SAUDI ARABIA SPENDS $14.6M VIA QORVIS

Qorvis Communications received a staggering $14.6 million from Saudi Arabia during the six-month period ended Sept. 30 for producing ads and doing PR to "increase the awareness in the U.S. of the Kingdom's commitment to the war against terrorism and to peace in the Middle East."

That amount exceeds the previous record $14.2M that the Citizens for a Free Kuwait front group spent at Hill and Knowlton during a six-month period in 1990-91 to build support for the Persian Gulf War.

QC projects another $5.6 million in spending for the last three months of the year.

The firm also dealt with a Saudi front group called the Alliance for Peace & Justice, which is described in the PR firm's government filing as an American organization concerned about the Middle East process. It ran ads in the spring in support of the Saudi Middle East plan. The Alliance paid QC $679K that it received as a "bridge loan" from the Saudi Embassy in Washington. The Alliance receives its permanent funding from the Council of Saudi Chambers of Commerce and Industry's Committee for the Development of International Trade in Riyadh.

On the PR front, QC arranged interviews for Adel Al-Jubeir, the foreign affairs advisor to Crown Prince Abdullah, with media worthies such as Ted Koppel, Bill Plant, Paula Zahn, and Bill O'Reilly.

QC CEO Michael Petruzzello devised Abdullah's media strategy regarding his visit with President Bush at his Crawford, Tex., ranch. He also squired a delegation of House Government Reform Committee staffers to Saudi Arabia. That panel is probing the alleged kidnaping of Americans to the Kingdom.

QC, which is a Patton Boggs affiliate, also spent nearly $14K for media training at Weber Shandwick's Rowan & Blewitt unit.

CALIO JOINS CITIGROUP

President Bush's top assistant for legislative affairs Nicholas Calio has joined Citigroup in a senior VP post at the financial services giant responsible for global government affairs.

Citigroup CEO Sandy Weill praised Calio's intelligence, integrity and candor, in a statement, calling him an "exceptional advocate" for the company.

Calio co-founded O'Brien*Calio in 1993 with Democratic lobbyist Lawrence O'Brien, and was assistant to President George H.W. Bush for legislative affairs.

NASDAQ AND TORRENZANO SPLIT

The NASDAQ, which has been hit with a 73% decline in the value of stocks since March 2000 and whose chairman is resigning, has ended its relationship with The Torrenzano Group.

Bethany Sherman, senior VP-corporate communications, said a new firm has been picked from a field of three finalists and it will be announced shortly. Seven agencies were in the initial field for the account, which is below the $1 million mark.

She said Torrenzano's contract was up July 31.

Richard Torrenzano, chairman, said his firm worked for NASDAQ four and a half years. During most of this period, Frank Zarb was NASDAQ chairman/CEO. He is now in private business. His activities include chairman of the Lower Manhattan Development Corp.

NASDAQ announced last month that the current chairman/CEO, Hardwick Simmons, would resign sometime in 2003, the final year of his contract. He had succeeded Zarb in February 2001.

GC TAPS KISSINGER FOR CHP. 11 WORK

Henry Kissinger, who turned down the opportunity to head the panel to probe Sept. 11 because he did not want to reveal his corporate clients, is representing Global Crossing, according to court documents. The former Secretary of State had offered to provide client information to the families of 9/11 victims as a compromise to full disclosure. That however did not fly.

Kissinger McClarty Assocs., the Washington, D.C.-based affiliate of New York's Kissinger Assocs., is advising the bankrupt telecom company. That operation is headed by Thomas "Mack" McClarty, who was former chief of staff to President Clinton. It is seeking U.S. approval to sell assets to foreign investors. Federal approval is vital to GC's hopes of emerging from bankruptcy next year, since the company's reorganization plan presumes the successful sale of the telecom assets, reported the Dec. 23 Legal Times. KMA is to receive $30,000 a-month, and a $200K "success fee" if GC gets an okay from Uncle Sam.

