H&K LANDS $4M AFGHAN PR CONTRACT.

Hill & Knowlton has enlisted in the State Department’s PR efforts in Afghanistan, where the “war on terror” and “war on drugs” are colliding.

The WPP Group unit was selected from an RFP process begun in February as the State Dept. looked for a firm to lead a complex $3.8M PR effort targeting Afghan citizens and stakeholder groups to dissuade farmers from cultivating poppies and boosting the global drug trade.

Wendy Hutter, director of U.S. business development/marketing for H&K, said the firm had not yet been notified by the State Dept. and declined to comment.

Under the government’s “full and open competition” process, competing firms for the account are not divulged.

Poppy production has surged since the U.S.-led coalition in 2001 toppled the Taliban regime, which was averse to poppy growing. Last year, 86 percent of the world’s heroin came from Afghan poppies.

Based on the work outlined in the RFP, H&K is required to deploy communications efforts through seven Afghan provinces, in the Dari and Pashto languages, as well as to maintain three communications professionals with Afghan experience to build capability within the Ministry of Agriculture, Ministry of Interior, and Ministry of Counter-narcotics.

It also wants the firm to develop communications offices for each ministry, each with a trained and skilled Afghan staff of at least two people.

The Rendon Group has worked on anti-poppy PR for the U.S. government in Afghanistan in the past.

UTAH TARGETS TEEN DRINKING.

Utah is looking for a PR firm to develop a media campaign to cut underage drinking by half in the Beehive State.

The firm will alert parents/guardians about how alcohol consumption harms a teen’s developing brain and increases the chance of addiction later in life.

The Utah Dept. of Alcoholic Beverage Control Commission wants parents to move beyond the notion that drinking is a “rite of passage.”

The PR firm will encourage them to become more involved in their kids’ lives. That is a “powerful influence in a child’s decision to remain alcohol free,” according to the RFP (#NO6576).

The one-year budget is pegged at $1.4M. The contract may be extended on a year-to-year basis for four additional years.

The campaign is to begin by Aug. 25.

IPG LOSES ANOTHER $182M.

Interpublic CEO Michael Roth reported a first-quarter $182M net loss compared to $151M for the year earlier period. Revenues were flat at $1.3B.

IPG, according to Roth’s May 9 statement, “must build on top line momentum, as well as focus on addressing costs.” He warned that the bar on organic revenue will be high for the next two quarters due to clients lost in 2005. That makes organic revenue growth “challenging.”

Professional fees – mostly related to IPG’s restructuring – were up 21 percent to $91M. Roth expects a decline in those fees for the full year.

IPG’s stock trades at $9.93. The 52-week range is $13.40 and $9.08.

DOWIE SUIT DROPPED.

A U.S. District Court judge has tentatively dismissed a wrongful termination lawsuit filed by Doug Dowie, the former head of Fleishman-Hillard’s Los Angeles office.

Dowie claimed he was being scapegoated by F-H to cover up illegal payments made by the Omnicom unit to politicos.

Michael Faber, Dowie’s attorney, called the dismissal “bizarre.”

Dowie and John Stodder are waiting for a jury’s verdict on charges they bilked the Los Angeles Dept. of Water and Power of more than $300K.

CPA PROFS RAP PRSA’S FINANCIAL REPORT.

Three CPA professors, shown the 2005 audit of PRSA, dispute key parts of it, particularly PRSA’s policy of booking dues as cash rather than deferring the income over the next 12 months.

“The standards of accounting call for full, fair and adequate disclosure,” said professor Phil Wolitzer of Long Island University, adding: “I don’t particularly see it here.”

The CPAs, two of whom were quoted in a Feb. 9 Wall Street Journal article critical of Omnicom’s financial statements, said the income should be booked “ratably” over the course of the year.

Doing so would cut PRSA’s claimed “net assets” of $2,637,058 by at least $1.6 million to a little over $1M. Assets would thus be a comparatively small percentage of PRSA’s annual costs of $9.9M.

The other professors consulted were Edward Ketz of Penn State and Charles Mulford, Georgia Tech.

