ANALYSIS: 'Pay-to-play' political deals could cost PR public's trust

In the midst of Fleishman-Hillard's LA controversy lies a debate on whether PR firms should be able to secure city contracts with political contributions.

In the midst of Fleishman-Hillard's LA controversy lies a debate on whether PR firms should be able to secure city contracts with political contributions.

Can a PR agency use political contributions - the legal, out-in-the-open kind - to build relationships with government officials without raising eyebrows? "The media finds the whole idea of money in politics to be utterly distasteful and evil," says Fleishman-Hillard's LA GM Doug Dowie. "This is how our political system works. Unless you want to totally reform, this is how it works." Dowie should know. As head of one of the most successful public affairs shops in LA, he has recently found himself in the spotlight over controversy surrounding Fleishman's $3 million contract with the LA Department of Water and Power. For months, the LA press has scrutinized the relationship Fleishman and Dowie have with city officials, including the mayor. Armed with vocal criticisms of the DWP contract from some city officials, including the city's controller Laura Chick, ("public relations is spin doctoring, and someone has to explain to me why the DWP wants to spin?" Chick recently told the media), the press has repeatedly questioned why the DWP needs such a large PR budget, and whether Fleishman's close ties with City Hall, including political donations and pro bono work, helped the firm win the competitively bid business. At the same time, separate investigations into a "pay-to-play" atmosphere at City Hall, where political contributions are suspected of aiding firms in their quest for lucrative city contracts, has become muddled in the Fleishman issue in media coverage and pubic perception. It's similar to a controversy that hit Edelman's Chicago office last week. There, the media implied that $32,600 in contributions by Edelman to Gov. Rod Blagojevich (D-IL), might have helped the agency beat out Ketchum and Ruder Finn for the renewal of a $6.2 million tourism contract. While in both cases the charges seem mostly innuendo and inference, the media scrutiny is raising concerns with public affairs professionals that being aggressive in the pursuit of valuable relationships and clients risks crossing the line into perceived unethical behavior and damaging the already-fragile image of the public affairs business. The controversy over contributions is nothing new - the mixing of money and politics is an ongoing American debate at every level of government from city halls to the Oval Office. But LA's and Chicago's current situations are highlighting the increasingly delicate line public affairs professionals must walk when building the relationships with government that private sector clients expect them to have. Public affairs is, after all, a business of access and influence. That makes contributions seem like practical business. But for those on the outside, especially the press, it's an ugly trend that conjures images of backroom deals in which the public is the loser - regardless of whether any actual impropriety exists. "I think that we all have to be careful about any kind of practices that cast a negative light on our industry," cautions MWW LA GM Harvey Englander, pointing out that the public already has a mistrust of PR. Losing the public's trust A recent political cartoon in the Los Angeles Daily News shows exactly how that mistrust of PR has been fed by the accusations against Fleishman. In the picture, a fat snake labeled "public relations" slithers out of an open manhole cover that reads "Department of Water and Power." "That should pretty much answer anything you want to know about if (the controversy) has a positive or negative impact on our industry," says Joe Kessler, president of Weber Shandwick California, of the cartoon. "I think it is particularly damaging at a time when we as an industry are working to re-establish our credibility." So can the value of making contributions - and connections - be balanced with the need for crafting a positive image and maintaining integrity? Everyone seems to have his or her own answer. From Kessler's point of view, the key is avoiding giving money to "any elected officials who could potentially hold sway over" future business. Money might not make for strong ties any-way, he adds. "In my experience, political relationships that are based on financial expediency tend not to be lasting," he says. Englander takes a slightly softer line, saying he lacks "a crystal ball" to see who might in the future aid his business, and supports those whose politics he believes in. Dowie takes a pragmatic approach. "What conflict of interest would that be?" he asks about contributing to those he might do business with. "This isn't Halliburton, where they get up one day and say, 'Here's a $5 billion contract.' The way to understand this dynamic is that contributions allow you to build relationships with elected officials, and that while they are not necessarily required in order to do public affairs work, they are door openers, and they are certainly something that is appreciated by people who need to raise money in order to seek higher office or to win office in the first place." Edelman Chicago EVP and GM Cathleen Johnson agrees that contributions are a valid strategy. "It's really a part of doing business," she says. "We have made contributions throughout the history of the company really because we're a part of the community." Information vacuum While there is little agreement on how and when contributions are OK, there is almost universal consensus that the hint of impropriety is bad for the industry. Along with reinforcing PR's image as a profession of spin doctors, it also can lead to the perception that the PR services do not have value, and contracts are just political gifts. "The real issue here is that people are questioning why government agencies go outside of their internal resources to contract for services," says Donna Andrews of Lee Andrews & Associates, another LA firm with a DWP communications contract. "People need to understand that PR is really a matter of educating people on how their money is spent." In fact, Dowie has been criticized by the local PR community as much for remaining mostly silent about the accusations as for his business tactics. Fleishman has run a number of successful programs for the DWP, but the public is largely unaware of any benefits from the contract, leaving skepticism over its value. That kind of information vacuum is concerning to some - especially when it involves public funds. "I do think it is incumbent upon agencies who do work that is funded by taxpayer money to be intensely transparent about the value of the work we provide," says Kessler. "I think PR firms should be guided by a set of principles that would render any questions about their ethical foundations groundless." But Dowie says that he is not obliged to stage a defense. He adds that the client's interests supercede those of Fleishman, and that it is not his or his firm's prerogative to respond. "It isn't our role to do that," he says. "It's the client's role. Up to now, those clients who've been singled out have not thought it was necessary because the constituents that were important to them knew the value we brought, and that protesting was not a worthwhile exercise." He might be right. While Fleishman's silence on the matter encouraged the press to keep digging and confused the PR community as to strategy, it hasn't yet hurt the agency - or Dowie. Last week, as rumors swirled through town that he was being fired over the controversy, Fleishman management instead announced that Dowie was promoted to head of the its California public affairs operations, and co-chairman of its national public affairs practice. Critics say it's a PR move to pull Dowie out of the LA spotlight and protect the firm's image. Fleishman insiders say the move was long in the planning, but pushed ahead by the speculation of Dowie's demise. Dowie says most of the criticism is sour grapes over his success. "If I'm doing something wrong," he says, "[the competition] might all want to start doing it."

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