ARMY CORPS ISSUES $5M PR RFP FOR N.O.

An RFP for PR and public affairs support for the Army Corps of Engineers in New Orleans could span five years and be worth up to $5M, according to procurement documents released on June 21.

The resulting PR contract would include a base year and four year-long options—all worth up to $1M each—to support the New Orleans District public affairs office and other regional entities of the Army Corps.

The RFP outlines a four-person public affairs team, including two senior specialists and two junior-level staffers, to support the PAO office.

The office covers Army Corps public affairs in New Orleans, the Mississippi Valley Division’s Task Force Hope, an ACE entity set up to support Federal Emergency Management efforts post-Hurricane Katrina, and the Hurricane Protection Office, which is governing long-term efforts for flood protection in the region.

Those entities are all working in some form to reduce the hurricane and flood risk in southeastern Louisiana, which faced hurricane-induced devastation exacerbated by the failure of an Army Corps-engineered levee system in New Orleans.

A PR firm hired by the ACE is expected to work behind the scenes, as government personnel only would act as public and media spokespersons for the federal entities.

The work spans media relations strategy, press materials, talking points and strategic planning to events support and speech writing.

Proposals are due July 19. The RFP is available via the FedBizOpps online procurement system.

GALBRAITH SUCCEEDS SINCLAIR.

Jeremy Galbraith, who headed Burson-Marsteller’s Belgium practice, has assumed the head of European operations as Heidi Sinclair plans to exit to handle PR for the Bill and Melinda Gates Foundation.

The 49-year-old Madrid-based Sinclair had headed Europe since 2005.

She also served as head of Burson/Los Angeles (`94-`96), VP-corporate communications at Borland, VP-corporate communications at Lotus Development, senior VP-advanced technology at Hill & Knowlton and executive VP at Ketchum.

Sinclair began her PR career at Regis McKenna’s tech shop.

Galbraith, 40, had been running Belgium for seven years. He will remain in Brussels. Sinclair will depart for Seattle in September.

CRANBERRY ACCOUNT IS LOOSE.

The Cranberry Marketing Committee has put its $400K domestic PR and promotion account up for review. Publicis Consultants (Seattle) is the incumbent.

Janice Barton, marketing director of CMC, wants to play up the anti-oxidant, bacteria-fighting, heart healthy, and potential cancer inhibiting aspects of cranberries.

The cranberry budget depends on the harvest.

Proposals are due July 10. Finalists will be invited to interview CMC officials in Plymouth, Mass. Barton has details (716/655-1602; [email protected]).

LOU HAMMOND ROLLS DICE.

Lou Hammond & Associates has picked up the MGM Grand at Foxwoods hotel/casino account in a competition that included travel/lifestyle shops such as M Booth & Assocs.

The MGM property is the centerpiece of a $700M development project that will open next spring.

Hammond also hit the jackpot by adding Foxwoods Resorts Casino, which was handled by Dan Klores Communications, to its client roster. Connecticut-based Foxwoods is the largest casino in the world.

Doug Dowie remains a free man as a U.S. Appeals Court ruled he can stay out of jail as his case is appealed.

The former Fleishman-Hillard Los Angeles executive was convicted of bilking the city’s Dept. of Water and Power.

NYS DISCIPLINE OFFICE PROBES PRSA CFO.

The Office of Professional Discipline of the New York State Education Department is examining evidence that Philip T. Bonaventura, named CFO of PRSA on June 19, may have improperly used the term CPA in connection with his announcement.

He is not currently a registered CPA and only those who have registered, paid the $245 fee, and taken at least 24 hours of formal education each year, can use that term in public.

The American Institute of CPAs and the New York State Society of CPAs both say he is not currently a

(Continued on page 7)

APCO, CASSIDY COMPLAIN ABOUT ‘LIES.’

APCO Worldwide and Cassidy & Assocs., targets of a “sting operation” conducted by Harper’s Ken Silverstein, question the journalistic ethics of the magazine for publishing a piece by a writer pretending to be a lobbyist seeking help for Turkmenistan, one of central Asia’s most repressive countries.