Veteran healthcare PR exec Gil Bashe has joined Makovsky & Co. as EVP in charge of its healthcare practice. The former Medicus PR, Hill & Knowlton and CommonHealth Worldwide executive succeeds Donna Ramer, who is now an EVP at Lippe Taylor.

WESTERN UNION TAPS McGINN FOR CRISIS

Western Union, which has been fined $8 million for alleged violations of the USA Patriot Act, relies on strategic counsel from The McGinn Group. That's what Staci Busby, a spokesperson for WU parent company First Data Corp., told this NL.

The anti-terror law requires financial companies to improve the tracking of single-day cash transfers of $10,000 or more. A New York State Banking Dept. probe found that WU failed to report nearly 600 of those transactions since Jan. 2000, and more than 60 this year. WU settled without admitting wrongdoing.

WU has not issued a release on the settlement "because it's not something we like to talk about," said Busby. FD issued a statement for media inquiries saying that in a "routine examination by the State of New York Banking Department, certain transaction reporting deficiencies were identified in Western Union's compliance system." The company "has fully cooperated with the Banking Department staff in its examination. In addition, we have worked quickly and aggressively to address these deficiencies and assure they do not occur in the future." Those remarks are attributed to Mike Yerington, President of WU North America.

TMG is headed by Dan McGinn, founding partner of Ryan-McGinn, which was sold to Interpublic. The Arlington, Va.-based firm specializes in financial crisis, environmental contamination, employment disputes, class action litigation, and natural disasters.

WU is the first major financial company to be nailed by the Patriot Act, according to the Dec. 20 Wall Street Journal.

NESTLE SEEKS TO DROP 'SCROOGE' IMAGE

Nestle CEO Peter Brabeck blamed "hasty communications" and "misperceptions" for the PR debacle it created when the $60 billion-plus food giant demanded that financially strapped Ethiopia fork over $6 million for a Nestle coffee farm that in nationalized 27 years ago. Ethiopia claims it could only pay $1.6 million.

In his Dec. 23 statement, Brabeck said its London executives were "confronted by a surprise demonstration at its front door." The point of the Oxfam-coordinated demo, according to Brabeck, was to depict the financial demand as a "heartless act at a time when Ethiopia, a very poor country, is in a state of famine."

Brabeck said after much consideration the Switzerland-based company has decided it is "not interested in taking money from the country of Ethiopia when it is in such a desperate state of human need." The Swiss giant now says it will work with the Red Cross to help the 11 million famine-stricken Ethiopians.

Nestle made its initial demand for compensation because it believes "it's important for the long-term welfare of the people of Africa that their governments demonstrate a capacity to comply with international law."

For years, Nestle has been a target of a consumer boycott for its aggressive marketing of baby formula in developing countries.

BEERS STRESSES ADS OVER PR

The use of "paid media" is the best way for the State Dept. to promote U.S. "values" in the Middle East, propaganda czar Charlotte Beers said during her Dec. 18 National Press Club meeting. Beers believes ads extolling the lives of Muslims in the U.S. are the way to show that America is not anti-Islam.

Those ads feature Muslim teachers, scientists and bakers talking about the freedom they enjoy living here.

The former adwoman described the Middle East as a boiling cauldron of anti-Americanism, stirred up by U.S. support for Israel in its standoff with Palestinians, and the impending campaign to invade Iraq.

"The Israeli/Arab conflict is a personal one to many in the region," she said. "It's made more intimate and immediate by constant media coverage of maimed bodies, extreme stories, and real stories of violence and death of children," she said.

Against that backdrop, Beers believes it's hard to pitch Arab media pro-American stories. "America is perceived as the world's bully," said the under secretary for public diplomacy.

Six protestors stood up and starting chanting "You're selling war, but we're not buying," and "No more war," disrupting Beers' presentation.

As security personnel escorted the protestors from the room, Beers said: "I should point out to those young women that in Iraq they wouldn't have stood a chance of walking out freely."

