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Spinning Media for Government

by Chris RaphaelSpecial to CorpWatch
February 10th, 2005

A television pundit gets secret payments to promote a new United States government education policy. Columnists are paid to provide support for a White House marriage stance. Actresses play news reporters to promote drug laws. A system of ranking reporters who criticize official policy. These, and possibly many other public relations stunts, are some examples of publicity contracts paid for by the U.S. government, which has spent more than a quarter billion dollars on public relations in the past four years.

For example Armstrong Williams, a conservative African-American broadcaster, was paid $240,000 to produce advertisements on the No Child Left Behind Act (NCLB) and plug the law in his syndicated television broadcasts. (see Leaving Children Behind)

The deal was brokered by Ketchum public relations, a subsidiary of media giant Omnicom, and approved by the U.S. Department of Education (DoE). In addition to the Williams contract, Ketchum was also paid $700,000 to rate media coverage of NCLB and produce video news releases on the law.

When the news of the Williams deal became public, Democratic members of Congress took a look at government contracts with PR firms, and the U.S. House Committee on Government Reform produced some quick but startling numbers. In a January report, the committee found that federal agencies spent more than $250 million on contracts with PR agencies between 2001 and 2004 – nearly twice as much as the $128 million that Clinton spent between 1997 and 2001.

“There used to be a time when our government would let the facts speak for themselves,” lamented Richard Durbin, a Democratic senator from Illinois, during one Congressional debate. “It apparently is the position of the Bush administration that the facts in and of themselves are not articulate.”

Two more questionable examples have cropped up since the Williams flap. Conservative columnists Maggie Gallagher, whose writing is distributed by Universal Press Syndicate (which also publishes the Dear Abby column and comic strips like Doonesbury, Calvin & Hobbes and Garfield) and Mike McManus (whose work appears in over 50 newspapers like the Birmingham News in Alabama) were exposed as having been on the payroll of the Department of Health and Human Services.

Both columnists agreed to work on behalf of the Bush Administration efforts to promote marriage.

While President George Bush officially denounced the practice of government agencies paying commentators, it is yet to be seen whether the scandal will lead to any lasting ethical change on the part of some in the PR industry, where the need to identify political and ideological allies is routine practice, or on the part of the government, which has been historically concerned with the need to flash “positive” messages – and propaganda -- into what they perceive as a negative and hostile media landscape. Ketchum and the DoE, for instance, initially defended the Williams arrangement.
Ketchum video news releases

Ketchum’s video news releases (VNRs) on the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) were found to be “covert propaganda” in a 2004 report by the Government Accountability Office (GAO). Ketchum hired a sub-contractor to produce VNRs for the Centers for Medicare & Medicaid Services’ (CMS) in the Health and Human Services Department.

VNRs provide video footage, graphics and audio edited together into a package directly to television stations in a manner that allows them to easily pick any of the component elements and create their own story.

The VNRs even featured a “reporter” – Karen Ryan – who was actually a public relations professional, and the releases contained “a favorable report on the effects [of the law] on Medicare beneficiaries.” Some broadcast stations ran the story unedited.

The GAO determined that although the videos were clearly labeled, the news story inside was produced in such a way that television viewers could not distinguish the “source” of the news. “The entire story package was developed with appropriated funds but [is made to] appear to be an independent news story,” the GAO wrote.

The GAO previously found that video news releases produced for the Office of National Drug Control Policy (ONDCP) were also propaganda. While both agencies have discontinued their use of the VNRs, the Health and Human Services Department continues to use them, said Bill Pierce, an HHS spokesperson.

“We can’t be responsible for journalistic ethics,” he said. Pierce added that HHS was keeping the GAO findings in mind, though the GAO report didn’t have a “dramatic” effect on the way the department used video releases.

“It’s kind of a dead letter,” said ONDCP spokesperson Tom Riley of the January GAO report which referred to the agency’s VNRs as propaganda. “We stopped doing VNRs last year, haven’t done any since then, and have no plans to use them in the future.”


Ranking Reporters

According to the House report, companies owned by New York-based Omnicom have a virtual monopoly -- 89 percent -- of government PR contracts awarded between 2001 and 2004. The company, whose headquarters are on Madison Avenue, the heart of the advertising industry, reeled in $8.6 billion in revenue in 2003 from clients like Kodak, Dow Chemical and Heinz ketchup.