B.J. Cooper, deputy managing director of APCO, told O’Dwyer’s the article is the “most unethical reportorial project that he has ever seen.” The D.C. firm was “lied to” by Silverstein and the information published was “taken out of context,” according to the APCO exec. He charges that Silverstein began with the premise that PR firms are bad and crafted his piece to back that belief up.

Cooper complained that Silverstein presented APCO executives with phony business cards, phone number, address and website.

He stressed that Silverstein’s phony lobbyist had a “first meeting,” in which both sides are supposed to feel each other out. It takes “weeks and even months” before APCO agrees to work with a client.

Cooper also said that APCO was not directly asked to represent the Government of Turkmenistan, but a “group of investors” that wanted to improve its image.

He said APCO wanted to sign a confidentiality agreement with Silverstein’s make-believe Maldon Group, but was told by the writer that discretion must be maintained.

The Harper’s piece reports that Barry Schumacher, APCO’s senior VP, said he understood Silverstein’s reluctance to sign a confidentiality pact. “It is not unusual to us,” he reportedly told Silverstein.

Cassidy issued a statement to say that it is “surprised that a reporter would go to such extraordinary lengths to gather information in such a deceptive way that really isn’t all that new or interesting.” It says the “reporter’s deception went well beyond what he described to his readers.”

Both firms criticized Harper’s for running the piece without their comments.

Public benefits, says Silverstein

Silverstein defended his “undercover techniques” to this website. He believes PR firms such as APCO and Cassidy engage in “spin” and undercover activities all the time on behalf of their clients.

He singled out APCO as an “unsavory firm” based on its work in the `90s to set up a group for Philip Morris to dispute the science vouching for the danger of second-hand smoke.

Silverstein admitted to resorting to “trickery,” but stressed that it wasn’t like he was “offering a wallet filled with cash” to get the lowdown on the firms.

“I made the whole situation as outrageous as possible,” he said, referring to the selection of Turkmenistan, a place slightly less Stalinist than North Korea, as the focus of the PR pitch. He said APCO conducted poor “due diligence” in falling for the ruse.

Silverstein believes he conducted a “public service” by outing how the foreign lobbying game works in D.C., especially when firms work for reprehensible regimes.

“It’s up to my readers to decide whether my undercover techniques were legitimate,” he said.

BOONSHAFT NAMED H&K/L.A. HEAD.

Hope Boonshaft, who once led Sony Pictures Entertainment’s worldwide government relations/corporate communications unit, has joined Hill & Knowlton as general manager of its Los Angeles and Irvine offices. The post had been vacant.

She joins from the Los Angeles Opera, where she was in charge of marketing, PR, community relations and outreach.

Earlier she founded Boonshaft-Lewis & Savitch PR/PA, a firm that counted Virgin Atlantic Airlines, Pitney Bowes, Four Seasons Hotels, HBO and World Cup as clients.

Boonshaft served in the Carter White House as director of community relations. At H&K, she reports to CEO Paul Taaffe. H&K’s COO Gene Reineke had been overseeing the southern California offices.

BRUNSWICK GUIDES GREENBERG.

Brunswick Group is handling Maurice “Hank” Greenberg, the former CEO of American International Group, who has sued his old company for its “unnecessary and improper decisions” related to restatement of earnings, which led to a $1.6B settlement.

Greenberg, who led AIG for more than 30 years until his ’05 resignation, alleges the restatement was not because of his “improper conduct,” but an effort by current management to “insulate themselves from liability.”

He charges current management with “pursuing their personal complaints” against him rather than working in the interest of shareholders.

Sarah Lubman, BG staffer and Greenberg spokesperson, credits him for “building the largest and most successful insurance company in the world.” She said he increased market cap by 40,000 percent when AIG went public in 1969 through the end of `04.

