Friday, April 28, 2006

G.M. Entangled in Pay-for-Publicity Dispute

The New York Times
G.M. Entangled in Pay-for-Publicity Dispute

WASHINGTON, April 27 — A public relations firm has apologized to General Motors after acknowledging that it may have offered money to former Labor Secretary Robert B. Reich in exchange for public comments supporting the automaker's employee buyout program. The offer would violate General Motors's policy against payments to opinion makers.

The firm's president, Richard Strauss of Strauss Radio Strategies in Washington, would not say if other commentators were offered payment for public support of the troubled automaker's buyout plan, which is intended to reduce sharply its work force of 113,000 hourly employees.

Mr. Reich, who was labor secretary under President Bill Clinton and is now a professor at the University of California, Berkeley, had complained publicly about the incident, which he said occurred three weeks ago. He described the offer of payment as a new instance of how "corporate America is paying pundits to shill for them."

Neither Mr. Strauss nor Mr. Reich would respond to questions about how much money might have been offered. A spokesman for General Motors said the company had a strict policy barring payment to outside commentators to promote its interests.

In a statement on Wednesday, Mr. Strauss said, "I may have mentioned the possibility of an honorarium" to Mr. Reich "out of deference and respect to him and his position."

While Mr. Strauss insisted that he did not "recall making an offer of money," he said that he had apologized to General Motors "for any misinterpretation that resulted from my conversations with Secretary Reich," adding that he was "fully aware that G.M. does not pay money or any other compensation for opinions." His statement was prepared in response to a reporter's questions.

In recent months, the practice by companies of hiring supposedly independent outside commentators to promote their interests has come under scrutiny in Washington.

Jack Abramoff, the Republican lobbyist at the center of an influence-peddling scandal here, paid at least two outside writers for opinion articles supporting the interests of his lobbying clients. And the Bush administration acknowledged last year that it paid outside writers and commentators to promote the Education Department policy known as No Child Left Behind.

On his personal blog on April 7 and in a subsequent article for The American Prospect magazine, Mr. Reich said, "A public relations firm working for General Motors phoned to ask if I'd say on the media that the buyback G.M. was offering its employees was a good deal for them."

"G.M.'s public relations firm said they'd offer me money if I did this, as a show of respect," he wrote. "I told them I'd look at the deal and make up my own mind, and I told them to keep the money."

He described the offer of payment as "an integrity buyout" and said that "if we've got to the point in this country when big corporations feel free to offer what are essentially bribes to columnists and commentators, we're really in trouble."

A spokesman for General Motors, Steve Harris, said the company had a firm policy of not paying outside commentators to make statements in support of it and its products. "We're not paying anybody," Mr. Harris said.

In the case of Mr. Reich, he said, "there apparently was a misunderstanding" with Strauss Radio.

Mr. Harris said that General Motors, through outside public relations firms, did try to provide news organizations with the names and contact information for independent specialists who might support its policies — in this case, the buyout offers — but that they received no compensation. Last month, G.M. announced a landmark deal with the United Automobile Workers union to offer buyouts to all 113,000 hourly workers in the United States.

"I've looked at the deal, and I don't know whether G.M.'s buyback offer is a good deal for its employees," Mr. Reich wrote in The American Prospect. "That depends on whether the alternative is a G.M. bankruptcy, in which case anyone who bailed out early and got some cash would be better off."

But he left no doubt about his disapproval of the offer from the public relations company.

"It just seems wrong for a company — or its representative — to offer money to someone like me to express a view the company wants expressed in the media," he wrote, adding, "It's one thing to offer an employee buyout; it's quite another thing to offer an integrity buyout."

Mr. Strauss, a former radio reporter who worked in the Clinton White House to promote its policies on radio, said in his statement that he had a "warm relationship with Robert Reich" that dates from the 1990's and that "this relationship may account for the misinterpretation, as I didn't provide the level of detail I could have with him."

He said that whatever the offer to Mr. Reich, "there was never any attempt to influence or pay for anyone's opinion."

On its Web site, Strauss Radio says that its client list includes several of the nation's largest companies, including Coca-Cola, I.B.M. and Hewlett-Packard, and that it has also done work for several federal agencies, including the Defense Department, the Treasury Department and the Voice of America.