DOWIE, STODDER FOUND GUILTY.

Doug Dowie, who headed Fleishman-Hillard’s Los Angeles office, and co-defendant John Stodder were found guilty by a federal jury on May 17 of bilking the city’s Dept. of Water and Power.

Dowie was convicted on 15 counts of conspiracy and fraud. Stodder was convicted on 12 charges. Each was convicted of a conspiracy count that is punishable by five years in prison. The remaining fraud counts could result in up to 20 years in jail per count. A sentencing date has not been set.

A juror said an examination of billing records and e-mails convinced it of the “existence of a criminal enterprise,” according to the Los Angeles Times. More than 1.2M e-mails were submitted as evidence.

F-H paid the city $6M last year to settle a lawsuit that alleged overbilling.

Richard Kline, F-H’s regional president and L.A. general manager, issued a statement in which the firm once again apologized to the people of L.A. for its “improper and indefensible bills.”

He noted the “numerous steps to avoid the possibility of something like this ever occurring again,” in the statement released in conjunction with Dowie/Stodder’s convictions.

EIN REPS MILBERG WEISS AMID INDICTMENT.

Milberg Weiss Bershad & Schulman, the prolific law firm handling class-action shareholder suits in the U.S., has turned to Washington, D.C.-based Ein Communications for PR help as the firm received federal indictments for racketeering, mail fraud, money laundering, conspiracy and obstruction of justice.

The firm is charged with funneling more than $11M in secret payments to three people who served as plaintiffs in more than 150 lawsuits.

Marina Ein, who represented Gary Condit through his 2001 troubles, delivered the news on May 16 that Milberg Weiss partners David Bershad, who joined the firm in 1968, and Steven Schulman (1986) have decided to take leaves of absence from the firm. Bershad was said to depart to “focus fully on other matters.”

The indictment, according to the May 19 New York Times is the “first instance of a law firm with national reach facing criminal charges, and it could prove to be a fatal blow to the firm.”

Melvyn Weiss, Milberg’s co-founder, said via a statement that the firm and employees are “outraged” at the 102-page indictment.

He called the firm the “champion of consumers and investors,” and is certain that it will be fully vindicated.

SITRICK, GRACE HILL AID ‘DAVINCI’ EFFORT.

Sony Pictures enlisted the help of two California PR firms with film industry experience ahead of the May 19 release of “The DaVinci Code,” which has been met with skepticism from the Catholic Church and some hostility from critics.

Sitrick & Co., a Los Angeles PR and crisis firm, has been working on positioning the film and fostering discussion in a behind-the-scenes role for the film, which is being distributed by Sony’s Columbia Pictures unit. Alan Mayer, managing director for Sitrick with experience in Hollywood issues, oversees the DaVinci work.

Also working on the film is Grace Hill Media, a Studio City-based firm specializing in PR targeting the religious community. Grace Hill is headed by Jonathan Bock, who got his start in Warner Bros.’ publicity department and played a role in Catholic outreach for the successful release of Walt Disney Pictures’ “The Chronicles of Narnia” and “The Exorcism of Emily Rose” last year.

GHM set up the DaVinci Dialogue website, www.thedavincidialogue.com, as an outlet for potential moviegoers to debate the film.

MWW ADDS SINDERSON.

Brian Sinderson, who had headed Edelman’s technology and business marketing groups in New York, has switched to MWW Group’s office in the city. At Edelman, Sinderson worked on General Electric, Canon, and Samsung.

Before Edelman, Sinderson worked at GolinHarris, a sister company to Interpublic-owned MWW. He led the Hewlett-Packard team from San Francisco.
MWW counts Sun Microsystems, Samsung, Nikon, Amazon.com and Deloitte & Touche as clients.

AD CONCENTRATION IS WORRISOME.

The concentration of ad buying power in the hands of a few giant conglomerates is a development that should cause concern, Jack O’Dwyer, editor-in-chief of this newsletter, told the Westchester/Fairfield chapter of PRSA and the Fairfield County PR Assn. May 17 in Greenwich.