Ketchum held $97 million, one-third of the total, followed by the Matthews Media Group ($52 million), Fleishman-Hillard ($41 million) and Porter Novelli ($33 million).

While it is not known how many of these contracts involve practices such as the Williams deal, the government seems to take the scandal seriously. The list of agencies looking into PR contracts, in one way or the other, includes the Government Accountability Office, the Inspector General, the Federal Communications Commission, Congress and the Pentagon.

Ketchum, which has earned numerous Silver Anvils (the industry’s highest honor) from the Public Relations Society of America as well as a 2002 “Agency of the Year” award from PR Week, the popular industry magazine, initially responded to the incident via a January 13 PR Week editorial by Ray Kotcher, chief executive officer of Ketchum. In the editorial, Kotcher put a positive spin on the scandal, calling it a “transformational event.” He referred to Williams' behavior as "an oversight" and implied that the scandal was politically motivated.

“It is no coincidence that this activity occurred in Washington,” Kotcher wrote, “where political divisiveness is at an all-time high."

He also suggested the rise of punditry had something to do with the whole affair:

“Williams' unusual role as both a pundit and information source – through his ad-production firm – would seem to blur the lines that once so clearly defined journalism and news organizations,” Kothcer wrote. “I'm not sure even the media itself can agree anymore on how to strictly define and distinguish journalists and news organizations.”

As reporters hounded the firm, Ketchum released a later statement saying it had made a “lapse in judgment” -- but didn’t make the statement available on its website, as Jay Rosen, a journalism professor at New York University noted. In his blog, PressThink, Rosen wrote that Ketchum’s site “shows no awareness at all that it is the ‘live’ public face of a company in the news and under pressure from peers. This would be mildly comical in the case of a chemical company. It is more amusing, and ironic in the instance of a public relations agency fighting for its reputation …”

In another curious development, a site on http://www.ketchum.com that touts the virtues of influencing public opinion leaders – through a special tool Ketchum calls “Influencer Relationship Management” – is no longer working.

Snapshots of the site on Wayback Machine (see http://www.archive.org and type in http://www.ketchum.com/IRM in the search bar) describe how the system works by “influencing the influencers.” The premise of Ketchum’s system, described in a press release and in snapshots of the site on Wayback Machine, is that there are a select group of people – such as elite media and analysts -- who mold public opinion. Through an “IRM portal,” clients can view the opinions of these influencers on an “attitude” scale. A snapshot of an “IRM portal” even seems to promise pictures of who these “influencers” are.

The DoE did not return calls seeking comment on whether they had access to the IRM portal, but Ketchum’s work for the DoE did entail identifying the reporters who routinely covered the NCLB Act, and ranking their stories.

According to documents obtained by People for the American Way, a Washington, D.C. nonprofit, Ketchum produced benchmark media analyses for the DoE showing how different newspapers and reporters in different states covered the NCLB Act. Stories were rated on a scale of 0 to 100 (with 100 being an “ideal media mention”), though some stories – “to allow for negative press,” as Ketchum put it -- earned marks less than zero.

Positive marks were given to stories that, among other things, mentioned that NCLB would "hold schools accountable for student's success," would "close the achievement gap," or generally mentioned that the Bush administration or the Republican party was "committed to education." Negative marks were given to stories which mentioned that 100 percent compliance with NCLB would be unrealistic, that the program is not properly funded, or that the Bush administration was interfering with state education duties.

The media analyses went on to rate the stories of reporters who covered NCLB most often. Low-ranked stories included few positive messages or else quoted NCLB critics, such as the National Education Association or the American Federation of Teachers. An op-ed by former Education Secretary Rod Paige earned the highest marks. The lowest marks? In one instance, Kenneth Remsen, a school principal who wrote a column for Vermont’s Burlington Free Press, received a mark of -70 for containing “12 negative messages” in an article Ketchum described as “creative conceit.”

This type of ranking isn't new. Former Energy Secretary Hazel O’Leary found herself in a major flap in 1995, when it was revealed the Department of Energy hired a public relations firm to rank newspapers and reporters on department coverage. Today, it appears to have become standard practice within many PR firms.

"They [government agencies] can develop any kind of assessment they want," says Lucy Dalglish, executive director of Reporters Committee for Freedom of the Press. She doesn't see the practice of ranking reporters or news coverage as problematic -- unless it leads government agencies to deny reporters access. She noted the case of Maryland Governor Robert Ehrlich, who has directed his staff and 19 state agencies to stop speaking with two reporters from the Baltimore Sun.

