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The Lakeland Times, Minocqua, Wisconsin: Government shells out billions to media, ad agencies

October 14, 2016 07:28 AM
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2016-10-14_19-31-34
 
 
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Government shells out billions to media, ad agencies

At least $1.5 billion a year to media, PR companies

Richard Moore
Investigative Reporter
 
 
The federal government is spending an average of at least $1.5 billion a year on public relations and advertising - and maybe billions more - creating an unprecedented bonanza for broadcast and print media companies, as well as ad agencies, a new report shows.
 
The report, released by the Government Accountability Office last week, scrutinized federal spending on contracts for advertising and public relations activities for the last decade ending in 2015, including the agencies that spent the most money, the reported number of federal public-relations employees and their combined annual salaries, as well as the agencies reported to have the highest total salaries for public-relations employees.
 
The report was requested by Senate Budget Committee chairman Mike Enzi (R-Wyo).
 
In summary, the report shows federal agencies spending about $1 billion annually on public relations and advertising contracts, with approximately 5,000 federal public-relations employees collectively receiving nearly $500 million more in salary. 
 
"With increasing pressures on limited federal resources, it is crucial to know how much is spent across the federal government on public relations activities and which federal agencies are spending the most," Enzi said. "It is important to understand the primary purposes and reported benefits from the investments of tax dollars paid by America's hardworking families."
 
According to the GAO report, the median public-affairs officer's salary at agencies across the government is about $90,000. The agency spending the greatest percentage of its annual budgets on public relations and advertising contracts over the past decade was the Consumer Financial Protection Bureau, which only began operation in fiscal year 2011.
 
In addition, the agencies that had the highest percentage of public-relations personnel on staff in 2014, as a percentage of their total employees, were the Federal Election Commission, the Small Business Administration, the State Department, the EPA, and the National Science Foundation.
 
The agencies that increased their public relations staff by the largest percentage during the past decade were Veterans Affairs (9.1 percent), Small Business Administration (7.2 percent), and Homeland Security (6.5 percent). VA public-relations staff nearly doubled during the decade, from 144 to 286 employees.
 
The details
 
Federal obligations for advertising and public-relations contracts have been close to $1 billion annually over the past decade, the GAO reported, ranging from a low of about $800 million in fiscal year 2012 to a high of about $1.3 billion in fiscal year 2009. 
 
"Obligations for these contracts are concentrated among a few agencies, with 10 agencies responsible for 95 percent of these obligations over the past ten years," the report stated. "The Department of Defense, which is responsible for over 60 percent of total obligations for these contracts, has driven changes in overall spending."
 
While a billion dollars a year might seem high, the actual figure is likely far higher, the GAO conceded.
 
"Although advertising and public relations contracts data provide an indication of the magnitude of federal spending on public relations activities, they do not capture the full scope of these activities," the report stated. 
 
That's because actual public-relations spending takes place not only in budget accounts that can be readily identified as public-relations accounts - for example, "support-management: advertising" - but also in other less observable categories that merely encompass public-relations activities and advertising in support of those categorical expenses, the report stated.
 
Salaries devoted to public relations are more discernible.
 
"The combined salary amounts for federal public-relations employees averaged approximately $430 million from fiscal year 2006 through 2014, reaching nearly $500 million in fiscal year 2014," the report stated. "Over this time period the number of federal public-relations employees ranged from a low of 4,422 in fiscal year 2006 to a high of 5,238 in fiscal year 2011. These employees were concentrated among a relatively small number of agencies, but to a lesser extent than contract obligations for advertising and public relations."
 
The Department of Defense was the largest employer of public-relations staff; and DOD public-relations employees had the highest combined salaries. In addition, the report stated, it is likely employees beyond just those classified as public-affairs positions are also involved in public-relations activities. 
 
Though the DOD might spend the most overall, the GAO reported, the Consumer Financial Protection Bureau, which was created in 2011, spends the greatest percentage of its annual budgets on those advertising and public-relations contracts. Between 2006 and 2015, the agency spent 0.83 percent of its annual budget on advertising and PR, or an average of $4.3 million a year, but that total ballooned in 2015 to 1.45 percent of its budget, or $8.1 million.
 
That's the ticket
 
So, just what is the government advertising?
 
A lot of it is public service, and much of it is noncontroversial. For instance, the report stated, the government has paid for a Department of Transportation campaign against distracted driving, and for the Centers for Disease Control to advertise information about the spread of the Zika virus. 
 
The Smithsonian's National Zoo has webcams that allow website visitors to view selected animals. The Department of Education provides information to people applying for the free application for Federal Student Aid.
 
Some of the spending is mandated by statute.
 
