Spinning Out of Sight

In some ways, Armstrong Williams got a bad rap. The conservative black commentator, who was paid by the U.S. Department of Education to advertise and advocate for the controversial “No Child Left Behind” law, lost his syndicated newspaper column and was pilloried for not disclosing the payment.

Williams did indeed betray the public trust, but he was a small fry – a subcontractor who received a mere $240,000 of a one-million-dollar deal between the Education Department and Ketchum, one of the world’s largest public-relations agencies.

And that deal is just the tip of the iceberg.

A recent House Committee on Government Reform investigation – launched after similar revelations about two other commentators besides Williams – identified Ketchum as the largest recipient of recent PR spending, with contracts totaling more than $100 million. Looking into federal procurement records for contracts with major PR firms since 1997, the committee's minority office also found that the Bush administration doubled the government's PR spending to $250 million, over its first term.

Yet there is little information about what that money was spent on. The lack of transparency is especially alarming given the recent spate of PR-related scandals, which include not just paid commentators but also the use of video news releases (VNRs) aired on TV stations as news reports. The Government Accountability Office issued two rulings declaring the VNRs produced for two federal agencies in violation of the ban on covert government propaganda.

Despite this worrying evidence of misuse of public funds, the top PR companies refuse to disclose the details of their contracts. Requests for information from the PR firms that received at least a million dollars from the federal government since 1997 were met with partial and unsatisfactory answers, at best. None of the firms were willing to share any information not already publicly available — including contract agreements or “deliverables” like studies, brochures and VNRs – to clarify what they really did with all that taxpayer money.

Ketchum

Ketchum has received a whopping $100.5 million in federal contracts since 1997. These deals included work for the Education Department; Internal Revenue Service; U.S. Army, to “reconnect the Army with the American people” and boost recruiting around its 225th birthday; and the Health and Human Services Department, to “change the face of Medicare,” promote long-term health care planning, encourage preventative care, and present home care information.

Large increases in Ketchum’s federal work since 2003 mirror the Centers for Medicare and Medicaid Services’ PR spending boost, suggesting that their Medicare work may be more extensive than is currently known.

Apart from the scandal surrounding Armstrong Williams, the firm also produced a controversial VNR for the Education Department that promoted tutoring programs under “No Child Left Behind,” and included then-Education Secretary Rod Paige and PR flack Karen Ryan, who misrepresented herself as a reporter.

Ketchum representatives did not return repeated phone calls – making them among the least responsive of the firms contacted by PR Watch.

Fleishman-Hillard

The recipient of $77 million in federal contracts, Fleishman-Hillard has worked for the Social Security Administration; Library of Congress; Environmental Protection Agency; and the Defense Department, to introduce “managed care” to employees, due to “rising medical costs” and “decreasing resources.”

While Fleishman-Hillard also did not return any phone calls, the firm notes in its application for the prestigious Silver Anvil Award from the Public Relations Society of America that the main challenge of the DoD contract was “the anger and frustration of the retired military community who were now required to pay an annual fee for guaranteed access to health care they said was promised them by their recruiter as a free lifetime benefit.”