Edition, January 2, 2003, Page 1
SAUDI ARABIA SPENDS $14.6M
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
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
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
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
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
GC TAPS KISSINGER FOR CHP.
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
who is now an EVP at Lippe Taylor.
Edition, January 2, 2003, Page 2
WESTERN UNION TAPS McGINN
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'
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
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.
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,"
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
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."
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.
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.
Edition, January 2, 2003, Page 3
PR FIRM USED
TO PAY FOR POSITIVE STORIES
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.
to WHYY-FM also provided for statewide distribution of the
environmental reports to other public radio stations.
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
article appeared, Bill Fantini resigned as news director
A DEP spokesperson
said it had awarded $510,000 to the GreenWorks PR project
through its PR firm, confirming the figure reported by CJR.
to Shaffer, GreenWorks not only paid for the reports but
suggested what topics were to be covered by WHYY.
she was pressured to cover "positive stories of dubious
merit" and learned the DEP was covering her and another
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.
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.
collaboratively with counterparts at GreenWorks until last
May, when Fantini says he cut off Schlitzer's access to
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.
ended its deal with GreenWorks.
value of a Winston Cup NASCAR sponsorship to the sponsor?
to Joyce Julian & Assocs., a Nashville, Tenn.-based
PR firm, this season's total exposure for 38 races came
to $3.7 billion.
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, 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.
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.
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
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.
Group and Magellan Media have agreed to create, produce
and deliver client-driven long-form TV programs, commercials
and corporate productions.
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.
specials are in development, each designed to help marketers
reach specific audience demographics.
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.
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.
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.
news continued on next page)
Edition, January 2, 2003, Page 4
NADER MAKES FITNESS COVERAGE
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
PR PRO ENJOYS MAKING TREND
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
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
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.
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
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.
was named head of business news at CNBC, in Fort Lee, N.J.
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
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.
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
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
Edition, January 2, 2003, Page 7
IABC STAFFERS TAKE UNPAID
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
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
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,"
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
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
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
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
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
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.
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.
Edition, January 2, 2003, Page 8
No less than three "corporate
credibility" seminars involving PR/IR pros have popped
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
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
of the most telling remarks at the Dec. 12 meeting came
from the journalists.
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.
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.
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.
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
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,
is to rate boards like bonds, "from triple A to junk."
Among boards to be rated are those of Omnicom and Interpublic.
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,"
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,"
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.