AIG filed its own suit against Greenberg seeking damages of more than $1B. Both suits have been dismissed by the other side as being without merit.

OAKLAND LOOKS FOR LOBBYIST.

The City of Oakland has issued an RFP to hire a lobbying firm to snatch more federal dollars.

The city’s `05-`07 budget included more than $50M in federal revenues that were used for parks, housing, recreation, police, arts and the environment.

Oakland, according to the RFP is eager to “establish an aggressive, substantial presence in Washington.”

The goal is to “craft significant relationships with the Congressional body” while marketing the city as a “viable and vital municipal center” with an eye to bringing in “even more funding opportunities for the city.”

The bidding firms must be in compliance with Oakland’s restrictions on “doing business with service providers considered nuclear weapons makers.”

A pre-proposal conference is slated at Oakland’s City Hall on July 10. VaShone Huff is project manager at (510/238-3141).

Jim Walsh, founder of Walsh PR in Dublin, has been elected as the third non-American to head IPREX since its founding in ‘83. The network has 58 members with a combined revenue base of $94M.

FRB HANDLES NEW DOW JONES BID.

The Financial Relations Board is handling a bid by an investment group headed by MySpace founder Brad Greenspan to purchase a 25 percent stake in Dow Jones & Co., owner of the Wall Street Journal.

The bid counters a $5B offer by Rupert Murdoch's News Corp., which acquired MySpace's parent company, Intermix, in `05 for $580M.

Greenspan contends that his offer will keep Dow Jones independent from media conglomerates so it can keep its culture of integrity and high quality reporting intact. He has studied Dow Jones' online assets and sees the opportunity to "significantly enhance the company's presences and revenue streams in electronic media."

In Greenspan’s letter to the Dow Jones board, he claims that he can grow WSJ.com and Marketwatch.com from their current 4.3M unique viewers per-month audience to 15M. He also would launch an ad-supported video content network within 18 months.

Greenspan holds majority stakes in Live Universe Inc. and BroadWebAsia, which own a combined 30 websites that attract 75M million viewers a month. His investment group is willing to spend up to $1.25B for its DJ&C stake, and in return is asking for two board seats.

FRB's Lasse Glassen is handling the Greenspan bid. Kekst & Co. is working for the DJ-controlling Bancroft family. Sard Verbinnen & Co. works for DJ.

WESTIN REVIEWS ABC NEWS.

ABC News chief David Westin has launched a two-year “top to bottom” review of operations to find out where the Walt Disney unit stands, where it is going and how it is going to get there. He expects to slice about 35 staffers from the payroll.

In a memo to staffers, Westin wrote that he plans to add people and resources especially in the digital area, which is “centrality” of its future. The network is looking to hire staffers to cover India, Australia, Brazil and Iran. Westin is also looking at places to trim. “We will be consolidating some operations, we will be asking some of you to take new assignments, and yes, some positions will be lost where that makes sense,” he wrote.

The ABC News chief is making his moves as Charlie Gibson’s “World News Tonight” is the top rated evening news program. Westin credited ABC’s revival to changes that it has made over the past few years. “Now we’re dealing from strength,” wrote Westin.

ECONOMIST BLASTS BLAIR’S RANT.

The Economist thinks outgoing British prime minister Tony Blair's “feral beast” blast (6/20 NL) at the media is a “bit rich.”

Blair, according to the June 16 issue, was a master of using the media. More than any other recent PM, Blair “seemed instinctively to understand the ways journalists think, with an unerring knack for finding the words to provide the coverage he wanted.”

The Economist continued: “For a prime minister who treats every public appearance like a theater performance, and whose administration will always be synonymous with spin, to question the system he has so often exploited seems a bit rich.”

TIMES, JOURNAL HIKE PRICE.

The New York Times and Wall Street Journal will both raise their cover prices on July 16. The Times said it will hike its newsstand and home delivery prices a week after Dow Jones announced a markup for the Journal.