Lebanon Nixes State Dept. Ads

The Government of Lebanon has rejected the State Dept. ads. Lebanon Information Minister Ghazi Aridi said his country won't air the commercials because "America's approval and backing of Israel's practices contradicts the values of human rights and freedom." Americans, he continued, "don't want to communicate, they don't accept others' opinions and anyone who opposes them is considered an enemy."

EPB SHUTS DOWN

Earle Palmer Brown, which opened in 1952, is no longer in business. The ad/PR firm has been closed down by its parent, Panoramic Communications, as financial problems led the agency company to sell or close operational units.

The closing came after KeySpan Corp., the energy company in Brooklyn that owns gas and electric utilities, moved its ad account from EPB to Cossette Post, part of Cossette Comms. Group. EPB had handled KeySpan for more than 20 years. Billings were estimated at $10 million by the New York Times.

Advertising Age ranked Panoramic as the #29 ad organization worldwide in 2001 with gross income of $86M and billings of $1.2B.

Jeb Brown, whose father founded EPB, had a small stake in Panoramic. He is vice chairman of Yesawich Pepperdine Brown & Russell, which had been an affiliate of Panoramic. YPB&R completed a buyback in November, which is when Brown joined the firm, according to Rod Caborn, senior VP of the Orlando-based PR firm.

PR FIRM USED TO PAY FOR POSITIVE STORIES

ICF Consulting, a Fairfax, Va.-based PR firm which handles PR for Pennsylvania's Department of Environmental Protection, was used to funnel about $500,000 in state money to Philadephia's flagship public radio station to pay for positive environmental reports.

The grant to WHYY-FM also provided for statewide distribution of the environmental reports to other public radio stations.

The fully funded reporting partnership between WHYY and GreenWorks, a nonprofit producer of positive reports about environmental protection, was revealed by Gwen Shaffer, a former reporter for the station, who was assigned to the GreenWorks PR project, in the November/December issue of Columbia Journalism Review.

After her article appeared, Bill Fantini resigned as news director of WHYY-FM.

A DEP spokesperson said it had awarded $510,000 to the GreenWorks PR project through its PR firm, confirming the figure reported by CJR.

According to Shaffer, GreenWorks not only paid for the reports but suggested what topics were to be covered by WHYY.

She said she was pressured to cover "positive stories of dubious merit" and learned the DEP was covering her and another staffer's paychecks.

Shaffer said she and the fulltime staffer, Brad Linder, were steered away from controversial environmental issues like oil drilling in Allegheny National Forest, and were asked to air positive pieces about small projects that had received DEP funding.

Although WHYY and GreenWorks insist that editorial control of the radio reports always resided at WHYY, Linder participated in story meetings with Tim Schlitzer, who is execuive director of GreenWorks and produced WHYY reports from material researched and reported by GreenWorks.

Linder worked collaboratively with counterparts at GreenWorks until last May, when Fantini says he cut off Schlitzer's access to the reporter.

Fantini, who developed the project, claims he was misled about the full extent of DEP's role and was unaware of the conflicts presented by it, but Schlitzer says all parties to the partnership were aware of DEP's funding role and the positive human-interest angle of the reporting.

WHYY has ended its deal with GreenWorks.

MEDIA BRIEFS

What's the value of a Winston Cup NASCAR sponsorship to the sponsor?

According to Joyce Julian & Assocs., a Nashville, Tenn.-based PR firm, this season's total exposure for 38 races came to $3.7 billion.

The firm calculates the exposure value based on how many times the sponsor is shown or mentioned on TV during a race.

For the second straight season, Budweiser, which sponsors the car of Dale Earnhardt Jr., got the most TV exposure ($166.4 million). Lowe's, which sponsors Jimmie Johnson's car, got the second-biggest return for its investment ($91M) and Home Depot, sponsor of champion Tony Stewart, was third ($83.7M).

