More Op-Ed Paylola: This time it's biotech giant Monsanto, which paid Hudson Institute senior fellow Michael Fumento $60,000 in 1999 -- a payment that went undisclosed when Fumento wrote a column promising that new products from Monsanto that will " help us all by keeping prices down and allowing more crops to be grown on less land."

Scripps Howard News Service has severed its relationship with Fumento, just as Copley News Service dropped Douglas Bandow after it was revealed that he accepted money from Jack Abramoff for writing columns favorable to the disgraced lobbysist's clients.

Fumento says he's "just extremely pro-biotech," which is a perfectly good explanation of why he wrote the column, but not of why he failed to disclose his financial relationship with the company. For the record, I don't believe Fumento wrote the column because he received a payment from Monsanto; I believe he received the payment because he held the kind of views he expressed in the column. That's not direct corruption, but it does create an insidious environment in which columnists know they will be nicely rewarded for pro-business editorializing.

At the very least, the public has a right to know how much money is changing hands and thus to decide for themselves whether that taints the objectivity and credibility of the opinions they are reading.

Dazzled by Bright Shiny Objects: Over at the National Journal, William Powers takes aim at the mainstream media for fawning all over the tech companies that participated in this year's Consumer Electronics Show. While some of the trade media offered a critical perspective on the new toys on display, consumer and business titles abandoned any pretence of objectivity to become unabashed cheerleaders: "To read the pop coverage of these trade shows... it's as if these aren't companies at all. We cheer them as if they were disinterested do-gooders or beloved folk heroes, not profit-driven powerhouses with legions of lobbyists in D.C."

A (Brief) Disruption in the Force: Silicon Valley Watcher Tom Foremski predicts doom and "disruption" for the public relations industry in a post that appears to equate PR with media relations -- mainstream media relations, in fact -- and to assume that its exclusive purpose is to drive sales. Richard Edelman responds point-by-point. I have nothing to add, except to say that the mainstream media experienced disruption because they conspicuously failed to adapt to a rapidly changing environment; PR firms -- even big mainstream PR firms -- are adapting at just about the right pace, which is to say that most are just slightly ahead of their clients in embracing new media. (ADD: Steve Rubel, who posts so fast I can't keep up, makes exactly the same point here.)

Swindlers, Fixers and... Is There a Third Way?: In an entertaining if not particularly substantive piece for the Financial Times (sub req’d), Slate editor Jacob Weisberg casts a jaundiced eye on the Washington lobbying scene, where he finds two kinds of lobbyists.

The swindler (Jack Abramoff was an example) “spends a lot of time prowling fundraisers and receptions to be seen and photographed with his arm around elected officials… Short of a criminal inquiry, infamy is free advertising. The Swindler lobbyist's natural prey is the naive but cynical client -- the African dictator, the Russian oligarch or the casino Indian -- who thinks the game in Washington is rigged and that he must pay someone… to play and win it.”

The fixer “does not socialise promiscuously or revel in the high life. His work takes place over the phone or in boring, substantive meetings…. What, if anything, he accomplishes for them remains a mystery, since neither he nor the client wants you to know.”

Cynicism aside, Weisberg captures a disturbing truth about the state of the influence game, which is that over the past six years it has moved back inside the beltway. In the 90s, most of the high-profile policy debates – telecoms and healthcare reform come to mind -- were played out in the public domain, and smart companies used a broad range of services that included media relations, grassroots organizing, issues advertising to marshal public support beyond the beltway and influence the outcomes.

Over the past six years, a lot of that work has either dried up or exists to provide “air cover” for members who have already decided which way to vote. Public opinion won’t sway them, but they’d like you to sell ordinary voters on your position so they don’t have to pay a price for supporting you. Whether that’s because one party controls all three branches of government, and does pretty much whatever it likes, or because that party is uncomfortable with free and open debate is an issue upon which reasonable people may disagree – but I don’t think the trend has been a healthy one for either public relations or democracy.

It’s possible that the Abramoff scandal might start the pendulum swinging back toward greater public involvement, that it might reignite the kind of public relations activity that involves voters in the discussion. My friend John Ashford, CEO of The Hawthorn Group and expert in grassroots mobilization, thinks so: “In the post-Abramoff era,” he says, “I have a feeling there is going to be a huge premium on true grassroots/grasstops lobbying… that is done honestly, credibly, transparently. It can’t be Astroturf… It’s got to be real... and it’s got to be transparent about who is paying for it.

