Edition, May 14, 2003, Page 1
WASHINGTON MUTUAL LOOKING
Washington Mutual, Seattle,
the largest residential mortgage lender which entered the
New York market last year by buying Dime Savings, is shopping
for a New York firm for ongoing PR.
Sources said that the
bank has visited Burson-Marsteller, Edelman PR Worldwide,
Fleishman-Hillard and perhaps other firms.
Since acquiring the 125
offices of Dime, Wamu has added another 25 offices in the
New York area.
Derek Aney is VP of Northeast PR. Overall PR is headed by
Bill Ehrlich, executive VP.
Wamu in March named Jasculca/Terman
and Associates, Chicago, for PR in that market.
A Fortune magazine
article March 17 said the bank aims at "working class,
people of color, and immigrant communities." It has
WSJ'S GOLDSTEIN JOINS TIAA-CREF
Steven Goldstein, the former Wall
Street Journal spokesperson and Tucson high school
teacher, has joined TIAA-CREF as executive VP-PA, a new
He's in charge of marketing strategy, corporate PR and
advertising for the financial services company which manages
assets of more than $260 billion.
Goldstein joins after consulting McKinsey & Co. on
the restructuring of its PR group, and evaluating the global
reputation of the management consultant.
He was a VP at Dow Jones & Co., parent of the WSJ,
and prior to that a senior VP at the Insurance Information
Institute for eight years.
TIMBERLAND PICKS PNI
Timberland, which has used Edelman PR Worldwide and Cone,
has given Porter Novelli International its PR account.
Frank DiFulco, chief marketing officer at the Stratham,
N.H.-based footwear and apparel company, said PNI was hired
to help Timberland achieve the "commerce and justice
outcomes we seek as a brand and as a company."
The company enjoyed record first-quarter results as net
income rose 39 percent to $19.3 million on a 10 percent
rise in revenues to $137 million.
The January 20 Fortune rated Timberland as "one
of the best 100 companies to work for."
PNI's CauseWorks social responsibility unit will promote
Timberland's "Path of Service" program, in which
employees get paid to do community service.
RF QUITS COUNCIL OF PR FIRMS
Ruder Finn, the second largest independent PR firm with
$81 million in 2002 fees, has quit the Council of PR Firms
over the issue of the Council's decision on publishing a
ranking of PR firms this year.
The CPRF elected not to publish any rankings after seven
ad/PR holding companies said it would be too risky for their
hundreds of subsidiaries to reveal any non-GAAP (generally
accepted accounting principles) financial figures.
Peter Finn, co-CEO of RF, said he had discussed the issue
at length with Kathy Cripps, president of the Council, to
no avail. "It is clear the Council is not going to
change," he said.
The firm will no longer pay its $40,000 in yearly dues
to the group. This has also been an issue, Finn said, since
PR firms reporting three and four times as much fees as
RF have their CPRF dues capped at $50K. However, he said
RF would not have quit the Council over this issue.
Rich Jernstedt, CEO of Golin/Harris International and chair
of the Council, said the group was "very sorry"
to lose RF as a member. "We hope they will return,"
he said. Jernstedt said there have been no other member
loses over the ranking issue.
Dues are .065% of U.S. revenues to a maximum of $50K. Minimum
dues are $2,500. The Council had 126 firms at its peak and
now has about 103.
IPG POSTS $8.6M LOSS FOR
Interpublic posted an $8.6 million net loss for the first
quarter on revenue of $1.43 billion, citing weak demand
for services and rising costs like severance payments and
professional fees. IPG earned $59.8M for the same quarter
Chairman and CEO David Bell said IPG is a "work in
progress" and the company's balance sheet "has
been strengthened considerably."
Revenues were up one percent from a year earlier due to
higher foreign exchange rates. The company saw revenue fall
by 3.6% on a constant currency basis.
The company said its has pruned 1,400 staffers in the last
quarter and 3,600 since March 2002.
Marketing and communications services, which includes PR,
declined two percent to $338M, while advertising and media
fell 1.9 percent.
