Feeding the beast with our tax dollars…

A story broke in the PR trades this week that much criticized insurance giant, AIG, had decided that public relations was a better way to spend it’s money considering its current position of being between a rock and a hard place...

NEW YORK: Embattled insurance company, American International Group (AIG), has retained Burson-Marsteller for PR services. In doing so, it suspended corporate advertising and other paid outreach efforts to offset the cost, PRWeek has learned. Earlier this month, Bloomberg quoted an e-mail between AIG spokesman Nicholas Ashooh and George Sard, CEO of Sard Verbinnen, discussing the possibility of placing ads to explain why AIG was planning a company conference at a California Ritz-Carlton resort.

The New York Post estimated the amount to be paid to Burson-Marsteller at between $100,000 and $200,000 per month. Those are our tax dollars, friend. But blessed be the wise, the company was doing so because it was feeling under a little pressure because of the recent criticisms…

“To spend the taxpayer's money on an expensive ad campaign to apologize for how you used taxpayer money leaves you open to further attacks,” Bloomberg quoted from Sard's e-mail. In September, the Federal Reserve loaned AIG $85 billion; the company received an additional $37.8 billion earlier this month. Some members of Congress had criticized an AIG event that took place after the company received government help. Most recently, AIG was criticized for steep executive payouts , but the company announced on October 22 that the payouts, which included $19 million to its former chief executive Martin Sullivan, were suspended. And last week, AIG agreed to suspend all junkets and perks not justified by legitimate business needs.

An associate of mine here at INK inc. determined that this new PR “defensive” works out to approximately $10,000 per work day…$1,250 per hour. Nice work if you can get it. Even by any of the giant monolithic PR firms’ compensation standards, that’s a healthy hourly fee. Having worked for several of these large firms during my 37-year career, including the recipient of this particular largeness, one can assume that chances are high that the majority of the fee will go against the writing and disseminating of self-serving press releases as a “response to the high volume of requests for information from the media, etc.” Not exactly what I would call a great trade-off for the millions in advertising dollars they were spending on the same message. A press release has little more credibility than an expensive wordy ad unless the news media buys into it. And the likelihood of responsible journalists, who also happen to be taxpayers, doing that is zero to none.

Hey AIG, I have a wild and perhaps even blasphemous suggestion coming from a life-long PR professional… and it won’t cost you a dime. Just cool it for a while, and get back to work for your millions of customers first and your shareholders second. Show some common sense, restraint…and honesty in your dealings with the American public and the news media…not more wasteful spending of our tax dollars on PR consultants.