(continued on page 7)

F-H LANDS D.C. DISASTER PREP PACT.

Fleishman-Hillard has won a competitive pitch to develop a multiyear PR plan highlighting the National Capital Region’s preparedness for a disaster.

Funds for F-H’s contract (budget is about $100K) are drawn from a federal Dept. of Homeland Security grant, according to Brian Worthy, a public information officer for Fairfax County, Va., which issued the RFP on behalf of the region.

Eleven firms pitched, including BETAH Associates, Inc., Comunicad, Inc., CRT/tanaka, Leapfrog Solutions, Mind & Media, Inc., MRC3 Media, Ogilvy PR Worldwide, Terrorism Research Center Inc., Weber Shandwick, and Widmeyer Communications.

The Fairfax County Office of Public Affairs is overseeing the contract.

Worthy said F-H has been charged with developing a strategic communications plan for the NCR, which encompasses Washington, D.C., and surrounding areas in Virginia and Maryland.

F-H’s work involves development of the plan, not implementation.

The RFP was issued in January after federal and local institutions were lambasted for the Gulf Coast response to Hurricane Katrina. “It is clear from the pointed questions raised after Katrina that many members of the public and the media remain unaware of the NCR’s disaster preparations,” read that document.

KREIDER JOINS GORE’S TEAM.

Kalee Kreider, a former Fenton Communications senior VP, has joined Al Gore’s Nashville, Tenn.-based braintrust as communications chief.

She has significant environmental bona fides, earned from stints at Greenpeace and the National Environmental Trust.

At Fenton, Kreider did PR for Energy Future Coalition, Environmental Media Services, MoveOn.org, Win Without War and True Majority.

Kreider is to help Gore handle the media as his book, “An Inconvenient Truth,” about the dangers of global warming, is released this month.

She also could play a PR role if the former Vice President poses a challenge to Sen. Hillary Clinton for the Democratic nomination for president.

MCDONALD’S ORGANIZES MOMS.

McDonald’s has established a “global moms panel” to get input on lifestyle initiatives, restaurant communications and children’s well-being.

The nine-member group includes women from the U.S., U.K., Argentina, China, Germany and Italy.

The American contingent includes Bonnie Blair (Olympic speedskating champion), Michele Borba (author of “12 Simple Secrets Real Moms Know”), Kim Carter (librarian and Parent Teacher Assn. president) and Laura Lopez Cano (artist and recent fellow at the National Hispana Leadership Institute).

The panel works with Mary Dillon, McDonald’s global chief marketing officer.

JSH&A Public Relations, which was founded in ’89 by GolinHarris Communications’ veteran Jonni Hegenderfer, does PR for the moms program.

NATIONAL BYWAYS SEEKS PR ADVICE.

The National Scenic Byways Program, a federal government project encompassing 30,000 miles of scenic and “All-American” roads in the U.S., is seeking the help of a PR firm to develop a public awareness plan for its Duluth, Minn.-based operations center.

Under the Federal Highway Administration, the NSBP Resource Center promotes, plans and preserves the national network of historic and scenic byways. It has allocated a $125K budget to hire a firm for development of a three-year plan to “help bring public exposure and increased recognition to the ‘America’s Byways’ brand,” according to an RFP obtained by O’Dwyer’s.

The Byways program, which was created in 1991 and gained steam in the 1990s, includes roadways based on trails with archaeological, cultural, historical, natural and recreational features. The 518-mile Seaway Trail through New York and Pennsylvania from the St. Lawrence River to Lake Erie, San Juan Skyway (Colorado), and the Historic National Road, the first federally funded road in the U.S. (Maryland), are among the highlights on the Byways list.

Proposals are due June 6. Henry Hanka ([email protected]) is taking questions. Finalists will be offered a $2,500 traveling stipend to pitch in Minn.

EDELMAN VOUCHES FOR ASPARTAME.

Edelman is promoting the European Food Safety Authority report re-confirming the safety of low-calorie sweetener aspartame on behalf of Merisant, which markets aspartame-based Equal and NutraSweet.