O’Dwyer said the purchase of 21 of what were formerly the 25 biggest PR firms by the five conglomerates has had negative effects including the apparent slowing down of the growth of these firms.

They have also been banned from releasing annual fee income and employment totals, he noted.

(continued on page 7)

DHHS CONSIDERS OUTSOURCING PR.

The government agency responsible for evaluating the quality and delivery of healthcare in the U.S. has floated a proposal to consider outsourcing its communications apparatus.

The Agency for Healthcare Research and Quality, one of the 12 units that comprise the U.S. Dept. of Health and Human Services, has moved to collect proposals from PR firms that can handle its public affairs, publishing, research and web operations.

The plan, which would essentially have a firm replace the agency’s Office of Communications and Knowledge Transfer, would affect 32 full-time workers who would be offered “right of first refusal” to outsourced jobs for which they are qualified.

Jackie Carey, director of contracts management for AHRQ, declined to comment beyond what was outlined in the draft solicitation issued by the federal agency.

AHRQ, which operates on a $319M budget and is officially charged with “improving the quality, safety, efficiency, and effectiveness of healthcare for all Americans” was formerly known as the Agency for Health Care Policy and Research.

It has acted to consider outsourcing under Office of Management and Budget Guidelines, revised by the White House in May 2003. Those rules say “commercial activities” performed by government workers should be subject to competition when possible.

A 170-page outline of the work was issued May 12 under the public relations procurement code for federal contracts. AHRQ is seeking a lengthy proposal from a PR agency that can show its capacity to handle all of the work.

Part of that proposal includes two hypothetical scenarios: one to run a campaign urging consumers and pharmacists to check their medications for accuracy (based on a $650K budget over two years), and second to design a $2M integrated communications campaign to improve the health of Hispanics.

B-M BACKS L.A. OLYMPIC BID.

Burson-Marsteller is repping the Southern California Committee for the Olympic Games, which wants to bring the 2016 Games to Los Angeles.

SCCOG has sponsored a Harris Interactive survey that found solid support for the effort.

Nearly nine-in-ten (89 percent) of 978 adults polled in Los Angeles County back the effort, according to the poll results released on May 18.

Economic benefit (83 percent) was the No. 1 reason for supporting the bid. That was followed by city pride (75 percent). Sixty five percent of the respondents said they would attend at least one event.

L.A. Mayor Antonio Villaraigosa okays the SCCOG bid. He believes the city has the facilities and a good track record of hosting the Games. L.A. was the site of the 1932 and 1984 Games.

The U.S. Olympic Committee plans to select a candidate city by the summer of 2007. The International Olympic Committee will choose the venue for the 2016 Games in 2009.

B-M’s Evan Anziska and Emily Ingle are working on the SCCOG account.

DCI PULLS ATTACK SITE.

TCS Daily, an online journal owned by DCI Group in Washington, D.C., has pulled the plug on “Fast Talk Nation,” a website it launched May 12 to attack the film, “Fast Food Nation,” which hits theaters this fall.

The movie is based on the book written by Eric Schlosser. He believes fast-food chains contribute to America’s obesity and other problems. The book revolves around a hamburger chain called “Mickey’s.”

The Wall Street Journal reported that James Glassman, resident fellow at the American Enterprise Institute and host of the TCS site, pulled FTN after dismissing as “theories” Schlosser’s arguments against fast-food. Glassman also wrote that Schlosser wants to decriminalize marijuana. Schlosser told the Journal he supports lighter sentences for pot possession, but opposes legalization.

Glassman plans to coordinate his activities with the “Best Food Nation” group that has been forged by food industry trade groups.

TCS Daily is published by DCI’s Tech Central Station unit. It celebrates the “power of free markets, open societies and individual human ingenuity to raise living standards and improve lives.”

The site receives corporate support from the American Beverage Assn., ExxonMobil, Freddie Mac, General Motors, Gilead Sciences, McDonald’s, Merck and PhRMA. On the site, TCS says it is proud of its corporate sponsorship, but the “opinions expressed on these pages are solely those of the writers and not necessarily of any corporation or other organization.”

PN REPS FEMA TRAILER CONTRACTOR.