Kevin Elliott, manager of PR giant Hill & Knowlton's San Francisco office, said ratings of media coverage are often produced because, from a public relations perspective, “it’s important to know which reporters to reach out to on a story.”

“A reason an organization might want to rank reporters is to track things like bias, accuracy…to see if the reporter understood the issue and had all the information,” said Mark Weiner, chief executive officer of Delahaye Medialink Worldwide, a media marketing and research firm. Technologies such as news database Lexis-Nexis, he added, have made the news-crunching task easier to perform.

The DoE did not return calls or an e-mail seeking comment, but told the Associated Press that the rankings did not influence how the department treated reporters. The Government Accountability Office is reportedly looking into how the ratings were used.

Reporter Greg Toppo of USA Today, which originally broke the Armstrong Williams story with a Freedom of Information Act request, said he had “no idea” what the DoE “was trying to accomplish.” In one analysis Ketchum produced, Toppo was given a score of 2 points for six articles that he produced between April and June of 2003 on NCLB. George Archibald of The Washington Times received a score of -2 points – “and he’s been generally supportive of NCLB, so the rankings don’t make much sense,” Toppo said.

“I was told that reporters who scored low would be targeted for some type of ‘re-education’ on NCLB, but no one ever contacted me,” Toppo said.

He also noted that the rankings didn’t lead to any kind of denial of access from the DoE -- but access, he said, “was pretty poor to begin with.”

Triangle of Silence

Omnicom, which holds 1,500 subsidiary agencies in public relations, advertising and other media industries, was also silent. A spokesperson in their New York office would only say that Ketchum was bound by Omnicom’s code of conduct, and referred all other calls to Ketchum, which did not return numerous calls and e-mails from CorpWatch. Ketchum has also referred other reporters to the DoE. But the DoE – which has defended the Williams arrangement while simultaneously pledging to get to the bottom of it – also did not return calls for comment.

Jack O’Dwyer, whose PR news website http://www.odwyerpr.com has been reporting on the Williams scandal, said he and his site have been playing the role of a default PR firm for Ketchum and Omnicom. He says has been handling media calls for the company – “supplying basic information, documents, and background including the history of PR and the major trends of the past few decades.” The companies might think twice about letting O’Dwyer handle their PR: He isn’t putting a positive spin on things, harrying both Ketchum and Omnicom in editorials such as “Heads Should Roll.”

PR Industry Denounces Ketchum

While the responses from Ketchum and Omnicom to the scandal were muted, the outcry from some in the PR industry itself was unequivocally clear. Richard Edelman, chief executive officer of Edelman Worldwide, the largest independent public relations firm, called the Williams incident “profoundly depressing.” He noted in his blog that advertising pays for space -- but PR “is supposed to earn it.”

“We are being asked to believe that the problem is convergence," Edelman continued, "that the blurring of the lines between advertising and PR is a function of technology and immediate access to information.” He disagreed with this rational, adding, “the response from several key members of the PR establishment is frankly very disappointing.”

Elliot Sloane, chief executive officer of Sloane & Company public relations, wrote that he withdrew his firm’s membership in the Council of Public Relations Firms after he said the agency laid the blame at Williams’ feet. Sloane called the response “tepid” and “apologetic,” although the Council has since said the kind of arrangement Ketchum had with Williams was “unacceptable.”

The Williams scandal comes at a bad time for the PR industry, which is under pressure from Wall Street to meet monthly financial goals and needs to “produce results almost immediately,” according to Judith Phair, president of the Public Relations Society of America.

At the same time, the industry is dealing with two major over-billing trials involving government agencies. In Los Angeles, John Stodder, a former Fleishman-Hillard senior vice president, has been indicted by a federal grand jury for allegedly helping to submit false bills that defrauded $250,000 from the Los Angeles Department of Water & Power, which held a $3 million annual contract with Fleishman-Hillard. Stodder has pled not guilty to numerous counts of wire fraud.

Elsewhere, in New York, a trial is underway in which two Ogilvy & Mather employees – Shona Seifert and Thomas Early -- have been accused of helping over-bill PR work to disguise a $3 million shortfall in labor costs on an account for the Office of National Drug Control Policy. The government settled a civil case against the firm in 2002 for $1.8 million.