The EFSA study followed a report by Italy’s Ramazzini Institute that linked aspartame consumption with an increased risk for leukemia and lymphoma. The EFSA determined that the Ramazzini investigation contained flaws that brought into question the validity of its findings.

A New York Times editorial (Feb. 21.) cited the Ramazzini report and recommended that readers concerned about the safety of aspartame try products sweetened with sucralose (Splenda). RF|Binder Partners handles Splenda, a product of Johnson & Johnson’s McNeil Nutritionals unit.

QORVIS TAKES SIDE IN IMMIGRANT DEBATE.

Qorvis Communications is representing the Agricultural Coalition for Immigration Reform on the immigration overhaul debate.

The firm is pitching Craig Regelbrugge, co-chair of ACIR, and his message that the U.S. requires a “steady supply of agricultural laborers to keep American agricultural products affordable for the American consumer.”

Regelbrugge also is senior director of government relations at the American Nursery & Landscaping Association.

The nursery and landscape industry employs 600K people during peak seasons. The ANLA has posted a tip sheet called “How do you respond when the Dept. of Homeland Security shows up at your farm, ranch or business?” Cooperate, but ask for identification is among those tips. The ACIR is a group of ranchers, businesses and farmers working to overhaul the H-2A temporary and seasonal alien agricultural worker program.

NEWSPAPER CIRCULATION DROPS.

The average daily circulation of more than 700 print newspapers tracked by the Newspaper Assn. of America saw an average 2.5 percent decline in readership for the six months ended March 31. That sag comes as more readers have turned to the web for news.

The San Francisco Chronicle and Los Angeles Times posted declines of 15.6 percent and 5.4 percent respectively, while USA Today and the New York Times rose slightly at 0.1 percent and 0.5 percent. The Washington Post took a 3.7 percent hit and the San Jose Mercury News, a McClatchy Co. paper on the block, dropped 7.7 percent.

AOL CUTS 1,300 WORKERS.

Time Warner’s AOL unit is cutting 1,300 employees and closing a call center in Jacksonville, Fla., in a bid to rebalance its work force.

AOL claims better online service has reduced the need for human contact by either phone or e-mail. It says eight million users a month use its online tools, while 5.5M people contact an AOL service rep.

The company has 18.6M subscribers, which is down from a 26.7M peak in ’02. That plunge is due to customers switching to broadband from dial-up.

AOL is also reducing staff in Utah and Tucson. The cutbacks represent seven percent of its workforce.

SMULYAN EYES EMMIS TAKEOVER.

Jeff Smulyan, CEO of Emmis Corp., has put together a $570 million buyout package for the radio broadcaster. The company plans to establish an independent panel of directors to consider the bid by Smulyan, who owns a 17 percent Emmis stake.

Indianapolis-based Emmis owns 25 radio stations in markets such as New York, Los Angeles, Chicago and Phoenix. The broadcaster is in the process of selling its TV station group, having lined up takers for 13 of its 16 stations.

Emmis' 2005 revenues were up 10 percent to $387M. Operating income tumbled to $39M from $73M due to a weaker radio ad environment and higher promotion/programming costs.

CJR TAKES ON WHITE HOUSE PR.

The Columbia Journalism Review says the White House “PR offensive” about the press not reporting “good news” coming out of Iraq is an “affront to those reporters who are risking life and limb to cover this story.”

In its May/June editorial, CJR says the fact that Iraq lacks the basic services for a civil society to function is news by any standard.

The President, when he talks about progress in Iraq, fails to mention that oil and electricity production and the availability of household fuel are lower than they were two years ago. The number of Iraqis killed by insurgents has tripled during that period. Nearly nine-in-ten Iraqis (87 percent) “want a concrete timeline for a U.S. withdrawal,” notes CJR.

The magazine concludes: “Indeed, let’s have all the context in Iraq.”

EGAN ‘STARS’ ON SIRIUS.

New York's Edward Cardinal Egan promises to make “exclusive” appearances on the Catholic Channel that Sirius Satellite Radio plans to launch in the fall.

The 24/7 operation will feature call-in shows in which viewers can comment upon Church policies and current events.

