Take, for example, the American Petroleum Institute. The oil and gas industry trade group spent more than $7 million lobbying federal officials in 2012. But that sum was dwarfed by the $85.5 million it paid to four public relations and advertising firms to, in effect, lobby the American public — including $51.9 million just to global PR giant Edelman.
From 2008 through 2012, annual tax filings show, the API paid Edelman a staggering $327.4 million for advertising and public relations services, more than any other contractor.
It’s been well-publicized how much industry spends on lobbying the government, but not so much is known about how much money goes toward influencing the public. In an effort to find out more, Center for Public Integrity reporters examined the tax returns for trade associations that spent more than $1 million on lobbying in 2012. The IRS requires the groups to report their top five contractors.
Of $3.4 billion in contracts reported by the 144 trade groups from 2008 through 2012, more than $1.2 billion, or 37 percent, went toward advertising, public relations and marketing services, more than any other category. The second-highest total, $682.2 million, or 20 percent of the total, was directed toward legal, lobbying and government affairs.
By industry sector, the biggest clients of PR, marketing and ad services were energy and natural resources associations.
The public relations industry is on a growth tear while the number of federally registered lobbyists is actually shrinking. Public relations work, unlike lobbying, is not subject to federal disclosure rules, and PR and advertising campaigns can potentially influence a broader group of people. In addition to Edelman, among the other major players are President Barack Obama’s go-to ad agency GMMB, “issue-advocacy” firm Goddard Gunster and government policy specialists Apco Worldwide.
While not a complete accounting of spending, the analysis provides a glimpse into just how important the public relations industry is to groups seeking to influence public policy.
Big energy leads spending
Boosted by the $327.4 million-worth of contracts Edelman inked with the American Petroleum Institute — consistently the largest contracts the Center found in five years of collected data — the energy and natural resources industry outspent every other sector on advertising and public relations.
The API, Growth Energy — which represents ethanol producers — and other energy and natural resources trade groups collectively spent more than $430.5 million on PR and advertising to help burnish their image between 2008 and 2012.
It’s not clear how much of the total went into the bank accounts of the PR and advertising firms and how much was passed on to media companies, however. Edelman declined to comment with Center reporters for this story. Edelman likely left some of the work for the API to its Blue Advertising subsidiary, which offers media planning and placement in its services and discloses work for the oil giant on its website.
Other top energy and natural resources interests included the National Fisheries Institute, which represents seafood harvesters, wholesalers and retailers, and the National Biodiesel Board, whose members take recycled cooking oil and animal fats and turn them into fuel.
Business associations — led by the U.S. Chamber of Commerce — represented the second largest industry category, paying PR and advertising firms a total of at least $214.9 million from 2008 through 2012. The U.S. Chamber, the nation’s biggest lobby and a prolific spender on political ads, paid $173.5 million to its top advertising firms during the five-year period.
In 2010 and 2012, all five of the trade group’s top contractors were advertising agencies.
The U.S. Chamber paid Republican media-buying firm National Media Research, Planning & Placement more than $60.8 million for advertising services in 2009 alone. National Media, based in Northern Virginia, researches voter demographics and behaviors and places ads in key media markets.
Another top advertising contractor for the U.S. Chamber was Revolution Agency, which the trade group paid more than $38.2 million from 2010 through 2012.
Revolution is a Northern Virginia-based advocacy firm that possesses the “Creativity of Madison Avenue” and the “Strategic Discipline of a Political Campaign,” according to its website. Its partners all formerly worked as staffers or consultants for Republican lawmakers, and the firm’s clients have included business groups and the telecommunications industry.
The agency was behind an award-winning public affairs campaign targeting the proposed Consumer Financial Protection Bureau, an agency birthed out of the 2008 financial crisis. The campaign on behalf of the U.S. Chamber included a TV ad that attacked the proposed bureau as a “massive new federal agency that will create more layers of regulation and bureaucracy.”
The finance, insurance and real estate sector ranked third in contracts with advertising and PR agencies, paying $184.5 million to contractors, including favorites the Most Organization, a West Coast advertising agency, and Locust Street Group, a “grassroots” advocacy firm. The sector was led by the National Association of Realtors and America’s Health Insurance Plans.