Johnson & Johnson, New Brunswick, N.J., has hired Dr. Nancy Snyderman, a medical reporter who was suspended last April by ABC News for a week without pay after it was revealed she had done voice work for a radio commercial touting Tylenol, a pain killer sold by a J&J subsidiary.

Snyderman, who balanced a head-and-neck surgery practice with being a regular medical correspondent for ABC News, joins J&J as VP, medical affairs.

Dow Jones & Co. will have to defend a defamation action in Australia's Victoria State after the nation's high court unanimously rejected its appeal to have the case heard in the U.S.

Melbourne businessman Joseph Gutnick has alleged he was defamed in an Oct. 2000 article that appeared in New York-based Barron's magazine and was also made available on the publication's website.

The decision has potentially major ramifications for web publishing worldwide, said Dow Jones, which had argued that exposing web publishers to defamation actions in jurisdictions where the material was downloaded was unfair, and could restrict information being made online.

Danna Group and Magellan Media have agreed to create, produce and deliver client-driven long-form TV programs, commercials and corporate productions.

The agreement brings together Gregory Jacobs, founder of Magellan Media, of Costa Mesa, who specializes in sponsor-driven long format TV specials and series programming; Dan Zukowski of the Danna Group, in Huntington Beach, a 20-year veteran of the media and PR field, and Meredith Cruse, an independent producer.

Several TV specials are in development, each designed to help marketers reach specific audience demographics.

Daily paid circulation of The New York Sun averaged 17,994 in its first six months of publication, according to Seth Lipsky, the paper's president and editor. The audit was conducted by the Audit Bureau of Circulation.

AssignmentEditor.com, a Chicago-based web service for journalists, was acquired by MediaMap, based in Watertown, Mass., from founder and CEO Jim Lichtenstein, who started the site in 1999 after raising $1 million in private equity.

The site, which has more than 1,000 paid subscribers, provides links to online resources for journalists and was developing a site where news organizations could buy amateur videos.

(Media news continued on next page)

NADER MAKES FITNESS COVERAGE PITCH

Ralph Nader wrote to managing editors of 50 major newspapers with a pitch to beef up their fitness coverage. The consumer advocate would like to see more coverage of recreational and participatory sports.

"I'd have them cover local leagues, local issues dealing with playgrounds, whether it's softball leagues, tennis, all the things that go on," Nader said. 'Here in Washington, they play these pickup games over by the Washington Monument."

He said obesity, diabetes and other illnesses "could be reduced by a better-informed, active, healthier and more confident citizenry."

PR PRO ENJOYS MAKING TREND PITCHES

Susan Pepperdine, who has been owner and president of Pepperdine & Assocs., Kansas City, Mo., since 1992, said she has become a "behind the scenes" editor of The Kansas City Star.

She enjoys thinking up story ideas and then contacting editors and selling them on the idea. "You try to spot trends and talk to editors about those and find them people who can illustrate that trend," Pepperdine told a writer for the Star.

"Sometimes, it doesn't have anything to do with a client of mine," Pepperdine said. "It's gratifying to see if it makes it into print or on the air."

ATLANTA REPORTER SEEKS STORY TIPS

Jennifer Leslie, a general news reporter for 11 Alive News in Atlanta, said stories involving health, safety and finances remain hot news topics.

Although many ideas are e-mailed to her, she prefers to get information and tips by phone, especially when it is time-sensitive news.

If e-mail is used, follow it with a phone call to make sure she got it.

Leslie, who works from about 8:30 a.m. to 6:30 p.m., said she is easiest to reach during the morning.

"I would avoid calling after 4 p.m.-unless the call pertains to a story the reporter's working on for that day's newscasts," said Leslie.

Her phone number: 404/873-9129; e-mail: [email protected].

The station's website is at www.11alive.com.

PLACEMENT TIPS

GQ, a men's magazine, has contracted with Margaret Carlson to write nine profile articles next year about figures in the nation's capitol.

