By Adam Andrzejewski
In 2013, then-U.S. Senator Tom Coburn criticized the then Hillary Clinton-led State Department for spending $630,000 to convince taxpayers to "like" the State Department on Facebook. The State Department argued it was informing the world of its activities. Coburn wasn’t impressed. He argued the Department was simply promoting itself, rather than the best interests of the United States or its taxpayers.
At OpenTheBooks.com, we decided to take a closer look at federal PR expenditures. Our organization, American Transparency, quantified this spending in our just released OpenTheBooks Oversight Report – The Department of Self-Promotion, How Federal Agency PR Spending Advances Their Interests Rather Than The Public Interest.
Here’s what we found:
We were surprised to find the U.S. government not only leads in military spending, but also public relations spending. The federal government, in fact, is the 2nd largest PR firm in the world in terms of number of officers.
Over the past eight years, federal agencies spent more than $4.35 billion on public relations while employing 3,100 public affairs officers. We discovered the average federal public affairs officer is paid $100,000 per year–70% higher than their private sector equivalent. But having a large public affairs corps wasn’t enough. The feds wanted more PR and procured it from outside sources.
Since 2007, the federal agencies spent an additional $2.03 billion with outside public relations firms–including some of the largest agencies in the world like Laughlin, Marinaccio & Owens ($87.98M), Young & Rubicam Inc ($57.5M), Ogilvy Public Relations Worldwide, Inc ($47.93M), Fleishman-Hillard, Inc. ($42.4M), Gallup Organization ($42.0M) and many more.
We analyzed the billing-rate contracts disclosed by U.S. General Services Administration (GSA) with private-sector public relations, polling and survey companies. Not surprisingly, no one seems to be watching the store.
For example, we uncovered a 104% high-to-low difference in the hourly rate for "interns" billed on approved federal contracts by outside contractors. Ketchum bills the federal agencies $88.26 per hour, or $183,581 per year, for their "intern" position. But, Hills Knowlton Strategies bills $48.36 ($100,589 per year). Other firms like Fleishman-Hillard and Ogilvy bill between $55.21 per hour ($114,837 per year) and $60.76 per hour ($126,381 per year).
Until recently, Ketchum was the PR agency for Vladimir Putin and Russian-owned Gazprom--making $60 million from the Russians over nine years. Ketchum also bills the U.S. government for "web developers" at $186.33 per hour, or $387,566 per year, and "video producers" for $242.72 – $273.67 per hour, or up to $569,234 per year.
There’s more. The federal contractor, American Institutes for Research (AIRS), charges $214,395 for the "cost" of a fancy "z-card"–a wallet sized plastic card with a fold-out paper insert. "Translation services" cost $677.08 per hour. Incidentally, last year, 16 AIRS executives made nearly $9 million in compensation and the "non-profit" banked over $27 million with more than $266 million in the bank, mostly from federal contracts.
Then, there’s a "minimum wage" of $1.192 million per year for an advertising executive at Booz Allen Hamilton.
Booz has a five-year contract with the feds that allows them to bill the government for 70 positions ranging from $64.24 per hour for a "Communications Specialist" to $525.62 per hour ($1.192 million per year) for their "Executive Manager." Booz is billing for two positions at over $500 per hour, three positions at over $400 per hour, six positions at $300 per hour, 15 positions at over $200 per hour, 32 positions at over $100 per hour, and 13 positions billing between $64 and $99 per hour.
While the Veterans Administration was allowing veterans to die on waiting lists it found the time and resources to invest in PR. The VA contracted with the Gallup Organization to provide employee "engagement" and other satisfaction surveys for $1.7 million. There is no indication that Gallup’s "employee polling surveys" helped veterans access care or dissuaded employees from "cooking the books" while collecting large bonuses.
Even the IRS has a piece of the PR action. Taxpayer’s pay $70 per hour, an effective salary of $145,350 per year, for telephone surveyors–telemarketers–at the Internal Revenue Service. In fact, Fors Marsh reaped $2.499 million from IRS ‘survey’ contracts. The IRS has a 90% survey approval rating. But, who would tell the IRS something they didn’t want to hear and risk an audit?
At OpenTheBooks.com we applaud any agency that opens its books and discloses its spending. But this federal PR outlay is something entirely different.
Spending $70 per hour for telemarketers, $88 per hour for interns, $275 per hour for graphic designers, and $525 per hour for ad executives has little do with transparency and everything to do self-promotion. It’s how an agency gets a bigger budget next year.
The federal government is one PR firm taxpayers may want to downsize.
Adam Andrzejewski is the founder of OpenTheBooks.com and the author of the OpenTheBooks Oversight Report – The Department of Self-Promotion.