There will be programs offering religious guidance, sacred music as well as a daily mass from St. Patrick's Cathedral. Vatican Radio will get airtime on the CC.

The new station joins Sirius' other religious programs including FamilyNet, the broadcast arm of the North American Mission Board of the Southern Baptist Convention, which features Pat Robertson's "700 Club."

Sirius is the home of shock jock Howard Stern.

ROLLING STONE FETED FOR RENDON PIECE.

Rolling Stone notched an American Society of Magazine Editors award for reporting excellence for its “The Man Who Sold the War” piece written by former CIA official James Bamford that profiled John Rendon. The article ran Dec. 1.

The Rendon Group CEO heads the Pentagon’s “go-to” PR operation. It was hired by the military shortly after the Sept. 11 attacks.

RG “produced” the liberation of Kuwait City and kept the Iraqi National Congress “relevant” during the run-up to the second invasion of Iraq by U.S. forces.

The reporting category “honors the enterprise, exclusive reporting and intelligent analysis that a magazine exhibits in covering an event, a situation or a problem of contemporary interest and significance.”

Said ASME: “Reporter James Bamford delves deep into the crossfire of the war of information and imagery to expose the work of the most secretive– and effective – tacticians of the endless Iraqi conflict. ‘The Man Who Sold the War,’ a massive reporting effort that includes a rare interview with General John Rendon, provides a glimpse into covert trading of rumors and information in order to go to war.”

The ASME award ceremony was held May 9 at New York’s Lincoln Center. The awards are a partnership with Columbia Univ. Graduate School of Journalism.

YAHOO TELEMUNDO FORMED WITH MERGER.

Yahoo has merged its Spanish language operation with NBC Universal’s Telemundo Hispanic TV network to form the Yahoo Telemundo website. The revamped site replaces Yahoo! en Espanol and telemundo.com.

The deal provides Yahoo access to Telemundo’s original “telenovela,” news and sports programming, while Telemundo benefits from the tech prowess of the Internet powerhouse.

More than 11.5M Hispanics visited all Yahoo sites in March. Yahoo en Espanol attracted 500K-plus visitors.

Time Warner has purchased Liberty Media’s 50 percent stake in Court TV for $735 million. Court TV, which will generate ’06 revenues of nearly $300 million, will be merged into TW’s Turner Broadcasting System group.

(Media news continued on next page)

‘FORTRESS AMERICA’ HINDERS PD EFFORTS.

The General Accountability Office reports that fear of terrorism, shortage of Arabic speakers and assignment of public diplomacy officers to “temporary duty in Iraq” are hampering U.S. outreach to the Arabic world.

American embassies have been turned into fortresses as 80 percent of them rate a terror attack as either “critical or high.”

Erection of concrete barriers, restrictions on pagers/cellphones and requirements for armed escorts, however, have the “ancillary effect of sending the message that the U.S. is unapproachable and distrustful.”

For instance, the GAO reports that the U.S. Information Center in Pakistan averages one visitor a day because many past visitors were “humiliated by the embassy’s rigorous security procedures.”

Karen Hughes, the Undersecretary for PD and PA, wants to step up development of “American Corners” outside Embassy compounds, but one official described that plan as doing PD “on the cheap.”

The GAO found that the State Dept. falls well short of filling “language-designated” jobs. Nearly 40 percent of those posts in the Arab world are held by people not fluent in Arabic. An additional problem: few PD officials want to serve in the Muslim world. During State’s summer posting cycle, jobs in the Muslim states received 3.7 bids per-position compared to 8.9 bids for jobs elsewhere.

The GAO reports that the U.S. Arab-language magazine, Hi, had few readers. An official in the Cairo embassy said he distributed 2,500 copies of the magazine to newsstands. At least 2,000 were returned unsold.

Hi, which was supposed to create a positive image of the U.S. among Arab youth, has been put on a hiatus.

MWW TAPS EDITOR FOR ‘CONTENT’ UNIT.

MWW Group has tapped Baseline Magazine senior writer Larry Barrett as the first member of the firm’s “content creation team,” based in San Francisco.