The Most Organization, based in Orange County, California, earned more than $116.7 million from 2010 through 2012 for its work to promote the National Association of Realtors in a national advertising campaign.
Fourth in PR spending based on top contracts was the food and beverage industry, which paid out $104.5 million from 2008-2012. Big spenders included the American Beverage Association, which has been shelling out millions to try and keep cities and states from taxing sugary drinks.
Rounding out the top five industries for PR and advertising spending was communications and electronics, led by CTIA — The Wireless Association, which represents telecommunications companies like AT&T Inc. and Verizon Communications Co. Also in that category: the Software Alliance.
Steve Barrett, editor-in-chief of trade magazine PR Week, says it’s clear why trade associations rely so heavily on PR and advertising.
“They certainly want to influence the general public,” he says, “because the general public will then influence the politicians, the lawmakers or the regulators in that particular industry.”
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Edelman leads PR firms
The Center’s analysis includes the top five contractors for each trade association. Annual totals need to be at least $100,000 to be reported. The Center looked only at trade associations that spent more than $1 million on lobbying in 2012, according to the Center for Responsive Politics. [See Methodology.]
Edelman’s lucrative contracts with the American Petroleum Institute helped the PR giant earn $346.8 million, significantly more money from top trade associations than any other advertising or public relations firm, according to the Center’s analysis. But the oil industry trade group wasn’t the firm’s only client.
Others included the Business Roundtable ($9.9 million), a group of CEOs who advocate for business-friendly policies, the Software Alliance ($2.5 million) and the Grocery Manufacturers Association ($1.8 million).
The food-industry trade group paid Edelman more than $1 million in 2011 for work related to its campaign to put select nutrition facts on labels — a move that some health experts criticized as a way to head off the Food and Drug Administration’s effort to require more comprehensive labeling.
Edelman is the country’s largest independent public relations firm. It employs more than 5,000 workers and maintains subsidiaries that specialize in grassroots communications and advertising.
The firm’s Washington office has a staff of 225, which includes “former journalists, campaign veterans, political speechwriters, White House staffers and legislative aides,” according to the firm’s website. Among them: Steve Schmidt, a senior advisor to Arizona Republican Sen. John McCain’s 2008 presidential campaign; former White House deputy press secretary Jamie Smith; and former Sens. Judd Gregg, R-N.H., and Kent Conrad, D-N.D.
Edelman is known for its at-times controversial tactics. In 2006, the firm was forced to apologize for creating a misleading grassroots campaign for Wal-Mart. To polish the company’s reputation, the agency had created “Working Families for Wal-Mart,” for which a couple drove across the country blogging positive accounts of the retail giant’s employees and customers — initially without disclosing that they were compensated. The campaign, which launched amid bad press about the company’s employment practices, sought to portray Wal-Mart workers as happy middle-class families.
More recently, leaked documents revealed Edelman’s aggressive plans to attack opponents of a pipeline being developed by TransCanada Corp. Within days of the leak, TransCanada announced that it was severing ties with Edelman.
In both cases, according to reports and leaked documents, Edelman maintained the same three-step approach: promote positive messages, respond to criticism and pressure opposition groups.
Michael Bush, a spokesman for the firm, declined to comment for this story. In an email, he wrote, “We do not talk about the work we do for clients.”
Public relations and advertising agencies boast of their communications savvy, but firms contacted for this story were mum. Some, like Edelman, declined to comment, while others did not return repeated phone calls and emails seeking comment.
Most trade associations also did not respond to the Center’s inquiries.
Lisa Graves, executive director of liberal watchdog group the Center for Media and Democracy, which operates the website PRWatch.org, says trade associations are designed to be a “shield and a sword” for their corporate members.
“It’s important for people to know more about how the trade associations operate and which PR operations they’re funding,” she says, “because those nonprofit entities are extremely powerful special interests in Washington, D.C.”
‘Turning the tide’
Communications firm GMMB ranked second behind Edelman. The agency, which has offices in Washington, D.C., and Seattle, brought in $123.5 million from contracts with five different associations in the beverage, communications, transportation and business industries from 2008 through 2012.