“What, in a democracy, could be a more legitimate form of advocacy or lobbying than taking a message about an issue into the public arena, convincing constituents of their interest in it, and mobilizing them to lobby their elected officials? It’s not about sky-boxes at sports events, or free trips or corporate jets, or salaries for members’ wives, or bundled campaign contributions. It’s about waging a public campaign on a public policy issue.”

Here’s hoping.

Only in America: The most bizarre crisis of the New Year involves a wrongful death lawsuit filed against the restaurant chain Benihana, claiming that shrimp tossed at a family by a crazed Japanese chef led to the death of a 43-year-old Long Island man. The victim jerked his head away when a sizzling shrimp seemed to be headed his way. "That violent motion wrenched Colaitis' neck and led, less than a year later, to his death," according to a lawyer representing the widow.

Tech's Back: A San Francisco Business Times article suggests that technology PR is making a healthy comeback in the Bay Area: "New technology-focused PR offices are popping up around the Bay Area as existing ones expand -- and all are hiring, hiring, hiring." (Let's hope they can avoid the hubris that accompanied the last PR boom.)

One interesting aspect of the article: it focuses primarily on boutique and specialist firms. Racepoint, Flash Point, Text 100, Allison & Partners are all spotlighted, but there's no mention of the Bursons, Edelmans, and Weber Shandwicks of the world. Is that ommission a reflection of the reality of the new boom (entrepreneurial clients are looking for entrepreneurial agencies) or of the writer's slant?

Quote of the Week: A quick calculation suggests I spent about 10 days on Virgin Atlantic flights last year (about 20 trips each way across the Atlantic) and I enjoyed every one of them. This quote from Virgin boss Richard Branson, welcoming new PR director Paul Charles, explains why: “As my memory is so bad our primary criteria in selecting a replacement for Paul [Paul Moore] was finding someone who answers to the same name. Paul Charles fits the bill admirably and is apparently not too bad at PR (although we’ll soon train that out of him).”

Wal-Mart Asked to Pay “Fair Share” in Maryland: The Maryland Senate yesterday voted 88-50 to override the governor’s veto of a Fair Share Health Care Plan that requires companies with more than 10,000 employees in the state to spend at least 8 percent of their payroll costs on health insurance.

There are four employers with more than 10,000 employees in the state of Maryland: Johns Hopkins University, the grocery chain Giant Food, the military contractor Northrop Grumman, and Wal-Mart. And there are no prizes for guessing which one in the only to spend less than 8 percent of its payroll on healthcare.

And so Wal-Mart spent heavily on lobbying to try to derail the legislation, which was overwhelmingly supported by Maryland voters: 66 percent told a Zogby poll that they wanted the Senate to override the veto.
Reactions from Wal-Mart supporters were predictable—and largely specious. House Republican leader George Edwards called the measure an unwarranted intrusion into the workings of the free market. But in a democracy, the marketplace of ideas is just as free and just as important as the marketplace of commerce, and Wal-Mart—despite spending a small fortune of lobbying—clearly lost in the marketplace of ideas.

Edwards also had a message for the company’s workers: “If you don't want to work for Wal-Mart, no one’s twisting your arms. Go somewhere else and work.” Of course, the same message now applies to Wal-Mart itself: “If you don’t want to provide minimal healthcare benefits for your employees, no one’s twisting your arms. Go somewhere else and sell.”

However, that could get increasingly difficult. At least 30 other states—tired of being asked to pick up the cost of uninsured workers—are reportedly considering legislation that would require large companies to pay their fair share. Victory in Maryland will add momentum to those efforts.

Robert Scoble: PR Man of the Year?: Neophyte blogger Tony Calandro (of Fleishman-Hillard in St. Louis) drew my attention to this post at Blog Business Summit suggesting that Robert Scoble has more reach and influence than any of the country's top public relations firms.

Actually, that's not quite what BBS is saying. But Scoble (if you don't know who he is, Google him, because he's a role model for any corporate blogger) is mentioned on more Google pages than any PR firm (almost twice as many as Burson-Marsteller, which tops the PR agency rankings); has 13,900 inbound links (compared to 899 for B-M, which again is number one); and is ranked 7,136th in site traffic by Alexa (Edelman is the top ranked PR firm, at 107,735th).