IPG also named pharmaceutical executive Christopher Coughlin
its first COO since January 2001. He takes the reins June
16. CFO Sean Orr will report to Coughlin, who had been an
EVP/CFO at Pharmacia.
Edition, May 14, 2003, Page 2
LAT RAPS F-H FOR POLITICAL
landed $20 million worth of contracts from the City of Los
Angeles in recent years as top executives donated $137,000
to city candidates and committees since 1998, according
to a front-page expose in the May 9 Los Angeles Times.
Doug Dowie, GM of F-H's
Los Angeles office who alone gave $7,000, told this NL there
is no "pay for play" involved and that all contracts
were put out to bid. "I'm fine with the story,"
he said, noting the Times reporter, Patrick McGreevy,
worked for him when Dowie was an editor at the Daily
News of Los Angeles.
The Times points
out that the city's Harbor Commission awarded F-H a $400K
deal a day after the firm paid $10,000 for its executives
to dine with Mayor James Hahn. A week later, the L.A. Airport
Dept. approved another contract with the firm for $500K.
The paper also notes Dowie's
close relationship with Hahn and that F-H has given jobs
to top City Hall aides and provided hundreds of thousands
of dollars' worth of image-building help to the mayor.
"We have a good relationship
with the city and the mayor," Dowie told O'Dwyer's.
Dowie said he could donate
twice as much but wouldn't get any contracts if the office
didn't have the talent. Dowie also said he spoke with Hahn
May 9 and the mayor expressed support.
The GM, who bills out
at $425 an hour, said he wished the Times played up the
firm's actual work for the city in keeping it together.
He said F-H had no plans to curtail or curb political contributions
to the city or mayor.
ANCHOR DOWN IN ANCHORAGE,
The Anchorage Economic Development Council has awarded
its $450,000 three-year contract to Development Counsellors
International, according to Kevin Pearson, a VP at AEDC.
"We reviewed the credentials of eight firms including
Hill & Knowlton, PRx and Fleishman-Hillard," he
said, but the decision to go with DCI was a "no-brainer."
"DCI is the only firm that specializes in economic
development, and I like its track record," explained
Pearson, who has been in the investment promotion business
for 17 years.
Pearson also is familiar with DCI'S April Mason, who will
head the AEDC account. He worked with her when she was at
the Kansas City Area Development Council. Pearson met three
hours with DCI executive VP Rob DeRocker and Mason.
DeRocker told this NL DCI will reposition Anchorage as
being in "the middle of nowhere" to "the
middle of everywhere." He said Anchorage is a good
place for companies in the "global logistics"
Anchorage, which has 270,000 people, is perfect for companies
marketing their wares in Europe, Asia and North America,
according to DeRocker, noting that Federal Express and United
Parcel Service have distribution hubs there.
JWI WINS $700K KUWAIT PACT
Jefferson Waterman International has a $700K contract to
buff the image of Kuwait in the U.S.
President/COO Sam Wyman, who was a Central Intelligence
Agency operations officer for more than 30 years, is to
arrange meetings of various Kuwaiti officials with news
organizations, think tanks and public affairs groups.
He also will keep Congress posted on developments in Kuwait.
JWI's contract is funded by the Kuwait Foundation for the
Advancement of Science and Fouad Alghanim & Sons Group.
KFAS, which is led by the Emir of Kuwait, was formed in
1976 to modernize the country and promote scientific development.
FASG is a leading engineering and real estate development
Wyman has worked and lived in Kuwait, Iraq, Saudi Arabia,
Egypt, Lebanon and Syria during his CIA career.
JWI CEO Charles Waterman also has an extensive CIA background.
He was National Intelligence Officer for the Middle East,
and vice chairman of the National Intelligence Council.
BOSTON ARCHDIOCESE SEEKS PR
Donna Morrissey has left her job as spokeswoman for the
Archdiocese of Boston.
The Rev. Christopher Coyne said the archdiocese is looking
for a senior person to take over communications and PR.