Known most prominently for its political work on behalf of Barack Obama’s presidential campaigns — GMMB’s leadership team includes Obama’s campaign advisor Jim Margolis — the firm has created ad blitzes for trade groups including CTIA and the American Beverage Association, whose members include Coca-Cola and PepsiCo.
From 2009 through 2012, the wireless association paid GMMB $40.5 million to produce ads, including one TV spot with the message that “wireless is freedom.” The beverage association, which teamed up with GMMB on a 2012 ad campaign to promote new prominently displayed calorie labels, paid the firm more than $55.2 million.
The Most Organization and National Media Research, Planning and Placement were the third- and fourth-highest paid contractors for advertising and public relations services. Goddard Claussen (now Goddard Gunster) came in fifth, followed by Revolution Agency, which was sixth, thanks mostly to its work for the U.S. Chamber of Commerce, according to the Center’s data analysis.
Apco Worldwide, which ranked seventh, earned $42.9 million from trade associations. The Washington, D.C.-based firm is known for its work for the tobacco and health care industries. Mike Tuffin, a managing director in the firm’s Washington office, joined Apco in 2012 after serving as executive vice president of America’s Health Insurance Plans, a trade group that represents health insurers.
On behalf of AHIP, the agency created front group Health Care America to attack filmmaker Michael Moore’s 2007 documentary Sicko, which demonized American health insurers, according to Wendell Potter, a former industry-executive-turned-whistleblower. (Disclosure: Potter is a regular columnist for the Center for Public Integrity.)
In the two years before Congress passed health care reform in 2010, Apco won at least two contracts with AHIP, totaling more than $5 million.
Among former government officials at Apco are ex-Gov. Bill Richardson, D-N.M., and ex-Congressmen Don Bonker, D-Wash., and Tim Roemer, D-Ind.
Ogilvy & Mather came in just behind Apco, earning nearly $41 million from four trade associations during the five-year period reviewed by the Center. But the firm, a subsidiary of communications giant WPP, earned almost all of its money from the American Chemistry Council, which represents chemical companies.
The American Chemistry Council paid Ogilvy more than $15 million in 2008 alone. That year, the firm led a couple of PR and advertising campaigns on behalf of the trade group, including one that discouraged Americans from supporting a ban on products containing phthalates, a group of chemicals found in plastics and suspected of causing changes in hormone levels, birth defects and other health effects.
The firm earned awards for the phthalates campaign, which it dubbed “From Toxic to Truthful: Turning the Tide on Phthalates.” Even though Congress eventually banned the use of certain types of phthalates in children’s toys, the firm patted itself on the back for helping to “neutralize negative coverage” and bring “a noticeable shift in the public mood.”
FleishmanHillard ranked ninth, according to the Center’s analysis. Its public relations and advertising clients included the American Petroleum Institute ($27.6 million) and CropLife America ($1.5 million), which represents the manufacturers of pesticides and agricultural chemicals.
The firm, which describes itself as being driven by “the power of true,” has consistently ranked within the top three of the world’s highest-paid public relations companies for the past five years, according to the World PR Report published by the Holmes Report. Its D.C. office is led by Kris Balderston, a former State Department official and deputy assistant to former President Bill Clinton.
Keeping the players straight in the advertising and public relations game is no easy task due to a series of massive mergers that have taken place over the past decade or so. GMMB, for example, is actually a subsidiary of FleishmanHillard, which is owned by the giant advertising and communications holding company Omnicom Media Group, based in New York City.
But most of the subsidiaries function under their own names.
Locust Street Group rounds out the top 10 firms for PR and advertising services. The Washington, D.C.-based agency earned $23.6 million in trade group money from 2008 through 2012, almost all of which came from America’s Health Insurance Plans. It’s unclear what exactly the agency did on the insurance group’s behalf — the firm’s founder, David Barnhart, declined to answer questions for this story — but Locust Street Group’s website says it builds “boots on the ground” coalitions and creates social media campaigns to help influence lawmakers.