Agencies publish information on regulations, for example, to meet requirements that the public be informed and given an opportunity to provide input. The Environmental Protection Agency publishes information on draft environmental impact statements to make the public aware and allow comment, according to the report. 
 
But some of it is controversial. For example, the federal government has used advertising campaigns to dissuade individuals from using marijuana, while the government spent $600,000 in 2003 to use a blimp to promote the use of Medicare. 
 
To cite another example, a GOP Senate report reported that spending on advertising and outreach for food stamps skyrocketed 600 percent between 2000 and 2011, to more than $41 million. The Census Bureau spent $130 million on an "awareness" project to encourage people to send in 2010 census forms on time, including a $2.5-million ad during the Super Bowl.
 
Millions of dollars were also spent - at whiskey festivals and on TV with ads featuring Elvis impersonators - to urge taxpayers to visit the Obamacare website when it was unveiled. It did not work.

The tip of the iceberg
 
The spending for advertising and public relations detailed in the GAO report was generally corroborated by another report last year.
 
A November 2015 report by Adam Andrzejewski, chairman of American Transparency at OpenTheBooks.com, pegged federal public-relations spending at $4.34 billion during the eight years between 2007 and 2014. At that level, Andrzejewski wondered whether federal public-relations spending was straying beyond what was needed for public service. 
 
"To be clear, we always applaud agencies who make information available," Andrzejewski wrote. "That is our core mission. But, again, agencies are not charged with making that information interesting or newsworthy. Agencies certainly aren't charged with using taxpayer funds to engage in thinly-veiled propaganda campaigns that are primarily designed to protect their budgets and hype outcomes."
 
Have we reached a point where the people's consent is being manufactured by our government? Andrzejewski asked.
 
"In the transparency age, we believe individual taxpayers and news outlets decide, not federal agencies, what is newsworthy," he wrote. "We believe funding decisions should be made by 'We the People' and their elected representatives without manipulation by public affairs officers who want to protect their own paychecks."
 
Using public data released by the 2006 Federal Funding Accountability and Transparency Act, the group said they quantified $4.34 billion in federal government public relations over the eight years: $2.347 billion in salary and bonus payments to federal employees with the job title of "Public Affairs Officers," and $2.02 billion spent on outside contractors for additional services.
 
The details were no less startling than those contained in the GAO report.
 
For example, the U.S. government ranked as the second largest public-relations firm in the world, based on the number of public-relations employees, with 3,092 federal 'Public Affairs Officers' employed by more 200 federal agencies in 2014.
 
Of those, 1,858 made at least $100,000 in base salary compensation that year, the report stated. Salaries totaled $2.337 billion and 'performance bonuses' totaled $10.929 million; the highest bonus was $35,940 to John T. Burklow at the Department of Health and Human Services in 2012.
 
What's more, the avalanche of spending on advertising and PR seems to be accelerating.
 
"Since 2007, PR positions increased in the federal government by 15 percent - an addition of 402 positions - from 2,688 to 3,092," Andrzejewski wrote. "Total PR salary spending by year increased by 22.4 percent despite a long period of freeze and sequester in federal hiring."
 
Since 2007, he wrote, $2 billion was spent by 139 federal agencies with 2,403 outside public-relations vendors on 16,249 individual transactions since 2007 - despite 3,092 federal PR employees.
 
All totaled, Andrzejewski wrote, there was a 47-percent increase in outside PR consulting expenditures under the Obama administration vs. the last two years under the Bush administration.
 
In the process, he reported, some of the top public-relations firms in the world reaped millions of dollars: Laughlin, Marinaccio & Owens, Inc. ($87.98 million), Young & Rubicam Inc. ($57.5 million), Ogilvy Public Relations Worldwide Inc. ($47.93 million), Fleishman-Hillard, Inc ($42.4M), Gallup ($42 million), and more.
 
And hourly billing rates are high. Ketchum billed at $88 an hour and $15,298 per month for 'Interns'; Boos Allen Hamilton billed $525.67 an hour, and $91,107 a month for 'executive manager.'"

Thunder and lightning
 
The report highlighted its own list of controversial public-relations spending by the federal government.
 
According to the report, the EPA's 'Thunderclap' 'I Chose Clean Water' campaign claimed to have reached more than 1.8 million citizens. As the report observes, the Thunderclap software is akin to creating a 'virtual flash-mob' of online support. 
 
Critics questioned whether the EPA violated anti-lobbying laws.
 
The Veterans Administration spent $1.7 million with the Gallup Organization for 'employee engagement' surveys and other employee satisfaction measurements. This, the report pointed out, was during, before, and after the largest scandal in VA history.
 
In addition, the government spent $4.5 million to 'monitor media, broadcast, video, and website' and 'news clipping services' from 2007 through 2014.
 