Coyne, a seminary professor who has been helping out as
a sometime spokesman for the archdiocese for the last 15
months, will serve until the archdiocese replaces Morrissey.
Morrissey, 34, who was hired by Bernard Cardinal Law as
part of the church's effort to improve its coverage by the
news media, left the archdiocese on April 28, a spokesman
told The Boston Globe.
S.H. SHUTS, SHIFT STARTS
Sterling Hager shut down after a 19-year run because CEO
Sterling Hager has decided to pursue interests outside the
PR arena, said Jim Joyal, who was president of the Watertown,
Mass.-based high-tech firm that had 60+ staffers at the
end of 2002.
Joyal is starting Shift Comms. with SH veterans Ed Weiler
(COO) and Todd Defren (managing director) along with nearly
37 other SH staffers.
The goal is to "re-invent" PR, and avoid playing
the "same old notes" associated with high-tech
communications. Said Joyal: "It's more than getting
your client's picture in a magazine. It's about getting
a placement in a publication that is read by a client's
SC, he said, will develop an array of e-marketing, newsletter,
sales generation, channel building, and white paper syndication
programming for clients.
SC is headquartered in Boston and uses SH offices in Washington,
D.C., and San Francisco.
It begins life with 40 former SH clients, including Tandberg,
mGen and Upshot.
Edition, May 14, 2003, Page 3
AUTHOR SAYS EMBARGOES
Nelson, author of the forthcoming "So Many Books, So
Little Time," said embargoes are used more and
more by book publicists because they can create hype for
books that would have gone unnoticed.
looking like a pretty good strategy right now," Nelson
writes in The New York Observer.
out embargoes were used on two current best-sellers: Queen
Noor's "Leap of Faith" and Trisha Meili's "I
Am the Central Park Jogger."
the reason no one has yet seen former Clinton staffer Sidney
Blumenthal's "The Clinton Wars," which is embargoed
until May 20 by Farrar, Straus & Giroux but currently
ranks first for nonfiction on Amazon.com, thanks to pre-orders,"
publicists get to demand that journalists sign confidentiality
agreements, and by picking and choosing who to offer that
option to, they can pretty much predict the type of coverage
they'll get, according to Nelson.
who refuses to sign gets 'punished': their articles and
reviews will arrive late," she said.
ENQUIRER TO EXCERPT
National Enquirer is running excerpts from Bill
Flanagan's new book, entitled "Dirty Rotten CEOs,"
in its May 14 issue.
who was a senior editor at Forbes for 17 years, has
also cut a paperback deal.
of rascals includes Gerard Levin of AOL Time Warner, Bernie
Ebbers of WorldCom, Sandy Weill of Citigroup, Tyco's Dennis
Kozlowski, Ken Lay of Enron, Adelphia's Rigas family, and
Gary Winnick of Global Crossing.
EGGE NAMED SENIOR HOME EDITOR
Sarah Egge was named
senior home editor of Country Home magazine,
replacing Carol Schalla,
who has moved to Midwest Living magazine.
Egge, who has been with Country Home's publisher Meredith
Corp. since 1996, was previously senior editor of interior
design at Better Homes & Gardens.
She was the recipient of the 2001 American Furniture Manufacturer's
Assn. Home Award for her coverage of furniture and the furniture
Country Home, which was started in 1979, is published
ten times per year. It has a ratebase of 1.2 million and
a readership of more than nine million, according to the
has replaced Greg Gutfeld
as editor-in-chief of Stuff magazine.
previously editor of Arena in London, was named to
succeed Hammer as executive editor of Maxim.
deputy publisher of The Weekly Standard, a political
magazine, is joining Qorvis Communications, in Washington,
is stepping down as editorial director of Primedia after
about 17 months.
who covered technology and wrote a weekly column for The
San Francisco Chronicle, has been dismissed.
CNN's financial editor, was honored by his alma mater Brooklyn
College during the annual Best of Brooklyn Dinner and Awards
Gala on May 13 at the Regent Wall Street. Kandel is a 1952
graduate of the school.