Porter Novelli’s Washington, D.C., office is counseling Gulf Stream Coach as the company, one of the Federal Emergency Management Agency’s top suppliers of trailer-homes, faces scrutiny amid a report raising health concerns about the temporary abodes.

The Sierra Club raised eyebrows last week with a report finding that the air in 29 out of 31 FEMA trailers it tested in Mississippi were found to contain unsafe levels of formaldehyde. The environmental group, which suggested the rush to build the trailers may have contributed to the elevated levels, said the industrial chemical is likely present from pressed wood products made with formaldehyde resins. In some cases, the levels were two and three times the limits set by the EPA.

PN issued a statement for Nappanee, Indiana-based Gulf Stream which said the company is not aware of any complaints from any customers, including from FEMA, over the years, and that it “goes the extra step to specify low formaldehyde emission building materials from our suppliers.”

FEMA awarded two contracts to Gulf Stream Coach for 50,000 white cavalier travel trailers in the fall of 2005, according to Taxpayers for Common Sense. The first contract, awarded on Sept. 2, was valued at $250M and included a mileage rate for delivery; the second contract, awarded Sept. 9th, is valued at $270M. Those awards drew criticism from larger competitors of Gulf Stream and Congressional Democrats – GS had donated heavily to Republicans – at the time as the contracts were issued under limited competition.

STENGEL TO TIME; KELLY UPPED.

Rick Stengel, 51, has been named managing editor of Time. He succeeds Jim Kelly who was promoted to the managing editor of Time Inc. slot.

Beside the magazine’s nearly 29 million readers, Stengel is responsible for its website that draws three million unique visitors a month.

Stengel had been running the National Constitution Center in Philadelphia. His Time history includes covering the ’88 and ’96 Presidential campaigns.

Stengel has written for The New Yorker, New Republic and New York Times. He was a senior advisor and chief speechwriter for Bill Bradley’s presidential bid. His appointment is effective June 15. Stengel will work with Kelly during the transition period.

Kelly’s corporate post calls for a focus on standards, practice and ethics for the more than 150 titles.

He will work closely with John Huey, Time Inc.’s editor-in-chief, on vetting controversial stories and recruiting outside talent.

Kelly, 52, has been at the magazine for 28 years.

Investigative duo cut

Time has dropped the investigative duo of Don Bartlett, 69, and Jim Steele, 63, as part of its cost-cutting move.

The pair worked at the Philadelphia Inquirer for 26 years and at the newsweekly for the last nine. Their book, “America: What Went Wrong,” was used as a prop by both Bill Clinton and Ross Perot during the ’92 Presidential campaign. It was a collection of their articles from the Inquirer.

Steele told the New York Times that they had a great run at Time, but “apparently the decision was made at the corporate level not to fund this kind of work.”

Time is part of Time Warner Inc, the world’s largest entertainment company.

O'BRIEN TO EDIT NYT’S SUNDAY BIZ SECTION.

Tim O'Brien, a business reporter at the New York Times, will now edit the paper’s Sunday Business section.

He takes over for Mark Stein, who was handling edit duties on an interim basis.

O'Brien has been in the news of late for his legal squabble with Donald Trump. The real estate developer claims he was defamed in O’Brien’s book, “TrumpNation: The Art of Being the Donald.”

O’Brien was a reporter for the Times’ “Business Day” section from '97 to 2000. He left to join Tina Brown’s ill-fated Talk Magazine, and returned to the Times in ’03. O’Brien was at the Wall Street Journal from ’92-’97.

HITCHING PORTALS LAUNCH PUBS.

Two popular online sites for dating and wedding planning are launching publications.

The Knot has moved its online magazine The Nest.com to the print realm, targeting young married couples in the “decision- and purchase-intensive period following the wedding.” Set for a July debut, initial distribution will be 400K select members of The Knot and The Nest.com.

Meanwhile, JDate, the top online player for Jewish dating matches, has kicked off an online-only magazine, JMag. The publication includes member-generated content, along with exclusive interviews of Jewish celebrities, advice columns, dating trends, travel and fashion.

JDate has 600,000 registered users.

