The spotlight continues to shine on the entire PR profession
following revelations (first disclosed in USA Today Jan. 7)
that Omnicom Group's Ketchum public- relations firm -- as
part of a $1 million contract with the U.S. Department of Education
(DoE) -- paid $240,000 to a company owned by conservative
commentator Armstrong Williams to ensure Williams would plug the
Bush administration's "No Child Left Behind" schools-standards
law.
The still-unfolding scandal has raised serious ethical questions
among senior-level PR pros. On one hand, the leaders among PR trade
groups applaud Ketchum's recent efforts to cauterize a gaping
wound. On the other hand, PR observers say the Ketchum debacle
clearly violates industry standards, and it is likely to cause
major damage to the profession.
The scandal has sparked a furor in the PR field, with other
embarrassing questions foisted on the industry about how rampant
"pay for play" is, whether PR pros are estranged from ethics and if
the DoE broke the law by using taxpayers' money to pay for
"propaganda."
After Ketchum initially dumped the blame on Williams, the agency
late last week said it regretted the incident and pledged to change
its policies to prevent another such incident. Ketchum -- which
dates back 80 years -- has hired outside legal counsel to
investigate the contract with the DoE and the Graham Williams
Group, the Washington, D.C. based PR/advertising firm that
Williams runs.
"Upon review, this particular contract did not comply with
industry standards and guidelines and was a lapse in judgment that
we regret," says Lorraine Thelain, senior partner of North American
operations for Ketchum." She adds that an internal review has not
discovered any similar problems and the agency has not received any
negative feedback from other clients.
A statement released by Ketchum and attributed to CEO Ray
Kotcher, reads, "We should have recognized the potential issues in
working with a communications firm operated by a commentator."
Judy Phair, president of the Public Relations Society of
America (PRSA) and president of PhairAdvantage
Communications (Laurel, Md.), says that by acknowledging
wrongdoing, Ketchum has started the process of rehabilitation.
The Ketchum fiasco shows that "you have to make sure you
communicate to your subcontractors the ethical standards that you
follow and expect them to follow, too," Phair says adding that
Ketchum's contract with the DoE violates the PRSA's Code of
Ethics.
Other PR execs, say the scandal is bound to take a huge toll on
the business. "The PR field has a black eye and mud splattered all
over it," says Mike Paul, a reputation- management consultant and
president of MGP & Associates PR (New York) who has been
a vocal advocate of the need for PR execs to speak out and educate
people about the profession. "Most people don't understand what we
do, and they only know what we tell them. And what we're telling
them in early 2005 is that PR firms still engage in dirty tricks
and dirty deals."
Brenda Wrigley, a professor of public relations at the SI
Newhouse School of Public Communications who teaches a course
called "The Ethics of Advocacy," adds, "By and large, PR pros are
uncomfortable with advocacy of their own profession, and they
haven't embraced it as they should.
The scandal has worsened the already-lousy reputation of the PR
industry, and it has caused an outcry among public advocacy groups
that now are primed to put the profession under the microscope.
Another out growth: how in a 500-channel, 24/7 media universe PR
execs can distinguish between a "journalist," a "pundit" and a
PR/advertising firm, which is at the heart of the case. Williams
calls himself a commentator but he also runs Graham
Williams.
"He's got to fish or cut bait," Wrigley says. "I don't
understand how a person can be a journalist/pundit and PR person at
the same time...When dealing with journalists, PR execs have to
understand ethical boundaries."
Asked why no one at the agency raised a red flag as the Williams
contract was being crafted, Thelian tells PR News, "We're
trying to get to the bottom of things...[But] when all of these
investigations are completed our reputation will remain intact and
the [Williams contract] will be shown to be an isolated incident."
However, the Williams debacle is only the latest blow for Ketchum,
coming on top of a government ruling last May that called into
question Ketchum-produced Medicare VNRs.
Williams, who was paid to promote "No Child Left Behind" on his
syndicated TV show and syndicated newspaper column (which has since
been cancelled by Tribune Media Services),
acknowledged taking the payment after the USA Today article
ran, and he has said he should have disclosed the payment
sooner.
Michael Lewis, who is working with Armstrong on the Ketchum
issue, says Williams has no intention of returning the money. "Why
should he?" Lewis says. "He delivered" in running ads supporting
the "No Child Left Behind" law.
Williams has argued that he was a vocal supporter of school
vouchers before he got the DoE contract, which only begs more
questions. "If he was stating opinions in favor of the law all
along, why doesn't he return the money?" asks Melanie Sloan,
executive director of the watchdog group Citizens for
Responsibility and Ethics in Washington (CREW), which has filed
Freedom of Information Act (FOIA) requests with 22 federal agencies
seeking information on their PR contracts.
[In a separate inquiry, former Fleishman-Hillard senior
executive John Stodder Jr. recently was indicted for allegedly
submitting at least $250,000 in false billings to the Los
Angeles Department of Water and Power, among other
clients.]
Despite the mea culpa from both Ketchum and Williams --
the DoE has been decidedly silent since the scandal first broke --
the blowback is just starting. And the drip, drip, drip of
information stemming from the case will likely cause some
dislocation in the business.
(Departing) Education Secretary Rod Paige has ordered an
investigation of his agency's public relations contract with
Ketchum while leaders of a Senate committee have asked for records
of the department's publicity deals. Meanwhile, the Federal
Communications Commission has called for an investigation into
whether the deal violated "payola" provisions of the 1996
Communications Act.
The said FOIA requests will be a slow burn for the PR profession
because fulfillment of such requests often is a long and arduous
process. "We're concerned that the government feels the need to use
PR to sell its policies," Sloan says. "Along with groups like mine
and the General Accounting Office (GAO), you're going to see a
rigorous scrutiny of government PR contracts that hasn't been done
in the past."
But one PR exec with 25 years experience in the federal market
says the Ketchum debacle most likely is an aberration. "Among my
clients, both big or small, I have never heard of any deal that's
even remotely related to what's happened," says Dave Alexander,
principal of Lincoln Strategies (Northfield, Mass.), who
advises PR firms on how to work with the federal government. It's
well beyond the pale." Still, Ketchum's snafu could have a chilling
effect on such contracts at a time when there's a deepening pool of
federal money for PR services.
Regardless of how the investigations shake out, senior PR pros
cannot afford to underestimate how news of the DoE contract will
affect the profession. "It would be foolish for PR people not to
realize the larger implications," Professor Wrigley says. "There
may be more regulations, it reinforces negative stereotypes of PR
people and the business will, in turn, diminish. But [the scandal]
also presents an opportunity for the profession to clean up its
act."
Contacts: Dave Alexander, 413.498.4544, [email protected]; Michael
Lewis, 646.326.9450, [email protected]; Mike Paul,
212.595.8500, [email protected];
Judy Phair, 301.317.8243, [email protected];
Melanie Sloan, 202.588.5565, [email protected];
Lorraine Thelian, 202.835.8838, [email protected];
Brenda Wrigley, 315.443.1911, [email protected]