Carlson, who is giving up her "Public Eye" column in Time magazine, will continue to contribute articles to the magazine, where she has worked since January 1988 after being the managing editor at The New Republic.

She became a columnist in February 1994.

Her first article will appear in GQ's April issue.

EDITOR NAMED FOR NEW FASHION PAPER

Brandusa Niro was named editor-in-chief of The Daily, a new tabloid-size newspaper that 7th on Sixth will publish twice a year during the Mercedes Benz-sponsored fashion shows that are held in the spring in New York and Los Angeles.

The new paper, which will publish seven times during fashion week in New York and three times in Los Angeles, will replace Inside View, a glossy publication, as the official publication of Mercedes Benz Fashion Week. Inside View will become a section inside The Daily.

Niro, who also was given the title of director of fashion publications, will report to Fern Mallis, who is the executive director of New York-based 7th on Sixth, which produces the two shows for MB.

Niro, a former fashion publicist, is no longer connected with Fashion Wire Daily, a news service that she founded with financial backing from Revlon.

PEOPLE

David Friend was named head of business news at CNBC, in Fort Lee, N.J.

A.J. Baime, previously a senior editor at Maxim magazine, has joined Boston Magazine as executive editor.

Roy Johnson is leaving Vanguarde Media, where he was editorial director of Savoy, Honey and Heart & Soul, to rejoin Time Inc. as assistant managing editor of Sports Illustrated.

Ned Desmond was named executive editor of Time Inc. Interactive. Desmond, who is relocating to the Washington, D.C., area, will continue as president of Business 2.0.

Jane Marshall, who was features editor at The Houston Chronicle, was named food editor.

FOOD MAGS USE 'TRIBAL MARKETING'

The publishers of leading food magazines are tapping into the "tribal marketing" concept to bolster readership and sweeten ad deals, according to Ad Age.

The marketing concept, which was made popular by the annual gathering of Harley-Davidson motor- cyclists in Sturgis, S.D., is defined as the art of targeting like-minded consumers who spontaneously connect around a product or service, said AA.

Bon Appetit will introduce its first-ever Culinary Classic & Celebrity Chef Ski Race in Colorado in February, and hopes to "lure thousands of consumers" to culinary fairs in seven cities with ticket prices as high as $500 for some events.

Gourmet and Food & Wine are also targeting readers with high-end galas throughout the year, and Cooking Light is expanding its series of supper club dinners, which were held this year in New York, to San Francisco and Chicago.

IABC STAFFERS TAKE UNPAID LEAVES

The International Assn. of Business Communicators "just about broke even" for the year ended Sept. 30, 2002, but it required unpaid leaves by staffers and other "belt tightening."

This report was given to IABC members in the Eastern district by district chair Larry Kerpelman. He said membership was "down" but gave no figures.
Kerpelman, who is also a member of the national board of IABC, called the results "quite a turnaround from the approximately $700K deficit against budget of the last fiscal year."

Headquarters staff helped not only by tightly controlling expenses, but by "volunteering to take a leave without pay for a time, providing considerable savings to IABC on staff salary," he said.

Asked about those unpaid days for staff members, IABC said: "Everyone on staff had to sacrifice for IABC, for how long isn't the story."

The financial report for fiscal 2002 is not expected to be released to the membership until February of 2003. Last year's financial report was not audited. IABC h.q. would not provide any additional figures to this NL.

The group's travel budget was also "cut considerably," Kerpelman said.

IABC has redesigned its website, making it "easier to join" the group.

"Webinars," providing professional development, "have taken off this past year," said Kerpelman.
IABC will hold a leadership institute Feb. 20-22 in Las Vegas. The Eastern district (district 1) is making available a travel subsidy to each chapter to support attendance.

B&A CLEARED IN ETHICS PROBE

Grassroots firm Bonner & Assocs. has been cleared by a Maryland State Ethics Commission panel of charges it lobbied for client Pharmaceutical Research and Manufacturers of America using "deceptive tactics" and without registering with the state.