NEWSCASTERS SOUGHT AS DRUG
news people, including Aaron Brown of CNN and Walter Cronkite,
have been approached by drug makers and other healthcare
companies about appearing as hosts in videos.
The news-style segments, which profile healthcare companies
or their products, are shown on local public TV stations
between regular programs.
CNN's Brown has backed out of anchoring an infomercial
because he did not have "editorial oversight"
on the project.
Brown and Cronkite, the former CBS News anchor, were approached
to replace Morey Safer of CBS as host of a new series of
video "news breaks," which are produced by a Boca
Raton-based company called WJMK Inc.
According to WJMK documents obtained by The New York
Times, the drug companies pay WJMK about $15,000 in
connection with the segments and other services and are
allowed to edit and approve the videos, which are two to
The Times also disclosed that Healthology, a drug
marketing company, has been hiring journalists from local
TV and radio stations to appear in video webcasts.
The programs are available through the websites of many
newspapers, including The Los Angeles Times, The
Philadelphia Inquirer and The Miami Herald.
Drug makers pay for the webcasts, which feature the journalists
interviewing doctors and patients about their products.
For years, local news stations, as part of their newscasts,
have broadcast videos created by drug companies' PR firms-"a
practice that critics equate to publishing unedited press
releases," the Times said.
"Now, production companies are expanding that marketing
tactic to public TV and the web and using celebrity journalists
to add to the videos' credibility," the Times said.
news continued on next page)
Edition, May 14, 2003, Page 4
WHERE HAVE ALL THE JOURNALISTS
Publicist Greg Jarboe
said the reason it has become even harder to pitch stories
is because there are far fewer journalists to pitch
Media.com, which keeps track of U.S. media layoffs,
recently reported that some 70,000 jobs at media companies
have been lost since June 2000.
who is the Food & Wine Magazine's wine writer,
won the MFK Fisher Distinguished Writing Award in a contest
sponsored by The James Beard Foundation.
Jane Pauley wants
to start a women-oriented magazine after she leaves
NBC next month. Pauley, who is 52, said the magazine would
be aimed at women in her age group.
'SEARCH ENGINES' HELP WITH
Greg Jarboe and Jamie
O'Donnell, co-founders of SEO-PR, believe major search
engines, such as Google and Yahoo!, will revolutionize the
way PR pros get publicity for their clients.
The "old view of marketing" assumes communication
is a one-way street, they said in an article appearing on
With search engines, "many potential buyers are no
longer waiting passively to receive messages- 98% of which
are of little interest to them anyway," they said.
"Instead, they're using search engines to find the
2% that they're already interested in. If they find your
site during that search, they're already pre-disposed to
take action. It's revolutionary."
They point out that journalists are among the 99 million
adults in the U.S. who use search engines to find information.
Jarboe and O'Donnell, who have 40 years of combined experience
handling PR for tech companies and web companies, said the
best way for publicists to get search engines to include
their site is to follow Google's placement guidelines:
1. Think about the words users would type to find your
pages, and make sure your site actually includes those words
2. Create a useful, information-rich site and write pages
that clearly and accurately describe your content.
3. Try to use text instead of images to display important
names, content or links. The Google crawler does not recognize
text contained in images.
4. Make sure all the sites that should know about your
pages are aware your site is online.
5. Make pages for users, not for search engines. Don't
deceive your users, or present different content to search
engines than you display to users.
6. Don't participate in link schemes designed to increase
your site's ranking or PageRank.
DREZDON MEDIA STARTS NEWS/PR
Drezdon Media, the
New York-based publisher of Rhythm and News Magazine,
and producer of "On Stage with George Fletcher,"
a radio program, will offer a new syndicated news service
for music publications' editors and writers.
will provide a clearinghouse for articles, photos and press
Media can tap into the site for stories and photos for
use in their publications, as well as post editorial opportunities
and calls for interviews with specific artists.
PR firms will be able to distribute press releases, post
a showcase page featuring their artists/record label clients,
music, electronic press kits and contact information.
Beginning with its next issue, Rhythm and News will
be offered solely as a digital magazine, available as a
free subscription at www.rhythmandnews.com
for monthly download.