The newsstand price of the Times will rise from $1 to $1.25 on July 16. Sunday cost will rise from $3.50-$4 only in the New York area. The hikes will mean $7-$8M in revenue in 2007 and more down the road.

Dow Jones said it will raise the newsstand price of the Wall Street Journal on the same day as the Times this month to $1.50.

Times launches ‘City Room’

The Times has launched "City Room," a blog to tackle government, crime, economy, housing and transportation issues. The site contains expanded photography, videos, neighborhood profiles, links to primary sources and forums for comments.

Sewell Chan, a metro editor, is bureau chief.

MERC CUTS 40 NEWS STAFFERS.

The San Jose Mercury News said it will cut 40 positions in its newsroom in July, a 17 percent purge that leaves 200 newsroom staffers. Seven years ago it had about 400 positions in the newsroom, the paper reported.

Executive Editor Carole Leigh Hutton said that although the paper is still profitable revenue is not growing at the paper, which fired 15 workers in December.

The Merc pointed out that the San Francisco Chronicle is eliminating 100 newsroom jobs amid weekly losses estimated at $1M.

The Merc was sold to McClatchy by Knight Ridder last year and then sold to a Gannett/Stephens Media joint venture with the Contra Costa Times.

YAHOO ACQUIRES DOT-COM AMID SHAKEUP.

Yahoo! has acquired Rivals.com, a college and sports high school site, to formally kick off the post-Terry Semel era. Rivals has a network of more than 150 sites that attract two million viewers each month. Its audience, according to Yahoo's Sports chief James Pitaro, consists of communities of "fanatical, like-minded enthusiasts."

The Rivals deal follows news that Yahoo co-founder Jerry Yang, 38, had succeeded Semel as CEO.

The 64-year-old Semel, a former co-CEO at Warner Bros., joined Yahoo in `01 and is credited with providing a focus and fueling its advertising growth. Lately, he took heat as Yahoo fell further behind Google in the search business. Susan Decker, Yahoo's 44-year-old CFO, has been promoted to president.

ESPN has named Keith Clinkscales, head of ESPN publishing and ESPN The Magazine, to head the newly created content development and enterprises unit.

The operation is to develop programming across the web, print, mobile and radio platforms.

Clinkscales' unit replaces the ESPN original entertainment division. Rob King, meanwhile, has been tapped as chief of espn.com.

(Media news continued on next page)

SITRICK IN MIDDLE OF HILTON PAY MESS.

Crisis counselor Michael Sitrick is in the middle of the controversy surrounding reports that jailbird Paris Hilton will receive up to $1M for the first interview following her release from the slammer.

The New York Post reported that the heiress is to receive as much as $1M from NBC for an interview with Meredith Vieira on “Today.” The network issued a statement to refute the Post story.

CNN’s Larry King landed the Hilton interview sans payment, which is slated to air on June 27.

The New York Times reported that ABC lost a “bidding war” with NBC for the sit down with Hilton. Barbara Walters told ABC management that Rick Hilton, Paris’ father, told her that ABC’s $100K offer to interview the heiress was “not even in the same galaxy” to what was being offered.

Sitrick, on behalf of the Hilton family, flat out denies that the heiress is being paid for any interview. That includes money for “any collateral, including video and photographs,” said Sitrick’s statement.

Paris released a statement via Sitrick on Saturday that said: “I am thrilled that Larry King has asked me to appear on his program to discuss my experience in jail, what I have learned, how I have grown and anything else he wants to talk about. Larry King is not only a world-renown journalist, but a true American Icon. It will be an honor to do his show.”

AMG SUPPORTS QUADRANGLE IN MAG BUY.

The Abernathy MacGregor Group is handling PR for Quadrangle Capital Partners as the private equity firm closes a deal to buy Dennis Publishing's lifestyle magazines like Maxim and Blender and other online and media properties in the U.S.

Media reports have pegged the deal in the $240M range, although the parties have not disclosed the price tag.

Quadrangle takes ownership of Maxim magazine and Maxim.com, Blender, Stuff, and Maxim properties like a radio network, restaurant chain, nightclubs and an event marketing company.