Says BBS: "The goal here is not to imply that the PR firms aren’t incredibly sharp at leveraging TV, radio, print, and other traditional media. These guys are consummate pros in those arenas. My goal is simply to nudge them into considering a shift in their Web strategies a bit more toward the blogosphere."

Le Big Mac: I've seen a lot of stories about the potential European backlash against American products as retaliation for our unilateralist foreign policy (and even written one myself) so I read with interest Daniel Gross's account of a study that provides pretty robust evidence that three quintessentially American brands--Coca-Cola, McDonald's and Nike--are doing pretty well in Europe, thankyou very much.

You'd think that if Europeans were going to pick on anybody, they'd pick on McDonald's, which is unpopular for lots of reasons, not just because it's American. But European sales at all three companies are thriving compared to those of European rivals and compared to their own U.S. sales. In other words, Europeans--like Americans--tell researchers they are going to do something (boycott, buy environmentally friendly products, etc.) and then do nothing.

Of course, the study focuses exclusively on sales. American companies could still be paying a price for the Bush administration's unpopularity in Europe in other ways: recruitment could be down, or recruitment costs higher; planning permission could be more difficult to obtain; the regulatory environment might be more hostile; takeovers might be more difficult to push through. Anyone have any data?

Created vs. Earned, Part II: Richard Edelman's first post of the new year (no criticism intended, he's a lot busier than I am) dovetails nicely with Steve Rubel's ruminations yesterday about what he calls "created" media and the traditional "earned" media that is the PR industry's bread-and-butter.

Richard cites a couple of stories--one involves the Washington Redskins doing an end run around the mainstream media by providing exclusive interviews to Redskins.com TV; the other reporting that: " Subjects of newspaper articles and news broadcasts now fight back with the same methods reporters use to generate articles and broadcasts, taping interviews, gathering email exchanges, taking notes on phone conversations and publish them on their own Web sites." Both appear to be examples of "created" media.

Richard makes an excellent point about the Redskins story: "While the technology exists to go direct to the end user of information does not mean it is smart to make it the exclusive means of news dissemination... Talking to the traditional media is also part of what fans deserve... There needs to be some opportunity for critical observers, whether reporters or bloggers, to ask questions of those in charge, whether in government, business or sports. If you don't like the heat, get out of the kitchen."

There's nothing new or interesting about "created" media if we are just using new channels to send out the same pre-packaged, controlled, one-way communication.

Richard's right about the second story, too: "Let the facts speak for themselves. Post the raw material in the spirit of the Web. Let everybody see the full interview copy. They can draw their own conclusions."

That's an entirely appropriate use of "created" media. It's disruptive. It's participatory. It opens up dialogue--at least between the reporter and his subject; hopefully between both parties and the intended audience.

Jay Rosen Nails It: Over at his PressThink blog, Jay Rosen expresses his disappointment with CNN (and other mainstream media) over the Sago mining disaster debacle, and takes the network to task for describing its erroneous reporting as "unavoidable." Then he writes a nice speech for CNN honcho Jonathan Klein to give to the troops at the network.

“We screwed this up, although we came out looking okay because the Governor was wrong, and we had a wrong Congress person too. Their sources were as bad as our sources.

“We’re CNN; we’re supposed to be more reliable than anyone. Our slogan isn’t ‘Wrong when the Governor’s wrong.’ Statesmen are supposed to watch us to find out what’s going on in their world.

“It is unacceptable to me that for three hours of live television, with our top talent presiding, we’ve got twelve men alive reported as truth, and we never saw those men, no ambulances for them ever moved, and we had no real confirmation. Just a bunch of people saying: yeah, that’s what we heard.

“No one from inside the rescue operation was putting his name, or his ass on the line with those facts. But we did not report that. Yet we put our ass and our name on the line, and Anderson’s, when we had almost no facts."

Rosen, who is a journalism professor, may not take this as a complement, but he would make a great PR man. At least, his public relations instincts in this instance are spot on. My only disagreement is that rather than giving this speech to employees, he should go on air and repeat it to CNN's audience.