BizBash Event Style
special Republican Convention planning issue is currently
being distributed. The tabloid-size publication, called
"Welcome to New York," features a listing of more
than 1,000 hotels, restaurants and lounges and a directory
of 237 caterers.
Wal-Mart Stores has
stopped selling Maxim, Stuff and FHM
magazines after customers said their covers were
While Wal-Mart can account for up to 15% of all single
copy magazine sales, Stephen Colvin, president of Dennis
Publishing, which owns Maxim and Stuff, said
Wal-Mart accounts for less than 3% of newsstand sales for
The Spring 2003 Competitive
Media Index from the Newspaper
Assn. of America shows daily newspapers in the top
50 markets continue to reach nearly eight out of 10 adults
(79.9%) over the course of a week (5 weekdays plus a Sunday).
The CMI is an NAA analysis of market data from Scarborough
Research of New York for the period ending Sept. 2002.
An NAA analysis of the latest Audit Bureau of Circulations
data for the six-month period ending March 31, 2003 shows
roughly half the daily papers gained circulation. The average
daily circulation for the 814 papers reporting for comparable
periods was 49,966,190, a drop of 0.1% (from 50,022,875)
over the same period a year ago.
On Sunday, the trend for the 640 newspapers reporting for
comparable periods was the same, falling 0.1% to 54,318,384
circulation rose 1.8% while circulation for The
New York Times fell 5.3%.
BABY BOOMERS GET NEWS FROM
New research by Knowledge
Networks, Menlo Park, Calif., reveals that Baby Boomers
(39 to 57-year-olds) rely on traditional media-primarly
TV and newspapers-for financial news.
On a weekly basis, 41% turn to newspapers to learn about
money matters; 41% turn to TV; 28%, radio, and 27%, the
By contrast, 29% say they consult with family or friends
about money at least once a week.
Among those who get financial information from TV at least
once a week, roughly equal portions say they turn to all-news
channels (62%) and to broadcast network newscasts (60%).
In addition, as income and/or expected inheritance increase,
consumers are much more likely to get money news from all-business
On the Internet, Boomers are as likely to rely on ISP sites
(33%)-such as Yahoo.com
for financial news as all-news sites (35%).
Edition, May 14, 2003, Page 7
INCEPTA LOSES $57M; REVISES
Group, parent of Citigate Financial Intelligence, Citigate
Cunningham and Citigate Sard Verbinnen, announced last week
that it lost $57 million for fiscal 2002 ended February
28 as clients cut spending. David Wright, chairman of the
London-based firm, "has yet to see any sustained signs
revenues fell four percent or 12 percent on an "organic
basis." Incepta says its financial units were hurt
by the lack of merger and acquisition activity and the dearth
of public offerings. Despite a tough high-tech market, CC
remained profitable due to a "progressive tightening
of its cost base and a refocusing on its product offering."
pared 230 staffers from the payroll. They were mostly in
PR and specialist advertising groups. Incepta employed 2,150
people at yearend.
Sard Verbinnen Earn-out Terms
has put its acquisition program on hold because of the "difficult
economic background." It also revised "earn-out"
terms relating to the April 2000 acquisition of Sard Verbinnen.
The original deal called for two deferred payments based
upon performance for the three years ended Feb. 28, 2003
and the five years ended Feb. 28, 2005. The payments were
to be made in stock.
earn-outs have now been settled through the payment of $13
million in cash on March 31 and the issue of 60 million
in Incepta shares.
million of those shares were issued on March 31. The remainder
will be issued on April 1, 2005. Those shares are trading
at 13.25 pence.
OMC STOCKHOLDER HITS OPTIONS
Robert McCrie, New York,
holder of 3,936 shares of Omnicom, has submitted a proposal
that is in the current proxy statement saying that OMC should
"cease the issuance of stock options to all named executive
officers of the corporation."
He said, "depending
on the circumstances, such options, however, represent a
stupendous potential transfer of wealth from shareholders
to a few officers and employees without reasonable merit
OMC granted 2.9 million
options in 2001 alone for the five highest paid employees,
says the proposal.