NEW NETWORK TARGETS LATINOS IN S.W.

LAT TV, a Spanish language channel, has launched in five major southwest markets to highlight "culturally diverse programming" produced in the home countries of its Latino viewers.

The channel is airing in four Texas markets - Austin, Dallas/Ft. Worth, Houston, and San Antonio - and Phoenix.

LAT TV is based in Houston and carries news, entertainment, cooking shows, soap operas, and feature films. The channel said it has dedicated one and a half hours a day to local programming and information and has set a growth goal of 25 stations in the next two years, and 50 by 2011.

WIRED HOSTS GORE.

Wired Magazine is presenting a panel discussion on global warming featuring former Vice President Al Gore at New York’s Town Hall on May 25.

The event follows the premier of Gore’s movie, “An Inconvenient Truth,” in New York and Los Angeles on May 24.

At the Wired event, Gore will be joined by NASA scientist James Hansen and AIT producers Lawrence Bender and Laurie David.

The panel discussion will focus on “solutions, responsibilities and controversies that we must face now in order to make a difference,” according to Chris Anderson, editor-in-chief. Zeno Group is handling PR.

C.U. EYES FEMALES WITH NEW MAG.

Consumers Union, publisher of Consumer Reports, has launched a quarterly shopping magazine for women aimed to offer “objectivity in a sea of product hype.”

The new title, ShopSmart, is slated for an August 1 debut and targets 30-plus females and features products tested by the non-profit CU.

The magazine, which follows CU policy by not accepting advertising, retails for $4.99 and begins with a national distribution of 800K at outlets like Barnes & Noble, Wal-Mart and Safeway.

CU said the new title differs from Consumer Reports (circulation: 4.1 million) because it will offer the “best of the best” for shoppers.

Lisa Lee Freeman, who held senior posts at Consumer Reports, CosmoGirl!, Working Woman and Investor's Business Daily, has been tapped as editor.

Tony Snow, the White House press secretary and former Fox News Channel commentator, denies that Fox is the “official news station” of the White House. It is however the official news outlet for Vice President Dick Cheney, who requires TVs in hotel rooms be tuned to Rupert Murdoch’s station before he checks in.

(Media news continued on next page)

BW GRANTS ETHICS ‘EXCEPTION.’

BusinessWeek granted an “ethics exception” to reporter Roben Farzad who wrote about the amount of money that he invested and lost in Microsoft co-founder Paul Allen’s Charter Communications, the “worst stock in America.”

The McGraw-Hill unit’s policy “prohibits reporters from writing about companies in which they hold stock,” but Farzad was allowed to write about CC, which he feels sports the “fiscal soundness of a banana republic.”

Of his investment, Farzad wrote: “What I ended up getting was an absentee father of an owner; book-cooking; Royal Tenenbaums’ like dysfunction in the executive suite; and the kind of corporate governance that would get a company booted from Zimbabwe’s stock exchange.”

The nation’s No. 4 cable company “has turned into one of the ugliest U.S. companies still in solvency. Its $19.5 billion in debt dwarfs its market cap of $510M.”

Charter assured Farzad that it has ample liquidity and financial resources. A headshot of Farzad appears in the piece. “Loser” is branded on his forehead.

Charter lost $459M during the first-quarter on revenues of $1.3B. Its stock trades at $1.13.

A Charter spokesperson, who did not want to be identified, told O’Dwyer’s the company “probably will not respond to this personal attack because it does not want to give any validity to its claims.”

DELAHAYE GAUGES Q1 NEWS COVERAGE.

The overall tone of news coverage improved dramatically for the financial sector in the first quarter as reporters increased coverage of corporate advancement and continued economic growth, as opposed to negative, high-profile corporate wrongdoings, according to Delahaye.

The Bacon’s Information monitoring unit analyzes print and broadcast coverage for the top 100 countries, scoring reports based on positive or negative tone and classifying coverage in five categories.

Following that less-negative trend, Citigroup moved up six places to No. 6 in its ranking of companies benefitting from coverage, while Morgan Stanley ranked No. 5 and Goldman Sachs remained at No. 8.