The Maryland Citizens Alliance, a non-profit group advocating universal healthcare, filed a seven-page complaint against B&A in March, charging the firm with registration violations and using "deceptive tactics in the guise of a consumer-based organization to do the bidding of the pharmaceutical industry.

B&A's grassroots campaign for PhRMA involved sending faxes, under the letterhead of the Michigan-based "Consumer Alliance," to community groups criticizing an MCA-backed bill aimed at reducing the cost of drugs for seniors and low-income residents. The faxes warned recipients that the legislation, which eventually did not pass, would limit freedom of choice for patients, making it harder for people to get the medicine they need. The "hotline" for the group connected to B&A's offices.

Jack Bonner did not return a call for comment.
His D.C. -based firm has done work for Boeing, Ford Motor, Merck, Procter & Gamble and Northrop Grumman, among others.

BRONX BOMBERS TO GROUND ZERO?

Veteran New York PR exec Phil Nourie has teamed with actor/activist Alec Baldwin on a plan to move Yankee Stadium from the Bronx to the World Trade Center site in Manhattan.

Nourie said in a statement provided by his firm that the plan "introduces an aspect of a concept that may be able to respond to the immediate and long-term needs" of New York.

Baldwin, who vowed to leave the U.S. if then-Gov. George W. Bush won the 2000 presidential election, told US News & World Report's Paul Bedard that every Yankee game could begin with a moment of silence and police and fire members could receive discounted tickets. The actor, a Long Island native, said he is trying to "stir the pot" as new proposals for the Ground Zero site are heard, saying other ideas don't mix commemorating 9/11 with boosting Manhattan's economy.

Nourie stressed the Stadium plan "is not about baseball; it's about building a public forum where anyone can come and reflect on 9/11." He said a stadium could also host concerts, art festivals and prayer conventions.

Nourie was at Ruder Finn, Citigate Dewe Roger son and Rubenstein Assocs. before starting Nourie PR.

BLJ GETS PACT FOR U.S./QATAR COMMERCE

New York PR firm Brown Lloyd James has won a $300K pact to promote economic and commercial ties between the U.S. and Qatar, a key Persian Gulf ally which sits over the third largest natural gas reserves in the world.

BLJ won the pitch for the U.S.-Qatar Business Council in part because of ties between EVP Mike Holtzman and the emirate's ruler, Hamad bin Khalifa Al Thani, who overthrew his father in a bloodless 1995 coup.

The Washington, D.C.-based Council was founded by Chevron, ExxonMobil, Occidental Petroleum, Phillips Petroleum and Qatar Petroleum.

The peninsular nation on the Gulf is home to Arab satellite news station Al-Jazeera and is the probable Central Command site for a war with Iraq. It is one of the few Arab nations with solid diplomatic ties to Israel, a relationship which has strained Qatar's own ties with neighbor Saudi Arabia.

Rahall Consulting Group has a $15K a-month deal with Qatar for PR and government relations.

Michael Henning, the former deputy chairman of Ernst & Young, and Errol Cook, an ex-Warburg Pincus & Co. partner, joined Omnicom Group's board of directors on Dec. 31.

CEO John Wren said the two were recruited because of their extensive accounting and financial backgrounds. Peter Foy, chairman of Whitehead Mann, is stepping down because of "other commitments." Omnicom's board has 11 members, including nine "independent" directors, Wren and non-executive chairman Bruce Crawford.

No less than three "corporate credibility" seminars involving PR/IR pros have popped up.

Panelists are scratching their heads, trying to find ways to win back public trust in corporations in the wake of Enron, Worldcom, etc. Investors, the largest single voting block at 100 million people, have lost $7 trillion since spring of 2002.

A Dec. 12 credibility seminar in Washington, D.C., by the National IR Institute and the Public Affairs Council, will be hard to beat. Panelists included 12 IR, PR, government, press, and institutional reps.