Merrill Lynch analyst
Lauren Fine in August 2002 said in a report that the amount
of options OMC executives received is "staggering."
CEO John Wren got options on two million shares at $79.50
that would have been worth $160 million had OMC reached
the target price of $165 set in the $850 million zero-bonds
that were sold via Merrill Lynch.
OMC, following a story
in the June 12, 2002 Wall Street Journal on accounting
practices, dropped from the $80's to the mid-$30's. It has
since recovered to the $60's.
McCrie points out that
the options could be worth more than $100 million or "zero"
depending on the stock price. He feels "compensation
of the handful of top executives has grown disproportionately
to the earnings per share in recent years..."
Management is recommending
defeat of the proposal, saying it is "aware of recent
criticisms of options in some quarters" but that it
believes its issuance of options "has been done in
the best interests of shareholders."
MF&S DEFENDS SKYLINK UNIT
Murphy Frazer & Selfridge
is working to distance an aviation client, awarded a lucrative
contract last week to rebuild Iraq's airports, from a sister
company which was banned on two occasions from working for
the United Nations.
MF&S represents Skylink Air and Logistic Support, a
sister unit of Skylink Aviation, which was banned by the
U.N. in 1993 for safety violations following a series of
crashes and again in 1997 over allegations it manipulated
a contract bidding process.
Skylink vigorously denied
those charges and the U.N. later said it found flaws in
its reports on the company, but stopped short of awarding
millions in damages sought by Skylink, according to the
Washington Post, which uncovered the story.
Skylink A&LS, which
is based in D.C., won the 18-month pact worth up to $10.2
million from the U.S. Agency for International Development.
It is charged with operating Iraq's three major airports
in Baghdad, Basra and Mosul, and developing a passenger
and freight air complex.
LIVINGSTON GROUP HIRES HERO
The Livingston Group,
which is headed by former House Appropriations Committee
chairman Bob Livingston, has hired Mohammed Odeh al-Rehaief
as an associate.
The 33-year-old Rehaief
is the Iraqi lawyer who led U.S. Marines to Pfc. Jessica
Lynch who was captured after her supply convoy made a wrong
turn in Iraq. Rehaief and his family were granted asylum
in the U.S. on April 29.
Rehaief, who speaks broken English, has sold the rights
to his story to HarperCollins for $500K. That book will
be written with Jeff Coplon. He co-authored "Return
to Glory" with Capt. Scott Grady, the Air Force pilot
who was shot down over Bosnia in 1995. The working title
of Rehaief's book is "Rescue in Nasiriya: The Untold
Story of American P.O.W. Jessica Lynch's Harrowing Ordeal
and the Iraqi Who risked Everything to Save Her." Lynch's
doctors say she does not remember much from her capture.
LG represents Turkey,
the country that refused to be used as a staging ground
for U.S. and British troops.
HOLLAND GOES TO WEBER SHANDWICK
Jim Holland, a 20-year
Federal Reserve Board Bank vet and speechwriter for Alan
Greenspan, is now at Weber Shandwick/Chicago. He's a VP
in the financial services marketing practice, which is headed
by executive VP Dan Reid.
Holland handled PR, marketing
and PA duties at the Fed, and served on its Chicago exec
Edition, May 14, 2003, Page 8
The decision of Ruder Finn
to quit the Council of PR Firms is a major one for the PR
A reader commented
to the O'Dwyer website: "The Council is the
rankings and now that the larger firms cannot own up to
seeing a minus next to their carefully 'branded' names,
the Council is basically stalled and dead in the water until
things get better (if they do and the firms return)."
We couldn't have said it better. The
CPRF's aim was nothing less than control of the rankings
and control of the definition of PR.
Its definition of PR included lots besides communication
via editorial time and space. The boxcar numbers that the
biggies put out dwarfed the numbers of the smaller firms,
making them appear insignificant.
Supposedly the bigger firms had more "clout."
