Williams/DoE Episode: Federal PR business faces future after Ketchum fallout

With the Williams/Department of Education controversy casting a shadow over the industry, PR pros evaluate the fate of government contracts.

With the Williams/Department of Education controversy casting a shadow over the industry, PR pros evaluate the fate of government contracts.

Ketchum's role in the Armstrong Williams/Department of Education (DoE) contract scandal has provoked varying degrees of indignation, analysis, and outrage within the PR industry. But ethical quandaries aside, the story is raising serious questions about government PR contracts in general. It now seems inevitable that such contracts are in for a congressionally mandated re-evaluation, if not an outright purging. So the industry must now ask itself an unpleasant question: Could what happened in Los Angeles after the Fleishman-Hillard overbilling allegations first broke (PRWeek, May 3) happen on a federal level? In other words, are all government PR contracts now in jeopardy? Perhaps surprisingly, leaders of major DC practices expressed little concern about the fate of their work. Richard Mintz, global public affairs practice chairman at Burson-Marsteller, says his agency didn't need to start double-checking its work because "we always double-check things. "We know the amount of scrutiny that goes into government contracts. We're incredibly careful," Mintz says. He added that informing the public is one of the government's main roles and one that is not likely to disappear. "Because someone made a mistake should not preclude the government from fulfilling its responsibilities to protect the health and welfare of Americans," he says. Yolan Laporte, EVP with Ogilvy in DC, agrees. "This has not affected us, has not changed the way we do business," he says. "We've been in this business a long time, and we do know how to navigate through the government communications process." Ogilvy has held government contracts since 1987, with clients such as the National Institutes of Health (NIH) and the Centers for Disease Control and Prevention. That work will not stop, Laporte believes, but it might be under a brighter spotlight. "I suspect that the PR work we do for government clients will come under closer scrutiny," Laporte says. "We haven't felt any effect yet, but I suspect it may happen." Avoiding overreaction Yet practitioners at all levels are cautioning that the industry's response to the incident should not be overblown. Ofield Dukes, president of DC-based Ofield Dukes & Associates, has spent 35 years in what he calls "the public relations capital of the world," and has handled his share of government work. "In a democracy, the people have a right to know," he says, "and with all of the government programs, the PR firms here and elsewhere have been a constructive and positive vehicle for getting the word out." Dukes doubts that the millions of dollars that the government spends on citizen-friendly communications for efforts like public-health initiatives will be affected by such a politically based scandal. "In some instances there will be, unfortunately, a violation of the ethics of PR, a compromising of integrity," he acknowledges. "[But] this is not an age of McCarthyism, guilt by association. Because there's one instance of the violation of the ethics and the integrity of PR doesn't suggest that it's widespread." While Dukes does not believe that DC agencies will suffer major business setbacks, he does characterize the Ketchum/ Williams incident as one of the most egregious ethical lapses that he has witnessed in his career. But he notes that government-related work is already conducted in the public domain, meaning that details are available to virtually anyone who wants to look. Because of that, Dukes feels that such contracts are generally very above-board and are unlikely to suffer any problems similar to Ketchum's. "We just need to be careful not to overreact and to exaggerate the fact that this type of situation is rampant in the government. I don't think that's the case," says Dukes. Joe Clayton, president and COO of Widmeyer Communications in DC, believes that the case will bring more attention to government contracts, but not necessarily a loss of business. "It's going to create greater sensitivity on the part of federal agencies that contract out for services," he says. "The contracting officers will be a lot more focused now on what sorts of activities these dollars are going to fund. I think there will be critical looks across the board." Widmeyer carries several big government accounts, including the NIH and National Institute for Literacy. Clayton emphasized the societal benefits of public PR work over the years and expressed confidence that those would continue. "Some of the most memorable public service campaigns in the country, like anti-smoking campaigns ... all came out of federal dollars," he notes. "Hopefully, that won't be jeopardized by these kinds of developments because it would be too bad if it turned out to undermine all that." Williams' professed ignorance of disclosure requirements led some to suggest that such requirements be spelled out in contracts from now on, at the contractor and subcontractor levels. Mintz has no problem with the idea, saying, "The more transparent, the better it is for everybody." Criticism within the industry The DoE has not admitted any wrongdoing, but outgoing Education Secretary Rod Paige did order a review of the department's PR contracts. Other branches of government leapt in to fill the void, however; the FCC announced an investigation into the contract, and politicians from Congress to the White House have condemned the arrangement. Some prominent members of the industry also have spoken out against what they believe are Ketchum's ethical lapses. Edelman CEO Richard Edelman says: "For me, it's a fairly black-and-white issue. One does not engage in a relationship like that with a reporter. There is a church-and-state kind of separation that is the key to the credibility of what we do." Edelman notes the longstanding public perception of PR as a refuge for spin doctors, which he said makes stringent ethical practices all the more important. "We're in a business that people like to take shots at, and we just can't afford those kinds of slip-ups," he says. "It's not right on so many levels: It's not right for the client; it's not right for the firm; it's not right for the industry. It's just not right." Despite the insistence of all involved that this is an isolated incident, Edelman has little doubt that it will reverberate throughout the entire industry. "It makes it all the more imperative that those of us who are in leadership positions speak out against this kind of thing," he says. "Because let there be no mistake ... I don't tolerate this, and I think it's terrible." Robyn Massey, Ketchum VP of corporate media relations, declined to be interviewed or to answer e-mail questions submitted for this article. But in an op-ed in PRWeek last week, CEO Ray Kotcher blamed the "blurring" and "meshing" of traditional journalism and paid advocacy, as well as "political divisiveness," for the controversy surrounding Williams and the agency. As difficult as some individuals' roles might be to distinguish, one respected industry organization has crystal-clear guidelines for ethical behavior. The Arthur W. Page Society is dedicated to upholding the "Page Principles," a set of simple rules designed to encourage PR work that serves the public interest. Page Society president Tom Martin sums it up succinctly: "The two most relevant of those principles to this, or any similar situation that regards transparency, are, 'tell the truth' and 'prove it with action,'" he says. "I think that's about as clear and simple as it needs to be." Atop the society's website is plastered a banner quote from Page himself, which encapsulates his forceful belief in corporate social responsibility. It reads, "No business has the right to live in a democracy if it bases that right on the practice of corrupting the press."

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