During those years, the government spent $1 million on speech coaching and 'speech writing and editing' for administrators within federal agencies, including $74,000 for secretary of transportation Ray LaHood and deputy secretary John Pocari. Another $1.48 million was spent on Public Service Announcement production.
 
As stated, the government spent some $2 billion with outside consulting firms, and some of those numbers and actions were eye-popping, too.
 
"PR services were procured by 139 federal agencies, including Centers for Disease Control ($412.7 million), Department of the Army ($254.9 million), Substance Abuse and Mental Health ($163 million), Federal Emergency Management Agency ($96.6 million), National Institutes of Health ($82.2 million), State Department ($79.9 million), Bureau of Engraving and Printing ($67.2 million), Veterans Affairs ($38.4 million), National Highway Safety Administration ($35.5 million), and many more," the report detailed.
 
Another $12.4 million spent was directly on identified advertising such as billboards, radio and television advertising, direct mail, bus wrap advertising, recruitment advertising, theatre advertising, conference advertising, and public opinion services advertising.
 
The government expends a boatload on polling, too, and not just domestic polling. It conducts polls in foreign countries, some $36.4 million worth in the eight years surveyed, including surveys in Britain, Czechoslovakia, Tajikistan, Armenia, Serbia, Africa, Poland, Spain, Sri Lanka, Germany, Mexico, India, Korea, Italy, Hungary, Greece, Pakistan, Palestinian Territories, Chile, Vietnam, New Zealand, Fiji, Moldova, Zambia, Georgia, Morocco, and Tunisia.
 
Among these polls, the government conducted a 'survey of medical insurance in Spain,' as well as a 'Public Opinion Poll Survey To Address Public Attitudes Towards Domestic And International Affairs In Austria,' the report stated.
 
"We found that State contracted with Associated Press ($36,168, FY2011)," the report stated. "This is either a massive conflict of interest, or an accounting error."
 
The EPA
 
If there was a poster child for self-promotion within the federal government, the Environmental Protection Agency would be a leading candidate for the position.
 
As Andrzejewski points out, the EPA spent more than $26 million with outside public relations consultants from 2000-2014, even though the agency employed up to 198 public-affairs officers on its own. Since 2007, Andrzejewski wrote, the EPA spent more than $141.5 million in salaries plus $1.5 million in bonuses on permanent 'Public Affairs Officers.'
 
"We quantified total EPA PR spending of $170 million," he wrote. "For example, we discovered that the EPA spent $116,490 on polling for 'development of future scenarios for EPA's multi-pollutant emissions projections and air quality analyses' in July 2010. The EPA uses these surveys to help craft environmental regulations like the Clean Water Act and Clean Air Act."
 
And sometimes, Andrzejewski asserts, citing The New York Times, the EPA's public-relations spending veers close to and may cross the line and conflict with federal anti-lobbying laws. 
 
In one instance, Andrzejewski wrote, the EPA proposed a rule and then immediately embarked on a media campaign. 
 
"To enact a regulation, federal agencies typically propose a rule, allow the public to comment on that proposal and then alter its final regulation based on those comments," he wrote. "But, in 2014, the EPA unveiled a proposed regulation to expand its authority under the Clean Water Act. Then, it launched a social media campaign to draw public support."
 
Among other things, the report states, the agency enlisted Thunderclap, a site specializing in broadening messages' reach through social media. 
 
"Critics charge the EPA violated the Anti-Lobbying Act - a federal law that curbs government officials' advocacy work," Andrzejewski wrote. "The EPA denied any wrong-doing."

And now for the rest of the story
 
In the end, the dollars spent on advertising and public relations don't tell the whole story of income streams flowing to media companies and advertising agencies.
 
There are conspicuous examples, such as grants to PBS and NPR. Then there's the money cascading into the "nonprofit" Ad Council, which lathers advertising agencies with millions of taxpayer dollars.
 
Included in the 23 executive actions the president decreed in 2013 was an ad campaign about "gun safety." Obama wanted to launch "a national safe and responsible gun ownership campaign." 
 
In addition to direct marketing for Obamacare, as The New York Times reported, the California Health Exchange spent $900,000 to fashion a public-relations strategy that, among other things, sought to prod prime-time television shows like "Modern Family" to incorporate the health-care law into their scripts.
 
There are also countless indirect ways the government is channeling money into the bank accounts of media companies. For example, as Matthew Boyle of The Daily Caller reported, The Washington Post pocketed $537 million from a fund providing taxpayer dollars to Obama-approved companies and unions that had early retiree health insurance plans, ostensibly as an incentive for them to retain them, though they had announced no plans to abandon them. CBS also netted $722 million from that fund. 
 
 
 
Original Article Here
 

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