Taking Their Toll (Calls): Andy recently launched into a rant against the offshort customer service people at Belkin. Concluding with the advice: "as for companies that outsource their customer service to companies that operate under the cloud of fake anonymity -- don't do business with them." Fair enough. Lots of people aren't to happy when they call a large American corporation and find themselves talking to someone a continent away who doesn't seem to be accountable to anyone.

But it turns out they don't like you any more than you like them. Newsday reports that one of the hot new shows on Indian television is The Call Center. The pilot scripts "depict Westerners as arrogant, immoral and comically rude." Not sure about the "comically" but otherwise it sounds about right.

Political Disclosure: In the wake of the Abramoff scandal, there's nothing particulalty surprising about this call for six large corporations--including Chevron, Cinergy, Union Pacific, and Wal-Mart--to disclose their political contributions. "Without these procedures in place, corporate executives will be free to use company assets for political objectives that are not necessarily shared by the entire company and its shareholders," New York City comptroller William Thompson says.

Actually, there is one thing that's slightly surprising: that there are still six big companies who think its okay not to tell shareholders how their money is being spent to influence the political process.

Created vs. Earned: Steve Rubel asks when "created" media will outshine the "earned" media that has traditionally been PR's bread and butter. Steve specifically mentions "podcasts, blogs, vidcasts and the like" as examples of "created" media, but in one sense advertising is "created" (by the company paying for it) too. What makes the new "created" media forms for which Steve is such a passionate advocate so different?

The answer is, not much, unless they invite feeback, response, and conversation. A podcast that simply conveys the message the company wants to convey is nothing more than an ad delivered via an iPod rather than a TV screen -- unless it's designed to be different. And the medium is not what makes it different; the content is.

If we use these new media for controlled messages--the kind companies have always prefered--then we have a new toy, but we haven't done anything to change the way we play. What makes these new media truly exciting is that we can use them to change the rules of the game, to surrender control and in exchange gain credibility--the most valuable currency of all in a media-saturated message-proliferated environment.

That means we don't create the media. We might initiate a conversation, or engage an audience, but if it's going to take advantage of the ability of these new media to deliver something powerful (and just as credible as "earned" media) that conversation must be allowed to take on a life of its own. It's organic. It's free-flowing. It has multiple contributors rather than a single creator.

So my answer is, "created" media (how about "engaged" media?) will outshine earned media when the creators learn to let go of their creation and allow it to become the property of entire community. And most companies are still reluctant to surrender that control. They still fear the unpredictability of conversation and collaboration. Until that changes, they will never realize the potential of these new media.

Mine Kampf: In the days after the Sago mine disaster, the media are trotting out their follow-up stories on the issue of mining industry safety, and they make disturbing reading. Archetypical is this effort from The New York Times, which includes some disturbing statistics about the number of safety citations at the Sago mine and lax enforcement by the Bush administration: "Since 2000, 84 mines have not paid any citation levied against them that exceeded $10,000, according to federal records. Indeed, miners say that they are sometimes forced to accept unsafe working conditions in return for employment."

An earlier Times editorial made a more explicit link between the Bush administration's lax enforcement and the disaster: "As inspectors delve into the deadly mine disaster in Sago, W.Va., their starting premise must be that the explosion that choked off 12 workers' lives would never have happened if all the safety rules now on the books had been properly enforced."

Meanwhile, over at the Washington Post, Howie Kurtz wonders why the story of mine safety was all-but ignored by the mainstream media for the past few years: "How many reporters have dug into the Labor Department's Mine Safety and Health Administration, which under the Bush administration was run by a former Utah mine manager until last year? About as many as did pieces, before Hurricane Katrina, on why a former Arabian horse official was running the dysfunctional bureaucracy of the Federal Emergency Management Agency."

Neither Times article, nor the Kurtz piece, seem to put much stock in statistics, perhaps because they might have contradicted the premise upon which they were built. The fact is that mining fatalities have shown a slight decrease under the Bush administration, from 38 a year under Clinton to 29 a year under Bush (I say slight, because the number of miners has also decreased, from 140,000 when Clinton took office to 108,000 in 2004).

There may be some logical explanation for this that does not undermine (no pun intended) the basic argument about lax enforcement, but if so I'd like to know what it is. As it stands, the media are just ducking the issue and hoping no one notices the facts that might get in the way of a good story. The blogosphere has actually done a better job of creating a robust debate about this issue, pro-administration and con.

