Governments Have a Responsibility to Spend on PR
Charting the future of public relations
Holmes Report
CEO

Governments Have a Responsibility to Spend on PR

Government agencies have a responsibility to keep people informed about their activities. In many cases, they also have a responsibility to educate citizens about behaviors that have significant implications for the community at large.

Paul Holmes

One of the most important responsibilities of government is to communicate with the people it serves.

Government agencies have a responsibility to keep people informed about their activities. In many cases, they also have a responsibility to educate citizens about behaviors that have significant implications for the community at large—environmental behaviors such as recycling or car pooling; behaviors related to public health issues, such as condom use and pregnancy prevention.

It’s hard to see how a decision last week by the Mayor of Los Angeles will help government fulfill its responsibility to its citizens.

In the wake of controversy surrounding the city’s relationship with Fleishman-Hillard, Mayor James Hahn last week directed city departments to halt negotiations for future contracts with public relations firms and if possible to break current contracts. “We’re going to have to save every single dollar we can,” says Hahn.

The moves comes after questions were raised about the Mayor’s relationship with Fleishman-Hillard, which has earned more than $20 million in city contracts in recent years, including work with the Department of Power and Water and the Port of Los Angeles. The firm has made campaign donations to the Mayor and others, and has done some pro bono work for political candidates in the city.

Two weeks ago, subpoenas were served at the firm’s St. Louis headquarters as part of an investigation into the city contracts, and last week, the firm announced it would not seek to extend or renew those contracts—a decision made irrelevant by the Mayor’s announcement this week—because the controversy has become a distraction.

Newspaper reported that officials at four of the largest city departments estimate their contracts with outside PR firms worth at least $7 million a year. While the papers suggested the decision could “save the city millions of dollars,” it is far from clear whether there will be savings, or whether the move could end up costing the city a large amount.

Some of the ongoing communications work currently handled by agencies will presumably still be done, necessitating the addition of in-house staff at unknown cost. Communications programs that are discontinued could cost the city even more: one of Fleishman’s initiatives for the Department of Power and Water, for example, involved conservation communication. Conservation has saved the city millions of dollars. If consumers use more water, the costs could be significant.

The move was immediately blasted by public relations executives in the city, and by national industry spokesmen.

“I understand the motivation for the move, but I don’t think the response was well thought out,” says Ron Hartwig, head of the corporate practice at Hill & Knowlton and one of the leaders of the PR business in L.A.. “Frankly, if abuses were suspected, who ever recommended this action to the Mayor should have suggested the administration take a look at each individual use of an outside firm to determine whether contracts were issued inappropriately: was there was sufficient, properly trained internal capability to handle communications, was specific expertise needed, or was outside counsel hired because there was no internal staff. Decisions with regard to the use of outside counsel should be made on the appropriateness of each situation.”

Jerry Swerling, a Los Angeles-based consultant who handles agency searches regionally and nationally, agrees, “A more rational approach would be for the mayor to trust the judgment of the people he hired and let them make decisions about what’s essential and what’s not,” he says. “He is, in effect, stripping them of the very accountability he seems to be looking for.”

The Public Relations Society of America, meanwhile, said the “sweeping decision to stop all city business with public relations agencies amounts to an overkill response that could prove detrimental to the people and the economy of the Los Angeles area.”

Said Del Galloway, PRSA president and CEO, “While we believe that any client—whether it be a governmental entity, a corporation or a nonprofit organization—has the right and the responsibility to monitor and review agency performance to ensure that value is being delivered and that the agency is performing in an ethical manner, suddenly stopping agency-developed and executed communications programs that help educate, inform and assist citizens seems no more sensible than suddenly ending all city contracts with advertising, law or accounting firms.

“By severing relationships with agencies, the mayor may well be bringing to halt programs that benefit the people of the Los Angeles area.”

Leaders of the Los Angeles Chapter of PRSA point out that agencies have worked for the city and county on public education programs to promote recycling; encourage the appropriate use of the 911 emergency number; support public participation in parklands development; and educate citizens on water and electricity safety issues. 

“If citizens are unaware of the resources the city offers to them, then those resources can’t help make a difference in residents’ lives and achieve their intended purpose,” the Society said in a press release. “If agency professionals are not there to keep these communications programs going, the city may be hard-pressed to continue these communications efforts that affect the lives and well-being of Angelenos,” added Galloway.

Galloway thinks it’s particularly troubling that Mayor Hahn was unable to say what the dollar impact of the decision would be, and what programs will be affected.

Not everyone was impressed with the PRSA’s intervention, however. Sue Tellem, a veteran of the L.A. market and owner of boutique firm Tellem Worldwide, worries that the Society might have brought national attention to a local problem. As far as I am concerned, it is a local problem, should have been contained here in L.A., and should have been addressed locally by PRSA-LA, because now every city in the America may start questioning expenditures for PR.”

In fact, other cities are already looking closely at PR expenditures, although it’s not clear that the scrutiny is a result of the situation in L.A. Just this week, civic leaders in Florida’s Collier County voted 5-0 to reduce the annual maximum that could be spent on each of four public relations firms from $500,000 apiece to $200,000 apiece. The cut reduced from $2 million to $800,000 the potential amount that could be spent annually on outside public relations work.