MWW president Michael Kempner said Barrett will be focused on staying abreast of trends and breaking developments in business and technology to create content and counsel clients.

Prior to five years at Baseline, Barrett was senior editor and writer for CNET Networks in a five-year career. Earlier, he was a technology reporter for the San Jose Business Journal.

People____________

Laurie Luhn has been promoted to director of booking for FOX News Channel, overseeing the weekday and weekend editions of “Fox News Live” and managing booking units in New York, Washington and Los Angeles.

She had been director of booking for FNC's D.C. bureau and has been with the network since its inception in 1996, after starting a career in PR in Austin.

Douglas Harbrecht, executive editor of BusinessWeek Online, has joined The Kiplinger Organization in Washington, D.C., as new media editorial director. He will focus on content and design of Kiplinger.com, the portal which includes the Kiplinger’s Personal Finance and Business Forecasts websites.

Harbrecht had been with BusinessWeek since 1986, when he began as a Washington correspondent. He moved to the digital side in 1999 after serving as Washington News Editor.

Whoopi Goldberg is the latest entertainer to enter the radio arena. The actress has signed on to host a morning-drive radio show, “Wake Up with Whoopi,” for Clear Channel Communications starting July 31. The program will run from 5 to 9 a.m. nationwide on adult contemporary stations. CC noted that the morning daypart has struggled to pick up female listeners in recent years.

Anderson Cooper will do five reports for CBS News’ “60 Minutes” program beginning next TV season. CNN, in turn, will have the one-time rebroadcast rights to the program. Cooper will remain anchor of CNN’s “Anderson Cooper 360.”

Liz Anderson, who has ten years of Los Angeles TV news experience, has opened LizMedia in the City of Angels. She is calling her venture a "television-to-go" boutique production company that will round up the best talent in the city to get results. Prior to opening LM, Anderson was a senior producer for Medialink. More info is at www.lizmediainc.com.

Briefs_____________

The New York Times has expanded its “Automobiles” section online to follow the boost of its print edition. Exclusive content like car reviews, video features and a directory of car clubs are part of the update.

Rotating topics include “Motoring,” which includes consumer advice on buying, leasing, insurance and maintenance, “GreenTech,” environmental auto issues, “Wheelspin,” news for car enthusiasts, “Handlebars,” focusing on motorcycles and scooters, “Technology,” “Collecting,” and “Design.”

Poker Pro Magazine said it will launch a European edition in September to tap the burgeoning poker market overseas.

The publication will be sold at retail outlets like One-Stop Stores, Rippleglen, and Balfours, and will be available at casinos and cardrooms in English-speaking Europe.

The magazine’s publisher, Dan Jacobs, said it will hit newsstands with the largest circulation of all poker magazines in the U.K.

News Corp.’s MySpace.com site, which has more than 75 million registered users, will offer free downloads of Fox TV’s hit show, “24.”

Burger King is sponsoring the programming because a lot of its customers spend time on the social networking site, according to Gillian Smith, BK’s senior director of media. MySpace says future programming may not come exclusively from Fox, its sister company.

News Corp. paid $650M for MySpace last year.

Three accounting professors have analyzed PRSA’s financial reporting and come to many of the same conclusions that we have (page one).

PRSA’s reporting is not “full, fair and adequate disclosure,” says Phil Wolitzer of Long Island University, who also gives accounting classes to reporters for the New York Society of CPAs.

Dues should not be booked immediately but “ratably over the course of the year” as earned, says Professor Charles Mulford of Georgia Tech. He says this is “not a grey” area at all and PRSA has no option but to do it this way.

Mulford and Professor Edward Ketz of Penn State are the same CPAs who disagree with the way Omnicom accounted for the shift of 16 dot-coms to an off-balance sheet entity in 2001.

The Wall Street Journal thought that Omnicom should have deducted $89M from its first half earnings of $246M.

OMC is sticking to its guns, refusing to do so, citing lack of action from the SEC and approval from two CPA firms, Arthur Andersen and KPMG.

We don’t expect PRSA to mend its financial reporting ways either, unless it hears from enough members.