A Fine Mess: Perhaps this is why International Coal Group thinks $2 million is a generous donation to the dead miners' fund. "At one point last year, the Mine Safety and Health Administration fined [ICG] $440 for a 'significant and substantial' violation that ended in the death of a Kentucky man." No, there are no zeroes missing from that number. And yes, the article says the fine has still not been paid. Maybe they could start another fund to raise the $440.

PR is Everybody's Job: Scott's crisis communications advice--"When a 5-Year-Old Gets Drunk at Your Restaurant, Don't Say 'No Comment'"--is spot on.

The larger lesson for public relations people is not a new one, but it's one too many corporations forget: public relations is everybody's job.

I once participated in a discussion of the proposition that "PR is too important to be left to PR people." I agreed. If PR people are the only ones thinking about corporate reputation, your company is going to have a lousy reputation. (Similarly, if the CFO is the only one thinking about making a profit, you're going to lose a lot of money).

One of the PR department's most important tasks is making sure everyone in the company understands the importance of reputation and is empowered to make the kind of decisions that will protect reputation. In a company that has done that right, the store manager would no more say "No comment" in a situation like this than the PR department.

Two more points: First, it's kind a cheesy journalistic trick to call the store manager, because you know he (or she) is going to be less sophisticated about PR than someone at headquarters. The only reason to do it is because you hope he (or she) will say something dumb, like "No comment."

And second, it doesn't look like the store manager in this case was any worse at public relations than the folks at headquarters, who didn't return calls from WCBS-TV and told The New York Post they "had not seen the legal papers yet."

He Would Know: Eliot Spitzer's business advice: "Never write when you can talk. Never talk when you can nod. And never put anything in an e-mail."

Vive le Difference: Another FT piece, this one by my favorite business journalist Alison Mailand, reports on a MORI survey that contrasts leadership styles in France, Germany and the U.K. Its conclusion, in somewhat simplified form: the Germans are democrats; the Brits are meritocrats; and the Franch are autocrats. The French were three times more likely than the Germans to say "being in a position of power" than the British. "I enjoy the decision-making without having to confer with others," said one French respondent, unfamiliar with the idea of consensus-building.

The lessons for anyone managing an international team are obvious: "The danger for any leader is only being able to operate within one of these styles," says Steve Newhall, managing director of DDI, the HR consultancy that commissioned the study. "If you take an autocratic style into a culture that expects a more democratic or meritocratic style, the chances are that you will trip up."

Swimming with Sharks: Last year, a German politician famously compared hedge funds to "locusts," but a thoughtful analysis in this morning's Financial Times says they're more like sharks: "While misunderstood and feared, sharks are a vital part of the ecosystem. In recent years, however, depletion of tuna and other traditional food sources has forced them to go after alternatives, in a move known as 'prey switching.' With a little modification, this description fits hedge funds, especially those in the U.S. [where].... returns in equities and fixed income are dwindling. Under these circumstances, hedge funds are forced to switch to Europe and Asia as they continue to gather assets."

The article contains some sound advice for corporate and financial communications professionals dealing with hedge funds: "Actively engaging investors is the prudent first course. After all, every company claims to consider its shareholders 'part owners' in the company; hedge fund investors are simply behaving as if that were the case."

And: "In order to live successfully with this new breed of sharks, executives must learn to use all the weapons that the hedge fund activists employ, including influencing current shareholders and mastering media relations."

Intellectual Inconsistency: Every now and again, The Wall Street Journal flat-out amazes me. Its op-ed pages today contain a lecture on the immorality of the sex industry, in which authors Colette de Troy and Mary McPhail stand up for the poor, exploited workers against the unabashed capitalists who make a profit off their hard labor.

"World-wide profits from prostitution exceed $12 billion annually," they say at the opening of their article. "Of course, the women generally see very little of this money." Later, they bemoan the fact that "the sex trade is predominantly in the economic interests of sex traders and takes place at the expense of the prostitutes."

Take out the words "sex traders" and "prostitutes" and replace them with the word "corporations" and "workers" and you'd have an identical socialist critique of the entire capitalist system.