Meanwhile, industry leaders in L.A. are taking stock of the Mayor’s decision on their business. According to Hartwig, “A number of agencies will be impacted by LA’s decision but I suspect only a few will see a serious hit to their revenue line.

“But the critical issue for public relations and public affairs firms, from a business perspective, is the suggestion left by this decision that outside firms do not provide value when they are hired by government agencies and that PR and public affairs firms firms are not good stewards of the money being spent by governmental agencies for outside counsel.

“Clients of communications firms validate our good work and valuable contributions each and every day, and I’m not aware of many firms that are not interested in providing clients a good return on their investment. For L.A. to single out communications firms among other professional services firms is not smart and just plain wrong in my opinion.”

Minority-owned firms may be particularly hard hit, because government agencies are obliged to include minority and women-owned businesses in their RFPs, and because many social marketing projects require special expertise in communicating with minority markets.

“I suspect that communications to targeted ethnic communities, which often are a critically important part of government public relations and public affairs contracts, will suffer as a result of this move, irrespective of whether that expertise is provided by minority-owned firms,” says Hartwig. “Public communications programs in particular must take into consideration not just language, but also cultural considerations in order to truly communicate with numerous ethnic audiences.”

Bill Imada, who heads IW Group—a specialist in communicating with the Asian-American community—says his firm handled city contracts during the Bradley, Riordan and Hahn administrations, but doesn’t expect to see business decline. “Although we currently do business with the City of Los Angeles, it should not impact our bottom line severely. We have a diversified portfolio that includes federal, state, county and corporate business.  Our city business is important but won’t hurt our overall business.”

But a more troubling question is why public relations firms are being singled out. The city also contracts with advertising agencies and law firms, for example. A more equitable course, Galloway suggested, would be “a review of city spending on all outside professional services firms, with an eye toward value provided and performance delivered. Singling out one profession, across the board, with no regard for the services that are being provided or the impact of the communications programs that are being conducted may be a short-sighted solution.”

“The public relations agencies that augment the efforts of the city’s communications professionals provide valuable work that should be judged on its merits, and either continued or terminated based on measurable results after a careful review process,” says Galloway.

There are two answers to the question.

The first is that there is still an almost overwhelming lack of understanding about what public relations is. The controversy over Fleishman-Hillard’s work has been exacerbated by the willingness of both politicians and the media to pile on, questioning what the city is getting for its money. Some even questioned why the Department of Power and Water, a monopoly, needed to spend money on PR, perhaps assuming that Fleishman’s work had involved marketing either electricity or water to residents.

Just as corporations hire public relations firms for a wide variety of reasons—and presumably, consider the money spent an investment—so government agencies face a wide variety of challenges, many of which require effective communications. And that’s particularly true in a city as large and ethnically diverse as Los Angeles.

Hartwig worries that government agencies may not have on staff either the ethnic understanding or the specialized skills necessary to undertake complex public education projects.
Says Bill Imada, “In a city as diverse as Los Angeles, where there are more than 100 languages and dialects being spoken, you must include public relations as part of your integrated communications approach. Many governmental agencies either have internal PR departments and/or use outside consultants to help them communicate with the diverse needs and concerns of their constituencies. So yes, it does make sense for the government to spend dollars to reach out to its diverse audience.”

But there’s a second concern, which is more troubling: that the dividing line between public education and political propaganda is awfully fine, and that public money is sometimes spent to promote an administration’s partisan objectives.

The federal government’s recent use of a video news release to promote changes in Medicare illustrates the problem. The VNR, produced by the Department of Health & Social Security, presented the new Medicare prescription drug benefit as good news for seniors, although many believe it will benefit insurance companies and pharmaceutical manufacturers more than recipients.

“This is a question of ethics,” says Hartwig. “Outside firms that take on government work must always be alert to the point at which legitimate ‘educational’ communication and ‘overzealous communication’ intersect.  Firms must be prepared to take an ethical stand not to act in a way they know is inconsistent with the agency’s mandate, particularly given the fact fees are being paid with the public’s money.”

In L.A., there may be additional issues. Certainly, some local firms question the process by which contracts have been awarded.

Says Tellem, “I am convinced that we have lost contracts because of favoritism. I believe there are contracts that should never have gone out to bid—it seems the decision of which firm to hire was made prior to the RFP. I do my homework after every loss to see what happened: I am questioning two/protesting one right now. We protested recently and won because the scores were added up wrong on the City’s part.”

Clearly, there is an argument to be made for greater transparency in the awarding of government public relations contracts, and clearly, there is a need for elected officials and media watchdogs to ensure that public money is spent wisely—which means making sure public relations programs have measurable bottom line objectives that benefit taxpayers.

But there is also a need for government to communicate as effectively as possible with its citizens, and it needs professional counsel to do that. By abandoning the use of PR agencies because of so far unproven allegations against a single firm is short-sighted, and does a great injustice to professional communicators who have helped Los Angeles city agencies explain complex issues and promote important initiatives.

Article tags
Government
View Style:

Load 3 More
comments powered by Disqus