Ketchum faces inquiry of contract with Puerto Rico

WASHINGTON: The Associated Press reported last week that an audit performed on the Puerto Rico Industrial Development Co. revealed irregularities and improper expense requests made by Ketchum on work performed from 1999 to 2000.

WASHINGTON: The Associated Press reported last week that an audit performed on the Puerto Rico Industrial Development Co. revealed irregularities and improper expense requests made by Ketchum on work performed from 1999 to 2000.

The investigation, conducted by the office of internal audits, turned up "several irregularities in the contract" with Ketchum, according to the news report.

Among those were expense requests made by a Ketchum employee for visits to a beauty salon and for alcoholic beverages, and $1.2 million in unpaid taxes. The report also claimed the contract was awarded without a proper competitive bid.

Robyn Massey, Ketchum's VP of corporate media relations, confirmed that the agency was contracted by the Puerto Rican organization in November 1997. The work, concluded in 2000, involved promoting economic opportunities in Puerto Rico to the US business community.

Ketchum hasn't, however, received any formal notice of an investigation and it has not been alerted of any taxes owed, Massey said.

"All we know is what's been reported in the media," she said. "We have not been contacted by any government entity.

"Even though it's only a media report, we're taking the allegations very seriously and conducting our own internal review to make sure everything is above board," she added.

Massey said that, "to the best of our recollection," Ketchum did bid against other PR firms for the task. She added that the employee is no longer with the firm.

The Puerto Rico Industrial Development Co. did not respond to requests for comment.

Ketchum has faced other questions over public contracts recently. A public-interest group has accused it of a conflict in working with the US Department of Health and Human Services to promote new Medicare laws and with a medical group seeking to change some of those laws.

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