The $1 million in true assets that it has are a little more than one month’s costs, which are about $833,000 on $10M annually. This is very thin financial ice. By booking advance dues as cash, PRSA is running a sort of Ponzi scheme that depends on replenishment from renewing members.

The more candid IABC admits to deferred dues of $1.5M and admits its assets are -$715,854. PRSA, in the same manner, should “bite the bullet,” “face it,” “deal with it,” as the sayings go.

The worst news we got from the CPA profs is that audits simply don’t “reach down” into a lot of spending categories. Audits are a very poor way for members to learn what’s going on financially with their organizations, especially when the leaders refuse to make any comments or explanations.

If PRSA members knew that the loss on their annual conference is well over $1 million a year if staff time sheets were properly kept, they would no doubt demand changes. They might want to cut back on the conference, to which only 4% of members go (and at least half of these are forced to go since they’re in the Assembly, are speakers, or are on committees, etc.) and opt to get back their annual printed directory, which all 21,000 members used to receive. It’s spin of the worst sort to claim that the online directory is better than the printed one. The directory obviously was ditched because PRSA can’t afford the conference and the directory at the same time. Staff and leaders love the conference. The members don’t. There’s a lot of free-loading at the conference by leaders including the 17 directors who get all travel, hotels and meals paid plus free registration. More than 20 ex-presidents go free for life and don’t pay PRSA dues for life.

Prof. Ketz said PRSA is a “more leveraged organization” than is indicated. The Society signed a 13-year lease for 22,000 sq. ft. at 33 Maiden lane starting in Q2 of 2004 and owes rent of $5,859,234, having deferred payment of $422,701. Ketz feels this should be carried as “rent payable” rather than “deferred rent” to be “clearer.” PRSA, he said, should show the $5.8M remaining value of the lease on the asset side of the balance sheet and on the liability side as a lease obligation. It doesn’t change the equity balance but “it does reveal a more leveraged organization than is presented in management’s statements,” he said. Rent in 2004 at 33 Irving place was $241,000. It is $439,360 for 2006 to 2008 and jumps to $530,893 in 2009 and $549,200 for 2010 and thereafter.

Howard Blankman, former president of the Long Island chapter of PRSA and now retired in Florida, said it was the rank-and-file members of the chapter who revolted in 1989 and voted to leave PRSA, not the leaders. He said the members concluded they got little for $175 in national dues. “I believe the new group, which is focused on the concerns of the rank and file–as opposed to PRSA’s bureaucracy–is serving the needs of members much better than before,” he said...while PRSA had a 14- year gap between conferences in New York (1990 to 2004), many conferences and shows are in New York every year and some two and three times a year. The Javits Center gave us a list of 26 shows that use the Center yearly including FAME (fashion), meeting three times yearly; National Variety Merchandise Show, twice yearly; Int’l Gift Fair, twice yearly; Children’s Club (apparel), four times yearly; Int’l Beauty Show; Int’l Restaurant and Food Service Show; American Int’l Toy Fair, and Int’l Hotel/Motel and Restaurant show...by not having its “international conference” in New York, PRSA is leaving nearly $1M in revenues on the table each year which it can ill afford to do.

Some New York PR pros are disappointed that only five PR pros made the list of “The Influentials” in the May 15 New York mag: Howard Rubenstein; his son, Steven; Dan Klores and his senior EVP Sean Cassidy (who is said to be running the Klores firm day-to-day while Klores is “making films”), and Ken Sunshine, who has his own firm and whose main accomplishment is “keeping clients like Leo DiCaprio and Justin Timberlake out of trashy media.” The Rubensteins are practically family of the magazine because Rubenstein Assocs. represents former sister company, the New York Post. However, heads of the big New York PR firms and New York corporate PR depts. are almost invisible these days because they make few or no public appearances, give no speeches, write no papers. They keep a low profile unlike past figures like Kerryn King, Ed Block, Herb Rowland, Ed Stanton, Jonathan Rinehart, John Hill, Dave Drobis, Paul Alvarez, Bill Novelli, Jack Porter, Bob Dorf, Kal Druck, Burt Hochman, etc.

--Jack O'Dwyer