What a mess. Ogilvy, the national PR firm, got a contract with the California High-Speed Rail Authority for $9 million last year.
Actually, Ogilvy was the selected company in the second go-around in a bidding contest. The first go-around was rigged to give the contract to a group of Gov. Schwarzenegger insiders. When this fraud was exposed, they had to start all over again and this time picked Ogilvy.
Let me say it clearly right here. The corruption involved in this high-speed rail project in California is breathtaking. And they haven't even started construction yet.
The CHSRA has had their hands slapped many times by a number of state government oversight agencies in Sacramento. So has their lead contractor, Parsons Brinckerhoff. And now, to no one's surprise, Ogilvy is charging thousands of dollars against their contract for doing what my grandchildren could do for a handful of Cheerios.
That this "waste, fraud and abuse" is going on is no surprise. That no one seems to give a damn is a surprise. Where is the public outrage? Have most Californians been drinking the proverbial Kool-Aid?
It's becoming obvious that the purpose of public relations in government is for the government to lie to the people. . . . and do it professionally with our tax dollars. Dave Paresh's article makes that clear.
The CHSRA is a textbook example of flagrant mismanagement. That would not be such a big deal except the funding they have been and will waste will be in the hundreds of billions over the next ten years or more; that is, if they can get it and if they survive long enough and don't end up doing the perp. walk.
California High-Speed Rail's PR Mess
USC ANNENBERG SCHOOL FOR COMMUNICATION AND JOURNALISM
Paresh Dave | April 7, 2011
The primary liaison for a global public relations firm with the California High-Speed Rail Authority was once a member of a Bay Area committee that sued the authority.
But that's just one problem for the organization charged with bringing America its first high-speed rail network and its public relations contractor. One of the strongest supporters for high-speed rail in California criticized recently the performance of Ogilvy Public Relations Worldwide, which is in the second year of a nearly five-year, $9 million agreement to lead the communications effort for America's largest public infrastructure project.
Quentin Kopp, who quit the authority's board of directors last month, said in a letter to authority chief executive officer Roelof van Ark that Ogilvy has wasted thousands in taxpayers' dollars and has done little to curb the authority's constant negative media attention. News of the letter was first reported Wednesday by the San Mateo Daily Journal. Ogilvy generally declined to comment to the newspaper.
Neon Tommy sought last month the authority's contract with Ogilvy after online ads for the high-speed rail project began appearing on websites such as the New York Times and the L.A. Times.
The contract was received Wednesday evening.
If the maximum value of the contract is paid out, it would amount to about $160,000 a month since the authority's board of directors approved the deal in Nov. 2009. The L.A. County Metropolitan Transportation Authority is paying a combined total of about $100,000 a month over six months for two public relations to handle a smaller outreach effort about the I-710 freeway “gap” project.
Last year, the state auditor's office paid at least $1.4 million to Ogilvy to handle outreach during the selection process for the inaugural redistricting commission. Two years ago, the Obama administration awarded a $6 million contract to Burson-Marsteller to orchestrate the public outreach for the nationwide switch from analog to digital cable. About $4.3 million was actually paid.
From San Francisco to Chicago, governments are relying on public relations firms to mount cohesive and structured messaging initiatives despite some of the worst budget deficits ever experienced.
Many agencies across the country have also been left under-staffed because of layoffs and hiring freezes.
Ogilvy's contract called for the company to develop “a statewide public information and communication program for approval by the authority.” The agreement states Ogilvy is to provide monthly progress reports and to get authority approval for expenses of more than $5,000.
Among the costs that Kopp criticized were paying Oglivy employees to read the news.
“In the letter to van Ark, Kopp details a long list of invoices from Ogilvy he disapproved of including $1,500 spent for someone to read news clips related to the authority for a little more than three hours in April 2010.
But it doesn’t stop there, the authority was also charged another $5,560 in the same month to have two other groups review media related to the rail authority. Another $5,400 was billed to the authority by Ogilvy for press clipping services in May 2010.
Ogilvy also billed the rail authority more than $10,000 in June to have a law firm review news coverage of high-speed rail and two other groups review news clips.”
The plan approved by Kopp and the other directors asked for “media monitoring and related daily media coverage reports.”
During the course of two weeks in early March, ads in a $50,000 campaign were clicked about 15 percent of the 6.5 million times that they were loaded, according to authority spokeswoman Rachel Wall. Experts consider 10 percent to be a good click-through rate.
“There are thousands of people that seek information from the authority every week and we want to ensure the information we are providing on our website is easily available and accessible,” Wall said in an e-mail last month. “It’s our job to provide information about the planning, implementation and construction of the project to stakeholders and nearly 40 million Californians - ensuring that people online know that we have a website and get to the right content has proven to be key in achieving such a task.”
The authority's website averaged about 35,000 visitors per month between its redesign in Sept. 2010 and March, which Wall said represented a 25 percent increase over the previous year.
“It is our goal to reach as many Californians in as many ways as possible, including new media,” Wall said. “We will start construction on the backbone of the system in the second half of 2012 and we want to ensure we include as many Californians as we can in the process.”
Similar pronouncements were made when Ogilvy was handed the job.
“It is paramount that the authority adequately keep Californians informed about the project, its progress, its finances, its board's activities, and more,” authority deputy director Jeff Barker wrote to the board in Oct. 2009.
He justified outsourcing the operation because of the high cost of public sector employees. The authority had budgeted about $1 million a year outreach efforts before signing the deal with Ogilvy.
Much of the original outreach was done by a subcontractor of the authority's construction contractor Parson Brinckerhoff with little board oversight and several failures, Barker wrote.
During the competitive bidding process, the authority said among the considerations in evaluating the success of a communications campaign would be “public support, effectiveness of outreach efforts, stakeholder participation in various authority-sponsored events, and media penetration.”
Ogilvy registered in February as a lobbyist for the authority, and the company's employees donated about $8,000 to California election campaigns last year. The state Legislature is expected to consider several bills in the coming months that would increase oversight of the $50 billion high-speed rail project. Both Democratic and Republican lawmakers have expressed concerns.
Ogilvy has worked with several other state departments, including the treasurer’s office, the pension system, Caltrans, CHP, the insurance commissioner's office and CalRecycle.
“Success not only includes harnessing the power of support you've already developed, but also shining a spotlight on it,” Ogilvy's Christi Black told the board before the deal was approved. “We will work with you and staff the closely to make sure we are prioritizing things as the board would want.”
Kopp made clear during the meeting that he would push for firing Ogilvy if material improvement was not achieved in reducing negative press.
“Mr. Kopp's point is a very interesting way to enter a new contractor into service,” another board member quipped.
To reach reporter Paresh Dave, click here.
Find him on Twitter: @peard33.