Kent Brownridge, who oversaw production of Rolling Stone, Men's Journal and U.S. Weekly as a senior VP at Wenner Media, partnered with Quadrangle and has been tapped as CEO upon closing of the deal, which is expected in the third quarter.

Dennis Publishing is based in the U.K.

AMG president Adam Miller and senior VP Lux Suvanto have been fielding media calls about the deal for Quadrangle.

ZD SELLS ENTERPRISE GROUP.

Ziff Davis has sold its enterprise group, which houses eWeek, CIOInsight and Baseline, to Insight Venture Partners, a private equity firm, for $150M.

The unit has a database of 3.5M business and technology users. It also runs digital and live events throughout the globe.

Sloan Seymour heads the enterprise unit, which has staffers in New York, San Francisco and Boston.

Rosen Group does PR for ZD.

BLOCKBUSTER TIPS DVD WAR.

Blockbuster has taken a side in the high-definition DVD war by choosing to expand its offering of Blu-ray discs for rental at its 1,700 corporate-owned stores by mid-July.

Blue-ray, developed by Sony, is locked in a battle with the Toshiba/NEC format HD DVD to become the dominant player in the new market.

Blockbuster said Blu-ray rentals have significantly outpaced HD DVD rentals at its stores since both formats were made available in November.

Blockbuster's SVP of merchandising, Matthew Smith, said the company could add HD DVD to locations down the road "if that's what customers tell us they want."

People _____________________

Anna Badkhen, foreign/national correspondent for the San Francisco Chronicle, has joined the Boston Globe as a general assignment reporter. Badkhen was formerly Moscow bureau chief for the Chronicle.

Thomas Gardner, president of Reader's Digest Association's international arm and its Direct Holdings Worldwide unit, said he will resign at the end of the month to pursue other opportunities. The 49-year-old Gardner was also an executive VP since 2006 and through the March 2007 acquisition of RDA by an investment group.

Briefs ___________________________

Yoga Journal has begun publishing a mainland China edition in Mandarin through an agreement with Beijing sports publisher Titan Sports Media. China is YJ's eighth international edition.

The Chicago chapter of the American Institute of Architects plans to publish a six-times-a-year magazine called Chicago Architect starting in October.

McGraw-Hill is collaborating on the publication. Dennis Rodkin, contributing editor for Chicago magazine and ex-editor of Lake, is editor of the new magazine. Lee Bay, former architecture critic for the Chicago Sun-Times, is among five writers already slated to contribute.

Trend Pot, which publishes a free Japanese newspaper in the New York area, has launched a free monthly magazine called Chopsticks targeting non-Japanese New Yorkers who want information about Japanese trends in food, healthcare and schools. It also lists more than 800 businesses in New York of Japanese influence. Info: chopsticksny.com.

Meredith Corp. has acquired the consumer health search engine Healia. Meredith, which publishes magazines like Better Homes and Gardens and Ladies' Home Journal, said the move is part of its effort to expand its reach in the women's health market.

The botched announcement of Philip Bonaventura as CFO of PRSA (page one) is proof that PRSA should be put into ethical and professional receivership.

PRSA has become too much of an embarrassment to its members, the PR industry, and the people who join it such as Bonaventura and COO Bill Murray.

Bonaventura has suffered embarrassment and will probably be subject to a reprimand by New York State because of PRSA’s flawed press release on him.

False claims were made that he is a “Certified Public Accountant” when he is forbidden to use that title in public because he has dropped his registration.

He did not have current memberships in the national and New York CPA societies as claimed. At the time of the release, he had let his membership lapse in the New York Society of Assn. Executives for a year and a half. He should have studied the release by VP-PR Janet Troy.

She should have confirmed the memberships. Troy (or the board) has yet to issue a correction when the PRSA Code says errors by a member must be corrected “promptly.”

