Ray Durazo has launched a new agency in the shadow of controversy around his former agency, Durazo Communications, which is now run by his son Dan.
Durazo Communications, which was founded in 1991, is at the center of a probe involving $2.8 million in missing tax money owed to TV stations that ran ads touting the California First 5 preschool program.
Regarding the controversy, Dan Durazo said he could not offer a lot of detail due to the fact that "the lawyers are currently negotiating" but said, "Unfortunately, from the start, this matter has been a terrible misunderstanding. The funds were never missing and were never misappropriated in any way and we've demonstrated that to GMMB. We've reached a tentative agreement with GMMB where the lawsuit will be dropped and the media that's owed payments will be paid in full."
Dan Durazo also said that as soon as an agreement is finalized "we're going to issue a joint statement announcing it."
As for his thoughts on his father's new firm, Durazo said, "Ray decided to go in a different direction and everybody here wishes him only the best. And hopefully it will be very successful."
Durazo said he is not concerned about the effect the news about his former agency will have on his new venture.
Durazo, a veteran of Hispanic PR and former head of PRSA's LA chapter, will focus his efforts on Durazo Marketing Group, which is already working on global projects for biotech company Amgen and energy drink maker Red Bull. Merrill Lynch is also one of its first clients.
Durazo Marketing Group was incorporated in December 2005, but Durazo said he put off making the announcement because he was just getting the company "up and running." The timeline was speeded up, however, when he saw a story in the Los Angeles Times about his former agency being implicated in the tax probe.
"Most people in the industry know I haven't been a part of Durazo Communications for a while," he said, explaining that he transferred his stake in that firm to his son, Daniel, several years ago. While he continued to service a number of clients through summer 2005, Durazo said, "I'm not privy to the company's dealings" with California's First 5 or other clients.
He noted that no Durazo Communications clients moved over to his new agency.
Durazo has also hired Joanne Gonzalez Forster as VP and Deborah Pappalau as account supervisor at the firm, which is a virtual operation.
Forster was VP of consumer products for entertainment PR firm Bragman, Nyman Cafarelli, and was most recently in Mexico City where she handled Hispanic media relations for Red Bull's X-Fighters motorcycle event. Pappalau was previously at Rogers & Associates (now the Rogers Group) where she worked on such clients as First 5 California, American Honda, and Kellogg's.