Microsoft, Disney and IBM topped the PR research and monitoring company’s quarterly assessment of news coverage for Q1.

Disney benefitted from coverage of its Pixar acquisition and divestiture of ABC radio stations in the first quarter, while IBM picked up press with strong earnings.

Intel, propelled by reports of Apple’s use of its microprocessors in Macintosh computers, and Verizon rounded out the top five.

Hewlett-Packard advanced six spots to land at No. 7 based on media coverage of a new line of digital products. Delahaye noted Q1 was H-P’s highest score since the company emerged from the exit of CEO Carly Fiorina in early 2005.

The strong backlash against huge oil profits pushed ExxonMobil down two spots to No. 21, while General Motors and Ford suffered negative fiscal stories to land at 99 and 10, respectively.

People_____________

Eva Rodriguez, who supervised a team of political and legal reports in the New York Times’ Washington bureau, has been named D.C. bureau chief for BusinessWeek. She was formerly executive editor and editor-in-chief of the Legal Times, Justice Dept. reporter for the Wall Street Journal, and a staff writer for the Miami Herald.

David Geracioti, editor of Registered Rep magazine, which caters to retail investment professionals, rang the NASDAQ closing bell May 19.

Kevin Mowbray, VP of publishing for Lee Enterprises and publisher of The Times of Northwest Indiana, has been named publisher of the St. Louis Post-Dispatch, succeeding Terrance Egger. The Times has begun a search to replace Mowbray. VP Jim Hopson is filling in on an interim basis.

Russell Hampton Jr., executive VP of Disney Consumer Products’ home and infant business, was named president of Disney Publishing Worldwide following the resignation of Deborah Dugan last week. Hampton oversees Disney's various books and magazines worldwide and is based in New York.

Briefs_____________

National Lampoon has re-entered the book publishing arena with a venture expected to churn out 10 to 12 satirical titles a year beginning in July with "National Lampoon The Saddam Dump: Saddam Hussein's Trial Blog." Holtzbrinck Publishers distributes National Lampoon Press books.

HomeStretch Media, which created colored rubber bands bearing advertisements that are wrapped around home-delivered papers, said it is expanding its reach nationwide after completing a project for the Los Angeles Times and Disneyland.

Disney wrapped 300K lime-green “BandAds” around copies of the Times to mark the theme park's 50th anniversary.

Eric Corwin, president/CEO of HomeStretch, said people, especially children, were seen wearing the bands around their wrists after they were delivered with the Times. He said the company has reached agreements with the San Francisco Chronicle, Sacramento Bee, and the Los Angeles Newspaper Group. The Boston Globe and Lebanon (Pa.) Daily News are currently using the bands, he noted.

Howell Raines, who lost his New York Times executive editor post due to the Jayson Blair scandal, says he doesn't read the NYT every day anymore. He told forbes.com that he reads the Wall Street Journal, Financial Times and USA Today.

Raines, who has semi-retired to rural Pennsylvania to fly-fish and write books, says he has had offers to do columns from both the Los Angeles Times and Washington Post, but he is done with newspapering.

His latest book is "The One That Got Away: A Memoir."

“PR at the Precipice,” the title of last week’s panel hosted by the Westchester/Fairfield chapter of PRSA and the Fairfield County PR Assn., was a chance for us to take an overview of PR (page one).

It was also a chance for us to talk about Greenwich, where we have lived 27 years.

Greenwich is the town where Interpublic made its largest acquisition ever, the purchase of the research firm NFO in 2000. The company, which was more like a UFO for IPG, was based in Greenwich but most of the operation was in Toledo.

The price tag of $600 million including $175M of NFO debt was too much for IPG to swallow and it helped start IPG on the road to severe financial stress. IPG soon had to unload the company.

Greenwich is also the hometown of Longterm Capital, an over-extended hedge fund that nearly collapsed the U.S. financial markets. It had to be bailed out with billions by Wall Street firms.

Skyrocketing real estate prices in Greenwich and nearby towns are also a case of over-extension heading for a fall. The forthcoming scenario is told in detail by the May Harper’s cover story that has the headline, “The Coming Real Estate Collapse.”