Best of all, a 38-page transcript of the dialog was sent to the press by PAC within a couple of days. The meeting was also webcast for NIRI and PAC members. The other two seminars are Jan. 14 at Fairleigh Dickinson University, hosted by 16 PR/IR groups, and Jan. 29 at Mercy College, New York, with business, legal, PR, accounting and other speakers (none of them journalists as yet).

Some of the most telling remarks at the Dec. 12 meeting came from the journalists.

Nell Minow, editor of thecorporatelibrary.com website, which tracks 1,800 companies and 20,000 directors (showing their other directorships and possible conflicts of interest), said that when "intelligent, capable, honorable people" sit around a boardroom table "their I.Q. points drop by 50% and their courage disappears entirely." She recounted some of the board-authorized policies of Worldcom.

Mike McNamee, D.C. reporter for Business Week, said many corporate executives are in a "cave" and won't come out for fear of being pummeled by the press for one reason or another.

Pat McGurn, with the Institutional Shareholder Services proxy service, agreed that most companies have been "silent" in the wake of the scandals: "There was this thought that if you stepped forward, you're going to get your head shot off. And that has led to this continuing lack of investor confidence." He noted investor confidence is at an all time low according to Gallup and continues to drop.

Doug Pinkham, president of PAC, said that if anyone "stands up to be counted...what will inevitably happen is a reporter will most likely dig into my company or my background and try to find something that will demonstrate contrast between what I've said and what the reality is..."

Minow said she doubted that the Sarbanes-Oxley Act would "make much of a difference" because "almost any structure can be subverted."

S-O, passed last summer in the wake of the corporate scandals, would give the Federal government a greater role in supervising companies (about half of which are based in Delaware, known for its lenient corporate rules).

The stockmarket, especially now that investors can reach each other via the web, will prove to be the real whip that will get boards into shape, she said.

Thecorporatelibrary.com is to rate boards like bonds, "from triple A to junk." Among boards to be rated are those of Omnicom and Interpublic.

Hank Boerner, who edits the monthly NIRI report to members, described the credit rating services, some of which were criticized for giving Enron a high rating even as its stock crashed. Amy Goodman, a lawyer at Gibson, Dunn and Crutcher, said a flaw with the services is that companies pay them $15,000 and up for ratings and the disclosure policies of some services are poor. "There's a concern it's almost like blackmail," she said.

A good part of the discussion was on boards of directors and who will serve on them now that they are under such close scrutiny. Margery Kraus of APCO Worldwide and Don Eagon of Diebold and chairman of NIRI, said some companies will find it hard to keep the directors they have. Some directors will say, "Boy, I don't need this," said Eagon.

Corporate panelists including Kraus mostly disliked the idea of more government intervention and said companies themselves must switch from just following rules to following the spirit of the rules.

The NIRI/PAC seminar was told that people don't serve on boards "for the money." However, board pay can be substantial. Omnicom in 2002 boosted base outside director pay from $24K a year to $60K (jump of 150%). OMC directors also get 250 shares of stock yearly, $2,000 for attending a meeting, $1,000 for a meeting via phone, and $2,000 for a special meeting via phone (total could be $100K). A new OMC director last year was Harvard Law School dean Robert Clark...we chuckled at the remark by Nell Minow, a specialist in covering corporate boards, who said I.Q.'s plummet and courage vanishes when someone sits on a board. How often have we seen this in the PR and IR fields?! IABC lost $1 million on an abortive web business and PRSA spent $1 million on computers. Both NIRI and PRSA have no deferred dues accounts although almost all associations do including those of doctors, lawyers, accountants and association execs. The PRSA board in 1999 voted a press boycott only to have the next board rescind it. A PRSA/Rockefeller credibility study in 1999 found "PR specialist" ranked 42 on a list of 44 public spokespeople. Institutions are afraid of their pasts because the press will dig into them, which has been made easier by the web...Eagon said boards are private, their actions done "behind very, very closed doors." But their actions or lack of them are only too evident.
--Jack O'Dwyer