“D.C. may have K Street with tons of lobbyists,” the firm’s slogan says, “but small towns all over America have a Locust Street.”
High stakes, big reward
For public relations agencies, landing a contract with a large trade association is a big deal.
“The stakes are high, and the competition is intense,” says Larry Parnell, director of George Washington University’s master’s program in strategic public relations. “But as you can see, winning one of these things is very lucrative.”
It’s difficult to draw sweeping conclusions from the data analyzed by the Center. Trade groups often vaguely describe the services their top contractors provide as “professional fees” or “consulting.” Many firms offer a wide range of services, at times making it unclear exactly what kind of work was done on the industry associations’ behalf.
Because the Center only reviewed the most politically active trade associations, the data didn’t include some industry groups that fell below the $1 million lobbying threshold but still spent heavily on public relations and advertising.
But the contractor information provides an inside look at the way trade associations use PR and advertising to ply the American mind. Trade groups determined to fight regulations and boost profits of their members have spent heavily to influence how the public perceives policies that affect everything from the air we breathe to the beverages we drink.
The strategy, public relations experts say, is not designed to replace lobbying so much as it is to enhance it.
“You can leverage [public relations work] so your lobbying is to a finer point,” says Parnell, noting that lobbyists can better influence lawmakers by showing them polling gathered by “grassroots” PR campaigns. “It provides air cover.”
“People and organizations are getting increasingly sophisticated with their communications strategies. They are more multi-dimensional,” adds Anne Kolton, vice president of communications for the American Chemistry Council. “With any advocacy [effort], the key is to create an echo chamber so people hear your message in numerous venues.”
There are some advantages to putting millions into PR rather than lobbying. For example, a trade association may be pushing a particular policy that is not so popular with the public. As long as it doesn’t directly contact a government official, it need not report who it has hired to do the PR work. Lobbying firms generally must report how much they are paid, who their clients are and what subject areas they are working on.
Misleading tactics
PR agencies may further obfuscate their role by creating so-called “front groups” that appear to be grassroots organizations, in an effort to push their clients’ messages. It is often difficult to discern who is behind these manufactured entities, though sometimes information can trickle through.
For example, the tax form for the National Mining Association showed that it paid $4 million to Weber Merritt, a Northern Virginia public affairs firm, as an independent contractor. The services were listed as “Count on Coal” in 2012, according to IRS filings.
Count on Coal calls itself a "grassroots organization" that educates people on coal-powered electricity. Its social media and online petitions, which criticize government proposals to cut carbon emissions, all omit ties to the mining association.
While this type of “grassroots” mobilization is increasingly driven by an industry or paid consultants, it is only one piece of the growing demand for communications professionals, who specialize in everything from crisis management to social media advocacy.
In 2013, the global public relations industry grew 11 percent over the previous year to $12.5 billion, according to trade journal The Holmes Report.
The steady rise in public relations worldwide spending has been accompanied by an overall drop in lobbying spending, beyond the trade group sector.
Lobbying expenditures peaked in 2010, when special interests spent $3.6 billion on lobbying federal lawmakers. Since then, they have declined steadily, falling to $3.2 billion in 2013, according to the Center for Responsive Politics. The total number of registered lobbyists has also dropped.
Some say the change indicates a shift toward so-called “soft lobbying,” a strategy that enables industry groups and unions to influence public policy not only with public relations, but through think tanks, nonprofit organizations and grassroots groups that aren’t subject to federal disclosure rules.
Journalists overwhelmed
The golden age for PR has coincided with the decline of mainstream journalism, especially newspapers, which have suffered from plummeting ad revenue that has necessitated layoffs in newsrooms across the country.
Today, not only are PR professionals outnumbering journalists by a ratio of 4.6 to 1, but the salary gap between the two occupations has grown to almost $20,000 per year, according to the Pew Research Center. The widening employment and income disparities have left journalists underpaid, overworked and increasingly unable to undertake independent, in-depth reporting.
Rick Edmonds, a writer for the Poynter Institute who covers the business of journalism, says the shift has been particularly evident in the coverage of science and health news. Many news organizations that once reported extensively on those issues no longer have the resources to cover them adequately, and special interests have filled the void.