Onetime $35,000 split ranches in Greenwich are regularly sold for up to $2 million, demolished and replaced with “McMansions” at $3.5M.

High interest rates are starting to demolish dreams with “for sale” signs already sprouting on the lawns of the brand new “McMansions.” Some builders are now putting up such houses “on spec,” meaning they, too, may be “out on a limb.”

Greenwich has gotten a “black PR eye” in recent years by barring non-residents from its beach, which actually belongs to the public up to the high water mark. It fought a lawsuit that attempted to open the beach to non-residents.

Good PR would have been letting anyone on the beach, on a first-come, first-serve basis, a couple of days a week. Maybe not too many outsiders would have shown up at all.

It occurred to us that one definition of PR is “the rich and powerful being nice when they don’t have to be.” Greenwich and other institutions can operate quite well regardless of what the public thinks.

We couldn’t help but note that Greenwich is also the hometown of John Wren, one of the most reclusive (and overpaid, according to Forbes) CEOs in the U.S.

Forbes calculated the six-year “annual total return” of OMC at minus two percent and gave Wren an “efficiency” rating of 89 out of 189 CEOs. (meaning he did not return too much for his pay). Wren rarely allows a press interview and this year the OMC annual meeting will be out-of-New York for the fourth year in a row (San Francisco). Two of Wren’s PR firms, Fleishman-Hillard and Ketchum, have caused a world of hurt to the PR industry this year and last year. F-H has apologized profusely and paid millions to offset any overcharges. We have yet to hear a peep from Wren.

Julia Hood, editor of PR Week/U.S., was supposed to be on the panel along with us and Phil Hall, recently named editor of PR News. We had a message for her that we’ll deliver here since she cancelled her scheduled appearance.

Haymarket, owner of PRW, made a bad deal when it decided to come over here in 1998 at the urging of John Beardsley and Ray Gaulke of PRSA. They wanted PR to have a weekly color magazine that “honors PR in the same way that Business Week and the Wall Street Journal honor business,” said a letter from Gaulke to PRSA’s advertisers. The letter said PRSA would “help them (PRW) meet our advertisers” and would “encourage our members to subscribe.” What Haymarket should have done is demand that PRSA stop publishing the monthly PR Tactics which has a circulation of 24,000. That circulation floods the market, stunting the growth of legitimate PR media (of which five have recently folded). PRW, after seven years, reported paid and requested circulation of 6,400 last Oct. 31, which is a small fraction of the 350,000 people in PR in the U.S., according to the Census Bureau. The 24,000 circulation of Tactics represents upwards of 24,000 places where PR pros feel satisfied they get all the PR news and how-to information that they need.

We couldn’t speak in Greenwich without mentioning just about the worst PR story we ever covered, the separation of one of PR’s best known and liveliest leaders from all her friends for the last five years of her life. We refer to the sad last years of the former Denora Prager, who became known to the PR world as Denny Griswold, founder of PR News. She couldn’t attend a lunch in her honor on Oct. 12, 1995, and receive an engraved silver plate, because there were reports she had broken her hip. She was admitted to a nursing home in Fairfield County and no PR person ever saw her again. A groundskeeper who slipped by the front desk found her alert but saddened because she felt everyone had deserted her. Telephone calls to her, visits, packages (including several attempts to deliver the silver tray) were blocked. She died at the age of 92 on Feb. 8, 2001, feeling abandoned when she hadn’t been. Because of the tragic details of her last years, we urged (futilely) that a PR group campaign for secure mailboxes for people in nursing homes, their own cell phones, and hearing aids as needed. Denny was found to be without her hearing aid. Such aids are available from Haverford for as little as $45. The story of Griswold needs following up because about 50 years of priceless PR memorabilia have never surfaced. Denny, who had no children, was thinking of making a gift of her townhouse on E. 80th St. to PRSA when she fell from view. The story was ignored by media in Fairfield County, where Denny owned an 18-acre estate. Major stories ran in the New York Post (“Woman in the Iron Mask”) and New York Times.

--Jack O'Dwyer