Klores stumbles into controversy with new St. Regis Hotels account

NEW YORK: With the ink barely dry on its contract, Dan Klores

Communications (DKC) trumpeted new client the St. Regis Hotel.

But one week, three New York Post cover stories and the scalps of two

agency execs later, hotel parent company Starwood is considering asking

DKC to check out early.

At issue is the origin of a story which has prompted legal threats from

New York Mayor Rudy Giuliani.

On Tuesday, as PRWeek was writing a straight account win story, a DKC

executive alerted the magazine to a Post cover story about how the


Regis was the mayor's "secret love nest." However, calls to Ruth

Sarfaty, partner at DKC and head of the St. Regis account, elicited

insistent denials that the story had not been leaked - despite having

all the hallmarks of a plant: details about room rates and mentions of

fresh flowers and fruit deliveries.

But on Wednesday, all hell broke loose as the Mayor denied all, as

printed in that day's Post.

Thursday brought a third cover story reporting DKC had fired two execs,

Michele Paolella and Jean Gordon. The Post asserted the two had met with

Starwood executives, all of whom had cooked up the idea.

Contradicting early denials, DKC chief of staff Chris Widmaier has since

told PRWeek: "Two employees of our firm received information regarding

the St. Regis Hotel and released it to the press." He confirmed that "as

a matter of informal policy" the two were "terminated."

Dan Gibson, SVP corporate affairs at Starwood, said: "There is an

ongoing investigation by our general counsel."

He confirmed that the result of the inquiry would determine whether DKC

stays on board. While DKC is new to the St. Regis account, it has a

long-standing relationship with the parent company, handling the

upmarket W chain.

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