New COO Bill Murray is also responsible. He had almost no background in PR. The news of his appointment by PRSA was also botched. It was made in the week between Christmas and New Year’s, a “burial ground” for unwanted news. PRSA first said he would be available for interviews, then contradicted that and then reversed that. Murray had a disastrous telephone interview with PR students at Auburn University. They were shocked at his lack of knowledge of PR and unresponsive answers. They raked him over the coals in the student e-group.

Murray had one lunch with us in which we told him what we knew about PRSA and asked him to work towards better financial reports and democratizing PRSA (removing the APR rule for directors). He never spoke to us again nor answered any of our e-mails.

Both Murray and Bonaventura have backgrounds with major organizations as did Rob Levy, who was head of professional development and No. 2 staffer at PRSA for one year. He suddenly quit in June of 2004 after boosting PD income by 61% in the first half. PRSA can recruit experienced executives but how long do they stay?

We’re disappointed in Bonaventura’s appointment because we wanted a bona fide, registered CPA at PRSA in hopes that a CPA would rid PRSA of its substandard financial reporting practices. Either PRSA doesn’t want a CPA on staff because a CPA would “clean house,” or CPAs, aware of PRSA’s history, refuse to work for it.

Frustrated by the stubbornness of PRSA on financial topics, and unable to force it to change (like the FTC did in 1977 when it made PRSA remove anti-competitive articles from its Code after the Assembly refused to do so), we asked some of the CPA societies whether they would look into this. They told us we would have to file a formal complaint supported by documentation. A staff member said it was a “serious” matter to accuse a CPA of unethical behavior. We responded we think it’s a “serious matter” that members believe PRSA makes money on its national conference when it doesn’t; it’s “serious” when h.q. are moved downtown to 50% more space for 13 years without the Assembly knowing about it or having a say in it, and it’s “serious” when the beloved 1,000-page members’ directory is cancelled without the knowledge or approval of the Assembly. Were CPA groups “serious” about ethical enforcement and making CPAs live up to the “highest standards” (as the CPA Code says), they would investigate misleading, substandard audits on their own (once reports about this hit the public prints) and not wait for a citizen’s complaint or ask the citizen to compile evidence that is already on the public record. Police and firefighters, if they see a crime being committed or a fire, don’t wait for a complaint.

The intransigence of PRSA is hurtful to the Society. It’s one reason it had to go to the West Coast to recruit a COO. It’s one reason none of the six new directors last year had a major job at a blue chip and two blue chip directors quit the board (Gary McCormick of Scripps and Ron Owens of Kaiser Permanente). The six directors, who share blame for PRSA’s mismanagement by caving in to its culture of silence, secrecy and inaction, are Leslie Backus, solo practitioner, Davie, Fla.; Tom Eppes, manager, Charlotte office of Eric Mower & Assocs.; Dennis Gaschen, PR prof at Cal State/Fullerton and solo practitioner; Francis Onofrio, Mason Onofrio PR, Bethany, Conn.; Dave Rickey, Alfa Corp., Montgomery, Ala., and Christopher Veronda, internal PR specialist, Eastman Kodak, Rochester, N.Y. We doubt any blue chips will show up this year for nominations. No one wants to run from some districts which is why the board tried to eliminate five district directors last year and replace them with five at-large directors. The move failed.

The PRSA board continues to withhold the transcript of the 2005 and 2006 Assemblies from members and is refusing to release the 2006 IRS Form 990 report until the summer (thus blocking access to former COO Catherine Bolton’s remuneration for 2006 and other financial information). A member can get the full 2006 audit by sending $3 to h.q. (a document that should be on the PRSA website).

The “sting” operation conducted by Harper’s Ken Silverstein (page two), in which he lied about his identity in order to knock responses out of APCO Worldwide and Cassidy staffers, is a violation of journalistic ethics. Such tactics are unnecessary because there is already plenty of information available about the work of PR firms for foreign principals. Such filings are required by the Foreign Agents Registration Act (FARA).

--Jack O'Dwyer