanta, a move that was expected following their recent joint win of the $150M BellSouth ad account.

360, an integrated communications firm that counts Coca-Cola, Chick-fil-A and Southern Co. as clients, has been merged into GCI/Atlanta.

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.

C&W founder Bob Cohn, who joined 360 in 2000, becomes chairman of GCI/Atlanta. Former C&W vice chairman Jim Overstreet has been named SVP.

KILLEEN NAMES WOOD AS ETHICS CHAIR

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.

Kathryn 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 C&W.

O&M SETTLES DRUG CZAR OVERBILLING

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 division.

GRANT'S IS BEARISH ON IPG

Grant's Investor, 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 positions.

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.

IPG Spent $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 P&L statement.

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.

Burson-Marsteller 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 ON BONUSES

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 CommonHealth.

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 Bashe.

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.

Hesitant 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 within WPP.

TAKE A WALK IN REPORTER'S SHOES

Tyson Heyn, 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):

1. Pitch 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."

2. What 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."

3. Check 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."

Heyn started LACP as a virtual PR association last fall after he left Gateway, where he had been PR director. He joined Intuit in September.

SPECIAL ISSUE TO FEATURE BEAUTY PRODS.

People En Espanol's first-ever bi-lingual issue, Makeover: Body and Soul, is slated to hit newsstands in mid-July.

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 accessories.

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 the issue.

PLACEMENT TIPS

Business Week has expanded its personal finance coverage with a new weekly supplement, called "Investor," which replaces the long-running "Personal Business" section.

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 section.

The Wall Street Journal 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 and gadgets.

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, NY 10013.

Shapiro said the mail will be delivered to the appropriate editors. His e-mail address is: eben.shapiro @WSJ.com.

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 area.

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 Bronx.

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.

MEDIA BRIEFS

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."

(Media news continued on next page)

McDONELL NAMED SI's MANAGING EDITOR

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 Olympics.

SI executive editor David Bauer was promoted to deputy managing editor.

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 Sport magazine.

NEWSWEEK NAMES NEW FOREIGN EDITOR

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 of Spin.

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, N.J., bureaus.

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/ bloombergola/onlineapp.asp.

FORTUNE SMALL BIZ ADDS NEW COLUMNIST

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" section.

Jason Tanz has replaced Gajilan as editor of the "Part One" section. Previously, Tanz was a writer at Fortune, and Smart Money.

PEOPLE

Randal Stanley, 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, Tex.

Mark Vamos, 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.

Greg Mitchell, 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 as editor.

Patricia Kirk 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.

EX-REGAN PRO HANDLES PRIEST SCANDAL

The Archdiocese 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.

A Boston Globe "Spotlight Team" of investigative reporters has been detailing some of the gruesome developments of the case.

It reported that the Archdiocese, "under an extraordinary cloak of secrecy, privately settled claims against at least 70 priests during the past decade."

Four of them, including the defrocked John Geoghan, have been convicted of charges of criminal sex abuse.

The archdiocese, according to the Jan. 31 Globe, shelled out tons of 'hush money' to "avoid public scandal at whatever cost."

There are 650 active priests in the archdiocese.

The Globe could not reach Donna Morrissey, the archdiocese spokesperson and Regan veteran.

She also did not return this NL's calls about PR strategy, and whether the archdiocese plans to hire a PR firm for advice-as some have speculated.

Morrissey posted a Jan. 30 message on the archdiocese's website about how the Church is cooperating with law enforcement.

The archdiocese "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 Morrissey.

George Regan, via his assistant, said his firm does not represent the archdiocese.

Another 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.

He replied 'no comment' when asked whether his firm, RaskyBaerlein Group, is involved in the pedophile story.

Cardinal 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 measure.

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 the spots.

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."

Jan Lewin, 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.

The 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 the understandable.

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 of 2001.

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.

Christopher 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," he charged.

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.

Investors 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 message.
--Jack O'Dwyer