This is true in advertising where media-buying giants can
drive down prices via huge purchases. But it doesn't work
in PR where important placements must be done on a custom
Also, the ad agency
sister companies never gave much business to their new PR
siblings. PR has been the worst performing segment
of WPP, OMC & IPG. Ad
people regard PR people on the premises as a munitions factory
would regard a smoker.
problems include a threat by Moody's to cut IPG's
long-term credit rating to junk status because of less revenue
and more bills. Standard & Poor's has already cut IPG's
rating to junk. IPG is having a hard time cutting costs
because it still has to pay rent on much space after cutting
12,000 of its 62,000 employees. Layoffs in Europe are particularly
onerous because of high social costs.
We heard IPG CEO David
Bell deliver a 30-minute hard-sell talk to an analyst
teleconference May 8 on how much better things will be in
the future and how hard IPG is working on its problems.
But this is the same IPG that refuses to identify more than
Advertising hard sell that is short on facts is no longer
going to cut it with the newly freed analysts and the increasingly
tough credit rating services. IPG, which owns Weber Shandwick,
once billed as the largest PR firm, is also taking a long
time to sell its NFO unit.
Although former PRSA
COO Ray Gaulke once reported annual expenses of $49,000
on PRSA's income tax return, staffers now tell us
that expenses are no longer kept by individuals, whether
staff members or elected officers.
The expenses are sprinkled among dozens of activities of
PRSA such as conference, assembly, publications, etc.
However, CPAs say this practice shows a "lack of internal
controls" because auditors don't get to double check
whether the expenses are correctly allocated. Auditors as
well as members should know whether anyone is running up
big expenses, the CPAs said. Section 274 of the IRS code
says the people involved and purpose of any expense must
be recorded. This is "shoebox accounting," one
CPA said, adding: "Petty cash must be tracked."
It's time for a thorough
examination of PRSA's finances by outsiders.
PRSA has ignored the
Sarbanes-Oxley edict to have outsiders on its board while
the American Society of Assn. Execs. already has two such
directors. The best "internal controls"
would be senior members working at PRSA h.q. and observing.
Steven Lubetkin of
FleetBoston, the ranking financial person on the PRSA board,
has refused to discuss any PRSA financial topics with us.
Sobel & Co., PRSA's
new auditors, said in an e-mail to us that the American
Assn. of Advertising Agencies should be checked for its
policy on deferring dues. The 4As has a deferred payment
plan in which about two-thirds of members pay their dues
quarterly or semi-annually.
Some firms don't know what their billings are until 3-4
months after the start of the 4As fiscal year April 1 and
can't calculate dues owed, further delaying payment. The
4As is a bad example for Sobel and PRSA to cite.
There are plenty of
financial topics to investigate at PRSA including
the $165,954 in travel, hotels and meals suddenly assigned
to the Counselors' Academy in 1990 (vs. $19,175 the previous
year). Whose bills were those? The Academy denied any unusual
Why doesn't PRSA have
a CPA on staff as it promised it always would after
the departure of financial head Thomas Veeder in 1992 who
had a degree in fine arts?
Maybe a CPA won't work for PRSA. Why are no PRSA contracts
ever put out for bid via the PR trade press?
How could $1,072,435 be spent on computers in about six
Instead of moving
h.q. at huge cost, PRSA should invest in some mousetraps.
If the space is so bad, why would anyone sublease it at
$28 a sq. ft?.
PRSA leaders are against
making the June 20-21 "leaders rally" in New York
also serve as an Assembly. However, it will be called
if enough non-APR rank-and-file members contact h.q. or
Reed Byrum, president.
Should decoupling pass June 20-21, the Assembly Oct. 25
in New Orleans could be the first one in many years dominated
Presidents of chapters (half of them non-APR) and VPs can
appoint themselves as delegates under PRSA's bylaws.
Such individuals probably would not allow PRSA leaders
to divide the Assembly into a dozen "focus" groups
nor would they listen to seven hours of presentations by
They might actually
assemble and talk to each other about major problems facing
PR instead of obsessing over PRSA housekeeping details.