I'm not making any kind of apology for the sort of human trafficking that accompanies the sex trade. But I'm not sure it's any worse than the exploitation of illegal immigrants on farms in California or coerced labor in sweatshops here and abroad, and it's hard to imagine the Journal giving op-ed space to union organizers opposed to such practices.

If I was a cynic I might wonder whether its outrage over the sex trade might have more to do with its disapproval of the product for sale than concern for the women selling it.

Full Co-operation: The New York Times takes a look at the crisis management approach of Greenberg Traurig, the Washington law firm where disgraced GOP lobbyist Jack Abramoff plied his dishonest trade. According to the Times, "his actions have threatened the firm's very existence by leaving it vulnerable to malpractice claims."

The company's response appears to be textbook crisis management.

Greenberg Traurig rushed to distance itself from Mr. Abramoff, appease his clients and work closely with prosecutors. In the process it has earned praise for its cooperation from Senator John McCain, Republican of Arizona, kept alive the possibility of suing Mr. Abramoff for its losses and negotiated financial settlements with most of Mr. Abramoff's victims.

"They have taken the new approach that most corporations or institutions take in today's world, which is just completely cooperate with the investigation," said David Schertler, a former federal prosecutor who practices at Schertler & Onorato in Washington. "Once they find out about some wrongdoing, they completely distance themselves from the person that was doing it." He added that for Greenberg Traurig, "that does seem to have been pretty effective."

That doesn't mean Greenberg Traurig will walk away unscathed. But so far it has not been tarred in the media with the same brush as its former employee.

When Your Trust Bank Account is Overdrawn: Scott at Media Orchard rightfully takes issue with bloggers who jumped to the worst possible conclusion about Wal-Mart's offensive links problem--and offers up the real explanation, which I hadn't seen before (it wasn't a software glitch; it was a well-meaning human error). Obviously, the company is owed an apology.

And yet... and yet... Without condoning or apologizing for those who accused Wal-Mart of racism, I have to say that if Al Golin's famous "trust bank" concept means anything, it means that while some companies have a healthy balance to draw on in times of trouble (Johnson & Johnson), others are overdrawn (Wal-Mart). So when a problem comes along, they don't get the benefit of the doubt; people assume the worst.

Wal-Mart, lest we forget, has a history of censoring authors whose politics it disagrees with; exploiting illegal immigrants; and comparing its critics to Nazis. That doesn't make it racist. But a company that nurtures that kind of reputation should not be surprised if some people are inclined to assume the worst.

When Your Trust Bank Account is Overdrawn: Scott at Media Orchard rightfully takes issue with bloggers who jumped to the worst possible conclusion about Wal-Mart's offensive links problem--and offers up the real explanation, which I hadn't seen before (it wasn't a software glitch; it was a well-meaning human error). Obviously, the company is owed an apology.

And yet... and yet... Without condoning or apologizing for those who accused Wal-Mart of racism, I have to say that if Al Golin's famous "trust bank" concept means anything, it means that while some companies have a healthy balance to draw on in times of trouble (Johnson & Johnson), others are overdrawn (Wal-Mart). So when a problem comes along, they don't get the benefit of the doubt; people assume the worst.

Wal-Mart, lest we forget, has a history of censoring authors whose politics it disagrees with; exploiting illegal immigrants; and comparing its critics to Nazis. That doesn't make it racist. But a company that nurtures that kind of reputation should not be surprised if some people assume the worst.

You Don't Say: Two minutes after posting the News Corp. story below, I came across this: "Old Media is Clueless on the Web, Says Independent Report." No further comment necessary.

Fox-Pas: In April of last year, News Corp. chief Rupert Murdoch made a major speech in which he acknowledged the power of the Internet and claimed to understand its dynamic. Younger consumers, he said, "want to be able to use the information in a larger community--to talk about, to debate, to question, and even to meet the people who think about the world in similar or different ways."

That's what they want, but apparently News Corp. is not going to give it to them. The company bought MySpace, a file-sharing site for young adults, a few months after Murdoch's speech. Now, according to this report in The Independent, it's censoring messages that refer to rival sites. Says one angry netizen: "This is soooo like Fox and News Corp to try and secretly seal our mouths with duct tape."

When 600 members complained and threatened a boycott, News Corp. relented--and then shut down the blog forum on which the complaints had been made.