“A great deal of science and health news is coming from the PR side,” Edmonds says.
For trade associations like the American Petroleum Institute, that’s part of the larger public relations strategy that makes lobbying federal lawmakers a lot easier.
“If we’re concerned about a particular member [of Congress], we will educate that constituency and encourage people to weigh in with their elected official,” Jack Gerard, the American Petroleum Institute’s president and CEO, told The Washington Post in a 2012 interview explaining the mentality behind the trade group’s PR offensive. “Congress is a lagging indicator. Congress is responsive to the American people. That’s why a well-educated electorate is a key to sound policy.”
The gradual shift from a focus on traditional lobbying toward greater use of the “outside game of politics,” or communications like PR, has been going on for at least a decade, close observers say, but is now accelerating with advances in technology, social media and digital strategies, says Doug Pinkham, president of the Public Affairs Council, an association of public affairs professionals who specialize in corporate PR, lobbying and grassroots advocacy.
Not all of the trade associations reviewed by the Center spent more money on top contracts for public relations and advertising than on those for lobbying and legal services. But the data appear to support broader trends in the so-called “influence industry.”
“In the world we live in now,” says Pinkham, “if you have an issue that is visual and has a compelling narrative, we’re better off spending more resources on trying to educate the public” than relying on traditional lobbying.
Troubled industries turn to PR
The trade associations that rely most on PR and advertising campaigns are usually those representing industries facing the heaviest regulation and the most public contempt, says Edward Walker, a sociology professor at the University of California, Los Angeles, and author of the book Grassroots for Hire.
And the campaigns are often tied to specific public policy crises. As Walker says, they usually launch “when industries really feel threatened that they might actually lose a policy battle.”
Over the last few years, both the American Petroleum Institute and the American Beverage Association have used PR campaigns to defend their respective industries during heated debates over issues like the proposed Keystone XL pipeline and proposed taxes on sugary drinks.
At the outset of 2012, the American Petroleum Institute announced a “Vote4Energy” campaign to promote the industry in a contentious election year. Its social media endorsed the idea that domestic oil production would bring jobs, revenue and national security.
With Edelman’s help, the American Petroleum Institute also organized a speech and panel discussion targeting “key influencers” in attendance, including think tanks, government officials and the media. Online groups also emerged, like “Energy Tomorrow,” which hosts a blog by Mark Green, a journalist-turned-industry-blogger.
In addition to Edelman’s work, the petroleum group paid FleishmanHillard $22.8 million in 2012 for advertising to promote hydraulic fracturing, or fracking, to skeptical citizens. TV advertisements targeted a half-dozen shale gas-producing states, including Pennsylvania, Texas and North Dakota, emphasizing small-town reliance on energy and downplaying environmental impacts, as part of its Energy from Shale campaign.
Big soda
Few industries have felt more threatened in recent years than soda makers.
Since 2009, the makers of sugary beverages have found themselves under attack from government officials and public health advocates who have blamed soft drinks for the nation’s expanding waistlines and have favored taxing popular sweetened beverages.
The American Beverage Association has fought back — vigorously — with the help of Goddard Gunster, a Washington, D.C.-based firm famous for creating the “Harry and Louise” ad campaign that helped bury President Clinton’s health care reform proposal in 1993 and 1994.
Goddard has produced anti-tax ads and created front groups in cities and states considering soda taxes. In 2012, the firm helped the association defeat two soda-tax ballot measures in Richmond and El Monte, California — campaigns that preceded its 2014 ballot-box battles in San Francisco, where voters rejected a soda-tax measure, and Berkeley, where a sugary-drink tax passed.
Jenny Wang, a public health worker and mother of two girls, recalls how the beverage industry flooded Richmond with anti-tax ads, buying up the town’s billboards and hiring residents to deliver mailers door-to-door.
“We didn’t have the manpower to fight against all of that messaging,” says Wang, a former Richmond resident who supported the soda tax. “They were so pervasive and so persuasive.”
Original Article
Source: huffingtonpost.com/
Author: The Center for Public Integrity | By Erin Quinn and Chris Young
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